The Wolf Of All Streets - Altcoins Dead? | SEC bombshell docs | Macro Week | CryptoTownHall

Episode Date: June 12, 2023

Join James Butrerfill (Coinshares), Michael Terpin, David Silver, Dave Weisberger, Bruce Fenton, and Mark Yusko in the most popular Crypto Twitter Spaces on the planet! Crypto Town Hall is a new daily Twitter Spaces hosted Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in crypto and bring the biggest names in the crypto space to share their opinions. ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉 https://www.okx.com/join/SCOTTMELKER ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►BITGET GET UP TO A $8,000 BONUS IN USDT AND GET MASSIVE DISCOUNTS ON TRADING FEES! 👉 https://thewolfofallstreets.info/bitget    ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

I did a space yesterday. Did you listen to yesterday's space? I caught a bit of it. I was in and out, obviously. Sunday nights are tough, but pretty intense. Huge audience. Yeah, man. And I'm listening also, Brian Armstrong did an interview yesterday. I was listening to it, or I think it was yesterday on the Wall Street Journal, talking about his efforts to... He couldn't even get a meeting with Gensler, despite many attempts. Instead of flying out to try to meet him, never got a face-to-face meeting, which is pretty unusual. Yeah, we've said

this quite a few times. SBF had no problem getting meetings, by the way. He had face-to-face meetings with Gensler? Yeah, a number of them. Face-to-face, not over Zoom, yeah? I can't confirm whether they were face-to-face or over Zoom, but Brian Armstrong's not getting a Zoom meeting either. No, he got a Zoom meeting. He did get a Zoom meeting directly with Gensler. Only one, though, so obviously incomparable to FTX. But he did get a Zoom meeting,

according to the Wall Street Journal interview, but didn't get any others. You know, same as in person in 2023. No, bro, you got to shake that. You got to hug. You got to build that relationship. Zoom meetings are easy to just end. Face-to-face, you got to get a coffee.

They tend to take longer. It's just more personal. And Gensler not taking that meeting face-to-face. I'm not a conspiracy theorist, Scott. You're the king of conspiracy. I'm joking. But I'm more balanced when it comes to everything, from Gensler to Sam to Coinbase, Binance, etc. But yeah to me sounds like exactly a BSE lawyer answer that you meet. They say that more than twice. And you want to, he says, my public calendar says twice. So we know he met at least twice. And we have public information on some of that meeting, we know that Gensler's former employee and former counsel to the office of the

chair when he was at CFTC became Sam's general counsel. And then his old buddy Sam is there. And then his old buddy Sam's girlfriend, who was Gary's student, was there. So it was like a big old family reunion with the guy who was the second largest donor to the politician who appointed Gary and then his pals there. So that's how you get access apparently in DC. I think that our anger towards Gary may be a little bit misguided. I'll tell you why I think that. I covered it today on the show, but I'll walk you through it.

So on the show, I said, you know, like Gary in this case is like, you know, like every company has one of those like health and safety guys, you know, like, and their job is to make sure all they do is they look around and they say, you know, can people get hurt? Can people get burnt? And then they put up those irritating rules that say, you know, you've got to do this and you've got to do that. And as people that work in the company, you all think like,

like what an idiot, you know think like, what an idiot. You know, like, who is this guy? What does he do? But his mandate is just to make sure that people don't get hurt and people don't get burned. Right? That's his whole mandate. Now, I think that that's Gary. And if you compare that to like a company, you say, look, if the fire hydrant guy, the guy, the risky fire guy,

he's not thinking about whether the company remains competitive in the global landscape. He's just thinking, can people get hurt if there's a fire? And that's Gary Gensler in this case. And I think if you want to see change, I think if you want to see change, hold on a second, hold on a second. I think if you want to see change, the CEO has to drive a mandate to say, this is a priority for us. And until the- Gary Gensler is sending people, Gary Gensler is the health and safety guy who's telling you, who's putting up fire hydrants at the office and telling you to light yourself on fire at home so you don't get hurt at work. Yeah, he's walling off the building so that he's turning the building into concrete with no exit and entrances so that it can't catch on fire.

Now, listen, I'll give you the pro-Gary argument is that there's no legislation. This is devil's advocate. There's no legislation in place. So when your only tool is a hammer, everything looks like a nail. But I can get that. And I can see that even in his warp-twisted,

Mr. Burns-looking mind, that perhaps he believes that he's doing good. But objectively, nobody has been protected. And the people who are, who have, who have, uh, access to this asset class right now are getting absolutely destroyed by what's happening. Nobody's being protected. People are only being hurt. So even if that is the nature of his job, he's doing it poorly. I don't know. I mean, I, I don't know if I, I don't know if I agree with you. I know it's an easy...

I think Gensler is an easy punching bag. And I think... Look, I was less skeptical of Gensler. I was less critical of Gensler a few months ago. But I think, you know, Ryan, just the fact that you didn't meet brian face you know

brian's been trying to do the right thing we all agree on that so like just a basic question why didn't you meet the guy face to face why didn't you offer some clarity early on because his job is to make sure that that crypto stops hurting people he only has one tool he doesn't have a set of rules the only rule rule he has is the, what's the name? The howitzer. That's all he has. That's the only thing he has. He only has one hammer.

That's it. And so he has to now use this hammer. That's not true. That is not true. There has been, it's been for five years, Commissioner Peirce, and frankly, I'm on public record of doing the same thing in February of 18. For five years, it was pointed out that the information that token project investors should need is available for them to put onto an SEC website if they register, and they're not allowed to register because their corporate structures and type of investment are do not fit within the sec

guidelines so the reality is if he actually had a concern of helping investors he would solicit or could have at any point in five years solicit feedback of how to amend his own rules if he believes their securities for how to put tokenomics for how to put scarcity schedules into yeah sorry dev i think you dropped out sorry interrupted you by accident but i'll continue for how to put tokenomics, for how to put scarcity supply schedules into. Yeah, sorry, Dave. I think you dropped out, so I interrupted you by accident. But I'll continue with the interruption, Dave, since you've been here for a while and you know that I interrupt a lot.

Dave, I wanted to kind of pivot the conversation to, before going to today's news, what I wanted to do is pivot the conversation from Gensler and whether he's in the right or the wrong, to the market's response to what we've seen over the last few days. Now, we've covered this at length, but I just want Vinny to touch on it because Vinny, you used to be a regular on our shows back in the FTX days, and I know you're a regular on Ran and Scott's shows. But I haven't asked you that question.

We haven't spoken since the SEC lawsuits and the DOJ leaks and then the crash in the altcoins a couple of days ago. What's your stance today? How bullish, bearish are you? Do you think the market is reacting the right way? Do you think without speculating, can you speculate whether we're at the bottom? Just give us a brief overview of where you're at mentally.

Yeah, so I think this is all a bunch of probabilistic outcomes that no one actually knows where we're going to go. So let's just be frank. You can be bullish or bearish at this point, but it's not certain that the end result is going to be one way or another. And one thing is clear, and I think there's definitely a divide between East and West right now. And so there's a question I have around

does wealth transfer over the long term to the East? Hong Kong just made crypto trading legal for a large number of cryptos. It seems like the East is gearing up to get more behind crypto. And obviously we have an East and West sort of political drama playing out on top of all this as well so that's that's the first thing i think um the second issue we've got is that there is no real legal precedent in the u.s for what's happening in crypto i mean you had the scc go to court a couple of times win a couple of cases lose a couple of cases but the the battle

between the scc and coinbase will probably be the most definitive battle we're going to see in our industry. And the outcome of that will determine which way we go with this. And I think that Coinbase versus SEC is the only legal battle that we should care about and we need to focus on. And, you know, when I say legal precedent, like I want a judge to actually say, here's my ruling based upon these facts. And after that, then the law has to either change or, you know, or whatever, or a new agency created or whatever the case is.

