The Wolf Of All Streets - Bitcoin ETFs Net Outflows | Crypto Town Hall

Episode Date: January 26, 2024

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Mario, can you speak yet? Keep showing you as requested, but then you can't be brought up. I think Mario's in the glitch. Yeah, it appears that Mario is in the glitch. How are you guys doing this morning? I'm feeling pretty drunk with power right now up on stage by myself, to be quite honest. I can say anything about Ran and Mario, and nobody can really respond. Pretty incredible power, but I'm going to hold my tongue.

Anyone who... Simon, were you here yesterday by chance? Were you listening, Simon? I wasn't here yesterday, no. What did I miss? Literally nothing. I was going to ask why you decided to show up today if you were. No, this is an interesting topic because I think it was a few days back when we were

talking about the bitcoin etf and then um i think we mentioned the next announcement you'll see is the u.s government uh wanting to sell some of their silk road bitcoin and we were talking about the mount gock story as well so lo and behold it happened yeah it's a it's a it feels like prophecy but if you've been around long enough, you know that these things just always seem to align. Don't they say bad things come in threes or good things come in threes? I'm not sure which one it is, but it seems to always be the case here. Mario, you're on stage. Good job.

Yeah, thank you. I appreciate it. You're on stage too. Well done, bro. Yeah, but I did it better. That's what matters. Yeah, man, and I don't know. That's what matters. Yeah, man. And I don't know why we're complaining about the US selling $130 million worth of Bitcoin. Don't find it to be that big. I don't think the markets care either. I've looked at the markets, but I'm going to go check them out.

I bet you they don't care. Of course they don't care. That's like 30 seconds of GBTC sell pressure. Exactly. That's what I mean. I mean, when you don't see it. I mean, when you see 500 million to a billion being sent every day for Grayscale, 130 million starts to lose its flavor. It's like when the government used to talk about debt and stuff.

We used to think that billions were big numbers. But now, don't even talk to me unless it's a trillion. You know how we were talking earlier, and you're going to be leading the space. I haven't looked at the agenda today just because of the space I was doing earlier. But we were talking about the volume being very low, and any sell pressure will heavily impact the price. Now we're seeing GBTC selling pressure like we haven't seen in ages, and the price is – I know it's dropped a fair bit, but we're still about 40. We're still about 41K. I just checked now.

That must be looked upon very favorably no as an analyst that that's how i view it i mean people obviously take different uh approaches to looking at the market but in my opinion if we have a known seller for the first time it's interesting we've always had these major fud events i mean we've been simon you've probably been hearing about mount cox for 10 years i've been hearing about it for, you know, seven or eight. Every day that's supposed to finally unlock. These sell events never actually happen. This one is as telegraphed and transparent as humanly possible.

And there's still, you know, net inflows versus the outflows. I think that it actually speaks to the incredible success of these ETFs and to the demand for Bitcoin in general right now, because it's obviously not all coming from the ETFs. And we all know that the GBTC selling, it seems to maybe potentially already be slowing. I haven't looked at the numbers today, but the fact is that it's eventually going to run out. And if the demand remains the same, it should be a pretty easy bounce. This is like the most predictable hindsight, I will say, 2020 dip ever.

Like you said, it's not really that big of a dip. I mean, Bitcoin trading near 42,000 is pretty bullish. Yeah, I'm going through the news though. I can see that Bitcoin ETF flows show negative trend for first time since launch. That could be seen as a more important piece of news, no? I mean, I think Ryan can probably speak to that a bit, but that's because the selling pressure from GBTC remained steady, and there's always going to be a natural tail, I think, to the early inflows. Yeah, I remember a lot of these, a lot of the issuers, obviously, from the very beginning, had feeded or had people they knew would be buying, right? You knew that we knew that, for example, BlackRock, we had the reports would have one to two billion of inflows already lined up. And I think it was Bitwise had 200 million, etc, etc. So then you get to start

to see, I think, the natural inflows. And throughout last week, actually, we were actually seeing increases on the fourth, fifth, sixth day of inflows, which is something you rarely, rarely see with ETFs. I mean, I was just looking at James Seifert and Valchunas' tweets, as always, and they pointed out that Valkyrie passed 100 million today. And that would have been one of the most successful ETF launches ever in a vacuum. And it's way down the list even of just these. So I think it's just extremely successful.

And we're going to continue to see these inflows. Is that the first negative? And Ryan, I would love to get your thoughts on this. Is that the first negative outflows, the net outflows we've seen since the launch of the ETFs? Is that true? I think it's the second, if I'm not mistaken. I think we've had two days of negative outflows overall across all of the ETFs now. Okay.

