The Wolf Of All Streets - Assets Rally On Trump Vibe Shift: Will BTC Break Out? | Crypto Town Hall

Episode Date: March 25, 2025

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Well, good morning everyone. It is 10 18 not doing too bad this morning on March 25th. Those care for posterity and welcome to crypto town hall. So yesterday we had an interesting day and today we haven't seen a reversal Tuesday yet. So I guess we'll see what what things play out. It's also a couple of interesting stories out there. Maybe our lawyers will care about that. Binance doing some things that make them look and feel a lot more like an ATS or a multilateral trading facility for our European friends than a crypto exchange. So there's a fair amount to talk about. But everyone, all they really care about is the market and the price. And look, look there's a bit and What that bid will turn into it will see the issue is is Trump really gonna let Scott percent run the economy And it looks like the answer is yes

And if so, there's an adult in the room and good things will come from that at least in my opinion Obviously feelings will be mixed. So curious if anybody wants to get started. I'm perfectly happy to talk about any of these things, but we got a bunch of good guests and you don't only want to listen to me talk. So anybody interested or should I just drone on some more? Dave, could you share more about the finance news and why you think it looks like that? I hadn't seen that. Dave, could you share more about the Binance news and why you think it looks like that? I hadn't seen that.

Yeah, there's a few stories out there. In the block, covered it. So first, Binance actually openly disciplined employees for what they called insider trading. Coinbase has done that before too, but it's kind of indicative of the fact that the DOJ is inside the organization and looking for things for them to actually do that look more and feel

more like traditional finance. But the really interesting one is there's been two stories where market makers on Binance were caught with their hand in the cookie jar over the last week. One, well, most recent one was on a token called Move. I don't know much about the story, but what's interesting about that are a couple things. First, Binance is holding market makers accountable to their program that says they have to make

two-sided quotes, et cetera. And the fact that they're kicking market makers out of their system for manipulating the price of newly launched tokens is a big deal. It's something that frankly, it would be a much bigger deal if every exchange did it and there was broader enforcement because the world doesn't like, I mean, people don't like to trade in markets where they know there are people who have the ability to screw them, rug pull them to use the crypto word.

I just find it fascinating and not surprising that Binance is the first exchange we're seeing actually flexing some muscles here. It's not surprising because of the DOJ, but it's still a good step. And there are so many people, you know, I go talk to a lot of people in TradFi and a lot of them are like, well, it's the Wild West and nobody cares about anything and the answer is that's not really true. The answer is that most exchanges have taken the approach that well, the market can sort it all out, people will figure it out and volume is volume, money is money.

But it's pretty clear that Binance is not taking that approach, at least whether they want to or not, they aren't taking that approach. Carlo. Good morning, Dave. It's interesting, it seems to be a pattern that we're seeing emerge because if you remember, there was a minute there where Coinbase was starting to list several meme coins that were trending and listing them very soon in their timeline, and then walked it back on a couple of them. It is nice to see the industry step in and self-police,

especially when it comes to highly volatile asset class, where there is a lot of potential for manipulation. Kudos to Binance for self-policing, I guess, because I've always maintained the industry's capable of doing this, and it's probably the better way to approach things and leave the regulators to handle outright fraud as opposed to micromanaging.

Yeah, I mean, look, I don't think in a global marketplace that the regulators are going to be able to do The same job that they do when they're inside their own little fiefdoms, right? I mean think of it this way You know, we always talk about momentum ignition. I use those words people in crypto just call liquidation cascades But whatever but we know that some of the time When leverage builds up in the system, there are firms out there actively looking to take advantage of that and trigger a liquidation cascade. Well, in Japan, in Hong Kong, in Singapore, in Europe, in the UK, in the US, that would

be illegal. But there's not one single regulator when you're doing, because it's generally a trade that is spot versus purse. It's rarely on the same exchange and chances are most people doing it are doing it across jurisdictions. So until global regulators figure out a way to do something about that, which I frankly, I would like to think I'll still be alive, but my guess is it's going to be decades. I think it's incumbent on the industry to not self-police that sort of behavior,

at least to be able to identify it so people can know what's going on. Austin. Yeah, I would say, I think there's kind of two levels to what's going on here, Dave. One, as you've been talking about, I think the industry taking a greater degree

of self-policing is probably a net positive for the world in that exactly as you said, there's a lot of people who are sitting on the sidelines with regard to crypto markets because they do not have faith or a belief that the trading is fair and things are not being manipulated. That is going to be increasingly a problem if you want any sort of mainstream adoption. The other thing I would say though is, as we're starting to finally look at a push in the United States to having some sort of market structure or crypto legislation, it is probably in the best interests of the industry to clean up their own house before somebody else comes in and cleans it up for them.

You almost always are going to get better treatment if you manage to find solutions that are constructive and cognizant of the technology. Because if you leave it to Congress, or you leave it to regulatory interpretation, they're going to be much more harsh about how some of these things work. So the other thing I would say is, in a weird way, the legislative environment getting more positive may actually serve as a driver for the industry to start taking these things seriously, or at least that's my hope. Because, you know, as we've seen in other markets, the other path can be pretty negative if you don't. Amen to that. Yeah, sorry. Go ahead, Carla. who suffered obviously the brunt of this with respect to the US regulatory arm and how hard they came down on Binance, they're still under scrutiny. It's part of their agreement that they would continue to be under scrutiny. So it's responsible of them to do so. And I agree 100% with Austin, if we leave a vacuum, regulators will always default to the extreme and they'll

step in and they'll be happy to step in, especially when you look at the amount of cash flow that the SEC generated in its enforcement regime. They necessarily, and part of their model is they self-fund themselves by what they recover. So they had a huge incentive to crack down on the industry. And what we saw in the end is, in the wake of all this, we saw a lot of companies have to settle, get destroyed and get taken out of the marketplace. And now they're looking at all these other cases that have been dismissed and investigations have been closed, but the damage has been

done. So I agree if the pendulum swings too much to the extreme and we let the regulators in and we don't self-police, well then we kind of get what we deserve. Yeah, I mean there's definitely some element of that. Zilean. Yeah, I got a pretty harsh maybe provocative thoughts on this subject. I think it's not very complicated to understand what's going on and to uncover what's going on. It's very simple. You have to look at three things. One, the constitution of the major market makers right now that are operating in the crypto space. Who gave the initial investments? What type of contracts they had with the exchange?

