The Wolf Of All Streets - Bitcoin Hits All Time High, ETH $4000 | Crypto Town Hall

Episode Date: March 8, 2024

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It looks about ready to make another all-time high here as we're signing on. $68,990 as I'm looking. Not the worst time to launch a show here. Simon, how many all-time highs have you seen in your life? All of them? Well, I started at $3. Every day has been an all-time high for you, buddy. Yeah. every day has been an all-time high for you buddy yeah but i i do remember my my worst one was the 30 30 dollars to three dollars that one was really rough the crash absolutely yeah it's amazing it's amazing to hear those stories i

got it in 2016 so obviously late late relative to you. But doesn't every person who buys Bitcoin, no matter when it is, feel some envy for that other person who bought it earlier? Oh, yeah. I mean, you know, we've all got our Bitcoin pizza guy story. So, you know, anyone that's been involved, you calculate. I mock the person that, because I really tried hard to get the person i bought my house from to accept bitcoin and so every single year ever since i bought it i've sent him

how much he would have got um and so he would he would actually have 440 million dollars right now if he and literally that outperformed all of his property development, all the work that he did, everything he did in the whole time. And he could have just sat on the Bitcoin from the sale of that house, but I'm okay. I send it to him every year. You mock him, but damn, are you glad he said no? Yeah, exactly. Yeah. No, no, no. Cause I had to sell it. I had to sell it to, so I didn't benefit from it. So it's, it's a bit of a mock at me as well. So that's my, yeah,

my Bitcoin pizza. So we do have that story. I love that story. I've been kind of on like a rampage of late, uh, on my social media and kind of ranted about it yesterday about the sort of laser eyes, never sell no matter what mentality.

Um, it was something we talked about here. Hey, I think never sell no matter what mentality. It was something we talked about here. I think that that's a wonderful mentality. If you have the luxury of being wealthy enough to actually think about storing a store of value and having true wealth to keep for your children. But 99.9% of the people on this planet eventually need to sell something to pay their bills. Right. And I, I, I hate the shaming of that so much. It drives me absolutely nuts. Like a person should be so deep down the cult rabbit hole that they're going to skip meals and not pay for their

kids like education because they refuse to sell even you know 500 worth of their bitcoin if you think that's bad i donated my ethereum genesis block allocation to vlad zamfir's research team because i thought it was a nice thing to do so that's about 40 million dollars that i walked away from so which is why i'm still practicing law as it happens instead of sitting on a beach in tahiti yeah we all have this story but uh listen it's how the whole hindsight is 2020 right i mean it's a lot of regret but when you look at it through the lens of where you were at that point it's not so unreasonable my wife loves to remind me that all the doge i was trading in like 2016 and 17 on those classic doge cycles you know where it was

like 10 to 15 sats it would go up to 180 and come down cumulatively if i had just like held the first doge i bought which i was selling for five or 10 grand here riding the cycle it would have been like 70 million dollars at the peak yeah but like and the other thing is like i don't think with these sorts of things i don't think i have an expression not all bad comes to harm you and like like working in crypto has been way, way more fun than just like getting rich. I don't, if I'd been retired, I think I would have been totally miserable. And it's just been so much more fun getting to actually work with different projects that I kind of don't regret it. Although I entertain the possibility that that's a retroactive

justification, but like, I'm pretty sure if I'd had a couple million bucks in my pocket and eat back in 2017, I wouldn't have like gone back to law school in America, taken the bar exam. That was all like that's all like difficult stuff. And so, you know, I don't necessarily regret it. I don't think it's the worst thing in the world. Preston, we have a term for people like us, and I believe it's COPE. Yeah, exactly. I have a giant I have a giant tank of copium that I'm huffing here as I as I'm on this call.80s before Bitcoin sort of started pushing past $68,000.

But bull market, isn't it? I mean, Peter, you know, you come on every week and you say, man, I'm not shorting this thing. Man, I'm not selling this thing yet. I'm not sure, Peter, the last time we spoke, was it, I think it was before Tuesday or maybe it was Tuesday, but we had that day, you know, 69,000 down to 59,000 to $10,000 spread on that candle bouncing back. This is showing incredible strength, even in the face of that flush, right? We had a 14% correction. I mean, I've heard on this conversation so many people saying, I'd love to buy a 15 to 20% correction. How many people did? It doesn't mean anything. You know, 5,000 here, 10,000 there, to me is insignificant. I'm not going to get shaken out on just little minor rallies. Hey, here's the deal. We all have to remember it is periods of short term or intermediate term uncertainty normally resolve in the direction

of longer term trends. And so we've got a weekly trend this up. So hey, expect daily uncertainty. We have a daily trend up, expect uncertainty on intraday charts. And so they normally get resolved. So I don't think this all-time high really means anything in terms of real, real, real supply and demand. That is bitcoins being bid for, bitcoins being offered, supply coming into the market. It's a psychological level for sure. But there's nothing that says that we don't bust through, go to 72, 73, get everybody excited and formaled out and then have another meaningful correction of 15 to 20%. That's not a prediction. I'm just simply saying, hey, stay with the trend.

