The Wolf Of All Streets - Bitcoin Has Been Co-Opted – Jim Bianco Warns The Fed Is Losing Control

Episode Date: August 3, 2025

Jim Bianco joins me on The Wolf Of All Streets to break down how Bitcoin and crypto may no longer be fighting the system – they might be part of it. We talk about Trump’s pressure campaign on Jerome Powell, the failure of rate cuts in a world ruled by fiscal dominance, and whether stablecoins are just the new tools of Wall Street. Has Bitcoin lost its rebel edge, and could the bond market be the last thing standing between us and financial collapse? Jim Bianco: https://x.com/biancoresearch This episode is brought to you by Binance, the world's #1 crypto exchange, trusted by over 270M users worldwide. Start your crypto journey with Binance: 👉https://binance.onelink.me/y874/wolfofallstreets Binance is not available in certain countries, including the U.S., check its Terms for more information: https://www.binance.com/en/terms ►► JOIN THE WOLF PACK - FREE Telegram group where I share daily updates on everything I'm watching and chat directly with all of you. 👉https://t.me/WolfOfAllStreet_bot ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/ ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities! 👉https://archpublic.com/ ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.io/ Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Bitcoin #Crypto #investments Timecodes 0:00 Intro 0:50 Trump Vs The Fed 3:35 Shadow Fed Strategy 6:17 Broken Fed Structure 9:16 Why Rate Cuts Fail 12:12 Trump’s Real Estate Logic 15:34 Fiscal Dominance Explained 18:41 Housing Crisis Trap 21:44 Bitcoin As A Risk Asset 24:29 Bonds vs Stocks Outlook 27:22 Stablecoins And The Genius Act 30:48 Broken Payments System 33:34 TradFi Co-Opting Crypto 36:47 Tokenized Assets Debate 41:06 Bitcoin Co-Opted? 43:30 Solana’s Lost Mission 45:57 Crypto Maxis & FOMO 49:07 Trump’s Strategy Shift 50:42 Growing Out Of Debt 53:04 Only Bonds Can Stop It The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

I do have in a file all of Trump's tweets from 2016 to 2020. We're the best. We're the hottest. Everybody wants to be here. Donnie from Queens, the real estate developer argument. Are we in a simulation or is this actually real life? Lower is better. Zero is the best. And negative is even better than zero. And higher is worse.

Is there any way that the United States can grow their way out of the current fiscal crisis? Does the Fed even matter at this point? What was up with that meeting between Trump and Jerome Powell at the Fed building? And where does Bitcoin fit into your portfolio? And should Bitcoiners be cheering institutional and government adoption? I talked about these topics and so much more with the incredible Jim Bianco. You don't want to miss this one. So I want to start by talking about an event that recently happened that you had some absolutely

hilarious and relentless tweets about that I've gotten no opportunity to speak with anyone about, which is Donald Trump's visit to the Fed building. Are we in a simulation or is this actually real life? This episode is brought to you by Binance, the world's number one crypto exchange trusted by over 270 million users worldwide. Start your crypto journey with Binance at Binance.com. Binance is not available in prohibited countries, including the U.S. Check its terms for more information.

www.finance.com. No, we are in a simulation and the simulation is, you know, Trump and what he's doing with the Fed building. It is unbelievable. Let me be serious and say what is it he's trying to do. The Federal Reserve Act says that you can fire, the President can fire the Federal Reserve Chairman for cause, not at will. At will means he can do it for any reason or no reason.

For cause has never been defined. It's never been adjudicated. It's believed to mean not, I disagree with you, on monetary policy, but that you've done some malfeasance or broke the law or something like that. The reason the Fed building became so interesting to me, go off a little quick tangent, my name is in a fall, I live in Chicago, I have relatives in the building business, some of them do government buildings. 100% of every government building ever done and ever will be done and is currently being done is ripe with fraud, abuse, cost overruns and all other shenanigans. So if you want to find a reason

to get rid of the Federal Reserve Chairman, tie him to a $3 billion building project. I guarantee if you look hard enough, you will find a reason that you can get rid of him for a cause. The question is, is that what Trump really wants to do, or is it that he wants to just hold it over Paul's head for the next nine months? That's the open question. That's what I saw in this whole ridiculous thing about him going to the Fed building.

I take the latter. I think it's all a setup for the predecessor. I believe that Trump is beating Powell down so badly so that he can literally implant any person he wants as the next and better superior option. I wouldn't disagree with that. I think that's what we refer to or Besson coined the term the shadow fed. And what the shadow fed is, presumably by the September meeting, he's probably going to drop the name of who he wants. the September meeting, he's probably going to drop the name of who he wants.

And if we assume that that person will be able to pass Senate approval, then the question is, I'm going to beat Paul down so much that while technically he's the Fed Chairman, no one is going to listen to him. He is such a lame duck that you're going to, you know, that Fed meetings you're going to have the new guy go on CNBC and he's going to get bigger ratings than Paul is basically what's going to happen. That's what Trump ultimately wants. Didn't fire him gets to serve out his term, but he marginalizes him in just many different ways. That moment was so incredibly surreal.

Tim Scott standing there without a helmet even on his head while Trump and Powell were forced to wear helmets and showed him the receipts that were completely accurate about the price of the building just to be able to have his gotcha moment. I've never seen anything like that or dreamed of anything like that honestly. In fairness to Trump I'll go back to my name ending in a vowel it It's a government project. Every receipt is a made up number. Yeah, when you're the head of the entire government. I was going to say that doesn't just apply to buildings. When you're the guy launching off meme coins just before you get,

inaugurated, I think that if we're going to talk about grift, it can go in both directions. And I'm non-political. And certainly as a Bitcoiner, I'm no fan of the Fed. In fact, I did an interview with Robert F Kennedy a few months before the election and tried to convince him to say abolish the Fed in the interview. But we didn't quite get that far. But even in this case, it's very uncomfortable for me to watch what he's done to Powell because I do believe that there should be some independence there and that Powell should be able to finish his term in peace. Well, in fairness to Trump again, I look, I'm not trying to defend Trump.

