The Wolf Of All Streets - Bullrun Slowing Down? BTC & ETH Sideways, ALTS Pumping | Crypto Town Hall

Episode Date: March 18, 2024

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Good morning, everyone. Happy Monday. Just getting all the speakers up on stage. Quite a day in the markets. A bit of a correction over the weekend. Hunter, good to see you, man. Bitwise, about $2 billion in market cap now on BITB, huh? I bet that's a little faster than you expected. That's right. Yep. It's great to see you. Great to be with this group as always. Last week, the Bitwise Bitcoin ETF crossed 2 billion after about two months. So, definitely continue to be excited about the adoption and engagement with the Bitcoin ETFs. My recollection may be incorrect, but I feel like weeks before the ETF was approved that people thought if we got $2 billion total, that would be good. That's right. Yeah. I think that they really have exceeded most of the expectations. I'd have to look back at the predictions we had from January, but I suspect that you're right. I'm looking now, it looks like obviously,

including Grayscale, but total market cap of all the ETFs I'm seeing is about $56 billion. I mean, I think that's way, way beyond anything anyone expected. Yeah. Yeah. Yeah. Substantial. Substantial. When do we pass gold? Yeah. I mean, it's a of which had come out of GBTC. So net, maybe $12 billion, which is just extraordinary in two months. And I think speaks to how enabling the vehicle has ended up being for investors who want to access the asset class. So feeling really, really excited about what we're seeing. Yeah. And on top of that, I remember last week, we had two days that were over a billion net inflow. So of that 12 billion, you know, there were in just two trading periods, you know, we added 2 billion of that. So clearly,

there's an uptick and increase there. Yeah, extraordinary. Yeah, sure. I mean, it's really another nuance of how the Bitcoin ETFs have in some ways exceeded or surprised my expectations is that you would imagine after 10 years of work on Bitcoin ETFs, then finally launching and being a much followed launch that you would have a significant opening. But the reality is that now, you know, 9-10 weeks on since the January 11th launch, they're still chugging along with just as meaningful of inflows as when they started. So I haven't tallied it up, but as you said, last week may have broken the record for the biggest single day of inflows. And that's now two months after they've launched.

So we continue to see a lot of large investors doing work now that the Bitcoin ETFs have launched. But I do think that there'll be a strong second, third, fourth inning for these products, because many who want to use them have been meeting with us, have been doing work, but actually haven't yet had the chance to deploy into them. I think we have this really interesting and very defined dichotomy right now in the crypto market where you have the Bitcoin spot ETFs on one side that are obviously fundamentally driving the price of Bitcoin up, very obvious. And then you go to the flip side of the crypto degen market, and we have this absolute mayhem and insanity of what's happening with meme coins,

largely on Solana, which has obviously pushed the price of Solana near all-time highs over $200. I mean, I saw two tweets this morning. One was from Josh Rager. He said that a dude raised over $30 million in a pre-sale in under 30 minutes by listing an address on social media. Gary Gensler doesn't understand the power of apes effectively, what happened there. And then the tweet he was quoting got deleted so perhaps after that 30 million raise uh that disappeared uh so who knows if that's a rug pull or otherwise but a guy literally you know an anonymous person with a sufficient following on x posted a pre-sale said this is 20 of the supply send to this address and people sent 30 million dollars in 30 minutes

without vetting anything, without knowing if any of that money would come out, without any of that. And then Dave Weisberger pointed out on Macro Monday this morning on my YouTube show, there was a coin called Slurf that had the highest funding rate. So by the way, these meme coins launch and then on Bybit, it's already available to trade with leverage, which is the dumbest idea you could ever have as a, as a trader, I would say. But, and then from Slurfsoul, this is the person who launched Slurf, I guess, guys, I fucked up.

I burned the LP and the tokens that were set aside for the airdrop. Mint authority is already revoked. So I cannot mint them. There's nothing I can do to fix this. I am so fucking sorry. So effectively we had this coin launched. The presale investors won't receive any tokens. They will not receive any Salada refunds. And this coin is available to trade with leverage with extremely high funding rates because people are shorting it on Bybit.

Are we at the froth stage here, guys? Steven, listen, you went through the entire entire ico boom ethereum you've been through every single cycle are there any signals here that maybe uh we've gone insane yeah no this is but the meme coins this is actually crazier than we've seen in 2017. i mean at least they pretended to be projects like Like, so in some ways, I think you've got this whole new group of people that came in that were not there in 2017. And so they just have no experience with it. We really haven't had one since then. On top of it, we just haven't had a lot of ICOs that have had these pre-sale rounds for quite a number of years.

So I think it's kind of scary. It's not going to end well. It's not going to end well at all. I think you're going to see these. When you see the first couple, like the one you just mentioned, where he couldn't mint the coins. I saw that too. I mean, that's kind of crazy, but people just throwing in their money without even looking at it right now. Yeah, to me, it's just absolute insanity.

