The Wolf Of All Streets - CFTC Approves Crypto as Derivatives Collateral #CryptoTownHall

Episode Date: December 9, 2025

This episode of Crypto Town Hall on Exit 10 focuses on major regulatory and institutional shifts in crypto, the real meaning behind headline investments, macroeconomic trends, and the rise of user-friendly DeFi products. The main goal is to unpack recent developments—such as the CFTC accepting Bitcoin, Ethereum, and USDC as derivatives collateral, and the true structure of Ripple's $500 million Wall Street deal—while examining their potential long-term impact on crypto markets, institutions, and end users. Later, a deep dive into EtherFi showcases how DeFi is building alternatives to traditional banking services, aiming for wide, user-friendly adoption.

Good morning, everybody, and welcome to Crypto Town Hall every weekday here on exit 10, 15 a.m. Eastern Standard Time. I know this is shocking, but we're a couple minutes late because we were working through the glitches of getting some speakers on stage and getting me co-hosted. But here we are. Actually, quite a few stories today. Dave, you're kind of the perfect person to unpack, I think, this first one. But CFTC approves crypto as derivatives collateral. This was Carolyn Pham saying that they're running basically a pilot program where Bitcoin, Ethereum, and USDC specifically, those three will be accepted for collateral in derivatives markets.

Obviously, we've seen similar news from institutions in the past few weeks, most notably JP Morgan accepting Bitcoin and Ethereum is collateral. I think we know that this is where the puck is moving, but this is the CFTC. Yeah, I mean, it's a pretty big deal. And it is, I mean, look, I don't like to get hyperbolic about these. things because, you know, although that would probably drive more engagement on X for me, I mean, I tend to think that people who get too insane, you know, deserve to be smacked back a bit. But understand that the market is completely missing, you know, what this actually is meaning.

I mean, whether, you know, we started talking about the head of the Basel Committee, now you have the CFTC, you add JP Morgan, et cetera. Once Bitcoin is treated the same way that equities are treated as collateral, then effectively owning Bitcoin becomes not bullshit yield, but real yield capable. And that matters. So that makes, that effectively is a dramatic increase in the value of micro strategy, for example, right? You know, the interest rate that they will have to pay compared to what they're doing with their convertible prefs are, it will drop. You know, it's just that simple. I mean, it effectively makes means that people who were, you know, with all due respect to our mutual friend, Mauritio, you know, paying significantly higher interest rates for Bitcoin back loans than you would for an equity back loan or an equity collateral over collateralized loan, those things will equalize.

All of this is extremely important and is going to be a long-term massive tailwind for Bitcoin. It is equally important for USDC because now the banks are really effed. So the banks are saying, well, you can't get stable coins can't pay yield. Well, that's true. But if you are getting the effective equivalent by pledging collateral, that's USDC, the bank could give you yield by basically allowing you to pay a lower interest rate. Because if they get the yield, if you do it not just as collateral in your account, but a collateral in their account. So you think about the implications of this. They're wide ranging. But what's really important here is the market, you know, really I would say that the crypto market, and certainly Bitcoin and arguably Ethereum very strongly, has been ignoring fundamentals in what's going on in their relative networks or what's going on in the news flow. And today it looks like they're ignoring it again. And that's fine. But you can only ignore fundamentals and use charts for so long. If you're a technical only argument, market, eventually the charts implode because the assumptions behind the charts change.

And that's what's happening here. And I think that's kind of the bigger thing. And I, you know, I, you know, did a video about this yesterday. I will continue to talk about this. The fact that you can use Bitcoin as collateral in, you know, effectively to trade, basically puts the CME, Parry Pesu, or Will, you know, with, you know, whatever, finance, you know, in terms of it. sets up, however, increase volatility in the future, which means options are probably under price, right? Because you know that when you have collateral that you use, that is also what you're trading, you're doubling your leverage. And so CME leverage just increased. So my guess is that the CME isn't being stupid about this. They will probably increase the, you know, the, or whatever, whatever, increase margin requirements, however you want to call it, in order to offset that. But if they don't, then you'll we'll see higher volatility. So it's an interesting developing story. We'll see what they mean by a pilot program. But it's one more data point in the inclusion of Bitcoin as a legitimate financial asset. And all of that matters. Do you think that this will end up extending

beyond Bitcoin Ethereum and USDC? I mean, it's interesting that USDC is very simply tag. I think that the way it should, let's let's be simple. It way it should work is how it does in equities. That prime brokers and, you know, companies, are allowed to create a formula based on volatility and volume traded in order to understand what the, you know, the, you know, basically to model out what the value of collateral is. And so the more volatile and less liquid a crypto is, it will have the less amount of leverage, you know, less amount of collateral value to it. That's how it should work.

