The Wolf Of All Streets - ALTSEASON NEAR: What Will Drive 100x Explosions? | Crypto Town Hall

Episode Date: March 12, 2024

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Ryan, it seems like things are going pretty well at Bitwise at the moment, huh? We are pretty happy, my friend. Things are going great, yeah. I think Bitwise now, where are you guys, about $2 billion? Yeah, we crossed $2 billion. I think it was maybe end of last week or... Yeah, I think it was end of last week we crossed $2 billion on the Bitcoin ETF, so very exciting. I think that that would have been a high-end prediction for six months for BlackRock. Oh, easy.

I don't think anyone expected there to be four spot Bitcoin ETFs over $2 billion, let alone one above $10 billion, another one approaching $10 billion. It's just kind of uncharted waters here and really blew our expectations. So really exciting. Yeah. As we're like letting people file in and getting everybody up on stage.

Juan, I think was here last week. My times are hard to keep up with at this point. And he kind of alluded to the fact that you guys have been somewhat out on the road show, right. That with your salespeople talking to RIAs, you said that you had, I believe, locked in three RIAs already that were going to advise or put 1% into their funds. I mean, can you talk about the process right now of getting these all unlocked?

Because I still don't think people realize that most people can't buy these. Yeah, definitely. So there's kind of two camps that we're on the road talking to on a daily basis we have a you know our sales team's done 25 30 people and then sometimes they bring us out on the research team they bring matt hogan out our cio to to come in and do these kind of like in-office presentations or discussions with ras and financial advisors which are kind of two different camps with both their money managers. RAs, you can kind of think of them like self-employed financial advisors.

They can move kind of more dynamically and quickly, and they can be more agile about what they invest in because they're responsible for running their own due diligence and compliance arms. And so as long as they're doing things within compliance with the law, they can invest in kind of any kind of asset they want. So for them, they learn about Bitcoin and maybe they have an investment committee at an RIA and they can, an RIA is kind of like a group of advisors. So maybe they have an investment committee at their RIA office and they bring us in. We explain to them what is Bitcoin? What is Bitcoin all about? How could it fit in a portfolio? What are the Bitcoin ETFs? How has the asset grown over the past 10, 15 years, things like that, we kind of do Q&As and answer any questions that they have. These

presentations can normally be to rooms of 15, 20 people at some of the larger RIAs or, you know, five to 10 people, some of the smaller ones. And so we go through the process of answering their questions and then, uh, and then, you know, we leave and they kind of hold a due diligence review of not just our Bitcoin ETF, but all the Bitcoin ETFs. Then they ultimately, if they decide to move forward with kind of putting their stamp of approval on letting all of the advisors at the RIA allocate to Bitcoin, they choose one or two ETFs that they are going to be able to invest in, and then they start allocating their client's assets to them. They either do that through individual advisors at the RIA can choose to allocate 1% to 3% to 5% or a lot of them have model portfolios that the broader group work off of that maybe have a 1% allocation of Bitcoin built into it after this decision or and that can also be 3% 5% so that's generally the process

with an RIA you go in you present to them they if they want to move forward with proving Bitcoin ETFs to their group of advisors, then they either do it in a model portfolio or they allow the individual advisors to allocate independently. Generally, especially before the ETFs, we'd see an allocation of 1% across these model portfolios. That was a big win. And that could come from gold or maybe technology sleeve of portfolio or just the general alt sleeve of portfolio. But now post Bitcoin ETFs, a lot of those conversations are starting at 1% as kind of the bare minimum expected allocation as we walk into the door. And we're hearing conversations where 3%, 2% to 3% is probably more normal. I've definitely been in the room. I was in Denver, ahead of East Denver with our sales rep out there going to meet with RAs. And we've had a lot of conversations in those meetings where I would

say 5% is the new 2% to 3%. So that's kind of the process for RAs. And that's a quicker unlock process. On the flip side, you have financial advisors that maybe are associated with the platform, like Morgan Stanley. The way you think about this is these are advisors who plug their business into the technology platform of someone like Morgan Stanley or Raymond James. So they run the business development, NASA gathering and investment side of the, of their business. And then Raymond James or Morgan Stanley runs the technology, the trading, the compliance, the regulatory side of their business. Right.

And then Morgan Stanley and those platforms got a cut of the revenue. The advisors are charging on their AUM. That process is a little bit longer because you're not going necessarily and presenting to the individual advisors, what is Bitcoin? Why does it matter? Where does it fit in a portfolio? How much did you allocate? You're actually going and talking to the home office or kind of the corporate office of Morgan Stanley and Raymond James. And you're trying to convince and answer questions to their compliance team and due diligence team as to what is Bitcoin? Where is it in the portfolio? Why should they invest in it? And then once the home office ultimately goes through that process of reviewing all the ETFs, deciding if they want to approve certain ones or not, then they can

approve it for their advisors. And then the advisors eventually can start allocating it once they've got enough to speak with Bitcoin. So there's these platform approvals, which is what we talk about a lot still hasn't happened because that process is a lot longer for platforms like Morgan Stanley than it is for just individual RIAs because they may only hold those due diligence committee meetings once a quarter or once every six months. And because they're managing these decisions for thousands of advisors or tens of thousands of advisors in the case of something like Cetera or LPL, and they just move a lot slower because they're a big organization like that.

