The Pomp Podcast - Bitcoin Is Becoming a Strategic Weapon | Jeff Park

Episode Date: January 7, 2026

Jeff Park is a Partner & Chief Investment Officer at ProCap Financial. In this conversation, we break down the outlook for 2026, how bitcoin is positioned within global markets, and what shifting capital flows mean as major institutions like Morgan Stanley enter the space. Jeff also shares insights on geopolitics, artificial intelligence, and why these forces are increasingly shaping bitcoin and broader financial markets.=======================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/=======================Uphold is the easiest way to buy and sell crypto unlike any other platform allowing you to trade in just one step between any supported asset. Check them out at ⁠https://uphold.sjv.io/K0RXra.⁠ This video includes a paid sponsorship with Uphold. I’m compensated by Uphold for promoting its products and services and may receive commissions from referrals. Terms apply. Not available in all jurisdictions. Digital assets are risky and may result in the total loss of your capital.=======================Bitwise is one of the largest and fastest-growing crypto asset managers, with more than $15 billion in client assets across an expanding suite of investment solutions—including the world’s largest crypto index fund—plus products spanning Bitcoin, Ethereum, DeFi, and crypto equities. In addition to managing assets, Bitwise helps investors stay informed about the fast-moving crypto market. Every week, CIO Matt Hougan breaks down what’s happening in crypto in five minutes or less. Read the latest at https://experts.bitwiseinvestments.com/cio-memos. Certain Bitwise investment products may be subject to the extreme risks associated with investing in crypto assets. Visit https://bitwiseinvestments.com/disclosures to learn more.=======================Timestamps:0:00 – Intro1:59 – Bitcoin setup for 2026: positioning, flows, leverage4:35 – Volatility + drawdowns: are bear markets changing?7:49 – The “ideological investor” & 3 forces shaping 202613:48 – Venezuela bitcoin rumors & geopolitics driving markets20:15 – Gold/jewelry drama & verifying what’s real23:06 – AI content & implications for the next generation34:05 – Morgan Stanley launching Bitcoin ETF & Solana ETF

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What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a

specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. The drawdowns in Bitcoin are no longer that violent in the way that it doesn't stay there for very long. How people want to position across three different categories of meta is going to mean whether they make it or they don't make it. And the three metas that I chose were one, geopolitics, two, AI, and three, culture. And all of those three in the first week of January have hit. Geopolitics, man, what a thing to wake up to one day and realize that Maduro has been captured and brought to New York overnight. There are rumors that Venezuela may actually have as much as $60 billion in Bitcoin.

It's very likely there is Bitcoin within Venezuela. The open question is... What's going on, guys? Today, we've got a great conversation with Jeff Park. Jeff is the Chief Investment Officer and Partner at ProCap Financial. And in this conversation, we talk about 2026, what's in store for Bitcoin, how is the asset positioned, what's going on with capital flows. Morgan Stanley, the big dogs, they're now in the game.

What does that mean? And then we also talk about geopolitics and artificial intelligence and the impact it's going to have on Bitcoin and financial markets. Jeff is full of insights that you're not going to hear anywhere else. I enjoy this conversation. So will you. Here's my conversation with Jeff Park. All right, Jeff, to start the year, Bitcoin, there's a lot of enthusiasm.

It started to kind of tick up here over the last couple of days. How are you thinking about Bitcoin's positioning, the flow of capital? There's some tax loss selling, I think, at the end of the year. It seems to be gone now. Just talk about Bitcoin and how you're thinking about the start to hopefully a great prosperous 2026. Indeed, indeed. And happy new year, Pomp. It's great to be back here and love to get after it. 2026, I think, will be a really fun year. I think it'll be great for Bitcoin. And right now, what's happened is we have a clean slate. So after December,

large option expiries rolled off, a lot of futures rolled off. And so we basically have little leverage in the system. And it's a clean board for everyone to start building new positions to anticipate three months, six months, one year from now. So that's great because there's no inertia and gravity that is counteracting pre-existing positions that people might have had that season throughout 2025. And what I've been sharing with investors is that 2025 was really marked by a bunch of covered call selling activities. So if you were coming in 2025 in January and February, and you were selling calls expiring in June, September, December, because you were really excited about Bitcoin momentum post-Trump, all of those calls you had