And so effectively, you know, what you know, it will have that. Now, they do make changes. Like, for example, you can't pledge a stock that's under $5. Now, if you ask why is that, it's because back in the old days, if stock fell under $5, it was flirting toward bankruptcy. You know, obviously it's a stupid arbitrary rule, but the goal of it was to understand that there was some value there. They will probably come up with thresholds of market cap. They will probably come up with thresholds of real liquidity on U.S., I hate to use the word regulated, but we'll say U.S. oversight, you know, exchanges like Coinbase and Robin Hood and Cracken

and Gemini, et cetera. And so they'll probably do it that way. That is what will happen. When there is actual changes, the accounting rules will be based on volatility and volume. But that's a really important point because one of the things that's interesting about Bitcoin as collateral compared to a stock is if a news event happens on the weekend, you know, you're taking a lot more risk by having stocks is collateral with bitcoin it's immediately accessible and so you know expect you know lots of changes here but the truth is that it will be based on volatility and volume and it won't include volume from you know from derivative exchanges or overseas exchanges got it we'd love to open this to the panel how important you view this if it's a meaningful advancement why it's specifically

those assets um Andre you probably are watching this. also guys congrats i should say the bit the bitwise 10 finally approved yes it's been approved before well there's been essentially like an uplisting you know from from like oTC to do et f okay fine yeah that's definitely big deal for us yeah yeah david your mic is lifted um yeah so uh anyone yeah anyone specific thoughts uh on on this Yeah, I thought, Andre, that was just great news finally after I know that was celebrated and then uncelebrated and then Grayscale got theirs. And I also have to say the Matt Hogan fart going commercial is incredible. For anybody who missed it.

Yeah, he did a couple of ones. Yeah, one of the best since like the most interesting guy in my view. Yeah, absolutely love it. So I think that we can just talk about how directionally the CFTC kind of as Dave alluded to is just another data point in the progression of how. Bitcoin, Ethereum, and other assets will be viewed in the financial system. Atkins just gave an interview as well, the SEC chairman, and he said, which by the way, I said I'm calling bullshit on this, but he said, I think all rail, all financial rails will be on blockchain in the next two years.

So I don't think that that's necessarily happening. All U.S. markets tokenized on chain in two years. Anyone believe that that's possible? No. Not even. Close. I love it. I love hearing him say it. Love it. Yeah. I mean, look, you can't, if you, if you token, there's two aspects of tokenization, right? There's aspect which everybody thinks about. And when, if you watch that and I did a roundtable the other day where it was from the Investment Advisory Committee, it is possible that you could replace and be on blockchain rails 100% in two years if you, you, use the proposal that I think it was it was a chuck from NASDAQ that made it I think it was Chuck

but I can't remember anyway you know I know the players so you know it was one of them I think I think it was NASDAC said which is let DTCC go from instead of old paper registries moldering in a basement in 55 water let DTCC pick a blockchain and tokenize that and leave everything else the same so that there's tokenized assets underneath DTCC that companies might be able to eventually access in some way on behalf of people or people might be able to access it. But effectively, everything is still held in street name and people really just own IOUs. Because as I've said, millions of times on this, not millions, but dozens of times on this show,

when you buy iron, you don't own IRA. What you own is an IOU from your broker that you own IORN. and your broker doesn't own iron, your broker has an IOU from DTCCC that says they own iron. So going to tokenization will change the second piece of it. The broker will have a direct claim inscribed on the blockchain that their address at DTCC would have iron, but you would still hold it at the broker. Or they might not even do that. They might just say that it's on the blockchain, and the broker can see how much iron is at DCCC,

but they won't actually know who owns it. There's a lot of details to be worked out there. So if you go down that road, it's important from the technology perspective, but it doesn't really do anything. Where tokenization matters to everyone on this audience is when you can have side by side with centralized ownership that you can take personal delivery, that you can do 24-hour trading via whatever exchange or defy platform you want because you have a tokenized asset. It means you could swap Bitcoin for Iran, for example, or back and forth.