Did they have an arm-tlen relationship with the exchanges or not? Very basic questions and the answers are pretty obvious. That's one thing. Two, there is no one today that is still in the game of exchanges that does not fully understand these relationships that manipulators may have with exchanges, especially in the beginning. And as they grew, obviously the nominal sizes of these things grew with them. So everyone understands what's going on. The problem is that you have certain players that are more exposed than others simply because at a certain point when you start talking too much you cannot source liquidity anymore simply because most of

the liquidity did not move yet to the United States in a sitting offshore place so a lot of people that might know what's going on and actually may not be kind of this playing to their advantage or what you call you the industry etc unfortunately up until now they don't the game is not they're not this play into their advantage or what you call the industry, etc. Unfortunately, up until now, the game is not, they're not majors in the game yet. And I think a shortcut here is simply to build enough awareness and to have regulated entities that are in the US that kind of decouple from a price perspective from the rest of the users because what you

will find you're gonna find the two type of operators the kind of US regulated ones and the offshore regulated ones okay and unfortunately the liquidity of this environment is one so I mean I got to push back a bit I mean look I'm an American and I you know I have friends at the FCC still a few of them left although quite a few of them my guess is I haven't talked to them in a while my guess is quite a few of them are those among the 400 that have tendered their resignations and taking the buyout but The the US does not have it's not the only regulate regulatory regime that goes after fraud that goes after market manipulation

Right, I mean there's fairly strong goes after fraud that goes after market manipulation. There's fairly strong anti-manipulation regimes in a lot of other places. The thing that the US does better than most is it has, in most markets, is it's more competitive and less centrally dictated. In crypto, there is nothing that's centrally dictated. It's really a question of confidence in the market. I'm not going to say that having the US regulators involved is, if they do it on a principles basis, is a bad thing. But if they get, if let's say we had Gensler

trying to do regulation, let's say he wasn't, you know, held by Elizabeth Warren's hand up his butt, telling him what to do, maybe he would have wanted to regulate the crap out of it as opposed to destroy it. Who knows where we'd be? But it's, I don't think it's so to destroy it, who knows where we'd be. I don't think it's so cut and dried about the US. Yes, no, just from a perspective, I agree with you, but from just the perspective of today, because today we're linking financial products with the price, right? I mean, we're linking ETFs to

the price of the underlying assets. Now we're probably going to go even more broader from the ETF offering, etc. What I'm trying to say here is that the price is unfortunately very hard to decouple one market with another. It's very hard, even though one market might be a casino and the other one might be less of a casino. But at the same time, it is important to have the right pricing, the right price discovery. So for me, I was thinking, really, I was thinking with the ETF, the avenue of the ETF and the whole requirements for ETF, especially from a price perspective, that the ETF price would be fully, which is impossible to do, but hear me, it's solely basically kind of linked to the price made in the US because you understand?

So just a couple little bits from the casino. Here's where it's going, just to be clear. And look, I've been involved with ETFs since before they were called ETFs, you know, actually on the second patent of an exchange traded product. So I go back a ways with this. Within days of Paul Atkins being installed, and I guess his hearing is finally on Thursday, you're going to see the SEC is going to accept applications to change the ETFs to be in-kind delivery. When that happens, there is no overt Lincoln price anymore. And that's really important because the Blinken price at that point is based upon what people think the price is, is wherever you can buy Bitcoin to create, wherever you can sell Bitcoin to

redeem, arbitrage will keep the price in line, absolutely, but there's nothing explicit. Right now, because it's based on dollars, they kind of have to base it on certain exchanges and where they're doing it, kind of like the CME does futures. Now, futures, because they are a derivative, they are based on the price. And so there, they use Bitstamp and Kraken and Coinbase, et cetera.

I think Jim and I, I can't remember if they ever resolved their dispute in the CMEs reference price, but just you don't want to mix metaphors there. I'm sorry, I'm very anal retentive about this stuff, but I'm a market structure geek. Anyway, Amateo. Yeah, going back to the Binance news, I mean, I think there's been a lot of questions around Coinbase and Binance and Exchange listings, because we tend to see quite a bit of volume interest and hype leading up to these listings, which does then lead to what looks like the most opportune time for these market makers to exercise one side of liquidity

as everyone sort of rushes into these markets once they become more liquid, which is ultimately for many assets with exchange listings that resulted in a complete repricing of both their market cap and everything else to a magnitude that's pretty significant. So we also got some news yesterday that the SEC is stopping enforcement actions to sort of the de facto way that they go after crypto companies. I think that's huge news for the industry, but I think kind of what you're alluding to points to something much deeper, which is that was a broad, overarching, unintelligent way to just throw a label, spend a ton of money attacking projects and hoping that you get a P&L on the money that you return. And it's just not very sophisticated.

It's just the shotgun approach. They're not gonna take that approach now, but it's very clear that they're gonna be very likely taking a more sophisticated approach, which I hope is what's leading to this crackdown. I hope that they're being put on notice. And I'm not accusing anyone just saying that there's clearly Manipulations in these markets that need to be flushed out and I think that with a more sophisticated approach