And so those platform approvals are definitely in the works, but certainly take a lot longer than smaller offices. And so we have teams doing both, but that's kind of the two different arms. Yeah, it's interesting because it sounds like you,

A, have to do Bitcoin education outright. Right. So you have to do Bitcoin education outright. Right. So you have to convince them that they even want an allocation to the asset class. B, then you have to convince them they want exposure to one of the Bitcoin spot ETFs. And then C, you have to convince them it's yours. Yeah. Yeah, that's right. It's a really long process.

Our sales team has been knocking on the door of a lot of these firms for two three years now a lot of a lot of folks on our sales team have been around since uh 2021 or earlier and you know there was a long period where it was hard to get a call back or uh maybe you get brought into a meeting and the the firm wants a free sushi lunch. And so, you know, Bitwise is buying a sushi lunch, ordering some sushi in and talking Bitcoin, but we're not really seeing any allocations or much interest. And then I think being persistent is key there. And then, you know, having different factors that differentiate us,

like being the crypto native issuer and donating 10% of profits to Bitcoin core developments and things like that. Try to help us stand out. But really, it's just persistent and knocking on the door and being the educational partner and being willing to answer those. Spend an hour in their office answering those questions. Yeah, I do want to move on to other topics. But I'm curious, curious just quickly if you feel like the other issuers are making the same effort like do you think fidelity and blackrock are banging down doors at the same level that you are do you think that people just come to them oh it's a good question i mean i think there's a lot of brand recognition obviously for companies like blackrock and fidelity and so

um there's a lot of probably just native asset gathering that they're enjoying through having brand recognition and, and people just will be willing and looking for their, their name when they open their trading platform. But they certainly have wholesale teams that are out there and pounding the pavement as these, as these ETFs get larger and larger, there's this flywheel effect where more AUM and more trading volume makes it easier

for these RA platforms and these more centralized platforms like Morgan Stanley to approve these ETFs because they might have certain liquidity or AUM thresholds that they look for before they make that approval. So they definitely have people out on the road. I mean, that's kind of the general wholesale model in the financial advisor space is have reps out on the road, knocking on doors, dialing for dollars and going and meeting advisors for coffee and in their offices. Makes a ton of sense. See, Ryan, we just did an entire podcast. Good job.

Thank you for the update. There we go. We do have the title here, Alt Season Near, What Will Drive? It said 1000x Explosions. I changed the title to 100x Explosions. I'm feeling like I should change the title to 10x or 2x Explosions because, damn, just a little hyperbolic

even for the clickbait on a show like this. But I think the idea here, obviously, is that Bitcoin is finding some footing above the previous all-time high. Peter, I want to ask you, obviously, you've come on a number of times and said all-time high is somewhat irrelevant. But technically, at least, we now, yesterday, I believe, had the first daily candle that closed above $69,000, that previous all-time high. Pushed all the way closed above 69,000 that previous all-time high pushed all the way to 72,000. Now, at least technically, can we view the previous all-time high as a key support, even though we don't really know where we're going in price discovery? Peter, I'm not sure if you heard me.

Yeah, I hear you. did you hear me okay yeah i heard you now you broke up a little bit but i think i can hear you try again now i can't hear you peter i didn't think oh there you go that important on the way up so yeah i didn't think it was that important on the way up. So I don't think it's that important as support. I think it was key as resistance. It's not key as support. I mean, we shouldn't be surprised that this market might have a chance. I mean, we've already had one 15% correction on the way up. I mean, 15% corrections are the norm, but I don't really see any resistance.

Peter, I think we're losing you in and out there. So maybe if you can find somewhere with a better connection, we'll come back to you. But I do want to talk about then sort of the concept we have in this market or past cycles which don't always repeat but we sort of have bitcoin bitcoin up we're at 72 000 right now we fit 4 000. then you tend to see bitcoin stabilize and consolidate and the move goes down you know if other l1s all the way down to the bottom of the bottom but this time we're also seeing and we did an entire two-hour space that made me want to commit hari kari or whatever they call it in Japan yesterday about meme coins. Well, we're seeing the meme coins pop off like crazy.

Even wild Bitcoin is, is making this move. Joe, you and I talked a bit about this this morning, but maybe for this audience, like give your thoughts on why we can see Bitcoin moving up to this level, but also see the Gary Gainslabeth horne's of the world pumping yeah i love it i can't stop saying elizabeth horne i just can't i'm sorry and you say it so eloquently we're like i can't i don't think i could have it roll off my tongue as easy as you can um real quick like just listening to ryan it's like that it's like a you know a 10 you know 10 year um overnight success you, as they say.