It means that all the rails that investment in banking systems and brokerage systems use could be made compatible, whereas right now they're not compatible. They have different regulatory, different everything. So there's a lot to be worked out, but it's incredibly important to move in that direction. And so that's why my know is to do what we actually care about, which is all of what I was just talking about. Does that make sense, Scott? because there's a lot of detail here, and it's really, really technical, and I don't want to, you know, have everyone's eyes glaze over because hell my eyes glaze over when I think about this stuff. Yeah, it makes sense. Ryan's guys hand up. Jump there.

The same government that makes the majority of people remove their shoes before they get on an airplane is not going to be able to handle tokenization of securities. Like, I'm sorry. Like, it's a great idea, but I think we're at least a generation out. like they don't understand the technology they're paranoid to the technology and I think the current generation of experienced traders you know Wall Street SEC people are all going to have to basically go away before they move on to a new technology it's just the government does not move that fast in any regard and when they do it's often reactionary well but here's the counterpoint to that Ryan it's not the government I mean the real question is, look, I've sat on these industry committees. As I said, I know the players. So SIFMA, for

example, is the largest multidisciplinary advocacy. And then there's STA, which I'm actually on the board of directors of the New York chapter. You know, these organizations are dealing with companies that want to move quickly. Why? I said this before. If you're sitting at any of the legacy financial firms and you see how much money Robin Hood and Coinbase is making from crypto, you want to be able to get at that and not be disrupted. They all remember being disrupted by electronic trading where they were way late to the party. So it's not the government. It's the private companies that want to jump in.

Now, the problem is, and this is where you and I are going to agree, the problem is when they do so, they're going to ask for rules that actually prevents real disruption and real change. So it'll be technology on name only. That's the problem. That's exactly who I was going to agree with you there. and there's two ways you can go at an opponent. You either try to disqualify what they're doing or you try to beat them at what they're doing.

And if the banks cannot beat Robin Hood or the traditional systems cannot beat Robin Hood or the Web 3 systems, then they're going to do everything they can't disqualify them. I mean, yeah, it's not disqualify. Look, keep in mind that it's like medieval warfare is a great analogy I always use that, you know, the Martin Bailey castles, you know, you have the outer wall and, you know, you have the inner wall, you have, you basically fight, you have a three-step battle plan. Their three-step battle plan is delay, is basically I would phrase discredit, delay, and, and unfortunately, I don't have a good D word, and compete. So, you know, the discredit is all the flood that comes out every time there's a downward market, all the bullshit, we've seen it. And, you know, it's getting less and less hysterical.

and more and more, less and less effective and more and more shrill. The second is delay, and that's exactly what we're talking about here. That's like, oh, yeah, we're going to write great rules that are going to allow competition, and they're going to throw massive, we're going to keep throwing hand grenades into those rules. And you're going to see that over the next two years for sure. Just we've seen it with clarity. We saw it with genius, but the banking lobby was dumb, and they got end run, and now they're trying to fight it again.

So we've seen that. And the third is, and they're doing this all simultaneously, is they have groups the people understanding what it means. In the case of electronic trading, the strategy was buy. And so there was a massive acquisition M&A spree. The same thing's going to happen here. At the same time, there were a bunch of companies that invested and changed their technology models in order to be able to create product.

And so you're going to see a lot of that. And I would be very surprised if you don't see tie-ups. And we're already seeing it. Deutsche Borsa and Cracken, for example. It's a great example that it was out. Was that last week, Scott? Yeah. We're seeing that.