I'm just trying to present another side here. The problem with the Fed is quick history, 1986. The Fed had a proposal at one of the FOMC meetings to cut the discount rate. That was the rate they used 40 years ago, not the funds rate. And the chairman, Paul Volcker, was against it. But the board, the 12 voters, voted in favor of cutting the discount rate. Volcker got up in the middle of the FOMC meeting, called Jim Baker and resigned right there within five minutes after the vote was over.

Wayne Angel was one of the Fed governors at the time, convinced them to come back into the room. They had a second vote and they voted the way that the chairman wanted. Since that point nearly 40 years ago, the chairman gets what the chairman wants. So the Fed making this monster where the chairman is basically it is why you get these attacks on the chairman. We don't do this to the Supreme Court, Chief Justice of the Supreme Court. If you don't like what John Rob, if you don't like what the court's doing and you want to get rid of John Roberts, fine. But he's only one in nine votes. You still got the other eight votes.

If DePaul was one of 12 votes, go ahead, get rid of him. You haven't changed anything. And this is the problem, and this is of the Fed's making. Now maybe what comes out of this is that when you are a Fed governor, you are appointed by the president, you are confirmed by the Senate to represent the American people, not please the chairman. And maybe they get back to doing that again. And that would actually insulate the chairman because you're just getting rid of 12.5% of the votes then, instead of getting rid of 80% of the votes when you attack Paul right now. That's the big problem that they have at the Fed.

I think the next logical topic is to discuss whether these rate cuts that Trump is bullying Powell so aggressively about even matter. I would argue for a very long time, we've been in a situation of fiscal dominance. We obviously saw when the Fed did choose to pivot at the end of last year that interest rates actually went up. So there's certainly no guarantee that we'll see mortgages improve or interest rates drop even if the Fed decides to cut. I would say that beyond maybe Powell being a lame duck Fed chairman, the Fed itself is becoming a lame duck agency in this current macroeconomic environment. Well, they might be in terms of just on your last point,

I would tend to kind of agree with you in terms of monetary policy, but don't forget, they also have another function. They're a bank regulator, and they're definitely not lame duck when it comes to basically, you know, torturing the banking industry to doing what they want. So they still have that power as well. As far as you know, the the rate cuts, you're right. And I want to just remind everybody the Fed cut rates four times last year, 50 basis points in September, let's call that two cuts, 25 in November, 25 in December. So every time Trump rails that the ECB's cut rates 10 times and this guy has a move, well actually did, he cut rates four times last year. But you know, we're not giving accuracy points to Trump here at any point. And so what happened is you're right.

They cut rates, long rates went up. Now, the way I've argued it, trying to keep it simple is the Fed could move rates up or down. Does the market agree for whatever reason that that's the appropriate policy? Last year, I think what happened was you had unemployment rate rise above what was called the SOM rule that was supposed to trigger a recession or signal a recession was coming. You had a big downgrade in the quarterly employment report, the revision to the report, spooked the Fed. They thought the labor market was falling apart. They cut rates. It turned out it

wasn't. The economy was fine. The market said, we don't need rate cuts because all you're doing is you're taking a fine economy and you're trying to extra stimulate it and you're potentially creating inflation and that's why rates went up. So this mistake that Trump makes all the time by saying cut rates and the economy will boom. Well, first of all, he's making two mistakes. One mistake he makes is that he says, we're the best, we're the hottest, everybody wants to be here, our rates should be the lowest. Okay, that's to be blunt, that's Donnie from Queens,

the real estate developer argument. And what that means is that he says, look, my building is the best. Everybody wants in, they're paying top dollar to rent in my building or lease in my building. So therefore I'm the best credit. I get a lowest interest rate. That's his argument. That doesn't work with sovereign yields. That the credit rating of a sovereign yield is kind of immaterial. Japan is rated a right now.

We're rated double A plus. We just came off of AAA. Japan's got rates half the yield of us because credit doesn't matter. Why? Because all developed countries, central banks have a printing press. And if you buy treasury bonds, are you ever going to be worried that they're going to pay you back? No, they'll always pay you back. They will print up pieces of paper and they will hand them to you and say, look, you got paid back. Now those pieces of paper might be worthless because of inflation or devaluation, but you will get those pieces of paper. So credit risk is never the issue. The issue is growth, inflation expectations in supply. And given that I think rates, you know, I'm talking about the 30 year now, just under

5% is about where it should be. If Trump gets his way and we cut rates to one, you're going to take a booming stock market. We got meme stocks back. Has anybody seen with GoPro and an open door doing some of the other ones as well? The economy is okay. And now we're going to inject it with steroids. We don't need to be doing that right now. That could have an adverse effect like it did last

year. By the way, he keeps yelling and screaming that the BCB has cut rates 10 times. But I would argue if you look at the 10-year yield in Germany or the 10-year yield in Italy or France, it's higher now today than before they started the first of those 10 cuts. Again, a rejection of the policy. We don't need that easy money, and that's why the 10-year yield is moving up. And that because of supply issues and everything else. So he makes this mistake, everyone makes this mistake when it comes to interest rates, that lower is better, zero is the best and negative is even better than zero and higher is worse. No, there is a middle ground. Your