But we have seen it before. But I do agree with you that this is worse than or crazier, I should say, more insane than the past cycles, which is saying a lot because, you know, we really don't have new retail investment or retail interest. You know, the meme coin cycle was, I don't even know how to state this, but a bit more controlled, I guess, in the last cycle, right. It was Doge, which was the original meme coin that was really leading all of it. And that was a result of Elon Musk tweeting about it and Mark Cuban accepting it for the

Mavericks. And largely, the entire retail bubble of the last cycle was driven on the back of meme quotes. You had three-month waiting lists at exchanges just to sign up. Robinhood was doing insane volume just because people wanted Dogecoin. This is now the crypto deggen just flipping and pumping and dumping all over the cell, you know, on each other. I think I don't think this is retail yet participating in this, but I do agree, Stephen, most people buying these,

it's ending badly. Go ahead, Zach. I think the problem, I've been thinking about this a lot recently, and we talked last week about, you know, are there top signs here? I think the challenging thing is we are at the Schrodinger's cat part of the cycle, meaning that we are, you know, this might be the end, right? And we speed ran the cycle. And we have all these late stage signs, or it could be the beginning of something massive. And I think you could make a reasonable case for either I think the community sort of largely lines out that they were at the beginning of a massive bull run, perhaps the last ever giant crypto cycle. And in that world, it might be rational in some weird... I mean, this is a terrible investment and legal advice, but throwing money at a project that has the ability to have massive gains on its

first day, you can understand how people get there mentally. Hopefully that's not what you're doing with your entire portfolio. But like in crypto, like there is the barbell of like, you know, stacking Bitcoin consistently and then these incredibly degen place. Yeah. I mean, I'm looking at the news that we have here and actually on Slurf, according to look, I can't believe we're talking about Slurf, like on a serious show, but according to look on chain, there was a wallet that spent uh 1.98

billion to buy 69.7 million slur at the opening and then sold it for 25 000 sold within 12 minutes earning 15 000 soul or roughly 3.02 million in 12 minutes so I kind of Steven what what happens here we're talking about before this is one of those things where a few people make massive gains, everybody sees it and they think they're going to do the same and probably just end up losing or riding them to zero. The other problem is that it's a game of hot potato with these memes. So unless you understand that you need to sell very quickly when they go up to move on to the next one,

you're likely going to just ride it to zero, which I think is what happens with a lot of people. Vinny, you've been here for every cycle. What do you make of the meme coin craze right now? I'm very concerned about it. I mean, if you look at Solana's recent stats, I think there's something like a million signups in the past 24 hours or this weekend or something like that.

These people aren't doing advanced DeFi stuff. They're not like advanced traders they're not uh crypto natives they're coming for the memes now that might be product market fit to some extent but you have to ask yourself what the longevity is of it and obviously i'm a cylinder ball and i'm crypto bull but i'm very concerned when i see spikes like this because it's just capital rotation. It's, I call it, you know, it's crypto musical chairs. It's all fun until the music stops and then no one's got a seat. And so it's not part of the thesis I have

for sustainability and utility and real value creation. I think it's a passing fad and I think it's distortionary. So I'm a little nervous and I'm, you know, as I've been telling people lately, I'm trimming. I'm like, there's no reason to be, you know, irresponsibly long on anything right now where you see this. And then the other thing you're seeing is in terms of rotation out of Solana and, you know, from Bitcoin to other alts, etc., you're not seeing a lot of the craze we saw in 2021 where everything would move up on the same day at the same time. You're seeing value rotate into very specific coins and move, you know, along very, very narrow narratives as opposed to sort of broad market moves.

So, you know, that indicates to me that there is some rationality in the market to some extent. But having said that, I do think we're, you know, we've had a really good run right now. And if you're not trimming your portfolio and playing a little bit defensively, you know, it's a little gambling, a little bit like gambling. So I'm not a bear i'm just like guys this is like be rational we've had some serious gains over the past you know year and a half i mean solana's up from eight bucks low to over two hundred dollars um you know render has gone from 40 cents low to 13 bucks last i checked and you know There's some big gains in the market. There are people who are going to have...

Obviously, Bitcoin's gone up 4 or 5x. It's possible we could have topped in this cycle, and then we go back for a smaller pullback and then recover. Who knows? I'm a little more defensive right now. Nobody ever went broke taking profit. If you're seeking the top, then good luck. or defensive right now. Nobody ever went broke taking profit, you know, right?

And so if you're seeking the top, then good luck. I said the same thing on my show this morning, actually, that I had over the weekend, and I've trimmed a lot. I don't sell Bitcoin, but I've trimmed a lot of altcoin positions, taking, you know, whether it's 10%, 25% of the position off the table when I'm up multiple Xs, something I always do, regardless of what I believe the cycle is going to do. I literally tweeted right before this show. Right before the show, I tweeted a question worth considering in any market, especially one making new highs. What would you do if this was the top?

So for me mentally, having gone through the past cycles and being a victim of the full FOMO, and it's all going to... Bitcoin is going to $250,000 and all these things are going to $10 billion market caps. I always have to keep in my mind, what if my entire premise is wrong and this is it? What would I do? So I think it's just a good mental framing for me to avoid the FOMO of the past. But I agree with you. And I think we have this capital rotation, the altcoins, alt seasons of the past that you mentioned, Vinny, when everything would go up at the same time. Maybe those days are actually over. Maybe there's just too many tokens in the market.

If there are 20,000 alt coins in the market, they just can't go up. Absolutely. That's exactly right. I think the market's a lot more sophisticated right now. I think capital flows into the right avenues and corridors, into the right coins when there is a rally. I think there is a trickle-down effect. There always is to some extent, but it's just not as pronounced as it used to be. And look, I know there are a lot of bulls out there that are screaming for 100K Bitcoin, 250K Bitcoin in this run. There's a lot of risks,

obviously, as well. We also never see a situation where Bitcoin breaks its all-time high and stalls and comes back down below it. Well, we did with 69 past 65, but some would say that was sort of double-toppy. Yeah, that was double-toppy. I mean, it was kind of in the same cycle, in my opinion. But, you know, maybe we see something, we see it go up again. I am very concerned about the ETF concentration of coins. So the one thing I made a point of last night on the space as I was on was that, you know, we've got 21 million bitcoins in total. I think we're at 19.5 right now.