Did you see the tweet I just pinned above? Justin, Michael Saylor, says the following U.S. banks are now issuing credit against Bitcoin. Citi, J.P. Morgan, Wells, Fargo, B.N.Y. Mell and Charles Schwab Bank of America. Yeah. And so let's ask yourself a question. For all the micro-strategy fudsters out there who said it should trade well below NAV, all of those banks are trading, what are they on average, 1.5 times book value? I mean, I don't know. I don't know what else to say other than the fact that, you know, if micro strategy really does trade at one envy or a bank, if J.P. Morgan or Citigroup thought they could buy micro strategy at 1.2 times, you know, price to book and they're trading at 1.5 to 1.8, that they're going to buy

it. It's really that straightforward if Saylor wants to sell it. Now, I'm not saying there he's going to sell because I don't think he will, but understand that this notion that they're going to have to sell their Bitcoin is so absurd. And yet a large. large part, one of the big planks of the bear platform was exactly that. So, I mean, I think that's the one piece of information that needs to be taken out of this news. Yeah, that makes sense. So I heard somebody else jumping in, or I think maybe that was a movement on Dave's end. So there was another story that I wanted to bring up, unless anybody has further thoughts on CFDC here.

This one was in Bloomberg, and I talked about it a bit on my show. this morning. It came out yesterday, but it was all the rage. Wall Street hedged big crypto bet and $500 million Ripple deal. I'm not sure if people saw this, but obviously it was huge news a few weeks ago that Ripple had raised $500 million from some of the largest investors on Wall Street, Citadel Securities, Fortress, Brevin Howard on down the line, all the big names, at a $40 billion valuation. This was a wide eye-opening valuation at the rate that they did it. And obviously, Obviously, this was a great PR move for Ripple, gave them a huge valuation. Well, a lot of the details of that deal came out and not, I guess, what many people anticipated.

Interestingly, there were people that sort of pointing this out at the beginning. I remember Laura Shin took an absolute beating from the Ripple army for pointing out that some of this didn't quite make sense. But this was kind of highly touted as Wall Street and these institutions huge belief in the crypto industry. and Ripple specifically to put $500 million behind this at such a high valuation. Well, it turns out that the deal structure was zero risk for Fortress and Citadel and friends, basically to give the TLDR, they were guaranteed as their floor, worst case scenario, 10% a year for the next three years. And with unfavorable terms for Ripple after that, like if there was a buyback,

it would have to be at a 25% bump to what they paid. favorable terms getting first in line if there was a bankruptcy or obviously if there was an IPO or sale of the company of some sort that they would get paid first and biggest. So basically this was a zero downside deal for these guys to make guaranteed money investing. And I don't think it mattered that it was a ripple or any other crypto company or non-crypto company. And so I guess the story is that it just wasn't what it seemed from the very beginning. Well, I don't think that's right.

Yeah, I don't think that's right. I think that, and I was listening to you talk about this morning, and I wish I had this. But it was supposed to be like it was positioned as like this big VC deal where they were investing in the future of the company. They were actually getting guaranteed 10%. I think my point is, okay, well, let's phrase it this way. There are two different things. You know, it used to be that that ripple themselves always said ripple and XRP are not the same thing. They don't do that as much anymore for a very important reason. But, you know, that used to be important. It is important, and my belief that the XRP army has their heads up their asses is because they keep conflating the two. There is no way this investment happens if Citadel and others don't believe there's potential in Ripple Labs to create a very important financially secure. That's fair. They do capture all the upside. They care about Ripple Labs. They, on the other hand, don't believe that XRP as a commodity has explosive upside because that was what they gave away, because the notion of XRP with explosive upside is just patently absurd. And it should be added, just as you're talking about that, that in this same article, the insiders from the deal divulged basically that when they valued this, it was 90% of it was the XRP token holdings.

at the time they were 120 million. I think now it's like, I mean, billion now, I think it's 85 billion somewhere in that ballpark. And obviously, at a 500 million dollar investment collectively, there was no risk of not getting paid back when they're holding 85 billion or whatever it is on the ballot sheet. Right. But the valuation, on the other hand, does care that it's there. So, you know, look, it's a nuanced take. I mean, when I say the, I coined the term years ago when I wanted to be polite in society, when I thought someone had their head up their ass, I called it rectal cranial inversion or RCI. So if you hear me ever say that the XRP army has RSI, it's because they do. Their heads are up their asses when it comes to not understanding