Don't get shaken out. Yeah. And that 15, 20% correction, it's incredible that it can come in a matter of hours in this market rather than elsewhere. But if you just keep that in perspective, it doesn't matter if it happened in a day or a week. We're above 69,000 as we speak, actually 69,005 bouncing around that area. But yeah, it just happens faster here. Yeah, and you mentioned you sell Bitcoins to buy tennis shoes or whatever the case may be. I mean, one of the reasons that or one of the things that Fidelity did when they came into this early and they came in really early, they were here in this space before the other big national brokerage firms. They have arrangements with some of their clients where they're custodian those Bitcoins for true holders,

and they're borrowing money against it. So, you know, people don't have to sell their Bitcoins. Certain customers are acknowledged, but, you know, they're borrowing money to live on against Bitcoins that are appreciating. So it puts them in a risky position, obviously, but if they're in early enough with enough, they can certainly take the risk of doing that. So there are ways to continue to pay bills and basically retire with Bitcoin earnings and nevertheless meet mortgage payments and buy new cars.

So, yeah, that's what put me in Celsius. Yeah, I was going to say for the wealthy. And then, of course, I was going to make the same comment, which is the CeFi collapse showed that that didn't work in the last cycle, but it theoretically works. And I think, Simon, what Peter is saying is the – I talked about this on another show actually yesterday. It's the billionaire playbook. And the first time I actually coincidentally really had that broken down for me

was the first time I had Michael Saylor on my podcast, which is right after the weak MicroStrategy first bought Bitcoin so many years ago. And he really broke that down. And that was before you could really collateralize your Bitcoin. And I think now that's still even only starting. But he basically said, listen, you know, rich people, he was already a billionaire. He's like, you know, we have our yachts and our cars and our stock portfolios, and you never sell anything. You never take a taxable event. You get a basically zero ZERP environment, low interest loan on everything.

You die with those loans. You never take a taxable event by selling and you live your life. And that's how obviously billionaires avoid effectively paying taxes on anything. And so imagine this world where without the Celsiuses of the world avoid effectively paying taxes on anything, you know? And so imagine this world where without the Celsius's of the world and with, you know, the true custodians, like fidelity, as Peter said, where all Bitcoin becomes a pristine collateral that it can be, and you can take, you know, lower interest loans against it and live. But again, that's a, this is like,

Reese sort of iterates the narrative that we were talking about yesterday, which is at the end of the day, Bitcoin is kind of, feels like it's actually a lot better for wealthier people than for poor people, right? Yeah, I do. It's a sad reality, but like poor people can't do that

and poor people can't afford to save money and poor people can't even afford the fees to send Bitcoin. Yeah, I mean, I do think it, it comes back with decent custodians. I guess it will be, you know, it's just a question of where's the yield coming from. I guess it's going to be, you know,

the covered call on the other side of the option. I know Bitfinex, they were like the first to create a peer to peer-peer order book for people to short Bitcoin. And then all the exchanges came through. And it appears now with our resurgence of interest on building on top of Bitcoin, that eventually you'll be able to do that in a DeFi environment where it will be executed on chain. And, you know, but these things, they're risky. And the times when I blew up... Simon, sorry to interrupt.

Sorry to interrupt, but Bitcoin just blasted through the all-time high, 69,500 and rocketing. It just had to give the update while it was there. We can go back to you. I just want people to see that. And it is, it's flying 69.7 now,.77 it's yeah it's going go ahead simon you can finish yeah no um i was just saying yeah um but yeah congratulations to every single person in the world that bought bitcoin and did not sell um you are now in fiat terms up so congratulations everybody

yeah there's a there's a lesson there in dollar cost averaging right that and it's one that i learned unfortunately the hard way well not unfortunately but in 2008 when i finally got some money and started 2007 i started dollar cost averaging into spy i was underwater for like a decade on every buy that I made and then I woke up one day and every buy I'd ever made was in profit. And that's exactly what people who have dollar cost averaged into Bitcoin right now at this very moment are. There's literally never a time in history you could have bought Bitcoin and you'd be underwater. Ever. Period. Ever. Dave, go ahead. Yeah, a couple of things. First, yeah, I love it when tweets age well. And I

pointed out yesterday, and I'll say the same thing this morning, funding rates on the perpetual swaps are still relatively low, meaning that the fuel that fired the last rejection at the all-time high wasn't there. If it got there this time, it obviously got there this time. There wasn't that fuel. Boom. So that was good. And watching that matters. But a point going back to the loans, you guys missed something. It's a biggie. The Bitcoin ETF holders are going to be able to borrow against that in two different ways. It will take a little bit of time before all the brokerage platforms allow you to margin it. but because it's a national market system ETF, you will be able to at some point. The second is if you have it in a retirement fund, for sure you can borrow against your retirement, your 401ks.