sold were in existence for the year and they were creating different kinds of liquidity black holes, if you would. Those are all gone. So it's a clean year, which I love. And you can actually kind of see that already in the options market. You can see it because right after December 31st, you saw the call skew finally steepen after basically three months of having shown no activity. When call skew steepens, what that means is that investors are either buying upside calls freshly to bring vol bid back up. Or on the other side, investors are not selling calls to suppress volatility on the upside. And so one of the big thesis I had was 3Q, 3, 4, 4Q was really dominated by a lot of cover call selling activities, which is why Bitcoin never got the

chance to really squeeze to the upside. And for now, six days into the new year, we are seeing renewed activity to the upside. We saw lots of call buying yesterday, which is really exciting. Love seeing the green blocks come through for upside. And then we also saw people just buying very outsized, far out of the money strangles. Strangles are when you buy calls and puts that are both out of the money. So it's not making a directional bet. It's making a bet on volatility itself. And this investor is basically saying whether it goes up or down, volatility is going to be higher for 2026. And I think that is the key message for not just Bitcoin, but for generally risk assets globally heading into a really exciting year. So the four-year cycle, I think

that, you know, I tweeted and I said, the first two weeks of January are going to tell us whether that four-year cycle still exists or not. And part of it was kind of ingest and fun for the internet. But I also do believe that kind of this fresh 2026 kind of people have, they've reloaded, right? You know, let's go into risk-taking mode. Now, increased volatility does not mean increased volatility to the upside exclusively it could also be down so how are you thinking about we went from 126 uh high at bitcoin's price to 80 000 it's you know almost 40 drawdown could we still have these prolonged deep 80 drops in bitcoin's price or is there kind of now more muted volatility in general and so we should expect you know maybe 40 is the new 80 you know

kind of drawdown and we shouldn't expect a 18 month two-year bear market maybe we got a couple of months. And it looks more like maybe an equity market would in these resets. I think volatility in general for upside and downside is healthy for Bitcoin. And I know people don't like it when Bitcoin goes down and vol goes up because they think that is net value destructive for your bags. But the reality is, anytime there's volatility, even to the downside means there's uncertainty. And the flip side of uncertainty is always opportunity. So it allows new investors to consider Bitcoin that may have been waiting on the sideline or they're looking to buy it at a deep discount value.

And those types of kind of trading behaviors and new investor capital formation that can only happen when there's a lot more volatility. So I think we need these kind of drawdowns because it allows like new capital to also step in that resets their holding period. That's the other thing. When you buy Bitcoin, I know there are those that are out there that permanently plan to own it forever. But the ETF channel investors are a little bit different. I think these are more your professional investors that are in the business of portfolio construction and portfolio

optimization. So they are looking for Bitcoin to play a certain role. And if it doesn't play the role, they're going to get out of it. But that also means there's new investors coming in and it resets their IRR. It resets to day zero. So now they can underwrite it for two more years. And you need to kind of always rotate and cycle amongst existing investors to new investors, because that's ultimately how capital graduates. So I think volatility is really healthy, and we should demand it on both sides. And what you've seen is, though, to your point, the drawdowns in Bitcoin are no longer that violent in the way that it doesn't stay there for very long.

So this is the key. When you have big liquidation events or macro resets like FTX, for example, there's some structural oversupply that comes to market where there's no bid, and it remains suppressed for a long period of time. And what you've seen with almost most of the drawdowns we've experienced is there's often a pretty quick bid. And that, I think, is really good because, to your point, it limits the drawdown to, I think, lower ranges.

and that is a healthy sign that there's like renewed appetite and risk appetite coming for Bitcoin too. Now, another theme for 2026 is this idea of like an ideological investor. And I think that Bitcoin maybe is at the intersection of the ideological investor versus like the institutional investor. How are you thinking about the ideological investor and maybe what they're going to be doing in 2026? Yeah, 2026 is the year of the ideological investor in my mind. And for those who have read my sub stack that I posted last year, I wrote about the rise of the ideological investor pitted against the death of the intelligent investor, meaning Benjamin Graham's version of investing is long dead.