Hopefully we get better more fair exchange listings for promising projects and not just means that aren't just completely influenced Yeah, I think I agree with everything you just said. So no comments needed. Simon, I think you're next and then Aladio. Yeah, just wanted to give a little bit of a pushback on the two-tiered system narrative of US regulations versus non-US regulations. Having been involved in regulated financial institutions for 20 years globally, including the US, UK, various other jurisdictions. There was a reason why I found Bitcoin and love Bitcoin is

because it regulates the regulator because regulations is a racket. And unfortunately, many people think they're protecting consumers. They protect consumers when it is in their interest. And they don They protect consumers when it is in their interest and they don't protect consumers when it is in the larger financial institutions interest. So if you think that US is a regulated market, it's like a financial apartheid. Those that they want to take out, they enforce their rules upon, and those that are larger and bigger and more strategically important, they do the crime and they pay the fine. And so unfortunately, it's very nice to think there is an element of it, but it is also

enforced globally as a global racket as well. There's institutions like Financial Actions Task Force, FATF, that puts a rating and enforcement on various regulators and then they have to work to comply with the regulations of the establishment and hand over all the data. But I'm sorry, it's a mafia group. It is about they all need to justify and pay for those big buildings. And the ones that are a certain size. If you don't think in the US that the largest banks and financial institutions are committing vast financial crimes and getting taxpayers to bail out when they get caught of their crimes, and that leads to fair markets. You just haven't figured out who where the financial flows are. And that's why it's investors. And that's why things like Bitcoin matters. And that's why trading is a game for insiders. And if you're not on the inside

or you're trying to do things a fair way, you're going to be regulated into submission. So can I push back a bit and tell you, let's start with the fact that you're directionally correct. But it's not what you're saying. And I'm saying this as an insider, I used to be. I sat on multiple boards of the most important industry group in the equity market from the broker dealer

and banking perspective, from the broker dealer, SEC perspective, a CIFMA, I sat there. The second most is Security Traders Association. I'm still on the New York's version on their board. And I know exactly the way that this works. It's much less obvious, but it works out to be the same thing. So effectively, what you have is when rules are written at the SEC, they absolutely do take public comments, they absolutely do all that stuff, except what actually ends up happening is the lawyers of the big firms work and submit comment letters and push regulations before Gensler.

In his case, he ignored them all to do what Elizabeth Warren wanted to do. So all the big ones, and it's also the asset managers. And they effectively push the rules to become what they want them to be. In certain cases, like for example, in the last administration before that, when my friend Brett Redfern was running trading in markets He tried very hard to push rules to where he thought he was protecting the public They actually sued him personally so you know you don't have to look very far to understand that this is a

This is not the simpatico mafia kind of thing. There's no one sitting at the table making people offers they can't refuse, but the industry does have the ability, and this is true about every industry in Washington. There are more lobbyists than there are regulators, and as a result, the lobbyists write rules. So it works out to be similar to what you're saying, but it's nowhere near as monolithic as you say.

Now that said, there's also a big difference between principles-based regulators who want more disclosures and less absolute, you know, absolutely prescriptive rules like Hester Perce, Mark Ayeda, and Paul Atkins that are about to be in charge of the SEC. And you'll see very different forms of that regulation. So, I mean, it's not quite what you think,

at least in terms of securities. On the banking side, I've heard lots of people who say that you're exactly correct. And certainly in the global financial crisis, the fact that there was not one, literally not one person criminally indicted for any of the crap that went on, it's insane. But, you know, so be it.

Anyway, since I responded to you, Simon, you have the rejoinder and then we'll go a lot of you. Yeah. Tom and then Austin. Yeah, I'll just add a few structural things. Unfortunately, in the big financial markets, it's just done at the systemic level. That's why you have this concept of too big to fail.

For example, if you're a normal financial institution or a normal broker, you have to segregate client money. And when you segregate client money, it's completely illegal to touch that client money. When banks decided to touch that client money, they just committed fraud and then they got it changed at the legislative level and got the bailouts and various other things and creates a legitimizing force on a Ponzi scheme called fractional reserve banking. And so if you look at all the money laundering that happens in the world,

the average person that's not committing crime, they give all their data, that creates a honeypot of data. But the big money laundering is happening at the intelligence agencies level through the banks. And we know that vast, vast networks of money laundering to this day is being done at the higher level through the ones that are meant to be regulated and everyone else is just passing on their data and they then give that for tax collection and other nefarious means. But I'm just saying the system doesn't work, it just means at the highest level you're not submitted to the same laws as everyone else and then the laws are weaponized against the people at the lower level. When you

work through the whole thing, no money laundering is being prevented. It's just saying we want to do the money laundering you're not allowed to do. Well that's a rabbit hole we could go down but I think that maybe we'll pass. And so we go Tom, Aladio and then Austin. Yeah so I think we're I don't know if we've kind of double clicked on what the current issues are a bit more in the current crypto market structure for token launches. And you see a lot of or any token that launches today, unless it has a very clear set of strategies, it basically dumps on day one, particularly if there's a broader fair launch type structure, which we've tried to incentivize here.

We've talked about regulating. So what are those kind of games people are playing? It's and you've seen this move and story and a bunch of other protocols right now. And it's really actually going out and getting direct purchases, purchase agreements from larger funds and giving them tokens at a discount. That's one strategy. Having a market maker behind the scenes who can incentivize broad liquidity

and is incentivized through option structures to hedge and buy your tokens and other. And then there are more in various games with, outside of the US counterparties who can directly purchase your token. And you see a lot of these protocols that are playing this right now. And what clears this up is a lot of things we're talking about here on market structure. So right now it's a very tricky, dangerous, and fairly illegal game out there.

And as you mentioned, Dave, unless you're an insider and know these things, it's really, really hard to play the Alco and space right now. Aladio. Good morning, everybody. You know, Simon, you don't get enough credit sometimes though, you and I disagree on Middle East policy. You're like the Carl Sagan of the crypto space. You are able to encapsulate, and especially for me,

because I'm an old traditional Wall Street guy that doesn't know, that probably knows the least about crypto in this whole room, but I've studied it enough to see that similarities that it has to traditional asset classes. You are spot on what has happened to regulation in the United States of America. To think that that that Elizabeth Warren and Gary Gensler and Larry Fink weren't working together. You know, I love how Larry Fink all of a sudden went from being one of the biggest ESG proponents to being now to dropping it completely. You know, it's sort of no different than what Mark Zuckerberg did, you know, when he realized, oh, shoot, I followed all the instructions that the prior administration gave me,

and now I'm going to pay for it with Trump. So I'm going to make me his best buddy. And that's the problem with the regulatory environment that is used with the regulatory environment that is used by the government to push things that haven't been legislated. And basically, Gary Gensler and Elizabeth Warren single-handedly tried to destroy crypto completely, like eliminated as an asset class was their goal, it seems to me. And that ripple lawsuit, which was finally dropped, which we knew was going to get dropped, and therein lies one of the problems that I see with trying to predict pricing with crypto now as opposed to three years ago.