interest rate is your cost of money. It should approximate the growth of your economy. If you have a 5% growing economy, you should have 5% interest rates. And I'm talking about nominal inflation plus real growth. If you have a 3% inflation growing economy, you should have 3% interest rates. If you're Venezuela a couple years ago and you have 200% inflation and minus 50% growth, you should have 150% interest rates. So that's how you set sovereign yields. You don't set it on we're the best, everybody wants to be here, so we should get the lowest rate. That's how you price the mortgage on Trump Tower. That's not how you price a Treasury security. I'm old enough to remember my parents having a 13% rate on their

mortgage in the 80s and thinking it was low. Yeah, in fairness to that, back then, because we had 13% nominal growth, now 11 of it was inflation and two of it was real, but that's the, if you had, just to use that example, let's say you go back to the early 80s, you had 13%, what that means is that the average investment, throw a dart, pick an investment, the average investment will appreciate 13% a year. You could put money in a savings account

and get that rate at that time. But now if the Fed is gonna offer everybody 1% or 2% interest, then everybody's gonna borrow to the end of time into infinity, and to use your example, we're just gonna put an infinite amount of money into a savings account and get 11%. And that's when you wind up having way too much money into an economy.

That's the risk you would have if Trump got his way and said, we cut rates to 1%. Well, money market funds are four. Then if you're gonna cut rates to 1%, I'm gonna get a banking license, I'm going to borrow $100 trillion and put it in a 4% money market fund. And so will everybody else.

And then you're going to wind up the old Milton Friedman dictum, and inflation is too much money chasing too few goods. Interest rates have to approximate the growth of the economy. Not down is always good and even further down is better. That seems to be the mentality that I see too much on social media right now. Yeah, I never thought it would happen. But I guess you could argue that Powell actually orchestrated this soft or no landing that everybody thought was a myth or impossible, and he's getting beat up for it. And I'm not a fan of Powell. Yeah, I agree. I agree. But you know, like I said, Trump is

Trump is a real estate guy. And you know, but I've also noticed on social media too, that whenever I try to make the case for why the Fed shouldn't be cutting rates, the guys that get most agitated and really just go off on me the worst are real estate people. Because every real estate guy wants,

every real estate guy doesn't understand why any mortgage is, every mortgage should be zero, is basically what they think. And anything above that is fine. Yeah, their mortgages might not go down as we've seen. So let Trump cut rates and see if mortgages actually go down. As you pointed out, in all of these markets, including ours, the market has not bought into rate cuts once when it came to mortgages. hates Paul so much. It goes back to the first Trump administration. I'm imagining Steve Mnuchin telling him that the Treasury Secretary back then that, hey, you know, they have negative interest rates in Europe. And Trump goes, well, what's the negative interest rates? That's where you take out

a mortgage on your building, and the bank pays you interest payment every month. And Trump is thinking himself as a real estate guy. What a wonderful idea. Why don't we have him here? every month and Trump is thinking himself as a real estate guy. What a wonderful idea. Why don't we have him here? Why don't we have him here? Well, Jay Powell doesn't like it and he's never liked them since. He's blamed them on it. It's as good a theory as any that I've heard. So I think from what I'm hearing and certainly my view, nothing stops the money printer. Whether it's nine months waiting for Powell to be gone or they find a different way. I think QE infinity and money printing are the only way that we grow ourselves out of this.

So, with that said- Well, there is one thing that that's stopped the money printer. It stops the inflation. It stops everything. Austerity? It's not... It's going to be the markets itself. It's going to be the bond market in particular. Because a quick word about the bond market.

If you look at capital structure, right, who gets paid first is that bond holders get paid first. Bond investors will always get paid. Bond investors and bonds will always get funded. I'm talking about at the sovereign government level, not necessarily corporate level. Well, how does that happen? How do bond investors,

doesn't matter what the budget deficit is and everything, how is it that bond investors always get paid? Because they will take bond prices down and yields up high enough to suck all of the life out of every other market to drag money into the bond market to basically fund the government. You don't want that because then you wind up having punishingly high interest rates.

So if the money printer's gonna keep going and if Trump keeps arguing, what stops this train, to quote a Lin-Alden-ism, I just invented a word there, is that what stops this train is going to be suffocatingly high interest rates because you're gonna need to borrow so much money. And let me talk to crypto guys. I would never put my money in a bond market if I'm a crypto guy. Well, what do you see the yield will have to do to suck the life out of every market

to get the bond market funded. You never want to get there. And that's the risk you face if you wind up too, too much money printing, lowering rates too much. Because look at Trump's argument, right? Why does he want rates down? What is his argument? Because we're paying a trillion dollars in interest costs. And he says if we cut rates- That's not a Fed problem. That's a pressure problem.

No, that's fiscal dominance. That's my point. That's fiscal dominance. And to put that in English for everybody else, what he's saying is if we lower rates and interest rates go down and our interest costs go down, then the government could expand even larger and can borrow even more money and even more money. And then you wind up having to say,

well, what are we gonna get all these bond buyers? And they can refinance the existing debt at a lower level because we know that there's trillions and trillions and trillions that are, you know, I don't know, financed at two point something low, high one points to low two, that could have to be refinanced at four or 5% if rates continue to stay this high.

