The Wolf Of All Streets - BIDEN vs CRYPTO with Robert Wolf | w/ @joincommonwlth | Crypto Town Hall

Episode Date: May 22, 2024

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Obviously, the story of the day is still the Ethereum move and the likelihood that we get an approved ETF tomorrow. I had James Seifert and Eric Balchunis this morning on my YouTube, and it's hard to understate how shocked everyone was and how fast this moved and how likely it became that we will see these tomorrow. And obviously, the market has followed. For anyone who hasn't been paying attention, even just in the last 24 hours, ETH up about 22%, but up way more than that over the past few days. And it looks like this is very, very likely to happen as soon as tomorrow. And I think a lot of this is in context of major tides changing with politics in the United States, which I think is coming as a surprise to everyone.

I mean, just to state the size of the move, I loved when somebody, Kyle, it might have been you that said it yesterday. And then there was an article, but that basically Ethereum's move in 24 hours increased the market cap of Ethereum by a total of Solana's market cap. Was that you, Kyle? Did you say that yesterday? Yeah, exactly. That put things in perspective really quickly huh yeah yeah i i think i think that i did a show today about the fact that i think the east etf is going to be a big letdown it's going to be a massive massive massive letdown i think um i'll break it down for you that you understand but i really think that i think that the way that things have panned out with this eth etf i think uh we

might be in for a little problem with it and i think that it may actually even cause an eth dump but is there an expectation at all i mean considering nobody thought it was going to be approved and there was already like i would say lackluster expectation of huge inflows because it's gonna i mean I think hopefully everyone understands at this point that everyone knows what Bitcoin is institutionally, but it could take even a longer time than we get comfortable with ETH. I think there's more of a like plumbing and infrastructural importance than it is for actual inflows, but maybe I'm wrong.

I think it's very, very, very bullish for ETH. I think it's very, very, very bullish for crypto. Very, very, very. I think the fact that we're getting an ETH ETF is unbelievable. I think it's probably the best thing to have happened to crypto in a long time. I think it's going to make ETH not a security. I think it's going to be very good for Solana because I think Solana is going to be next. I don't think there's going to be a meme coin ETF anytime soon. But I think that with this specific ETF, I think we're actually set up for

failure. And I'll explain to you why I think we're set up for failure. So if you look at the Bitcoin ETF, we spent a lot of, there was a lot of pent up demand and a lot of marketing before the chances or the probabilities of the ETF being approved were really high. And so people almost like started getting excited about the fact that they were going approved were really high. And so people almost like started getting excited about the fact that they were going to participate in ETF. And then it's almost like a pre-sale, you know, when they hype the token up so much, then they open up the pre-sale

and the pre-sale sells out in 10 minutes, right? Now with the ETH ETF, because no one was actually expecting the ETH ETF to get passed, we haven't done the marketing. We haven't created that pent up demand. There's no TV ads, there's no Grayscale ad, there's no Bitcoin. There's no BlackRock ad. None of that's basically happened, right? And so now we're in this position where none of that's happened. You've got a 10 billion GBTC or ETH trust, which will most likely also be approved at the same time as these ETFs actually

get approved, right? And that's got $10 billion worth of ETH in it, which will become liquid. Now, unlike the Bitcoin that were locked up in GBTC, I don't think such a big amount of these ETH have been as hedged. Why? Because no one was expecting the ETF approval, right? So you've got all these unhedged ETH, which are now going to become liquid, that were at a massive discount until two days ago,

which now are going to come into the market. So you're going to have like a GBTC type situation where ETH are going to start coming onto the market. We haven't created this pent-up demand. We haven't done this marketing campaign for ETH are going to start coming onto the market. We haven't created this pent-up demand. We haven't done this marketing campaign for ETH. We haven't told the world how ETH is the best thing since sliced bread. And so you take the one plus the other, and then you add a third thing to it. And the third thing is that all the ETFs which are currently launching are launching without staking.

Now, you may say, okay, well, that's not such a big thing. Staking is not the not there in the world in tradfire when money is inflationary and easy you know when when everybody is earning rewards on eath which are which average between four and seven percent and you're not getting the rewards you're effectively at a 47% disadvantage to the market. Now, that's not a very good entry point into an asset when effectively everybody else that's holding the asset is 47% richer than you at the onset every single year compounded. And so I think when you combine all those things together, I think that the ETH ETF is not... And then the last thing, the last thing is remember that before Bitcoin launched, we never had a frame of reference.

The only frame of reference that we had was the gold ETF. And the gold ETF was a very low benchmark to compare ourselves to. Now, people are going to start benchmarking the flows relative to the Bitcoin flows, right? And they're going to say, geez, Bitcoin got like 5 billion in the first month or whatever the number was in the first month. And ETH, well, ETH is not going to get that. And then I think it's going to do a perception damage to ETH where people are going to go, you know, like ETH is like Bitcoin's ugly younger brother. You know what I mean? Like, ETH's Bitcoin's like, oh, look, you know, Bitcoin got $5 billion in the first month,

and ETH, well, no, ETH got like half a billion or a billion or whatever it was. And so I think that as a result, whereas I have no doubt that in the long term, ETH is going to be a great competitor to Bitcoin in terms of ETF flows, I think in the short term, it's got a lot of headwinds. A lot to unpack there. Alex, I would love your thoughts and James, your thoughts as well.

Alex and James. Go ahead. Yeah. Can you hear me? I have some thoughts. Yeah, I you hear me? I have some thoughts. Yeah, I have some. I mean, look, I think it's interesting. I think that if you stake ETH, you made 8% more since the merge than someone who didn't stake it. So these funds will, if they don't have stake, it would underperform.

I mean, some people say, well, you know, if the assets up 120 up 120 like what's that other eight percent and the convenience of the etf sure there's an argument for that i think that's probably right they think they probably are somewhat successful i think in general like it's very positive but i'm i don't want to shift the conversation but like i don't really give a about that right now i give a about the apparent 180 from the sec and how now the white house is not even threatening to veto the fit 21 bill. That's going to come up for about a couple hours, how the pivot really appears actual. It's not just an aspirational.

I'm more concerned at the moment and, and enthusiastic about what it means that they really have appeared to roll on their prior opinions on this and what else that could extend to. Does that also apply to companies trying to go public in the US, which they've not been supportive of? Does it also apply to any of the other rulemaking that the SEC has been involved in? Like, why would the White House threaten to veto SAB 121 overturn last week, which is a relatively inconsequential measure right it's a niche

accounting rule that mostly only affected banks and prevented them from doing crypto and by the way most of the banks didn't even want to do crypto and even if you took that away you could have the banking regulators stop the banks from doing crypto it's a pretty niche thing the white house threatened a veto on today today's bill is not niche, though. Today's bill is a massive sweeping overhaul of the crypto and regulatory framework in America, and they're not threatening to beat up. So they're just saying they oppose it. So a massive political shift is happening. The ETH story is a part of that, not the other way around. Sure, we want the ETFs, but they really won't come for months, most likely. So let's not worry about that right now.

Let's focus on the bigger stories is what I'm spending my day on today. Yeah, James, I want you to give your answer as well. Then I want to ask Robert Wolf a couple of questions. Go ahead, James. Yeah, I mean, I think just looking apart from Funblazer, which come onto a set, just looking at the futures positioning, the futures market is not caught on to this in any way or that, or they are kind of skeptical about the prospects of this actually happening or not rightly or wrongly

um you know it's it's it's actually if you look at the sources that this is this news has come from it's primarily bloomberg isn't it um and you know people reacted very positively i'm not actually saying this isn't going to happen it does seem like it is but it's just such incredibly short notice which is unusual and i'm very much with ran on this one that um the fund flows could be very negative i mean it's remarkably similar to bitcoin in some ways in that there was a massive discount that to the nav that that discount to nav is closing very rapidly people have been sitting on basically assets they can't get rid of um and even i think if they reduce the fees they're still going to be in assets to just a big fund plays which are probably in the first couple of weeks at least like bitcoin

uh prompt um net outflows most likely and it comes at a time actually if you look at the fund blows into ethereum it's the only asset this year, digital asset this year, is in a net outflow position. The just broader sentiment has been negative. And I think that's a mixture of people's bearishness over the likelihood of an Ethereum ETF being approved. But then obviously that's changed. But then also people's skepticism over various different upgrades to the network, such as Shanghai and Emerge and others and Cancun, or Dancun, sorry.