the difference in Ripple Labs and XRP. That doesn't mean XRP is going to zero. It doesn't mean it's even going down. It doesn't mean it can't go up. But what it can't do is become more valuable than the companies that are creating actual value in the entire financial system. And all of these, people saying it could be worth, you know, tens or hundreds of trillions of dollars are, I mean, it's a delusion that is almost unmatched in the financial system because it doesn't make sense because it's designed as a utility and Ripple Labs themselves built their software that they could use other things. Now that said, Ripple Labs will do really, really well if they execute on their strategy and XRP stays at exactly the price it's at today. And if it goes to $4 from

today and doubles and just keeps up with inflation, for example, they do very, very well. And the notion of XRP as collateral will get there, but you said something else this morning that I disagreed with. You said that, you know, the Hidden Road, you know, requires Ripple Lab, requires XRP as collateral use. No, it doesn't. I didn't say that. You sort of said it.

Well, anyway, the Hidden Road could do really, really well as part of, you know, Ripple's brokerage. Yeah, maybe one of them said that because I would ever say that. I don't. Okay. Yeah, but okay, so you understand it. So I'm sorry. I was in the jet.

You're going to want to be clear. I don't yet, no. But my point is that XRP becoming a more stable, less hyped asset that is becomes, that is, that becomes usable as collateral. Yeah, that's better collateral. At the current balance sheet of size is more than sufficient for Ripple Labs to execute in a really, really interesting business plan. Now, they still have to execute, right? Hidden Road has a good business. They do lots. I know the guys, they're smart people. They're arguably the best FX prime broker out there. You know, there's a lot of things they need to do and offer. But the truth is it's a big market. And the market for prime brokerage in, you know, if you think about tokenization, you know, is really controlled by the banking cartel. If Ripple Labs can be a large balance sheet competitor to the bank. banking cartel, there's a pretty, there's just, there's a lot of very large total addressable market there that will do nothing but grow as the profits and as the margins decrease a bit

because it becomes more available and it becomes more global. So you have to understand that there's a lot here. And if you're in, look, I know the people with Citadel who evaluate these things, right? And they're smart people. They're doing this specifically because they believe that there's a reasonable chance that ripple labs can execute and make this a really great business. None of that is a damn importance for, really, it doesn't matter very much to XRP, except that it probably says XRP will get slightly more valuable and a lot less volatile. That's really what the bed is. Yeah. Ryan, the frame of that. Go ahead. Ryan. Sorry, I just have a question because you guys probably know way more about Ripple than I do. And

I'd stop paying attention to Ripple like 10 years ago, so I really don't know. What's the point of it? It's open source, and if they're just running like a business, the barrier to entry to copy their tech is basically not. This is the fundamental disagreement, and you can get it. You can go endlessly down this road. I think the critics will say Ripple could do exceptionally well, and XRP could not be a part of it. And the proponents will say, listen to Brad Garlinghouse, who says that XRP is at the center of everything we're building. Right. So, can I address that, Scott?

Because that's that, I don't want to address that an answer, right? Better you than me, buddy. Have fun. What Brad said is exactly what I would say. If I own $80 billion of collateral, I am not going to talk trash about it. Because why would I? You know, it doesn't make any sense for me to. In fact, if that $80 billion in collateral stayed at exactly today's price, Brad would be able to execute in his business plan and do really well.

Because Brad's business plan, because they bought custodial solutions. They bought prime brokerage solutions. They've bought, you know, wallet solutions. They're putting together an ecosystem where they can become a blockchain-based prime broker. Now, prime brokerage, Brian, just to be clear, means a firm that is capable of financing every aspect of the financial transaction ecosystem. So if you're a hedge fund and you have a long short, they finance both the longs and the shorts. If you're an individual and you have a collateralized loan, they can finance that. they can finance that. It is a financing activity. It allows for firms not to have to deal with

the plumbing and not to have to deal with handling collateral on individual exchanges. They get the prime broker to give them their collateral and manage their risk on a totality of their trading as opposed to, you know, if they have one leg on one exchange and one leg on a different exchange. So prime brokerage is a very large business. It's basically securities finance writ large. Ryan, aren't you asking what's the purpose of the token specific? Yeah, like what's the, oh, the token? Well, as far as the, totally. Yeah, because if that's the, it's interesting, but he's saying like, why does the token need?

