The Compound and Friends - Coinbase Is the Godfather, the Return of Cathie Wood, Neil Dutta on Jackson Hole

Episode Date: August 19, 2025

On this TCAF Tuesday, Josh and Michael sit down with Coinbase Chief Financial Officer, Alesia Haas, and Chief Legal Officer, Paul Grewal, to dive into what’s next for the world’s largest digital asset exchange. Then at 45:23, hear an all-new episode of What Are Your Thoughts with ⁠⁠⁠⁠⁠Downtown Josh Brown⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠Michael Batnick⁠⁠⁠⁠⁠! This episode is sponsored by Betterment Advisor Solutions and Rocket Money. Grow your RIA, your way by visiting: https://Betterment.com/advisors Cancel your unwanted subscriptions and reach your financial goals faster with Rocket Money. Go to https://rocketmoney.com/compound today. Sign up for ⁠⁠⁠⁠⁠The Compound Newsletter⁠⁠⁠⁠⁠ and never miss out! Instagram: ⁠⁠⁠⁠⁠https://instagram.com/thecompoundnews⁠⁠⁠⁠⁠ Twitter: ⁠⁠⁠⁠⁠https://twitter.com/thecompoundnews⁠⁠⁠⁠⁠ LinkedIn: ⁠⁠⁠⁠⁠https://www.linkedin.com/company/the-compound-media/⁠⁠⁠⁠⁠ TikTok: ⁠⁠⁠⁠⁠https://www.tiktok.com/@thecompoundnews⁠⁠⁠⁠⁠ Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Josh Brown are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of ⁠⁠⁠⁠⁠Ritholtz Wealth Management⁠⁠⁠⁠⁠, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here ⁠⁠⁠⁠⁠https://ritholtzwealth.com/advertising-disclaimers⁠⁠⁠⁠⁠. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: ⁠⁠⁠⁠⁠https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

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All right, we have an action-pack show for you. Michael and I spoke with Paul Greywall and Alicia Haas, who are the chief legal officer and chief financial officer at Coinbase. Coinbase is one of the best performing stocks of the year. It is now the 24th largest financial services company in the stock market by market cap. and just racking up a series of wins and major partnerships, most recently, a deal with PNC Bank, another deal with JPMorgan. They have 80% of all of the assets custodied for the dozen or so Bitcoin ETFs.

They just, it seems to be on fire. So it was a really fun chat. We got to ask them some tough questions and they answered them. And I think you guys will get a lot out of it, whether you're a crypto person or a crypto skeptic, this conversation is for you. Following that, it's an all-new edition of What Are You Thoughts? We had a special guest star, Neil Dutta, popped on to preview this weekend Central Bank jamboree. We refer to as Jackson Hole. That's coming up starting Friday with Jay Powell's big speech. And Neil shed some light on some of the things that he's watching

for. We also did a ton of stuff on AI. We took a look at Kathy Woods resurgence this year. Some of the buys that Berkshire Hathaway has been making, David Tepper, Michael Berry, I don't know, talk a little bit of shit about Chamath, but I like them. But you'll hear that for yourself. There's a lot. And it was a big show. And I hope you guys enjoy it. I'm to send you right in now. Special thanks to the sponsors, and guys, please enjoy. Welcome to The Compound and Friends. All opinions expressed by Josh Brown, Michael Batnik, and their castmates are solely their own opinions and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be

relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Ladies and gentlemen, welcome to live from the compound. Coinbase has become one of the largest financial companies in the United States over the last few years with a market cap of almost $80 billion. You guys, I don't know if you know you are a top 25 market cap in the XLF right now. Pretty big. Okay.

Coinbase is now larger than NASDAQ, larger than MSCI, and larger than the CBOE, just to give you guys an idea of the scale of this company. You are the Coinbase, the six best performer in the sector year to date as well. You've reported 245 billion in assets and over 80% of the assets of the Bitcoin and ETH ETFs are held at Coinbase. Our guest today are Paul Gruel, the chief legal officer of Coinbase Global, where he is responsible for Coinbase's legal, compliance, global intelligence, and government relations group. and Alicia Haas, who is the chief financial officer of Coinbase, where she has served in that role since 2018.

Guys, welcome to the compound. Thank you for being here today. Thanks for having us. How's that for an intro? Pretty good, right? I'm pretty damn good. Alicia, what would you give that out of 10? I want to just note that we have over 400 billion of assets on our platform.

I'll shut up forever. 400 billion. Let me correct the record. All right. Guys, what is it like being on the management team at the largest crypto business in the world? How does it feel? What is the day-to-day like these days? It's pretty exciting, I would imagine.

We're pioneers. Okay. It feels like you're sitting on the brink of history and watching the world transform in front of your eyes. It's incredibly motivating. Yeah, it really feels like the world is changing quickly around us and we get to play some significant part in seeing what that change looks like in the future.

I think the world is changing, but then you guys are also responsible for shaping that change. And I know that's very deliberate. I know that's, she's pointing at you. I know that comes up. He's opening doors for us, opening doors. And then we have to chase a- Knocking a few down as well, but yes.

Knocking down some doors. Okay. I think we want to, where do we want to start? So, Bitcoin, let's start with Bitcoin. Bitcoin started, I think, as self-sovereign money. It is yours. The government can't seize it. Like, it is yours and it is yours alone.

And the story has evolved a lot over the years to the future of finance. But it seems like the story today is a new asset class. Last week, Eric Baltun has reported that spot Bitcoin in Ether ETFs did about $40 billion in volume this week. And if you just look at the ETF's loan, that's like it's up there with VOO and the Q's in some case bigger. Like to me right now, the story is about crypto as an asset class. Is that how you guys say it?

That's the first chapter. We see crypto as an asset class being the foundation. But then we think of crypto moving to a financial asset in which you can transact, you can use it for lending, you can kind of broaden the financial transactions versus just a store a value in a savings vehicle. And then we think of crypto as an app platform. And that's where it gets really exciting about thinking about base as a layer two, where we're seeing new social, new messaging, things built on top of crypto that's embedding data and dollars all in the same platform. So we think about it as we've moved from this offline world to online world and

now we're moving on chain. And that is then the evolution of crypto, an asset, a financial system, an app platform. Yeah. And I think that evolution from off chain, on chain, into an app platform is what creates some of the most interesting, but frankly, challenging regulatory issues that we've confronted. But what's also, I think, unique about crypto is that all of this has taken place in the course of roughly a decade. I don't think we've ever seen that in global financial history. How much of what you guys are building is looking at the analog or the traditional world and saying, let's do the digital equivalent versus truly pioneering things that no one is doing in any way, shape, or form.

Like, if you could maybe talk a little bit about why you're able to move so rapidly because there is this groundwork laid by traditional finance, but then, like, going off into areas where people are like, wait, what are you doing? Because it seems like you're doing both at the same time. I would say that what we're doing certainly builds upon, I think, a lot of traditional financial infrastructure. And I think in the first instance, Bitcoin and later digital assets that followed were about offering alternatives to that system that frankly weren't serving a lot of people. The reality is that even in the United States, let alone all over the world today, access to the financial system is limited for way too many people.

And so I think correctly the industry as a whole and certainly Coinbase in particular has focused on that as an initial priority. But as Alicia alluded to, the goal here is much bigger than that. the goal is to build a true platform for all sorts of decentralized applications. They can go far beyond just asset speculation, appreciation, trading, and the like to really fundamentally changing how people interact with their data online and ownership of their identity online in ways that we think are powerful. One of the things that the crypto skeptics have been saying all this time is if I'm not Venezuelan, there really is no day-to-day use case for me other than speculation or accumulating

wealth. I would argue it's been an incredible tool for accumulating wealth, just looking at the prices. Like, it's been really hard to, at least in the last couple of years, lose money in crypto. Okay, so we know that works. How do you answer those skeptics? What do you tell those people about the daily use case of crypto who just don't see one? Or maybe it exists in the background, but they don't know that they're interacted with crypto. Or like, what's your answer these days to those people. Crypto is more than just Bitcoin today. And I think that you have to look at what are the pain points of each individual customer and how can crypto solve their problems. Yes, Bitcoin

and Ethereum, many of these assets have tremendous investment returns. But you also now have stable coins with product market fit that are enabling faster, cheaper transactions. You have the emergence of decentralized social. And what we're seeing with decentralized social, we have a product that is, and it's beta, we are just onboarding to it. It's this magic moment of if you're a creator and you are posting content, that content now is a coin. You own that content. You can monetize that content. That immediately flows into your wallet. From that same wallet, you can send a payment. You can buy a crypto asset. It's combining social, trading, payments, identity, messaging, all within super apps. And so just reducing friction, lowering costs,

giving more boundary-less transactions as well as what we see the real value out of crypto in people's lives. Can we double-click on that? In the creator economy, you still have gatekeepers. They're different than the prior gatekeepers. But is Patreon, his only fans, his Instagram, is TikTok, what you're describing sounds like a direct payment to a creator who can then put their content anywhere. But surely, you're going to want to get paid for that, too.

So do you just replace the existing gatekeepers? or are you suggesting an entirely different sort of experience? Well, I think payments are certainly an important part of the opportunity that crypto offers to content creators. But payments are just the beginning. Fundamentally, what we're talking about is ownership, right? In the traditional web two world, who owned the content that so many creators added to those platforms that drove a lot of the value? It wasn't the content creators. It was the platforms themselves.

With decentralized assets and with cryptocurrency, you offer the opportunity for the content creators themselves to own their identity and own the content in ways, allowed them to port that content to whatever platforms allow them to reach their intended audiences and share value with those audiences, ways that they deem most appropriate and most valuable. That's the fundamental opportunity that we see there. So that's the transition to an app platform, financial app for... That's right. Okay. Okay. So this is in distinction with, let's say, your former employer, Facebook, YouTube. So basically, you'll have a scenario where people can take full ownership of their work, not just contribute it to someone else's app or someone else's website, but they do have to put it somewhere.

So it sounds like it's going to be a situation where it's a little bit of both and not fully, I have my own video platform now, right? Am I describing that? I think that's right, but I think what's important to understand is that in this scenario, in contrast to the old world of Web 2, the content creator makes that choice. The content creator decides where that content is hosted. That content creator decides how fans and audiences will interact with that content and on what terms. And that ownership, that independence, that autonomy, we think it's what's fundamentally different from the old gatekeeper world model that you are describing.

