The Wolf Of All Streets - Bitcoin ETF Is Close, Another $1 Billion Crypto Fraud, The End Of Crypto Winter Is Near?

Episode Date: October 20, 2023

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We had fake news regarding the approval of a Bitcoin spot ETF earlier this week, but now we're seeing follow through in price as if that news is coming. And there seems to be a consensus that it is even JP Morgan today saying that a Bitcoin spot ETF is imminent. Of course, we also have Elizabeth Warren and her anti-crypto army cracking down on terrorism, writing a letter alongside over 100 Congress people and senators to the White House National Security Advisors. And we have Morgan Stanley ringing in and telling us that a crypto winter is likely coming to an end. This is rapidly becoming our most popular stream of the week. It's the Friday Five here with NLW. Guys, I look forward to this one every

week. We're going to recap all the important news that's driving these markets. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we Let's go. do and it's not all sam it's an amazing week although i will say for whatever reason people really engaged with our conversation about sam last week so it's clear that people are watching that trial and really interested in what's happening there it's it's our exorcism so of course you can't look away that's what's so bad it's this slow-moving train wreck that you have to watch and collective catharsis and therapy all at the same time. Really good. Exactly. We can dig into the stories of this week. And we've touched on some of this, obviously, in the past. I like to put up her picture just to trigger everyone really early. We've got Elizabeth Warren here. U.S. Senator Warren leads lawmakers to push administration on crypto-backed

terrorism. Of course, she's getting the headlines, but there are 102 lawmakers that have signed this. Clearly, there's real interest in Congress and the Senate in pushing this narrative that crypto is funding terrorism. Here's a bit of what she had to say, or the letter did, so it's not just her. Given the clear and present danger posed by the financing of these and other militant organizations, we asked the administration to provide additional details on its plan to prevent the use of crypto for the financing of terrorism. Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy. Is this a fair criticism of crypto or

is it not? This is why people hate politics in a simple, cute little package. A thing that is very, very tangentially related to an actual tragedy and horror show of modern life becomes a leverage point for someone who's just pushing an agenda that they had in advance. Nothing is new, just to be clear, about the bill that's being pushed from what it was being pushed earlier in the summer. It has nothing to do with exchanges that, for example, have been known or proven to facilitate terrorism. It is entirely about just defy KYC, right? It's a very, at most, orthogonally related thing. But in the wake of this, you know, the horrendous attacks, and particularly after the Wall Street Journal writes this piece kind of saying that it's, you know, funded by crypto, it's just exactly what, you know, she needed to go leverage this

point. Now, there are a couple of things that make it perhaps less bad than it seems. And some of these go back to what we talked about last week. The first is when it comes to these 102 people, my strong guess, now I haven't sat down and gone through this with a fine tooth comb. My strong guess is that about 97 or 98 of those 102 were handed a letter by a staffer that said, you know, this letter says the White point is the evidence of this is the fact that there are a number of pro crypto Democrats who have signed on, right? If the premise of the letter is just, hey, guys, this is an important vector for funding of terrorism in the future, we should make sure we have good policies for that. Totally reasonable. Everyone in crypto would agree with that. Now, what we know is that there's a bigger agenda

behind it. Here's the other thing about politics. Even these 102 senators know, or the 102 people who signed onto this, they still know that that's not the same as actually supporting a bill. This is just a letter. It's an open letter. It is actually the cheapest, most convenient, and least committal way to associate your name with anti-crypto terrorism financing without having to actually do anything about it. So it's just as toothless as anything else she does, except in so far as it continues to kind of erode and distract from other conversations. So I think it is extraordinarily frustrating. It's completely predictable in some ways, but it in and of itself, I don't think necessarily shows a lot of shift in momentum other than what we might already have seen around this. When push comes to shove, this bill will either be actually kind of advanced or it won't. And when it is or

isn't, it will be debated on the merits of it then. So it's kind of just a distraction. It's a very annoying one. I do think that it has impacts for all the people who are in the crypto lobby in DC who are just trying to have common sense conversations and move things forward sensibly. But it's probably less impactful than it is annoying is my kind of short take. I think this goes back to the old adage, never let a good tragedy go to waste, right? And especially if you're a politician and you have a specific talking point and you can somewhat superficially attach that talking point to something that's happening in the world, you go for it. Now, I will say, I agree with you, this should be addressed, right? If crypto is being used in some way to fund terrorism, then sure, that should be stopped. But it's crypto.