And is that, as Scott said, that the GBTC selling pressure is consistent? The outflows from Grayscale are consistent while the inflows have kind of eased up. Is that true? Yeah, I think that's accurate. That's what we're seeing. And how long do you result in outflows. It's hard to know how much of that flips directly into inflows into other ETFs. We've seen some of the sell pressure come from FTX and other estates that held GBTC that liquidated those assets over the past two weeks. You have people that were running the the arbitrage trade right where

they could buy gbc at a discount before the tests were approved and then probably closing out that trade so it's hard to know if it'll be like 25 less or more than that maybe 50 so i could see outflows continuing for you know another week or two um jp morgan they did put out a piece yesterday saying the analysts were saying that the outflows are largely behind us, should be largely behind us, as I'm quoting directly from them. And that's, quote, limiting any downside for Bitcoin from here. So essentially, they're saying that a little color on that, Mario. Yeah, just a little color on that, Mario. Last week, JP Morgan had put out a report that they speaking specifically to the arbitrage trade that Ryan's talking about.

So JP Morgan really not looking at this holistically. They're sort of looking at the people who took the discount and wanted to exit the market entirely rather than those who might be reallocating. And they estimated there was about 3 billion in total of people that would be exiting GBTC because they took that discount trade. And obviously, when discount to NAV goes to 0%, they exit and move on with their lives. They estimated that to be at about a total of 3 billion. In the first couple of days, it was already at 1.5. GBTC selling is now way over 3 billion. They think the percentage of that arbitrage trade has effectively been drained.

And so I think accurately that that means that the outflows are going to subside. I mean, you have to imagine that most people who are dying to get out aren't waiting two weeks to get out. They did it. Ryan, anything else to add on that? Yeah, no, I think that's true. I also think the price falling might have a bit to do with the slowing of inflows and acceleration of outflows. And if we see the price continue to turn around here a little bit, I know we're still probably close to 20% below where we were kind of pre-ETF launch height in early January or maybe the end of last year. But I think, you know, it does have an effect if the price starts to fall and you're sitting in GBTC, or if you've gotten into another one of ETFs and you see the price dip 15, 20%, maybe you get scared of the volatility of Bitcoin, or you get scared that you're missing your moment to exit if you've been holding GBTC for a long time. And that becomes kind of a self-fulfilling cycle,

obviously, as more sell pressure hits the market. And so I think, you know, if the price had gone up, we would be in a different world when it comes to flows. And if the price turns around, I think we could see momentum coming back into these things. It's a little bit of a speed bump to obviously have the price fall 20% following the launch of the ETF.

So yeah, I think though, you know, these ETFs are just a long-term play. Like, we did still expect to see overall, you know, billions more flows coming into these ETFs throughout the rest of the year. And I was at a talk yesterday at the Bloomberg offices with what Eric Balchunas gave, and he still put his estimates for flows into these ETFs at $10 billion this year, right? And so net flows into these ETFs at $10 billion this year. And so net flows into these ETFs at $10 billion this year. So I think we still have quite a ways to go throughout the rest of 2024.

I mean, I haven't checked. What's the total market cap now of all the ETFs, $27, $28, something like that, if I had to guess? I know that GBTC dipped below $20. And I know BlackRock is about at 2 now. I think Fidelity close behind in the 1.6, 1.7 range. I mean, there's meaningful AUM in these things. Ryan?

Yeah, sorry, just checking now. Yeah, $25 billion as of yesterday, based on James' tweet. Makes sense. Which actually, curiously, was about the market cap or AUMG BTC before all of this. So it does make sense that we've only seen really 600, 700 net inflow if you look at it. But I don't think that that's an accurate way to look at it, as we said before, because I do think there's a tremendous amount of outflows that were just in it for the trade and had no interest in Bitcoin or rotation, right? Yeah, I think it was a great trade. I think the discount trade in arbitrage trades was a very popular trade over the past two, three years. We saw it get some people in trouble with Three Arrows Capital.