So, you know, I don't think it's going to be that exciting initially. Yeah. Would you go as far to say maybe disappointing? Yes. it goes far to say maybe disappointing. Did anything change from yesterday where we heard from, I believe it was Eric or someone else that even if it's approved, we still have probably

at the best case days, but maybe even a month. Yeah, they had the captain at two weeks when I talked to James. Yeah, but compare the two weeks. So then you have time for commercials to be made. You have time when I talked to James. Yeah, but compare the two weeks. So then you have time for commercials to be made. You have time for the marketing to kick in. You have time for all this stuff. And plus, I'm pretty

sure that BlackRock and these guys have already made their commercials. My guess is that they've done that. I don't know. I think that there's a lot of upside. I think that we also live in a bubble. And I think that the negative sentiments around Ethereum probably hasn't seeped out into the real world right because in the real in the in mainstream there's really just kind of two assets that are even options at this

point i mean some are getting into other ones as well but like really for a long time the two has been considered has been bitcoin and eth and uh and so for them i don't think that it's been negative sentiment in fact it's up a lot in the past year for any other assets on that they could have been traded. So and I think the staking is not much of a big deal as like Bitcoin doesn't have staking either. And I don't think that they're going to look at it. They don't they can't buy it. The reason that exists is because they can't buy spot and they can't take it themselves. Right. So they need to do it.

So, yeah, OK, they can they miss out on that four and a half percent or whatever. But at the same time, like you would you rather miss out on four percent? Or would you rather miss out on the upside of that asset class as an opportunity? Yeah, I think I think that I think when, like, okay, if it was just four and a half percent, maybe you're right. Problem is, it's four and a half percent, a $10 billion overflow. Remember that as the East ETF ETF buys up ETH and removes them from the possibility of getting staking, the staking yield for the remaining assets actually grows. You could get a staking yield of closer to 8% if the network is busy and, and, and, and, and, right?

So I think the 4.5% is on the low side. I think it's actually – I mean, it's probably more realistically around 10%. And why? Because you're removing ETH out of circulation. The staking reward will go up. There's also the restaking narrative, which you can't do if you're in the ETF. So I think it's like – But if you're removing it from circulation, then the price is going up a lot. So that counters it. No, you're not removing it from that kind of circulation. You're removing it from circulation, then the price is going up a lot. So that counters it.

No, you're not removing it from that kind of circulation. You're removing it from staking circulation. You're not removing it from buying and selling circulation. It's completely liquid. Why would people unstake just because the ETF is approved? They're going to buy it from either OTC desk or on exchange. No, that's what I'm saying. So there's going to be less ETH in circulation and less ETH in circulation for people to stake. Therefore,

staking rewards for the people that do stake will go up. I don't think that would make much of a difference. I think if people wanted to stake today, they would be staking today. We see less people staking today than we did even a couple of months ago. So I don't think that that is going to affect it. No, staking has increased. Staking is now 32%, which I think it's one of the highest staking that we've had. I just don't think that's a consideration for them. I think that it was a nice upside, and they considered it initially in the ETFs and said, hey, if we can get a 10 stake, great.

But I just don't think it's going to be much of a consideration from an asset class. I think if you're in an asset class, you know what it's like. It's like you're in the US dollar, and everybody's earning 5% and you can't earn 5%. It makes the asset class a lot less attractive for you. One of the things that I just wanted to bring up too that I didn't yesterday when we were having the same discussion was, I think, and this goes back to the political point of the conversation, is that you have the second largest asset manager in the world who is a private company that essentially owns a big chunk of BlackRock. You don't really know unless you dig deep who the owners of Vanguard

are. But if you do, just look a little bit deeper, you know that the majority of the ownership of Vanguard comes from the richest families in the world, the Rockefellers, the Rothschilds, these kind of guys. I think that was a huge, massive thing that nobody's really talking about. It was a sign, a signal from the ownership of every core, the S&P 500, almost the number one shareholder of every company in this and P 500, including all the media outlets, everything, the number one shareholder is Vanguard, not BlackRock, it's Vanguard. And then who owns who owns BlackRock, the number one is Vanguard. I think that the fact that Vanguard is showing a

signal to moving toward Bitcoin, not that's been stated yet, but you don't go hire the guy from BlackRock who did the Bitcoin ETF for any reason, right? Like, that's pretty clear. So I think that that's almost and coincidentally, that made was moved at the same rate right before everything else was was done right all the stuff within senate uh the the elizabeth warren biden all this shift in sentiment sec vanguard made that first decision and when we think about the power the power structures of the world it's vanguard that literally owns the world right like it's the biggest and so there is some nuance there though obviously they do own the world, but it's from passive indexing. Right.

So I just want people to it's not like Vanguard is actively trying to buy up all of these companies. Correct. I mean, it's BlackRock's the same. People love to point out that BlackRock owns a huge stake in micro strategy. That's because of their funds and ETFs and such where they passively index all of these. A hundred percent. No, I get that. But more so, Scott, I'm talking about the shareholders.

I agree with you, by the way. Yeah, I agree with you. I want to focus on, go ahead, Kyle, finish up. Yeah, I just want to say, I think that that is something that is ultimately where these marching orders are coming from. That was the first signal to me of holy shit, the fact that Vanguard for a while was completely against it. And then it switched and flipped. It also probably lets me know coming back to this, you know, this, they're looking now they're

rethinking the strategy, because before they said they wouldn't invest in asset classes that don't produce yield, which is why they wouldn't go into bitcoin um and so i also don't think that they're going to care now that about the yield from eath for example uh so i just that's my two cents there but uh i think it's a really that's the biggest deal i think yeah i think that's huge and valid point i want to go back to the point that alex, which is what's actually overriding and the most important here, which is the seeming complete pivot from the United States government with SAB 121, the FDIC chairman stepping down, obviously, perhaps by not vetoing this bill, and the ETHF all at the same time. And Robert Wolf, I know that you're presumably somewhat close to the Biden White House. You're close to Obama.

And are we reading first, in your opinion, are we reading this right? Do you think that this is a huge move in sentiment from this administration or are we echo chamber creating narratives? So very intriguing listening to you guys. Me being on Crypto Town Hall is like when I do my Fox shows a few times a week. So it's been a good learning curve. So just to be clear, I'm speaking for myself here. So no conversations with respect to the administration. Listen, I think you guys are onto something. I think the political movement has shifted. I'm not telling you anything you don't know,

but it's shifting in a lot of different ways. I mean, first of all, you know, you could almost equate this recently to how the White House is thinking about marijuana. You know, I think that this White House and prior to that, in some ways, the Trump White House, not with respect to how they look at regulation, but how they look at things like crypto and marijuana, I would say they were, you know, quite conservative.

And I think time has become, you know, their friend, not their enemy. I'm not surprised that it's into an election year that stuff like this opens up because it's all about getting out the vote. It's all about figuring out how, you know, Gen Z votes and getting them excited. And so I'm not equally surprised that over the past, you know, year with the Bitcoin ETFs rallying and people not, for the most part, losing money and it providing, you know, liquidity to a new asset class per se versus the past, which has become more mainstream, you know, it becomes more in vogue and becomes more mainstream. And as things become more mainstream, the next thing becomes

more mainstream. So not surprised by ETH. I thought the timing seemed a little quick, but I'm not surprised because the voice of BlackRock brings a lot more credibility than the voice of, you know, what I would say some of the pure play crypto players of the past. It also helps that a lot of the SBF money, it looks like, you know, people are going to be made whole. So that's another good sign. So, um, yeah, I, I would say that, you know, you're at the, at the intersection of kind of K street, main street and wall street, and it's working to your advantage and, you know, the trend is your friend. I would say that, you know, you have to be skeptical, um, you know, about whether, you know, whether there are changes, you know, you have to be skeptical, you know, about whether, you know, whether there are changes. You know, the more mainstream something gets over time, the more it becomes looked at and regulated.

So this is kind of a grace period now. I know that you're kind of saying, oh, my God, the SEC and the White House, and they're not going to veto this, and they're allowing FASB to change. Listen, all this is good until the shit hits the fan. I remember, you know, the Lehman crisis when I was one of the executives there over that weekend. And, you know, before that time, you know, banks and brokers were separate, except for a bit, little bit of Glass-Steagall, insurance companies you couldn't talk about. And then

all of a sudden Lehman happens. And now we have, you know, the SIFIs, the Systemically Important Financial Institutions. And if you recall that meeting, the Treasury Secretary was there, the Fed was there. But, you know, wasn't there anyone that could talk about AIG? Because they were an insurance company. And, you know, who else wasn't there? BlackRock, the big money market funds, Fidelity, because that was not regulated by the Treasury or the Fed. So the more you become mainstream, it's all good until there's a hiccup. And then when there's a hiccup, the shit hits the fan. And so I would say, you know, I think these conversations are interesting,

constructively challenging yourself on the regulatory side versus what I'll call the supply-demand side. And I think that you have to continue to look at that balance. The other thing I love about this call is whether we like it or not, since the Lehman crisis, the intersection of Washington and Wall Street or finance and public policy, we're going to own that forever. So I think what's happened is you could argue the SEC was behind the eight ball, like you guys have been touting for a few years now, and now it feels more mainstream, and now they want to push faster and forward. So remember, for the most part, Wall Street,

the government, they're not good managers the pendulum goes slow and then it goes too fast so as you guys said today it took fucking forever for bitcoin and now all of a sudden the pendulum swing and here's etf is eath when you know when we weren't even sure what was going to happen so i i think the way you're thinking about it is right um uh and i'm not surprised by the timeliness. I'll pause there to open it up to questions. Who don't know me, I used to run, I was president of UBS globally and CEO of the region. So I played at that intersection of politics and finance, you know, in over 20 countries. So I think I get it a bit.