But this is the battle of the titans, really. But what do you think? So the more direct question on... Go ahead, Ryan. Let me ask my question quickly, Ryan. I'll give you the mic. I'll shut up for a while. but this is the battle of the titans really but what do you think so Vinny the more direct question go ahead Ryan let me ask my question quickly Ryan I'll give you the mic

I'll shut up for a while just one question Vinny the ambiguity on whether all these talks will be considered securities and I know this will be a prolonged legal battle what do you think

that uncertainty will do will startups as Bruce said will they just move outside the US the world doesn't revolve around the US.S.? Or could that really take a hit on a few of these protocols and startups and further hit on VC funding in the ecosystem?

I mean, that's already happening. A lot of founders are moving out of the U.S. or starting companies outside the U.S., so that's really happening. I think people need to appreciate that a lot of the crypto comes from the U.S. It's the world's largest economy and if you know we we as sort of crypto investors can't you can't don't want to buy uh you know it's going to impact the valuations and the prices so crypto prices and valuations will probably come down if the i mean look if the htc wins their battle against coinbase the market's gonna shit the bed it's as simple their battle against coinbase the mark is gonna shit the bed I mean it's simple as that if coinbase wins is gonna pump

That's basically the That's in that's in years. What's in five six years? No, I know I know so this is like this is a we were kind of in Purgatory right now. It's gonna to take a long time. So what happens in purgatory? Well, actually, so the real question, this is like what happens with the next administration, who is in the next administration, because it's very clear that the current administration

is anti-crypto after FTX collapse, right? So for a lot of reasons, but I think we all know some of the speculation out there, they're very anti-crypto. And if it stays the same administration for the next four years, yeah, we're going to be in for a tough ride for a couple of years. The counterbalancing point is that the East could just say, we don't care. And, you know, Bitcoin goes for the habit next year and crypto is legalized more and more in maybe China or wherever else, Russia. But it's not only the East, Vinny. It's not only the East.

If you saw Andreessen, I spoke about it today on my show, and I said, look, if you look at a US election, and there's an election coming out next year, I think the last election was won 51-49 by the Dems, right? And if you look at some of the seats won by the Dems, for example, or the Republicans, some of the differences in votes were like 8,000 votes. Like the one party was ahead of the other party by 8,000 votes or 10,000 votes. I think there's a point that Bruce made last week where he says, you know, you don't need a lot of votes. You need a small amount of votes to actually change an election now what does it do to the u.s when they read articles like andreessen andreessen which is i would say the bedrock of of vcs in the bedrock of of cities or silicon valley

which has effectively created the the the economy of the united states for the last 20 years in terms of technology and these guys are now saying, look, we're actually opening our first office outside the United States. And it's not only them. Sequoia is doing pretty much the same thing. Going into an election year, do you not think that the Democrats have to tone this down?

No, I don't think they have to tone it down at all. I think they think they have the popular pitch. Go ahead, Vinny. No, I actually think Ron has a point here. I think that if if um guys it all depends who the candidates are in november right so and what platform they're running on and what their sense is towards crypto so the like i don't think we underestimate the the impact of political pressure on this process and what the sec does and who's running the sec and whatever else.

So let's see how it plays out. I think it's a factor, but I don't think we can bank on it. I mean, I think in crypto we should hunker down and basically hold, maybe accumulate, maybe take some chips off the table if you need to. This is not the time to sell your house and buy

anything. We're not in that season right now. Vinny, you sound scared. Much more scared and much less optimistic than I've heard you. I'm very concerned. There's a spectrum of outcomes here which are unpredictable, like we don't know. So I think it's just being prudent right now in this particular... Is this the most scared that you've been in your crypto life?

Be honest. No. Name one time for me. 2009. 2019 was worse. Okay, Bruce Fenton, I know you're a speaker here as well. Is this the most scared that you've been in your, is this the biggest battle that crypto has ever had to fight? Is this the most terrified that you've been? strength i'm less worried about bitcoin being uh destroyed i think looking at the environment of and what's happened over the last you know recent history with the u.s i think it's clear to me that the u.s just can't stop bitcoin i mean they they i think uh that they are trying to stop bitcoin i

think it's naive to think that they're just that these people who hate bitcoin gansler warren these kind of people who are pulling the strings, they hate Bitcoin. They've never owned Bitcoin. They don't believe in Bitcoin. They don't see the value. When they say crypto, they're not talking about altcoins. They're talking about everything, including Bitcoin. And they hate Bitcoin. And if you had a mandate a year or two ago, if you're Gensler or Warren or whatever, and you create a mandate that says we want to get rid of Bitcoin, you'd look at it and you'd talk to your lawyers and you realize that that's very difficult because Bitcoin is ultimately speech. It's code given away for free and published and that's protected under our First Amendment, which is one of the hardest

things to fight in the US. So if you wanted to attack it, you'd attack everything around it. You'd attack the on-ramps, you'd attack the off-ramps, you'd start doing money transmission things. You'd do exactly what they're doing now. And what you do is you would try and boil the frog in the water with increasing legal maneuvers. I'll predict one thing now. If I was trying to attack Bitcoin in the United States government, the next thing I would do is I would attack one of the forks like Bitcoin Cash or especially BSV, because nobody is going to defend BSV. They could write up anything they want, and every clown in this space would go, government!

They could write up a thing that says, you know, we are suing BSV and Craig Wright and Calvin Ayer because proof of work coins are a security, and coin is a security and everything else. And every idiot in this space would be cheering for it because it's extremely unpopular. That's how you attack speech. You attack like you want to attack free speech. You attack like, you know, somebody who's saying something horribly offensive because nobody wants to defend that person. But if I was trying to attack Bitcoin, that's what I would do. I would attack a very unpopular chain like that and then use that precedent, win the case. And then you go later and you attack something like money transmission or something like that, you know, adjacent to Bitcoin. You go into a judge and say, look, your honor, in this federal court, we won this judgment that acknowledged that proof of work coins such as bsb and therefore bitcoin are problematic for this this this that's how they do it that's exactly what they're doing they're trying to get more and more um you know legal ammo that they can use in other cases because bitcoin is very hard to stop but make no mistake they are trying to stop them stop it for sure

but having said that i'm not that worried globally about it yeah but bruce for a very long time xrp had that same sort of polarization and i think uh sort of a negative connotation for anyone in the market who wasn't a huge supporter and it's interesting to see most people galvanizing behind ripple now because they just want to see any win against the regulator and against the sec so i wouldn't even put it past the community to get behind PSB to some degree to see a win. I used to hate Ripple, and it was interesting. I think it might have been, honestly, I think it might have been somebody clever

who was trying to turn the XRP people against me because three days after I announced I was running for office last year, I said something critical. I said something. No, I know what the tweet was. I tweeted a tweet and I said SEC ought to be shut down. The entire building should be shut down, auctioned off to the money given to the public. And Gary Gensler sent home. So you would think that would be a positive XRP thing, right? Rob, somebody somebody put out the word that I was anti-Ripple. They found out

a four and a half year old tweet that I had made criticizing them for appointing Ben Lasky, and I had the entire XRP Ripple army on me. I mean, people have spoken about this before. It's crazy when you have the whole, when you have thousands and thousands of posts hating you.

I mean, it was nuts. But it was crazy because I'm like, we should all be allies. Me saying I want to get rid of Gensler should be something that everybody should be, you know, the XRP people should be in favor of. I mean... Can everybody hear?

I lost sound. I don't know if it's just me or everybody. I hear you. I didn't know if it's just me or everybody. I hear you. Okay. I didn't hear anything there for about 15, 20 seconds. Yeah, I didn't hear anything either. I think you broke the internet, Scott. Yeah. It wasn't me. It was you, Yusko. You're the internet hacker. that we had an interesting discussion, Pomp, Jason, and I. We do our Monday ICs,

and I have to give credit to Jason on this one. It's a very nuanced view that I kind of think is right in that he said, look, this is actually not a big giant attack on Bitcoin that we all kind of think it is it's it may may or may not but his point was that this is really an attack on crypto broadly and the rails that fed now and ultimately CBDC want to maintain.