It was heavy into that trade before they blew up in 2022. But I think it's been a pretty solid trade over the past 12 months and would not be surprised to see people taking profits and just moving on to other things, especially those that are institutional traders and arbitrage traders versus primarily long-risk traders. Yeah, that was a nice way of saying it. You could argue that aside from the glaring and outright fraud, that that was the widowmaker trade that collapsed the entire industry. The GBTC premium going to a discount effectively destroyed 3 three hours capital block fi and and others because that's the way that they were effectively earning and passing on yield so yeah uh it's nice to see that that's out of the market although they'll find new ways

can you give us just a quick trend overview you and then christopher as well just on on the market in general on the bitcoin price as well like we we're seeing resistance at the, what, 40K mark? Was that a resistance level that seems to be holding? Remember, I'm horrible at analyzing charts. We're about 41,300 right now. So I would say that at least for the moment, depending on your timeframe, that that resistance has now flipped back to support. I think you'll want to see that happen, though,

on dailies and weeklies as opposed to... Yeah, yeah, I said resistance. I mean support. So you're seeing 40K as a strong support level, correct? I think that's what people are looking for to hold, right? You want to start to see larger time frames closing above it and then maybe even see a dip to test it back as support after that. But it is encouraging that price was trading, you know, in the mid 38,000s and already is now back in the mid 41,000s. Really kind of a reversion to the move. But we forget that that was about

10 minutes of price action. You know, price popped up to forty nine thousand right when the ETFs were approved and was quickly right back down to where it started. Forty seven, forty six. So we've meaningfully retraced a big part of the meat of the move and are still at a really reasonable level, in my opinion and you know the minute that uh bitcoin has sort of calmed down a bit you're starting to see all coins push again so um i think just signals that we're generally in a bull market and that these dips are for buying i think we should talk to chris about it though i just sort of get his overview of how he's viewing it go ahead chris chris you gotta unmute bottom left corner by the way did you know that grayscale Go ahead, Chris. Chris, you've got to unmute.

Bottom left corner. By the way, did you know that Grayscale started giving webinars now? Yeah, Chris unmuted, but I don't think his mic is working because I don't hear him. I did see, Balchunas, by the way, to what you're just saying, that he tweeted that BlackRock is having a huge conference to educate RIAs on this. This is exactly what we've been talking about. I think this is what will make the difference. Yeah, we haven't even unlocked the demand yet.

The launch is just the plumbing. It's not the demand. Exactly. It's Grayscale becoming one of our cheerleaders. I think this is the game changer. David, we haven't spoken. I think we've spoken to David since the ETF launch. David. Yes, sir. How are you, Mario? Good, good. Yeah. Congratulate us.

Absolutely. Congratulations. Your thoughts on the market's response since the launch. And today, we saw the first day of net outflows. But again, that's kind of expected with Grayscale and shouldn't last too long. Your thoughts on how the markets have been responding and where we stand today? I wonder if Gary Gensler is really happy at the way things have gone. I think he generally has a horse and an interest in the outcome of this race, in spite of the fact that he really shouldn't, simply because he's a regulator to go ahead and protect investors as opposed to picking winners and losers in the market. But look, obviously,

for folks that were expecting a major move upward, it's been disappointing. I think we are generally in a very bullish environment overall in markets, especially coming into the upcoming election cycle. You know, the macro economy in the United States is doing quite well. That will go ahead and push people to go ahead and look towards what they believe are speculative risk on assets, whether Bitcoin is that. Let's leave that discussion aside for a second. But I think it will go ahead and push people to look at alternative assets they haven't looked at before. Certainly, the education that is going to go on is going to take a lot of time. And, you know, I think most most investors in this world and I say that as for lay investors and you know, I, I think most, most investors in this world, and I say that as for lay investors

and professional investors. And when I say most, I mean like 90 plus percent are chasers. Um, and so once we start to see good movement, um, we will start to see, uh, the, the, the very loud rhetoric,. And as a crypto long-term investor, it doesn't matter to me if it comes next week or next month. Honestly, I mean, I don't care if the P&L shows up next week or next month. I'd rather it show up, though, under good conditions. And I think we're going to have good conditions based on, like I said, based on the macro economy and based on the fact that we've flushed out a lot of bad actors, a lot of bad related storylines in the asset class. And we're now ready to,

you know, generally more institutionalize the asset class, have the holdings be of much wider breadth, and then start to get into what I think people in this room care about maybe even more is the real substance of cryptocurrency. How far can we go ahead and take this? How far can this go ahead and change markets overall, change commerce overall? And I think those discussions cannot happen until we've got mass adoption in terms of investment. And then we will start to see those conversations happen in earnest. And then really another leg upward from there. Chris, is your mic working again? No.