And that's how the average person, as Bitcoin moves 10x here, all the people who allocated into those funds are now going to be able to do on a smaller level what Michael Saylor was doing. And that matters. Now, eventually, would we expect a similar thing in the spot world? Yes. And the nuance there to what Simon was saying is people who are doing that don't care. Dave, I'm interrupting you, too, because Ethereum just broke $4,000. Go ahead.

Yeah, I saw that. I saw it broke it, and then it kind of went a little bit below. And Bitcoin right now is crossed massively. It's over $70,000 on the IPERPs by a lot, like $73,000, $70,000, $366,000, and $70,000. It's all over the place. But breaking $70,000 anyway on the perpetual. So, you know, that is happening, too. But anyway, the point is that in order to do what Saylor was talking about, you don't care if you get yield on your Bitcoin. You just borrow against it. You're paying. It's what do you have to pay. So the yield to the people who want to buy, you know, is less relevant than the cost. And so it's kind of an inversion of the model that we all had back during DeFi summer. And obviously, we all know how that worked out. But yes,

you know, the DeFi side stuff will still work where there's real demand to borrow, to be to borrow. But if you want to borrow against your Bitcoin, it's really a question of what interest will you be willing to pay in order to not have to sell it. And that's a different dynamic than what we've seen. MAX WIETHE, That makes perfect sense. But the bottom line, I think, Dave, is you're saying is it can be treated like any other collateral. There's nothing special here.

There's no massively over collateralized loans like on Celsius. It will just become in that regard. DAVID ROSENBERG, Well, yes and no. Yes and no, Scott. I mean, look, volatility will still matter. Lenders care about volatility of assets. They absolutely do. But, you know, it's really a question of if you're looking to what the terminal state is, people who get themselves by being early as Bitcoin goes to where we all think it's going to go, the perversity here is as it gets there, its volatility will decrease and your ability to borrow against it will be higher.

Right now, you're still going to have to over collateralize the hell out of it, because people look at the volatility and it's just it's a question of risk. I mean, even just now, I mean, there are exchanges, right? Well, whatever. I mean, anyone, you can watch the pricing. I mean, Deribit, I mean, there are exchanges, right? Well, whatever. I mean, you can watch the pricing. I mean, Darabit, from what I can see, their inverse perpetual is below $68,000, while Binance futures above $70,000. Now, I don't know how- Yeah, Bitcoin's now back in the 67th, actually, 68th.

That's right. We're going to expect massive volatility anytime around those levels. I don't think there's anything surprising there. You were saying that you saw funding rates relatively low. I'm just checking CoinGlass. They look, I mean, not like historically high, but longs are paying quite a bit to get long right now. Still, it's 0.06 Bitcoin open interest weighted funding rate

across perpetual swap exchange. Which ones? I mean, Darabit, well well you know maybe i'm looking at uh you know binance 0.06 okay x 0.057 dy x 0.154 holy crap i see three zero i see five basis points well whatever uh yeah no they're not they're not they're not huge but uh i'm just saying people are still uh gig along you know uh even after that flush, they got long again, which has been the right move. If you've got long, obviously on that flush. Yeah. This is, this is crazy stuff. Okay. Well, anyway.

Yeah. But you know, I think that what I want to know actually from everyone is I still don't have the feeling, even though we are fear and greed index years in 89, if that's a meaningful to anyone, extreme greed. But I still don't have the feeling that the average person is paying attention to this. Obviously, last cycle, your cab driver and your barber were telling you about Dogecoin and how can they buy it and what the hell is going on. I mean, right now, I haven't even had my closest friends ask me about it. And you would have thought that at all-time highs, I'd be getting congratulations just like I was getting the funeral notices when it was under $20,000 from all of them to asking me if I was okay.

Nobody's asking me if I'm okay now. I don't feel like it's fully happening yet. Is it going to take 100 for people to pay attention? I don't really know what the number was. I thought we'd be getting a lot of headlines at all time high, David. Yeah, so I think you're right. No, the average Joe is not paying attention to this. I think the things that they remember are the blow ups. And the fact that, you know, maybe there's no legitimacy, you know, behind crypto assets, or maybe there's nothing backing them, things like that, I, they are not paying

attention, they are going to pay attention. I like the fact that, you know, this run is happening, frankly, before there's any real education, formal education going on, you know, by the RIAs. We're still waiting to see if the platforms are going to go ahead and all allow for investment. And then, you know, you've got other kind of retail, I would say outlets that are just starting to get involved. There was a story about the Arizona pension fund system that it is considering allowing Bitcoin ETFs into retirement fund portfolios in Arizona. And I think each state will go through this in turn. You know, those that are progressive when it comes to financial accessibility will be sooner and others will be much later. And then BlackRock wanting to go ahead and buy spot Bitcoin ETFs for their global allocation fund.