So they're basically like, okay, all of you competitors for our primary rails, we're going to shut down and we're going to use all the ways we can, you know, enforcement through or, you know, regulation through enforcement. And you think about BTC and ETH have really been kind of cordoned off and not really specifically addressed. I just think that's a very nuanced and probably correct view that this is really more about preserving the integrity of the Fed control of the primary money rails. I thought that was interesting. Go ahead, Bill.

Yeah, I was just going to follow up on what Vinny was saying in terms of the game theory. Maybe a more nuanced view of where we are and how this is likely to play out over the next two years. I think the biggest challenge right now is everybody's so emotional because, you know, honestly, fear of price, right? I mean, obviously, narrative follows price. A lot of people think it's the other way around. But the reality is, is the SEC has been on their soapbox for over a year, right? A lot of the actions just started now, maybe enabled by FTX. But the reality is, is that this narrative that everybody's espousing, which is fear-driven, is a function of price mostly and fear that it could go lower. I actually think that the economy itself is falling off a cliff right now. Oil is plummeting. I think you're going to see a big drop in employment numbers. I think the CPI numbers are going to plummet further. I think a lot of that has been priced into the stock market over the last year. And I think the lows are long in for stocks. And the perception is it's going to be that

the Fed is going to lower rates sooner than everybody thinks because they always get it wrong 100% of the time. Their guidance is always wrong. So now let's assume that that's somewhat right. I realize it could be wrong, but let's assume that's somewhat right. And we do see a spike in liquidity. I do think you're going to see a, you might see a capitulation move in crypto, but save that, I do think you're going to see a, you know, you might see a capitulation move in crypto, but save that. I do think we're going to see a higher crypto this year than where we're at now. You know, we could hit 20. I have no idea, but I think I'm reasonably convinced that the liquidity is going to come in droves and that's going to have an outsized impact on crypto as it always does. And the question in my mind is, okay, well, if narrative follows price, what's the narrative

that's going to follow price? Well, there's a couple of things that are interesting to me right now, right? What's the hottest topic in all of tech by far? Clearly AI, right? Exactly. So how does that impact the narrative as it relates to crypto? Well, I've been thinking about this a lot. And I think the most interesting, probably non-discussed topic is the integration of crypto and AI. And what's the most likely integration point for the two, right? Why would Andreessen Horowitz move or create a subsidiary to invest out of the UK? Well, I think you're going to see an explosion. Sorry for the maybe Freudian slip,

but an explosion in DAOs that are actually AI-based that use token economics, similar to the way we had smart contract-based NFTs and DAOs and algorithmic stable coins, et cetera, et cetera, but start to show the power of how you can use, uh, autonomous smart contracts in an AI driven environment, which I actually think is going to have show an explosion in venture funding. Um, you know, I don't know what you want to call them, new token offerings, whatever. Uh, and, and, you know And the message is going to be,

okay, regulators, come shut us off, right? Come find us. I don't know if you ever saw a jumping jack flash when Whoopi Goldberg was in the phone booth and trying to call for help for dear life. And the operator came on the line and said, please insert a quarter. And she said, you come find me in New York

for this damn quarter. And well, that's going to be this down model, right? The question is going to be, how are you going to shut them off? And the answer is going to be, well, you come find us because there's nobody to shut off. And I do think that this environment is perfect for creating the mentality that we need to create hardened, decentralized solutions. And I think AI is perfect for that because if you want truly autonomous artificial intelligence, I think integrating that with next-gen token economics is a huge idea and completely untapped. Anyway, so I think, and I have other ideas about how this is going to play out, but I think if narrative follows price and we are falling off a cliff, which I think we

are, and I think the public grossly underestimates how fast this economy is falling into a recession, it may be V-shaped, that's fine. But the reality is, is the Fed's always a lagging indicator, and they're going to basically look at this and in a political environment where they don't want the Republicans, they are going to basically be flooding this economy with money any way they can. Call it QE, call it lower rates. It doesn't matter.

They're going to be flooding the economy with cash, in my opinion. I think a lot of people here probably agree with that. I just want to give a quick reset to the room. We never even really did an introduction. Everyone, obviously, this is the Crypto Town Hall. We do this every day at 10, 15 a.m. Eastern Standard Time.

We even did it this weekend after saying that we wouldn't because apparently we are psychopaths who hate free time in our life. But to give you a very quick market update, everything pretty much seemingly flat today. Stocks very much flat. Bitcoin up 0.29% from yesterday. But giving a market update on Monday after what happened Friday or Saturday is a bit disingenuous because I think we all know that there was an absolute slaughterhouse bloodbath in the altcoin market. We saw coins specifically that were named in the multiple suits and those then that were being delisted from Robinhood dropped upwards of 25% at a certain time and

now sort of dead cap bouncing. I think that that's the topic that we need to probably hone in on. Right before we do that, though, and I ask everyone's opinion, I just want to say how absolutely important this week is on so many levels. I don't know that we've ever really had a week like this. I mean, in macro alone, and that's not even necessarily what we're talking about here. We have CPI Tuesday, FOMC meeting Tuesday and Wednesday, PPI Wednesday, FOMC rate decision on Wednesday. That's not even crypto. Crypto today, we have a deadline for Binance and Binance US to respond to the SEC's application for temporary restraining order. But then tomorrow alone, massive. SEC ordered to respond to Coinbase's rulemaking request. District court in DC to hold 2 p.m. hearing on SEC's temporary

restraining order request against Binance US. Internal SEC documents and communications regarding Bill Hinman's 2018 speech on Ethereum decentralization expected to be unsealed finally after all these years in the Ripple case, revealing further reasoning behind Ethereum not being considered a security. House Financial Services Committee to hold a 2 p.m. hearing titled The Future of Digital Assets. Public comment period closing for SEC's proposed change to exchange. That's all tomorrow. And in the next 24 hours or to 30 hours, we're going to get all of that, guys. I mean, absolutely never seen, I don't think, as intense a news cycle here when it comes to

regulation. But let's talk more about this bloodbath this weekend, because I think it was pretty astounding and shocking for a lot of people here. Anyone who'd like to jump in and give their opinion, Ran, I see you lifted your mic. Go ahead. Maybe not. This is not a bloodbath. I'll take it. This isn't even close to a bloodbath, guys. Bill, how is it not a bloodbath? 25% drop in a day.

And we're at pretty low levels already. Yeah, but you're talking about 25% drop in all coins that are not very liquid in the first place, right? So if you look at Bitcoin and Ethereum, which is the vast majority of crypto, right, you're talking about a, what, a 3.5% weighted average drop across those... But that's not what I mean.

They were not considered securities, so they're not counted in the bloodbath. Okay, okay, fine. I mean, but still, altcoins have shown 25% gains in a day, 25% drops in a day over time. Tread carefully with altcoins because as I've said for years, you run a significant risk of losing a lot or all of your money when you're speculating in altcoins is not the price volatility. I realize there's a lot of traders on here looking to figure out when they can pump back in. I'm interested in this methodical march towards global decentralization. And a lot of these projects are important for that. A lot of them will fail. So be it. That's the nature of tech. 95% of startups fail. The only difference with these projects versus startups is that these tokens are publicly tradable, whereas most startup

equity is not. I'm not saying that any of these are securities. I think the SEC got the definition of securities wrong here, but that's not the point. It actually doesn't matter to me. What really matters to me is how are these projects affecting the methodical march towards decentralization? And in that sense, startups are hugely volatile. Projects, whether they're decentralized or centralized, are very volatile, right? And that's going to be the nature of these things as we figure out or as the software industry figures out the winners and losers, which is going to play itself out over the next five to 10 years. And we don't know what the use cases are going to be. And you should expect more of this volatility, some of it regulatory driven, some of it market driven,

some of it use case driven as projects fail, as projects succeed, et cetera, et cetera. It's not going to stop. Mike, before you go, Mike, and then Brett, just for the audience, do you think we're over-exaggerating when we put in the title, are altcoins dead? Or do you guys agree, Doug? Is, Doug? I think it's ridiculous. I mean, look, it's your space. You can call it what you want, but I think it's ridiculous, to be honest.

I agree with you. I'm still holding my bags, but we've got to get people into the space. I grew up listening to Howard Stern, so I understand sensationalism, and I actually enjoy it. I still listen on occasion. I admit it.