I think part of the problem with crypto branding for the average person who doesn't see the technology doesn't understand the dollars that are extracted from the financial companies from the system, all they know about are the scams. And they remember FTX, the collapse in 2022. How surprised are you that the price of Bitcoin fell from 70,000 down to what about him, 15, something like that? And, like, two years later, or thereabouts, wherever it was, it was at all-time highs, and it a-dexed from those levels. How damaging was the collapse to trust in crypto? And how surprised to you that it's only three years later and we're so back, all the way back. Are you surprised, Alicia?

I wasn't surprised, no. I think it- Which part weren't you surprised by? The fall or the recovery, or both? Both. I wasn't surprised for either. Okay. Because when you saw the collapse, there was a lot of leverage in the system.

So whenever you have a highly leveraged environment and you have an event like FTX failure, you're going to watch a downward price trajectory. However, at the same time, we were watching new corporates on board into crypto. We were seeing new participants go like, this is a buying opportunity. We wanted an entry into this asset class. There was a huge chilling effect on the industry, though, because everyone re-underwrote every platform. They said, could Coinbase be the next FTX?

Coinbase, what are your control? banks were definitely fearful of then interacting with these crypto companies. What did they not know? So we definitely went through a re-education process. We had to really rebuild trust in the underlying controls and infrastructure. But once we did that, with the tailwinds that we now see, with the regulatory clarity, with the increased institutional and government interest in this asset class, I'm not at all surprised to see the essential price as well. How much of the recovery that Michael's referring to, can you point to?

the fact that Trump won and Trump was highly supported by people who are crypto positive because there's another world in which Trump doesn't win and your day is probably being spent very differently and your day is probably being spent very so like would you say that's 50%

of the story of Bitcoin running to 125,000 or 30% like what would you handicap that election being well I don't think there's any question we now have the most pro-crypto administration in history And I don't have to imagine what that world could look like, because frankly, the previous four years offered us a pretty tangible example of what a hostile attitude towards not just an American industry, but frankly, an American innovation could and would look like. There's no question, though, that the political support for crypto has now gone far beyond just the Trump administration or a small set of early adopters on one side of the political aisle.

We've seen now, because we've seen votes taken in Congress and legislation passed, that Democrats and Republicans, by and large, understand that crypto is going to be part of the financial system and financial future of this country. And so we need sensible rules, sensible standards to govern that, to protect against, you know, collapses like FTX and to make sure that people are kept safe, even as they invest in this new opportunity. Are you surprised that Democrats weren't strategic and smarter about recognizing that there was this huge demographic, and it's young and it's energized and it wants to affect change. Are you surprised that they didn't grab that opportunity to be the party of crypto prior to Trump coming along? Well, some Democrats absolutely grabbed that opportunity. We've seen that actually here in New York with leaders like Congressman Richie Torres, Senator Christian Gillibrand, who have staked out a very early claim to sensible ideas

and sensible standards for crypto that are reflected in the legislation that was passed. What I think was disappointing and what you're alluding to was the fact that the previous administration, the Biden administration, as well as the Harris campaign, just couldn't get their minds around what opportunity crypto offered to the very constituencies and communities that they purported to want to champion. We met over and over it again with the previous administration and with that campaign to try to lay out for them the case for crypto for the very people that they sought to champion. And yet over and over again, we just saw either a disdain at the very least or an outright hostility

that was extremely counterproductive and ultimately, I think, cost them in that election. I think that's a good segue. I want to ask you about something that you guys did that almost no financial institution would have the courage to do. Some would say the chutzpada do. But you guys sued the SEC. And it sounds like that was coming, I mean, obviously it's coming from Brian Armstrong, the top down.

It took a lot of guts, but you actually won. And it took a really long time. talk a little bit about why that was so important for you guys to once and for all say current securities regulation just does not apply or is not written so as to make it conducive for our industry and we need something different and you need to listen to us what was that decision-making process like how many sleepless nights and what did it feel like when things ultimately fell your way well i give our CEO brian armstrong and our board a lot of credit because the decision to take the fight to the SEC head on was not an easy one and

certainly ran against all conventional wisdom at the time and maybe even since then. I will certainly say that when I attended law school nearly three decades ago, maybe the second or third lesson, if not the first lesson that we learned, the very first day of class was, don't see your primary regulator. And yet there we were in 2021, already seeing that that day would come for us. and then ultimately we were confronted with and forced to pull the trigger on that in 2023. Look, I think if you just take a half a step back, it can seem like ancient history now, but not that long ago, we were in an environment where the previous administration made it clear.

They did not want to see crypto flourish in this country. In fact, in many quarters of the White House in particular and certain leaders on Capitol Hill, particularly Senator Elizabeth Warren, there was a mindset of let's try to drive this thing underground at the very least or out of the country entirely through lawsuits. won't pass rules, we won't tell people what the standards are, all that we're going to do is take them to court and either grind them into submission or ultimately make it so impossible for anyone in crypto to operate in the United States that people would leave voluntarily. And so in that environment and against that challenge, in some ways, the choice was actually relatively easy because what other choice did we have? Nevertheless, I do think Brian and the board deserve a ton

of credit because the fight was not only for Coinbase's survival, but frankly, the thriving of the industry as a whole long term. And it may be the thing I'm most proud of that we've done as a company. Given the size of Coinbase, can you truly say that this is a decentralized asset class in the way that the original Satoshi paper laid out? Like, can we all kind of admit that maybe there's a limit to how decentralized anything of this size can really be? And that ultimately throughout history, crypto or otherwise, power tends to consolidate. And institutions tend to get large when there's money in motion. Like, we can kind of all, I think, say, no, it's very decentralized.

Not if you're in our executive meetings. Okay. That's still an important part of the atroise is what you're saying. It is an incredibly important part. Okay, talk about that. I think we might be the only company that is actively working to decentralize everything that we do to ensure that each one of our customers has the ability to withdraw their crypto to a self-custodied wallet to take their money anywhere around the world, pass through

borders, that we fight through legal and policy efforts, that we build products to enable this, that we are bringing in decentralized applications into our main platform to give our customers direct access to moving into on-chain apps. We are not putting up barriers. No. We are doing quite the opposite of trying to really encourage this movement into an on-chain economy. I think we have a record to prove that. I mean, it really goes back to, for example, the very first significant win in our fight with the SEC was establishing legal clarity for non-custodial wallets is falling outside the scope of the federal securities laws. That was huge. That was huge. If you look at sort of where we're really drawing hard lines in our advocacy efforts for new legislation,

defy and protecting defy is critical. You could argue that each of those efforts and a dozen others I could list actually run counter to our narrow short-term self-interest as a company. But our vision is for something much bigger than just, as you would suggest, suggest by your question, replication or duplication of the way we've run the traditional financial system for decades in this country. Tailwinds for crypto right now. There's a lot. I think maybe number one is a lot of people still don't own it. In fact, like nobody owns it, practically speaking. And the limited supply and the race to own it. Then there's the political landscape. There is the ETF, which was enormous. That was the spark that lit the latest ball run.

one of those tailwinds, though, can potentially turn into a headwind. I don't know when or how or why, but the number of Bitcoin treasury companies that are using you guys, I would assume, in many cases, to secure their Bitcoin and to store it. So, Saylor tweeted this morning. Strategy has acquired 430 Bitcoin. They now hold, or hold it, excuse me, 629,000 Bitcoin acquired for, not worth, acquired for, $4,000.

billion. And this is from the FTA. In the year to August 5th, some 154 public companies have either raised or committed to raise a combined total of $98 billion to buy crypto. I don't know what stops this, but the more and more companies are getting in on the action simultaneously has to excite you. This company, ETHZILA just recently converted. This is today. It's not that noteworthy other than it was today. Converted from a biotech company into a, ETH Treasury Company. So on the one end, a rational person sees this and this says, like, all right, time out. Like, this is getting crazy.

I want to get off the train. But the other person might say, but this is sort of one of the points is that there is a limited number of supply and there is an all-out race to accumulate them, which should be very supportive of the price. But I guess, does this cut both ways? Like, what happens if there's a geopolitical event? And at the end of the day, these harvest gas sets and they can go down and an interest can wane, So how should investors think about the simultaneous tailwind that might turn south in a hurry?

I think you have to have a long-term hold on these assets. These are not assets that should be viewed as linear risk-free assets where you're looking for great annual or quarterly returns. We've seen crypto go through cycles, even ignoring the 2022 events that led to a significant decline. prior in 2017 and 2015, you saw definite waves. If you zoom out, Bitcoin, Ethereum have had long returns over time. And so you have to take that long-term mindset. These are store value assets. These are not daily speculative assets for the majority of investors. What I think about these treasury companies, though, is very few institutions had access to buy spot crypto commodities. many funds have a prohibition. They couldn't buy ETFs. They couldn't buy spot Bitcoin. They couldn't

buy spot Ethereum. And so they're using these as equity wrappers because they can hold equities. And so it's introducing new capital into the crypto ecosystem. What I think is an untested theory is, is this a moment in time? And will the world change where then more investors can go into spot commodities once you have market structure in place? Will funds change what their investable asset classes are over time. But these wrappers are just giving more and more capital access to crypto since really what they're doing. I think everyone would like to be long term and zoom out. And historically, if they had done that, it would have served them well. But there's a lot of leverage in the system as a result of the Bitcoin and the ETH treasuries. And that doesn't allow you

to zoom out always. When you get a margin call, you can be as long term oriented mentally as you want. Financially, you have to come up with the money. I think that's the risk that Michael's alluding to. Do you think that there's as much or more leverage currently given the size of these crypto treasuries as there was back in 2022? Or is it a different type of leverage that may it's a different type of leverage, but it's hard to tell because you don't have transparency into the global holdings. And you have a lot of crypto held not outside the U.S. in companies that don't have any financial reporting obligations, which makes it very difficult to look at total leverage in the system today. If you think about, so Bitcoin has been the best performance.

asset class for the last 10 years, right? Since inception, it's crushed everything. There's nothing that's even remotely close. As you think about the future opportunity set and as Bitcoin matures, you would expect all else equal that volatility will come down a little bit. And that returns cannot possibly continue to compound that 50, 60 percent, because ultimately it will swallow the globe in just terms of asset size. We were talking recently about this. How do you think about the size of Bitcoin? Because it's not a market cap like equity is. which means that maybe the size of it can be way larger than we think because it's not a true market cap. Correct.