We are moving to a world where ideology is everything. Attention is everything. How people want to position across three different categories of meta is going to mean whether they make it or they don't make it. And the three metas that I chose were one, geopolitics, two, AI, and three, culture. And all of those three in the first week of January have hit. geopolitics, man, what a thing to wake up to one day and realize that Maduro has been captured and brought to New York overnight. That is geopolitics right there. And that theme is going to stick with

us for a long time because we are re-underwriting the death of the Washington Consensus. And so already people are thinking about what does this mean? If Venezuela is potentially a protectorate of the US, it may or may not be there in the long run, but energy companies are finding renewed interest. I think there's several companies that had operated in Venezuela, American owned, that are still demanding reparations for how they were treated. There's billions of dollars on the sideline. I believe ConocoPhillips is actually one of them who are intended to kind of capture a big chunk of that litigation claim. So these are the things that are now catalysts in driving valuation models. It's really not DCFs. It's what's in the news.

What is happening with strategic interests? Where are the flows going? So that's the first meta. And the second meta is AI. And you saw this very clearly. Everyone over at Christmas, all they could talk about was AI and the launch of Cloud Code and Opus and how amazing it was that it reinvented their entire workflow. And this has huge implications for flows too, because I think it means that there's going to be more investors who are waking up to the idea that you have a companion who's basically your robo-financial advisor, and they're giving you the principal ability to actually

invest the way you want, and at the same time, giving you the rules around it to which you have historically outsourced that to a paid financial advisor. So that's world-changing. And we're going to see really interesting flows that come from that agentic model. And the third is culture. You saw the biggest news was, in my opinion, in the culture category, seeing Nick Shirley basically take down Minnesota. And that is a huge cultural awakening at this country. I think that shows you one, independent journalism still matters. And independent journalism really matters only when it looks as authentically as Nick did it. Because the other side with these AI and like hyperfakes and all these videos is like, people don't know what content they can

trust. But the reason I think, you know, Nick's at the center of this cultural moment is because when you watch those videos, you can just tell it is a hundred percent authentically his creation done by somebody who cares about a certain issue, has beliefs around it. And it is independent journalism in a way that culturally America has lost. And so these things are all going to point to you in directions of where's the money going, where's the attention going, and how are you going to position yourself to outperform? And that's why I think 2026, Bitcoin is going to be really interesting. AI is going to be really interesting. I think midterms will be really interesting. And there's a lot of around this forces coming together to create a pretty dynamic year for investing.

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I actually think it's going to be a theme across the board, right? There's a number of products that are coming out that are kind of, you know, there's one for legal, there's one for finance, there's going to be kind of every single sector. And my new talking point is that there's a bunch of nerds sitting in labs building super athletes to compete for every single job in the world that a human does. Some are writing software and doing these AI applications to go and compete with knowledge workers. But I don't know, man, I've seen the humanoid robots and those super athletes look like

they're going to outperform the Amazon worker right in the warehouse. And so we're just getting in a very weird world where like AI machines, all this technology is kind of coming to market. So we'll see that. But I want to spend some time on the geopolitics one. You know, obviously the Maduro thing, that was like the Super Bowl of the internet. You know, the team at X or Twitter is now reporting the greatest day for activity or most popular day for activity on a Friday was last Friday. The greatest Saturday was last Saturday, right? Basically, they hit all-time high metrics for four straight days. I saw something that said, if you're a guy who monitors the situation, it's a great weekend.

And some of us were joking. There was even somebody who said, you know what they should build? Trillion-dollar free idea. Somebody should build a sports bar, but built for guys who monitor the situation. Just have a Bloomberg terminal, have an X feed, have all the news up and running. Kind of just give people what they want. Let them drink and monitor the situation. It's so funny. Almost like a Barstool Sports kind of vibe where you see Twitter feeds just scrolling through the screen.

Just monitor the situation, right? You know, like, come on, boys, like the Delta Force is going to Venezuela. But one of the things that has come up, and I read this whole article, which I had never heard of some of these people, etc., is there are rumors that Venezuela may actually have as much as $60 billion in Bitcoin. And my understanding of how we kind of got here is they were selling gold or selling oil. they were then trying to figure out what do i do with this because i'm worried someone's going to take it from me maybe i should put it in bitcoin and they were likely or potentially doing that somewhere in the like five to ten thousand dollar range well bitcoin's trading at ninety plus

thousand dollars today and so you kind of look at the numbers you look at the appreciation they could have you know tens of billions of dollars of bitcoin um how likely do you think that is and then also you know i think that i've seen some people talking about like well maybe that's the U.S.'s Bitcoin strategic reserve. If we confiscate Bitcoin, they say they're not going to sell it. So how are you thinking about that? Indeed, indeed. Well, if I had to put on a little bit of my tinfoil hat, I do think it's quite probable that Venezuela has Bitcoin. I don't know what, of course, the magnitude of that amount is, but for all the reasons that Bitcoin represented freedom money in the ways that Venezuela has long been sanctioned outside