But you ask a question and it's ridiculous. So that's your answer. I think before we see if Brett thinks it's ridiculous or tied back, they're worth highlighting from what was just said. The first is that remember that BTC and ETH

make up at least 60% of all the volume in global crypto. And it's higher when you include derivatives, especially in the US if you're looking at the US market alone the regulated platforms that are protected by the CFTC. That's what we're going to see in the short term. And in the meantime, I think companies are going to hunker down while we sort of wait for something to change from the regulatory side. I mean, obviously, these litigations are going to take years. So we're not going to get clarity from there in the meantime. There's at least some promising movement with regards to legislation, but that's going to take a long time. So what is it going to be? Is it going to be an administration change? Is it going to be the influence of large companies in the US like A16Z, for example, that's going to help push back and change the narrative? I'm not sure. But in the meantime, people are going to hang around and weather that storm they always have you sort of see cycles like this with very virtually every new technology and every new asset class i don't think we're going to see anything different here the second is a very interesting point that there is a very big difference between you know btc and eth and sort of name your average altcoin, and that it is sort of like

a view into the highly volatile private market. I mean, think about all the startups out there, not crypto startups, just normal sort of software, you know, equity based startups. And if you were able to sort of see a secondary market, a liquid secondary market in those private startups at all time, what would you see? You probably would see similar volatility, you know, 5%, 10%, 20% moves during sort of particularly volatile points or particular news related to the regulation for those companies. And that's something that we don't appreciate, don't get to see normally in these kinds of markets because we're only used to public markets where these companies have been around for many years.

They're very established, very predictable. And so, you know, you don't get the same kind of volatile events. So I think it's important when we are looking at these sorts of products to not sort of freak out and say something is terribly wrong here. Understand that these things are highly sensitive to news and not necessarily representative of the larger crypto industry. Yeah, I mean, this is something I literally tweeted. I just want to say I pinned this tweet above because it's something Dave and Mike and I

talked about quite a bit on YouTube before. Just sort of to echo that point, total crypto market cap is $1.05 trillion right now. Bitcoin and ETH together is $710 billion of that. People talk about Bitcoin dominance, but when you now add stable coins, which weren't really there before, and in past cycles, you had to exit through Bitcoin, you don't anymore, that's 126 billion left. There's only 214 billion of literally everything else. So you're talking about 20% of the entire market cap of crypto is every single coin that's not Bitcoin, Ethereum, or a stable coin. Scott, I mean just talking about

You're odd, you're James JJ's you're odd, you're not sure if you can fix it. Yeah, no, it's very echoey, a bit far from the mic. I'll let you fix it. I'll give you maybe a minute to fix it, James. Mike, I know you're trying to unmute earlier, so I'd love to get your thoughts on the narrative

around altcoins. How's that? Yeah, earlier, so I'd love to get your thoughts on the narrative around altcoins. Oh, stop. Yeah, Jay. So we'll go to Mike and then right back to you, James. Mike? Oh, okay. James and I have a tendency to do that. Yeah, I think what Bill said makes a lot of sense.

This is a resumption of a bear market. We just have to face it. And there's really good reasons for it. It's going to be a minimal of a year to really have something get past this. We have an election coming up. It's very likely to happen during a severe recession and very likely to tilt towards a young Republican if they can get the right candidate. That's just facts of the way cycles work. As far as the thing I've been, as far as me, always in this space is just the massive amounts of silly, massive speculation in bogus coins. Now that's just going to need to be

purged. We all knew it was going to happen. And I think the way to look at it is we've had a bear market last year. It's bounced. That's the way all bear markets work. And we're probably supposed to go back down and take out those old lows. That just life but it's also the macro is so overwhelming and remember cryptos were part of in the big pump and liquidity now liquidity is still bumping dumping that's the bottom line figure and the macro the liquidity is still dumping the fed is not easing the central bank of canada is hiking the ecb is still hiking so that's the macro but i look at it from we all know those 25,000 cryptos and coin market cap need to be purged. Maybe there's a hundred that matter,

but it's Bitcoin I think is being differentiated. Certainly Ethereum. And one thing I also want to... And one thing I want to find, I'll end with this and go ahead. On the show we did with Scott on Macro Monday, he did point out about crypto dollars. People call them stable calls. I call them crypto dollars. Right now, they're 11% of the total. In 2018, they were 1%. And that's the thing I always like to publish to make sure the U.S. government is aware of

and make sure strategists who are bearish about are aware of is when people say the U.S. dominance or wills decline, it's not. It's actually increased. And just ask any central bank who's tightened in the last year, why are they doing it? Because one reason, the most significant central bank in the world is still hiking. So the dominance of the dollar in the US is actually increasing, particularly with this war going on. With that, back to you.

And Mike, one more question to you, Mike, before we go to James. One last question for you is how long do you think this process will take? Could we expect a crypto ice age as some have named it? Well, exactly. I'm expecting the worst recession, global economic reset of our lifetime. Now, I'm 58. This is something, the cycles are all there. The last thing to drop is the stock market.

So this could last longer. I think Bitcoin's going to come out eventually. Gold's going to come out eventually. Deflations get kicked in. If I'm wrong, yes, go ahead and tilt the McGlone and blame him. But I'll point out this morning, people are talking about the crash in Bitcoin and cryptos over the weekend. Crude oil is down 5%, 4%. That is the most significant commodity that's been trading for 100 years. And it's collapsing.

Why? Because the world's tilting towards recession and central banks are still trading. Now we're also having this whammy of the US regulation. Now it's going to take at least a year to have to get past that election to tilt. Maybe we'll win a case eventually. Eventually that's going to happen. But for now, and here's one thing I want to end with, those of us who are in futures and been around for a while, we have been there, done that with Gary Kanzler when he was a head of CFTC. We all got past it. I just remember people at Goldman Sachs privately said some very nasty things about him because he really crushed their business to create swaps on commodities. But what he did was eliminate some of that, just added some restrictions. Maybe they didn't really do what they're supposed to, but it all worked out. People moved on and

were okay. But it just added that regulation space to commodities. Now he's doing it for crypto. So he's just that kind of guy you got to deal with. Mike, don't you think that the markets have already priced in a recession and are now going to need to price in the massive amounts of liquidity that need to be injected, which actually could point to significant spike in risk on assets? There's a key thing that's changed. That's the big thing that Mr. Powell said he's changed all things. Even our chief economist, Anna Wong, has changed.

The Fed will never ease with the ease of the past. So you have to focus on, you're focusing on what they've done. Every single time the stock market down went down 20% since the 87 crash, with the exception of the big financial crisis. They always threw liquidity at it. Right now, they're looking at owner's equivalent, the highest ever. Employment cost index, personal consumption expenditure is very high. They're looking at lagging indicators and they are expecting pain. They expect unemployment to go up. And so you have to bet on that.

But again, we need a long and variable lag, a significant period of easing for risk assets to typically bottom. And the fact that most people are still looking for a soft landing, including the Fed, and the markets are up. The stock market is our chief strategist, Gina Martin-Adams, said it's a bull market. I'm like, okay,

well, good luck with that one. That's what they said in 1930. And it's just sometimes you have to look back to yourself and say, be careful following the masses who did not realize it. I'll end with this, that things have changed.

So why is crude oil right now $67 a barrel when a year ago virtually every strategist on the street said it's going to be $150 or over $100? They were completely wrong because they missed what changed in the world. The US and Canada produce about as much crude oil as OPEC does. They have a massive surplus. Why?

Because of technology. Part of that technology is cryptos. I agree with it. It's adopted the dollar. I agree with it. But we're in the flush stage. It's a bear market. I look at it as you look for, in bear markets, you're supposed to look for opportunities to sell rather than opportunities to buy. And that's to me, the bottom line here is we have good reasons for this to end until liquidity pump gets turned on. And I think it's not going to happen until the stock market makes it go on. It means it's got to go down. So I'll end with this. I actually think it's already started. I mean, I think your comments on the macro state around oil falling and the reasons for it are all correct.