All right. Can you hear me? Yeah, there you go. Yeah, it was something I had to issue with Twitter there, it seems. So I had to drop out and back in. But yeah, so I mean, what I was trying to say was we were kind of looking for this move up here. Again, it hit my first target there at the daily S1 pivot. We rallied up. Overnight, we were looking for the breakout back there above that 40,200 kind of area, which we'd hit multiple times since Wednesday or so of this week. And so we got that and we rallied up to the daily pivot and that that's where we're finding some resistance right

now. I'm still looking more along the lines of about 42,200. And then let me see right about 43,550, 43,600. As my, as my two levels, I really want to see us overcome. If we can do that, then I think we're on our way up there toward about 56, eight and then a pullback and then further up into 60, if we can get that. So, you know, nothing really changing here. Right now we just kind of need to overcome this, this, this daily pivot area a little bit higher there that we're at. And I think we start looking really good for further upside.

The daily looks great. RSI, stoke RSI, stuff like that. Indicators just getting going. So, yeah. I blacked out when you said $56,800, so I didn't hear the rest of it. Anyone else? So I think it's worth pivoting over and talking, I guess, Ron, since we have you here, has anything changed on the legislative front? I know when I see you on stage, I have to ask. No, it's a good question to ask. And sorry, can you guys hear me?

I'm stuck in the capital right now. Yeah, you're good. Okay, sorry. If I do drop, play the tunnels and walk it through. Yeah, there's really no update yet on the legislation. But the thing to monitor that was big this week was Mitch McConnell really bowing down to Trump on the whole Ukraine border package.

And I think, you know, it's always, we call it silly season here in D.C. when it's like the campaign season. Everyone is just trying to get their talking points in to prove either party's better than the other rather than actually legislating. But we've kind of like hit that point really early for D.C. And so now everyone's in campaign mode and Trump is kind of de facto running the Republican Party for better or worse, which McHenry, he went on CNBC yesterday, and he's been very vocal saying, look, the more we do this campaign stuff, the more we actually just try to get talking points instead

of actually legislating, the less time we have to actually vote on crypto legislation. And I've been waiting since October of last year to vote on my bills. But we keep talking about the speaker race, the border, Ukraine, and nothing gets done. And so there's some growing frustration. But it seems like I think in the next month, we're going to start seeing some movement in the House. So not full details just yet have been revealed. But I think it's gonna get a little busy come February, and mostly March, I keep an eye on March for legislation moving. But the idea of market structure or stablecoins passing, it gets slimmer by the day. And that's the unfortunate truth, especially with the campaigns kicking into high gear.

Yeah, I was going to say, I mean, the consensus has been that nothing will happen in an election year period, right? So any movement, I i think would be viewed as positive in context of that view yeah i mean congress is very reactionary so if there is movement it probably means there's something that happens so um i still hold on to stable coins i'd still say market structure is probably five percent or less at this point uh they're they're they're gonna try they're gonna try to do market structure first. But I keep an eye on stable coins. Stable coins is still probably the one

that we can get some bipartisan agreements. But at least right now, Patrick McHenry is in one place and then the Senate banking chair, Sherrod Brown, who's running a tough reelection, he's in a very different place too. And basically those two have to come together

to an agreement. And they have nothing in common right now, both in crypto and other financial services legislation. So threading that needle is going to be very, very difficult. Let's not also forget, Sherrod Brown is getting hit pretty hard in his home state of Ohio from Fairshake and a few other PACs associated with crypto companies or crypto individuals. And so Sherrod Brown is getting a little heat from the crypto folks. And I don't think he's going to try to do them any favors when they're campaigning to replace them with a definitely more pro-crypto Republican Bernie Marino, it looks like. That all makes perfect sense.

The one thing we kind of didn't talk about, Mario, much this week was the Binance SEC hearing. We do have, I don't know, Fred and Lawyer, since we have two lawyers on stage, if either of you have been closely tracking that at all, but it seems almost like a forgettable event after the Lollapalooza of Coinbase versus SEC the week before. Is there a reason that we're not really talking about Binance here, Fred? You know, I think there's whenever you talk about these court cases, it just gets very specific into the facts and the weeds and actually who the judge itself is. And, you know, if you have a judge that isn't fully on top of their game as what crypto is, then you're going to get some bad rulings for for crypto. We don't have a ruling, obviously, in Binance yet. It was just oral argument. But this judge doesn't seem as on top of it as the judge in the Ripple case or the Coinbase case. But she's definitely not as bad as some of the other judges either in the cases. So really, that judge actually kind of took the Binance lawyers to task a little bit, especially on the BNB coin.