Right, exactly, exactly. And so, the point is is that the only thing that stops this train is the bond market itself by putting on suffocatingly high interest rates. We're not there now. I don't think 5% is there. Trump thinks 5% is suffocatingly high, but so do all real estate people. But I don't think we're there now. And I think if we continue down this road, one day we will be there. And then that will be the biggest problem that we'll be facing in financial markets. It's suffocating the housing market, certainly,

which is just frozen, effectively, non-existence. Is it? I mean, there's two- I don't know, I'm just trying to sell some houses, it's not going great, so maybe- Well, here's the thing. Here's the thing. Every moment of every day, since you and I have been alive,

and every moment of every day that we continue to be alive, housing will be in a crisis. And the reason is that it depends on which point of view you're talking about. Today, what's happening with housing is home prices are at all time highs. Meaning home price in the United States, like $430,000. The Case-Schiller Index is at an all time high

and all the other metrics are at all-time high. So what does that mean? There's no housing crisis for homeowners, sellers of homes. There's an affordability crisis for would-be homeowners that want to get out of being renters. And part of the reason why sales are down so much is that home prices are at all-time highs.

So that's an affordability crisis. Okay, what do we fix that? How about if home prices fall, then we have a financial crisis and you know, you know, it's your biggest source of wealth and the fin and the banking system goes. So if home prices go up with an affordability crisis, if home prices go down, we have a financial crisis, but The housing market is perpetually in crisis. There's never a happy balance where homeowners say, this is a good price for my house, and home buyers say, I can afford that price. We're never ever at that point.

Let's not talk about that any further. Let's talk about what you actually do with your money at this point considering the environment that we just discussed. Now, as you mentioned, the crypto guys are going to say put it all in Bitcoin. Some of them will say put it all in a Bitcoin treasury company and lever it up. Some people will say buy gold. Some people will say long bonds are a great opportunity right now, like my good friend Mike McGlone. Some people will say stocks are never going to go down, so put your money there. So how do you allocate now in the current environment? Well, keeping in mind that, let's throw in one other thing, everything's at an all-time

high, right? So stocks are at an all-time high, except bonds. Stocks are at an all-time high. Gold is at an all-time high. Housing is at an all-time high. Crypto effectively is at an all-time high. I know ETH is the one that matters. Yeah, ETH is close enough. It's close enough. The one that matters, I should say. Right. So everything is going up right now. So in that

type of environment, just to finish off my thought, of course, everybody says, well, if everything's going up, then you got to buy the riskiest possible thing. As you pointed out, why buy Bitcoin? Buy a company that has Bitcoin in its treasury because it's effectively a levered Bitcoin play and the like. And that is where I think that the mistake is going to come is that we're over our skis. And this brings me back to the great line from the original Top Gun movie Maverick that was some of the best flying I've ever seen right up until the moment you were killed. This is some of the best investing I've ever seen

with you buying levered Bitcoin products and playing everything in double levered S&Ps and QQQs and, or TQQQ, the triple lever QQQ. And man, it is the best you've ever done until the moment you're killed. And that's the problem that you're going to have to face in this market. Now, what am I doing with my money?

I guess I'll answer that question what I'm doing professionally. I am managing an active fixed income total return index called the Bianco Research Total Return Index. There is an ETF by my partners at WisdomTree, WTBN is its ticker, that tracked my index. And so we are suggesting that the bond market might be a good place to be in the market. Now everybody turns their nose up on that, and let me give you the argument.

Not everybody. I've made the case that starting now, moving forward for several years, not now, but for several years, cash will average 4%, which is what it's done in the last year. Bonds will average 5%. They're actually up 4.9% in the last year. Stocks will average about 6-ish percent going forward.

Now, they've averaged a lot more than that the last few years. And they're about up a little over 7% in the last year or so. Now, the reason I think that stocks will not will only average about 6% or so maybe if you want to squeeze it 7% is because of the extreme valuations in the market. That doesn't mean it has to crash. What extreme valuations usually say is that when you pay up for an investment like that, you usually don't get the expected returns that you think. And that's why I think in this environment, the four, five, six environment, as I've tried to call it, that cash, bonds, stocks are all going to be competitive investments to each other. And that's why I kind of entered into the space in that argument with our fixed income ETF

Wtbn and that meant that goes with our index and I so I think that that's where we need to be now The problem is what everybody really wants to know is what's gonna double by the end of the year and then what's gonna double? In the first half of next year end of the month sir end of the month. We're very we're very impatient now Zero DTE. How about by four o'clock? half of next year. End of the month, sir. End of the month. We're very, we're very impatient now. Zero DTE. How about by four o'clock? Yes, you know, or you could say end of the month because it is the day we're recording is the 29th of July.

So the end of the month is less than 48 hours away. But that's that environment. Yeah, that might consist persist, excuse me, for a little while longer. But I don't think it's going to be a good long-term play. I do think that when you look at the world in 2030 or 2035, I think you're going to see that the market gave you six-ish, 7% returns, the stock market, and you're going to say, look, even if I'm right that we're going to have elevated inflation, that's another argument

I've been making, like 3-ish percent inflation, 6% or 7% stocks is a good investment in that environment. But the problem is, everybody's like, no, it has to be 25%. That's what they think, that the stock market owes them 20% to 25% every year, because that's what they got in 23 and 24. I just don't think we're going to see that continue as we go forward. And where does Bitcoin fit in a portfolio? Or should I reframe that? Does Bitcoin fit in a portfolio? Yeah, it does. But I think, you know, let me, can I answer the question, where does crypto fit in the portfolio? Yeah, because Bitcoin is the store of wealth.

It doesn't look like it's gonna be the medium of exchange. It's still unsure as to where the medium of exchange is gonna be, by the way, I heard a great line from somebody the other day on Wall Street that he thought Ethereum was something you go see a urologist for. I will never forget at the dead top of the last market, the guy who was cutting my hair asked me

what I thought about urethrium. And I thought generally the same thing, urethrium. Yeah, exactly, exactly. I think that as far as where I would go with Bitcoin and Ethereum, the Maxis argument that everything's going to shit and that you have to have your money and Bitcoin is demonstrably wrong because everything's at an all-time high right now. It's not going to shit.