When I buy an investment, I always usually say, you have to be early to be right. Now, if you could afford to lose a little bit money initially, you want to be early to be right. Now, if you could afford to lose a little bit money initially, you want to be early because once the move takes place like it did in the last two days in the stock market, you want to be in. So you have to be early to be right. And I find that the earlier you are in a stochastic move in the initial phase of something, the most profit is going to be made. And it is not realistic. Now that we have had all these lawsuits dropped, we've seen a regime change with Elizabeth Warren, a regime change, at least a Pocahontas as Trump calls her is powerless to a degree now. And so is Gary Gensler because he's out. So the moves we saw all it was the perfect storm coincided with the with the

pivot of the Fed where they were going to now start to at least not raise rates. And they waited nine months to add liquidity. They lowered rates. And that's when the markets took off, when the POW had his Fed pivot. And, and I just think it's going to be harder for crypto to move because we're not going to see a regime change like the one we saw. And obviously that had a massive impact on people getting back into crypto, knowing that the government was not going to regulate it out of existence or at least regulate certain parts of crypto

out of existence. So, but certain parts of crypto out of existence. So, but I agree that when you look at regulation in this country, it has morphed into a tool of those that want to stop something from happening and it's usually based off of their ideological positionings. And then the last thing I'm going to say, involvement of BlackRock or other large custodians in a similar fashion to say Michael Saylor and MSTR, where they control a large amount of the supply of something that is limited has some serious implications in my opinion, even if it's only custodied, it is in their possession.

I just have a problem with the concept that Bitcoin was created as a counter-revolutionary movement against the printing of money by the Fed, which in all fairness started in 1913 and never stopped and accelerated in 1980. And I just feel that the involvement of BlackRock and owning large swaps, even if it's only custodied of Bitcoin, to me, it goes counter to the reason it's not a decentralization when an ETF gets created that monopolizes the flows of something. As we know in the S&P 500, half of all flows are passive. I'm done.

Okay. As co-host, I won't body slam you, although I violently disagree with two or three of the things you said. The point that I want to make, BlackRock is a passive manager and everyone in the Bitcoin world needs to understand the difference. I have sat in rooms, I have seen arguments, gone to conferences where the entire world and the equity world talked about, oh my God, the world of equities is going to end if we go from 5% to 10% passive. We are nowhere near that in Bitcoin until Bitcoin is available to the average human being where they never have to worry about what happens when they die.

They never have to worry about whether or not there's something in my wallet that's going to get stolen until they never have to worry about any of the things that have been abstracted away by firms like BlackRock and firms like Bitwise, which is where the ETF that I tend to use. Until those worries are gone in the world of spot crypto, there will be Bitcoin ETFs. And then the other thing that ETFs are gonna do is they are going to provide a bridge for multiple, you know, for baskets and indices of crypto assets as they whatever. As far as the conspiracy theory, I mean, it's just, look, it's just not true, right? You know, as far as Larry Fink is concerned in ESG, I mean, I know some of the inside baseball here, so I'm not guessing. I can tell you that the younger crypto people inside Blackrock convinced him that Bitcoin and there's actually an interesting story about this that Bitcoin was pro ESG and He was like really how and when they explained to him how it's used to stabilize grids How would incentivize his energy production including renewables?

He started to get the idea and then he went down the rabbit hole So you don't have to look much farther and to say that Larry Fink agreed with it was working with Elizabeth Warren that's complete nonsense. Yeah really really really she and you need to understand that Warren and Gensler were pariahs from most of the financial industry. They hated them all of them. The people up and down these organizations. Look I sit in with these people and I'm telling you they had their own agenda. Yes, she wanted to control the banks, but BlackRock was oppositional to the banks and he actually stuck his neck out to fight them.

You know, but during the Biden administration, so you got to be careful there. But okay. Anyway, I've talked way too much. I think it was Austin next. much. I think it was often next. Yeah, wow. Okay. So actually, Dave, I'll continue on one thread you've dealt with as somebody who's dealt a lot with crypto investment and Bitcoin. I'm going to point out something that I think most people in the crypto space don't like to acknowledge, but is extremely important, which is that self custody is an extreme net negative for the average user of crypto. And the reason I say that is as somebody who's helped build a Bitcoin custodian in the past,

it is far more likely that you will lose your private keys and or get hacked and or lose your assets doing self-custody than it is that something happens to your custodian, especially if you're smart enough to go with some of the few regulated custodians in this space. Right, like my mother and my father are not technologically sophisticated enough to be doing self custody securely. And more to the point, they don't have time. That's a specialization of labor issue. Like my father was a doctor

treating people with brain cancer. He's doing that 80 hours a week. He does not have time to go down the rabbit hole. And so something to understand on the mainstreaming is if you don't want any centralization and you want to say to everybody, do your own research and you want to say to everybody, this is your own thing to deal with, you are also saying, I never want crypto to go mainstream because that's just a function of time. One of the few things we can't buy more of the second part on the regulation part, back all the way around to the original

Binance story, it's important to remember that anti manipulation regulations for market trading work different than some of the AML KYC things. Anti manipulation is also big boys fighting big boys, and they want those rules, right? You do not want to live in a world, as even most large institutions, where all of you need to have better information than say, like, literally J.P. Morgan in order to trade effectively. So one of the things to remember when you're looking at something like what Binance is doing or how market structure works, is that anti-abusive trading, so things like painting the tape, like banging the clothes, like insider trading, all of the trading restrictions that you get are also so that big boys can trade with big boys, not just for retail. And those as a result, you know, as Dave was saying, globally tend to have a lot more teeth, because this is going to pit the big guys against each other. There's not a unified lobbying front on that. None of them want to get screwed individually on that front. lobbying front on that. None of them want to get screwed individually on that front. So I would just tell people as you're looking at rules and regs as to what's moving through, there's a big, big, big, big, big difference between market structure, which is PVP and

something like AMLs, you know, KYC, which by the way, for all the paperwork that everybody does is definitionally designed not to work in the current implementation because it was designed for the 1970s. But that is a totally different issue than market structure. Yeah, I agree up and down with you, Austin, but I guess that's not surprising given where we come from. I think it was Simon and then 21 million. Yeah, and actually one of,