So talk about how you think about supply, price. If it's not a stock and we know it's not, then maybe market cap is just a term we're borrowing from Tradfai that's not applicable. So maybe we need to think about it like the supply of U.S. dollars. Well, I think it is a bit of an outdated or outmoded term of art. Market cap. Yeah, because if you think about it, right, even now under U.S. law, after a lot of struggle and a lot of heartache, we have established that Bitcoin is not a security. It is not an equity. It is properly considered as a commodity. And I think treating it

and considering it as a commodity class is probably a better way to think about it. The other point I'll just make in terms of like it's potential for growth. I think you're exactly right. We don't need to see compound annual growth in terms of historical norms for Bitcoin to continue to grow and continue to play a much larger role in our system. And I think, think that's in large part because now we not only have the ability to buy and acquire and hold Bitcoin in custodial wallets and non-custodial wallets by individuals, but we have a lot of other ways to get at the asset class. There are the digital asset treasuries for sure. Strategy is certainly one way to go about it. But the ETFs you mentioned earlier, I think

were the catalyst for so much retail and institutional adoption. I actually think in terms of the law, the single most significant event in the history. of crypto was the decision of the D.C. Circuit forcing the SEC to grant those ETF applications have been pending for years. That was a watershed moment, and that has brought in a whole new class of investor that has access to this market that never was there before. I think it smooths out the flows into the asset class because it's not fully reliant on people who decide every day, I want to place a crypto trade. Now you've got money coming from the asset management world, pensions, insurance companies, wealth management, where it's scheduled

each month I buy X dollars of, you know, one of these Bitcoin ETFs, or every time I rebalance my portfolio or whatever the case may be, I think it kind of, that decision, to your point, for me, that was a moment where it's like, okay, this is now permanent. You can't get rid of this now. The game is now on. The game is now on. All right. You guys mentioned stable coins. Stablecoins had a big moment this summer. I have to be honest with you. I read the S1 and then I listened to the last earnings conference call.

I still don't understand why Coinbase allows Circle to exist. Why isn't it the Coinbase stable coin? Why are you guys taking marketing or distribution fees from a company that you could very easily just replicate overnight? What's the rationale behind doing that? And I know that's a client of yours, but like... It's an important partner of ours. It is. I understand all that, and I know why it is, but why don't you guys just do your own? We really firmly believe that you need to have network effect in stable coins, and we want

many distribution partners. We want to have an interoperable stable coin. We want to build stable coins as a utility layer of the overall crypto ecosystem. And we thought, starting in 2018, when we partner with Circle to create USDC, that doing this as a multi-party ecosystem was the best way to do that. We have an important role in this through distribution. We're a key catalyst in getting USC adopted by Defi, really embedding it into like the trading community because we have such a large exchange and distribution capability.

But we are both incentivized to add even more partners. We want to add more people. We want to add more on ramps and off ramps, which is why we partnered, for example, with Shopify to embed USDC to Shopify's merchants and why you see Circle going out and bringing their own partnerships to the table as well. this is going to be a utility that we bring to this overall space. Most of the money in Circle, to be clear, though, is custody at Coinbase? Or do I have that wrong?

We hold more assets on platform than they do at this time. So at the end of the second quarter, we had over $14 billion on our own platform. But that's out of the $60 billion in the overall ecosystem. So a large percent are just held in self-custody wall. It's held in DFI protocols distributed throughout the ecosystem. I think that distribution in 2025 and presumably, you know, beyond validates the original vision back in 2018, that more participation, broader distribution, and ecosystem would lead to greater adoption.

How important are ETF custody and trading solutions? We referenced this statistic before that about 80% of the money that's being custodied for the ETFs is at Coinbase. I was dead wrong about this prior to Coinbase coming public. I said very publicly and incorrectly, I viewed the ETF. F's as being competitors to people having Coinbase accounts. Why would you even bother opening an account and trading crypto at Coinbase if you can just do it at Fidelity and Schwab? Horrible take. But it takes a big man to admit where you got it wrong. Very big man.

Horrible take, but I'm on the record and everyone knows I said it. Okay, so that was wrong. What ended up happening was it was such a hugely beneficial thing to the overall crypto ecosystem that it was a net positive. But also, you guys became a, a substantial player in the ETF products. So talk to me about why that's so important to you and what you see happening there these days. I think it just further cements that we are the partner of choice. We have built a platform that is institutional grade that you've had these large, reputable asset managers kick the tires of our platform and compare us against many other stratify players, other crypto players, and overwhelmingly chose us. But what we are trying to do is

I mentioned in the opening, like we are trying to become an infrastructure supplier to the overall crypto economy. And so that is our deep liquidity on our exchange. That is our custody platform where we can custody all types of these bare instruments, different protocols with different security considerations. We are unique in this. We've done this for over a decade to safely store these assets. And this is where it enables other banks, other fintechs to build on top of us. And so the custody is the route. We announced in the second quarter, for example, that PNC Bank is a new partner of ours,

where they have chose us to embed our products underneath their platform so they can offer crypto trading and storage to their customers. So it's just further support for us being the platform of choice of large institutions to turn to when they want to build crypto offerings. You're the picks and shovels or the arms dealer in that analogy. You don't care if BlackRock garners more Bitcoin assets for their funds. this month versus another player or another player. It's just about you can work with everyone and they can all use your systems.

We want to see the partners succeed and, indeed, thrive. And by the way, you were hardly the only one to raise those questions or concerns. A short while, I will tell you, I mentioned the D.C. Circuit's seminal decision ordering the SEC to grant those ETF applications. We actually filed in that particular case that Grayscale brought to achieve that result. an amicus briefing. I can't tell you the number of people who reached out

to me afterwards and said, why are you guys supporting a firm looking to take your lunch? The people trading crypto

on your platform if they can just do it in an ETF. But you guys had the forethought to understand the bigger picture. Robin Hood

would say that they are as large a player in crypto as you guys are, but then they also transcend crypto with a brokerage

platform and custody for traditional assets, how long before you guys have to acquire interactive brokers or public or E-Toro or a trad-fi brokerage firm so that you also can offer stocks? Because in the eyes of the consumer, the younger brokerage account holder, they don't see the difference. They would love to be able to do everything in all in one place. So you have meetings about that.

You're thinking about starting your own. Where does that have to get to? Absolutely. And as we shared on our second quarter earnings call, it is our vision to be the everything exchange. Our vision is to bring every one of those assets on chain. This is a critical difference. Which is the critical difference. So tell me about that. So just like we've been talking about decentralized finance, the ability to self-custody to own your own assets, we want to bring all of those assets, securities, prediction markets,

commodities, real estate, restaurant shares, you name it, assets, broad categories of assets on chain as tradable, ownable individual assets. We started with being the easiest place to buy spot commodities, Bitcoin Ethereum. Recently, we've been diversifying into derivatives, and so we launched futures. We now have 24-7 futures in the U.S. We just closed our acquisition of Deribit, which is going to bring options to the platform. So now we have spot derivatives. The next frontier is equities. And the next frontier is being able to offer tokenize equities. We haven't given the exact roadmap of how we will do that, but we believe that we also need to bring that to our customers. You're going to get a brand new set of competitors. You're going to get Vanguard Schwab

Fidelity in addition to all of your crypto competitors. We are. It'll be a deep front of me in cooperation space. Why are spread still so wide with spot digital assets? Like, why am I paying Robert at 85 basis points in whatever you guys are taking? It's not nothing. Why is that still the case? It's not commoditized yet, quite candidly. So I think that what you see, is when things become commoditized, spreads will compress, when things are broadly available, when you can then buy every asset everywhere. You can stake your Ethereum and Solana on every platform. You'll start to see spread compressions. We offer a more differentiated experience today where products and the depth of our products have enabled us to have premium pricing.

We run price experiments all the time, but we absolutely believe when commoditization will come spread compression. Why do you think more people don't use, more traders don't use Coinbase Pro? Are they not familiar that that's an option? Everyone's familiar as an option. It's side-by-side in the app. I think that people enjoy the more simplistic experience. You can miss it. Fair.

I'll take the feedback. We also have Coinbase 1. So we have tiered pricing where you can now even pay $5 a month and get fee-free trading. So we offer a number of ways. I didn't know that. I would have signed up for that. Brand new. Brand-new.

Coin-Based 1. The day is young. Yeah, now we're talking. Okay. You guys have been striking tons of deals with some really big plagued. I know Michael wanted to make sure we asked you about the J.P. Morgan deal, which is fresh, I think, last week or the week before. Two weeks, two weeks. Only the biggest bank in the country and the largest bank in the country, one of the largest financial institutions in the world. And pretty vocal about,

like, Jamie Diamond was not shy about his feelings about the industry. They have not been shy in the past, that's for sure. So this has got to be a huge win for you guys. But their customers want to be in crypto. So they're doing the right thing. Yes, exactly. They are. And they've been an important partner of ours. They've provided bank accounts to us for years. And we're really pleased. to continue to broaden the partnership. But I just want to underscore, partner of choice. Yes, J.P. Morgan chose to partner with us.

We're now enabling more and more on-ramps to crypto by enabling their credit card customers to redeem points into our platform. I mean, who else were they going to choose? I mean, maybe that's credit to you guys. But this is credit to ours. We've built this space. We are the infrastructure provider of this space.

And we've done it in a completely compliant way from day one. I think that has also been a critical element of our appeal to our partners. Another coming unlock is banks, and they spoke about this. The head of the FHA said this is coming, the ability for banks to look at your digital assets as assets that count towards your net worth. That's right. We see you have $100,000 of Bitcoin, sell it, convert to cash.

We'd be happy to loan against it. That's right. I think we'll unlock collateral to pledge against various loans you're taking. This is all coming. And I think maybe we should go into market structure because I think market structure rules are critically important to us looking at all of these assets as collateral for enabling trading and margin as well. So tell our audience what you mean by market structure and why is that relevant to this? Yeah, by market structure, we're referring to maybe the most important piece of the

legislative puzzle that the industry as a whole, and Coinbase in particular, I've been working on Capitol Hill now for well over 18 months. Just recently, you saw Congress pass and the president signed a massive new bill on stable coins. Genius Act. And we're thrilled to have it and we're grateful to the political leadership for that will. But the market structure legislation that we believe is critical to completing the task at hand remains pending in the Congress and awaits a final vote in the Senate to match the vote in the House so that we can see this thing signed by the President in short order. What a market structure bill will do, among other things, is confirm for the first time a framework for deciding what assets may fall

to the federal securities laws in which assets are properly treated as commodities. What is the appropriate role for the SEC in that world versus the commodity futures trading commission. What requirements need to be in place for disclosures so that people acquiring digital asset commodities can understand what it is they're buying and what it is they're getting. So these basic standards need to be in place in order to provide full confidence on full clarity, hence the name of the legislation in the House, on these issues. But the good news is we think this is coming. The president made it very clear. He expected to see a bill passed by the Congress this year that he can sign.