Robert, the other thing that I failed to mention in sort of the intro to the context politically is that the opponent came out very pro crypto, right? So obviously, I think it was on May 8, Trump made the speech where he said, if you're pro crypto, you vote for me, Biden, you know, doesn't understand crypto, etc. And has doubled, tripled, quadrupled down since which is clear, clearly a political tactic, understanding the voter base, even to the point where I think today or yesterday, he said he's going to raise a crypto army, obviously, in response to the anti crypto army, you know, that's been touted by Elizabeth Warren. So it would seem that the timing of this is somewhat to mitigate the power of that announcement or to at least, you know, back off the gas attacking the industry. Here's what I would say. That's not why the SEC is doing what they're doing. Okay. I know that you think there's no separation of church and state, but, you know, Gary Gensler

isn't doing it because of what Donald Trump says. That being said, it doesn't hurt. I think Trump, you know, someone told him, hey, it's important to get out the vote for young people. You know, Biden made this thing about marijuana. He follows up with crypto. Now Biden follows up with crypto. Maybe next week, you know, Trump follows up with, you know, something else. I mean, you know, this is just this going back and forth. It doesn't really have substance to it. What has substance to it is that the SEC has seen that these ETFs are working. They're working on, they have the liquidity they need. They have the know your customer that, you know, is opening. And they rather actually do it this way than get it out of the shadows. But then why?

But they've doomed it. Yeah, the security versus the model. Why the about term? Hold on. Why the about term so abruptly from not engaging with any of the providers to giving them less than 24 hours to file a 19B4 sort of a sign. It just doesn't make sense. You don't not engage with ETF providers so close to deadline, really give them every

single sign that you're disinterested and that nothing's going to happen. And then two days before the deadline, you give them less than 20 hours to update their 19 B4s. It just seems too suspicious. So suspicious, fine. Maybe, maybe not. If you don't think they're having conversations with the people like BlackRock and others all the time one you're kidding yourself

Because I know because we spoke to be providers who indicated to us on the show that the SEC pretty much has been has Completely blindsided them hasn't basically returned calls and it seems completely disinterested To them to the point where they all believed that the ETF wasn't actually going to be approved. And then all of a sudden, they get phone calls or letters or whatever it is saying, look, it's four o'clock in the afternoon, before 10 o'clock tomorrow morning. So, I mean, listen, as I said, they're not good managers and the pendulum always swings. Okay. I remember when the treasury blueprint for regulation was 21 pages and then it became tens of thousands. Okay. And everyone wondered what the fuck just happened. And then you realize there's all these meetings because this is what they do all day is they have meetings after meetings and they come to,

you know, some decisions some i'm gonna challenge you there i'm gonna challenge you you can challenge me that's fine you say you say there's no just that there is separation between church and state i'm telling you that there's zero separation between church and state that this whole thing that this whole thing is in response to the trump thing uh that this whole thing is in response to the trump thing uh that this whole thing is in response to trump thing it is it is the fact that that biden and the administration saw that some of the democrats voted for the uh the bill for the banks to to be able to custody crypto at the same time trump uh threw a couple of punches at them at the same time the the polling the the polling numbers came back trump was 10 points ahead in

the polling and then i think they realized listen we cannot lose this passionate passionate passion crypto vote crypto since became a a center point or a focal point or at least a pressure point in this election and now both sides are fighting to gain the the the crypto the crypto vote and i think that the dams are using the tool that they have, which is the fact that there is no separation between church and state. Okay, so you should just talk to yourself. You just answered your own question.

I don't have skin in the game, so you asked me to come on. That's fine. You can disagree with me. I thought you guys didn't want to have your own echo chamber. Okay, so I'm throwing it out there. You've given your side. I've given my side.

Yeah. That's great. All right. Cool. Should we move on, Scott? But, Robert, do you expect that trend to continue? So, should we say that the fight against crypto is pretty much over now, thanks to the elections? Or is it too early to call that?

I think it's too early, because as I said, the regulation is going to get more prescriptive, not less. Quick, quick. Sorry, go ahead. No, go ahead. Go ahead. Well well i was actually just going to say uh the very important context somewhat breaking from eleanor terrett just now or about 15 minutes ago the white house says it opposes passage of fit 21 in its current form but also says it's eager to work with congress to quote ensure a comprehensive and balanced regulatory framework

for digital assets so it still sounds like they are going to stick to their guns and veto it in its current form no no no no this is what i was saying when i joined this the statement of administration policy which is the white house when they put out their view on a specific bill specifically includes no veto threat whereas the identical one from last week did include an explicit veto threat. So this is a major political strategy shift. I don't know that they won't veto FIT21, but last week they thought the good idea was to threaten Vito, and that blew up in their face. And this week now they don't think the good idea is to veto. And it's a big deal because FIT21 is a much more consequential pro-crypto legislation than SAP 121 being overturned. Like if you were going to veto one of them because you didn't like crypto, you would

definitely veto FIT21, which is a sweeping overhaul of the SEC and CFTC's authorities on crypto. So there is, and I don't agree with what I hear from Robert, which is sort of cynicism about the process. I'm on the ground on these issues. There's hundreds of millions of dollars being poured into these races. Now, the crypto packs themselves are being so successful at attacking the opponents in the swing state Senate races that Republicans are that don't care about crypto or giving money to those packs.

There is a major shift happening here. You know, whether I know whether either party, depending on who wins actually delivers something positive for crypto is obviously a different question but the political strategy has shifted clearly from the from the white house no disrespect that's not what i said i said it's not surprising after marijuana and then comes crypto and then i so i didn't say that well you said there wasn't't substance to it robert you said it was purely political i'm saying there is substance now i i said that i said i don't believe the sec is working with the white house the way you guys think well you also said that you also said that like this was mere like go after the young voters for marijuana then go to crypto and

i'm telling you there's real substance behind what's happening on the crypto stuff. It's not just a political ploy by either side. I didn't know. I'm in agreement with you. What I did say is the SEC saw what was happening on Bitcoin and that it was working well and that the pendulum swings quickly. So then all of a sudden, ETH becomes front and center faster. I'm agreeing. That's what I did say. Dave? Dave, is your mic working? Dave Weisberger? Yes, yes, yes, yes, yes. I was just on the wrong thing. Yeah, I mean, I appreciate Robert's comments. I think that that sounds right. I mean, look, there's a lot of cross currents here,

the single most important issue from the crypto industry's perspective. And Robert said something about being prescriptive, being more prescriptive, when right now, we quite literally have a policy of banning crypto in the United States, because you if you combine obfuscated, I mean, intentionally obfuscated rules, as in, what are the rules, if you follow the Coinbaseated, I mean, intentionally obfuscated rules, as in what are the rules? If you follow the Coinbase case, the Kraken case, the Uniswap case, I mean, it's extremely clear. There are no rules, right? It is not clear. Gensler, under oath in Congress, never answered whether Ethereum is a security, much less other things. And then they made claims back and forth without consistent methodologies.

In the industry, the key to the FIT Act, there's really two things that matter. Everything else is specifics, but the two key things that matter, number one, end regulation by enforcement. We could talk about it as much as you want, but that is critical, and that's on the first page of the bill. And second is to codify what is and who has regulatory authority so that you can move forward. And that matters. So when you look at what Gensler said today, his statement was one of the most absurdly horrible statements I have ever seen. And I did policy debate for years, right? That's what I did in college. And as a policy debater, what he said was literally the kind

of thing that a team that goes oh, and eight in their tournament would say, he basically said, we want to protect investors by leaving a obscure non regulated environment pushed offshore with no US comprehensive policy. I mean, it's the dumbest thing I've ever seen a major appointee say, and I'll stand by that. I mean, he said dumb things before, but that was dumb. And the reason the administration has no choice at this point is because it is becoming extremely clear. I mean, the narrative in 2022 was Luna blew up, Voyager blew up, everything blew up, and then FTX blew up. And everyone, you know, last year was like, oh my God, the crypto is horrible because of that. It has now dawned on people into the zeitgeist that one of the causes of that was the fact that the US did not have a cohesive regulatory regime. And so we need one. And that is the

dawning. That is the important thing that matters, because with all the gaslighting that Elizabeth Warren and Gary Gensler have continued to push down the industry, that's really the key here. So SAB 121 was a massive overreach, but that was their waterloo. Essentially, they tried to say, well, the most secure firms on the planet can't custody. Well, that's dumb. In fact, they took it even worse. They said the most secure firms on the planet can't protect customer assets. So that's why they lost there. And that's the kind of thing in war, when you go too far and overextend yourself, the counterattack is vicious. And that's literally logically It's a major change. And yeah, you know, even Ryan Selkis makes a statement, I don't like the FIT Act the way it's currently written either. But the goal of a principles based with some prescription with clearly delineated authority is what the industry wants. And that would stem the tide. And that is a very, very big deal.