Just like diamond dollars knocking on doors. This has been just a long time coming, but it's so much infrastructure and so much work underneath it. That's why this is a sustainable run. And these ETFs are just going to keep moving. They're just going to keep pounding that pavement. There's pension funds. There are so many different funds, there's sovereign wealth funds, there's so many different institutional funds that are going to keep pushing. And I think a lot of, you know, your retirement accounts are going to start holding Bitcoin, and you're not even going to

know it, but you're going to be 5% exposed. And so, you know, what does 5% of money supply look like into Bitcoin looks closer to 1.1 to 1.3 million. So I think it's going to take time to get there, but I think we're on our way. You know, over at Lunar Crush, yes, we're looking, we're kind of like looking at social media and some of the D-Gen part of the market. And, you know, meme coins have been, they've been running, right? And I think we talked about it this morning. The market, you know, of the people that are currently here, because retail is not back in general, but the market that's here are all the people that have been here. And, you know,

quite frankly, they just didn't know where else to put their money. Right. And so it's a, it's kind of a safe bet in a way to put it into meme coins where there is no utility and it's pure euphoria that drives and what's going on in pure sentiment. And so we've seen a lot of that in the data of the communities getting rallied around some of these coins. You've got people launching coins on all sorts of different layer ones and layer twos. You've got the tailwinds of the Bitcoin L2 narrative still going. You've got people launching meme coins over there. You've got the tailwinds of the Bitcoin L2 narrative still going. You've got people watching meme coins over there. You know, you've got things like Tundcoin from Telegram that there's suddenly a meme

coin community over there. So I think it's just one of these parts in the market where people are kind of finding their footing, at least the builders and the people that kind of know what they're doing. And eventually, we'll start to see more of retail push into that. You made a great comment this morning about maybe we know retail is back when Dogecoin really starts to move again, because that was kind of how people were introduced to the market in the first place. Yep. That's my new base case for anyone who didn't watch on YouTube this morning. As Joe and I were talking, I sort of formulated this idea. We've seen Bitcoin reach a

new all-time high. Usually, that's when you would start to see potentially retail coming back, mainstream adoption, mom and dad calling your uncle that has conspiracy theories. He's been sharing on Facebook. He gives you a call asking you when to buy Bitcoin. Anecdotally, I haven't seen any of that. But I think that makes sense when you look at the last cycle that most people, whether Bitcoiners want to admit it or not, came to crypto last cycle through the NFT bubble and through Doge. And we know that Robinhood had a waiting list to buy Doge. Binance, CZ said people couldn't sign up for two months to Binance. They couldn't get enough customer service people. And all those people were just waiting to buy Doge.

Right? And so maybe it's when Doge reaches an all-time high that this cycle, we start to see the real mainstream interest because those people are no longer underwater. I'd love to hear anyone else's theory on why retail kind of isn't here yet and what you think would bring them. Anyone? DB, I would love your thoughts on that. Yeah, that honestly makes a lot of sense, I think. And I hadn't thought too much about that. But as I said on last week's show, I haven't had anyone reach out to me.

And we're above all-time highs, which is unusual. And I'm not a trader, but I love listening to all the TA experts. And the majority of them are just completely stumped. And it's funny because they don't know what's going on. We've never seen a cycle like this before. So people don't really know where it's going, how high it's going to go. We've had predictions of $5 trillion to $10 trillion in total market cap for the entire cycle. Well, we're almost at the the market cap that we

saw at the peak last year i think wasn't it three or not last year last peak was three trillion right where it's 2.85 right now so maybe a 2x from that but people are expecting a lot more especially from the altcoins i keep seeing these 50 100x gains that people are expecting and lot more, especially from the altcoins. I keep seeing these 50, 100x gains that people are expecting. And we've got Cardano that's 4x from highs. We've got Solana that's 40% from high, AVAX 3x from high. So there's still a lot of movement that people are expecting out of altcoins if they're going to eclipse previous all-time highs but bitcoin is just really throwing everyone off which is it's interesting so i think that's a good narrative to kind of pay attention to some of the previous cycle highs like dogecoin and see yeah i think bitcoin yeah i think bitcoin is different money

this time right so it used to be that like that bitcoin high was the same crypto natives and it flowed but as ryan so sort of eloquently laid out, this is institutional money. This isn't the money that falls into meme coins the second they get bored. Right. So I think it's just different. I mean, William, do you have any thoughts on this cycle versus previous cycles or what you're looking for? William, can you hear me? All right, David, I'll pivot over to you there, buddy, and then we'll go to Dave Weisberger. David Lawant, sorry if I pronounce it wrong first, then Dave Weisberger. Hey, sure. Of course, I do have some thoughts, and I think I agree with everything that has been said.

Perhaps one asset I'd like to highlight is ETH. I mean, from FalconX, we are a prime broker and trading desk. So most of our audience is institutional by nature. But this is one asset that I've been hearing a lot, of course, because there's the Denkun upgrade coming very soon. There's chatter around the potential approval or denial of an ETH ETF. But I think it is somewhat surprising to some that ETH has been outperforming Bitcoin this year. The other stat I've been paying attention to is, you know, Scott, in the previous cycles, when Bitcoin reached its all time high for the first time, ETH was much further away

from its all time high than it is now. So like, if you look in the 2020 cycle, when Bitcoin breached that 20k all time high from the previous cycle, ETH was 50% away from its market cap. In the cycle before 2017, ETH was less than 60% away. Now, we're basically, Bitcoin just broke above its all-time high. And here I'm looking at market cap terms, not in price, just I think it's easier. And ETH is like less than 10% away from its all-time high in market cap terms. So I fully agree with everything that has been said. I mean, we see that at our desk. Bitcoin is definitely at another level.