And leadership in the Senate is working diligently. Is there a division, though, in the community amongst the diehard crypto-native people who would say, why do we want this? Leave us outside of the financial system. We're decentralized. We don't need rules. We don't need frameworks. What we need is to be left the hell alone.

That kind of crypto-libertarian mentality still does exist. Or is it sort of dying down as even the hard. core crypto people realize it's a fairy tale to exist in your own bubble and you have to learn how to play. Yeah, there are still purists out there to be sure. But to them, what I would say is, let's not forget recent history. We saw that what we saw what can happen in the absence of legislation when an administration comes into power. Lawfare. Yeah, they're going to rely upon regulation by enforcement in the future just as they have in the past because the current law doesn't provide for guardrails around that. What this market structure bill, this Clarity Act

passed in the House, would do is finally enshrine in U.S. law standards that limit the ability of a new administration or new regulators to take a very different view. And I would say even in a world where we have very positive, even visionary leadership from the regulators like we do right now, just look, for example, at the recent speech that SEC Chair Paul Atkins gave, laying out a vision for crypto that I think could not have been more expansive and welcoming. Almost as if the industry itself wrote the speech and passed the jury. I can't say any of us picked up the pen, but I certainly didn't have any, I didn't have any red lines for him, if that's for, that's your personal question.

Sure. Okay. You're a veteran of Facebook where you worked with Mark and Cheryl in the endless battles with Congress, various agencies, foreign governments, foreign regulators. You're a wartime consigliary. What do you do now? The industry is at peace. Some would say the industry is more influential over the government than any other industry in the country.

I'm not suggesting that that's a negative thing. It seems like it's constructive. I don't see who the victims are, quite frankly. The more your industry institutionalizes, the better for the retail community. So I'm actually in favor of all of it. So I don't want to sound overly cynical. What is someone like you do now that you're not at war and you're not forced to sue your own regulator and you're not necessarily battling with 50 different states individually.

What's the, what's it like now? I appreciate the reference to one of my favorite films of all time, The Godfather. Godfather. So you were definitely a wartime consecutive. I appreciate that. Facebook in 2016. I think we could all establish that. Well, look, the reality is that even though we are in a much more favorable climate at the federal level today than we were just a short time ago, there are real challenges that remain. I would start with, for example, the states. Not all of the states.

Not all of the states have fallen in line. Several have chosen to continue this senseless. Which are the most anti-crypto right now? Well, I would say that the handful of states that have chosen to pursue litigation, even after the SEC withdrew its entire campaign, would be at the top of my list. Right now, for example, Coinbase faces a completely meritless lawsuit by the state of Oregon for some reason that doesn't seem to understand that it's 2025. It's not 2023. but we'll deal with that in short order. And we also have, I think, important issues to resolve outside the United States.

We tend to focus only on Washington for obvious reasons here in the U.S., but there are other jurisdictions, I think, that are further behind where the current administration is on crypto policy. And we need to make sure that they catch up. So your work is not quite done. Not quite. Okay. And one for Alicia. Alisha, last one for you.

At least from Bay. I've listened to you over the years on the quarterly calls. how has that changed from your perspective over the years? What are investors giving you in terms of roadmap, benefit of the doubt, higher multiples, all that sort of stuff versus, say, a couple of years ago? Well, a couple of years ago, they were worried that we wouldn't exist. After FDX, it was some pretty dark days. Now people are very focused in the future.

Everyone's excited about the product roadmap. They are very excited about what we're building next and less focused on what are your expenses quarter to quarter. So I think that we now need to execute. We need to deliver on our roadmap that we have set forth a very exciting vision with everything exchange and continue to show the discipline of managing our expenses and continue to show topline growth. It's a great thing that I get fewer and fewer questions on the quarterly earnings calls I did just a short while ago. Yes. Yes. I would agree. The less you're talking, the more positive the environment. We should all look to hear much more from Alicia than me. That's for

Sure. Well, guys, I want to tell you in the relatively short time, this has been a publicly traded company. You guys have done an unbelievable job for investors. Stock has done very well. I know most people would say you've done a great job for the customers of the company as well. And we really appreciate you stopping in, talking with us and sharing your story with our listeners and viewers. Thank you so much. Thank you. Thanks for having us. All right. Guys, make sure to like and subscribe. Go ahead and where should people check out more information about the latest doings at Coinbase. What could we send them? Well, there's always Coinbase.com, but I am on X and posting frequently at I am Paul

Graywall. I'd also encourage everybody to check out our presence on Discord and Telegram and elsewhere where we have a pretty active presence as a company. I like that they're talking. Coinbase talks. A lot of financial institutions don't really talk and you guys talk. So all right, congrats on all your success. We appreciate it. and we hope to talk to you in the future. Thank you. Thank you. Oh, my God, you guys.

Look alive. I am. No, I'm furiously closing out taps. I had way too much open, which would affect my resolution and I want people to get the full effect. Hey, it's 5 o'clock on a Tuesday. We are here with an all-new edition

of what are your thoughts for those of you checking out the show for the first time. His name is Michael Batnik. My name is Josh Brown and each week we gather together here with a few thousand of our loyal live pounders

and talk about all the biggest developments in the markets and the economy and we have an absolute blast doing it. Can I say something? your his name is my name is that's a very 80s movie theme that's like weird science you know what I mean that though no I'm just no I love it it's retro I thought it came off well yeah I love it let's say hi to some of the viewers and then we'll get to our sponsor teo wa is here just Dave Ronald Aramenta Matt stevick says batnik button down that's right very rare oh

oh buttoned that I'm wearing a button down you're right you're right at bar Muhammad likes the the big, the big pony polo shirt. Thank you. Vince and Aguilar is here. Rose is here. Hello. Lawrence Raponi. Two brothers say, what's up?

What's up? All right. All the, uh, all the pounders are here tonight. And, uh, we love you guys for coming out for the live on YouTube. And, uh, as I like to say, the chat is already lit. Tonight show is brought to you by a betterment advisor services. Solutions. Betterment Advisor's Solutions.

If you happen to be thinking, there's got to be a better way to grow my RIA, you're not alone. With Betterment Advisor, solutions, we do the heavy lifting so you could focus on what matters most of your clients from improved service that makes asset transitions smoother to fast paper free onboarding that delights clients on day one. We've built a digital first platform designed to stream your operations and make life easier. Now, if you're thinking, well, they take the paper out of paperwork, then you'd be right, grow your RIA your way at Betterment, Solutions. Learn more at betterment.com slash advisors. Investing involves risk, performance, not guaranteed. Okay. We have an action-packed show. There's all kinds of, oh, who could it be? Look who's here. You guys, we are in the presence of absolute greatness. Neil Duda has run the doorbell. Yeah, literally. Hi, guys. Neil, thank you so much for stopping by. And perfect

timing because starting on Friday is another Jackson Hole August weekend. And this is the last one, we think, for Jay Powell. What do you think? I think that's about the safest bet you can make. It's going to be his last. Neal, are you a Jackson Hole truther? I don't even know what that means, but are you? Well, I think that what, what is that? So what does that mean? Does he believe that it exists? I mean, I certainly believe that it exists. I think if I had to say what it would mean, it's like that you're going to get some big signal out of it, right?

I mean, because this dates back to like the Bernanke era, right, when he basically green lit QE2, if you remember, at Jackson Hole. And really, ever since then, everyone's always kind of looked at Jackson Hole for some kind of signal. I mean, if you remember last year, you know, Powell basically green lit a September rate cut. we didn't really know whether it was going to be 25 or 50, but he green lit a cut. He said the time to adjust policy was now. So, you know, it kind of comes and it goes. I mean, there are times when there's not really much news that comes out of Jackson Hole,

and there's times when there's lots of news that comes out of Jackson Hole. So, you know, we'll see which one this will be. Last year, the speech was 15 minutes long. Barron's has a piece. He's calling, they're calling this year Powell's last stand. like this is his last chance to cement his legacy is the way that they're taking it like basically he might end up using this as as like a defense of the independence of the Fed might be like a whole thing about that who really knows but last year when when he greenlit

the rate cut I don't think people thought okay we'll do one and done but that's how it ended up being because the economic data just, I guess in his eyes, didn't justify more. So even if he does signal that they're ready to cut rates in September, nobody should take that to mean anything beyond September. Well, I mean, last year, they went, they greenlit the September cut. Then they ended up doing 100 basis points worth of cuts for the year, right? They went 50 in September and then they went 25 at each of the remaining two meetings. Yeah.

You know, it's interesting, like, listen, looking at that Barron's article and, like, what is his legacy? Because obviously, they're framing it in a way of, like, okay, he's, like, this, like, last line of defense against Trump and the Fed's independence, but, like, inflation fighting and so forth and leaning against tariffs. But let's not forget, like, before COVID, his legacy was supposed to be the guy that had this inclusive labor market. Remember that? I mean, basically bringing people. in at the margins of the workforce and sort of, you know, I guess I can say this as one, like leave no minority unemployed kind of thing, right? I mean, so that, I mean, it was basically about running the labor markets hotter and

sort of, you know, inflation expectations were anchored. And so they fed had more room to kind of let the labor markets run hot. That's what his legacy was going to be before. What do you think it is? What do you think his legacy is as the chapter is closed on, say, Josh. As the chapter closes on Jerome Powell, what do you think the legacy is going to be? I mean, I think if you give it enough time, I think his legacy will be one of, you know, I mean, the Fed basically delivered reasonably good economic outcomes in pretty trying times.

That'll be his legacy. I mean, you know, and part of this was stuff that Governor Waller talked about before, which is, you know, I mean, how do you get a soft landing? And, you know, the Fed leaned into this idea that you could essentially trim job openings without seeing much of an increase in unemployment. And, you know, by and large, that bet was a successful one. And if you look at, I mean, you have to grade on a curve, right? Like, could the Fed—

Dude, he was coaching the 2017 Warriors. You have to grade on a curve. That's kind of what I believe. And so, you know, if you grade on a curve, I think, you know, the Fed did reasonably well over this period. All right. So zooming in on where we are today, what do you think, where do you think rates should be? And what do you think he's going to tell the world in a few days? Well, I think that he's going to try to give us some meat around the bones of how they kind of think about

both sides of their mandate, right? Like they have one of employment and they have inflation. And the tension right now is that, you know, the labor markets are getting worse, but they think inflation might be getting worse too. And so how they resolve that tension is going to be very important. Now, Powell has a really tough job because this isn't like last year. Like back then, everyone was on board for rate cuts, right? It was really just around the timing of when they would do it that year.