the correspondent banking system, it's very likely there is Bitcoin within Venezuela. The open question is, in the way that Stash exists, how much of it comes from drug trafficking and how much of it comes from asset seizure of its own citizens? Because I think the narrative changes a little bit if you were to create a strategic reserve based on that forfeiture of of assets where it was basically ill-gotten because then people would be more willing to say like, okay, yeah, the drug traffickers shouldn't get those things. So we're just going to seize it. And people will feel relatively, I think, more morally open about that. It's a little bit different when it's like the sovereign's capital for the people and then the US takes it. Then

that's a little bit bad, right? So I think that there are devils in the details to this. And of course, like- Now, I will say though, Russia, they had assets and there was some seizing and we're going to give it to the ukrainian like like there's now this weird geopolitical kind of precedent that's being set which in a weird way is driving people to gold and bitcoin at the nation-state level but how do you navigate it yeah no it's tricky i think though what's really fascinating is um venezuela is not new to crypto from a technological perspective either you may remember back in like 2017 2018 they experimented with the petrodollar uh and the ways to imagine it through crypto rails so this is why i think there's another data point to say

Venezuela probably has some Bitcoin and crypto risks because they're very familiar with the technology. And you're right that they've been selling gold since about seven years ago. And why would they be selling gold if not to reinvest that somewhere else, right? As kind of being orphaned from the rest of the global financial system. It's not to buy treasury bonds, right? So what are they going to buy? They're probably buying Bitcoin, I think. So I think it's- I think they had Tether as well. And Tether froze a bunch of their assets. So like the whole like, you know, bad people use this technology, like, yes, but also there's, you know, in a weird way, Tether, which people claim is unregulated, helped law enforcement seize some of those or freeze

those assets, whereas the Bitcoin thing can't be frozen. You know, it kind of shows the technology differences of these tools. Yeah, indeed. And this goes back to the trade-offs between gold and Bitcoin, in my opinion. The other, because, you know, the other thing people talk about with Maduro's capture in particular is how they rope in like the international law regime to whether say this is good or bad. And you hear conversations about like violations of sovereignty and you see it like, especially on some of the left side, even within this country arguing about his release because it was unfair and violation of international laws. But what I think people don't realize is like international law as a category is pretty nebulous. And why is it

nebulous because it's it's actually like a code of conduct in which the only thing that really in my opinion determines whether something is law is enforcement capabilities so like take for example like you do something bad at your home and you get punished for it by your parents and you know why is that like a law well it's a law because like you got punished for it so if you can't follow through with enforcement at some level the argument is more about whether it's illegal or immoral but it's not about the law itself. Law always has to have enforcement capabilities behind it. And that's why international law is so nebulous because who's going to enforce it? The US, right? And so-

You saw the meme. Go ahead. You saw the meme. Oh, boy, did I see the memes. The fighter jet. That's the international law, baby. But that's the thing with Bitcoin. In some ways, it's a little bit scary because you think it's unenforceable because it's code. And yet there are rails in which you We have on-ramp and off-ramp, and those things can be enforced. And so that's where sometimes Bitcoin, even though it touts it as its main strength, could also be its downfall.

Whereas gold, you can literally just put that in a stash and it cannot be seized. And you don't really need on-ramp or off-ramp to transact in gold in some ways because there's a decentralized marketplace for that wherever you go. You can really bring a gold bar anywhere and someone will bid you for it. You might not get the best price, but there's a bid. And it's a decentralized bid. Whereas Bitcoin, it's very hard to transact unless you're on ramp to some kind of centralized infrastructure.