Why don't you just use tether if that's the business? I mean, is Ripple the settlement layer? Is that the idea of it? It's more than just that. It's the settlement and financing layer. Prime Burgers do provide settlement services. Yes, that's part of the package. But it's really, it's the financing activities is where the profit is generated, the settlement,

is done more or less at cost or with a small markup. But where XRP is in that, XRP as an asset is one that is valuable to them because they own a lot of it and it gives them the ability to have a big balance sheet. XRP as an asset, if you want to value it, is really based more upon what gas fees and what will be needed in the XRP in the XRPL ledger. And XRP as an asset could be pumped by Ripple by as their business grows. So if you build a business as big as finance, you took BNB and said, you know, if you own BNB, you're going to give you lower rates. And if you'll get hyperliquid, if you own hype, you'll get lower rates.

Well, those lower rates are very valuable if you want to use the service. There's nothing stopping Ripple labs from using XRP in exactly the same way in order to tick up demand for it. In fact, they'd be dumb if they don't. And so they probably will. So there are ways that they can create value for the token as they build their business. But right now, the value, but I think that they can't afford the token to get too expensive because it gets too expensive and it makes their business more expensive if you need it, right? It's always that dynamic tension.

That's why when they first did their first product, which was what was it? It was a ripple, what the hell was it called? It was a ripple net. That was a different one. Oh, X rapid. When they first did X rapid, they made it very clear that although it was, using Ripple that they could pivot to Bitcoin or anything else that they needed to. They always used to tell people that.

They don't say it's nearly as much anymore, but the software is designed that way. So there's always that, that, that, that, that, does that answer your question, Ryan? Kind of. I think my understanding takeaway is XRP is essentially a open purpose chain that they haven't really utilized other than just moving, yeah, Ryan, they'll tell you, value around. Right, but they'll tell you that, yeah, it's, It was obviously, they'll tell you that it's the liquidity pool for cross-border payments. And if you want to swap quickly and cheaply in between to go from, you know, a Euro-denominated

stable coin to something, you know, different crypto, whatever, that it's basically the bridge, the liquidity and cross, that's the argument that I've heard. You can debate whether it's valid or not, but that that would be the theoretical purpose. I mean, generally, I think you can just send a dollar-denominated stable coin to somebody. that's every smart contract chain in existence right now though yeah interesting okay thanks for that this space was downloaded via spaces down dot com visit to download your spaces today anybody else for the thoughts here i mean we could we could pivot to the market obviously i know we do have a sponsor i think in 10 minutes or so and we haven't really heard much from

andrea floria and adam david so uh you know maybe talk about where the market's at right now It's hard to even talk about where the market's at right now because it's just in the low 90s. But we are at 92. We're up a 3% today. But we're just going to pump at the end of the week. Obviously. Guaranteed, try it to like 150. Just, you know.

No, I think it's going to be like 105. I just want all those end up here predictions to be good, you know? Like, come on, man. They were so big. David, go ahead. Sure. I'm just going to say that at a ground level I'm seeing people in developing side, actually pulling development assets away from blockchain and moving over towards prediction

markets. So, you know, no surprise there. People are going to follow where the money goes. You know, what does that vote for crypto in 2026? You know, fewer people working on pumping out product and updates. Bigger question for me right now, just looking on a monetary policy standpoint, is all these central banks who are, you know, indicating that they may move to ease, but, you know, the long bond is basically blowing out. You know, what does it say for financial markets in 2026? Unless we have a Fed who comes in or a Treasury that comes in and starts exercising yield curve control, a lot of Japan over the last 10 years, you know, things may not necessarily look as positive in 26 as they have been in 25.