It's slowly going to bleed into other places, whether people want it to or don't want it to, it's going to get there. And then, you know, with respect to institutions like endowments, foundations, pension funds direct, remember, you know, their largest role that they played in the last chapter of the cryptocurrency world development was they invested on a VC basis in a couple of the biggest blow ups that there was, you know, particularly the Canadian pension funds. And, you know, they will eventually have to come back to this asset class. But I think it's going to take a long time for them to come back and their firepower is enormous. They're going to eventually have to go ahead and allocate to this asset class in a major, major way because now it has legitimacy and that will only grow. They're frankly not even interested in this, by the way. Most private wealth clients are more concerned about their real estate

holdings and everything going on with respect to rates than to go ahead and care about. I think between now and the presidential election, we're going to see massive appreciation in crypto assets. It's going to be a major risk on environment. Those people that have flexibility are going to go ahead and allocate to it because they can't go ahead and miss out. There's not going to be much that's going to push the economy back going up until the election. And so I think that this is really the time where we're going to see some massive upswing, but there's going to be a large portion of the population, I wouldn't be surprised that is still going to be left out of this asset class come November. The interesting thing, David, is you talk about obviously BlackRock. I think that's the second

fund that they've filed to add their spot ETF to. We know that Fidelity in Canada is even in their conservative funds is putting a 1% allocation to Bitcoin spot ETFs. You talked about the Arizona, obviously, the state of Arizona, but the market does what Larry Fink does, right? We can argue that this entire bull market is a result and began the day that Larry Fink went on TV and filed for BlackRock Bitcoin spot ETF, and him going on TV and saying it's a flight to quality and continuing to bang the drum for this asset class. Now I've always long sort of jokes that the next big catalyst is that Larry Fink just goes on an interview one day and says, you know, BlackRock's recommending a 1% allocation in your portfolio to Bitcoin, right?

And then every RA in the world gets in line and does it because Larry Fink said it, but this is Larry Fink quietly saying it, right? Or at least BlackRock by adding it. And what I find most interesting about that is that that means if this happens and it starts getting allocated into the bulk of these funds at BlackRock and elsewhere, that even people who hate it or don't understand it or haven't gotten exposure will be exposed and they won't even know it, right? The same way that you have people who literally hate Elon Musk with a passion or hate Mark Zuckerberg and hate their companies. And I would never buy their stock, but are passively investing in retirement targeted mutual funds on Vanguard. I hate to tell you guys, you own a lot of meta and Tesla or exposure.

Right. I don't I don't mean to sound like a preacher. Those people will be in denial until one day. They won't be in denial anymore because this is the truth. And so, therefore, they will become active investors one day in the asset class to a greater extent than that they are passive. By the way, since you brought up Fidelity Canada, I will ask the audience, I am trying to get in touch with somebody at Fidelity Canada. If anybody knows anybody at Fidelity Canada, please go ahead and just send me a message. I really need a contact there. If anybody knows anybody in Canada, let's be real, we're Americans. Why Fidelity Canada? I know Tom jessup who just runs the digital assets uh no it's got it's got to be i think it's a it's a separate entity the canada from

fidelity investments us yeah it's a different company and i need i i need somebody in canada for reasons that i can't explain go ahead simon but i will explain I will explain at a later date, hopefully. Okay, you don't need to explain it, but that very same request is the same request I'm getting from people all around the world. So it's not the request of, hey, Simon, should I buy Bitcoin right now? It's the request of, Simon, I've got a Hargreaves Lansdowne SIP.

Do you know anyone in Hargreaves Lansdowne that will allow me to figure out when they're going to let me put the Bitcoin ETF in? That's what I'm getting everywhere, which is like at the moment, like in the case of the UK, I didn't live in the UK, but everyone assumes I am because I'm British. But every single person that's got a SIP and retirement fund is saying, why is the FCA not allowing us to put the Bitcoin ETF in my retirement fund right now or my self-invested personal pension? That's the same with people from Australia, the same with people from Canada. They've all got like kind of these obscure ways of getting exposure. But the regulators in the

international scene have not quite adjusted to this. So there is still so much. It's an issue here, too. Yeah, it's an issue here. It's an issue here,, right? I mean, that's sort of the story of these trickling flows. They're huge, but there was no major unlock or fire hose. I mean, if Bitwise yesterday, and he said he's on a roadshow right now with their sales team. And they just convinced three RIAs. I think it was a billion-dollar AUM, $750 million, and $2 billion, something like that. They're all going to allocate 1%. This is going to keep happening. And to David's point in talking about BlackRock adding this, we're going to have the flows of people who just finally get access or get it actually recommended buying, but then you're just going to have these passive massive allocations that happen.