Interest in altcoins is mostly limited to certain assets that have attained certain narratives like Solana, perhaps some of the DeFi 1.0 kind of protocols. But then there's ETH, which is kind of in between. It's starting to show some early signs of catch up after underperforming quite significantly in 2023, as most folks here know. Listen, you're preaching to the converted, I'm obviously bullish on Ethereum price and think the same, but it's also important to note that in that cycle,

or at least in the previous one, I believe it was when Bitcoin topped and then Ethereum topped and went crazy a month later. And that was the top top. Right. So there was no bull market after that. We saw, we saw the steady decline. So I think a lot of people would hope that is not what we have necessarily happened here. Again, Dave Weisberger, then William. from, let's say, warm to red hot. I do think that this might be slightly different this time just because of the type of investors that are involved in the space. But yeah, you're very right.

So the catch-up at that time, especially on the ETH side, Bitcoin was a little slower, but ETH went from very, like, 50% from market cap all the way to reach an all time high like maybe a little over a month. I would expect something definitely something slower this time just because of the type of investment capital that is involved. I agree. Dave Weisberger, then William.

Yeah, I think that people need to understand history and actually go back a bit further. There's always this huge recency bias in the crypto community. Okay, we got three cycles. Great. You know, we're talking 12 years of history. Big BFD, as it were. The closest analogy to where we're at now in the crypto cycle, though, is the aftermath of the Internet bubble we saw in the 2000s. It was a transformational technology. People got way too excited. There were enormous number of frauds. The whole market

got cleaned out. And then Google came on board. Facebook came on board. And a bull market slowly that was disbelieved and hated for a while started and then ramped up into the global financial crisis, which then set back all tech. But honestly, we've been on a bull run ever since that. So you can look at it. What's important about that is many of the usual suspects, the companies that drove the original internet bubble, literally never recovered, went boom. And I think a lot of that's going to happen with failed layer, layer ones and a lot of the coins that were out there from the first bubble here. You shouldn't expect necessarily that they're going to everything is going to come back. The stuff that comes back will be stuff that people have a story behind.

You know, Bitcoin, Ethereum, Solana has a lot deep in gaming, AI, obviously, those are the things. And so, you know, this bull market looks different. It just does. And it feels different to the crypto markets, but extremely similar to what we've seen in just as speculative a market in regular financial assets. William. Yeah, hi.

So I'm seeing a number of startups that had put their token plans on hold before during the bear period now getting ready to dust off these plans and getting ready to launch in as little as two to three months out. So when we talk about altcoins, I think we need to think that the activity, the new activity is not going to come necessarily where everybody is looking. And everybody is looking at the traditional altcoins like the, of course, there's going to be ongoing activity in Solana and the other L1s and L2s that we all know about. But where not everybody is looking, I'll give you a couple of examples. One of them is in the flow ecosystem. It's getting ready to resurface in full force, in my opinion, not just based on the strength of NFTs,

but because they have something called EVM equivalency. So everybody's been talking about EVM compatibility, but this is even different. This lets you run Solidity code on flow in what is called an emulation mode, meaning that you don't have to change the Solidity code too much. So look for a resurgence of flow in the next two to three months outside of NFTs, perhaps in DeFi as well. Another example is on Forecast, and I've mentioned that before, Warpcast specifically. Everybody on this call who wants to experience where Web3 is going should get an account on Warpcast, which is where all of the experimentation is going on in Web3. And they have their own meme coins there. And some of them are

going to do better than the current ones we all know about because they are tying them to use cases, earn and spend use cases. One example is one called DGN, rightfully so. And you look at the meme coins that everybody knows about. What can you do with a Dogecoin or a Shiba coin? Nothing, speculate on it. The meme coins that I'm seeing on Warpcast are becoming utility coins. You earn them by doing things and you can spend them by doing other things.

So these are two areas I would... William, I've always joked, you know, the first question that when that retail people do come back or when you meet someone who knows you're in crypto, the first question I'm sure it's for all of you is, what should I buy that's going to pump next? Right? I mean, it's kind of the title of this. And I always or what token from last cycle is going to be like the winner of this one. And I always kind of joke that it's something you've never heard of. It's always something new that doesn't have the selling pressure that comes onto the

radar and ends up being kind of stealing the show for the cycle, right? Yeah, but I think the the smarter ones are going to want to try it. Before, maybe you did it because you heard it from somebody who heard it from somebody else and so on. Or so-and-so is doing this, let's go in there and do that. But I think the smarter ones are going to say, can I use it? Can I use it? Like, is this thing for real? And I've been saying this for a long time. I'd like to see more token utility as than uh token speculation in the web3 space you are going to see more utility

and the utility is getting better and it's not just a rush to earn something by doing trivial things at the beginning they might look like silly things, like, yeah, I'm going to like something, and I'm going to earn 10, whatever, DGNs. But now I'm seeing more real actions that mean something. And whatever you've earned, you can use it to spend on creating something else. And these are the real new economies

that are going to be more meaningful. Another tidbit here, minting. The act of minting is not just to mint an NFT, whether it's an expensive one or a cheap one. I am seeing minting is going to be the new like. You go on a Warpcast. Like, for example, I've just recently moved my blog from WordPress to Paragraph. Paragraph is like a sub-stack on Web3. So when I write a blog post, you can mint up to 10 unique copies of my blog post for $2. It's nothing. It's insignificant.