But I actually think people don't realize on the margins, liquidity is shit, but it's already turned. And people are just looking at this like, oh, the banks aren't lending. It's getting worse. And I actually don't think it has. I actually think liquidity is improving. Just on the margins, it feels terrible. And you have to look at global liquidity, not just US liquidity. And from a global perspective, it does feel like we've troughed.

And I don't know, I do feel like the Fed has to figure out very quickly over the next 18 months how to lower rates, because if they don't, the entire system is going to break. We cannot sustain these rates with the debt levels we have when no one wants our debt anymore. Just the two don't reconcile. And I do feel like people are underestimating the degree to which we are actually seeing improvements in global liquidity. I don't know. I just, I think I could get it wrong, but, you know, after 30 years of looking at this, it just feels like this time is not as different as everybody would have us believe. I don't know. Bill, you're absolutely right.

I mean, the playbook of the Fed is to knee jerk on the way up. So they wait too long before raising rates whilst facing inflation. And they wait too late to cut rates. And I think this time it's going to be no different at all. The Fed will carry on marching on despite the damage that's already happened to the US economy and globally. I don't think we should expect any difference. I mean, I also I actually think last month's rate hike was a policy error. They probably won't do one this month,

but probably next month's will carry on, and it will be equally as damaging. If you look at the U.S. banking sector, over 40% of U.S. banks have a credit default swap of over 100 at the moment. That's a really worrying situation, so I do think there's still a big risk of a minsky moment and that this is not like um factoring in some of the uh the problems in other sectors so if you

look at the first rate hike and how long it takes to have an effect on cpi so we're getting the results through tomorrow obviously but it generally takes about 18 months after the first rate hike for it to have a material effect on inflation and i think a lot of people are being lulled into this false sense of security that everything in the u.s is getting better looking at the payrolls numbers when you know the these rising rates have not have not hit the u.s economy at all um you only have to look at say the uk and europe i'm not saying monetary policy is any better, but they haven't been anywhere near as aggressive. But then again, inflation is not so good.

But onto the altcoins side of things, I think you have to look at altcoins like small cap companies. They are the canaries in the coal mine. When the economy starts to deteriorate, they're one of the first things to go. And what's cool about crypto is you can measure the success of these in quite alternate ways. So we've been looking at GitHub data. We've scraped about four terabytes of data looking at 5,000 different cryptos, 500,000 different ecosystems and aggregating them. And if you take Ethereum, it's over the last 180 days, it's seen a 38% decline in active devs. But then you take some altcoins, Etherscale, the active devs, it's fallen 84%, Polygon 62%, Gravity DEX, 65% decline. So what is evident in this data, in these 5,000 different ecosystems,

is that it's all coins getting killed from a developer perspective. They're all leaving those small cryptos. And I think they must feel that economically it's just not worth their time. Wait, wait, wait. James, where are they going? Is this like one of those, hey, everybody's leaving crypto for AI things? Or is it they're packing their bags, taking their ball and going home? Because that's the first time that I've heard anything fundamentally wrong at these projects outside of, oh, price is dumping because of the SEC. whether these individuals are shifting their focus just onto the larger cryptocurrencies i mean there are some altcoins that are doing very well like tonic labs have seen a massive increase in um active devs you know 4700 what was that tonic labs i've literally never heard of that

and i'm yeah you've got deep in this market i mean some of these are quite small but you know there's 389 devs in TinyGrab, which compared to something like Polygon, which has got 241, it's not that irrelevant. But a lot... Wait, how many... Sorry to interrupt, James. I just got to dig into this.

So is Ethereum developer activity increasing or decreasing? It has been increasing, but not as much. So it's got Ethereum. Increasing or decreasing? You know, this is really varied in terms of what's doing well and what's doing badly. You know, like if you look at the NIR protocol, it's down 54 percent. But generally, most of them are just down. And I think there's a lot of there was a lot of fluff in there. A lot of devs were thinking, no, I don't want to be involved in this anymore. And they weren't really doing much anyway. OK, but we've talked about, James, sorry to interrupt again, because this is fascinating to me. We always talk about like the Bitcoin mining

floor, right? Where all of a sudden they become not profitable. They turn off their monitors. Is this effectively a similar thing where at a certain price for the coin, the incentive is not enough for them to continue because this isn't as bad as it was even a few months ago. So it has to be something else going on here. This is the first time I've heard this, and I'm really, really, really shaken by that. Because that is a very different thing than prices down. That means that the developers are losing belief in this market

and are leaving and that there's... I don't think it's quite as horrific as you might think. So you can look at, on GitHub, you can look at active devs, something called pull requests, and then commits. And commit can be any kind of change in code. So you could put some parentheses in some code, and that would be it. That's hardly any kind of change.

And if you look at pull requests, that's a bit more substantive. So that is when code is actioned and enabled into the blockchain and what you find there is actually pull requests have not declined that much at all which is telling I think those core sets of devs that around now are doing just as much development work as a lot of those devs that have fallen by the wayside weren't doing much anyway. I think there was a kind of a bit of a rush in 2021 and 2020

where devs were just thinking, hey, let's get involved in this, but they weren't really doing much. Okay, James, the next natural question, and Mario, you're going to like this. Is that because they're using AI and all of these devs are 10x developers now and can code way better and there's less work for the... No, it's because the grifters are gone.

The grifters are gone, and it's just like the dot-com crash equivalent. The dot-com crash gave us Google, Facebook, and a whole bunch of next-gen internet economy companies with staying power. And I think that's exactly what's what's going to happen here. Right. So the quick buck developer artists, you know, in the dotcom era, it was BMWs as bonuses. Here, it's people, you know, releasing token projects before there is any use cases. And the market for that is has dried up. And and those people who hearts are at it or not in it for the right reasons or in it for the wrong reasons are

gone and, and good riddance, right? So, uh, we've seen this before and, and, and we'll see it again. And I think that it's the quality of the developer output to, to the point about what you see in, in, in GitHub that I think is super, super exciting, not just the sheer numbers. And I do think you're going to see the emergence of just some absolutely killer use cases over the next couple of years because the people who are in it, you know that their hearts are in the right place because they're clearly not in it for the quick buck. But what if that trend continues? I agree with you for the quick buck. But what if that trend continues?

I agree with you, by the way. But what if that trend continues down massively? Well, look, I can tell you I sat in VC meetings when I was an investor, you know, pre 9-11, when the sentiment was, OK, you know, software is dead. It's not coming back. Get used to the new norm. And then what happened? We had the biggest bull market in history, which was basically a function of massive amounts of capital, low-cost capital that flooded the system, which enabled a level of software-based entrepreneurship,

which led to this whole software is eating the world mantra, the likes of which we've seen so then that begs the question well is this time different and honestly i think in that regard i don't think it is uh and and i just think the industry i think the industry's being stripped down i think it's being stripped down to the bare bones you've got you know exactly you definitely weren't really doing much and he's just now getting to this kind of a base where all the quality core developers um where yeah they're committed to actually working at this that's exactly and what we saw was just a load of fluff in 2020 and 2021 that's funny because real quick mill that's funny go ahead you have a choice between ai and crypto and you choose crypto your heart is in it right and? Yeah, that's absolutely true. Yeah.

Yeah, that's it. It's as simple as that. I just wanted to point out really quick, because Vinny, before, I think it was Rand that was asking everybody, well, is this the most fearful? Is this the most pain? Is this the worst situation you've ever seen in this market? Is this when you have the most doubt you've ever had? Everybody sort of reported to 2019.