So they are freezing wallets. They're actually taking action against these things, regardless of what Elizabeth Warren says. And so you can take that criticism and it's valid, but you can't take it in a vacuum because you have to make the same criticism for every other form of illicit financing for terrorism, like pallets of cash being delivered, you know, across the border, which we all know is happening. So I think that it's a unfair singling out of crypto. More importantly, when you dig in, I mean, here's the rest of the story. Chainalysis says some reports might be overestimating crypto's role in terrorist financing. And this isn't just an overestimation. I'm just going to read you what Chainalysis had to say, easier than discussing it.

We've seen recent estimates related to the attacks on Israel that appear to include all flows to certain service providers that receive some funds associated with terrorist financing. In other words, these total include funds not explicitly related to terrorism financing. To the untrained eye, it might appear that 82 million worth of cryptocurrency was raised for terror financing, but it is much more likely that a small portion of these funds were intended for terrorist activity, and the majority of the funds processed through the suspected service provider were unrelated. So they're saying that with the estimate that Elizabeth Warren's talking about, 82 million, has an extra few zeros there. It's about 450,000 worth of funds that actually ended up in terrorism-affiliated wallets.

Yeah. The presumption or the statistics that this whole kind of story was based on was the idea that this particular kind of exchange money transmitting business in Gaza, 100% of it was illicit funds to terrorism, which obviously just isn't the case. No, listen, I mean, this is, again, it's why I can't ever get ultimately that frustrated is because there are so many obvious counterpoints. And at the end of the day, people don't make policies, even our terrible system tends not to make policies exclusively on bad information unless you have a really extreme situation. When push comes to shove, those reports are going to get identified. I'm glad Chainalysis stepped up and did that. Now, it's an interesting sort of sub-story. One of the things that I think a lot of folks are

watching about the Chainalysis, the elliptics of the world, is to what extent they are sort of defenders of what the community might say are crypto values versus tools of a surveillance state. And it's a very tricky line to walk. And this is a great example of a company that is probably the biggest beneficiary of US surveillance of crypto from a financial perspective, still going out of its way to say, that's not really true. And I think that's an encouraging sign. I wouldn't expect anything less from them from what I've seen. The CEO of Chainalysis very famously had a, well, it was calm on his end. It was testy on Elizabeth Warren's end, but they had an exchange at a hearing once where she was really trying to get him to make her point about this exact sort of thing. And he just said it wasn't true. I mean, she had the prepared talking points that she could not stray from. It was a pretty incredible hearing for anyone who didn't see it, because no matter what he said,

she just went on to her next question as if he hadn't even answered, which was classic, I think, politics and trying to do her stump speech on his behalf. There's a pretty big story. Number two here, Gemini DCG sued by New York for alleged 1.1 billion crypto fraud. So Gemini being included here, we've only seen sort of the DCG side previously, but they're being sued by New York's top law enforcement officer for allegedly defrauding customers of 1.1 billion, escalating legal woes for two companies hit hard by last year's plunge in cryptocurrency markets. This is a civil. It's not criminal for everyone, to be clear. And we know that that this office, the New York District Attorney General, has it out for crypto and is kind of part of the Elizabeth Warren anti-crypto army, but there's something here, right?

Yeah. I mean, so there's a couple of ways to look at this. The question is, I mean, you could go kind of hyper real politic and ask what the likely impact of this is going to be. And to some extent, then the question becomes, is there any real new information or new accusation? Or is it just basically the New York Attorney General saying the stuff that everyone already saw, we consider fraudulent, you know, and I think it's, you know, whatever, it's not minimizing the seriousness of this for the for the plaintiffs here, or for the defendants here. But the, you know, it really isn't some new smoking gun type of information, at least on my kind of initial read. It's not a, you know, a Sam kind of case

where there's some new thing that's been addressed. In fact, I think in some ways, what seems more concerning to me around Genesis and DCG right now, is some of the stuff that's been addressed. In fact, I think in some ways, what seems more concerning to me around Genesis and DCG right now is some of the stuff that's been brought up at the SBF trial that raises questions about what was known when, you know, regarding those loans. You know, but again, going back to just, you know, real talk about this, this is the sort of kind of, you know, gray area, debatable, fightable, that a lot of these battles are going to take place in quiet courtrooms and behind the scenes. I think in general, DCG has been on the drag it out until crypto markets are good enough that we've saved ourselves