That's looking not good for the security designation. Just if you go by the judge's comments, although the judge also took the SEC to task, you know, asking what's going on. You don't seem to really have an answer for, you know, why you're talking about any of these other things that are cryptos or not. So it was a mixed bag. We're not going to get a ruling there for probably a couple of months. It'll be interesting to see how it comes out. You know, it's just you get all these opinions stacking up one way or the other. And, you know, right now, while Ron's going through the legislative side of things, you're just stacking these things, these decisions, one on

top of the other, and we'll see what happens as it makes its way up to the appellate courts. Yeah, I was talking to Nathaniel Whittemore at LW this morning, and he made the point I hadn't really thought about because I sort of said, well, you know, why are these cases viewed as so differently? And there's a few things, but you nailed the main one. Coinbase doesn't have a token and Binance does, right? And those make them wildly different cases, I think, at the very base. Also, we also have the DOJ action already closed against Binance.

CZ, everybody's moved on. So it feels like a civil case against Binance when you've already dealt with the criminal side is going to obviously lose some of its interest to people. Yeah. Oh, yeah, definitely. And that's the thing, too. There wasn't for the crypto world. The Terraform case wasn't very favorable if you're pro crypto. And, you know, that's kind of a similar thing. That's getting wrapped up with Do Kwon.

Everybody sees him as the villain. So there's not that kind of cheering from the sidelines that you get in some of the other cases. Absolutely. Simon, go ahead. What's happening with Do Kwon? Maybe get an update on that one. Is he going to jail?

How long do you expect him to go to to jail for we haven't even spoken about him oh you know that's that's a good question um i don't actually know exactly where his criminal case is it got delayed till march it got moved yeah so he uh that's right so you know it's just deal mode right now. You know, what what type of deal can he salvage if at all, if he wants, if he's going to plead guilty? Is he facing is he facing is he in a worse position than Sam or is Sam screwed more? I think that, you know, again, this is our judicial system. It all depends on who you're in this case, in the criminal or are they willing to be a little more open and say, all right, you plead to X, Y and Z. We're only going to push 15 years. You know, you're out in 10. And I don't have a good handle on what his particular prosecutor is doing. But I don't

just again, in terms of the media attention, it's just not as high as it was on Sam. So I think he's not going to be as bad. But, you know, that's just all reading tea leaves. Simon, you've been following the Do Kwon story? Yeah, following a bit. So, I mean, Mijinski and SBF are facing up to 115 years. The Do Kwon one, you know, yeah, it got moved over to March and they said it cannot move again. And that was just a jurisdictional issue.

What's the country he's in again? Montenegro. Montenegro, but he's being extradited to the United States. I think they won over South Korea in the battle for extradition. Yeah. So, yeah, I expect it to be less severe than spf and mishinsky actually in terms of the number of things because it's more around the security side which the binance case although we haven't been covering it like everyone's got bored but um it it starts the

low hanging fruit of which tokens are securities because if ever there was a token that would be a security it's the one that was sold in order to raise finance that's connected to the profitability of the company that has a buy and burn structure where people buy it because they think it's going to be connected to the growth of the company and so the if they if they use this one in order to classify a buy and burn exchange token as a security in the US, but then it pivoted to trying to be decentralized and then created its own chain in order to try and circumvent essentially. And then does that start to have spillover effects on, do they try and get more spillover effects on like the Coinbase case with things like they've obviously got base and layer twos and things like that? I don't think it will go that far because I think Coinbase is set to win and Binance is set to lose. But at some stage between these cases, there's going to have to be a red line between what they do consider a security and what they don't consider a security. And if they all win, then essentially it's back to unregulated other than money transmitters. And then the US will actually, and then it goes into the political cycle,

because if it turns out that the SEC doesn't have jurisdiction, then it's got to do what the rest of the world is. It's got to come up with the same virtual asset service provider regime, figure out a new regulatory body. And then that probably ties in with stable coins elections timing and all that type of stuff so i do think it's worth like the the binance case is really worth watching i think we could just have simon do the show and you know and get the full summary. I think Ryan, you want to jump in on this one? Yeah, no, I really appreciate all this color here. One thing that you said that struck me as interesting is around the emphasis on the

buy and burn element of BNB. Reading through the Coinbase charges from last year, a lot of the assets and maybe all of the assets they included or most of them they included in those charges, they put emphasis on the operating company or launching company promoting this buy and burn function. And so I guess I'm curious why they might be so hung up on that when it comes to the Binance suit. But there's like this seemingly optimistic outlook for the Coinbase suit when a lot of it hinges around some of the same elements. Like, for example, talking about these crypto asset securities, quote unquote, promoting this buy and burn mechanism in both instances. You know, Ryan, I would just say, and I'll add this, kind of what Simon was saying is that, you know, the SEC,