It's sort of like people love to point out the fact they say BlackRock owns 10% of MicroStrategy or whatever that number is. That's passive. That's just them adding it to their funds. That's not an active investment. And the buying pressure that comes from that of these ETFs is going to be just astounding. Peter, I saw you had your hand up. Yeah, I mean, one of the hesitation to accept these into pension funds and so forth has just been, what is the world-recognized closing price for the quarter, for the year, for the week,

whatever, of Bitcoin. And we have various exchanges. So there's some hesitation of exactly what is used, what time zone is used. Do we base the valuation at the end of the year based on Greenwich Mean Time, based on Hong Kong time, based on New York time. So there needs to be some recognized standardization of how we value the asset at the end of the year. And that's a minor issue, but it is an issue that has to be taken into account before some people are willing to put the asset into pension funds or certain accounts. See, Peter, that's just so hilarious to the Bitcoiner that is used to the 24-7 world. The, you know, somebody that wanted to put Bitcoin in their pension or their self-invested pension has literally probably going to lose out potentially on 100% gains or a doubling of their retirement fund in the time that people were trying to figure out what is the time of the closing price of a 24-7 market that never stops. And the painful thing here is that people are watching these assets appreciate,

and it's like the ultimate FOMO and pain, all because compliance teams just cannot work at the pace that is required in order to allow people to protect their traditional assets with a small allocation into this. And it's just so painful to see that people are having to go through that because this market ain't waiting for no compliance officer or no financial institution to get this signed off in any kind of reasonable time that the traditional financial institutions work at. That's the painful story, really. Yeah, I think that's true, but they're going to have to work it out. I mean, they've worked it out with CME futures, right? That's why we get the CME gap meme every single weekend. CME futures

close, Bitcoin keeps trading, and then they try to find a meeting place in the middle on Mondays, which is absurd, but it's sort of the way that this market works. Anecdotally, are any of you guys getting those calls I was talking about from your mom, your friends, or a conversation with your Uber driver or your barber? I'm just trying to get an idea of sentiment. Preston, have you had it? David Tal has given me a lot of thumbs down. So, Preston, have you had that at all? Not really. I've gotten some, what I am getting is, so let me tell you a story about a client who called me in the depths of crypto winter, sort of May, June of last year. He said something to me when, of course, it was terrible. SVB went

down, funding dried up, every VC, you know, the latest sort me when, of course, it was terrible. SVB went down, funding dried up, every VC, you know, the latest sort of jingly keys, shiny object was AI. So it was really difficult to get funded. And one of my clients said to me, you know, all the narratives are dead, right? And that is to say he had ceased to believe himself in crypto's narratives because the markets were so bad. What I'm seeing now actually is really interesting stuff around the fusion of those two disciplines. So there's a startup called Morpheus or a protocol called Morpheus, which is being worked on, which combines both AI compute and crypto. So after a really brutal and bleak, long crypto winter, as stuff comes back, we're starting to see some ideas that maybe looked kind of stupid a year ago, right? Or look like they weren't getting traction. Now they are starting to get traction. So I'm not getting really a lot of, I don't tend to get a lot of retail calls.

I did my, my space is seed stage startups and early stage startups, but people like are enthusiastic. They're hopeful. They're like, okay, the markets are coming back, which means we can go build cool stuff again. And so I think that those projects, we shouldn't really expect to see those kind of like weird next gen projects for another three to six months. I suspect the timetable for those projects is going to be really compressed, right? Because they're seeing what the markets are doing. And they're just going to barrel full speed ahead to try to go get an L1 launched as soon as they can. So I'm not getting retail phone calls. My mother

and sister and all the rest of it, they just make fun of me most of the time. And they say, you know, that shit coin you told us to buy a while ago, what's the price? I have gotten two of those from my sister in regard to one shit coin where I had her set up a mining rig at home. So you can imagine, you know, sister, husband, baby, and you're like, cool, you should run a mining rig. And they're like, they're like, okay, and then, you know, runs for husband, baby, and you're like, cool, you should run a mining rig. And they're like, they're like, okay. And then, you know, it runs for three years and nothing happens. How bad you look. One of those situations.

But, but no, I'm not seeing retail, but I am seeing a lot of renewed interest in the startup space and the infrastructure space. And that's, that's going to come to market in three to six months. Okay. I have another question, Preston, before we go to DB. I see your hand up, but, but another question, because listen, you know, anyone in this space who has like a telegram account, you start to get like crazy. I hesitate to call it deal flow pitches on new projects. Right.

And you're saying that you're seeing an uptick, the amounts that I'm seeing that are likely, and we know that 99% of that ends up being vaporware, is like peak 2021 right now. Yeah, I think that I don't even think it's close to 2021. So the most interesting things that I'm seeing, and it's kind of reassuring, is that VCs are investing in infrastructure projects now that don't necessarily have tokens attached to them, but might. And so that's the sort of thing where you say, okay, let's assume we live in a world where,

so AI is one example, and there are a lot of startups working on authentication in order to insulate or reinforce authentication systems that are now rendered vulnerable by AI systems, right? So you're starting to look at crypto and people are saying, hey, that's a distributed PKI. That's really interesting. Maybe we can integrate this application with crypto. Farcaster, I think, is a really good example of that. That's a social media company, which is Ethereum native and crypto native. And so people are starting to trade early numbers.