I think my entire career has been focused on one piece of legislation, which is client money, and who can do what with that money and how it's actually created in the first place. And I do agree that there are circumstances by which people just want exposure to price, and they may want to do it in a tax efficient manner and a hands off manner, which is the vast array of lots of capital that can get exposure to Bitcoin through their retirement funds and various other means. But Bitcoin is about way more than protecting yourself from upside price exposure. It is actually for many escape from oppressive regimes, the ability to store vast amounts

of wealth and get no permission. It is the ability to achieve freedom. And freedom doesn't just come from the value of your wealth. It also comes from knowing that you can store your own money and that you can send it as you choose in an innocent until proven guilty system. Whereas as soon as you hand it over to the custodian, it works off a guilty until proven innocent system. And you have to prove your innocence, particularly as your wealth grows. It also is the very type of structure that can subject you to seizures.

It can subject you to corruption. And so you just got to bear in mind that it's actually a risk management game. And so holding all your Bitcoin with BlackRock takes away certain risks, but subjects you to other risks. And holding your Bitcoin in self-custody takes away some risks and subjects you to other risks. And as your wealth grows in Bitcoin, if you own it all with BlackRock and you achieve significant wealth, I would suggest that learning self-custody, particularly in the worlds that we live in today, is a vital and

important skill and many people will learn that as different types of use cases come through. On the BlackRock equation, we actually protected ourselves with the design when Satoshi Nakamoto designed Bitcoin. He rejected the concept of proof-of-stake, where by owning the coin, you get control over the governance of the network. It was designed incredibly elegantly where you could run a node and that performs one function. You could mine Bitcoin and they perform another function and you can buy that Bitcoin as well and you can own it in self custody

or you can hand it over to a custodian. It is in that mix and the vast majority of Bitcoin is already held in self-custody. If we enter into a world where the vast majority of Bitcoin is held in custody, BlackRock, while it is initially held in custody, they will also create ETFs and less passive funds. And so all of these mechanisms can be used. Fortunately, proof of work was the mechanism for making it where it doesn't matter too much who owns it. And another mechanism was the fixed money supply.

So while BlackRock or MicroStrategy may be able to create lots of leverage on top of the coins that they're able to hold, and if they end up in a cascading liquidation structure, then they can certainly affect the price short term. But because of the fixed supply, it's become one of the hardest assets in the world to manipulate long term. And if you understand that, you know that your job is

simply to acquire as much Bitcoin as you possibly can over a long term timeframe. And every time one of those people that leave too much in custody and those custodians mess it up. It tends to create an opportunity to accumulate more Bitcoin cheaper with your fiat currency. So try not to be pushed into one direction or the other. It is risk management. Now, you're absolutely right. I think there are some great points there and I I'm going to

be say something salty. Although if I don't I think we're gonna have a sponsor So I don't think we're gonna able to do this much longer but I believe that the reason that aetherium is doing what it's doing is because of the stupidity of listening to the environmental people who the environmental Nazis who basically didn't know what what Bitcoin was and Understanding what was happening. By transitioning to proof of stake, they basically made it impossible for it to be a store of value and to compete with Bitcoin.

People forget that back at the time they did it, that Ethereum was trying to and all the big Ethereum bulls were saying, well, it's going to replace Bitcoin because it's better because it doesn't use as much electricity. Meanwhile, now, today actually, the BBC even, and we're talking about the BBC who hates it and has always hated it, actually did a story on how Bitcoin is allowing for African villages to afford to build power and to afford to power their places. It's a very big deal because they got it completely wrong and it's very rare that a company could make such a massive sea change being

completely wrong in their justification and survive it. Now I do own some Ethereum, it's definitely not one of my larger bags, but I think that it's the original sin there and I think that that's a large part of it because Simon you're a 100% right. The breaking of the difference and people don't understand it. Like Michael Saylor, people were talking about him yesterday like, oh my God, look what he's doing. He's trying to corner Bitcoin. He's not trying to corner anything. He's trying to make himself into a trillionaires what he's trying to do because he believes Bitcoin is going to 10 to 100x

from here and he wants to own a lot of it. So cool. But that doesn't mean he can control the network. And that's an incredibly important point you made. Anyway, 21 million, you had your hand up, I think, before. Yes, sir. Great points. I think one of the things, and I'll comment more on Bitcoin for the mind, Dave, is just that when I first came out, right, when I first was was 2009, to me the biggest thing was number one, the playing field.

We had an unfortunate housing crash, a stock market crash, where a lot of the people who put us into this scenario pretty much got bailed out. So this is something where if you were in Bitcoin when it comes to the blogs, the reddits, and some of these early memes, pretty much everything that's planning out is kind of, what's the plan? Not to say the same word, but early on, people who are adopters who believe in it,

they're the ones who put money into it. So like you're saying whether it be BBC, whether it be Chase or the Black Rocks, I believe it was on the radar for a long time. It was on the CIA's radar and I say from my 2011. Right. So this is something where they saw this actually a potential currency taking over the global market. And to me, this is one of those things that just planning out.