kind of plan for a very long time. And this is just throw one more thing on the pile. Maybe the amount that Bitcoin needs to hit or the number that Bitcoin needs to hit just went up a little bit to save them, but their whole plan has been waited out for as long as they can. I mean, Gemini has even said that in their public accusations against them. Yeah. I think the additional information here, as I said, is that Gemini is being named and there's some egg on the face of the Winklevi twins because they've sort of been the aggressor pushing against the evil empire of DCG. And now it looks like at least Letitia James thinks they're kind of complicit in this fraud that they knew Genesis had the hole in the balance sheet. We obviously saw the argument over the 200 plus

million dollars that the Winklevoss twins had withdrawn from Gemini Earn a couple months ago. Of course, some said that that was them front-running bad news that they knew and still telling their customers that everything was fine. They quickly responded and said, no, that wasn't even us. Actually, this was shoring it up and putting money into an insurance fund. But clearly, there's a lot of he said, she said going on here. And at the end of the day, it seems that the biggest players knew that there was something wrong at Genesis. We saw it in the FTX trial, as you said,

Carolyn saying, listen, Genesis said we need 500 million, whatever the number was to shore up our balance sheet. Can you guys send that to us? She sends a our balance sheet. Can you guys send that to us? She sends a fake balance sheet. What this speaks to, to me, is the endless clarity we're getting on how incestuous the big players of this industry were in this yield chasing environment that crushed us last year. 100%. I mean, so here's the thing. And again, maybe I'll be clear about why I don't think this is that big of a change. I don't really think anyone was buying the Tyler and Cameron being the white knight kind of thing. This is for some time now, I think that the average feeling in crypto has been a plague on all your houses. Burn it to the ground, go to jail, pay your fines, whatever you need to do, just get the hell out of the way and let us build back, you know, the way that we were supposed to. And so it's sort of, you know, I do think that it's more confirmation or more kind of evidence in the column of that sort of perspective. But,

you know, yeah, I think that your analysis that it's sort of, you know, further evidence of what has become real clear about the last year is quite clear or is quite true. Yeah, of course, you have to point out this tweet, Silbert, that everybody's dunking on and brought back November 23rd, 2021. It's my turn, Sam, to which Sam gave the eye, a few eye emojis. Everybody just sort of, you know, now saying it's my turn, Sam, implying that maybe it's Barry's turn to get called in by the courts. Not exactly what he wants his turn to be. But of course, I think the big question then becomes, will the lawsuit against

DCG impact GPTC's chances of an ETF conversion? Because DCG is the parent company of Grayscale, and we all know, once again, there was an incestuous relationship, certainly among all DCG entities, Genesis loaning to Grayscale,, loaning to Genesis and all of these other players. Will this affect it? Well, I would say the market doesn't think so because we're still seeing that GBTC discount disappearing with time. And I would say that maybe it affects Grayscale in some way, but I don't think it affects a Bitcoin spot ETF in general.

But most analysts who are looking at that, we have a lot of pundits who are saying they'll never do it. But we have a lot of experts saying that this is a nothing burger. Yeah, I agree. I think that the market is going to be the actor to punish DCG when the Grayscale Bitcoin Trust converts. I think all that money is going to convert and flow out and flow into iShares or Valkyrie or whoever. I would say that the- GBGC, BlackRock, Grayscale, BlackRock. Let me choose. The average, I think, analyst position at this point is that it's far more likely that a big

swath of these things get approved all at the same time and they sort of let the market decide, then they hand the keys to the kingdom to just one of let the market decide, then they hand the keys to the kingdom to just one. Also, if they do decide to hand the keys to the kingdom to just one, it certainly is not going to be grayscale. So listen, there are real serious problems. I would not be a long-term bull on that business in a lot of ways, but it's not going to be because they're not allowed to convert, I don't think. I think it's going to be because rational market actors are going to say, no, thank you, and move to somewhere else. Yeah. I think consensus is that DCG is a bit of a train wreck and it's one that's probably priced in. That's how I feel about it. Everyone's