So every user of a social network has a number associated with them, and it's usually sequential. And so the low numbers, the first users, those are being turned into NFTs. People are selling those NFTs and in so doing are basically selling the namespace of the number that they have. So there's a lot of scammy stuff to be sure. And I don't think, if you're a real D-gen and there are telegram channels you've been in forever, and one of your fellow degens introduces a stupid project, but like, you know them from whatever, I think that's a very different proposition from some mass market telegram channel, where people are saying, Oh, go buy this early Joe Bowden or whatever else that that's going to

a lot of tears. Yeah, I think that's a pretty good summary of it. I'm just saying, I shouldn't have been so critical of the things that are coming in the bulk of it maybe are legitimate projects that are trying very hard to do something but i was just kind of piggybacking on the idea that all of a sudden there's this major uptick in a rush to get things to market right a lot of this is probably stuff that's actually been being built for the last year, 18 months quietly. And all of a sudden they see the market go nuts and, you know, they can get wildly oversubscribed and launch immediately.

Right. Yeah. I'm seeing projects that were dead for three years, but like, so there's one project I know of, I'm not going to say it in here so that, so that, so as not to be accused of shilling, but it was pretty much dead, no listings, no nothing for three years. And then in January it got put on otc then the markets started going nuts and then now they're looking at doing things like dex listings and sex listings and various other things so like all of the timetables that people were on

before whereas like you know okay who the hell wants to launch a protocol in august of 2023 when it's just going to you know die quietly in a corner and nothing's going to happen. Everyone's all of a sudden got a new energy about them and they're starting to push those projects forward. So it's really good. And most of them were looking at the cycle and thinking they had until November or December for Bitcoin to make an all-time high and things to run and now they're panicking. I mean, they may, you know what, they might still be right. I don't think all of this is ETF related. And, you know, I had a couple of tweets a while ago where I mean, they may, you know what, they might still be right. I don't think all this is ETF related. And, you know, I had a couple of tweets a while ago where I said, you know, this is basically like

the equivalent of the advent of securitization for credit markets. You're looking at this huge influx of liquidity that no one, and I think people really underestimated, I think it's clear now, people really underestimated just how much liquidity is available and things like retirement funds and 401ks and such that's going to move in. And we haven't even seen a fraction of that. Like it's clearly, you know, the word hasn't gotten out fast enough. People haven't come over and gotten convinced enough. So we're only seeing a tiny fraction, rounding error of a rounding error of the amount of potential liquidity that could come into the space. If you let's assume conservatively, let's say a 1% allocation across the world's retirement funds comes into Bitcoin.

We haven't seen anything close to that even yet. So it's like, there's a long, this has a long, long way to go and a long way to run. I agree. DB, go ahead. Hey, yeah, I'm seeing the same as you and Preston, for sure. VC money's coming back into the space and projects that, like you said, kind of died are just just shows how early we still are. I manage my mother's portfolio. I've got some colleagues and friends that have always been interested in the space. Not a single message. It's just like it's not even discussed at all. I have a feeling it's

going to become a pretty hot topic in the election coming up. It's got to be brought up pretty soon. And I think it was Dave that mentioned it's going to become much bigger in the next 6 to 12 months. It just has to be. I'm expecting that. But we're not there yet, not even close. Like I said, I haven't had a single person ask me about it, which is strange. Go ahead, Simon.

Yeah, but it's great. Go ahead, Simon. Yeah, no, there's definitely more people trying to raise into the market. That's definitely happening. I just wanted to bring in another thing that's happening played like in really bad in the FTX case. So obviously, the FTX had a massive position in solana but it had a lot of time locks that's now being auctioned off but the worst part of it is that if you actually had solana you're being locked in at the rock bottom price they're saying to the world that you're a hundred percent dollar hole but now they're auctioning off that solana

to sell it to i think pantera capital has bidded yeah i think a quarter of it or something maybe 250 million dollars worth i don't want to quote it wrong but i think that's what i read yeah so pantera is bidding on that getting or getting some of the upside because they've got access to the liquidity and then that upside is going to be going to the IRS and other creditors that have put in their big claims. So literally, the upside on depositors' tokens, even though it was meant to be a custody relationship, it is just horrific how you can just misuse these, these, these processes and then the U S government or agencies like the IRS come in and just literally steal victims upside. And then the VCs come along and they're able to get access to the liquidity

to take the upside of those victims is just, just horrible and complete. It's worse than last time you came on and told us what a scam it was because now there's a third party coming in and sweeping it up. Yeah, and it's 100% legal. So they're playing within the parameters of the law. And they're getting a massive, I mean, I know there's a lockup, but they're getting a massive discount as well.