Andre? Yeah, I just want to comment on the macro side because Jody Visser, he's made an interesting observation, right? He said, like, better high beta stocks are actually outperforming quality, which essentially means that there's like return and risk appetite and Bitcoin should follow, right? And we are also observing something similar based on our cross-ass risk appetite index. but I have like a funny kind of working hypothesis that I'm thinking about and I actually wanted to pick your brains about this. So my thesis or my working hypothesis somewhat that crypto as a sentiment has been low or depressed and retail interests has been depressed

because of like overall depressed consumer sentiment. And you can see it in like labor market indicators like job openings. I mean they obviously surprise today, right? to the upside, it appears to be the case that the job market is turning around the corner. And I think that if you look at leading job market indicators, like the ASA staffing index, it's already picking up, right? But like my working hypothesis is once you see this kind of return and like risk appetite, and once the job market actually improves, you should also see like improvement consumer sentiment

because, like, the University of Michigan consummates, like, at all-time slash cyclose, right? It's very depressed as well. So I think, I don't know, but what's your take on this? Like, on job market slash sentiment, retail interest, and so on. I mean, yeah, for what it's worth, I think what Jordy was pointing out is actually interesting. The real question, frankly, is. a lot of people have this belief that I think is nonsensical, that Bitcoin is the tip of the spear or the leading edge and is leading the market. And since October, Bitcoin has been saying

one thing that's been different than the stock market and the stock market's going to follow. And I'll all say is that since the global stock market is 70 times the size of Bitcoin, I find it very hard to believe that Bitcoin will have that kind of macro influence and is a leading indicator of that scale. During a weekend, when there's a news event, course it is because it's the only thing that that's trading and so you see that but for a two month sustained period that seems just batshit crazy to me you know i think that that equity markets ignore cds spreads and blowing out of risk and they ignore a lot of other stuff very often for periods of time and those markets are big yep now i agree i agree with the like the credit observation

equity observations so like credit tends to lead like equities so it is entirely possible if you believe What I think is that Bitcoin has its own idiosyncratic stuff going on, right? It had, you know, it was in a distribution phase. There was a lot of leverage. One point that someone made in a response to me, which I think was brilliant. That's her name was Beckney or Bakke or something. She said she pointed out or somebody pointed out, I can't remember who, that the use that Athena in particular and other players by selling crypto derivatives masked the fact that there

was a lot of leverage built up in the system because funding rates, which in all previous examples of major leverage built ups, the leverage was built up on the long side and they paid a lot, but we didn't know that there was as much leverage built up in the system because you can't see it in something as easy as funding rate. So I obsessively look at that, and now I realize that I was looking at something that was essentially, you know, it was old, right? It had changed because structurally there were a lot more players who had arbitrages on that were selling. And so keeping the derivatives and more balance to the spot. So it was really October 10th was a massive buildup where there had been a massive buildup and leverage in the system and it got flushed. And that I think

is far more reason that Bitcoin went down and everything went down because there were a lot of people who were forced to sell, et cetera, et cetera, then it being a macro lead. So if in fact it isn't a macro lead and those were temporary, one would expect that if the stock market stays where it is and continues to do what it's doing. As Jordy pointed out, that Bitcoin will catch up and it will correct the underpricing that it currently has to most fair value models. That was my takeaway from that.

Andre, does that jive, do you think? I do think, like, ripto-acid sentiment is actually leading stratified sentiment because we're actually calculating both types of sentiment ourselves. And you can see, like, it tends to lead by a couple of days, you know, both, like, during the recent, most recent downturn, like crypto asset sentiment, moved first and then, like, cross-asset sentiment, but across, like, acutist bonds, like, across, like, all Treadfi assets actually followed,

and same for the reversal, right? Like, crypto-asset sentiment reversed up higher first, right? And then, like, Trap-Fi sentiment followed. But like the observation by Jordi actually implies like the offset, like chain of causation, right? That like trap-fi sentiment, like this high beta versus quality stuff moves first and then like Bitcoin follows, right? Yeah, it's interesting thesis. I mean, Dave, any final thoughts there? No, I think that covers it. You guys have with me.