It wasn't whether they would do it or not. That's not the case this year, right? Right now, it's like a bimodal distribution. You have a bunch of people that think they should cut twice, and you have a bunch of people that don't think they should cut at all. And so it's really his job to kind of find a middle ground. And that's why, you know, Bloomberg has this article, Wager for Half Point Rate Reduction Faces Test of Powell Remark.

I don't think he can make a strong signal like that at this, at Jackson Hall. Like, there's no way you can do that before the meeting because you have so many people that are out there telling you, and they're still out, they're swacking. I mean, you had a bunch of, you know, regional Fed presidents and so forth coming out and talking about this. There's no way to front run that meeting and kind of lay down the, you know, the pipe for a big upfront move. Tell me if this is a reasonable take.

The Fed cannot control tariffs and input prices. The Fed cannot control the labor market, particularly entry-level jobs that are getting smoked. But what they can control and what they have absolutely wrecked, a huge piece of the economy, is the housing market. The housing market is all sorts of effed up. And for that alone, rates show. be at least 50 basis points lower. Is that reasonable or is that ridiculous or somewhere between? I think, I mean, I would argue that the Fed does have a little bit more. I mean, over the long run, the Fed doesn't have control over the unemployment rate, obviously. But,

you know, I think there are times where if you provide some lift to the economy by lowering interest rates, you probably will generate some demand for labor. Do you think they will today? That environment exists today? Sure. I mean, if you, like, for example, you just mentioned housing, right? I mean, I think, I agree with you. by the way, on housing, I think housing is an absolute mess. And we saw more evidence of that today, right? I mean, you have, you know, basically the main asset that's used as collateral in the banking system deflating in price for the last five months. That was out from Zillow this morning. And then, you know, look at building permits today. Building permits hit another cycle low.

And, you know, I mean, builder sentiment was weak. So we had a raft of housing data this week that we're all sort of not great. And so I would tend to agree that if you have a housing-focused view, that it kind of makes it pretty obvious that you should be cutting. But at the same token, I mean, this is also probably one reason why builders are probably on the verge of cutting construction workers, right? I mean, they need to rationalize their building model relative to what they're selling. So that means cutting costs, which means cutting people.

Oh, who could it be? you have no idea you have no idea what just happened there there's like a power come out no there's like a Wi-Fi setup that just crashed off the wall onto the floor we're going to blame that we're going to blame hurricane Aaron feds got a cut but but but Josh Josh welcome back but Neil so for no it's all good for people that are that are looking around and saying the SEPs at an all time high Chamath is launching a spec there is speculation in the streets and in the sheets how could they cut rates? Isn't that such a red herring?

Like, does that matter at all to the conversation, the inputs that... You don't need to take my word for it. You don't need to take my word. You have a very good analyst in your own shop that made that very precise argument. Shout to Kelly. So shout out, yeah, Kelly made that argument. And I obviously, I agree with her. I mean, you know, look, I mean, at the time of the, look, at the time of the rate cuts,

the markets are not that far from their highs. That's also true, by the way, at the time, if you look historically of, like, the first negative jobs number, the stock market's not too far from its size. So I think what's important here is, like, if you're the Fed, do you care about financial market conditions or do you care about financial conditions in the real economy? Like, if financial conditions are this loose, why is it's so difficult to buy a home? Why is, I mean, you look at the Fed's own loan officer survey, lending standards for CNI loans, CRE loans, multifamily residential loans, they're all still tightening.

Different parts of the consumer credit space are also tightening. So just because financial market conditions are loose doesn't necessarily mean that financial conditions in the real economy are as well. All right. Last thing for me, as we go into the week, there is a, I think a misunderstanding or mis-expected, I don't know what I'm looking for. People tend to think that Jacksonville is a market-moving event. And unfortunately, it was in 2022 when we were at Future Proop, that was a lot of fun not.

But Bespoke has this chart showing how the market has reacted during these weeks. And it's sort of nothing with nothing. I mean, maybe a little bit elevated, a few outliers. But overall, yeah. Well, this goes back to the point that I made earlier is that there are times when it's a huge signal for what's about to happen. And there are times when it's just sort of an academic discussion among friends about, you know, things they're looking at in the future. And, you know, this time, it might be a little bit of both, right? I mean, the Fed's going to talk up their framework review, right?

I remember back a few years ago, they had this flexible average inflation targeting thing that they put in place, and that lasted all, you know, about a few weeks because of COVID. But, you know, so this is sort of, you know, you're going to have a little bit on the near term and I think a lot on, you know, how the Fed is thinking about how they're going to deal with supply shocks in the future. my my only question is why don't you get invited to jackson hole or have you been and you've opted not to go because it would be much harder for you to analyze this if you became part of the the show itself i think um i think the primary reason why i'm not invited is because i don't have three letters after my name is it is it as simple as that no i mean i don't i mean

it's not i you know look i think some of the bank economists have in the past gotten invited But really, this is, you know, it's central bankers talking amongst themselves. That's kind of what, and presenting their research. And, you know, I mean, that's largely what it's been about. I think the Chicago Fed or the Booth School at the University of Chicago does a nice monetary policy forum. I'd like to be invited to that one day. That'd be cool. But not expecting an invitation to Jackson Hole anytime soon.

Well, if you do get invited, you're, you're, will be the commentary I most look forward to coming out of that event. All right, Neil, thank you for bearing with us. I'm sorry I dipped out for most of that. I will be rewatching it later, technical difficulties. But awesome to see you and enjoy your end of summer vacation. Thanks, Josh. Thanks, Neil.

All right. All right. All right. All right. You got to take us to the next topic. I'm attempting to get my Wi-Fi back up. I got you. I got you back.

I would not believe the sound that this made. I got you when it all came crashing down. We're talking, this is a good timing because a couple of weeks ago, was it last week actually, you and I played the game, maybe two weeks ago, it was two weeks ago, which falling stock would you must want to buy? And I believe my name. The falling knife game. Yeah.

I believe we landed on United Health. Maybe my memory is faulty, but either way, either way, there was news last week because the 13 Fs came out and a lot of people bought this knife, Berkshire included. So they bought more than 5 million shares throughout the quarter. We don't have an average price. They spent one, oh no, yeah, my bad. We do have an average price. I can back into it, but I didn't do that.

So apologies. They bought 5 million shares for $1.6 billion. Chat, what did they buy it at? Help us out. It is, chart on, please. It is their 18th largest holding. So they've got a $1.6 billion position out of, call it $200 and, I don't know, the market's up since then, $280 billion portfolio.

Tiny. Yeah. Tiny. But we, all right, so I think it's important to point out that a lot of times they will start out buying something and they're nowhere near finished. They might never buy it again. They might sell the next quarter. They might spend two years adding to it every time they report.

Every time they file a 13F, they might add to it. So this is one of those things where it's like too early to really like a sign. a, like a hard and fast decision on what they're doing here. But it is classic, it is classic Buffett. I don't know if this is one of his picks or one of the lieutenants. I would imagine they're involved in the conversation of young guys because he's retired as at the end of this year. But what, $25 billion in earnings at a $250 billion market cap?

Like, this is like what they do. So I want to, I want to. I forgot to include, I didn't include this in the image because it was tough to see, but I clip that from slick charts. So shout out to them. It's a math. I used this thing. Remember this?

$320. That is the price, the average price that they were in at. United Health traded as low as $2.35. So, oh, my God. They thought they were getting a bargain. Maybe they did, but they still had to sit through a nasty drawdown. And mind you, the price today. So they popped on the news, obviously.

it wouldn't take much for this rubber band, which is stretched all the way down to pop a little bit. The stock is still at $304. So still a little bit underwater. But yeah, no, listen, United Health is not a company that Berkshire could buy. It's a gigantic company. And who knows what their attentions are.

But they're not day trading this thing. They're not looking for a quick, you know, 5, 10% pop. It's not what Berkshire goes. I agree with that take. And I would also point out it's even more notable that David Teper, Appaloosa, was also buying a. at the same time. And I'm sorry. I don't know if there are historical examples of stocks where they got Dow stock cut in half with both David Pepper and Warren Buffett buying it at the same

time. But like, I have to believe that's going to have a good outcome for the people that. Now, a lot of the people that I do TV with, they were long the stock already. And, you know, they were excited because in many cases, they owned the thing from 600. They were. rode this thing down from 600 to 270, they averaged down the whole way down, they defended it. And now like Buffett coming in in the low 300s, I feel like it's a get out of jail free card. It's validation. It's validation that like, see, there is value here. Unfortunately, if you loved it at 600, it might be a minute before your investors care, but at least you save a little bit of face on TV. Having defended the stock. Here were some other

moves. They took a small stake in steel manufacturer, New Corps, Lamar advertising, security firm, a Legion. They got back into Home Builders. I think that's notable. You and I are on that corner. They bought Lenar and D.R. Horton. And they did some trimming and Bank of American Apple. He's got a long history of being in and out of the home building and the housing-related stocks. It was really interesting that Home Depot missed on the top line and the bottom line and the stock traded higher. Yeah. That actually helped the Dow buck the bigger trend of down stocks.

Home Depot is a $400 name. And I know you don't care about dollars, but the Dow does. Yeah. And United Health last week and Home Depot this week, those are two kick save stocks with high dollar share prices that help the Dow 30. Oh, shit. Oh, shit. Was that a misprint?

my bad. I just got excited about a stock that was the fat-finger trade, I suppose. All right, anyway, Home Depot is a stock that I own, and I didn't read the report yet today, but obviously investors don't care about what happened last quarter because it's not relevant. All that they care about is what is the next Fed chairman and rates coming down, and that really is it. So, John, can we throw this chart up? I thought this is interesting. I saw, I couldn't find it. I saw Robert, I'm trying to the FT did a post on Berkshire versus property and casualty companies and I couldn't find it. So I recreated it.