expecting something bad to happen over there. So if does happen we're going to move on with the black rocks and arcs of the world and and life will continue yep and then we get to sbf what's happening at the sbf sam bankman freed trial i think that uh last week we covered gary and carol caroline rather uh extensively but now we have nishad singh and of course zach prince from from BlockFi being, I guess, the star witnesses of this week that we haven't spoken about. I know you've been following this closely. Is there anything brand new that we're seeing here? SBF lawyer pokes holes in Singh's story on FTX spending. And of course, just to get these stories out of the way, the Sam Bankman free trial is revealing crypto's amateur hourways. And I think that's very clear circling back to the incest that we were speaking of before. But let's talk about

what's happening in this trial. Any new revelations? Yeah, I would view these two testimonies as less revelatory and more very specific parts of the story for the prosecution that are not going to be particularly good for the defense. So when it comes to Zach Prince, obviously the former CEO of BlockFi, in some ways, the main thrust of that, it was actually less about what the prosecution said in this case and how poorly the defense handled it that I think will be the lasting impact. The defense at one point went through a very long sort of 40 minute extended line of questioning around a set of loan documents. And what they were clearly trying to establish was that basically it was BlockFi's risk management

department's fault that these things happened. Effectively, the argument was, you are so stupid, you should have known our client was defrauding you, kind of more or less. That was the argument. And at the end of the culmination of this big, sort of long, classic, whatever, defense presentation, Zach Prince had to point out that the documents that they were talking about were for a loan that they hadn't approved, that they did approve loans later, but that one that they were literally trying to make their case, that the risk management department had said, yes, it's too stupid to use FTT as collateral unless there's a shitload more of it and other collateral too. So no, we're not going to approve that. And Zach Prince agreed with his risk management

department. So it was just, it was, you know, for people who are in the court, they actually said that in some ways it was even more embarrassing than other kind of moments just because it was so dumb, you know, on the part of the defense. So that I think is, you know, they almost just lost an entire plank of the potential defense, which is other actors really knew what was going on and they, you know, they should have made different decisions. When it comes to Neshad, I actually think that in many ways, the biggest impact will be with the jury and on sort of a human level. I don't really think there is particularly a lot new that came out with Neshad's testimony that wasn't already covered by Gary or Caroline. Caroline, I think, really did the biggest work in showing just how many points along the way Sam had know, sort of Sam had

been running the show and determining exactly what they were and weren't going to do. And Gary kind of added this, you know, almost a technical aspect to that, like how they encoded that in the actual platform itself. Nishad in many ways just showed this sort of human side of a guy who was very clearly, you know, doing stupid things, but at least feeling guilty about it. Not that he came off as sort of like super, you know, likable or anything like that, but it didn't matter. It's just the fact that he showed some remorse, the fact that he was angry, the fact that he was frustrated, as opposed to, you know, the picture that's emerging of Sam is just as this complete sociopath. And I think that that's going to really

stand out to the jury. Now, the last thing that I think is interesting, you might have seen all these stories that say, you know, the defense finally got a blow in. Man, that is the most, because they haven't been able to write that story exaggeration in this trial. Like they literally, what this entire thing is based on is that apparently at some point, Neshad told the prosecutors in an interview in December or January that he was somewhat hazy on what June and July 2022 were like.

And, you know, listen, I do think that Neshad was clearly still a little ass covering in a way with this. And it sort of it stood out but that's different than the defense landing some major blow that just you know yeah it's like hey they finally got one jab in in the seventh round after taking an absolute beating and having to still be standing up so good job that some of the funny revelations surrounding nishad though where they said you know he really wanted to quit.

He really felt bad. He was going to quit. He obviously didn't quit, guys. And just like a month before FTX collapsed, he took a loan directly from FTX for a $3.7 million house that he bought in Washington. This is Nishad. I think that's the most damning thing. Yeah.

I think that's the most damning piece of that i think that's i think that's the most damning piece of that for sure yeah you know yeah go ahead no i just i think i think that like look to do the right thing uh it requires two things it requires you to know what the right thing is and then it requires you to do the right thing and it sounds like nishad at least had half of that equation unlike some of the others at FTX but he still didn't do the right thing and that's why he had to plead guilty to all these charges as well yeah and he'll pay for it the amateur hour by the way part of that story is worth just mentioning because it shows how difficult it was for all of these companies to vet any of this