and I just personally believe they're getting orders from higher ups, you know, maybe Elizabeth Warren and her crew, but, you know, they're just, everything is anti-crypto. You know, you just mentioned that they created the term crypto asset security. And I just want to add, because we had the ETF denied, delayed from the SEC just yesterday or the day before, I'll say that I don't think that's going to be coming until we get the same type of court action that Grayscale went through. And just as an aside, our firm, Hottel Law, we sued the SEC back in November of 22 in a declaratory action to say, hey, Ethereum is not a security. We're using it every day. And we want to know if we're engaging in

unregistered securities transactions. And the SEC and Port, now they take opposite positions depending on where they are and what jurisdiction. They said, hey, listen, I'm not going to get into the weeds, but there was a famous seminal speech from the SEC from a guy named Bill Hinman that Ethereum wasn't a security. But, you know, they said in court, we don't say, you know, essentially we don't care what that guy said. We can make our own decision whenever we want. and we haven't made a decision on Ethereum. And that case got dismissed at the trial level on standing, but we're appealing it in the Ninth Circuit right now. And so I just think with that kind of fight, you're not going to see anything with Ethereum until you've got similar litigation with a grayscale or wherever this case goes that we're suing. So I just don't think there's going to be any movement on that front without this type of forced court battle.

That makes sense. Great color. Preston, do you have any thoughts there? We've got two other lawyers on stage. We need to get Bill. Yeah, I mean, not really, to be honest with you. I just wouldn't, I'm trying not, the Coinbase proceedings were fairly interesting, but one can't really, the opinion doesn't come down until the opinion comes down. It's hard to know what the judge is going to say, so. Yeah, that makes sense. I agree.

I think not too much new interesting here to talk about and really it's like it's so different with the token like i tend to be of the thought that that this really does look more like a security and i think that we should you know we have to be careful not to be sort of a crypto space that says oh you know if it's on the internet if it's digital it's not a security because you know there are people out there buying it thinking and it's true if if binance says, well, I'll do well if I buy this token. And if they're going to raise money initially

and they're going to sell a token that you can fud by saying the CEO is bad or something like that, really looks and smells like a security. And maybe at least in America where they have securities laws that should be treated differently. Lloyd, I have one question for you. Maybe we can wrap afterwards, Scott. But Lloyd, while we're at the NFT ecosystem,

we saw the last thing we talked about was impact theory getting sued and settling with the SEC. And the settlement wasn't too friendly to them either. But then it's been pretty quiet. Is that pretty much the end of the action against NFT projects? Make an example out of a couple and that's it? Oh, I mean, I don't know. Right now, the low-hanging fruit

and the things they're interested in are not NFTs. But that could change if we see hype there. It's really, they're following the money. Right now, the NFT market is crashing. It is true now, but what about all the ugliness of the last cycle? If it's dead now, they forget about it? Yeah, I think so. I mean,iness of the last cycle if it's dead now they forget about it yeah i think so i mean like you and i probably know that it's coming back but they don't

right um i think they'll be more interested when it does come back so it would be we won't see anything but even if i mean mario there's no statute of limitations you know if they if nfts become huge they'll still be going after people yeah they can go back it's just not there there is a statute of limitations um excuse me there's no if it happens in the next two or year two i'm sorry there's a seven year set the more interesting case than impact theory was actually stoner cats um so there were two cases that came there were two settlements that were announced within like two weeks of each other in august and the first one is impact theory which is basically an n NFT dressed up as something which looked a lot like an investment contract.

I didn't have a lot of sympathy. The second one, though, was this TV show about a bunch of ganja-smoking felines that was backed. I think Mila Kunis was in it and Ashton Kutcher backed it. And so it was really interesting. And they did a really totally anodyne, procedurally generated 10,000 NFT launch. And the SEC got them to surrender on the basis that that was an investment contract. And I think even Commissioner Person Yeda both dissented from that. So more interesting, I think, on the next cycle is whether we see things like