Vinny certainly did and said that was worse. And the reason I think for a lot of people that 2019 was worse for anyone who was there was because it was just endless, right? You had just apathy, nothing happening, nothing to talk about, prices slowly drifting down or going sideways and just nothing happening. And that sort of what you're talking about now indicates that might be what's coming apathy right apathy and just nothing happening for a while and that would make this whole situation way worse as we contend with the sec and regulators etc i would love to get your thoughts on that if you're a trader it makes it worse if you're a builder and you have a five-year vision i i think i think your apathy is towards

the traders as but you need to have you need to have a five-year bill you have to have a five-year vision, I think your apathy is towards the traders. But you need to have a five-year, well, you have to have a five-year runway as well because you have a five-year vision. And how many companies really have a five-year runway and actually really counting on this kind of thing happening? Now, I can only go by what I know. I can only go by what I know. And when I look at.com and everybody said venture is dead and it's not coming back. And, you know, we saw a level of entrepreneurship, the likes of which we hadn't seen in over a decade. And so, yeah, I do think there's there's pain to come. I don't think that we've seen the last of the failures on the corporate side or even on the decentralized project side. But that's just the way of things, right? We don't accept the fact that 90 plus percent of new technology projects fail.

And that's always going to be true. I just I think this again, the narrative follows price and everybody is basically being driven by the fear right now that that it's just a trend that's going to continue. And it never does. Right. But how many of these developers could potentially be leaving because they don't think that there's a future for it if they're in, say, the United States and you're seeing these nasty listings? Many. Because that doesn't necessarily make them grifters. That makes them maybe pragmatic and fearful that they don't.

A hundred percent. I think for most developers, AI is a better bet right now. And I think for the people who stay in crypto, it's going to be because they have an absolutely killer idea in their mind and their hearts are going to be in the right place. And there's nothing wrong with that.

If you look at the overall dev scene, you look at this 5,000 different cryptos that we track, it's down 5,000 different cryptos that we track. It's down 50,000. Why so few, James? Why so few, man? We get 5,000.

Yeah, I mean, there were 100,000 devs 180 days ago. There's now 50,000 devs. In six days, we've lost half. Yeah. Wait a minute. So GitHub is seasonal. So you have to look at it on a seasonally adjusted basis as well meaning uh you know github usage dramatically slows from from june to late august so so i don't know if if you're taking that into account i'm sure that

yes uh my numbers yeah i would be highly skeptical. Talking about the health of companies or projects by the number of PRs submitted or unique users of GitHub. I think for anyone

here who has worked inside of a tech company before, I think that is sort of like an anti-metric. Just want to throw that in there. What then is the best metric for defining the health? I mean, I think it's sort of difficult to think of it on a,

it's difficult to lump every kind of company out there into one bucket i mean you have infrastructure companies you have protocol developers you have security companies you have security audit companies you have you know different sort of decentralized networks i think it's i'm definitely not going to be the one to try to come up with like the single silver bullet that's going to tell you sort of the full health of the kind of the future crypto market i think it's as much as sort of current sentiment as anything else yeah i guess i was just trying to understand if developer activity price etc are not the key metrics for determining what's happening with an individual project or protocol how

do we then determine their health anyone can answer that but uh dave i see you have your hand up if you don't want to go ahead james do we then determine their health? Anyone can answer that, but Dave, I see you have your hand up if you don't want to. Go ahead, James. There's definitely some link between price and dev activity, but what leads what?

When the price tanking, do devs leave or price tanking because devs are leaving? I mean, I think it's the former, I think. James, let me ask you another question if you don't mind. How does this compare? How do these metrics compare? And anyone could take this I think. James, let me ask you another question, if you don't mind. How does this compare? How do these metrics compare?

And anyone could take this, Dave, James, anyone. How does this compare to 2018? Yeah, just looking at 2018, we saw a decline. Now, I would say, just eyeballing it, I don't know exact numbers. I'd say we saw about a 30% decline peak to trough. Whereas this time, it's more dramatic. In fact, if you look at the overall dev numbers, they're lower than they were in 2017 at the moment.

We're at a seasonally funny point though, because what I see in the numbers is that over Christmas time and just after there's a big drop in devs. And my data only stops, it finishes at the 30th of April this year. I'm just updating June numbers right now. Change, as you said, hold on, you said dev numbers are lower than they were in 2017? Yeah. And so I've seen many other...

Scott, don't you know that? Scott, Ryan, did you guys know that? No, I didn't. And that's, I'm sorry, I find that astounding. Maybe I'm not looking at it right travis i saw you lift your mic there's a lot of you obviously want to jump in here go ahead you look at i'll just finish here you look at misari data and it will show you the active devs are still well above the 2017 levels but we're taking like a very very broad spectrum

of ecosystems everything that electric capital provides in terms of all ecosystems, we're aggregating it all, and I don't think some of the other data providers are doing the same thing. So that's why our data looks a little bit more bearish than others. I think a lot more bearish. Yeah. Did you know, before

we give the mic to Travis or David, Ryan, did you know the numbers that James just mentioned? The number of deaths is lower than it was in 2017. Unless I don't believe that. I can't argue because I don't have the raw data in front of me. What's the story? That's how I feel, Ryan. My knee-jerk reaction is there's something about that data

that's just not accurately portraying what's actually going on on a project-by-project basis, which that was kind of what Brett was alluding to as well. Yeah, I mean, Travis and I have been here since back then. I mean, we've been here, and you can't even compare the number of active defenders. Yeah, it's not even comparable. We've been to the hacker houses.

We've been to the hackathons. We've been to all these houses, we've been to the hackathons, we've been to all these things. You can't even compare. But is there a number, David, before you jump in, is there any number, any study that says otherwise, other than anecdotal? Yeah, of course. I'm actually trying to find something now. I'm trying to find

something now, but there's many. Look at the electric capital data. Yeah. Can I jump in with a slightly different perspective? I think what we're all missing, and maybe it's just because I did the most up, in 2017-2018 was the $22 billion invested into the ICO market when everyone on their LinkedIn page was running an ICO, had businesses, developers, and everything

blowing up. And that facilitated the bull run for those years. I mean, we can't ignore, I think someone said before, the grifters are gone this time. But I can't help as an outsider for what, I'm definitely on the opposite side of most people who are speaking here. but I can't help but feel like I'm hearing the same things I heard in 2017, 2018. We're first going to see the killer use cases. We're first going to see this. We're first going to see that. I mean, what fueled the market in 2017, 2018 and 2018 was the ICO investments when everyone was having the first round of true FOMO. And that FOMO is, I think what we're describing now, we're in the opposite when we call it apathy. We are having complete apathy right now

because people are turning around and people are saying, oh my God, who should we trust? What's going on? Even if you don't believe in what Gary Gensler is, and obviously here, almost everyone is against what Gary Gensler is doing, there's the opposite of FOMO right now for people in institutional money who do want to liquefy the markets,

who do want to buy while blood is on the street, although I don't personally believe we're in a moment where blood is actually on the street. I think we're still in the opposite way. Isn't blood drying on the street. I think we're still in a... We're still in the... Isn't blood drying on the street? It's been on the street since FTX. Well, I mean, for people who have been around since 2015, 2016, to say blood's on the street because we're off our peaks,

I think there are a lot of people who would say the peaks were artificially inflated. I don't think we're in the blood on the street from FTX. I mean, we're still above FTX lows. I mean, FTX lows were about in November, I think. And guys, I'm not a trader. We're somewhere around $18,000 Bitcoin. 16.

Yeah, 16,000. Yeah. So I don't think we're in that blood in the street moment because if there was truly blood on the streets with what happened with Coinbase and Binance. And look, I was one of the guys who said when this happened to Binance and the off ramp on Binance internationally got struck, I would have thought in my life, I would have bet my kids who I genuinely like that the price of Bitcoin would have dropped drastically below the bottoms of FTX. So I do think it's important that we're not in that critical crisis moment yet. I do agree. I do like the word apathy. I do think people don't know what to do right now because they don't see the five-year runway. The other big point I think that's worth mentioning again is, I think Bruce brought this up a little bit earlier, about BSV.