Bruce, go ahead. Good to have you back. What's happening? Don't be fooled by the rug pull, folks. It's all a big rug pull. This is all nonsense. Congress did not suddenly become our friend. The Biden administration didn't have his handlers suddenly wake up and decide that this guy has a clue and they're all our buddy. And bipartisan just means you're about to get screwed. This so-called victory last week, that SAB was not a workable thing anyway. So it's a fake victory designed to embolden people and do exactly what you see now to have this attitude like, yay, we won. Let's win again with this other thing, which is more nonsense. This FIT bill is not a whim. It's just a big rug pull. None of these people are our friends, with the exception of a very, very small number of Liberty people, a subsection of the Republican Party. But all of the Democrats and almost all of

the Republicans are uniparty, statist authoritarians who want to march forward with more regulation and they want to roll out CBDCs. That's what the fit bill is about. That's what all of this is about. So don't be fooled by it. It's just a big rug pull. And the only thing that's going to really, really make a difference is actual revolutionary change, not this, you know, kind of bipartisan nonsense. You know, this bill is, you know, 212 pages of more nonsense, more control, more government. That's, that's exactly the opposite of what we need. So I just encourage people to not be fooled by it. Andrew.

I mean, I'm not sure who that speaker is, but I think it was a very smart what he said, because what he's getting at is what, you know, we in banking learn the hard way. It would be great if things were principle-based and dynamic, and then you start getting things, you know, to a regulated shift with a bunch of people who don't really know what they're doing. And then they go into an overrun mode. I think that what the gentleman's saying is that there is a lot of politics being in play. But what I would say is the SEC is trying to play catch up.

So, you know, as my earlier comments, these pendulums go fast and they mismanage it. I know that the gentleman says that these funds aren't involved in the discussions. As someone who was involved in many of these discussions, a lot of discussions you just don't hear about. Sorry. I think it's great that that you guys brought brought robert on um i was i spent a good amount of time with ubs when robert was the king of weehawken so hi robert nice to uh nice to see you here in this space um i agree with what bruce and and robert just said. All of this feels not only rushed, but it feels kind of just like it's a veneer, right? There's some sort of veneer. pull even amongst a uniparty type of action, even amongst, you know, grit your teeth and you're

forced to approve an Ethereum ETF, you know, but staking's removed. We have cash create on the Bitcoin ETFs. You know, this is the takeover of traditional finance and wealth management and the regulatory, you know, sort of structures associated with Wall Street. And Robert said it really well, you know, maybe 15 to 30 minutes ago that, you know, there aren't geniuses at the regulatory bodies and in Wall Street. You know, all of us agree with that on the compliance side, but certainly, you know, that needs to be said in Wall Street, too. These folks aren't aren't aren't smarter than everybody. So, you know, act accordingly. You know, be careful here. Be careful with, you know, how you treat these cycles, how you treat these actions and activities. Also, there's a big difference between approving, you know, 19 B4s and Ethereum ETFs actually trading.

You know, that could take weeks. It could take months. I would bet that it probably takes months. Why? Because, you know, all the issuers were not ready, even remotely ready, one with their 19 B4s and certainly with their S1s. You know, I talked to some BlackRock folks and they're like, there's no chance that the S1s are even close to being ready. And so conversations with regulators and conversations with lawyers at those firms are like, you know, there's no way that this can actually be approved and start trading within the next couple of weeks. That would be insane. So it's a strange kind of moment. Ethereum's gone from 2,900 to 3,800 inside of 72 hours. And it should have, based on the news, the political landscape

is shifting. That's a net positive, but it just feels off for some reason. Those are my thoughts. You don't think... so two questions, Andrew, and I'm going to shift it back to the markets. First question, you just don't think it's politically motivated. It's not a response to Trump's comments in your opinion? I don't know about Trump's comments. I think it's hard to tell. Honestly, it's hard to tell. It feels like it's politically motivated because you have everything that happened on Monday, right? There was, you know, a change at grayscale. There was an NYG agreement between Genesis for $2 billion. There was another thing and another thing and another thing. And then, you know,

you've got the Bloomberg guys saying, oh, now the Ethereum ETFs are going to get approved. All that happened inside of four hours. You know, the political winds. Yes, I think that's a real thing. I just feel like political winds shift all the time and they shift really fast. And I also I also think that Gensler's letter to this morning was probably a harbinger of, you know, you guys haven't seen my last act. I'd just be cautious. That's all I'd be. So, Robert, behind the scenes, before going to Dave, how does it work behind the scenes with the access you've had and you don't know if you still have? Can decisions, creating this close to elections, can decisions be made by the higher ups saying,

all right, cool, we have to shift, we have to do a 180 on our stance on crypto? Where do we start? And then this is what we saw in action over the last few days. Because I'm sure, I know Bruce disagrees with this. I think that's the point that Dave kind of hinted on yesterday. What's your stance? Well, there's always conversations right and and they're always trying to find the balance between um you know where where the general public's you know a fan but that that there's a lot

there's a big difference between populist rhetoric and and and getting shit done you know we've been hearing about you you know, the SAFE Act, which is about banking being able to do, you know, marijuana banking for years. Hasn't moved at all. We've been hearing, you know, the opposite about, you know, crypto and it moved quickly. I think to the gentleman's point beforehand, there's been a lot of news that has been generally positive. And good news moves things more quickly. Like I said, I don't think that President Trump, you know, making an announcement that he's going to take, you know, crypto money is changing the speed of the SEC. I just think

that that's nonsense. You know, just like, you know, I advise the Pentagon and I have national security clearance. And I don't think, you know, what what someone saying about, you know, Gaza in the Middle East is going to shift how the Pentagon thinks either. So I think that there is more of a separation than meets the eye. I don't think just how people think about voting. And by the way, voting shifts friggin, you know, as far as voting, we're talking about, you know, less than 5% of the population that anyone even focusing on. We're down to like eight states. So this idea that, you know, no disrespect to this great crypto town hall, and I love listening and learning, but the idea that this group is going to shift the momentum of the campaign, I wouldn't give

yourself as much credit as you're giving yourself um i would say sure it's a talking point just like others but it it doesn't uh move the needle um like like pro-choice and reproductive rights is moving the needle um so i i would just i would just calm down i disagree yeah i think he's right but i would say just really quickly robert in just brief response that, whether it's the biggest issue or not, it's definitely on the radar. Because when Trump made the announcement that he was obviously raising crypto army and was going to take donations, Biden immediately sent out a fundraising email saying that oil barons and crypto billionaires were out raising the Biden campaign. Right. By the way. And you're talking about, you know, speaking points out raising the biden campaign right by the way and you're talking about you know speaking points and ads from the campaign and every day they come out with a

different thing i've been involved with campaigns for over two decades okay trust me every day there'll be some new dynamic point that they'll be touting and maybe they'll reverse themselves or maybe they won't and anything believe you know, listen, anything to get out the vote and get people exciting. But there, there are myriad of these. Okay. That's going to happen over the next six months. I don't think so. I don't think so. I don't think so. The points that you made, you're suggesting that things like pro-life pro-choice,

these kinds of major discussion topics are going to move the needle, but that's not because it's, it's always, if those are always a red, like right versus left, red versus blue decision points and everyone that's already made the decision to either vote blue or red, that's already decided. It doesn't, those talking points. Yeah, you're wrong. You're wrong.

No, I'm not. Let me finish. Let me finish. No, but that's not accurate though. You're telling your people the wrong thing. Every, every, every vote. Okay. Let me finish. That's not accurate, though. You're telling your people the wrong thing. Every vote, okay, since the Dobbs decision, Democrats have outperformed by six to eight points, including red states, whether it was Ohio, Kansas. Okay, go through it.

That's just not accurate. Okay, I'm saying right. The amount of popular votes for last election, Biden versus Trump, was down to, I think it was just like 200,000. There's 50 million crypto holders in America that are eligible to vote. And most of these people lie somewhere in the middle. And they're not quite decided on where to put their votes, right? All of you guys are not... I'm going to give you guys all more credit than you give yourself. You're not one-dimensional. Okay? You're not going to vote because of ETH and Bitcoin regulation.

Just like on Wall Street. I'm an American. I'm an American. Kyle, let Robert finish quickly. Time out. Time out. I'm an American. I'm an American. Hold on. I'm an American. I'll tell you... Kyle, let Robert finish quickly. Just like on Wall Street, they told me for 40 years, I'm only going to vote because of taxes. 40% of Wall Street votes Democrat. 40% votes Republican.

20% are independents, and there are certain issues that move them one way or the other. Most voting over the last two decades has been either about the economy or about war. Maybe this year there's this third thing called democracy on the line, whether it's with you guys getting your rights in Bitcoin or reproductive issues or marijuana. But my point is, you guys are not single issues. Don't make it like you are. You're better than that. You're not going to vote because frigging Bitcoin.