We've got about 4.5 lost, presumably. So about 15 million coins, in actual float. The number that's actually trading right now in the past year, last I checked, I think it was like six to eight million. It's not a huge amount, obviously a lot more in cold storage. And then you've got the ETF concentration of coins plus micro strategies sitting at half a million-ish coins and growing very quickly. The moment this number gets to, and it probably is nearing a significant amount of the float uh you know we're getting to a point where if you have a long weekend if you have uh you know a bad um weekend of trading a you know a big draw down there's two things and it's worth pointing out that ETFs trade five days a week and Bitcoin trades 24-7.

So you always have this lag. And you have a lag going into a long weekend, Tuesday or even a Monday, where there was a big drawdown on the weekend. And you have to rebalance and readjust these holdings. You've got to find bids for these coins. And so what do you do when the market's down 20% and you're trying to find bids for a stash of Bitcoin? And then what happens to alt in that scenario as well? It's worth considering that.

And also the other thing is the halving's been priced in, in my opinion. There's no way we're moving into the halving with this sort of furor and say, oh, it's not priced in. Because the actual impact of the halving is very, very small at these inflation levels. So it doesn't really matter as much. Yeah. Hunter and then William. I just want to – William, can you hear me?

Hunter first and then William, please. Yeah. Go ahead. Hunter. Can you hear me? Hunter first and then William, please. Yeah. Go ahead. Hunter. Can you hear me now? Yeah. Just a very brief question to piggyback on, Vinny, what you were and then the asset, you know, assets pull back going into Saturday, and they come up a little bit on Sunday. My sense is that this is an emerging pattern. I'm curious, with this group, who, you know, is very plugged into what different traders and

investors are doing. How do you how that pattern of drawdowns over the weekend and then asset prices coming back up on Sunday? What do you think the story is there behind the scenes? Isn't that just CME gap? Is it like the CME gap on meth now because we also have the ETFs that effectively stop trading on friday and resume trading on monday yeah interesting i mean i would say you know the cme gap as much of it is a meme for people who don't understand obviously cme futures don't trade on the

weekend and bitcoin continues to trade so there's a natural rational tendency you would think for price to sort of uh mean revert on monday for them to meet right the price of the cme and the price of the actual spot bitcoin so i think now when you throw in the etf basically you know the prices have to kind of come back together on monday to some degree so i don't know but but i don't know how that explains saturday versus sunday necessarily right uh oh i think we've seen that on Sunday night for a while. But that's because Asia is opening. Right, that's because Asia, it's Monday morning in Asia.

So that actually makes a lot of sense. I can't really speak to why Saturday and Sunday would be different. I don't have a great idea there. William, I know you want to go ahead. Yeah, two thoughts, because we're talking about two different things. One, the ETFs and then the means. On the ETF side, the questions on my mind right now is what's going to happen when the ETF inflows start to slow down. And this is the beginning of the week. We'll have to see. Furthermore, tied into this, when will the registered investment advisors come in?

Apparently, they need three months of trading data before they come in, because right now, the ETFs have not been made available to that segment of the market. So that's something to think about, whether we see a dip before the three months get closer. The second one, since we've talked about the meme coins, what I've been impressed with with the meme coins is how quickly they've been able to integrate in the variety of segments, be it DeFi, NFT, gaming, and obviously the exchanges start to pick them up afterwards. And that's a tribute to the Solana ecosystem, meaning that once you're in there in the Solana ecosystem,

it's just one ecosystem. Everything starts to work together, as opposed to if you come in on an L2 on Ethereum, let's say base, then you're really in the base ecosystem and you have to jump through a few hoops to make yourself available easily to the other L2s and to the rest of the EVM, which as a whole is big, but really the meme coins on the Ethereum side are launching on it. William, can I ask you a question? I'm sorry to interrupt, but in your opinion then, obviously, you know, as Vinny spoke to,

we see the meme coin hype on Solana or within these other ecosystems as well as really driving the entire market cap TVL of these protocols, right? A lot of people would say Solana has massively mooned because people are trading and rotating in meme coins. Obviously, they need Solana to buy and sell in and out of these things. Do you think though, to your point that that is actually moving into more, let's say, legitimate use cases on those chains? Is it moving into DeFi when somebody exits a meme point or is it just rotating in and out, which is sort of the musical chairs that Benny talked about? I have my doubts that just because the money is in the ecosystem that it's going to find, it's going to stay there

or that's going to find a more sort of mainstream or legitimate use case beyond just speculating on meme points, which is fine. Yeah, yeah, that's a good question. I think it's a bit of both, but leaning more towards the speculative aspect, kind of waiting an expectation of seeing utility. Most of these meme coins, they are promising utility of some sort, whether you're buying into an NFT collection or a promise of a gaming of some sort or a promise of a social coin being useful for doing this or doing that or earning this and spending it there.

So there are lots of hypotheses. It's hypothetical at this point. Yeah, it's easy to show a little bit of activity, to show that you can prove it on a small scale, but to grow it on a bigger scale, yeah, it's still the proof. Yeah, even Franklin Templeton, obviously one of the larger financial institutions, I don't have it in front of me, but they wrote a report last week on meme coins and the power that they have basically basically, as I described, in driving interest in those protocols.

I've even seen people say basically that it's the whales in each of these protocols that are creating and sending these memes up because it drives more to the protocol and then obviously drives the token itself up. So then I think the next natural question, and Vinny, I see you giving the 100. And Steve, the next natural question is when the meme point music stops, let's say that in the Solana ecosystem, we get some sort of, we always see these cycles cool.