But it's just an act. It's an act of lighting that may cost you $2. But it is kind of where things are going to be going, doing more meaningful things attached with tokens. You have a much more faith in humanity than I do, although I tend to agree that that's how it should happen. Joe, do you think that... And DB, I see you're giving it up too. So Joe first. But do you think that the average person is going to actually care about utility or do you think they're more likely to just hear about it from their friend's friend and try to make a ton of money? I lean towards the latter, although I believe there will

be an element of the former, as William said. I think it's a beautiful vision. And a lot of us are building towards that future with utility tokens. I think from just like a pure meme coin standpoint, some of these people want less utility, right? It's almost like that Russ Hanneman from Silicon Valley. He goes, it's not about how much you earn, it's about what you're worth. I don't know if you remember that. He goes, companies that... Who's worth the most? Companies that lose money. Pinterest, Snapchat, Amazon's lost money every quarter for the last 20 years, and Jeff Bezos is the king. So I think there's... He's like, revenue, we don't want revenue. He's like, then they're going to want more. So I think that there's a little bit of that,

a lot of bit of that in the meme token market where people just they want memes and memes of the currency. But the beautiful vision for the rest of us is building utility. And I 100% agree with Farcaster. There's some really interesting things going on over there. You know, we're even looking at that from a Lunar Crush standpoint of how do we start pulling in social data from Farcaster. And, you know, since it's all open, it's very easy and it's interesting. So, yeah, there's a lot that's going on over there. Yeah, I mean, I'd be careful with the regulators as well. I mean, if there is no utility, then it makes their case stronger for labeling whatever as a security. One of the biggest pushbacks from the SEC and the smart regulators is, what does the

token do? I mean, the reason why the L1s are kind of left alone, more or less, because the token does something. It does something for the security of the network, number one. And these altcoins that are going to be consumer tokens, if they don't do something, what's the utility? That question is going to be asked eventually. I actually heard an argument earlier in the cycle, there was an argument, by the way, from a lawyer that was here that said that because memes, if they were fair launched and literally were launched without any utility,

no kind of promise, nothing that they would actually be relatively off the radar of regulators as much as they hate them because they make no promises, no guarantees. They don't claim to do anything. So it's actually quite the opposite. I can't speak to that as a lawyer, but we had a lawyer on the panel say that in the past. So I found really interesting. Go ahead, Dave. Yeah, I mean, it's it's so depressing that what that was just said was correct in terms of securities. It's one of the the weird things that meme coins don't have that problem because there's

no utility, but it's not just utility. Remember, it's about an organization centralized that looks like a corporation, et cetera. But all of that really boils down to a very simple thing, which is places like Dubai, Singapore, potentially Europe, if they get their act together with MICA, maybe the UK, actually have a chance of developing an ecosystem for people to participate in a means of financing that effectively goes hand in hand with open source, which will be a very big deal in terms of global productivity going forward, which if you don't lose sight of that, you can't lose sight of the fact that that's really the major innovation in crypto is 24-7 global markets where you don't have to trust an intermediary,

that does not fit the United States securities model. I mean, Commissioner Peirce has been saying this for, you know, basically since she's been on the commission. And the real question is, will the U.S. be left behind completely or not? At this point, the train's left the station. There's no question the world's going digital. The sole question is, will the U.S. go from number one in financial markets to a backwater? And really, you know, Mike Novogratz made a tweet this morning, which basically that's what the essence really is. And so we'll see. But I don't think that security or not is going to be nearly as big of an issue because the rest of the world is just going to move ahead. And I also think that there's just a general lack of respect for the regulator at this point in the

United States, which is such a bipolarity from last year. Like we were all terrified of Gensler cases against Coinbase, Binance, and they keep losing. So nobody's even taking it seriously. It's not a fact. It's that they're overreaching and they're overreaching. I mean, at the end of the day, you know, you know, Napoleon didn't reach nearly so far in opening a two front war as this SEC has. They basically pissed off every single corner of the industry. Right. I mean, and so they're fighting on every single factor, whether it's the climate rule or the the order protection rule that they're going for on traditional finance, and they've been getting their head handed to them in crypto. There's so many lawsuits. It's not that they're not respected. It's that people at this point just don't believe that it's real, right? And,

you know, you got Congress people basically saying, don't regulate by enforcement, don't do this, don't do that. And, you know, I guess we'll see. But, you know, it at the end of the day, if the U.S. is held back, things are going to move overseas and they already are moving. I mean, obviously, that's true. Yeah, the feeling was that they had moved, you know, that's even last cycle, you would speak to Americans, even on these very panels, they'd say, you have to be nuts to even try here. And that sentiment is gone. Oh, yeah. No, that's very true. I mean, look, we're in the same boat. You know, with CoinRoutes, we're opening, you know, overseas in multiple locations. So, you know, but it's pretty much everybody has to do that.

Yeah. Jack, have you had to navigate any of this? Hey, guys. How's everybody doing? So, security is always an interesting question. And I think the best way to see if anything is security or not, or whether it actually even matters, the Howey test. And ultimately, you can even have a security or deem to be security, but that doesn't actually mean that you're breaking the law. The only time security is illegal is when you sell it to the uh u.s citizens without being registered with 1934 i

believe act uh so basically uh if you if you sell your security as crypto to accredited investors this is not breaking at all so it's not even a question of like whether it's security or not it's whether what what you do with it how you raise money so that's that's my understanding yeah i think that uh there's just so little clarity you know that uh but i think that people are just gonna persist at this point and keep pushing and wait because i just don't think that they're scared at all. But let's talk about the cycle here. DB, I don't think we got to you there on this one.