Kyle, quickly, Kyle, quickly, just before you make your point, I think you're both right. It's just on a very dramatically polarized spectrum. Robert, I think there are single issue voters, but it ain't 50 million crypto holders that give a shit. It's 10,000, 20,000. I don't think that's true either. I'll tell you like i've been an american obviously all my life i've never ever voted ever right this is the first time in my entire life i even give a shit right like because this typically in my life it's never i've never been mostly directly affected by who was in office. There's never really dramatic changes that are drastically made. The same problems seem to always exist. But what I see a real opportunity for real change to be made here, or at least for America

to stop falling into the gutter, and for me to be able to freely create and innovate within the country that I live in without worry about prosecution. Yeah, and this is only going to grow bigger. And so it's not it's not a small thing. You see that the history has been made with with Bitcoin ETFs massively over outperforming every other thing that's ever launched before. It's a bigger thing than you think and what's what do people want the most they want their life to not suck. So if someone's looking at how can I make more money? How can I defend myself against

inflation? How can I make my because most people, they live paycheck to paycheck, they want to vote with their wallets, most importantly, and I agree. I agree. The economy is always one of the bookends, but people, people are killing it in the stock market. They're killing it. No. Okay, they're not. They're not. That's nothing.

You can't even compare the two. The asset performances are nothing but close. Listen, can I just say something? I wouldn't price Bitcoin today and say that's going to be the end all. We know it's an asset class that goes up and down. Okay, for those people that sold at 17,000 didn't get back in. Okay, they're not feeling too good. Let's not overthink. Okay, the impact you guys all have no disrespect. Do you know how many people have become rich because of Bitcoin?

I'm glad that's a great thing. I'm a capitalist. I hope a billion. And then not to mention just the ability for. All right. It gives everyday people the ability to actually make money. And I've never seen such interest from people like people didn't really invest in stocks so much. But with crypto, it's getting younger people who are very interested. You see young kids making lots and lots of money. It's a much, much, much bigger deal

than you think. And we've seen that. Scott, can I make a point here? Look, Robert, I've been around almost as long as you have. I've sat on most of the industry committees. I know how the sausage gets made once it gets to the agency

level extremely well. And you make a lot of very good points. I know how the sausage gets made once it gets to the agency level extremely well. And you make a lot of very good points. There's a point that you're not making and that a lot of people that are younger understand well, which is in 25 years, our financial markets will be digital. The question and the question is, will the America, which today has the most efficient capital markets on the planet, and as a result, 50% of the world's investable assets, has trillions of excess GDP, millions of jobs because we have the best financial markets. Will we cede that to the rest of the world by being the last analog system on the planet? That's really what's going on. Yeah, I'm with you.

Many people who understand that. Yeah, I'm with you. And there are many people who understand that. Yeah, I'm 100% supportive. I've been touting for digital currency for years. So, and I'm not, by the way, I'm a proponent of crypto for years. I always thought, no, no, I've always thought that my view of crypto and I haven't, you know, I'm not in it, so I don't have any view.

I'm glad people are killing it. But my view was always at the beginning, it was kind of a libertarian perspective, and it was amazing for remittances. Those are the two things that made sense to me from an asset class. Then I thought it got ahead of itself and didn't mature. Today, it's maturing faster than I ever thought. And this is why I think it's great that you guys have this town hall. I'm not here to shoot you guys down. No, I get it. I get it. I just want you to understand because I talked to a lot. Look, I have a lot of friends in the Tradify world.

I started at Morgan Stanley in the 80s, for Christ's sake. So, you know, I go back a ways. But the simple fact is that what we are seeing in the digital markets in so many different variables is more efficient. And there are so many reasons for this. But in order to move forward, we need a regulatory framework. And the reason that I focus and the reason that Ryan Selkis focuses, the reason that Richie Torres buys this argument is that we need a regulatory framework. We can't have one power-h chairs. This is not just a partisan. This is a hyper-partisan SEC chairman who, and you know this, Robert, because you have the same friends I do, you can't find one constituency on Wall Street, not one, who thinks that he's doing a good job, not one. The asset managers can't stand him. The retail brokers can't stand him. The market makers can't stand him. The hedge funds can't stand him. The banks can't stand him. They all can't stand it.

And it's not just about crypto. It goes way, way deeper than that. He is overly prescriptive. He has an agenda. He is not well-liked. And honestly, that's one of the reasons why this particular issue is going to get a lot more play is because he has made enormous enemies throughout the entire industry. And that is what's going on here. So yeah, it's not yet we, you know, look, I agree with a lot of the people on this call. I mean, you know, yes, I am a believer in crypto. Yes, I formed a company specifically to help make them help mature the market seven years ago, and have been all in for quite some time. But my company, we're opening offices in Spain and in Dubai. Why? Because we're being forced offshore. I'm in Miami Beach already. I don't want to be pushed out into the ocean by Gary Gensler. But yet, effectively, most entrepreneurs in our industry feel that this is our last stand. Either

we have to leave the country or we're going to be allowed to do what Americans do, which is innovate. And that's what this is over. This is not about the ability to make money in Bitcoin. This is not about, although it may be for some voters, the ability to play on Uniswap if you're college age, etc. This is about our ability to innovate. This is about our ability to do so responsibly. And it's being framed that way. That's what's important. And so yeah, you

know, we'll see how it goes. But I think that that's kind of the important point here. And to be included to write because as as someone who runs crypto business, many of them, unfortunately, we are advice from lawyers is always just say no to Americans. And it sucks, man, like, you know, I we have to exclude the entire country for for fear of being included in this uh sec that's right and so so all the americans are watching the rest of the world be able to participate in these amazing opportunities but they're banned from it

why because they're american and people and you know you want to it's an easy argument kyle that i like to use with with uh my tradfi friends say, well, what is this crypto stuff? I go, listen, you remember Linux, you know, Linus Torvalds invented Linux, which is undeniably one of the great productivity enhancers of our generation in open source. Now imagine that you have a way to incentivize development and use a network building in open source. What could happen? And they go, oh, that's interesting. I said, yeah, well, America's banning it and the rest of the world is embracing it. What do you think is going to happen?

And that point is a mic drop moment. Bruce? Yeah, I think, you know, I agree with Robert to the extent that I think we can't, we shouldn't overestimate the power of the sort of crypto lobby. You know, I know that there's a lot of crypto people who are excited. And, you know, from a marketing standpoint, I, you know, I can get it. And maybe I don't know if they either don't know and are just repeating something to try and rally people or if they actually know the truth. But the truth is, we don't have that much power. Now,

we can pretend to and that might be enough to scare Democrats or scare people, especially people who are running for office right now. All the Congress seats and many Senate seats are in play. But in reality, we don't have that much power. The money that we raised was fake money that Sam stole from people and gave to people, and that gave the impression that quote-unquote crypto people have money to give. But realistically, elections are won by money. And if you talk all the big talkers on Twitter, you know, doing victory laps, you know, well, they're, in my opinion, actually getting rug pulled. I don't think there's anything that's actually a victory. But even if it was, you know, ask them, say, okay, show me the money,

show me how much you've actually raised. Because the thing, one of the, I think the biggest, people asked me what I learned when I ran for US Senate. I think one of my biggest learnings was how important money is in the elections. And we all know that money's important, but you have to realize politics and political advertising and marketing in the United States is an extremely well-developed science. It's right up there with soft drink marketing. Soft drink marketing, potato chip marketing, these kind of commodities that are very, very similar have extremely advanced marketing. Lay's Potato Chip knows exactly the average consumer of potato chips, a 46-year-old woman, because women typically buy and 46-year-olds tend to have teenagers,

and teenagers eat the most potato chips. So they have it down to a science. Coca-Cola knows by degree, one degree difference, they know in Austin, Texas, how many Coca-Colas are going to sell. Political, despite all their folksy marketing and trying to pretend that they're one of the gang, it's a hugely developed machine of political, of advertising. And it all comes down to money they pinpoint down to the penny what it caused in a jurisdiction in a in a in a in a area to elect somebody you know they say okay it's it's 11 and 23 cents per vote here and over here it's this and this is how much you know this isn't like some you know we we we like this folksy idea that you know mr smith Smith goes to Washington and

can just go and give a great speech and everybody's going to vote. It's all nonsense. The 50 million crypto people, like Scott said, it's only 10,000 of them who care and only 2,000 of them vote and only 50 of them are going to donate. It's all nonsense. I'll give you one simple example. I mean, people who know me know I'm pretty, I think it's fair to say of any federal candidate ever to run, I'm the most pro-crypto. There was a pro-crypto PAC that gave $5 million to my opponent. My opponent is a Democrat who has a 98% similar record to Elizabeth Warren. So if you're looking at it and you say, okay, Bruce Fenton, maybe I don't like him. Maybe I like him, but I'm going to go donate to a crypto pack. Is there who on planet earth thinks that Elizabeth Warren is more pro crypto than me? No one, no one on planet earth yet. All the people

in our industry, like, you know, somebody, somebody gets them, you know, they're, they're the person at the poker table who doesn't know who the sucker is, they go say, hey, I got a pro crypto pack here for you. Can I have a million dollars? And a bunch of people give money. And then they give it to somebody like Elizabeth Warren. Elizabeth Warren got pro crypto money. So it's all just a big scam. It comes down to the money. A lot of this money is outside the states that people are running. It's a big, big system. Tech billionaires, Soros, these kind of people who feed these campaigns. It's very much down to the money and the science. And there's just not a lot of giving. There's not a lot of people who,