Here's a chart. People have talked about prior to, I guess, the last couple of years over the last, like, remember there was a time not too long ago over the last one year, five year, 10 year, 15, 20 years, Berkshire had underperforming the market. Not anymore. Not anymore. So the purple line is Berkshire. The blue line is the S&P.

And the orange line is, I guess, what you would be. bucket them into, although I know they're not really a property and casualty company, but certainly they are a giant insurance company. And however you slice it, I mean, they've kicked ass. The stock has worked every which way. Yeah. And what's so crazy about it is that this, the outperformance is persisting through, um, this AI, uh, moment and the cloud computing era and Apple obviously helped them a lot

but then like insurance business was great last year like premiums were high not a lot of underwriters were out in the market and and there weren't any massive catastrophes there was a the wildfire episode but like that was a great year for example for all the PNC insurers and that's a huge part of Berkshire's business I know Geico is doing really well and then the railroad was doing really well. So, like, they, there's just so many different ways to make money as a Berkshire shareholder. The exposure to financials that they've largely taken off by now, but they had on. So it's like, I don't know, I hate to, I shudder to refer to any individual company stock as an all-season kind of stock. But if ever there were one, I really feel like it's Berkshire.

Even when people are disappointed with it, all that usually means is that it went up slower than some other index, you know? So it's definitely, it's definitely having another moment again this year, though. I agree. Last thing before we move on to Josh's topic, if he comes back, Josh, come back, is Michael Burry. Credit to him, this guy's a sense of humor. So his 13F came out and who knows what positions he still has on. But he famously got mocked and ridiculed on this show as well as, as well as others for just tweeting sell, which is a fairly irresponsible. thing to do, especially when it doesn't work. If it worked, yeah, hindsight of 2020, we probably would have spoken differently.

But we did flag it. He'd be on the cover of like everything. But anyway, the guy's got a sense of humor. He tweeted by exclamation point with all the activity that he did. And, you know, whatever. Credit to him, he was getting in there. And he's got some positions that he probably made a lot of money on. Although those Lulu calls, that doesn't look, that doesn't look like that aged well.

But, but whatever, he's, you know, he's laughing at himself. appreciate that all right what so i can't i can't see what i wanted to discuss next so just tell me what it is all right chart on prompt chart on so we're talking uh that there are now 30 AI ETFs our fred toddson did some work here so josh can you see what we're looking at if not i'll i'll talk through it and then you could comment yeah no no i can and i love this because it's such a reminder it's such a powerful reminder that sometimes you can have a theme that's so popular that everyone knows it's going to work. And like, the knee-jerk contrarian in people is to be like, sell it. But like, then it just keeps on working. And for me, that's the

story of 23, 24, and now the first eight months of 25. Yeah. AI has been the obvious growth theme for the entirety of the last two and a half years to the point where there are 20 different pure play ETFs. They're all raising money. They're all buying the same stocks. And then also in Todd's work, there's another 10 ETFs that are like AI infrastructure. They're buying the utilities and the natural gas transmission companies. And it's like obvious to everyone and also still a great investment. Not everything has to be mysterious, I think is my point. Not everything has to be like, oh, this is so popular, I'm going to go the other way. It's really important to fight that instinct because the herd's not always wrong. They're wrong at the end. They're wrong at the

beginning. In the middle, the herd is the herd because whatever they're doing is working. What are your thoughts? So it's funny. Ben and I spoke about that exactly today, about people wanted to make money the hard way by being contrarian. But yeah, you're right. And I would argue that the obvious trade, and again, hindsight, but even still, was the fang stocks. That acronym, I think was born in 2017. And there's been people that have been fighting this for going on eight years. By the way, I didn't even know that IFRA was a thing. John, throw that chart up, please. So IFRA is the IShares infrastructure, U.S. infrastructure ETF. And flows are coming in, not surprisingly at all.

And let me tell you, I'm looking at the top 10 holdings. And it's 1, 2, 3, 4, sorry for counting on air. There's four industrials and six utilities. The largest stocks are CSX, Norfolk Southern, huh, primoris, which is not a stock that I've known, Evergey. In fact, you know what?

I don't know any of these names. If I be a honest, Hawaiian Electric, Bowman, Consulting. so Sean and a chart offer section so Sean and I did a write-up last I think it was last week or the week before first of all our best stocks in the market list is loaded with utilities and we're trying to write about them individually because nobody knows anything about any of these companies and one of the most interesting ones we wrote about was Dominion which is in Virginia and it's like, I think we did this as make the case, maybe last week. But like, you're talking about, you're talking about a company where all the data centers are within their domain. And like,

you talk about an AI play, all the software, all the chips, all the GPUs, all the data centers are worthless if you don't have electricity course and through that. And the fact that all those data centers are located in Loudoun County, Virginia, of all places. And this just happens to be the regulated utility that's sitting there, electrifying everything. It's just, and that's obviously a utility stock, but like it looks incredible, technically. It does nothing but go up because the estimates keep going up. There are so many stories like that that we don't associate with technology. But the charts are just lower left to upper right and continue to work. So why is that happening? Well, you've got 20 different ETFs that are allocated to these stocks and people are

buying these ETFs every single day. And they won't stop until they get some sort of a signal to tell them to stop. So this I shares U.S. infrastructure ETF that I've never heard of, ticker is IFR. The thing has $3 billion in assets. And needless to say, it didn't exist. three years ago, okay? Like, it was just zero to three billion a couple of years impressive. Josh, you had Sean make a chart on VGT, which is the Vanguard Information Technology Index Fund. I'm curious, why do you care about this one? And chart on, please.

According to Todd, this is the first sector ETF ever to break $100 billion in AUM. Oh, wow, the Vanguard one, huh. huh how do you like that more than x okay no wow no um and i think it's a model portfolio story oh yeah it's got to be yeah there's no other explanation but still so this is this is what i think i think financial advisors are trying to please their clients and they're using this as an overweight mechanism to just give them more exposure to the most obvious trade on earth that's been the most obvious trade on earth for the last two years as we talked about this is such an easy way to do it it's like oh just slap in 10% VGT it's low cost it's an index it's vanguard so no one's

going to yell at you they're not going to fuck it up and you'll end up with exposure to these tech stocks that just they will not relent like they go down for two weeks and then they go up even more when they recover. Like, look at semiconductor stocks. They flush these stocks this spring. And then now they're off like 30% from where they started. So I think people are using VGT as that kind of like, let me shut my client the up overlay.

And it works. It's doing the job. Now you're an advisor. Look, I talked to Taranova about this. Joe Taranova's got a momentum and quality fund. So he's screening for quality. and he's screening for momentum, and he's got whatever it is, 40 names, 50 names. He had advisors tell him, like guys at UBS, guys at Merrill Lynch.

He knows these guys forever. He's been traveling around the country, talking to advisors. And they tell him, like, Joe, I don't know these stocks. So I use your ETF so that when my clients call up and they're like, why don't I own Palantir? Oh, you do? here you own in the joe t so it's interesting like it's this is like a thing that advisors and um portfolio managers are struggling with um and i think the vgt breaking a hundred billion tells you all you need to know that's advisors shutting their clients up here you're happy here's your here's your

tech overweight i gave it to you okay can we can we talk about uh funding your grat now or you know whatever whatever you're working on with the client. So we have more from Todd here or that's it? There was one. There was one chart that we skipped over. I mean, we discussed it. The AI focus ETF inflows going vertical.

Listen. The bottom pain is the bottom pain is the inflows. I hate to short term, who gives a shit, but it certainly feels like this might be, we might be at a pause. It just, it went,

everything went parabolic, like everything went vertical. the headlines it's stupid. It's stupid. We're in silly territory. Did you see that Palantir just erased its entire post-earnings

gain? I did see that. I did see that with us. I shared that. That's a wild chart. It's an Empire State Building chart. Yeah. And Carp and our boy, Dan, they were talking a lot of shit on the call. The stock gaped the hell up higher,

shut every bear up. went up for a few more days and then whoosh. I mean, listen, the bulls have had the last laugh or they're enjoying themselves. Who cares? It's down 60% and something, a gazillion percent. But, yeah, we'll say. All right.

16, it's down 16% from the high. Yeah, whatever. Whatever. They can announce one contract with like Russia tomorrow. Who the hell knows what they could announce and you get that all back? Before Bear start getting salty and start flexing. It was at 66 at the. April low and it went to $1.90. It's now $155. We'll say. All right. Last week and every week,

we talk about these gigantic tech stocks that are not even tech stocks. There are everything stocks. Amazon being a classic example of what even is it. How do you describe it? It does so many different things. And like a gigantic ocean liner, it's just demolishing anybody in its wake. week was Instacart. Now, the shares have since recovered a little bit. But what am I talking about? Here, here's what I'm talking about. This is from Bloomberg. Amazon.com plans to offer same-day grocery delivery in 2,300 cities by the end of the year, more than doubling the current number and making it its latest attempt to muscle into the $1 trillion grocery industry led by, of course, Walmart. This is the faceblower to me. So you as shoppers spend $1 trillion

dollars annually on groceries and yet online grocery sales represent less than 20% of that now it's still it's a gigantic number and there is a natural cap at some point like people want to go to the grocery store not everybody has prime not you etc but but still there's there's room there yeah and it's not even just that there's room there it like forces target and walmart so um to play defense because um um um You know, those stores have very, very successfully used grocery to drive foot traffic for people to buy other things while they're getting their groceries. And it's been an amazing strategy.

But if Amazon starts picking off grocery customers, well, those are less trips to the store, to the physical store. I don't know that Amazon's e-commerce lead is terribly powerful versus Walmart anymore. I think a lot of people just interchangeably will order things from Walmart's e-commerce operation at this point. But Amazon going same day with things like produce and meat and eggs and the kinds of things people don't want to order and wait a day for, the kinds of things like people are like, no, I want to make this for dinner tonight. Or no, either I get the eggs now or I have to go to the 7-Eleven. I have to go to like a convenience store or a supermarket. oh don't worry about it at amazon we'll have them here by five o'clock to me that's behavior

changing and it's a really big deal and um you know the maple bear thing with instacart at first of it's the worst service ever have you ever used it no you used instacart so i had to on a couple of occasions i had to like uh order some stuff because i was coming back from florida and we just had nothing in our fridge and we were going to land and it was going to be all the stores would be closed or would be too tired. So order groceries so that I get off the plane, I get home, and there are plastic bags sitting in front of my door waiting for me. I do like that.