But like, do you think that this hyperbolic alt season near title, do you think that that's relatively accurate? I mean, do you think we're going to start to see this capital flowing down or do you think Bitcoin is still the show? And by the way, everything's kind of going up. So it's kind of funny that we're talking about the alt season when things are up by many multiples already but here we are yeah yeah everything is is going up it's moving up kind of slow and steady we haven't seen too many huge parabolic moves except for a couple circumstances in the ai or deep in a couple narratives that are playing out like that but overall it's kind of more of a slow gradual up and down up up again but as for if it's going to play out like a previous cycle i'm i'm starting to think no because bitcoin really is stealing the show and with the the capital that's flowing into the etfs that may

not necessarily flow into ethereum and then altcoins and mean coins like it typically does in most cycles i'm thinking it's going to be a bitcoin ethereum maybe top 10 heavy cycle with not the blow-off tops in the the altcoins that we've seen in the past with just solana doing a 10x in a week or whatever it did three years ago. I just don't think we're going to see a lot of that playing out in the next year or two like we may have in previous cycles. So I actually have a counterpoint to that and it's pretty basic. 70 or 80 percent of Bitcoiners huddle the Bitcoin. They're not moving their Bitcoin, they're sitting on it. In the last week, as Bitcoin hit all-time high, we actually saw 2010 miner wallet move

and sell Bitcoin and Coinbase. Now, where is this money going? It's definitely not sitting at fiat. I think what's going to happen is that as Bitcoin reaches for all-time highs, this 80% slice of the crypto segment is just getting more and more value. We'll be looking for new places to invest and speculate with their newfound wealth. This is like we've seen it in every cycle. So anything that's alt, and obviously including Ethereum, will have a multiple or a higher beta when it comes to moving higher obviously it will have more risk for the downside but i think bitcoin is the this

giant you know iceberg destroyer that's getting a lot of capital is getting pushed by the threat fi and all of the guys that been sitting on bitcoin will now be looking not necessarily for exits but rather for investment and continuous speculation in other interesting things, which include L2s, L1s, AI, memes, and all of the things that are new in crypto that's getting basically the sort of like a baseline of the Bitcoin move higher. DB just made an interesting point sort of about Deepin and AI. They've sort of had their little, I wouldn't call them bubble narratives, but those are some of the first narratives we've seen in this cycle. It sort of harkens back to DeFi summers and NFT summers and metaverse falls, you know, all these things that were extremely hyped when parabolic and then the slow bleed when either the cycle changed or we started to realize that

they just weren't ready yet. UI, UX, there was no mainstream adoption of them. I think all of those narratives come back harder this cycle because they are more ready. The infrastructure is built and the real use cases for them are being found. But then again, you see this deep end in AI movement. Are those going to be the darlings of this cycle? Or is it sort of like I said before, there's some things we may not even expect? Are there other narratives any of you are looking at that you think are glaring that haven't moved yet? Go ahead, DB. Yeah, and this is kind of I think what William was touching on with utility. And I completely agree. I think that's where the space is moving and obviously where it needs to move, real utility. And a lot of these deep end projects, they're providing real utility. You look at Render, Akash, Flux, they're providing cloud compute and AI cloud compute for a fraction of the cost and decentralized too versus AWS and Google. And this is real utility that the world and people need. And same

with some of the AI projects. Now, I think a lot of the AI projects are kind of a bubble. Some of them not, though, for sure. Not the entire sector. But it's all going to be coming down to actual utility. And while we're growing there, I don't think we're there yet because there's still a lot of the space is lacking in security, in my opinion, with the ERC token. This has a lot of security issues. Just in February, we saw over 450 million in hacks again. And that's an average month. And we're still without adoption at this point. So you bring in adoption and that number is going to 10x plus.

Right. I'm just wondering what that next killer app is, right? I think we've had Bitcoin as the first killer app. I would argue stable coins have been the only other actual killer app for crypto writ large so far. Will any of these things find a killer app in this cycle? Or will it just be a whole bunch of speculation on narratives and then, you know, siphoning off? Towards the end of the cycle, maybe sometime next year or late this year, I see more of it coming about. But I don't see us completely there yet. I still think we're possibly another cycle out until we have the strong narrative utility projects that not only are useful, but they're also accessible to the general public, which a lot of it is not at this point because crypto is still confusing. And it's still not super accessible for the average person.

But it's a year or two out, possibly, I'd say. Yeah. Jack, I'm glad you raised your hand because I was going to ask you next since you're obviously building. And, well, you helped build Google. So, that's a perspective here. Yeah. Thanks for that. So, I think, and we've seen it in other cycles, too.

What we're seeing now is the connection of TradFi money flow into crypto. And the killer app today is really an ETF. What we're seeing now is the connection of TradFi money flow into crypto. And the killer app today is really an ETF. It's connecting all of the boomers out there and my mom and my dad with their 401ks, allowing for the money around the world to flow into crypto. And I say into crypto, not just Bitcoin, because I think other ETFs are coming. I think yesterday we heard that Great Britain is getting their act together in terms of getting an ETF launched. So for the next couple of years,

the killer app is actually the money flow from Stratify into crypto and legitimizing the crypto financial industry, which will attract VC capital. So like in other words, as Bitcoin gets hotter and hotter, and so is Ethereum and various other projects, will actually attract millions of dollars. Like we've seen Monad just a couple of days ago raised $200 million on $3 billion valuation. And I think Monad is just about to launch a test that they don't have a working test

not yet, just a Git book. So this sort of influx of money that's been sitting on the sidelines since COVID actually will introduce a lot of interesting players into the ecosystem that will build the next new thing.