The narrative on altcoins, if I was the government, I would be focusing on the altcoins and taking out the weaker links. The SEC, especially when they do enforcement through litigation, they don't pick the strongest enemies. They pick some of the weaker enemies to go after. And I do think they're going to go after some of the weaker entities in the coming days, weeks, and months. I do think that's why they pick some of the projects who they named as securities, because a lot of those projects, they don't have the legal wherewithal to fight back. And we're going to see some capitulation. And when we see that capitulation, I do think it's going to show it's going to be exactly what we were talking about, a fight for, you know, who's who the weakest links are and who can't fight. And then we'll see the SEC take a bow

when some of these weaker projects fail, which I think we all believe they are. But they're going after the biggest players in the space now, David. No, they're going after the biggest exchanges. Yeah, okay. Can you clarify that? I don't understand how what you're saying aligns with let's go after Coinbase. Okay, so the exchanges and the off ramps, that's attacking the financial system. And when they're attacking Coinbase and Binance, they're attacking the way the money is centralized and who can handle that centralization. So whereas going after individual projects like Ripple is

very different than going after the centralized exchanges. Right, but since Ripple and the library, they've been very passive aggressive about that, just naming them in these other suits and sort of saying, see, there's securities without ever going individually. So is your claim we're just going to see like a widespread sort of enforcement action against a hundred of these smaller projects? And they're obviously going to have to settle because they can't afford to fight? Exactly is where I'm going with this. On the security side, it's very different when we're going to see the attack on the altcoins and the attack on what's the security and what's not

versus an attack on the centralized exchanges. Will they go after ETH? Will they go after Ethereum? That's the question that matters. I am dying, like everyone else, to see what the internal paperwork from the SEC says from Hinden from back in the day. I can't see personally how they go after Ether Bitcoin at this point because I don't think they have the ability to unwind the clock. And I think that's their biggest problem right now. They can't go for Ether Bitcoin because there's too much water under the bridge here.

So now they've adopted a new strategy of going for the tokens via the exchanges. Exactly. So they control the exchanges and that's what the litigation is about. I think Scaramucci a couple of days ago made a really good point. Where is the $70 billion in lobbying going? The $70 billion in lobbying isn't going onto the altcoins. It's going onto from the legacy financial banks and the Goldman Sachs to control what the legislation is going to look like for the centralized exchanges and who can operate them and who can control them. That's where the money is going.

And that's why I think right now we're too early into it right now to see what the real end game is here. But I think what we have to be looking at is what differentiate between going after the exchanges and the money and going after what's the security on the altcoin. I think they're going to end up taking a lot of shots at these smaller altcoins. So is the altcoin market dead? No. But we're going to see a lot of action getting a lot of the smaller ones blown up and killed. I think, I mean, Dave, with respect,

I think there may be something that you're missing here. And I'll tell you what I think you're missing. And then maybe, because you see it from a legal point of view, then you can give me how you see it. I said on this basis on Saturday that the way I see it,

what they've done is they've actually banned altcoin trading in the United States. And the way they did it is as follows. They issued two actions against two of the biggest exchanges, right? In those two actions, they issued two separate lists of coins,

which were securities, right? And some of them were the same and some of them were completely different.'s like a common there's like a common subset between them but effectively there's different coins between them i think what they did there was they issued a very strong message to anybody who wants to trade altcoins in the united states and said the following you never know when we're going to come for you. When we come for you, you never know which tokens we're going to deem securities. But if you are trading a token that we deem a security, even though we have never told you it's security before, we could hit you with a lawsuit.

Now, what does that do? It gets every single compliance officer and every single exchange to consider whether they want to be hit with a SEC action. And probably a lot of them are going to just have to just delist altcoins because it's either that or lose your entire business. And so what I think that they've done here is they've actually, they've taken another step towards banning altcoins without going to Congress. Could I tie that to the point that was being made before on developers? Because one of the most important points here isn't the exchanges. If you're a developer, or frankly, a founder or whatever, but if you're a developer and you want to understand whether or not your time is going to be compensated, if you're in the United States right now, your time has just suffered massively in terms of whether or not you're going to be compensated because you might think that you're going to get more rewarded with tokens for the work you've done and you won't be able to sell it meanwhile if you're sitting in dubai if you're sitting in hong kong if you're sitting in europe uh your time might very well

get rewarded uh and therefore you're gonna be more more willing. So the trend of developers decreasing is completely unsurprising because we have this great sucking sound of people thinking, well, I'm not going to be able to get at this. The entire reason for tokenomics in many respects is to prop up the network and incentivize developers. And so they're going at that critical underpinning, which literally is the exact opposite of,

not to jazz Bruce up, but it's literally the exact opposite of what the SEC's mission is to do. But that is exactly what they're doing. So it's, and we talked about, people talked a lot about the internet bubble. I was nodding crazily when I was on the trading desk at the time. And the difference is in the aftermath of the internet bubble, we did not see people cracking down on companies. We did not see the FCC going crazy, oh, you used the internet for this, you did this wrong, we didn't see that. We did not see a massive regulatory push in the aftermath of the internet bubble, period. And that's really important, because basically, that's why Google, Facebook, and all the ones you guys talked about were able to grow. Now, we're in a situation where the U.S. is actually doing the opposite of what it did back then, and the rest of the world is doing what the U.S. did back then.

And I think you need to understand what that actually means. Do you want to get to the headman here? Okay, go ahead. Just before we go into him, and Dave, I just want to hear your views here, like around what I said. Do you think that every exchange now in the United States is seriously evaluating whether or not they want to be listing any kind of altcoins? Or do you think I'm being a bit dramatic? Actually, you're not dramatic at all. Robinhood proves you're right. I mean, the difference is Coinbase basically is, I mean, look, they're eight, nine months pregnant, whatever.

I mean, you know, at this point, they're not, nine months pregnant, whatever. I mean, at this point, they're not going to do anything. They need to defend their process. They say they reject 90% of their applications. And I'm pretty sure they're going to stick to their guns until they get a path towards a settlement, which is what will happen because no company, well, I shouldn't say that will happen. Maybe they will try to stick it out. But the fact is the SEC virtually never goes to court. The amount of times the percentage is really small. Generally, it ends up in settlements.

And so I think you're going to see some of that. The problem is there's no... They will go to court with Coinbase, right? They are going to go to court with Coinbase. There's no way... Coinbase is not going to settle because settling would mean all nasty listings. They're going to go to court. Coinbase is definitely going to settle because settling would mean all nasty listings. They're going to go to court.

Coinbase is definitely going to settle. Come on. Statistically, they're going to settle. Are you lying? But, Ran, I mean, I think to your point. You are suing Coinbase a lot, right, David? I am. I've got over 150 cases against Coinbase myself.

But going to Ran's question, Ran, I think another thing, and this is not my area of expertise, but we have to talk about the fact that Coinbase can't necessarily pivot because they need revenue. And everything they delist is less revenue to them. So they're not just going to roll over, which is when they say they're going to fight. I do think they're going to fight because they have to, as Dave was saying. They have to say that our process was solid and we tried to play by the rules. I think that was their game plan from the beginning. And as long as their game plan maintains, we're going to say we were running a legitimate business

and we're legitimate and we only need you to tell us how to run a licensed exchange that is compliant we're going to keep doing what we're doing and until that happens that's the settlement i think they're going to look for for them to get legal compliance because that is the and i think vinnie was talking about this before we could say about everyone leaving the United States. I'm not as a big believer that A16 going to London is a big deal. It's nothing. Yeah, it's nothing. They're opening an office.

Who cares? Exactly. So the only thing that matters is that the US is the end of the rainbow. And I do think Coinbase is going to fight till they solidify. You guys, you both say that it's nothing. I think you're missing the big picture here. Yes, it is nothing in terms of capital flows. Yes, it is nothing in terms of an office.

But I want to just highlight a few things for you. Number one, this is the first office outside the United States that these guys have opened. Number two, Chris Dixon says in his blog and anything, he says, crypto is still in the early innings and needs clear regulations to provide an open pathway for startups to build constructive solutions while protecting consumer and stamping out harmful.