If it stops, do people sit there in Solana or do they sell their Solana for dollars? I think 90% the latter. the latter really what do you think so actually i think people will go into solana initially because that's the first gut reaction is like you're going to salon and by the way just to be very clear i'm a big solana bull yeah i've been here since the beginning i just don't like what I'm seeing here because I think this is a distraction from the real, I mean, sure, there's some real value here, but if it gets to the point where the value is going to start distorting the underlying reason why we use, I mean, and I totally was

already tweeting about having to increase the block size because people are using this for meme coins. And, you know, look, look it's gambling that's what it is nobody knows how this plays out there's no real most of these things are are uh sucker bets you know whatever some of them might pay off but most of them are sucker bets um but this is a good question sorry just just just answer this question um Scott's question, my thesis on this is the money will initially flow into Solana. However, if the number of net new buyers of Sol drops and you see the price hitting a topping point in the charts and you're not going to get a million people over into Solana in a week or a day or whatever it is to buy more Sol to go purchase some ecoins, obviously, then you reduce buy pressure in the market, then it starts going

down. And when it starts going down, then you have people saying, well, I shouldn't go out of Sol into USDC or Bitcoin or whatever else. So there will be a rotation there. So it's hard to predict exactly how it plays out. But at the moment, what is helping prop up the price of Sol is this. The other thing that's concerning is obviously FTX has been selling the SAFs at very low prices recently. This is a well-known market fact. I don't know whether I've seen it publicly or not. It's public. Yeah, it's public. It's like $60 and stuff.

I personally declined to participate in it, but it's a four-year lockup, and a lot of it comes in the first year. And there is a lot of incentive for people to pump the price in the short term to get the price up so that they can offload short and basically hedge out their SAF. Yeah, I mean, it looks like the GBTC trade at the premium, right? I mean, that's what it looks like. So for people who aren't clear here, I believe it was Pantera was looking to buy $250 million worth of Solana from FTX bankruptcy at an extreme discount. Now we can debate why they would sell the discount if they can literally like raise more money by actually selling Solana on the market at a much higher price. I heard Brevin Howard was doing the same. I even heard that some of the university endowments who are invested with the Brevin Howards and the Petters

or specifically Brevin Howards of the world are also being offered this opportunity to buy Solana in it. So this is trickling down pretty far, Vinny. But why would they do it? What's the motivation for a discounted OTC deal right now when price is so high? And by the way, creditors had their Solana sold at $9, which is the real scam. Yeah, absolutely. That was the biggest scam of all. Okay, so let's go and just analyze this very briefly, right? When the SAF deals were being discussed and done, the price was like 120, 100, 140. And the reason that there is a discount, obviously, is the time value of

money. If you're waiting four years for the sale, there has to be some discount. So there's no real juice in the spread between, call it 60 and 120. The moment it goes to 200, there's a lot of juice in it, or even 250, 300 300 so you can now borrow because you've got the guarantee of deliverability you can hedge it out and you can short sell the market and you make you make huge returns in a week or two or three or whatever it is and now obviously the ftx estate will start increasing the price but for people who've been buying recently at these like 60 prices they're going to want to take profits. And the way they do it is by buying. So it increases the funding rates of Solana.

And if they can find someone who's a lender who will take the collateral that the SAF will be there and they put down some collateral and pay some interest, it increases the demand for Sol in the short term because you've got people trying to borrow. But again, there's a lot of incentive right now for these guys who are trying to arbitrage the market here to spend a couple of hundred thousand bucks here and there creating these meme coins. I personally have seen no value in Joe Bowden and Elizabeth Warren, other than just to piss off the regulators and the political class and have them come after us. And, you know, whatever that's elizabeth that is

elizabeth horan sir it is pronounced horan just that we're going to be clear yeah by the way i was trying to be nice that's good you've got me here to run with that um i said the word bankruptcy and simon magically appeared good job simon i was so you know we were talking about the ftx bankruptcy and you magically appeared on stage, your favorite topic. And I pointed out something that you often point out, obviously, which is how badly creditors got screwed doing these OTC deals. I think we talked about this last week or the week before when creditors got none of the upside and forsold their Solana, you know, sub $10, right? Yeah. So, yeah, the ftx people so spf gets to say i made everyone 100

whole zach prince from block fire is doing the same thing mizinski from celsius is doing the same thing um because they're well mizinski because i fought in court to get us out before we got 100% whole. We made an additional $1.5 billion on what everyone else would have lost because FTX sold at the bottom. And then we got the additional upside from there, which was another $1.5 billion. So you're talking about a $3 billion difference in creditors' dollar recovery by not selling the crypto and understanding the whole rug pull game. But in the FTX side, it's like a triple whammy.

So first you get scammed by SPF. Then that crashes the market and they file for bankruptcy on the exact same day the bitcoin hits sixteen thousand dollars so then everybody's claim gets dollarized at sixteen thousand dollars um and then they try to sell everything so they they they work a trade so it locks in everyone's loss but there was a bunch of illiquid assets like solana um they had time locks, so they couldn't sell them. And so now they decide because some of the assets have appreciated, we're close to, you know, we're over 100% whole in dollar terms with a $16,000 Bitcoin price. And all of the increase in Bitcoin is what bailed them out essentially. Then they sell off Solana that's like worth whatever it is right now, $140 or something and go to the VCs and say, how much do you want to pay for these things?