And so this is that kind of fine-tuned trade-off of enforcement where sometimes Bitcoin is not, in fact, the preferred choice of collateral for criminals. Have you been paying attention at all to the Trax NYC jeweler drama in Midtown Manhattan? No, I haven't. Tell me more. There's a guy known as Trax NYC, famous jeweler, got millions of followers on Instagram. etc um he is uh aggressive maybe it's the way i would describe him how old is this guy he how old he's probably older than 35 40 okay younger than 60 like you know maybe like mid 40s if i had to

guess um you know strong good looking amazing you know gentleman and um he's very famous uh jeweler and there was a video that went viral recently where he is sitting with uh what is perceived as a customer and he has a receipt and he's holding a uh like it looks like a um a watch or a bracelet or something and the customer is saying they told me it was 14 carats and he takes out his machine and he measures it and it's like 10 and he is pissed off because another uh jeweler i think it's uh okay or something like that uh diamonds is using the tracks nyc name in some form or fashion okay but selling jewelry at less than what you know kind of from a substance standpoint so the video goes viral because tracks nyc walks into the jeweler and is screaming and

yelling and pointing i mean like if you thought making a scene think 10 times worse takes it slams it on the tables like give him his money back and whatever and a fight breaks out and when the fight breaks out, basically there is security camera footage. They try to choke him with his chain around his neck. And so eventually the diamond folks get arrested, not for selling jewelry that wasn't at the substance, but for fighting and physical assault, you know, all that kind of stuff. So you back up for a second, you say, wait a second, that's one incident. I haven't thought about gold jewelry, diamonds, any of that stuff in a long time, but I saw that video and the two things immediately came to mind. Have you seen a video of the diamond prices or a, sorry,

an image of the diamond prices yeah yeah since the rise of decline yeah lab grown diamonds have exploded in popularity and real diamond values have completely fallen off a cliff and so okay so fake diamonds are replacing real diamonds they're fake diamonds but maybe not authentic diamonds perhaps okay that's a nice which is different than fake all right that's a that's an eloquent way of saying it um not real diamonds they're real they're just not authentic and uh but with gold what you see is you see this you know kind of you can sell 14 carats it's really 10 whatever that's all jewelry stuff but it does beg the question how do you know you own what you think you own and it feels like that plays into the whole ai content like how do you know what

you see is real yeah like that feels like a 2026 story is just like what's real and what's not that's a great way to put it i think 2026 is the year where um people are going to really understand that authenticity matters so much but the way that they're going to judge this is their own criteria for measurement is going to be more fine-tuned you've seen people now pick up what is now called like AI slop in the social universe where you can kind of have telltale signs of things that are like, you know, maybe AI generated and people are quick to equate that to mean that those are therefore not of high quality. And it's interesting because, um,

it is a definition of quality comes to play, right? Cause like when you have made in China, like sneakers, right. Uh, by child labor, you know, which was not great in the nineties, it's hard to know if those are like actually badly made or just cheaply made and what people felt about that to be like an authentic experience of a good that represents their values right i would almost argue that those sneakers are probably better than my current like on sneakers which every day seems to get a hole like every every month and so they're not well made anymore so i think the the bar is going higher and in that sense like everyone is going to start um craving

for more realness and that realness then translates into like really idiosyncratic behavior right because think about it again like llms they learn by regurgitating past behavior at scale so the only way to differentiate yourself from past behaviors at scale is to do new behaviors that are so idiosyncratic or your own that it cannot possibly be confused with ai so i think 2026 is going to be a year of like total wild wildness in terms of people acting out almost not just for the sake of like uh wanting to um get their message through but over exaggerating the call for authenticity in a way that they can stand by and say this is authentically me because it couldn't be other way around you also saw vivek ramaswamy recently um gave up twitter i don't know

So if Instagram too, I think Instagram as well, I see. So, you know, and his whole view was that Twitter is net negative. If the feedback loop is ever so constant where it's starting to affect his political message and not the other way around. So instead of being the outlet for information, it's becoming the thing that shapes the information that he wants. So the programming. Yeah.

And if this is the direction in which like AI content goes, we're all probably going of feel a little bit of wanting to like resist that as much as possible to get a sense of independence of your own thoughts. Today's episode is brought to you by Uphold. Are you someone who's tired of juggling multiple apps just to trade, earn, stake, or spend your crypto? Then listen up because Uphold does all of that in one single unified platform. You can access 300 plus crypto and fiat currencies with an interface that works for you, whether you're a beginner or an expert. Uphold also features any-to-any swaps, where you can swap crypto to fiat, fiat to metals, and tokens to tokens directly in the app. If you prefer self-custody, Uphold's vault gives you multi-sync security, key recovery, direct trading access, and peace of mind without giving up convenience.

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Go to bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO Memo. Carefully consider the extreme risks associated with crypto before investing. Have you ever thought about like entertainment? So, you know, this whole idea of like AI slop, right? It's basically the insinuation is it's fake and it's not entertaining. But the counterpoint to that is, have you seen the Grok bikini thing, right? Where like there's some photo that goes like Maduro, right?