But like, half the items that are listed in the app that they say the store has, they don't have it, or they have a different flavor or the wrong size. So then you have to have this back and forth with the driver. Either you have a setting where you say to the driver, pick the closest thing available, or the driver has to notify you. So, like, oh, you wanted a lemon Italian ice is. They only have chocolate. So now you're having like this back and forth on the app, which sucks.

And then they screw it up anyway. And then by the time the fees are taken out and you're adding a reasonable tip because like you almost feel guilty not tipping someone who just walk through a store for you. It's just so egregiously expensive. Half the items are wrong. The website had it wrong. And it's just, it's a horrendous experience. So I'm not surprised to see an over-the-top reaction, negative reaction for Instacart,

if Amazon's going to come into this business. Not that they'll do it perfectly, but they definitely can't do it worse. Here's another area that Amazon disrupted. I mean, not Amazon per se, but just everyone. Is there a worse, is there a larger melting ice cube than the linear cable services? So, for example, we got news this week that YouTube is now throwing their hat of the ring to get the rights to show the Academy Awards. Last night, or two nights ago, I rented, it's not Blockbuster or Netflix. I rented Jurassic World Rebirth.

The new one? Yeah, so anyway, I got that on Prime. Now I'm like, we're buying stuff on Prime. I mean, it's everything. It is everything. I'm sure you could think things that they don't do, but it does everything. Well, just look at how the cable companies and the media conglomerates are treating their linear TV assets. They can't shed them fast enough.

So NBC, Comcast, which is NBC, is getting rid of all the news channels. They're going to bundle it into Versant, which will include CNBC. MSNBC just announced a name change. Yeah, what's the name? That's beyond bizarre, but no comment from me. MS now, but then the NLW stands for News Opinion World, which I, I bet you $1,000, that'll change between now and the end of the year. Okay, I will not take that. I will not think about it.

All right, speaking of sign of the times and the feelings of or the not feelings to risk, who cares about risk? The bullish IPL, let's talk about that. Well, my take was this is, I don't have all the data in front of me, but I would just say it's billions of dollars in market cap for a company that is based in the Cayman Islands, which already, it's three red flags, not a fan. They filed an F1, not an S1, in order to go public. So an F1 is what you file when you intend to be a foreign domiciled company, but you want a listing on a U.S. exchange. So in this case, it's the New York Stock Exchange. Do I'm going to read some of these things that you put in here? Yeah, give us some of the numbers.

All right. So according to the F1, for the period ending in March 31st, 2025, it generated 46.8 million in total revenue, a 22% increase over the prior year. However, it incurred a pre-tax loss of $348 million. Earlier in March 22, they reported annualized monthly revenue of $97 million. dollars. Analysts have noted that bullish business relies heavily on trading fees.

Okay, obviously, all right, whatever. Here are the details on the IPO. They raised $1.1 billion via the sale of 30 million shares at an IPO price of $37 per share. Initial valuation, $5.4 billion. Wow. Shares open trading around 90 peaked near 118

before closing around 68. Where to close today? What's the ticker? What's the ticker? It's BLSH, okay. DLSH. Yeah, that's not good. That's not good.

It closed at $58 or $59. Yeah. So this is not, this game is not for me. I think they're losing like $40 million a quarter or something. Like basically one of the problems here is that the value of their crypto assets rises and falls. And there's like an accounting treatment of that that can make it seem like it's got like this erratic business, which I don't really think is the case. but it's kind of like a mediocre brokwage. They're pitching this story where they're better for institutional clients than Gemini or Coinbase are.

I haven't doubt it. I don't believe it. The one thing that I think generated that $100 open, though, is Peter Thiel's involvement. So I don't think he's like got a day-to-day here. He's an investor. He's an investor in a lot of things. but there's a Peter Thiel connection, and, you know, there was with Allentier and people just like, they name associate.

And so it's like, oh, this is Peter Thiel's brokerage. Yeah. Let me give you an alley of, Josh. All right. Today, quote, this is a quote from somebody. And you know who it is, Josh. Today, a company called Bullish came public. The deal was more than 20 times oversubscribed and the stock opened up for trading 143% from its offering price.

Wow. The underwriters actually did their best to tamp enthusiasm. The deal was supposed to be 20.3 million shares, priced between 20 to 31, but it was indeed upsized to 30 million, then priced 32, 33. I would have taken that a little bit higher, but you know what I mean? Arguably, they could have upsized it much more and made the price much higher. Josh, who was that quote from? So that's Jim Kramer.

And the irony is the stock that bullish reminds me most of it. All right, so I want to say this, bullish owns CoinDesk. So CoinDesk is one of the biggest media publishers in the crypto space, and Bullish owns it. I guess they bought it during the tumult of 2022. Okay, CoinDesk is great. They do a great job. I like those guys. But it's basically, it's a media company attached to a brokerage service.

So the irony of Kramer commenting on it, this reminds me a lot of the street.com. And I was there for the street.com IPO. I was in the business, and it came public in May of 1999, not right at the top, but like eight months before the top. And this is no fault of Kramer's or anyone else's. This was just the level of enthusiasm for anything related to trading. The street.com, along with Marketwatch, were like the two first websites that were dedicated to covering the dot-com boom in the stock market.

And the street.com was great. I was a subscriber. I almost bought the IPO. I'm glad I did it. That, they upsized that deal several times due to demand. I think it opened that like, it ended up at 73 on the first day and then spent the next 25 years going to zero. Like literally, never had another bull market in that stock ever again. It was just this 25 year odyssey falling from $73 a share where it never belonged in the first place.

to effectively zero and then I think the assets ended up just getting handed to somebody else. But that's what this reminds me of and I'm not saying the businesses are identical. I'm just saying thematically. We're now bringing a coin desk public effectively

and we're saying it's a better brokerage than I don't know. Bracken, Binance, Coinbase, Gemini, how many other Robin Hood? Like, come on, what is this? Like the 10th, the 10th largest brokerage firm in crypto attached to the street.com of the crypto era, and this thing is worth billions of dollars.

Yeah. Is that what we're doing here? Is that what we're going with this? So that was my impression. I'm not surprised that it was a big IPO day. I'm also not surprised that the stock is getting crowbarred. Okay. Here's what else is happening in the market in case you needed, lest you, lest you forget,

where we are in the temperature check. Social Capitals, Chamath Polyhapitia, is launching a new SPAC, raising $250 million for the American Exceptionalism Acquisition Corp. And Q Capital 2020 shared the filing and highlighted this part for us to take a look at. Here's a quote, we believe that retail investors should only participate if, A, this investment as a small part of an otherwise diversified portfolio. B, this investment is a quantum of capital. Who says quantum?

They can afford to completely lose and see if they do lose their entire capital, they will embody the adage from President Trump that there can be, quote, no crying in the casino, end quote. And you know what? Okay, fine. I like this disclosure. I like it a lot. Yeah.

I think the filing should have a fucking spelling for us phones right on the cover. And you know what? Swim at your own risk. I really made a 180. First of all, I'm in the minority of people on Wall Street. I like Chimov. I don't care. I'm not embarrassed.

The guy snake charmed me the first time I met him, and I'm still hitting the ties by him. Look, I don't invest with him. I'm not putting my money into his deals. His deals were mostly shit in the, what is it, Hadassafilia or something? He was in the arena. Don't be a baby. Right. No, I don't give a shit.

Like, he tried it. It didn't work. Now, there are people that think he's, like, deliberately scamming people. Give me a break, dude. Don't you think he would have loved it more than anything if those stocks worked out? And if those companies turned into great companies, he's just not that good at it, it turns out. That's okay. Most people aren't.

So I'm not one of these, like, people that, like, knee-jerk, everything Shemath does. I have to talk shit about him. I like the guy. I think he's interesting. I don't want to invest with them. I don't want Spacks. I wrote a book where I did a whole chapter that Spacks are poison. I explained all the reasons why all the fuck-up incentives and the carry and all the reasons why it's like the deck is stacked against you.

I went on everyone's clubhouse and I ranted and raved and nobody listened and everyone lost all their money. I did the best I could, but I don't I don't hate the player. In that case, I hated the game. Anyway, I'm not buying Chimov's new spec either. I do think that this is a sign that we're getting closer to the end of something than the beginning. I do agree with that. And he probably would agree too, which is why you better sell this thing as fast as you can. So, all right.

You might not have another chance to launch this in six months. Another Canadian. Eric Jackson, is he going to do this? Is this going to work? It's just like such a great heel turn. Tweet on. Tweet on. Is it, but is it, all right, so, uh, what did he, what did he tweet?

I can't see it. It says when the pirates take over the ship and suddenly it starts sailing faster. So for those of you who don't know, and if you're watching the show, you do know, but Eric Jackson took Carvana, not, Eric Jackson was very early on Carvana and he, fucking thousand extant. I assume that he held for the majority of the time, maybe the whole time, good for him. And so when he spoke. Great Paul.

And when he spoke about the next 1000X, people listened. And I listened. I almost bought it. I didn't. And I regret not buying it, but whatever. So now they got the CEO out of her seat at Open Door. By all accounts, she was doing a terrible job. And Eric thinks this is the next hundred beggar.

And he thinks it's going to $82 a share. And the question is, can Eric and the army of retail investors get this thing remotely close? It's at three dollar where, I don't know, it's three, four bucks, whatever it is. Can they do it? The thing is that he started this at like 50 cents. So if you listen to him, you're already up a lot. And he's talking about this thing being worth thousands of percentage points more. He's from 82.

But then he's like pulling a lot of the tricks out of like the classic playbook for this meme stock shit. where he's like picking fights for people who disagreed with him and he's doing like the memes. He's all in on this. He's all in on this. And then he's also doing this thing where it's like this is like what's good for society.

Like thanks to open door, we're going to solve the housing crisis. Like I'm mad. So people accused him of manipulating. We didn't accuse him. We asked the question, is this manipulation? And I think if you play back what we said, And we said, no, it's not.

This is no different than anyone else saying they like a stock. The difference is it was a 50 cent stock. And he's not talking about it going from 50 cents to $5. He's talking to like going to almost 100. So it just like it gets under people's skin when you do that. But he's unapologetically doing it. And he doesn't believe that I don't believe that the stock needs to go to 82 for him to be that. to be right. If this goes to 10, this is one of the biggest winners anyone will have in their

portfolio. And it definitely could go. There's a universe where this goes to 10. Show the charge. Show the Eric Jackson effect. John, please. So this is the stock just getting destroyed. It's still down 90%. But show the next one. Well, let's tell people what this. Wait, like, go back to the other one real quick. So actually, this is a Chamath stock. Isn't this? It's a Chamath. It's a Chamat's back. So Open Door had this idea that they were going to digitally buy houses, like just on the internet, just bid for houses and then resell them. By the way, by the way, there's an alternate universe, chart off. There's an alternate universe where maybe it could have worked.