And what Bitcoin suffers from is it looks like a levered risk asset. It goes up when the stock market goes up. It goes down when the stock market goes down. Ethereum has had this massive comeback since April. I think had this massive comeback since April. I think that Ethereum's comeback since April has been driven by the Genius Act. And Tom Lee. Yeah. Ethereum got a Michael Saylor of their own, you know, so at least temporarily. Well, yeah, except isn't his tool now down like 80%?

His stock is down like 80% or something. I think they had, well, it was up 3800%. I think now is a down 80% from the peak. And I think today, you know, this will come out on Sunday. But like you said, this July 29th, I think they announced a billion dollar buyback or something. So I haven't checked where it is. Right. So let me give you the case on the genius act. The genius act, I would argue it's better than not having it. But

it's, it's not all the way there and there's a lot of unknowns with it. The genius act is legitimizing stable coins, just to put it simply. The problem with it is twofold. One, I do don't like the idea that the genius act is basically putting in a class of fully collateralized stablecoins so things like frax and die don't account and they're going to kill innovation in that space. Your stablecoin is basically a money market fund.

For everybody to remember, money market funds have a $1 NAV. Stablecoins have a $1 price. Money market funds are backed one for one by assets, mainly treasuries. Stable coins are getting backed one for one by assets, mainly treasuries. They're exactly the same thing with one huge difference. Money market funds pass through the interest on the underlying investments. Stable coins do not. They can't buy law right now.

Which was the major point of contention in the debates surrounding the Genius Act a few months ago. Was the industry wanted them to pass on yield or have yield included and the government did not? Right, and so what you've created with the Genius Act is you've created a money market fund with no yield. In a world where you can get a 4% yield in an actual money market fund,

you know, this whole idea that Besant was saying $200 billion of stable coins is going to be 2 trillion. There's there's one way that that happens, right? If you 10x the price of crypto, if you 10x the price of Bitcoin, you don't need 120,000 stable coins to buy one Bitcoin, you need a million to buy one Bitcoin. But if that's what you're arguing, then say it. Say it, we think the price of a Bitcoin is gonna go to a million and we're gonna need two trillion dollars worth of stable coins. I think that that's a US-centric view

and is not entirely inaccurate, but the proliferation of stable coins around the world in economies where people can't access dollars and now easily can, has been the main driver of growth to this point, which is evidenced by the fact that as much as we make the argument that Ethereum should go up because of stablecoin adoption, most tether is actually being transacted on Tron, which most people forget because it's super fast, it's super cheap, and somebody says, I'm going to send you $3, download this wallet. And nobody cares what chain it's on, obviously. It's chain agnostic in

their mind. They just want to quickly and cheaply send money. So unless we believe there's going to be a minimizing thirst for easy access to dollars, I don't think stable coins are going to have a problem with growth. Right. I understand that argument. And Tether has three years to come on shore, right? They're presenting a plan, but we know they'll get there considering they've got the Secretary of Commerce. But up until now, 90% of all stable coins are used for trading. They're not used for basically those wallet transfers that you're talking about or payments or anything like that. So the stable coins, so the Genes Act is also, the thing I really like about it is addressing a major issue

and that is the payment system in the country. It's been so horribly broken. Come on, it's terrible. So I'll give you a great example. The dealer that I have my car with sent me an email last week, and he said effective August 31st, any purchases or any service that you do on your car,

that they're going to charge you 3% if you use a credit card. So if you swipe your credit card to pay for your oil change, they're going to add 3% on it. So in other words, they don't want to pay the credit card fee. They want me to pay the credit card to pay for your oil change, they're going to add 3% on it. So in other words, they don't want to pay the credit card fee. They want the me to pay the credit card fee. In 1871, Western Union developed the money telegram. When there was a there's an image,

I tweeted this out a while ago, there was an image of a money telegram from 1871 said $300, $9 fee, $309. That's 3%. But in 1871, if you wanted to send somebody money, it would cost you 3%. But they had to put $300 of coins and currency in a saddlebag and ride it to you on a horse. Today, 150 years later, if I want to send you money using a credit card, it's 3% is what it is. That needs to be fixed. Money should be like emails or texts, a billion a second, all free. And what we really need to do to fix the payment system is then we can have consumer demand payments

and consumer demand receipts. In other words, I shouldn't get paid every two weeks or every month. I should get paid every minute. In my,, I shouldn't get paid every two weeks every month. I should get paid every minute. We agree on the price and every minute money goes into my account. My mortgage should not be a monthly payment. It should be every minute you take money out of my account for my mortgage. Netflix should not be a monthly subscription. It should be I just start watching a movie and every minute you take a penny or two or whatever the price is going to be of a particular movie. That's the system we need. They

had the capability to do that 30 years ago and really what I think is strangling the digital economy is the payment system and if the Genius Act is going to push us to fix that, hallelujah. Now what I fear is and I heard a chief economist of a Wall Street firm yesterday saying some of these things I just said about the payment system. And he said, I think stable coins are gonna be like run by JP Morgan on their servers. I'm not sure that's a stable coin at that point.

That's just another TradFi product. And then he said, or maybe even buy- They have JP Morgan coin. They do that. They have JP Morgan coin and they use it for cross border transactions. We go ahead. Sorry. Yeah, I was going to say, and then he went on to say, or maybe run by the Federal Reserve.