They had a picture of him. Within seconds of the picture being posted, immediately people are like, Grock, put a bikini on him, right? When I see that interaction, it becomes cultural. Yes. And it actually becomes entertainment. Yeah.

And so the movie is not real, right? It's acting. I got to be careful saying this in this room because Matt's a huge WWE fan, but wrestling is not real. Right. But it's highly entertaining. so there is this like precedent for people to consume things that they even though they know

it is not real how many parents are still you know playing the santa game hopefully no kids are listening right but like you go down the scene you're like no actually a huge portion of our society is built on being entertained by things that we already can confirm and know are not, you know, what they are claiming to be. But we're okay with that because it provides us value. Indeed, indeed. Yeah. Funny story that you mentioned with Santa. This year, my son is turning six. And so he's really into Christmas. And I wanted to potentially kind of light a fire to that imagination as long as possible, right? Because it's all magical to believe in these things. So this year, for the first time, I actually created an AI video of Santa Claus

visiting our home and dropping off the presents underneath the Christmas tree at night. And it was so realistic that for a split second, I was like thinking to myself, I can't show this to him anymore. Because there's a line that crosses between like a white lie and something that is totally fake, but also so real looking that you're actually tricking somebody. And it's like almost like a moral code that just like goes off in you. And I asked my wife, like, should I show this video to my son? And she was like, I don't know. It's like, Oh, you guys are way better parents. I was tricking the hell out of my kids. But it's funny. Cause I actually did end up showing it to him. And he asked me like lots

of questions after it was like, where did you stand for that exact video? I want to know exactly the angle. Well, that's a really astute question. Well, you know, what's funny is, um, so I, uh, I saw something on the internet, put Santa in a photo in their home, whatever. So, uh, I took a picture and then i put santa and i put myself holding the president's together presence like putting it yeah and uh i showed it to uh my kids uh the next morning i hope we did a great job right got them all the gifts they want all the stuff whatever i got more questions there was more attention played you met santa you know him right it's just like like especially my daughter like she could not get over the fact that i met santa and helped him put the presence right and i

And I was just, that's how my wife, I'm like, I can't do it. Not because I have some moral code of, I don't want to trick my kids. I can't deal with all the questions. Right. So then I was like, I was like, should I like do one with me and Bluey? And I was like, no, that'd be like, that'd be like three weeks long of, you know, so where was Bluey? Like, what is it?

You know, that's so funny because context matters so much here, right? How people perceive this information. The reason your kids asked was because you're next to Santa. So he thinks you guys are buddies. Yes. So when I showed my video, I'm not in that video, right? the thing that my son latched onto was where were you where were you and then at the end i kid you not he told me daddy i'm glad you showed me a video because i am like glad he came but also

never do that again because you violated santa's privacy by filming him out of the core of a room without him knowing and that blew my mind so i was like wow like how like just raised the next Edward Snowden over here. That's incredible though. It's really something. I feel like kids pick up so fast on the context of how they're fed information. This context setting is so important. So what I learned from that experience was every time you show them something of this world, because they're going to grow up where this is so prevalent. There's a part of me that wants to protect him from this as long as possible. Because once you cross the Rubicon into knowing what's real and what's not real, your world's going to just change totally. Right now, he

believes anything he sees is real and that's a beautiful thing too have you taken a photo yet put into ai and asked if it's real i have not done that no oh i i do it probably like three or four times your own photo no no no like i see a photo online oh and i take it and i put it into one of the models i say is this ai or real got it yeah and uh there was one is it accurate for the so well so here's the thing is uh it will tell you why it thinks it's real or ai and usually i'm doing it because i actually don't know but the things that it tells you when it says it's real like i i did a photo recently it was maduro standing in his orange jumpsuit in a jail cell and it looked really real and it was shared from an account that was really sophisticated and

doesn't you know post nonsense whatever did it and it was like oh there's like uh uh reflections on the light and like, yeah, uh, definitely real. So I took all those things. And then I told AI to make another photo and include reflections on the light, blah, blah, whatever. I don't know, man, it was kind of like reverse engineering, you know? And so, uh, what I didn't do, but now I'm thinking I should have taken that new photo and then put it in a different AI and be like, Hey, is this real or not? And you just start realizing like you and I, uh, hopefully we're, you know, we're grown adults who have like real things to do there are young people with a lot of time like imagine if we were in high school and had these tools yeah oh my god yeah to get out of doing homework type