So then Pantera goes out and says, oh, we'll raise finance and buy all of your Solana at like 60 cents because it's time locked and we can afford to do that. And so then they go out and raise finance. So all of the upside from Solana then goes to the VCs and then anything else on top of that, because you, once you hit a hundred percent whole, it goes to the next subordinated class of creditor, which is Alameda Investors and the IRS. And so the IRS puts in a $47 billion claim and says, yeah, we'll take all the upside from there. So essentially, because of the bankruptcy process, you get trolled by SPF saying, we made you 100% whole. Then you get the VCs taking all the upside

on your token because they're auctioned off. And then you get the IRS and the US tax authorities saying, we'll take all the upside on that. And all the lawyers and the bankruptcy court take a billion dollars of client money that they're spending, essentially, where they've legalized the process of doing exactly what SPF does, which is just spending client money, and all the vultures come in. It's the sickest process ever. And really, if all that had happened is everyone just got their assets back, then they could have rode the whole upside. And yeah, they would have locked in their crypto loss, but they wouldn't have needed all of the additional stuff. And the IRS wouldn't have sold the upside, would have stolen the upside.

It's a sick process. Crypto and bankruptcy don't match. Yeah. So, so the short answer is FTX doesn't need the upside now from the full price of Solana. Right. So, so they can, they can do exactly what you just described. Pretty insane. Ron, listen, you obviously kind of track what's happening with the government and legislation and regulation for us. Do you think that any of this meme coin madness is on the radar,

or do you think that at this point it's sort of a relevant part for the course? I'll definitely say it's starting to get on the radar here. And we're seeing two camps. So at least more of the crypto champion side or those who are supportive of the industry in Congress are saying the reason why we have all these meme coins is because the SEC has said if you have actual utility for the most part, we're going to go after you on the enforcing and if you're a meme coin we're just going to let uh you know go out into the ecosystem here uh so that's been kind of more the frustrating thing to see from the pro side on the con side

uh we've actually saw this last week where we saw two centers say see all this bitcoin etf stuff it just unleashed all this flurry of you You know nonsense here. And the- SEC should not be approving anymore ETP's. What do you get that coincide theory and whatever your- in the future. And I think. That came from two senior democrat senators. That's probably political cover against their needs on top of other things to keep denying the ETF on the east side- but yeah we're I'm not expecting anything. In terms of

positivity anytime soon, unfortunately, from DC. Yeah, Dave, you kind of had a nice rant actually this morning on YouTube about this very topic and how meme coins effectively are going absolutely nuts because of the Elizabeth Warrens and Gary Genslers of the world because if they have no utility, they obviously don't fall under the auspices of security law. Ron said it very quick, very succinctly. The rule is simple. If you try to monetize the value of a social network and provide investors in your coin with any defined participation in said network, then you're a security and they're going to punish you.

Now, whether they will or not, who the hell knows? But that's certainly the threat. On the other hand, if you say, hey, this is just for fun and there's no utility and whatever happens in the secondary market, it's up to you, it more or less is this exact same thing as Beanie Babies were when the Beanie Baby craze happened. I happened to watch that movie, Scott knows, on the flight to London. It's on that Digital Asset Summit right now. The simple fact is, is you could draw a straight line many times in our history from government actions to perverted effects that they claimed were unforeseen consequences that were completely foreseeable this is completely foreseeable and I think it's very clear that those who understand it get it and it's just

like it's like anything else when the government stops you from doing something people will find a way there's not a whole lot of difference in in the market action and so what we saw in the internet bubble with stocks so to make a claim that that securities would somehow make this impossible no just higher burdens but the reality is is when you tell people what they can't do they're going to figure out what they can do and that's what's happened here uh that said you know it's like i i have a very hard time understanding why they would buy something that's not limited that they don't know what the economic value will be. It's just based upon what other people might pay for it, you know,

in the next five minutes or two days. And that's what's going on. And so, you know, it's one of those things that it hurts the creditors. You know the answer. The same reason we play craps, blackjack and, you know. Damn Skippy. That's exactly right. You know, they turn it into a casino and they wonder why it

becomes one maybe to to jump in um to to kind of some interesting insights we we had from some of our partners um and people who really actively are more like you know moving around this kind of degen space um it looks like like twitter is no longer the main place for these debates like tick tock actually started to move markets. And if you follow some of these meme coin movements, they've come from TikTok. So that does indicate that there's younger generations actually entering the market. And they associate these... I think for me, I was long-term skeptic of meme coins. I never really bought any. I never understood. I started looking into them more, not because I think that they have a finite supply. They're not Bitcoin,

not Ethereum. It's something very different. And it's obviously an online casino without doubt. And it comes with all the pros and cons of that because speculation does drive adoption. But what you do see is younger generations, they're so used to like these memes, these point systems just from their day to day, from the games and like social media, that for them it's natural to now just translate this. I mean, and again, that's only speculating based on conversations I've had, but it seems more natural for them to translate this also into investments. And I do believe that that's what we're seeing and we're not going to see meme coins go away. I mean, you still have Doge as one of the leaders in the space.

And I think you'll just see more. It's just like DeFi somewhere with the vegetable coins. But I'm certain that you'll have a few survive just because of the culture around them. If you look at all these DAOs on Ethereum that still exist and have quite big treasuries that got started in a similar way um i i wouldn't write it off i i think it would be a mistake of of you know and i'm just very sorry to say that here um but like of like i guess like all the generation writing off what the younger people are actually doing and i think that could be a risk um also on financial decisions yeah i just i feel like i have to respond to that only because i actually agree. And most of the people at my age, I think I may be the oldest person on some people lost money because they got into whatever late had to do with an actual good business idea of

turning a brick and mortar store with an enormous following into an online community and then other memes that happened which made no sense whatsoever like amc movie theaters is all of a sudden going to be cut when a rise from the dead you know know, post pandemic. I mean, a lot of this stuff made no sense, but the point of all of that was they were accessible and we've made crypto tokens with utility much, much harder for a lot of, for certainly for us retail to access and younger people even harder so but with defy all of a sudden that becomes the force where where the younger generation can get access to i mean you find me a 20 year old or an 18 year old that doesn't know what pancake swap is and i'm gonna that's gonna be a rare person right they all know and they're part of it and that's a generation that's going to be relevant