I'm like, wait a minute, that's a CBDC is what that is. And so what I also fear about with stable coins is that people are talking about JP Morgan coin and basically CBDCs and they're just basically calling them stable coins and they're not going to be on Tron, they're not going to be on Sol, they're not going to be on ETH, they're not going to be on the Bitcoin network. There's going to be none of that. And so that's where I also fear that with this no interest

in some of these other things that we're going to, we're basically pushing TradFi to fix the payment system of TradFi and basically kind of sidestep the whole stablecoin thing. It's not going to be a decentralized coin in one of these networks. I tend to agree with that. So I think that it's hard to know how it will look, but we know Citibank is coming out with Citibank coin. They've said it, right? Bank of America is coming out with Bank of America coin. Coinbase just partnered with PNC to be able to use stable coins and do trading on PNC. And I think today FIS to deal with Circle so that they can incorporate stable coins

there. It's definitely departing from the ethos of the crypto native side of stable coins and will likely be co-opted. And there will not be an investable opportunity there for the average person. That I do fear. We get very excited about stable coins, but I'm not sure in that world that that's very exciting for your average person who's trying to find a way to make money in crypto. Quick aside on this. I've been in the I've been following the crypto space long enough. And in fact, I had a conversation with somebody about this this morning, that this whole conversation we're having about stable coins sounds a lot like the exact conversation

we were having about stable coins in 21. And that we've been down this exact road before. And it all got brought to an abrupt halt with the Terra Luna debacle in May of 22, and then piling on with FTX in November of 22. And it's almost like we forgot that we've tried, these arguments we're using about stablecoins, we've already tried these arguments. We were talking about them being the big push for cross-border payments and all that other stuff that you were mentioning about with Tether, we were having this conversation four and five years ago, and it never panned out. Well, I think that was because of the pendulum swinging so far in the other direction from

a regulatory and legislative perspective because of the fear of even touching crypto. It was kryptonite for anybody to even talk about it after those things happen. And we conflated an algorithmic stablecoin backed by air with stablecoins that are backed by US treasuries and are the sixth largest buyer of US treasuries. So I see why it took us so long. But there's a reason it paused. Right. I remember I remember the days of Olympus style and that that you know, they were supposedly going to create a stablecoin with like a 4000% interest rate. Yeah, exactly.

I will pose this. There is another way I think that stablecoins became become much more popular and you get to two trillion even without the price of Bitcoin going to a billion dollars or a million dollars. And that is with the increase in tokenized assets in general. So if we do actually see all of these institutions move forward with tokenized products, we've obviously seen BlackRock with BUIDL and sort of the first iterations of this, but talking about tokenized stocks becoming wildly popular. And if stable coins end up being the base currency

of those transactions, they're going to be absolutely massive. Once again, I don't know coming wildly popular. And if stable coins end up being the base currency of those transactions, they're going to be absolutely massive. Once again, I don't know if that'll be on the JP Morgan network or Ethereum. I can't imagine that the DTCC and Citadel are gonna, you know, do an open source stable coin for transactions settling stock trades.

But stable coins will be huge. So let me ask you the question then. So for RWAs, what's the value proposition for an American investor? I already own Nvidia. Why do I need to sell my New York Stock Exchange Nvidia to buy a tokenized Nvidia? What do I get? You're telling me that the base currency is going to be a tokenized stable coin with zero interest rate.

I mean, at least my cashcoin with zero interest rate. I mean, at least my cash earns me an interest rate right now. Well, I think there'll be ways to make interest on your stablecoin that aren't native that will be pretty straightforward. But that aside, I think you hit on the first one, which is as an American. Yeah, again, forgetting there's the rest of the world that can't access Nvidia stock, which I think is a massive unlock. But I think if it brings us to T plus zero settlement and fees go down and we eliminate the third parties in between, then there could be something compelling there. And I think that's always been the promise of crypto.

The problem is it's being co-opted by centralized large institutions and may not be the decentralized version of that that we anticipate. Now, the thing about the thing about RWAs is they have to be backed one for one like a stablecoin too. You know you can't create an NVIDIA token and not you know and just just start selling it. That's the old bucket chops from the 1920s. I mean I'm sure people will try. Yeah what you're effectively doing is you're issuing you're not NVIDIA and you

are issuing NVIDIA stock if you have a tokenized asset and you jump back at one for one. So recently Robinhood in their big announcement that they were going to be offering tokenized stocks offshore, not in the United States, obviously, they did some sort of giveaway or announced a giveaway where you could get stock in private companies that was tokenized. And OpenAI very quickly tweeted or wrote a letter or something, we have no idea what this is. We have not allowed Robinhood to do this. This is privately traded. What's going on here? And Robinhood, obviously, will be backing it with the privately held shares that they have and such, but it opened

this sort of can of worms that alludes to exactly what you're talking about. What will be the custodial requirements for anyone issuing those tokens? Who will be able to issue them? How will they be distributed? Will we still have the same walls where it's not democratized and your average person in Nigeria can't buy it and it's still the same American investors. A lot of these actually should be these issues could be loosely addressed in the Clarity Act. We'll see. That's where they should be, right, in market structure. But I don't think that those legislators are ready to make those decisions. Exactly. And I'll just remind everybody that, you know, NVIDIA is the company or is the entity that can issue

Nvidia stock. You cannot have some third party, be it Robinhood or whoever, to basically invent Nvidia stock and issue it to other people because then you wind up destroying the float or massively increasing the supply and depressing the price or manipulating the price, if you will, of that stock. And so these are some of the issues that have to be kind of, and the question then also becomes too, what if a company says, look, I'm Apple, just to invent the name, I don't want you to do this.