Yep, and now SBF is using it to try and reduce his sentence by saying I made everyone 100% whole. They were good investments. think people didn't actually lose money at all at any point and it didn't even matter so that you know i think fraud is fraud regardless of the the outcome for so i don't think that's going to work too well for for spf but um i think we all know that bankruptcy process is utterly broken and favors lawyers and like you said the government agencies and anyone with the liquidity at the end and not a single creditor. I mean, in the case of Voyager, we got back at the time, 34% of our assets pegged to the price at the bankruptcy. So FTX people are getting 100% pegged to the price. We got 34%.

I think I did the math, unfortunately, in my head this weekend of what my Bitcoin and Ethereum, basically my Voyager account would be worth now. And I think that I basically got paid back 12% at current prices. Yeah. Oh, some good news for any BlockFi creditors. Because of this upside, I think FTX are going to be settling $850 million with BlockFi. So it looks like that's going to be signed off in court, but it looks like there'll be a larger distribution. So bad for FTX creditors, but good for BlockFi creditors.

Yeah, it turns out that bankruptcy is a scam and the longer you go, the more legal fees you take. In this case, having it dragged out, for anyone who did have it dragged out out benefits massively from the market going up. So it actually worked in the lawyer's favors and in the creditors favors in some of these cases, which I think is a rare situation. Yeah. Oh, sorry. Go on. Yeah, I just you know, I just find it endlessly hilarious that Kyle and Sue are on the run and SBF is in prison. And basically all they had to do is not be complete scumbags during the bear market and they would have been fine.

But apparently I've heard quietly. Sorry to interrupt, Preston, but apparently it looks like they've recovered 30 to 50% of 3AC's assets as well, which will be a benefit to a lot of creditors, including Voyager. Interesting. That's what I'm hearing in the background, but I, hedge funds, et cetera, hedge funds, buying claims, you know, like buying claims for 20 cents on the dollar that they expect to be 40. I think, Simon, you might know, how low was the market once on FTX claims? Do you remember? FTX was, it started at 10%. I think it's now 80% on the market.

Right, so those people bought people's... And talk about getting hosed as retail. You panicked and you sold your claim for 10% because the market was so bad, and now somebody's going to cash that claim for eight times what you sold it for. Sorry, Preston, I did interrupt you. Go ahead.

No, no, I had nothing else worth saying anyway. Yeah, the thing with the claims investor though is that they're in in dollars so all they need to do is is play that game it's still a i mean it's a highly risky game because you're trying to play the clip on that but but if you if you started in dollars you know you're fine if you're a stable coin investor you're fine um it's the crypto people that just got absolutely. And it's just excruciating because every single one of these people are going to have their Bitcoin pizza guy story. And hopefully it makes you a better investor.

And you don't put and you don't use that to put you off Bitcoin forever because Bitcoin at FTX is not Bitcoin. And I think Bitcoin ETF is probably not going to be Bitcoin. But I do think that will be some disaster stories that we're going to experience together. So make sure you learn self custody eventually. And that's the story. And then make sure your disaster story isn't your failed self custody. Exactly. There you go. We find creative ways all the time in this market to lose money. Dave, go ahead. Yeah, I think that the I heard the Hitch and Simon's voice on the probably on the ETF. I'll take the other side of that one only because the fact is, is in their covenants, the ETFs have to hold one to one. And so the also there, because the ETFs themselves are securities, it gives additional protection.

The reason we have this problem, and, you know, I hate to get up on my soapbox and bash the SEC and Elizabeth Warren and everything again. But the truth is, the reason we have this problem is because there's no, and I'd love to hear Preston's point on that, view on this if he's still here, is as far as I can tell, there's no legal framework for protecting the tokens on a crypto exchange in the United States, whereas there is a legal framework for protecting securities in the event of a bankruptcy. And that's a large part of why we need the FIT Act. Yeah, that's right, actually.

There's a special bankruptcy regime which applies to securities where if you're holding the securities and then the exchange or the broker-dealer goes insolvent, you can get paid back the securities. And I believe there are some tax consequences to that which are beneficial as well, although I believe there are some tax consequences to that, which are, which are beneficial as well, although I'm not a bankruptcy expert. And the issue with the crypto bankruptcies is that crypto is treated as just ordinary property and not as a security for the purposes of bankruptcy law, which seems kind of unfair, given that it's treated as security by the SEC, it's treated as property, which is not a security

by the IRS and the bankruptcy code. So you've got two different government branches treating it differently. So there can be weird or funky tax consequences. If, for example, you put your Bitcoin into Celsius at $20,000, then they go bankrupt. Then you get your Bitcoin back, let's say, at $70,000 or $80,000. And then you've got, it's not a step up in basis, that's a different concept, but basically you have an increase in the value of the property. And there is a likelihood, I think, that that's going to be taxable, the award that you got back, whereas with the security, that wouldn't be the case. So there definitely needs to be a regime. And other jurisdictions

have had no problem wrapping, getting crypto its own regulatory regime. And other jurisdictions have had like no problem wrapping, you know, getting crypto its own regulatory regime. In the US, they pretend it's impossible. But like the UK has a, where I'm also admitted, has a specific crypto regulatory regime, which doesn't treat crypto like securities. It just treats it like property for the purposes of securities law. Right. And so they kind of, you know, whatever the UK bankruptcy considerations would be, would be slightly different. So we do, the US like just hasn't moved at all. And we're still operating in these, in some cases, almost century old frameworks, and we need to update them, right? And it's possible to do it. It's just that Congress can't.