I think like Scott or somebody said, there's not a lot of people of the 50 million crypto holders in the US who actually care enough to vote. It's very, very ridiculous to think that people, it's hard to get people to vote. You know, Andrew Tate said, oh, he could get anybody elected because he's got a popular Twitter following. And I laughed at that. It's just not true. You don't, you think he's the only one to try it? I mean, this is a billion dollar game. They hire anybody they can from Lady Gaga to Disney. Everybody's in on it. And by the way, I should just add, because, you you know what you're saying is spot on but someone said oh there's going to be you know there's tens of millions of dollars spent

in you know crypto and lobbying this there's going to be 20 billion spent on this campaign and i'm probably yeah yeah over 20 isn't much and a lot of it is a lot of it's a rug when you when you talk about how much you're moving the needle like i said everyone should vote i'm a capitalist but i just think that this echo chamber you're living in okay taylor swift will impact this election more than this of course there's one there's one thing i'd like to add that hasn't really been touched on um and that's basically the financial nihilism of the younger generation, of the millennials and now the Gen Zers. I think the fact that Biden

seems to be coming around on this is kind of the reason that we've seen him basically do other financial incentives to basically what looks like to be buying votes, i.e. for giving student loans and and all that. So the fact that Trump came out positive on it basically, I think, showed that Biden doesn't support, you know, basically giving more more financial power to to this um to these younger voters so i think that's part of the reason why they came out in terms of uh people in other swing states there's actually a poll that came out 20 of voters in these swings in these swing states actually do care about crypto um there are 90 million holders of crypto in the US.

So I think it's quite a substantial voting block, especially in these, you know, these eight states that actually matter. And I think Biden's basically going for every vote that he can. It's going to be a very, very tight election. And so I think that's part of the reason why, you know, we're seeing this and going back on financial nihilism, you know, buying a house these days, like, like we see this in Korea, like, there's a reason why the Kim Chi premium exists, right? The young people there feel like they have no chance to make money to, to increase their careers, their parents got super rich off of real estate. I think we're kind of seeing that in the in the in the US where the boomers aren't moving out and interest rates are up. Inflation is up, even though maybe the stock market is doing good,

but pragmatically, actually, people are feeling much less wealthy than they were before. So yeah, I think the financial- I've got a question for you and David, and I want to slowly pivot it back to the markets. How much does all this matter? How much does the quote-unquote anti-crypto army or the pro-crypto army matter to our industry? Yeah, I think it does matter. You know, like I said, the stats are pretty crazy.

40% of Americans own crypto in some sort of way probably many i think i think kind of the strategy for warren and a bunch of these people is like hey these crypto wealthy billionaires millionaires and billionaires um you know you all bought in 2021 you're all down we're gonna stick it to these guys but i think what's happening now is is the the vote is going to be so tight that the reason i asked does it matter is that isn't it just inevitable like based on the metrics you're mentioning how many crypto owners there is what the markets are doing now the spf clouds are gone dave you disagree that it's inevitable that eventually the the tide will change whether whether it will happen now because of the

elections or will happen post i i no matter who's in charge. I basically tweeted – Because otherwise the U.S. will fall, as you said or Kyle said or whoever said, the U.S. will eventually fall behind if it doesn't change. There's no doubt. Look, inevitable in a 25-year horizon, yes. Inevitable in a 10-year horizon, no. actually tweeted this morning, what I genuinely believe is that taking your foot off the gas as an industry, taking our foot off the gas, promoting the ability for responsible regulation to give a framework so U.S. entrepreneurs can build businesses, if we mistakenly believe that

they're going, and it's not enshrined in law, and nothing changes, and we end up with four more years of the same administration with a slightly nicer veneer on top of it, but behind the scenes still telling the SEC, having the SEC telling FINRA, don't approve brokers trading crypto as non-securities, not having a framework to understand it, not having a firm like ours being able. You heard me say this before. Five years ago, I talked with commissioners of the SEC saying, our expectation is once you guys sort this stuff out, is we'll become an introducing broker to be able to allow our algorithms to be used by

the masses. The fact is, is there's no way to do that in the United States because not one broker has been approved. Unless we have an administration change, that doesn't mean Biden has to be tossed out. It means he has to toss out all the appointees that are enforcing, that are not allowing Custodia Bank to get a Federal Reserve master license, that enforced Operation Chokepoint, that did many things behind the scenes, that it's not a win unless this act, which bans regulation by enforcement, passes. It's not a win. A win is a win. And understanding what it is matters. And so, yeah, I do worry that Bruce is right, that it's a rug pull. It's not a rug pull yet, but it could be. Imagine a world where people say, ah, it's okay. These guys are on our side, but they don't actually codify anything.

And then we get four more years of this nonsense. That's bad. So that's my point. Well, what about the – go ahead, Terrence. I hear someone unmuting. I'm not sure who it is. But I'll give you the mic quickly, Terrence. Now, I've got – Dave, the next question I want to ask you is just going back to the ETH approval.

Are we getting a bit too excited too early? We just don't know what inflows there will be. Obviously, the staking issue is there. Could we see a potential letdown? I think Ryan was mentioning a potential letdown if the inflows don't come in as expected. Or as Scott said, is there no expectations right now? So what would happen next? We saw the pump once the news came

out that the ETF would most likely get approved in the next day or so. But then what happens next? Well, I think, look, yesterday was, frankly, it was CoinRoute's largest, our client's largest day of trading ever. We did like $1.6 billion of volume through our platform. And a lot of it was using algorithms, trading the Bitcoin-Ether ratios and various ratio trades around Ether, right? Because it was a huge move. But look where it is right now. The Ether-Bitcoin ratio at 0.5338 is almost bang in the middle of the trading range that it's been in, a large trading range for months. So is it over exuberant now? No, it's back. It's just a snap reversion to the mean. Where will it go? Well, it will probably bang toward the top of the range. And then

that exuberance, I think people will fade it. I still think it's the range trade. Now it's a very large range, right? It was a 17% move in that ratio yesterday. It was a very big deal. And lots of people, lots of traders, yes, it was a trader's dream but no it's not a rational exuberant it's only right to the middle of the range if it went to point you know zero six two or something and broke through the top of the range then yeah i'd say you're probably right but no i think we're right where where it should be uh markets are rarely efficient in the long run but i think this time it's more or less accurate. I want to pivot, Kyle, I've got to ask you the same question on the market's reaction to the news.

I want to pivot the discussion to a completely different sector of the market that we were meant to talk about today. We had Robbie from Animoca as well, but kind of got down the rabbit hole of the anti-crypto versus crypto movement. But Kyle, your thoughts on the market's reaction to the news and what do you expect to see over the next week or two? Well, like I said earlier before, I think that we're going to see a lot of inflow into it

because like on yesterday's space, I just don't know where else people are going to, where people are going to park their capital right now. And I think this is an opportunity. I also don't think that the lack of staking is going to matter to people because it was never an option for Bitcoin before. And when you look at the potential upside,

and for anyone who studies market cycles, which all of these smart RIAs and all these asset managers will look at historical data and see what's going on, they understand it pretty well. So I think this is another opportunity for them to make more money. As an asset manager, you want to bring in more AUM. You want to make sales.

If you're on the sales team for these guys, you want to make more revenue. And again, it's also an issue of a winner takes most scenario. And so, you know, I ran into something earlier that we don't have commercials and this kind of stuff yet. But the fact that this thing isn't going to start trading probably for a while, winner takes most scenario. And so, you know, I ran into something earlier that, you know, we don't have commercials

and this kind of stuff yet. But the fact that this thing isn't going to start trading probably for a while gives time for these guys. And look how fast they put, they either, before when the Bitcoin was approved,

they either had these commercials put together already, like way ahead of time, or they did them within a few days. Right. And so I think that the second it gets approved, we start to have all this advertising and things like that around this.

Again, I think that we're going to see that I did I did think about the GBC overhang. And I do think that that's going to that there will be some outflow, maybe some of this and some of the Bitcoin where we see 50 percent of that come out. It's a lot less than the Bitcoin outflows. And we'll probably have less inflows as well. But so it's a lot less plus, we also have this $14.5 billion dollars that's going to come right after the ETF starts trading $14.5 billion dollars getting airdropped to crypto DJs, who were already savvy enough to trade their own assets

on FTX before. So it's like a stimulus coming in to exactly the right people that we want to get cash, crappy fiat back into their hands so they can put it back into the market. We're literally getting a $14.5 billion stimulus check from FTX that's going to happen within the next month or two, I guess. So I think that if you're looking at the markets and like, you know, I do a show every day on YouTube. Right. So and I have my researchers do a little bit of and they're not they're not BlackRock. They're not Vanguard. So we don't have access to the best research.