Bored Apes, and this is not the coin, but rather the imagery, whether they decide to go after those art collections like they went after Stoner Cats, which struck me as fundamentally the wrong decision. I actually thought that was way less interesting because they went after them because they were Mila Kunis and Ashton Kutcher, and settled it because it was pocket change so I mean it could have been really interesting to see it go play out I actually minted a stoner cat and you know kind of wanted to see where that went but no I they settled it because it was easier to end that call with a million dollar yeah for sure coolest lawyer I know by the way lawyered a lawyer that mints his tone of cat yeah my favorite i don't think i made money on that one uh scott anything else did anybody make

money on any yeah i'm kidding i'm kidding i'm kidding neo tokyo i'm just kidding neo tokyo is that a real thing or did you make that up? No, it was real. I didn't sell the top, but it was a free mint and it went to like a 450 grand and I think I held it all the way down to like 3,000 or something. All the way? Hold on. It went up to 600, to six figures

and now it's down to 3,000? Is that what you said? No, I think it was more like 3 ETH. 3 or 4 ETH was the bottom. But yeah, it was Becker and Elio. They made a really cool riddles. I remember it. I think I've heard of it. They were on one of my shows.

I remember that. They were heavily funded, no? No, no. I mean, bootstrap themselves. They had nothing. It was really just a thought. They had a lot of interest. But the floor.

How much was the mint? How much was the mint? How much was the mint? Free mint. Oh, free mint. Yeah, it went up to multiple figures. It went to like... The top sales were like 450k. And then it went straight down from there.

What's the project called again, Lawyered? Neo Tokyo. It's still around. And I think it's like... It went up a bit. NFT flow. I was definitely disappointed to see that I sold the bottom. Tokyo. It's still around and I think it went up a bit. I was definitely disappointed to see that I sold the bottom. You actually sold the bottom? Yeah, but it was free.

It went up to multiple figures. I'm missing something else. They airdropped bytes. It was a token they made and at the time I got like 600 bytes and they were 120 bucks each. I think I sold... Well, I don't want to say what I – I lost my keys in a boating accident. But it was a very good project.

It just sort of let it go in the bear market. Oh, yeah. Lawyers are the best. Lawyers are the best. He literally stomped his way halfway. He blacked out. He doesn't remember. Lawyer, we're going to delete the recording.

Don't worry. I've got the shredder on. We're good. Neo Tokyo Star is up to 10 delete the recording. Don't worry. I've got the shredder on. We're good. Neo Tokyo is up to 10 ETH right now. So 23K. That's pretty good. From 3 to 23K is life-changing for most people.

Yeah, these people have a lot. From 400K down to 20K is depressing. Yeah, but what the top is and what you could have done is the most irrelevant trap you can possibly have in investing. You made a whole lot of money on something you got for free. Seems like you should just run with that one. Lottery ticket. We disagree.

Simon and Ron have their hand up. Would you want to wrap? I think let him speak real quick and then we'll wrap go ahead uh ron and simon and move around yeah i mean i think one last thing just to fly for folks because we're having these conversations right now in dc with a bunch of obviously uh lawyers in the space who are monitoring the coinbase case finance and what have you uh there seems to be recognition now and i said like you know legislation is going to take some time it's going to probably not be this year, at least when it comes to answering the

commodity security question, the age old question. But there's been a nose uptick in the past week, I'd say, of folks being like, look, I think the faster play, even with all things considered, is probably still Congress versus the courts, because the courts, hey, we don't we still know where the judge is going to land. But also this could especially Coinbase take a couple of years. So just flagging even. They could get coinbase take a couple years so just flagging even if they could get this done so fast if they wanted yeah i mean or if it was a priority

exactly but yeah i keep an eye on congress still and there's been some movement this year on the bill five percent chance probably it gets to the finish line but uh they're gonna probably pick it right back up in 2025 depending on who's uh in power so uh just keep an eye on the congress even when there's some movements, I think the courts are going to take some time it looks like so a lot of our internal resources in DC are being allocated to sounds good. Simon. Yeah, I was just gonna end on a fun story if that's okay with

you on the original topic of the Silk Road Bitcoin. Yeah, whenever government, the US government is actually one of the largest holders of Bitcoin from all the seizures, but the original Silk Road, they sold a chunk of those in an auction at $600. But this round that they're selling right now was the 50,000 Bitcoin from the seizure from Jimmy Zong. So look it up. It's a

fascinating story. But Jimmy Zong was basically around during the Silk Road time and he was trying to, and it was, he had, he got caught with 50,000 Bitcoin and the way he got caught from Silk Road, that was, the way he got caught is he went away and he called the police because one of his friends broke into his house and stole one of his cold wallets. And he actually called the police. And then the FBI actually started becoming really friendly with him and they filmed the whole thing. And he started opening up all his wallets and then they traced it back to 50,000 of the original Silk Road Bitcoins. There's documentaries out there, but it's a fascinating story for anyone that's interested in Bitcoin history.