Now, do I believe in decentralization? For sure. I think we should own your own keys that way you can control your money. You can do what you want with it when you want with it I manage a bank and I can tell you right now I would believe way more in Bitcoin because of what I do on a daily basis now at that same time and to have Hyperbiconization we're going to need the larger players. So we're gonna need the country's buying We're going to need the larger companies like Michael Saylor buying. So this is one of those things I think that kind of sticks out is that early adopters and I think we're still early, right? We're only about four,

15, 16 years into it now. So it's one of those things where if you think about like one example I always use is if you think back to your 16, 15 year old self, do you view the world the same way? Do you think the same way? No, you do not. So this is so early still even though Bitcoin about a hundred thousand and eighty eight thousand to be exact. This is where when we go 10 20 50 years into the future, we're actually going to see the importance of these days now. So again, I think we need both levels. We need a certain size centralization that way the larger, you know, players

can feel safe as well with their money. We also need to on an individual scale. And most people in the Western world look at Bitcoin as an investment. But like you're saying, countries in Africa, countries in Asia, South America, I'm personally from Kosovo. I'm the second, third generation American, but that's where my family comes from. There's crypto exchanges on every corner. And it's something where you sometimes don't trust the government.

So that's where you see where Bitcoin actually comes to play on the individual level. It's how important it is to actually control your money. Number one, also your money to increase in value. Look at places like Venezuela, for instance, Argentina, Turkey, people who have been working their whole life, making a life savings, they go to retire and all of a sudden the money pretty much just vanishes, right? So this is something again, that on all levels, people need Bitcoin and we need them to work together.

We need the Donald Trump's, I apologize, I forgot who the leader of China is, but these people to kind of want to understand why Bitcoin's important and for them to adopt it. And then you'll see also how the people get into it. Because one last thing, when the leaders of the world are getting into Bitcoin, that also shows the majority of people how number one safe it is

and why they should also be joining the wave. So just some things I want to put out there. We need to have actually a good balance. We should believe in Bitcoin Stacks and Toshis, but without the larger players, we don't reach the prices that we probably want to. But again, it's about freedom at the end of the day. You control your money and you do what you want with it. Sorry, David, one very quick story. I know you're wrapping up. Not a story, but speaking of world leaders, it was hitting. It was just announced that the Trump family through World Liberty Financial have announced the launch of their stablecoin. So buckle up and get ready for

the stablecoin race. Everyone wants the future of the dollar and everyone's going to be paying incredible political gains in order to try and get their chunk of the dollar. The important word in that sentence is game. And people like myself have been talking about the game theory, you as well, at the sovereign level, at the corporate level. And in the crypto world, we just went through this correction where, look, the average crypto trader has the attention span of that Dory from Finding Nemo. This hasn't changed. And game theory at this level plays out over,

frankly, generally plays out over years, but I mean, months and weeks at a minimum. So be aware that what you're seeing today is, and we're affirming up its price technically, there's a lot going on. Hey, Scott, are you there? Yeah, I am. I'm in the glitch and couldn't get the AirPods to work. How are you? Thank you for covering for me once again. Everybody likes you better than me, by the way. Well, I'm not sure sure that's true. But I think you have you have a sponsor today. So

I'm going to let you take the reins now. Right? Yeah, I don't know if Shachaf is on stage yet. And I wouldn't even call him a sponsor. It's just an awesome conversation that we're gonna have with a friend, but I think we're gonna have to get him on stage momentarily. I'll check in. If you could just keep going for one or two more minutes, and we'll get that sorted.

Well, never a problem for me to talk. I think that the point that we were just talking about in terms of game theory matters, but the 21 million made the point and everybody that's listening should understand. It has never been the case that Bitcoiners believe the US would be the primary market for Bitcoin. It has always been the case and it would start in countries where their currencies were melting

faster. I mean, Michael Saylor talks about the US dollar melting and it is true and a lot of you made it very clear If you look from 1913, 98% of the purchasing power has been eroded If you look from last Thursday, the power of the Turkish lira 98% has been around obviously I'm exaggerating but you know that the currency is devalued at that level and that's a big point Right that that people need to always remember so when the US is trying to take the lead, they're just trying to get in front of the train. And that's game theory in operation.

And you know, people, whether it was David Bailey, who first got in there to convince Trump of this, or Ryan Silkes down at Mar-a-Lago, whoever, they've gotten the they've been orange pill the entire family has. So I think that's really an important point. Anybody else care about that? I do, but I'm working hard in the background so that a lot of you don't see it. Don't go for it, a lot of you. You know, I want you to understand what my point was with Elizabeth Warren and Larry Fink.

My point was whoever's in charge of a major banking institution doesn't want to be in the bad side of the incoming administration. It's that simple. It's not that complicated. When Jamie Dimon was at Davos, I believe, and he uttered the words, well, for somebody who isn't liked, he was certainly right about a lot of things when he spoke about Trump. And, you know, there are only 2,000, I don't know, 180 billionaires in the world. They all know each other. They're all in cahoots and they all contribute to Elizabeth Warren. And it's not hard, just follow the money. Has BlackRock ever contributed to Elizabeth Warren's coffers? I don't know. But that has an impact in society, in our government, when

an entity gives you money and is responsible for making sure that you're in office? Well, look, there's no doubt that every major firm plays both sides. Because you have to, right? We all got annoyed when the Stand With Crypto people went and didn't support John Deaton against Elizabeth Warren. We all got annoyed when the Crypto for Kamala people who had their heads up their asses, to be honest, did what they did.

But that was a hedge. When people say, well, you need to be bipartisan and crypto should be bipartisan, that's absolutely true. The problem that we face is, and it may very well be changing, the changing of the guard is clear. People like Ro Khanna and Richie Torres are both very much pro innovation and it's an age thing in the Democratic Party.

But until the Democratic Party isn't controlled either by the octogenarians or the democratic socialists, you don't wanna deal with that. But anyway, Scott, you guys ready now? Looks like you are. No, but to that point, you have to remember also that a lot of these institutions kind of go with the winds of change as well. I mean, we love BlackRock for their interest in Bitcoin, but everybody hated BlackRock when they were the champions of ESG.

Oh, that's right. There's no doubt. But what most people don't know is in these big organizations is there was a group of people Inside Blackrock working on crypto for years before it became public that they were going to do anything And they had to win the internal wars. I've seen this from my own self. I mean I started in portfolio trading program training And program trading had a horribly bad name back in the 80s when we started it training. Program training had a horribly bad name back in the 80s when we started it. People thought I could have people like me cause the crash of 87. It turned out that it wasn't true and I knew it wasn't true, but it didn't matter. I was accused of destroying our business from inside the firm so many times and kept fighting. Eventually, automated training, which I was running at the time, became de rigore. And everyone's like, oh yeah, that's what we do.