And so if I know all this stuff, I'm certain that they do as well. Right. And so what wouldn't you want to front run, you know, a $14.5 billion direct injection into the space? If you saw Biden flip bullish and start hiring a meme, a full-time meme manager, wouldn't you be bullish? It just seems like you would definitely want to, right? You would definitely want to be in that position. So your objective should be to make your clients as much money as possible. If you do that, you highly encourage them to take some of their other investments in bonds and treasuries and slow-moving equities, whatever else they're invested in,

and you put it in ETH. Like, okay, all right, Bob, hey, Bob, last month you did 0.5% of your portfolio in Bitcoin. How about you do another 0.5% this month at ETH? And they trust their RIAs. They trust their advisors, right? And so this is an opportunity for them to make more money, for Coinbase to make more money in custody, for everybody to win more.

And at the end of the day, the exposure of the entire portfolio is still minimized. I mean, we're looking at most of these asset managers who are allocating 0.05%, 0.1%. And that's still big inflows, but it's a fraction, right? And so to get a little bit more exposure to another asset class makes a lot of sense, in my opinion. And so I think that's, again, that people are maybe underestimating the amount of inflows. Do I think it's going to be the same as Bitcoin? No. But do I think it's going to be significantly meaningful? Yes. Do I think it might be relevant to Bitcoin and Ethereum's market cap sizes? Probably.

Do I think it's going to start altcoin season? Yes, I do think so. Robert, yeah, sorry. Go ahead, Robert. Final words. Yeah, go ahead, Robert. Yeah, I was just going to say one thing for you guys. I thought what I think what David said earlier, one thing to keep in mind is when these paradigm shifts take place of something that seemed out of favor like crypto and all of a sudden it's in favor you know we all know too well what happened in the SPAC market you know this was something out of favor for a while at the SEC that it became in favor they approved deal after deal after deal after deal and then all of a sudden the deals traded like shit and trying to get a SPAC approved through the SEC, okay, has more hurdles than the frigging 400 Olympic hurdles. Okay. It's not, it's incredibly difficult. That's why I was trying to say how the pendulum

swings with these regulators. The trend is your friend until it's not. And don't underestimate the positive news of the SPF assets or the positive momentum that's gone on with crypto going from 20-something when it was approved to now over 70. All of these things that are making it more mainstream really bring the momentum until something happens and then all of a sudden regulatory starts impinging upon its growth or its speed of success. So I would just say, look at this as a time and space that things are happening quickly on your side. But I would not make it like there are not going to be incredible roadblocks ahead. I would say that we've already had the – you're saying don't be surprised when regulatory environment becomes unfavorable.

I'd say that we've made this much traction with the most – No, I didn't say unfavorable. The most unfavorable. No, no, no, because remember what's happened it went from unfavorable to favorable right i mean the approval process in itself was what's favorable you guys have created a new asset class that does not happen too often yeah so so robbie i appreciate you coming on and you know led to a pretty heated debate and a good discussion, something we don't get to have when everyone on stage has got bags and incentive to be pro-crypto. So, I appreciate you coming on, Robert. Always a pleasure. And I do want to go back to Kyle. Kyle, we've had a debate yesterday's space. We've had it on many spaces. We're meant to have it today as well. Just the entire VC model in crypto. So it's kind of pivoting away from regulation and pivoting away from the ETF and more to the niche of VC funding and IDOs and launchpads

and exchanges. Something we talk a lot about and something that me, Scott, and Ran debate about as well. So my question to you is, we've discussed the flaws in the industry. First, actually, the industry itself. We've seen the markets recover, yet projects that have raised VC funding are still not doing as well as many expect. So my question to you before digging into the model itself is, why? Why aren't we seeing that same inflow of capital into IDOs as we're seeing with Weimcoins, for example? Why are we seeing the same amount or not as And not as much not seeing the same amount? No, we're not seeing the same amount at all Yeah, I mean cores are pumping are doing extremely well yet projects are raising money from VCS and trying to build something

Despite the model not being perfect. They're just not getting the That same retail demand as they previously did it's because we don't we don't see it. Well, first of all, there's a difference. So you have a different type of launch for each of these things, right? Meme coins are launching either from a pre-sale or they're doing something like pumped up fun. But the point of that is that usually it's 100% circulating supply when it launches. And you're talking about like a $25,000 market cap, or maybe it's a $200,000 market cap. And so it's, I mean, and but there are tons and tons and tons of rugs.

But mostly, this is all fueled by the success story that's shared by someone's favorite influencer, where they see that some guy, you know, just made 10,000% on something overnight. And these things actually happen, like, well, frequently, probably more frequent than a casino, but like also quite rare as far as how many people are attempting to do these things. So when we hear more about people love to talk about their successes and share those, but when people are losing money and getting rug pulled, we don't hear about that as much. I think it's because it's commonly accepted now as part of the game. When you talk about big VCs and the fundraisers, those the ones historically that have raised a bunch of money and been marked up, you know, from the earliest round being sold at, you know, 30, 40.

Actually, it's now usually the good projects from the big investors. The seed round is more expensive than it ever was in any cycle before. So, you know, like we had Ethereum launching at 25 mil, FTV back in 2015. Then you had Solana, you know, launching at, the first round was $20 million in the seed round. Optimism following that the following cycle at a 40 or $60 million seed round. And then Starkware launching at a, starting at an $80 million seed round. So it just it just they're understanding that it can be things can be marked up because the demand has been there and the gains for VCs have been there. So it all makes sense for them to come in and do

this because they've seen what they've been able to produce. So you have this this more unrealistic valuations, which doesn't make sense, because there's actually more competition for these things as well. And, and so that but these more unrealistic valuations, which doesn't make sense because there's actually more competition for these things as well. But these big projects that raise these hundreds of millions of dollars from the A16Zs and Dragonflies and this kind of stuff, they go, and because of regulatory environment that we've been talking about, unfavorable regulatory environment, they haven't been able to do public sales. And so they're not building communities natively,

first of all. No one is actually educating themselves about what the project is. There's no belief in these things that they're going to do well long-term. People just see that I can go farm this airdrop and I don't care what it is and I can make some money

and they definitely plan on selling those tokens when they get them. And it's also this airdrop stuff that pumps up these valuations to completely unrealistic valuations because the TVL is all temporary. TVL is just there for airdrop farming. So you have EigenLayer

and with this hilarious meme video that went around, you know, where they were able to coerce or trick people into getting $15 billion in TVL, I think which led to their final round or the people into getting $15 billion in TVL, I think, which would lead to their final round or the last round being valued at, what was it, raising 100 mil from 816Z or something at a, what was it, a billion-dollar valuation or something, right? But of course, that TVL was just temporary. It was just there for the airdrop, and then we found out that they rug-pulled the airdrop. And then we found out they rug pulled the airdrop. And so there's, you seem to see a lot less, people are paying much less, much less attention or thinking that

retail is not important, right? The community is not important. I mean, I love, I talk to founders all the time, who just say, No, we don't need a public sale. What for? And I'm like, do you do do you do you want users on your platform? Do you want to have people who are talking about your project on crypto Twitter? Like, I'm sorry, crypto X. Like, do you understand the significance of a community that why is XRP still so valuable when there's like no value accrual in that token?

Why is Cardano so valuable when there's no value accrual in that token? It's because of these these loyal crazy communities that typically get in quite early and they and and they're they're there they're there and they're learning they're paying attention and so you know people are dramatically underestimating or over forgetting community growth like real organic community growth and that's really important. And we're and so you have a mixture of a bunch of different things going on right now. Plus, you have massive manipulation to try to achieve these high valuations, because and these and

these really, you know, over, overhyped, and the the launches, people have been led to believe that how you launch, and the the amount of multiples you do on a launch somehow signifies the quality of your project, when in fact, it definitely does not at all signify the quality of your project. It's the perceived quality and value of your project. However, after that launch, you still need to deliver. And if you have a low float or low circulating supply of your tokens, then somehow you have to pull off the miraculous feat of offsetting hundreds of percents of inflation every year. And which means that how are you going to find that buy pressure? in buying a token valued at $20 billion, when they can go, they're much more likely to make money buying a whiff or a pop cat or whatever the hell it is.

So we just lost principles here. We lost first principles as an industry. And there's no one that really talks about first principles and why we're here in the first place. And I think that if people really just understood that tokens, we should be looking at them, not all I think that if people really just understood that tokens, we should be looking at them, not all the same,

but if you're investing into something, you should look at the way that that token accrues value and educating people on that. And if you look on chain and you look at some of these protocols that are producing good revenue, like, for example, Banana Gun, which is a Telegram trading bot, the price of the asset is directly correlated to the amount of revenue that thing's producing.