But I think for the first two years, the killer app is just this acceleration of the velocity of money coming in into the sector from everywhere, including taking all of the VCs' monies, hitting all of the new and interesting projects and building new teams. The amount of VC capital being deployed right now is absurd. And the amount of projects being pitched is absurd. So I know that there is the ETF liquidity on the one side. And then on the other side, there's the complete degenerate crypto native washing machine going on in the background of pre-sales and such that I think William even mentioned, you know, a lot of them have been sitting on the sidelines for two or three years, they're getting ready finally,

now. So I do think that that's the case. Here's another question, Ryan, maybe you have thoughts on this, because we sort of have, like we said, these segmented parts of the market now. You have Bitcoin, which is being driven clearly by institutions, ETF approval, unlocks of RIAs and such, and then you have the rest of the crypto market. Do you think that some of that money that's going into ETFs will eventually make its way into the rest of the market? Or do you think they're really siloed at this point? I think the meme coins and the lower market cap coins that we're talking about are very siloed from the investments that are being made from RAs and financial advisors into Bitcoin ETFs. I think there's some middle ground. So if you think about the other blue chip crypto assets like Ethereum, Solana, and maybe some chain links and Uniswap, things like that, like blue chip DeFi assets, I think we could see investment in those eventually.

Obviously, once they get a taste of Bitcoin, especially how it's been performing, and if they've gotten to the ETF at any point to now they're showing positive returns, that's going to probably peak their attention into other areas. But still, there's the access issue where if they're waiting for an ETF to allocate, then they could be waiting a very long time for anything other than Ethereum. I mean, a very long time being, I don't know, one, two years, three years, maybe. So there's definitely some middle ground there where i think we could see interest there's also crypto equities like coin base or bitcoin miners or micro strategy i think we could see those investors that are investing in bitcoin etfs uh rotate or add to their position into crypto equities which could be really interesting as well uh and certainly is a high beta play to Bitcoin. But there's definitely, in my opinion, not going to be financial advisors and RAs and money managers who are managing on

behalf of clients aping into meme coins. Or really, it's tough for them in a lot of instances to access lower market cap, lower liquidity assets that aren't trading on potential exchanges that aren't supported by custodians. Do you think they would buy an Ethereum spot ETF? I do think they would buy an Ethereum spot ETF. I don't honestly think the demand will be as high for an Ethereum spot ETF as it is for Bitcoin.

I just don't think a lot of non-crypto investors understand Ethereum or really have paid any attention to it. So you have to go through that educational journey with them on Ethereum like you have for Bitcoin. It's taken many years to get there for Bitcoin. I think it will take some time for us to get there for Ethereum. Even if we do have approval in May, I don't think we'll see the same level of demand that we saw for spot Bitcoin ETFs over the last two months. I totally, totally agree with that. Andrew, you you jumped on stage which means you have an opinion um i have an opinion that i don't i'm not sure it's been discussed but i just i just wanted to toss it out there um i'm probably sarcastically, but also in reality, I'm very impressed with the PR campaign of Grayscale and what they're doing. And by proxy, the PR campaign by Barry Silbert and Michael Sonnenschein, they're hemorrhaging assets while at the same time Bitcoin is going up. So

it's keeping their total AUM, you know, on the upside. 27 billion forever. Yes, exactly. But it is a two-pronged thing to talk about right so behind the curtain there you know the the fees associated at 1.5 percent which is only one of the reasons why people continue to jump ship from gbtc um is funding the entire operation that is dcg there's there's really nothing else there of meaningful revenue a little bit of a mining operation and their interest there, but it's funding not only their operations, but also they still have suits that are out there, yada, yada, yada.

But the, I guess the, I'm looking for the right word here, but Sonnenschein is on CNBC and other networks, you know, with just without a care in the world as if this is all on the up and up. You know, they announced this mini BTC fund, which, again, I promise you is nothing more than just a bit of a PR stunt. If anybody thinks that, you know, somebody is going to take their GBTC and move it into another Grayscale product, that's insane. If anybody thinks that Grayscale is going to walk into wealth managers and do little donuts and coffee meetings and say our mini BTCs

is better than BlackRock or Fidelity, that's also a joke. But again, on the flip side, the PR bump and arc that they're receiving and getting from doing all this is, I don't know, it has to be, you know, given it. They've played this game exceptionally well, Andrew. They really, really, really have. They did the math. They knew what they would lose. to be you know given they've played this game exceptionally well andrew they really really really they did the math they knew what they would lose they took a bet on bitcoin rising as a result of all this and now they're you know being able to i think it's been a great narrative for them

yeah it's uh it's something you know all the marketing you'd see it everywhere airports and you know all over the place um they made a bet that the you know, there's only a tiny, tiny portion of the populace, even in crypto, that meaningfully remember what DCG and Barry and Genesis and Grace, what they're about and what they've done and what they were involved in. Most people have forgotten it or don't remember it at all. And certainly, the public at large doesn't have any idea. And they made that decision and went forward with it. And so it's kind of a masterclass in PR. They're going to continue to hemorrhage assets. I think a couple of weeks ago, their outflows were down to like 75 million or 110 million on a daily basis that everybody was like, oh, looks like things are, you know, things are slowing down for Grayscale and their outflows are going to basically end. That wasn't the case. And also, you know...