You know, I want to control the float of my stock. I don't want it to be out of my control, out of my handling. And remember, a lot of this is voting shares. And I want to be able to have a handle on who owns these shares, because I want to know what they want is how they're going to vote on various proposals that the board puts up to the proxy every year. So there's a lot of issues that have to be resolved around real world assets. So kind of as we talk, I can tell that you're a bit critical about the original ethos of Bitcoin and crypto and potentially what it's become. And I know that you had comments about that when the ETFs were originally launched, right? I think you've had similar comments

potentially about a strategic Bitcoin reserve. I want to read you a tweet that I fired off last week that got me in a lot of trouble with Bitcoiners. It ended up in like four articles that misquoted it and took it out of context, but it started a conversation I would love your opinion on. I said this, Bitcoin is amazing, but it's obviously been co-opted to some degree by the very people that it was created as a hedge against Many of the most ardent early whales have seen their faith shaken have been selling at these prices

So I got eviscerated by Bitcoin maximalists because maybe I've used too strong of wording with co-opted But does that align with sort of the thoughts that you've had about these products? Yeah, it does and the reason is let me just be clear about where I've been. I've been a big fan of these products as a disruptive force for the financial market. As we were talking about with stable coins in the payment system, the financial market is, and the banking system is in desperate need

of change and disruption. And I saw these as vehicles that could do that change and disruption. And I saw these as vehicles that could do that change and disruption. But along the way, what happens is it gets caught into these bouts of FOMO and speculation, especially with Bitcoin. And that all of a sudden, because the FOMO is there, because the adopt, you know, the word they use is adoption. But what they really mean is FOMO because of the ETF, that everybody piles in and everybody buys it, and you give a disincentive to innovation,

and you give a disincentive to basically trying to disrupt the financial system. Now I'm just here for number go up. I'm not here to understand where this will fit in, how this will make us, you make us a better financial system. That's why people like me tend to kind of like Ethereum a little bit better than Bitcoin. Now I'll probably get razzed for just saying that by the maxis, but because at least Ethereum appears to be trying to become a new version of a financial system. And I think when we get back to that goal of trying to better the financial system,

I'm all in on this stuff. When we lose sight of it, and I'll give you another example, losing sight on it is Asolana, Sol. Sol's stock price, by the way, peaked right on the inauguration. It peaked essentially when Trump rolled out his meme coin. Sole, because of Pump.Fun and everything else, Sole is the metric of meme coins. And I think meme coins peaked in January

and Sole peaked in January as well. It had the promise of being that competitor to JP Morgan and the Federal Reserve and the US Treasury. And it kind of got lost in this meme coin mania. And now it's kind of lost its way on what it's trying to do. Hopefully, you know, Toli can get it back going in the direction he needs to get it going in to say, look, we have to be a better JP Morgan and a better Federal Reserve. He said exactly what you said.

He literally was a it was a story today. I think that he said that memes and NFTs have no intrinsic value or nonsense and was kind of dismissive of all that, even stating obviously that he's aware that they've driven a lot of TVL and interest and usage of the chain. I tend to agree.

My lens is not bad. By the way, trivia question for you. How many memes are on the Solana network? Oh, 20 million? Yeah, I was gonna say, I've heard it's over 10 million. By the way, trivia question for you. How many memes are on the Solana network? 20 million? Yeah, I was gonna say, I've heard it's over 10 million. I mean, just- I mean, there were 6 million launched in April. So, I don't know, and that wasn't peak.

To your point, Trump put in the peak. There's no greater ceiling than the President of the United States launching something. So you're not doing bigger than that with meme coins. That was it there. I agree with you, but that also counts like a kid in his mom's basement who launches a meme token that never gets a single buyer. 99% of them never trade one time.

Yeah. So they might never trade one time, but I agree with you there. My framing that I've always had, like I feel like I'm a Bitcoin maximalist because I just view Ethereum and Slahn everything else as an entirely different asset class. I would agree with you. And that's kind of the same thing, too. I don't see why Ethereum is triggering to Bitcoin maximalists in the same way that I don't see why buying Nvidia would be triggering to a gold bug.

Right. Or buying it or that buying Nvidia triggers a Tesla stock owner. Why it should matter to them either way? Because I think at the end of the day, the maximalists are FOMOs. They're basically there to say that there's this new asset class called crypto and everybody needs to get into the token or the coin that I own, not to be thinking about a bigger picture of it and what is it trying to accomplish, what it's trying to do, where is it trying to go? It's kind of like, you know,

Nvidia is a good example of this too. My favorite thing is whenever I meet somebody that owns Nvidia, my first question to them is, name me, what's the name of their largest product? And how much does it cost and who buys it? Nobody knows, they don't care. Most of the time when I ask them, what's their largest product? And how much does it cost and who buys it? Nobody knows they don't care. Most of the time when I ask what's their largest product, their answer is it's got a four trillion dollar market cap. That's what their answer is. Their stock. Their stock is their most important product. Obviously, nothing else matters. But listen, when you get in an environment like that,

shouldn't those start to be hints of top signals? They are, they are and we're in and they and we are there. Now that I've said that we are getting hints of top signals, that's the problem, right? Does that mean that we're going to peak tomorrow? Or we're going to peak towards the end of 26? Or something along those lines? I don't know. That's why going back to my 456 argument, I think that once we get through this period and we look years down the road, we're going to see a 6% return on the stocks. We're going to see a 5% return on the bonds. Bonds are going to be competitive with stocks because they're going to give you most of the stock market with less risk is what they're going to wind up in. Cash is going to give you half of the stock market, if not a little bit more with

no risk because it's a $1 NAV every day. And so that's the risk that we face. Look, we've already got this. We got the FOMO going on with the crowd right now this year. Look, it's almost August, and the stock market's up by 8% in the year because of the big sell-off in the middle of the year. And we've got everybody frothing at the mouth that, you know, it's been like this spectacular rally. Well, so far, it really hasn't. It's been decent 8% in eight months. It's not bad, but it hasn't been like 23 or 24. I wonder what it would have been like without the tariff situation that obviously sent that

very quick V-shaped recovery, but that very quick trench to the bottom. So let me let me ask you this one too. I do have in a file all of Trump's tweets from 2016 to 2020 and I've been collecting all of his, I do this kind of stuff. I've been collecting, I got a program that runs every couple hours that collects all of his truth social posts.