I don't know. But they launched at the absolute worst time possible. 21. Yeah. Well, it went public at the worst time. They launched to a housing mania. Yeah. But I would also point out

Zillow tried the same thing and it failed miserably also. It's not an easy thing to do. It was the worst timing ever. Yes. Now, the difference is Zillow got out of that business and Open Door is still at it. And now they have a partnership, I think.

But anyway. Okay, but yes, this was one of the Chimot Spacks and it fell 99% Like, it's one of the, it is one of the most horrific pieces of paper to have occurred in that 21 to 25 period. And there were a lot of them. But this one was really bad. It's amazing it didn't go to zero, but it didn't. And now they seem to have gotten a handle on the losses at the company.

Chamatha's gone. And they fired the CEO, which of course you have to fire the CEO. The stock is 50 cents. But the average loss over the last four quarters is like $40 million. And they actually have been surprising to the upside, meaning the losses are smaller than expected. The company is claiming on an operating basis, they're actually earning money. The problem is if $2.2 billion in debt, so they're making a lot of interest payments on that debt, and they're barely profitable. But they needed to get the CEO out.

Hello. wake up doing equity offering raise some money pay down the debt well so so that's what i think is is going to happen and it should happen and if you're along the stock and you truly are an investor and you're not just trading it because it's a meme stock you should want them to raise money they should raise equity capital and they should probably be talking about a reverse split there is no institution that will own this stock at three dollars a share it should be 30 a share no they don't want the institutional investors three dollars is the point you know that You want the retail now, but you probably, as the story matures and the retail loses

interest, then you're going to want institutions. So start thinking that way today. Yeah. Retail was so excited about GameStop when it went to 40. They didn't stop buying it. Yeah, yeah. Show the chart about the year or the day chart that we have. I mean, look what this guy did.

Eric did this, and he deserves credit because he probably brought this thing back. from the dead. I don't know what would have happened absent him saying, hey, guys, there's actually a valuable business here. So he did that. Well, absent that, they would have ran out, they would have ran out of money. They would have ran out of money. If you short the stock, you hate him. If you long stock, you love him. Yeah. Okay. Last topic. Kathy Wood. She's back? I think she's back. What do you think? I want to hear what you think. I don't think so. what do you mean

her ETFs are doing well they are like not just okay they're doing really well yeah and her stops are working we have a we have a table of what she's buying or what her biggest positions are uh so it's it's tesler roku coinbase tempus ai is that a private stock i don't know that one

roblok shopify bonteer crisper robin and amd listen she's definitely back in the sense that uh the performance has turned around for sure or Balchunas tweeted, holy Noah, get it. Arc is at the top of the one week flow leaderboard with $5.5 billion. It's a lot of money. It's more than VLO and the Q's. So she's not not back.

She's back. This is her environment. This is her market. When the $3 stocks are going to $6 and when the money losing companies are up 40, 50, 60% off the April lows. And when everyone's talking about robots and AI and flying. cars and gene editing and all that shit. This is her market. Okay.

And that's what's going on. And that's saved less forever. No, I know. Listen, okay, fine. Looking backwards, absolutely she was back. Let's throw this, uh, this chart of arc versus S&P versus the cues. So I'm guessing. So this is the last three years.

And yeah, listen, I love that she made a comeback. I love it. I love, I love more importantly, forget about her. The investors that stuck with her, I don't like to see people losing money ever. So I very much. I very much am in favor, and I hope this continues, and I hope that investors get whole because it was a really, really difficult couple of years for them. So I'm rooting for them. How about this? Here's another person. I don't invest with her, but I root for her and I like

her personally. And it's another, like, there are a lot of people like that where it's like, I don't really agree with the way you view markets, but like I like you, and I root for you. I don't understand all the hatred. I guess like people were short stocks that she was long. I understand some of it. More so for Chmoth than for her, because Chimoth was kind of a dick when people were chirping at him. Like, he was not, he was not very nice to the people that, that lost a lot of money with him. Be a little, I have a little bit of self-interest. You know what, so I'm not on, I don't see it.

I'm not, I don't have the Twitter thing in front of me, but from what I, from what I hear, that that's what he did. He, like, kicked the Hornets Nest after these stocks blew up. And that never goes well. Remember all that stuff I was saying about how people use Joe Taranova's active ETF to, like, hit that segment of the market, the momentum trades. Like, why not use, why not use ARC that way? Say to a client, like, look, I don't buy shit like this. I'm never, I'm never going to buy, like, gene editing stocks for you.

And I'm, like, I'm not going to be buying you Flutter and Draft Kings and all that stuff. It's not what I do. But I recognize that in certain market environments, those stocks are going to outperform. So rather than me trying to do a Kathy Wood impression, I'm going to give you 3% Arc. I'm going to give you 5% ARC. There's not like, what's wrong with that? I don't think anything. People are definitely doing that.

Okay, so to their credit, ARC is outperforming the DJ Endow year-to-date chart on, please. So ARC is up 83% from the liberation lows. And this is a year-to-date chart. And yeah, it's just so credit to her. We tried to come up with our own index of Kathy Wood-esque stocks. and she's beating them. Okay. All right.

We need to do an active rebounds. Josh, I'm going to do a mystery chart real quick. I don't know if you could see it, but it's instructive just for the purposes of today's show. And then you'll make the case for a rocket. John, mystery chart on, please. Josh, can you see this chart? Yes.

Okay. So this is... Showing me the volume on the bottom page. Yeah, yeah. So I'm going to give it away because I don't know how else to give you a clue without giving it away. But I just think this is the sort of thing. chart off for a second. This is the sort of thing where you talk a lot of shit. The internet

gets up in arms. And then like it goes the other way and never gets brought up again. So chart back on. What we're looking at here is a conversation that we had on the show, I guess two weeks ago, three weeks ago, where I was defending the bankers. This is a new issue. Nobody is trying to misprice the shares. Okay. They want to get it right for their clients. Their clients are the people that are paying them. And anyway, the stock popped and now it's just got nowhere but down ever since that first day. What is it? Sigma?

Yes. Yeah. You gave it away because I remember us talking about it. I don't think people are saying that the bankers deliberately screwed over the company in favor of the shareholders. Yes, they did. No, that is what people were saying. That is what I don't say that.

Makes no sense. My comment, well, no, it definitely makes no sense because I guarantee you the corporate issuer of securities who's going to sell stocks and bonds through you for the next 10 years is a way more profitable client than the schmucks that are allocating 100 that are asking for 100 shares of an IPO 100% I agree what my comment is how is it possible we're doing this we're doing this shit since Amsterdam in the 1600s how can we be so bad at gauging the demand for a stock after 525 years of initial public offerings on exchanges around the world from Europe to New York, to San Francisco to Asia.

I'll tell you why. I'll tell you why is this like, I'll tell you, Mike, they're getting enrolled by a by a factor of 100%. What the kind of business is this? Let me quote our friends, then we quote our friend Phil Perlman. I believe this is the tweet. here's the thing about behavioral finance people are crazy was that the tweet you remember that tweet you can't you can't price you can't price mob behavior i would jeff i would jeff that

dude it can't they can't do it you've got to be a better it's got to be a better way i think oh yeah genius who from the way it is i don't know but there's got to be a better way questions there has to i'm not suggesting that i'll come up with it you're telling me yes somebody is not benefiting from this circus. It's just this random thing that we can't get better at. Sometimes they price at high or sometimes they price at low. The average IPO should not open up 100% higher than the pricing. It doesn't.

The average does not. The average does not. It's literally what's going on all summer. We just talked about bullish. We did circle. He did Figma. Okay. Figma went to 150 and now it's 60.

By the way, it's 69, 69 in the after hours. Very, very nice. It's not the banker's fault that people go nuts when these shares start trading and then they lose interest. How is that a banker problem? People get excited and then they get bored. There's the way the auctioning is working. If they really wanted to get it closer to reality. Make the case for a rocket.

Not really making the case because we've already done that on this show. We are giving people an update because today there was a very big initiation of coverage on Rocket. and we have people, you know, that have listened to us, make the case on the stock before. Double disclosure here. Not only do we own the stock personally, but Rocket as a subsidiary called Rocket Money, which is a frequent advertiser on the compound. Classic double disclosure. Double disclosure, but we're very transparent here.

Anyway, the stock is working. The stock is up huge from its lows on the year. It is, I think, up in anticipation of rate cuts. When they closed this acquisition of Mr. Cooper, according to the analyst at BTIG, who initiated coverage with a $25 price target today, Rocket will become the largest originator and servicer of mortgages in the United States. Most of the shares outstanding are not in the float, meaning like there's a lot of shares that are non-traded. And so it looks like it's got a tiny market cap, but like the reality, the real value of this company is like in the 30-ish

billions range. But if rates come down over the next year or two years, and we have another cycle in housing, and we see a lot of transactions in an existing market, and we see refi activity, and we see the young millennials and our older Gen Zs start to really participate in the housing market, these guys will have the best math. trap technologically to grab all that business. Not only did they make this Mr. Cooper acquisition, which is the largest independent portfolio of mortgage servicing, they also bought Redfin, which is a leading lead gen app for realtors and mortgage brokers. So they have built this, like during this time of depressed activity in housing, they have built this vertical empire.

And that's what the analyst wrote about today. You heard it here first from us. I said 11, 12 bucks a share. Now it's 18. The analyst says in the bowl case with both rate cuts and $500 million worth merger synergy, this could really be a $30 stock. So reason to hang on. And if you can get yourself a copy of that BTIG note and your longest stock, I highly recommend reading it.

It was really well done. All right. That's it for me. Michael, you did an amazing job. I apologize for my technological issues. We didn't miss a beat. And you were there to save us. Guys, thank you so much for listening.

Thanks for watching. Special thanks to our friend Neil Dutta for stopping by and filling us in on the Jackson Hole Outlook. Tomorrow is an all-new edition of Animal Spirits. First thing in the morning, we'll do another Ask the Compound this week. And then at the end of the week, it's a very special compound and friends

with a returning champion, and someone whom I know you're all dying to hear from and see. So you're not going to want to miss that either. Thanks again. Have a great night. We'll fall to you soon.