and the older generation seems intent for reasons beyond me to try to control them and stop them from doing things and once again water finds its level people will figure out how to do things when they're stopped from doing things that they want so no i don't want to write it off agreed uh michael i saw you and you requested. Did you have thoughts on this specifically? Yeah, give me two seconds. You good? Go ahead, Mikkel. Yes, really. Ron, actually, one of the things we've heard a lot from the Republican side of things was that they were going to be working to hold Gary Gensler accountable. They were going to be calling him in. They were going to happen in front of Congress. And it seems like to me, Gary Gensler is held just as responsible by the last administration, the Democrats, than the Republicans are. I think I remember twice, maybe three times he was called in front of Congress under the Democratic House. And what's it been only once, if not over a year

since he's been in front of Congress. So whatever happened to the efforts of actually putting Gary Gensler on blast and kind of pushing him on some of the shortfalls he had in kind of creating the issues we see today? Yeah, I think the thing to keep in mind here is that the Republicans only hold one element of Congress, and that's the House. And that's the least powerful, you could say, of all the branches here. I mean, also the Senate, who confirms or denies appointees. But we've seen, obviously, the Republicans being a lot more aggressive here. Like this week, for example, there is a hearing in financial services on the SEC overreach. Again, Gensler's not there personally, but I would not be shocked.

He's going to be there probably next two or three months or so. You know, he comes in front of that committee, to your point, probably once or twice a year, especially if Democrats, probably once a year, Republicans probably twice. But at the same time, they can only do so much. I mean, take the board, DHS Secretary Mayorkas, who is renowned, at least among Republican circles, as someone that should be impeached potentially, but that's going nowhere in the Senate. And I think that's kind of just the political dynamics where, you know, the Republicans can raise hell here as much and as loud as they want, but at the end of the day, you know, they only still have half of Congress. Even then, they have a hard time doing things like funding the government. The last thing I'll say, too, though, is that there's actually a decent amount

of Democrats who have been flipped on Gensler, whether it be the ESG side of things, his attack on private equity, crypto. And he's pushing in a lot of directions here. So hypothetically, let's just say today there will be a vote for Gensler to be reconfirmed. Again, that wouldn't happen. It'll be in two years, likely, if Biden still wins. But I'd see even right now, I'm not sure he would get 51 votes. I think there's enough Democrats who have been irked enough by him, you know, multiple ways to not vote for him to go around again. So he is losing popularity. But at the same time, the Republicans can only do so much having only control of the House. And right now, again, they have the House

control by two votes, which is the slimmest majority, I believe all of Congress for majority. So we're talking very slim, and they're almost in a standstill for anything. So we'll see if they even fund the government again, on Friday. So it's a it's a very slow Congress to say the least. William. William? Awesome, thank you. Go ahead. Sorry. William, go ahead. Yeah, since we're talking about the SEC, my

conclusion right now is that it's clear the industry is stronger than the SEC. It's done. I think the industry has completely circumvented the SEC at this point, whether it's within the US or outside. The reality is that the SEC cannot go after all of the token projects. Their strategy was to go after the big ones and then to prove that that could be a guidepost for the rest of the industry. I mean, if they won a few, then they win by virtue of

litigation. But that was their hope. But as we well know, as we know very well, this has not worked. So two things. Either the Republicans win, and obviously we know that the signals are that they are going to be a lot more friendlier to crypto. Or number two, if the Democrats win, I predict that the second term is not going to be the same as the first. Either Gensler is out or he stays, but they will have to clarify the rules. They will have to capitulate and they will have to retreat. And that's my prediction.

Ron, do you agree with that? Largely, I think, I mean, the court cases are making a major play, at least when it comes to politics. And all the bills are kind of currently in limbo right now. Again, I want to stress that everything is really in limbo, including funding the government, because of just how politics is made up with a split Congress and Republicans only having control by two votes. So everything is really contentious on every single bill, even naming a post office, which takes the act of Congress, can be contentious now. So it's a very difficult situation. But obviously, at least the elections, we're seeing the PACs, we're seeing the donors, as well as the crypto community and grassroots really getting a lot of the candidates engaged. I mean, we've had a significant uptick in Republicans and Democrats reaching out,

just trying to get more of us on the issue because they realize that people care about it. And also that there is a financial backing from various PACs and such that will support them. And they've been successful. So again, Ohio is probably the next race to watch. That's going to be a really big race um senator brown um who's the chair senate banking has been one of the largest holdups in congress in terms of any crypto legislation moving forward the past four years um and that's what stable coins that's a market structure sab 121 a variety of issues so uh i keep a look on that but uh you know at least here in dc the vibe has been going pretty well.

And that's just, you know, on top of the market price, but more just about the elections going in the favor of candidates and a lot of media outlets like Politico reporting on it, which has been really great to see. So we'll see that effort continues. And again, I want to stress it's on both sides of the aisle here that we're seeing this pivot, even like trump starts to pivot to be more pro-crypto now which is shocking uh to see publicly even steven go ahead oh i mean i think look like they're just looking at like the statistics of like how many people you know the electorate of own crypto today have touched crypto. And so you're seeing the current people that are rerunning for election and the new people like John Deaton or whatever that are coming and that crypto and even Trump has just become

part of their campaign. And it's just obvious because it's not only something that people are holding and they care about and they just didn't like one or two cycles ago, but it's also something that actually they can fund. So you're seeing all the candidates now send cash or whatever, credit card, or you're going to send crypto. So I see all of that at the same time, but I have a question actually for Rob. I worked with you on the 2019 with the Taxonomy Act, and that was perfect legislation. That went nowhere.