In 2016 to 2020, Trump tweeted hundreds of times about the stock market making all-time highs. And he tweeted a handful of times about interest rates in the Fed. In 2025, in truth social, he has tweeted about 60 times about interest rates, he has had exactly three tweets about the stock market. The first one was in April when he said it was Biden's stock market because it was selling off. And he was trying to... That's right, when he said, I don't care about the stock market, right? That's not my gauge of success. We're gonna rip the band-aid off, right? But even since then, as it's been roaring higher, he's only had two tweets that, you know,

celebrating the high in the stock market. That's it, two since April. How do you explain that? Because my theory is, is that he's like everybody else and knows that I don't want to time, I don't want to hitch myself to that mask, mask because I'm afraid that it might go over the side. By hitching myself to the Fed needs to cut rates

and calling them too late. If the stock market sells off, it's Paul's fault. If the stock market keeps going up, well, I don't need to say anything. I could just say the economy's good. And so he's basically hedging himself. And he's basically trying to... Yeah. Otherwise, if this was Trump 1.0, he would be tweeting every day that the stock market

made an all-time high, because that's what he did during 1.0. I think he's afraid to hitch himself to that thing right now. We obviously had this major pivot in narrative. We went from Doge and this austerity by another name and tariffs and external revenue services to best and say we're gonna grow our way out of this. Elon Musk left. Can we grow our way out of this debt in this situation? And why did they give up on being fiscally responsible, let's say financially responsible?

Right, I think there's two things. Yes, you can grow your way out, but let's be clear on what growth number we're talking about. We're talking about nominal growth. We're not talking about real growth. Nominal growth is inflation plus real growth. So if you get enough inflation,

you can have your, what, remember, what Besson is talking about is the debt to GDP level is about 100%. We have about $36 trillion of debt. We're at about a, you know, and we're about a $37 or so trillion dollar nominal economy. So you want to get that ratio down. Well, you need the economy to grow faster than the debt.

And the best way to do that is inflation, otherwise known as inflating your way out of the problem. That brings your debt to GDP ratio down. So to your question, can we grow our way out? Yes, we could by having inflation. The better question is, is that is that a desirable thing to want to shoot for? No, it's not. It's not. It's not a desirable thing at all. Remember that even in some of the polls that have been put out last in the last week,

the number one issue, according to the public is still inflation economic issue, excuse me, is still inflation. Why is it still inflation? Isn't it down? Isn't it resolved? No, because for most of the country, let me give you a quick statistic. Bankrate.com does this thing every January,

and last January they said 60% of the public, six zero, cannot come up with $1,000 in an emergency. They got to borrow it, put it on a credit card, or ask a friend for it or something like that. These people, they're not like everybody listening to us, right? We own homes, we own portfolios, we watch asset depreciation. They don't have that. They rent, they live paycheck to paycheck. If their paycheck is not rising faster than the inflation rate, they have to buy less things. Right now, according to Indeed, the employment service, their website, they did a study last week and they still said something like 35 to 40% of the workforce is

still getting raises of less than the inflation rate. Who are those 35 to 40%? They're the bottom 35 to 40%. They're not the people making $5 million a year. They're people that are making $35,000 a year. And they're seeing that inflation rate is going up around two and a half, 3%. And they're getting a 2% raise. So when they go to the grocery store, they look at their what they have in their basket, and they go, I could buy more things last year than I can buy this year.

So that's why I wanted to say, yeah, you can inflate your way out of a debt problem. You might have a revolution if you're not careful, if you wind up inflating your way out of a debt problem, because you really, really stick it to the bottom end of the population in terms of income and they pay a terrible price for it. And so yeah, if you want to get the ratio down, you could do it that way, but I don't think that's the desirable way to do it. The desirable way to do it is to elect politicians that will rein in spending, but we don't do that. That doesn't exist. Nobody wins on that. Yes, I agree. They don't exist. So, this is back to

my Lin-Aldism again. The only thing that stops the train is going to be the bond market, because ultimately, you're going to be borrowing more and more from the bond market. And the bond market is just going to shove interest rates to confiscatory levels. And it's going to force everybody to stop what they're doing. Now, when that happens is the question, maybe it's 10 years from now, or maybe it's later this year. But that's the road we're on, I think. Perfect place to end because we're on, I think.

Perfect place to end because we ran out of time, unfortunately, because I feel like we could have done this for four hours. Jim, where can everybody keep up with your research and follow you and make sure that they're getting all this insight on a daily basis? All right, a couple of ways. Business one, Bianco Research. That's our research business. It's an institutional research product, biancoresearch.com at Bianco Research on X, Bianco Research, that's our research business. It's an institutional research product, biancoresearch.com, at Bianco Research on X,

Bianco Research on YouTube, Jim Bianco on LinkedIn, Bianco Advisors, that's that index that I manage, and WTBN is the ETF that tracks the index, if you wanna find out more about it. Jim, thank you so much. I've been following you for so long. I've seen so many interviews, but you're one of the few people

hadn't had the opportunity to speak to is really lived up to all the hype. Thank you. Enjoyed the conversation. Thank you so much. We'll speak soon.