So these things take time in these large organizations. As long as you're trying to say is it's not nearly as black and white as it looks from the outside. That's really the only point I'm making. Not that Aladio's wrong, because God knows, I think Elizabeth Warren does what she does to keep control over the banks. And I bet you the banks are funneling money

to her and to the DNC. I literally just finished. The reason that I was late today was I just had a conversation with Charles Hoskinson for the podcast, which comes out on Sunday. Half the conversation was about the situation in Washington and what it's like to have to go there and lobby as a libertarian and deal with these exact kind of institutions and the government. It was really, really fascinating, but suffice it to say it's a contentious, fickle, petty environment there from what I could hear and very difficult still even to get things done. So I think it's just important to remember we have this sort of moment right now, this two year period, I guess I guess where everything's aligned but Elizabeth Warren can be the chair of the

Senate Financial Committee if the vote goes the wrong way in 18 months or you know in 20 months it's really you can't take for granted that things will remain exactly how they are in this environment now I think we're working on getting shock off up right now I think I see him on my Shachaf up right now. I can't do this right now. On my screen, I see him here. Shachaf, can you hear us? Yes, I'm here. I see. We're in the glitch.

You're a listener for me. Dave, you are officially off the hook, man. Thank you, as always. I'm not kidding. I get comments all the time. They're like, when Dave, when I'm on. Just people saying, hey, get Dave back. So I really appreciate you showing up and covering for me.

Absolutely huge. Shachaf, what's up, man? All is good. This major local crypto event here is beautiful. I haven't seen you in a while. I was supposed to go to Paris next week, but I actually had to cancel for some other events, but I figured I'd see you there. But maybe Token, Dubai in a month? Yes, yes, I'll be in both in Paris and in Token. Yeah, I figured. Well, so let's talk about why you're going to these places.

Obviously it's because you're doing some absolutely huge things and have some big announcements coming. Like Dave said before, before you're on here, he's like, I think you have a sponsor today. I was like, no, it's just, it's not a sponsor. It's just a friend doing cool shit. shit when I have friends doing cool shit I like to bring them on and talk about it so you guys are obviously launching uh Koti v2 have launched going live two years in the making so I mean maybe just give us the TLDR and what's happening yep yeah so we're actually launching Koti's and you mean tomorrow. And it's been a long two years of research, development, innovation, and we're really excited about what we've created.

So, you know, those who are not familiar with this Corti's an encrypted blockchain. It's really the fastest, lightest privacy solution on Web3, works on Ethereum and seven other blockchains too. And it's the missing link in Web3's evolution. We've been talking a lot about this in the conference here. And it provides accessible and scalable privacy on demand. And I think with scalability being solved in blockchain, privacy is the next thousand X opportunity because it unlocks trillions of dollars in real world assets and new use cases across AI, DeFi, gaming, data management, and a lot more. Can you talk more about privacy on demand?

It's kind of a term I think you guys have coined, not something I'd heard before. I mean, what does that mean? Does it mean that it's not always private? Does it mean you get some choice as to how private you want your transactions to be? How does that work? Yes, that and some other things.

So first of all, yes, privacy is a very confusing word. It means different things to different people because it's mostly about perspective. Like what's private between, I don't know, you and your wife is not private, it may be un-private for someone else. So selective disclosure is the key word here. What you want to appear on a public blockchain

and what you rather have encrypted. So that's selective disclosure. And privacy on demand actually means that we are working with cross-chain partners like Hyperlane and Afsalar to allow privacy on demand from various chains. It means that if you are a developer, you can use the current tech stack that you have and use the chain that you're currently on

and use Codi just for the privacy part without changing anything on your underlying tech stack. So, for example, you are on a Solana DEX and you want to make a private trade, so you start on Solana, your transaction is funneled through a gateway that we create. It is then being encrypted. The process is done on Coty and then sent back to you encrypted to Solana.

So essentially as a developer and as a user, you've remained on Solana but you've been using Coty under the hood for the privacy part. So that makes a lot of sense. So talking about the actual use cases, like we obviously talked about DeFi and RWA and AI agents. So how does this incorporate into all of these things that we know are being built right now

from a privacy perspective? So yeah, so overall we already have 40 teams developing multiple use cases on top of Gaudi. I would say that you can think about this in two ways. One is my depth, but with privacy, and how is it better? And we'll talk about that in a minute. But you can think about other things that can only happen when you have privacy. So new products. So essentially, let's say, like in the world of games, you couldn't play poker if the cards weren't hidden. It's not like chess, right? So there are new products that can only be created with privacy.

But if you want to think about the things that are currently happening and how they are better with privacy. So obviously there is a real world asset. That's a major opportunity. A recent JP Morgan article cites that privacy is the number one obstacle for institutional adoption of real world assets. I think even this AI XBT today tweeted about this. And it's mandatory for institutions going to real world assets. So that's like 20 trillion dollars out there waiting for privacy to go on chain. We are working with central banks and governments for CBDC so you can like it or not like CBDC but as it's happening,

privacy becomes a critical thing. It was already announced that we're working with the Bank of Israel in their project, but there's another major thing that we are waiting for the other party to announce, but that's kind of major with regard to CBDC. DeFi. So DeFi is great with privacy because it shields trades from MEV exploits and can protect trading strategies. And we have like as we launch, we have two DEXs running. One is Bancor, the OG.

They're going to run. Yeah. So they're running. Is that still y'all? It's still happening. And yeah. Bancor? I met Eyal 30 minutes ago here.

I love that guy, man. Yeah. I love it. We've been working together. Yeah. And love that guy, man. Yes. I love it. We've been working together, yeah, and something else. AL is amazing. Yeah, yeah. And just met him here.