information and also how hard it was even to get an auditor, right? Paradigm, BlockFi, Genesis, and other companies did not have access to audited financial statements prior to investing or loaning billions to FTX, etc. And this comes from the Zach Prince testimony. He said, effectively, any and all financial information that the potential borrower was willing to share with us is all that we had to go by. So he's literally saying, and this aligns with what Carolyn said about the fake balance sheets. Nobody's auditing it. Nobody's willing to audit it. Of course, everybody wanted to believe that they were giving the boy genius their money and he was going to turn it into multiples. But the fact is that

they were all doing these incestuous loans again on, well, if you say it's okay, then it must be. Here's the balance sheet for my Excel that I will give you to prove what I have. Now give me a few billion dollars. Probably a screenshot of it as well, not even the actual chart. No, the one other story that I just remembered that I think is actually quite telling and may also resonate with the jury was in 2021, FTX had $950 million in legitimate revenue, trading fee revenue. And Sam really wanted it to be a billion, apparently. And he had Neshad go back and backdate a set of contracts between another one of Sam's companies and FTX, where those other companies paid FTX $50 million for staking serum, which was, of course, a token that Sam also made up.

And so that's how FTX went from $950 million to a billion. And I think that what's so telling about that is how preposterously unnecessary it is. Like, again, a big part of the question for these juries are going to be, and what Sam is trying to prove is, is this a person who got themselves in over their head and made a set of bad decisions that slowly trapped them in an ever increasingly bad situation, which is basically kind of the sense or the feeling that Caroline tried to give, or was this sort of masterminded from the beginning? And we've heard about how, you know,

these things were coded into the platform to allow Alameda to have a negative balance all the way back in 2019. Certainly seems like the beginning, but the egregiousness of making up these fakes staking sales just to go from 950 million of legitimate revenue to a billion is so telling of the callousness and the lack of caring that I really think that even though it seems silly and is less egregious than some of the other things that were done, it'll stand out as speaking to Sam's character. I agree. The guy was just a fraud from the beginning. It was all about his ego and all about the perception. And that's why he had to be with Tom Brady and Giselle and Shaq and Larry, David. Clearly, this was just about stroking his ego. He could do no wrong and nothing he did

should have been considered bad because in his mind, the ends justified the means. It's really crazy town, man. It really is. Yeah. So now sometime after, after some of these class action lawsuits are done, maybe I'll go give you guys the ranking of which of these celebrities were the most fun to work with and the most sincere and serious. Yeah. People, I think people even know here, like how, how involved you were in the marketing side there and how surprised you were. But one day I maybe we'll do a separate show to get to that.

Of course, our next story here, which everybody this is number four. Everybody sort of watched live on Monday when we were doing Macro Monday was the news that the Bitcoin spot ETF had been approved. It was fake. It was Cointelegraph. A single tweet that came out sent the market flying from roughly 28,000 to 30,000 within moments. Seemingly, everybody found out that was fake and it went down. I think this speaks to an environment where these news sources, not just in crypto, but maybe particularly in crypto, are much more concerned with being first than being right. The Cointelegraph chief editor was on a panel right after this and said, hey, man, this isn't our fault. That's just the way the world is. We wanted to be first. We found it in a random telegram group. We went ahead and printed it because YOLO.

And by the way, you guys are idiots for believing it. We're not really idiots for posting it. I mean, listen, that's hyperbolic, but that was the gist of this. But this did give us, I think, at least as far as price action, an idea of what could happen if we do see a Bitcoin spot ETF. And maybe that's the story people want to talk about. I actually never do this on Fridays. I brought a chart just because you can see what happened when that move happened a few days ago visually. Today, we've actually seen price go higher than that fake ETF news pump, although it's sitting lower. It actually did manage to go higher. So clearly, whatever happened got people excited for what would happen if we see this approval.

Yeah. So I think you're right that we shouldn't spend too much time on lamenting the fact that modern news rewards speed rather than accuracy, because we all know that and we're not going to solve that here. I do think what's the most interesting part of the story is what it says or suggests about what will happen when an actual ETF is approved. So the line of thinking that I saw from a lot of folks, people like Alex Kruger, who I always respect what he has to say, even if I disagree, they pointed out that the broad perception has been that a spot ETF approval is priced in, and that suggests that it is significantly not priced in. Now, there's certainly plenty of evidence of that. I mean, we ripped up