And this is how also Wall Street tends to price stocks. They look at things like price-to-earnings ratio and revenue and the value accrual in the underlying asset. But no one's educating people about that kind of stuff in this space, right? And so it's like either follow Ansem and Arthur Hayes into whatever they say, or look for the thing that launches on Binance or like your airdrop or your meme coin. But what about all of the other quality projects that are really trying to build something great that do understand the space, do understand the essence of decentralization and peer- peer transactions, this is the most important part is that are you building something that is actually utilizing the value of decentralization, removing the middleman from the equation. Remember, this is why Bitcoin is great, because you remove the middleman, the middleman is where all the problems are all the value extraction. If we didn't create peer

to peer systems that that run themselves, then that's the best situation and the most efficient system. And we forgot first principles in industry. When people perceive someone like Sam Bankman or Alex Machinsky to be, quote-unquote, industry thought leaders, it's bullshit. They created banks or centralized companies that were just dealing in the Web3 space, but they still were centralized figures with value extraction as much as possible. So I think that as a first principle, I would love to see more people talking about first principles of this industry, like guys like Andres Antonopoulos and Eric Voorhees. If you just sit down and listen to them for a while, you realize that we've gotten way

off track, way off track as an industry and it's uh it's really disheartening to be honest with you but that's that's why you know i hope that we are building some of the things that that uh will be that chat gpt moment um and so yeah that's my my two cents so so one of the flaws you've talked about a few flaws in the model um one of the flaws is that the VCs get that early access to these projects and then launch to the market. They raise money. In the past, we were raising at pretty low valuations. That valuation has increased recently, which doesn't make sense considering that there's limited demand from retail and just a lot harder to get that traction post-listing. But the issue of VCs getting that early access

and retail not being able to come in early is something that you guys have solved, something you've been vocal about for a while and you've been working on for a while and you're trying to solve with Commonwealth. So can you explain more how does Commonwealth solve that? Yeah, so kind of the inspiration was, you know, back in 2015 and

16 i became aware and simon is on here all the time simon dixon so uh simon if you are listening um thank you uh he created an amazing platform called bank to the future and this gave me an opportunity who at the time was a no one i was i I was lucky to be considered an accredited investor because at that time, my Bitcoin holdings, you know, hit that qualification of that, that what you need to be an accredited investor. And so I was able to register on the platform. And once I registered, I got to go on there

and look at things like, wow, I can co-invest alongside Pantera and A16Z in this company. Amazing. And so I have equity in Coinbase, Circle, which is USDT, Bitfinex's parent company, which is USDT, Abra, Securitize, Kraken, Bitstamp, and B2TheFuture itself, which has exposure of many more great companies, storage, I've got equity in all these behemoths and there's a lot more. And wow, I was fortunate.

Like that made me feel so, so good. Like it's so lucky to be able to do that. However, the reality situation is that 99% of the people on the planet, maybe more, don't get these opportunities because they they're not either not rich, or they don't have and or they don't have access, or they don't have the minimum investment amount necessary to co invest in the as an LP and Pantera's fund or multi coins fund. And so

they're left buying the secondary market, which is oftentimes, especially today, the one coin, that token starts trading, it's oftentimes 30, 40, 50, 60, 100, 200x what the seed round got in for. And they're often just used as liquidity. And this is why a lot of people are bitter about they get wrapped in the market because they don't get that early access opportunity. And so what I wanted to do is recreate that experience, how I was fortunate enough, and open that up to everybody.

But that was a challenging thing, right? You have to look at how can you do that and what is like you have to create an aligned value between the project founders, the VCs who are often the first to get these great, amazing deals, and then the community who wants to participate. And so Commonwealth really is just a platform, decentralized, fully autonomous, on-chain VC. And we like to describe it kind of like Wall Street bets, focused on power of the crowd, power of the community and meets Robin Hood, which is giving retail easy access. So nice UX UI makes it easy for them to participate and mix with mash that up with an A16Z or Sequoia, whatever, which is a traditional style fund model where

it's managed for you, essentially, you just put you can put some stable coin in there. And when the returns come back, you're going to get your stable coin back to you, minus some carry fee. And then we've built this all into a way that's gamified. And in a way that's that the community, anyone holding the wealth token will benefit from the success of the funds that are open in Commonwealth. And so it's just a fund. It will be probably the world's biggest fund. And people might laugh when they hear that, but like, why wouldn't it be? It's open to literally everybody. It's an open permissionless protocol where once people start seeing the track record of the investments, and they're like, wow, either I can put my $10,000 into, you know, into into some new new coin or something, or I can put it into one of these Commonwealth funds that has amazing deal flow and, and performance

and is risk minimized, because I'm getting into these highly qualified embedded deals that are handed to them on a silver platter. And in exchange, I just have to, you know, I pay a small fee for that, right. And so that's essentially the idea. And it's been in the works for two and a half years, amazing team behind it. And yeah, that's what I said. Let's see, let's see. Another thing as well, especially in the midst of the hype, we've got another couple of minutes. So I want to kind of focus on the final question and then talk about your launch. But the VC start to fight for these allocations when a project is doing really well. What will be the advantage of a project accepting capital from Commonwealth? So your decentralized VC than a typical

VC is a really, really good question that was asked a lot. So yeah, so cap tables are very competitive. And especially Yeah, you're set it so it's simply the same exact logic why in the in the 2021 bull run, you would see the best game by projects and the cap tables. And you would see like, you know, A16Z and mechanism and whatever. But also in the seed round, you would see YGG, Yield Guild Games, or you'd see Merit Circle, or you'd see AvocadoDAO.

Because why? They had some sort of interesting value proposition that justified them being, and was a signal. Essentially it was a signal. You knew that if you had a game, and the game,'re you're you can give a check to one of these guilds. And that meant that you're probably gonna have 10,000 players on day one or

whatever. That's a damn good value proposition. So for Commonwealth, the lowest hanging fruit is you you have a your own XRP army on day one. So you can either give a check to a VC who's not going to add a lot of value like a lot of them. Or you can give a check to Commonwealth, which means that you're going to have every single token holder of Commonwealth is now going to have skin in the game or be interested in seeing you succeed, which means you're

going to get an army, a literal army of Wall Street Bets style army, who have interest in seeing you succeed, which means you're going to get guerrilla marketing like you've never seen before, pure, organic, genuine interest, and you're going to get users, adoption. It's like, where else can you find that? And all you have to do is let them into your round, right? That's it. Why would it? It is the easiest decision ever? It's so it's the same as the launchpad just much earlier in the round in the in those early seed and private no, no, no launchpad has no like a launchpad is different there.

There's no there's not the community. Well, actually, well, the paid yes for paid network. So it all comes down to designing the economic models, right. And so if, if the if the economic model, if that project, so most launchpads, first of all, they're centralized, their value extracting launchpads, the founders just take profits from that, and they don't give it back to the community. Right. And so the the community has no direct. They're only interested in their it's a it's PVP munchpads, completely PVP. If you design, if you understand token economies and how to create value within them,

then you can understand how to align a community to where it's a true DAO, a true family, a true group of people who work together for an outcome. And that's what we should be doing. So with paid network, for example, where Commonwealth is launching tomorrow, that is designed like that. Commonwealth is designed like that, where the profits from the protocols themselves go directly back into the token economy, which is more revenue in the protocol, directly accruing to the token, zero value extraction from that protocol. So yeah. As a final note, your tokens listing tomorrow?

No, no. So I'd like to hear, Bruce, do you have something too? But to answer your question, Mario, tomorrow is the, another thing too is we wanted to make in a first principles approach, in a true spirit of decentralization and inclusiveness, I believe that we're probably the only launchpad that doesn't have this huge barrier of entry. This huge barrier of entry, most of the launchpads will require you to have a bunch of tokens staked, which is a huge upfront capital commitment. And so tomorrow at 11am UTC, it's literally open for anybody. However, you have to come and make sure that you register on the platform as soon as possible. And, and yeah, then you with anybody can come participate,

you don't have to pay tokens, for example. And Commonwealth is, is, yeah, is doing the public sale there. And yeah, it's truly, this is a big deal for me as I'm directly involved as a founder in both projects. And so you'll see a lot of similarities when it comes down to the way the economic models are designed. You've been vocal about Commonwealth for a while. We've talked about it on the show well before, you announced it publicly

and you announced the public sale as well. So, yeah, I love the solution, the problem you're fixing as well. For anyone that wants to check out Commonwealth, the name is in the title. You can check it out there. And the public sale is open tomorrow on paid ignition at Cars Launchpad. Otherwise, yeah, man, it's a pleasure to have you again. We're investors. Not sure if Ryan and Scott are on the cap table as well, but I know I am. So pretty excited to see where this

goes. And I think it's a problem that needs a solution. And that's the best solution out there. So yeah, Kyle, appreciate being here. Everyone else appreciate the discussion today, the debate we had with Robert Wolf and the rest of the panel. And we'll see you all tomorrow at the same time. In the meantime, make sure you check out Join Commonwealth again. And not only because I'm an investor and he's partnering with the show, but the solution that Kyle and the team are working on is a pretty exciting one for anyone in the VC world. Thanks, Kyle.

Thanks a lot, everyone. Thank you. Bye-bye.