Casino culture has developed. The UK is on the right path, and eventually they had to leave the us because the us stifles their innovation and their growth that's what he says in the blog post then and i think the part that maybe you both missed you is the last us election was won by the democrats with less votes and because they got 51 versus 49 in the next election in order to swing the difference between swinging one state or one or one um uh uh uh uh seat is just a few passionate investors now headlines like andreessen leaving the us and any smart investors reading this and going we're losing our vcs to the uk it may not not be factually 100% correct, but it's these kind of headlines which are going to sway the voters in already what is a very tight potential election. answer maybe yes but i mean we've seen this from novogratz galaxy is as big as andreessen horowitz

to some degree they they said they're opening offices elsewhere moving offshore come on are you really comparing are you really comparing galaxy digital to andreessen horowitz i'm just saying they're the same headlines these are the same headlines it's not the same headline i mean galaxy is listed in canada isn't it? Whereas Sequoia and Andreessen, they are the darlings that built Silicon Valley. I think to back Ran on this, I think what could happen is what you're not going to see publicly,

which is that what are the conversations going to happen now with all the LPs in Andreessen? Because how many major universities, state pensions, government sovereign wealth funds are invested in A16Z, and if they're making this move and they're asking the question why, and are they going to be able to get the best investment given the current US regulatory environment on that firm? I think that could be where the influence really happens versus just the headline. I agree.

The headline of their opening an office in the U.K., who cares? Every company has offices in five different countries. Yeah, but I think, again, I think it's just you have to sway a couple of voters. You don't have to sway a lot of voters to win the election. You have to sway a couple of voters here. And I think that, you know, we're what? We're one year and three, four months. What?

November. So it's one year and five months away from the election. So I think as we get closer to elections, I think it's going to I think they're going to have to tone down the the the argument here. Bear in mind that we're not a lot of voters in the United States, but we're very, very, very passionate voters. Yeah, I don't know. Listen, I agree with you. So I would just want to play devil's advocate for the sake of conversation. I think most people that we are giving credit for being passionate about crypto actually kind of hate it at this point.

Go ahead. I think most people are down massively, do not have a positive view of this market, and are unhappy and are not going to vote on this. And I think we're a very, very vocal minority, which is great. We're passionate and say we're one issue voters and care about this. And that's how I view myself. But I think the majority of retail in the United States will have major fatigue against crypto and will not view it as a key component of their election i agree with that strategy well one thing one thing to take into mind is the fact that it's basically seven states that are that will decide the election because

the electoral college and it's typically the big cities in those states. So Las Vegas, Atlanta, Philadelphia, these are areas that the crypto industry can mobilize and that the Republican Party, who's going to be the ones who are fighting, you know, sort of on the pro-crypto side, depending on who gets in, of course. RFK, obviously, it'll be less so, but assuming that it's Biden versus Trump or Biden versus DeSantis. And if it's DeK, obviously it'll be less so, but assuming that it's Biden versus Trump

or Biden versus DeSantis. And if it's DeSantis in particular, I think that there's a very strong chance that forces could mobilize in those areas. I mean, Las Vegas is a very, you know, kind of easy area. It's pretty, you know, dominated by one newspaper, you know, owner that's got the morning and evening

and all the TV stations are owned by the same group. And Atlanta's got a decent blockchain presence and same with Philadelphia. Yeah, I agree that the city that loves gambling is probably going to be on board with pushing crypto. I do. Listen, I don't disagree. Like I said, I'm playing devil's advocate for the sake of conversation. But I do think that it's important in general to step out of the people we necessarily follow on Twitter and our own echo chambers to see what's really going on out there, because there are much bigger problems that are going to drive this election

than our opinion on Dogecoin. Now, Scott, I do have a couple of points to make because I've been listening here. This is going back to the miners. We're still at an all-time high for hash rate. And historically, over the past 10 years, price usually does lag behind the hash rate. And the miners are investing billions of dollars collectively into long-term infrastructure. So they're in it for the long haul. Another point I need to make is it's still profitable to mine Bitcoin. The last number we got back in April 30th is it cost $17,000 to mine one BTC. So I don't think of it as so grim. It's something that people have been saying for a long time. What if the miners drop off? Well, Bitcoin has a difficulty algorithm that retargets. So it's self-healing in nature. Yeah, sorry, that's not the point I was making. I was just saying that we always have the narrative of miner capitulation sort of at the bottom, and I was making a comparison to the developer activity that

James was talking about dropping off. Got it. Just want to make that point. Cool. I think we've covered everything, guys. Any final thoughts for the audience, Scott, Ryan? By the way, for the audience members, we forgot to tell you all. We do go through the comments, get your thoughts. And it seems, look, ryan scott you know my shows have kind of gone beyond just crypto and and i'm starting to get more exposure outside our crypto bubble for the last year since fgx has collapsed and i could tell you this the sentiment the amount of hate i get because i still have a punk and probably not for long um is is this increasing month by month and and this week hasn't been the best. So I don't think voters give a shit.

I know there's the argument of like, hey, freedom, freedom. Well, with the Restrict Act, when people are talking about it, and we covered the crypto aspect, which I thought was one of the more important aspects of it, the response we got from people is like, hey, we don't care about crypto. That's not the concern we have. We care about people's freedom, et cetera. So, yeah, the sentiment has changed massively.

And, you know, I think we've got to keep that in mind because we're still in our little bubble at the moment. But, Mario, I just want to point out that I agree with you 100%. I just think that if we're going to be honest, that drastically changes with price. If we see some ripping bull market between now and the election all of a sudden people will care about crypto again. If we see... We're going to see that but for price to go up we need people to come in and people just... and they'll need to

see a sustained... Look how long it took us for the bull run after the 2018 collapse and if we keep getting bad news with regulators I just don't see and we're going to see keep getting bad news with regulators um i just don't see them and you know we're going to see something targeting the the usdt or we could see more pain with binance with the doj uh with your doj filing that i just don't see things getting any better

we need some sort of good news now will ai help that will will apple's headset whatever apple vision pro help the metaverse projects in the ecosystem, Web3 metaverses, and that would help NFTs and digital ownership? I don't know, but it's just not looking like it. We didn't even get the fabled metaverse coin irrational pump on the Apple announcement that you would have expected when this market always… Yeah, I didn't check. Was there anything that pumped? Chat GPT released and all of a sudden, you know, 50 altcoins that have nothing to do with AI all pop off. We've seen this in the past when Meta rebranded from Facebook to Meta. We saw all these Metaverse projects go crazy.

We saw nothing on this Apple pop. By the way, the more apathetic and disgusting and ugly this bear market gets, the closer we are to truly being in a bottom and rising out of it. I want to read you something just before we go. I want to read you something from Andreessen Horowitz's letter around expanding to the UK, because I know you guys brushed it off and said it just said that, but I really want to read something to you. It says, over the last year, it has become clear that blockchains and software movements

around them, usually called crypto or Web3, can only succeed in a clear regulatory regime that provides an open pathway for startups while also protecting consumers from fraud and manipulation. This regulation should be aimed at stamping out the casino culture that has developed around crypto while also allowing for constructive applications to reach their full potential. A common question we hear is, what is the problem that blockchain solves? Services built on blockchain solve the the problem that blockchain solves? Services built on blockchain solve the same problem that other digital services solve, but with better outcomes. They can connect people in social networks while empowering users over corporate interests.

They can underpin marketplaces and payment systems that facilitate commerce, but with persistently lower take rates. They can enable new forms of monetizable media, interoperable and immersive digital worlds, and artificial intelligence that compensate rather than cannibalize creators and communities. Technology takes decades to develop. We are now seeing the mainstream application of AI after 80 years of development.

We are in the early innings of crypto. Today, there are tens of thousands of crypto developers, but the numbers are growing fast. Sorry, today there are tens of thousands of crypto developers, but the numbers are growing fast and we expect to see 1 million developers by 2030. The infrastructure will improve, increasing performance and lowering fees, and many more applications will be built across a wide range of categories.

And this is how they justify moving to the UK. So I don't know if that... I don't understand why they don't just move to Dubai. Like, why the UK then? Yeah, yeah. All right, guys. So just for the audience, if you do, we're going to start doing understand why they don't just move to Dubai. Why the UK then? Yeah. Alright guys, so just for the audience, if you do, we're going to start doing pitches soon like we've done on the other shows.

So if you want to pitch your project, we're still active. If you want to work with us at Incubator, DM Scott, Ryan or myself. Otherwise, we'll see you again tomorrow. Bye guys. See you later.