7% and then back down and $100 million of liquidations along the way. The question for me, and I'm interested in your take on this, Scott, is to what extent, it's almost like both parties are right, the people who think it's priced in and the people who think it's not, in the sense that it is inevitable that there will be some absolute rip to some level on the news that it's happening,

but that then when push comes to shove and the actual thing happens, it's likely to kind of recede or stay at some point. It's not going to be some massive inflows that jack the price up another 30% or something like that, but there's probably 5%, 10%, 15%, whatever percent it is where the bottom resets a little bit because we know this is coming. I mean, what's your take on that? I share the same sentiment. Dave Weisberger actually on Twitter Spaces broke this down very well yesterday. He said, there's three kinds of market participants, the speculators, those are the ones who spaz and buy immediately when they see the news. Then there's the more

swing traders, then there's the longer term investors. And the reaction of the market will be based on what each of those people do in their timeline. So basically, we saw the speculators. By the way, this wasn't new money. If you looked, altcoins got destroyed against Bitcoin. So this was the old washing machine of crypto, where a bunch of people said, Bitcoin's better than altcoins right now. I'm going to sell my altcoins into Bitcoin. So I don't think this was a bunch of RIAs advising their clients in that 20 minutes to get in on Bitcoin and new fresh money coming in from institutional capital on the sidelines, right? So I think that we see what we saw the other day on steroids. Exactly what you said. Maybe a move to 35 or 40, right?

This huge kind of move. And then people say, okay, we have an ETF. Price slowly comes down. And then fundamentally over time, much like the Bitcoin having, which, you know, that supply reduction takes six to nine months before it actually affects the market outside of the narrative of it affecting the market. And then maybe we see sort of that sustained growth based on real volume coming in, real AUM coming into a BlackRock ETF and these things. So I think it aligns well with what you're saying is that we'll see a big pump. Then we'll see a bunch of people take profit because they'll say that's it. And you'll get all these shorts and longs liquidated on both sides. And then we'll take some time to see what happens afterwards. I think that it feels likely to me that, or I guess one of the biggest questions

rather is what is happening in the world around it? Because one of the most important things that happens when the Bitcoin price rips up is how the media frames it, right? And if the media frames it as just, this goes up because of ETF hype, I don't think that that pushes anyone new in. If there's been some big geopolitical event the same day that the SEC happens to approve it and you see Bitcoin ripping in the opposite direction of other markets, a different story gets written. And I think we've seen that a couple of times this year. So that's kind of what I'm keeping an eye on is what sort of surrounds the news of whatever

kind of little jump we have there. Yeah, I think that's right. But the moral of the story is don't fall for fake news until you see it reported very widely and quickly. But hey, it was fun to watch and fun to be reporting in real time. I can tell you that. So at least it led to some entertainment. I guess this will be the fifth story, right? We got the final story here. We are going to do an honorable mention at the end. But will CryptoSpring ever come? Now, interestingly, I wrote a CryptoSpring newsletter just last week and literally gave the exact same analogy as Morgan Stanley ended up giving this week. I'm not saying they're copying me, but clearly there's a lot of people who are now debating the seasons of crypto. I've been of the mind that CryptoSpring has been here for a very long time.

Mark Yusko just discussed this very well by pointing out that weather in spring sucks. Yes, exactly. People forget how much spring sucks. Yes, spring sucks. So yeah, winter is horrible, but spring, most of spring is terrible and you have a beautiful day, then you have a terrible day and you have a sunny day and then it snows a week later. And that's what I think we've been experiencing here. Whether it's CryptoSpring or not, here is not why we highlighted this as a story. It's that a article called Will CryptoSpring Ever Come is coming from Morgan Stanley. To me, that's the story.

It's yet another massive institution really digging into the nuance of the four- year cycle and what happens with these each year in crypto. I think that's the story here. Really big. I think, too. So I completely agree. And I think that the the the. So a couple of things. One is coming from Morgan Stanley.