stuff right like you know kind of the normal kid stuff but also just like you would become so good at you know uh using these tools that frankly like that's where the future is gonna go you're gonna be competing with a kid who knows how to you know essentially trick the ai into thinking the photo is real and like what are the ramifications of that i don't know yeah we're gonna find out together this box is open and it's coming for us faster than we think all right last thing i want to talk about morgan stanley uh announced this week that they are going to launch bitcoin etf and a solana etf uh what are your big takeaways from this uh three big takeaways the first big takeaway is i thought it was funny they didn't choose ethereum as one of the three

Why do you think they didn't do that? Oh, man, it's a loaded question. I've held a view for product market fit in general, especially towards Wall Street. The barbell theory of investing in crypto was always Bitcoin and Solana. The reason is because it's very easy to bet on vices and things that are basically what I call short humanity. And I don't mean like Bitcoin is genuinely a short humanity. But what I mean is Bitcoin is like a world ending hedge, right? So it's a little bit of like a hedge against that as a vice. And Solana for a long time, I think, was the kind of meme coin proxy, right?

So it was like a gambling proxy for crypto to bet on that humans love to gamble. Humans love to predict. Humans love to kind of do these things that Solana has captured the mindshare for because it's built literally to optimize for that with as low latency as possible. So it found product market fit. And so from that barbell approach, Bitcoin is, you know, never going to change because it's Bitcoin. Great. Solana, very quick to change, very fast accelerating, like tons of technologists and futurists working on new paradigms of tokenization and all the ways like crypto rails are going to start affecting our infrastructure. And so it's really like a sandbox for like pure max tech. Ethereum is like literally neither here nor there, right? It's kind of not Bitcoin and it's not that fast.

And the one virtue it seems to consistently signal, sometimes to my annoyance, is this concept of like decentralization. When in reality, we all know, we just talked about kids using AI to do whatever they want in the future. They don't care about decentralization at the core if you're going to sacrifice productivity gains from it. So I think Solana, in some ways, represents that Wall Street ethos because it's about tech maximization. And the rails Solana's built has been kind of done with the DNA of a high-frequency trader.

If you look at a lot of the projects that came out of Solana originally, they're kind of like the things that the Jumps and the Jane Street types would have backed because you're trying to create a better trading infrastructure. I mean, that's a Wall Street game. So I think Solana has product market fit. Bitcoin does too. I think Morgan Stanley, in a slightly soft way, is almost making that claim as well, because it should have been obvious Ethereum should have been on that list if they felt any differently about it. So that was the first thing that caught my eye. The second thing is, man, I think Morgan Stanley is like a sleeping giant for crypto. And I've said this for a while now, but they have all the vertical rails to make crypto as integrated as possible for the consumer experience, right?

First of all, they have wealth management that is now, I think, close to like 15,000, 20,000 advisors on their platform. A giant beast post-2008 when James Gorman came in and reshaped Morgan Stanley away from the Goldman model. And that is now almost 20 years ago. So we're reaping the dividends of that. Two, it has E-Trade, which sometimes people forget. E-Trade is now part of Morgan Stanley's direct retail reach. And then you have E-Trade offering crypto trading via partnership with ZeroHash. So they've done things towards a lens towards tokenization and tokenized equities.

And now they're bringing basically the ETF game into the system. I was told that it's very rare for Morgan Stanley to launch its own branded ETFs because they've acquired others in the past like in advance is a good example like but they don't label it as morgan stanley products but this uh will be which is kind of in a way a historic thing to just show their might of distribution um so i think that's that's really interesting you used to work in morgan stanley that's right you i think last year called this pretty much and said morgan stanley is the sleeping giant um what does it look like if they're successful could they be bigger than black rock like

is it like a hey they go win and they're number one or is it they're like in the game and they find new differentiated products to go and you know maybe pioneer um and you got to have an etf if you're in the game and you're a big financial institution but like that's not the that's not the game to try to go unseen blackrock it's more of get in the game and then you know expand from there well one of the first acquisitions that um the new ceo ted pick made at morgan stanley was Secondary's trading company for private stocks, which I thought was really quite interesting. Equity Zen, I think it was.