Hey, Simon, the other unspoken part of that same sort of scam for Celsius and Voyager creditors at BlockFi, I guess, to a lesser degree, is that all of that interest that was paid was taxable. So, I mean, I can speak for myself, but I paid taxes on all of the gains on everything in the account before it was lost. And there's nothing to do about that either. Even worse in Celsius, if you're not from the US, no tax advice, everyone, but when you deposited to Celsius, you relinquished ownership of that token, and then they didn't keep it in the same form

because it wasn't a custody, so it obviously changed title, which is a disposal. So you've actually got a tax issue from the past to figure out uh when you deposited it um as well as all that so yeah sorry not tax advice and sorry if i ruined anyone's day but um it's an it's an absolute shit show but um just on the there is a just you know there is a risk that does need to be disclosed and if anyone actually read the prospectuses of the etfs i didn't do that i didn't go through that process um but in the case where if they're cussing at coinbase and

coinbase coinbase gets hacked um then obviously it's back one-to-one but they no longer have access to that key and so there must be a very I'm sure the SEC went through exactly how that is treated in that case. Maybe they get a claim on the recovery of the hacked coins because it's still property and custody. But did anyone actually go into that level of detail to figure out what happens if the custodian gets hacked and they can't access the key again. My understanding is that with custodied coins that under the bankruptcy code, and again, I'm not a bankruptcy lawyer. There are people at my firm who are actually better positioned to speak on this, but obviously they're not here and I am. I think when it's a custodied coin, you avoid most of the tax problems around the sale and disposal of the coin, and then also the fact

that you're getting a claim back from the bankruptcy estate, which is not the case if you had something like Celsius, where the assets were pooled. So there's a distinction between those two positions that a bankruptcy court is likely to look at. Again, if you're worried about this, you need to talk to a tax lawyer or a cryptocurrency lawyer who has specific tax or bankruptcy advice. And like, I'm happy to, I don't do that, but I can refer you to people. Yeah. I mean, Preston, we had like, I don't know if there, we haven't really seen this answered, but prime trust lost keys, right. And lost access to a wallet. And I think fortress had some sort of hack or something similar. These were trusted regulated custodians, by the way,

how these stories went underreported. I don't know, but there should be some had some sort of hack or something similar. These were trusted, regulated custodians, by the way. How these stories went underreported, I don't know. But there should be some. I think that's still actually going through the process, so we don't have clarity. But that would probably be a good example, Simon, of what would happen, however they sort those. I guess it remains to be seen. We have to watch that one because um that is how how it would be

treated but the the reality is is the assets aren't there and if the company has to go bankrupt and the custodian doesn't have the assets yeah uh they maybe they committed well you know if you'd have to i guess you'd have to prove whether it was negligence but even then that would just lead to a criminal act and whatever that in the case of prime trust we prove whether it was negligence. But even then, that would just lead to a criminal act and whatever that is. In the case of Prime Trust, we actually, it was right when we started Crypto Town Hall and we got all the information in advance and we chose not to share it. And then when it started to become public, we did a pretty big deep dive. allegedly, but seems very clear if you dig into it. They lost keys and did not do their obvious duty to report it to their insurance company or to anyone else. And then they actually attempted to trade their way out of the hole.

So massive fraud. But even then, what is the insurance? Because if it's custody and they've got property and Bitcoin has ripped since then, it's going to be the dollar value of something that's insured, not the Bitcoin. Yeah, it's going to be very similar to the retail bankruptcies. Yeah, that's a good point. So there's always – I think the bottom line as we sort of move to wrap here is there's always risk. Right.

And unfortunately, there's always going to be – in this case, unless you're self-custody, there's always going to be probably some third party that you're exposed to, no matter how trusted that you have to be aware of. Well, we've got Bitcoin now. Funding rates are rising, Dave, by the way. People are getting more long. If you weren't paying attention, I kind of seem to notice. Bitcoin's back down to $67.7. Ethereum back to $39. So clearly, there's a hell of a lot of selling interest as

Bitcoin reaches highs at this point. And I would have imagined we would have seen a bit of a flush of that open interest, but people are just getting longer. So it's going to be interesting, I think, to see what happens. Guys, thank you so much. I hope everybody has a great weekend. It will be interesting to see if we see more fireworks, but appreciate the contributions of everybody on stage. You guys are amazing. Love having you back consistently, all of you and having these chats. It's really great out by thing for the audience.

So everybody please follow our guests. If they're up here, it's because we really, really like respect and listen to them. So I encourage you to follow everybody on stage until Monday guys. See you soon. Have a great weekend. Bye.