So yes, so Bankor is going to run a DEX on top of Kotli. And there's a new team called PrivEx that is running Perp DEX with Binance and Bybit liquidity through Intent with Privacy. And they have a very cool feature. They are building a launchpad for AI agents that can trade autonomously. So you can train them on whatever data that you have or KOLs that you appreciate and whatnot and they'll trade autonomously on top of the DEX. So we have all these two DEXes running and bent during the oracles. And of course, AI, so Codi agents, Codex, NFA, some others are building AI projects on top of the new chain.

Essentially, private datasets that are fed to agents and training models that can be used. So that's kind of like a few obvious things in terms of use cases. We've also been accepted to the Theory of Enterprise Alliance, where we are leading privacy and tokenized Africa Council, where our core infrastructure will be used. Yeah. So you talked to me about what that means? Obviously, I saw that news, the Africa Tokenization Council.

What is the involvement and what does that mean for Kodi and the ecosystem? That's a pretty strategic partnership for us. We are founding partners there. The aim there is to scale tokenization of real-world assets in the focus regions, which are Africa and MENA, Middle East and North Africa. And these regions have a proven history of leapfrogging traditional economic environments

like they did with mobile fintech and crypto adoption. And we provide technical infrastructure and steering and guidance. And there are some very important figures that are involved. Dr. Mansour Al Malik is in the oil and gas industry in Saudi Arabia and advising the ministry there. And we have an event actually in token 2049. So you may want to drop by and it's's like takes part in the real world assets event.

And we're bringing some very high caliber figures from central banks, banking in Europe, state officials from Africa and some others to really propel this thing forward. Very excited about this. It's obviously very big for us. Yeah, you talked about Africa and MENA kind of being the focus. I hear that all of the time. Why is it that that's where everybody seems to see the most potential growth in South America?

I think it's because there's still opportunity to build infrastructure. Not everything is set in stone. These are nations with motivation to leapfrog from the current game is set for the U.S. and Europe. And if you can play the new game, then it's obviously very liquid. and if you can play the new game, then it's obviously very liquid. That makes perfect sense. So I also read you're launching a new node ecosystem. So what does that look like?

Yeah, so look, obviously, a new infrastructure is an opportunity to think about nodes again and what you could do, especially with the layer 2. So we're building a new node ecosystem that I think will be among the most sophisticated in the Web3 space. We didn't design the node system to allow anyone to participate. So, you know, first of all, rewards are guaranteed by the protocol and not by some other metrics. So, you know, it's a solid license to have. So it's a solid license to have.

And rewards can be very high depending on how involved you are. And you don't have to be techie to run a node. You can either click a button and run it from your old laptop, or you can just assign your license to someone else who is already running a node. And two cool things about it is if you run a node, you can run a staking pool but this is not a plain vanilla staking pool, you know, with the set APY. You can build a mini economy around it,

setting your own fees, adding leverage, longer locking periods, et cetera. And you can kind of like decide how staking works with you. And if it works well then you can make good rewards from that. And the other thing is that our native staking infrastructure is not limited to just CAUTI. Any builder that builds on top of our chain can use this infrastructure to run a staking pool. So it's not every project we need to build staking for themselves. So that's pretty significant and I believe we'll be talking about this a lot more probably mid-April or beginning of May. So with all this in mind and launching this new V2, how do you plan to grow the ecosystem and get

more projects and community involved? Because obviously, I think you need that to see this become successful and gain traction. Yeah. Look, I want to turn Coding into the number one destination for innovators. Now, this is 2025. We have an opportunity to look back. We started in 2017, a lot has changed since, and we have the opportunity to be looking again at the market and figuring out new ways to do things. And market and figuring out new ways to do things. And I see a movement happening and a lot of innovation

taking place in the intersection of AI and web three. I'm not talking just about agents. I'm talking about an opportunity to use new tools to turn yourself into something that is a lot more inclusive to lower barriers for new builders to come into Web3. So currently there's estimated about 30,000 developers in Web3 and everybody's chasing them with huge treasuries and convincing them to build on their own chain. I think you could think about this problem differently and instead of just trying to have,

you could think about this problem differently. And instead of just trying to have, you know, signing the bigger check to someone to build on top of your infrastructure, what if we've opened up the opportunity for other type of builders to build on top of code? What if we targeted, you know, 100 million no-code developers, people that understand how they want the product to be built,

but they've never learned to code. So we are establishing a community-led movement and we will empower a lot more people to build on Kodi with no code, low code tools. And you can build amazing things these days with the proper AI tools. So we'll be working a lot in how to empower folks to build on top of our infrastructure. And we'll probably have a lot more projects than most just because we'll be using these sort of things. And yes, we will have grants, rewards, and global exposure for builders on top of Kodiq. But it's more about empowering people and letting people not just be a token holder, but actually a builder on top of our infrastructure.

not just be a token holder but actually a builder on top of our infrastructure. And there's a live stream tomorrow, is that correct? March 26th? To kind of celebrate the launch and how can people find that? How can the community plug into that and what can we expect? Yeah, so if all goes well, we'll be launching tomorrow at 1pm UTC. So the live stream is 2pm UTC. It will be on Codi's YouTube channel. So you can just follow our channel and socials to find this. We will have some partners joining in and we will have an airdrop to celebrate everything. So it will be Codi but our partners will also be airdro dropping tokens for those who will join.

So it's worth a while. That's awesome. Man, I'm looking forward to it. I know you're at a conference and you got to run. Say hey, hi to all for me and keep you updated. What time is the thing tomorrow? You may have just said it. 1 PM UTC.

1 PM UTC. Mainnet, 2 PM live events. Awesome, man. We'll be there. I can't wait to see it. Congratulations on getting this done. I know we've been talking about this for a really, really long time, so it must be really satisfying to finally see it in the wild. Yes, thank you. But this is just the beginning. Awesome man, well thank you so much, Shahraf, for your legend. I always love seeing

what you're building. To everybody else, especially to Dave, thank you for hosting, thank you to the panel, thank you for all, thank you to the panel. Thank you for all of you for tuning in. We will be back tomorrow morning, 10.15 a.m. Eastern Standard Time for yet another Crypto Town Hall. Later, everybody. Thank you, bye.