Well, I saw things like VanEck dumped their fees completely for another year. So there's a, there's a counteracting narrative there with people who are going to be talking fees. Sorry to interrupt. No, yeah, no, you're, you're right. And, and at the same time, um, you know, there, when, when some of these, excuse me, big inflow outflows started hitting again, Oh, that's the, you know, that's kind of the Genesis agreement that they've got to sell. Well, that's come and gone. You're now seeing again, 300, 400, nearly 500 million in outflows, and that's going to continue. So it's just a really interesting, it's kind of a masterclass in, you class in recovery of reputation PR.

And I don't have a ton of love for Barry and his crew, but you got to hand it to them, I guess. Respect where due. Dave, go ahead. Yeah, I mean, my father used to have an expression. He had a lot of expressions, but one of them was you'll never get poor betting on this. You know, you will never you will never fail if you continue to bet on the stupidity of the American people. And he was talking about his dumb things. Do not underestimate the benefit of having the ticker symbol BTC. Do not underestimate that. That is expect. You could expect that they will gain from that. And we've all seen it with tickers.

I mean, Scott, your way of saying this is humans are going to human. But, you know, if they continue to have their retail, because they were the first retail product, it is a way for them to gather assets. But I agree with Andrew. It's not targeted at the RIAs, the FIAs, the professional markets. It's targeted at the self-directed retail punter. And honestly, I think that it's a brilliant strategy as much as I tend to agree with the sentiment about what that does. about even even with ongoing outflows if if if and when you know bitcoin you know floats higher to 100k you know you're you're talking about you know and and grayscale sits there even in their shitty gbtc product at one and a half uh you know percent fees you know they're going to be making $450, $500 million in fees from that product and some

of their other products, not to even discuss their ETH product. So they could do nothing. They could literally do nothing other than ride the wave. And they're going to be making, if we hit a brutal bear market and everything gets cut in half or even 60 percent they're still still sitting on 250 300 million in fees if we go in the opposite direction 600 650 million in fees just from grayscale dcg could do nothing other than just exist and uh they And they've got a great business. That strategy worked for them really well before the ATF. Don't allow unlocks.

Don't allow people to redeem. Do nothing. Collect. Yeah. Yeah. It's, you know, Barry Silbert is not a great guy. That's been confirmed. But what he is great at is the law and manipulating the law in his benefit. And they did that with the initial gray scale products because you couldn't get your money out. Right. But nobody made a big deal about that at the time. Like, oh, I've got access to a product here. I've got access to Bitcoin in my IRA. That's awesome.

Nobody looked at the fine print, to Dave's point, betting on the stupidity of the public. So it's a unique, interesting, it's not the way I would do things, but from a PR standpoint, kind of a masterclass. Yeah, guys, we're going to move here to wrap up as we're coming in sort of to the end of the hour here. Quick summary, I think my base case here is, you know, what will drive, I don't care if they're 100x, 10x, 2x, whatever, explosions. I'm really formulating this case that I think it's when things like Doge start to approach all-time highs that we'll actually see more news and retail interest than even when Bitcoin is reaching its all-time highs. NFTs maybe potentially as well, because those are really the things I think that brought in retail en masse last cycle.

I could be wrong, but I still think it's interesting that Bitcoin's trading at new all-time highs and we're not really hearing about it much. But if you remember the fever pitch of Doge and NFTs on SNL and all of those things, I think that really might shockingly and sort of not unexpectedly be what brings retail back. Also just like a very quick announcement, Joe was up here. We were going to talk about this. Joe, Mario and I have partnered now. So Mario basically we're 50 50 on my YouTube channel, which is a slash Scott Melker, the Wolf of all streets on YouTube. And we're launching a whole bunch of new shows. Andrew,

we're going to be launching a show together, uh, Tuesday afternoons, right? Indeed. Fantastic. I've been the slowest man on earth to get that done, but we are launching a show together on Tuesday afternoons. Um, and, uh, but the first, and that, you know, eventually I think Andrew will be able to hold that down probably without me, but my FOMO will keep me showing up regardless. But tonight, Joe from Lunar Crush, who was here before,

launching the first new show not hosted by me ever on my channel, which will be at 9 p.m. Eastern Standard Time every day, Monday through Friday. I'm really excited because Lunar Crush and what they're doing and how he utilizes and understands the data of social sentiment in this market can answer things like what will drive 100X explosions and when it's time to exit the meme coin cycle and all those things based entirely on their machine learning and data and social sentiment. Really, really fascinating stuff and a ton of alpha there. So that launches tonight.

That's sort of the soft shill from, from Mario and I here, since we both have now equal interest in building out the content on the channel. So really excited now to have, uh, you know, IBC and Mario sort of behind me to help build this out. So it's not just me showing up every morning and tell you about the BTC inflows and Dave and I arguing with Mike McGlone. Right, Dave? We need some new blood here. I think it's going to be great. All right, guys. So I hope you guys check that out tonight. You'll see some tweets from

us. But otherwise, we'll of course be back here tomorrow. Space is 1015 a.m. Eastern Standard Time for Crypto Town Hall. Thanks, everyone. Bye.