Nothing has happened since then. You said the Republicans don't have, I get it, it's only a two-person majority, right? But why don't they subpoena go against him? What is the political holdup on something like that where they have the ability to do that, and that would really put a lot of pressure on him? But they don't do that. Do you have a comment on that? Well, I will say the subpoena is definitely a threat, and that's still been out there, and we haven't seen McHenry utilize that yet. So I would definitely still – I mean probably for him, he's waiting for the right time to use it and trying to exhaust any other elements politically before he gets to the subpoena.

Because once the subpoena is sent, politically, you are not going to get anything from Gensler. I mean, mind you, again, we're not getting much from Gensler to begin with here, Kenley, but that's kind of like the red line there where you are pretty much assuming that nothing's going to pass in Congress, at least for the rest of this year. And you've made a very public, loud enemy with Gensler and are trying to slow him down any way you can, which again, your tools as a member of Congress are pretty limited. The courts have been that great thing for crypto. They've been really that pushback that we've needed to get things like the Bitcoin ETF. And even then, Gensler, as we all remember, was trashing crypto

when he approved the ETF. And you can tell he was kicking and screaming to approve it, which, again, is why I don't think an ETH ETF is happening anytime soon, just from reading the political tea leaves from all of the Bitcoin ETF and recent comments from senior senators. So again, I would say that the subpoena is definitely something still in the cards. McHenry is leaving. But there's also just the idea that, hey, look, maybe we have to wait till the politics are better, or at least we know what admin we're dealing with or what Senate makeup we're looking like. Because again, it looks like the Republicans will have the Senate.

And if it's a Republican Senate and a Biden administration, Biden's got to get those nominees re-upped again when their term runs out. So for Gensler, again, that's 2025. Would he get that in a Republican Senate? Probably not. So a lot of things have to happen here before we kind of know what the full chess board looks like. But at the same time, I will say they're still holding up in Congress if there's a chance for legislation. And there have been several talks going on with the Speaker's office last week talking on a couple of strategies. We'll see what happens. But a lot of things have to get done first, like funding the government, before we talk about crypto and all this stuff.

Again, remember, Ukraine funding, Israel funding, the border. There's a lot of things that Congress is trying to tackle first. And even then, they're barely tackling it. It's just good political makeup. Dave? congress is trying to tackle first and even then they're barely tackling it it's just good the political makeup dave yeah so on the topic of the etf i had uh what would be what i think most people in the audience would have really enjoyed uh conversation with aaron kaplan from promethean and uh also his number two at promethean uh at uh conference week, and we talked about many things. But the simple, brutal fact is, they believe that the SEC believes that Ethereum is a security, even though they don't say it. So now think about the implications of that. They claim to have a

platform that will allow people to trade Ethereum in dollars, with custody, with the able to be having control over their assets as a security, full stop. And so that's what they've built. Now, obviously, the CFTC does not agree. It's obviously a fight. I have no idea if the SEC can unilaterally do something. But it would not be remotely surprising if the SEC decides that you do want to deny a ETF to cite that as a reason. I mean, given this this sec they'd probably say it as something stupid like well there is a material chance that that ether will be a security rather than saying it's a security and therefore help nobody but the fact is is i mean if you

believe that he and that company have been put up uh by the sec then understand that is what they're saying. And they're saying it as loudly as they possibly can. And it creates a fascinating interaction. And frankly, I have no idea how it plays out. Simon and Bruce. Let's play through that. So let's say that the SEC wants to adopt a strategy of saying that ETH is a security. Then obviously, historically, everything's been fought in court. So for XRP, they put Ripple in court.

For all of the tokens, they put Coinbase in court. What would they do in the case of Ethereum? Do you think they'd actually try and fight in court the Ethereum foundation that this is a security or not? Because I think it's a very different type of battle. And or would this just be the CFTC trying to take jurisdiction? Surely the way you determine it finally is if you put the Ethereum foundation and try to sue them for making an illegal unregistered securities

offering. And I think they'd be scared of that failing. I'm just curious what everyone thinks. I think the statute of limitations is passed on that. It's been pretty clear that Ethereum has not been treated like a security. So it'd be pretty hard for them to... I mean, it's just so late now, and Ethereum is so large, and Ethereum is just not workable as a security. But we should back up a minute. When it comes to Promethean, we should remember that Promethean is a scam, and it's fake, and the people in charge of it are not credible. The hearing when they were in front of Congress was laughable at best. They exhibited no knowledge of this industry and no knowledge of securities. And the CEO looked like he was on drugs. It's utterly baffling that this was put out there as some kind of case study. And I think a lot of

people have speculated that this was just put there so that Gensler's lie, which he says all the time, which is, come on in and register. He was trying to cover for himself and say, look, these guys did it. But in reality, nobody's been able to register. And the thing is, what Prometheum has is what's called a special purpose broker dealer. Special purpose broker dealers can't work with retail. So it's a useless, it's a useless nonsensical designation anyway, even if you have this ridiculous designation, it doesn't matter whether eth is a security or not. And also broker, no broker dealer can work with any crypto, by the way. So no registered firm is allowed to work with Bitcoin or Ethereum or

anything else. You have to do it through an affiliated entity. That's why, you know, Robinhood and these kind of organizations have, you know, affiliated groups that are not broker dealers. But the bigger, you know, the really big issue that we should be looking at on this, you know, we're caught in the weeds of nonsensical, ridiculous procedures that are created by tyrants. And that's because they're making it hard for securities. It's like, as many people have said in the previous comments, if something is designated as security in the United States, it's like the kiss of death. And it shouldn't be the case because securities are awesome. Securities are a wonderful economic tool.