And it almost sits at the center of the story of what's going on with the SEC in terms of the regulatory environment they're trying to create for different kinds of capital formation strategies. And I think Reg CF, Reg D, they'll all come back in play to allow either private companies to go public much faster

or create different kinds of caps and weightings to allow capital to flow more seamlessly between public and private capital markets. And at the center of that is like, you know, wealth managers. And so in my opinion, what Morgan Stanley has done kind of better than almost anybody else is they have built the channels to reach the end consumers as directly as possible and giving them a wide range of like investment choices that allow you to play like on the public side and the private side. And I think that's kind of where everyone's trying to go. Like, you know, Robinhood is starting on the public side and they're trying to give you crossover pre-IPO names and early vetting as one of the ways, but like you can't trade like SpaceX yet on, on,

on Robinhood, but you know, they're coming, they want that. And Morgan Stanley has a platform they're bringing that back onto. So in a way it's like fundamentally like what crypto represents, right? Crypto is all about decentralized kind of ways for people to access things at the retail level. And then two, it's like giving liquidity, right? Let's just give more liquidity to the system where there's no like weird barriers to um price discovery that is a large kind of cancer of i think the way the current like monetary systems operate and so that's why i think um like morgan stanley's pretty unique in the way they've built their wealth platform it's almost it's different than um definitely all the investment banks but it's even a little bit different i would say from

like how black rocks approached it the last thing i'll leave you with is um when people used to ask me is uh bitcoin aol i used to always say ethereum is aol and i would always leave them very befuddled right they were like wait but it's the second one like i don't understand whatever and my point was very similar to what you're saying which is like a monetary asset actually first mover advantage is incredibly important um adoption is very hard to unseat and the uh rigidness of the monetary policy like all the things that make bitcoin bitcoin you end up in a world of maximalism like a dollar maximalist just somebody lives in america right right i don't have pesos i don't have you know uh euros yen and like i have dollars and it's actually really hard for me to get any of those

other things unless i'm in the crypto world yeah technology is not that way i mean look at the ai models i don't know i use like five models a day depending on what task i'm doing right and so technology is all about competition. It's not about maximalism. And I've always just thought that the cheapest and the fastest will win. You know, it's a good way to put it. I think it's competition maximization, but I also think it's productivity maximization. That's the output. It's like wherever you can be most productive is where you will flow. And the input is the cheapest and fastest. Yes. Yes. And if you think about productivity, it's like a kinetic energy right it's kind of this idea of translating your battery into growth and

so it's like kinetic energy maximization is tech and you got bitcoin which is kind of like the opposite i'd say it's like potential energy maximization right it's like a store of wealth and so bitcoin has no interest in having any kinetic power it just wants to store really well and so what you see is the barbell the approach of maximization is a great word it's a max it's pick a lane and maximize your factor and bitcoin is potential energy and tech is kinetic energy and i think the great myth is that you can occupy the space in the middle where you can make these trade-offs for kind of half of each and i think that's just not really humanly like plausible right because the the the dream of ethereum which i think there's rooms to believe in is it requires

like so many things to work towards against the interest of their own and humans are not really good at doing things against their own interest and so even when you talk about building like a global settlement layer the idea of like decentralizing away your authority especially if you think you have a little bit of a dominant edge versus others is a very like irrational ask The U.S. hegemony is a U.S. hegemony because it's self-interested. It's not willingly going to cede away things for the sake of decentralization if they thought their counterparty might actually not be a good actor. So at some level, if you believe humans are self-interested and that's their primary driver

of rational behavior, it's just not enough to virtue signal decentralization to supersede self-interest to drive adoption. And that's, I think, my biggest qualm sometimes, when people talk about the moral calling of something that is antithetical to your own self-interest, and they're calling that to be the thing that is required of adoption for a greater good of a community, when in fact, you as the independent thinker, you as the independent actor, you as the primary agent of your own life should make decisions that are based on your own needs at some level, in conjunction, of course, with the context of the community. There's a reason why one of my favorite sayings is God, family, country. Just start with self, go to your family, go to the quote-unquote greater good. I like that. It is a very concentric circle kind of hierarchy, whether the people recognize it or not. Awesome.

We're curious to be able to follow you online or read on Substack. Jeff's been in his bag. He's writing. So we're curious to be able to- Yeah, it's a new year, 26th resolution to write more. So please keep up with it and reach out as you can. I'm on xdgt10011 is my handle. And there's a link to my sub stack there as well.

Amazing. All right, guys, we'll see you guys next time.