Yeah, it's a crazy story. Go ahead, Mario. That's it, man. Were you using Silk Road back in the day, Scott? Silk Road long predated me finding Bitcoin. But if we're being intellectually honest, I probably would have. Hey, Rand is here. Hey, Rand.

Speaking of Silk Road, Rand's on gummies right now. We took a video of him doing gummies and then doing a show. So I really just want to hear Rand tell us about the meaning of life. I mean, you make as if gummies are like fucking heroin, bro. It's just a gummy. It's like... I know, I know, I know. I mean, it's not like I took fucking 10 hits of heroin.

It's like a weed gummy, bro. I thought a weed gummy was the gateway drug to 10 heroin. Come on, it's a very chill thing. I want to get you on ayahuasca. Ah, that's

a different story. Then I'll tell you the meaning of life. But I've never done an ayahuasca trip. I've been wanting to do it for ages, but every time someone tells me their story about vomiting and all that shit, I change my mind very damn quickly. Ran will tell you that the vomiting

is pleasant. It's a pleasant experience. Correct, Ran? It's not vomiting. It's purging, and you're purging not purging food. You're purging a lot of emotion emotion and that's probably a topic for another space but i think it's suitable you can't you can't say you don't tell me when i'm in the bathroom on the on the toilet you can't tell me mario it's just your emotions no you're on a beer i know dude

you're on a dirty mat you're on the on a dirty mat in the middle of a jungle with a bucket it's not as nice as you're envisioning it. I'm purging my emotions. I still want to do it one day. But, Ran, why don't you come? There's an event in South Africa in March. Why don't you come? I want to go to South Africa.

I will say that if you're going to do it, I trust Ran very much to have honed in on the best person and source to do it with in South Africa. I'm fine doing it with Ran. Just South Africa is not the location of choice. I guarantee you, Mario, I guarantee you when you come here, you'll consider moving here. We just had the whole banter team from all around the world come to Cape Town to visit us

and mostly it makes you want to come live here. I mean, you can't judge. You can't judge. You haven't been here. Why? Because of nature? I've been to Dubai. I've been to the States. I've been to you name it. I've been there. I've lived in Australia most of my life. I'm so sorry about that. I'm so sorry about there. I've lived in Australia most of my life.

I'm so sorry about that. I'm so sorry about that. I mean, Australia is beautiful, but boring as fuck. Seriously. Come to South Africa. Come be my guest for a week in March. I'll give you a place to do your streams. I was going to come.

Robert Wolf, he came to Dubai and he was gonna go to Africa and I was genuinely considering it just a couple of months ago but yeah how many rooms do you have at your house? I have enough for you

my friend I have enough to give you cool done yeah I really wanna come in December Ran

you and David have sold it to me that that's like the best place and the best time to be. Can I talk about, just before we end, can I talk about your place, Ran? How secretive are you about it? I mean, I have a house in Cape Town. House? Hold on.

House in Cape Town. Can I continue? I mean. Protected? Yeah, maybe not. Just because I don't feel like unwanted guests tonight

you know what I mean why not I thought South Africa was really I thought South Africa was really safe I don't why don't anybody

share where you live because I I can tell you where I am in Dubai I have no problem right now yeah okay yeah but South Africa

is not exactly okay there are trade-offs there are trade-offs for that great weather I have to ask you a question you guys said that the town hall thing was ETFs net outflows.

Was that the topic today? I knew. Yeah, shit. No, we had seven topics today. Yeah, go ahead, Brian. Please tell us what you think about the outflows. You know what? I want to remind you guys.

Before the launch, we said that if after three months, there's between $5 and $10 billion in the ETFs, that would have been a good start. And I think today we hit $5 billion. So it's two weeks and we've already hit $5 billion in net inflows to new ETFs. That's quite a milestone. That means we can reasonably assume that in three months, we can have probably 10 to 15 after three months. Now, that's way beyond what any...

When we did the spaces about the net inflows into the new ETFs, we didn't assume that the new ETFs would get 5 billion in the first two weeks. So I think from that point of view, I think there's a lot to celebrate. Yeah, I think we all agree at this point that it's been a pretty rousing success. We just have the GBTC overhang, which will not be with us forever yes cool on that point uh we can wrap it all right thanks everyone and we'll see you on monday and there will be a crypto town hall ayahuasca retreat at rand's house you're all invited bye guys