They're one of the greatest inventions in the history of economics. And as a country that still tries to, you know, live on marketing from 100 years ago, pretending that we're a free country, we should embrace this technology. We should allow security. Securities are great. You know, Microsoft's a security, IBM, Google, Facebook, Tesla, Twitter, whatever. Securities are awesome. And security should be easy. And we've made it so that they're very, very difficult to what Dave and a couple others said that you've made it so, so difficult in the United States to of a security is very, very, very broad. It covers stocks and bonds and all kinds of debt. It covers investment contract, which is if you go through all the lawyers, I mean, think about all of these companies, how much, how many deck of deck of millions that they spend on legal counsel.

And none of them, no one in the United States has been able to successfully do this, none. So the idea that we're just a bunch of cowboys out here, you know, who don't want to follow the regulations is absurd because there's a bunch of lawyers, some of them right on this channel. There's a bunch of lawyers and there's a bunch of law firms and there's a bunch of firms like me and a bunch of others who spend millions and millions of dollars on compliance. And not a single one of them in the United States has been able to

successfully do anything with this industry under a properly, you know, according to the regulators, a properly regulated environment. And that's the root of the problem. That's the problem. With security, it should be easier. You should let people trade, let people have free trade, and just let it work. And that would be a much better economic solution for the whole country and the world. Ron? Yeah, one thing I will add is... Can I say something quickly? William, Ron speaking. I'm not sure if you can hear him, but you might have an issue. I'm going to take you off and bring you back up. Go ahead, Ron. Yeah, I was going to say, I mean, the fact that we're still talking about this, you know, if it's security or not, the CFTC chair two weeks ago

doubled down multiple times in his testimony and in the hearing and the agriculture are saying uh ethereum's a commodity and he believes that but the fact that we're still debating this shows that the sec like many already understand this they seem to have you know the final say for a lot of these things here and we've been seeing the battle at least on the ethereum side for quite some time i mean we all remember where chair mckenry kind of questioned uh against our straight up hey is it is ethereum uh security or a commodity? And he wouldn't answer that. But we've seen that rollback happening behind the scenes for quite some time, especially when Gensler assumed a role at the SEC.

So I think one man or one ideology is really kind of leading here, especially again with the Biden administration. But it's important to highlight again that the CFTC is actually in the complete opposite camp here, which is hilarious when folks say there's not a war between the SEC and CFTC, or the rules are clear when both agencies are saying this exact polar opposite

for one in particular token. And that's the situation we're in right now. So, and I don't see that unfortunately changing with either Gensler at the helm or at least a court decision to force his hand. And that seems like a while out. William, can you hear now? Yes, I was going to say that. Yeah, I mean, it's easy to say it would be great to embrace the securities paradigm.

But with that will come a lot of disclosure requirements. And as far as I can see right now, most of the projects are not even near an ability to really live up to the disclosure standards that security is currently a glide. That's going to be a challenge. Go ahead, Dave, and then we're going to move to wrap it up. Go ahead. Yeah, I actually, the first time, William, I completely disagree with you, like literal polar opposite. The problem isn't that the projects can't live up to the disclosure requirements. The problem is the disclosure requirements are written in the 1930s before

there were computers. And in fact, we have disclosures such as prospectuses that require armies of lawyers to write, yet nobody actually uses it to make investment decisions. And yet there's no way in the disclosures the SEC has to display or talk about tokenomics or lockup periods or supply schedules or anything that's actually relevant to investors in these projects, which is why new regulation is needed. In fact, it may be the poster child for why new regulation is needed. So anyone claiming that securities as a concept is a problem, I mean, Bruce is 100% right. It's not the concept. It's the implementation because they literally have not revitalized their rules and when Hester

Peirce in 2018, it's been six years ago, basically made these points and said, listen, we need to have a safe harbor. We need to work with the industry to come up with new rules. Clayton said no and Gensler of course has said no and that's why we are where we are today. No, no, to respond. I want to respond. What I meant is that there has to be some disclosures, not the existing one. I've written about this in the last three, four years as well. We need new disclosure standards, definitely. The current ones are not going to work. But even at that level,

there will be some disclosure standards that will have to be adhered to, definitely. Not the exact same ones that we have today. Sal, I'm going to let you give last thoughts, and then Marina, move to wrap. Go ahead. Yeah, final thoughts. I've said it many times.

Just like America, just get on with the virtual asset service provider regime. It's already established. It's already got a model. It's already America just get on with the virtual asset service provider regime. It's already established. It's already got a model. It's already the world standard. The Financial Action Task Force have told the whole world what needs to be in there. Everywhere around the world is just getting on with it. Start with anti-money laundering and then add market manipulation and add disclosure and just build it up but you know if if there's a way of um america

just stop you can't shoehorn it into securities laws um i know there's a lot more politics around it there's money grabs and there's all the ones i want to find but um america just needs to get on with it it will get there eventually it's just a question of how long is it going to take um there is there is lots of templates right now. Europe has done a bunch of work on it. And, you know, America can just continue to be the leader in virtual asset service provider or give it to somewhere else. Yeah, I think, more importantly, the market has moved on to some degree and clearly the industry, as William stated before,

is bigger than the regulator at the moment or more powerful. So I think we can at least take some solace in where we stand versus a year ago since we happened to actually advance from a regulatory or legislative perspective. Guys, thank you so much, everybody. We will be back tomorrow, 10.15 a.m. Eastern Standard Time. Please follow all

of our guests, of course, and crypto underscore town halls. You never miss the spaces. Thanks, everyone. See you tomorrow. Bye.