Two, it's actually a fairly useful article. This is the type of thing that a person who was at, you know, Morgan Stanley or Bank of America or any traditional financial institution could send to a person who's not really paying as much attention to Bitcoin and crypto and say, this is a pretty good job of explaining kind of what this cycle actually means. It's a useful analogy, in other words. And I think that they do a good job of, you know, in whatever it is, 400 words, you know, kind of crisply explaining it. So it's not just that they wrote it. I think it's actually a useful piece as opposed to a lot of these things. So that's one part that I think is notable. The other part is that I think in some ways, a measured sort of rational markets are thawing, keep like one little tiny piece of your brain take

from Morgan Stanley is a hell of a lot more useful than a, if they had blown it out and said, you know, the bull is back and like kind of, you know, if they had gone too far, because that just looks like analyst hype. That looks like it's trying to get people to, to, to share it. This feels like a piece that was written because they're actually trying to understand where in the cycle we are and what evidence we have, not that they're trying to sort of make big, buzzy social media headlines. And I think markets and traditional markets especially can smell bullshit. And so when you have this sort of more measured piece, it contributes to this overall sense of, you know, we are past the worst point. And there are these

people who are sort of lining up around the edges and starting to kind of, you know, replace their chips on this table. And, you know, maybe I should start paying attention again. And I think that's a much healthier place to be than sort of either, you know, assuming it's dead or assuming it's, you know, we're so back. And guys, I think it's worth reading if you do want to dig into it. We won't do that now, but it does offer actually metrics about what's happened in past cycles, how far the width, the drawdowns tend to be when you can gauge that maybe the bottom is in based on the bounce. They really dove in and did this right, which I found very impressive. And go ahead. No, I really dragged this. I did this for, I do a long read Sunday on the show on Sundays where I

take an article and then sort of analyze it. And I really tortured this analogy, extending it. And I think, for me, the thing that I was sort of talking about on that is part of what shapes that transition from spring, when we move from very early spring, where it's just the thought to late spring and the beginning of summer, I think in a lot of ways is the stories that non-crypto market participants are resonating with that bring them in. And if you look back at other cycles, there's always a Bitcoin story, but then there's other things as well, right? So in 2020, we had Bitcoin leading the way with great monetary inflation thesis, but

that was quickly followed by DeFi summer for the degens in the space to get their hands dirty and get excited again, which was followed then by NFTs for normies, right? This year, we're very, we're just starting to see the first kind of shadows of what the Bitcoin narrative might look like, right? With people talking about geopolitical instability and Bitcoin being a flight to quality with that. We have no idea yet what those sort of resonant narratives are going to be either for the sort of like the insane internal traders or for the normies. And I think that as those things, as we start to see more contenders for those stories, that's when you're going to know that we're kind of transitioning once again. Yeah. I'm putting my money on RWA because it's got a new three-letter title. Real world assets. That's my leading fighter right now. Guys, we're going to do a very quick honorable mention. I

know that we're way over our intended time here, but there's just a lot to talk about. We have to mention this. SEC drops charges against Ripple CEO, Garlinghouse Chairman Larson. To be clear, they're still pursuing the central Ripple case. So any of the bad takes you saw that the SEC was completely dropping this are false, but the SEC is clearly capitulating here once again on another part of this case. Seemingly Chris and Brad are out of trouble here for any personal responsibility or liability. And you just love to see the SEC continuing to take these small losses. Yeah. I mean, this one is fascinating. We could have done the whole show on this. You know, basically, when the judge's most recent decision was that the SEC was not allowed to appeal part of the case that had been decided so far, they had to wait until this piece of the

case was done, basically the executive piece. And so the read that I've seen from people who I think are the most sort of dispassionate is that the SEC clearly wants to have the fight around the judge's interpretation of Howie and how they were going after that, as opposed to executive culpability. And they want to start having that now. I mean, that reads to me like that is a fight that Gensler wants to pick before he's potentially out of office. So I would expect more, not less fireworks because of this decision, at least in the short term. That's a good take because I think to your point, they're focusing on what they can win and getting rid of all the nonsense that might deflect from that case. I think that's absolutely correct. Guys, that's our Friday five plus kind of half.

We'll call that with the friday five and a half today because we did get in uh brad and chris there at the end with gary this happened apparently on gary genzel's birthday by the way so twitter was really excited to see him take a small loss on his birthday yeah i'd love to see it once again guys you can see hear this uh on both of our audio channels both of our youtube channels and you get to go and hear uh nlW give a better introduction after actually listening to it and knowing what we ended up talking about. So, so we're checking out there. And of course his daily show, and I do love your long reads on

Sunday. I think that's great. Everybody should, should check that out, especially I'm not here on Sunday. So you got to find something to listen to, man. Thank you so much. Uh, appreciate the extra 15 minutes that we did here. hope you guys enjoyed it uh and that's all that we have i guess for today so man i'll see you uh next friday later guys bye guys