Yeah, we got a couple minutes left before I know we have a. Sponsor from Etherfi jumping up. I mean, Florian, Adam, David, you guys' thoughts on the market here, anything specific? I know Florian, you're always looking deeply at metals and we've kind of had, I guess we can take a launch from what Dave just said

about markets being correlated or Bitcoin being the tip of the risk spear. It certainly has felt pretty uncorrelated this year as gold and silver have flown, stocks have flown, and Bitcoin's trading down on the year. Yeah, thanks for having me again. Well, I think it's obviously pretty disappointing the price action in Bitcoin

the last one and a half, two months and I'm afraid that yeah, the cycle probably is over. I mean, something's definitely wrong here. Yes, it could still catch up and yes, if there is a big wave of new money printing coming, Bitcoin certainly will react

and should bounce back here. But right now it does look too bullish. I mean, something's wrong in my opinion and I'm much more cautious now. I mean, I thought the last quarter should bring the big grand final but we saw the all-time high being met in early october and since then it's been a strong sell-off and everything else is outperforming bitcoin so i assume right now that we're probably

in a bear cycle now yeah anybody anybody want to take the other side of that besides me i i would just say i would say i would say actually this is um when when at least in crypto and just general sentiment in crypto is, wow, this is kind of like the, we've been adopted, right? This is the Wall Street cycle. And so, but it feels like, well, why didn't the number go up a lot more? And certainly with the alts, we've been kind of crushed. And my feeling is actually, no, this is actually the start of kind of a weird, like, second cycle. And, but we'll see. I mean, it's not, we're not going to know until 2026. But I think, you know, the awareness in crypto, anytime you get like, people will say building is bearish when you actually launch the product often you get this

kind of like disappointment and i think that's what kind of crypto is going through right now but overall long-term very very bullish crypto okay like my picture big picture views essentially like risk appetite will return maybe we're already seeing in this kind of return because there's no recession right there's rather reacceleration growth there's even like a re-acceleration and leading employment indicators already, right? So that should drive a rebound in risk appetite by growth expectations. And I don't know whether you've seen that chart that's been posted by Northman Trader, right? That's kind of decoupling between the SPX and Bitcoin.

I think, like, Bitcoin's ridiculously mispriced relative to others. I mean, the market's always right, right? There's no doubt about it. But, like, price what you pay, values what. get. And so I think Bitcoin is rather trading on the cheap side, right? It's undervalued relative to other assets like gold, max seven and so on, but also in absolute terms. And especially with respect to the growth outlook in 2026. Right. Yeah, I think we're in a reprieve right now. It's, you know, we had kind of a blow off the top. We had a lot of people taking profits. We hear all

these, like, positive headlines, people are all really hyped up. I always find when people try to sell me on, oh, it's going to, you know, 150, 200, 500, to me, that's the sell signal. If people are trying to, you know, push a price that just doesn't make sense in the near term. And they're saying there's going to be this explosive growth. Like, you just typically don't see that. It's like this. Yeah. Anyways, I think we're in this reprieve. And I think generally in the U.S. right now, Life feels very expensive. Just the cost of living seems to be increasing exponentially, like Southern California, Puerto Rico, even in Texas, parts of Texas, it seems like it's getting very expensive. So people don't feel like they have a lot of cash, and they're not going to gamble with a strict budget at this point.

So maybe in 2026 when the economy is churning and, you know, Trump policies take effect in a positive way, then people are going to feel wealthier and start putting their money into riskier assets. Anyone else? I mean, I think that we're just fine. technically there's some obviously concerns the 50 m and the weekly if you're a chart watcher but otherwise i find it hard to get panicked on a 30% retrace uh when price made it to 125 when we've seen this movie so many times i mean how many times have we seen 30% plus corrections and bull markets and then long periods of sideways and you know the fact that

it's been doing that and it has not moved like metals or like stocks to me is even more bullish, because even if your thing is uncorrelated to the downside, at least it's uncorrelated, which people will appreciate and view positively into the future. I mean, one of the best cases for Bitcoin is it doesn't trade like anything else. Unfortunately, sometimes that means it goes down. I'll just add this, Scott. If you have not taken out your resume and tried to polish it up, we're not in a bare market. Like, when the price pulls back enough to where you're...

Think pieces on that, though, Ryan. Did you see all the people quit? Like, I've literally see these viral think pieces like, dude, I wasted eight years of my life building in crypto. It's a scam. Like, I literally like those things are going around. Yeah, but I would say on a personal level, if you haven't really considered like, maybe I should get a job. I think we're pretty safely out of the bear market for right now. Well, the problem is I can't go back to DJing at 49. So I don't know. You could. It just wouldn't be pretty. Yeah, I'm running out of options personally. I mean, David, what are your thoughts on the market here?

Throwing out bullets, putting people on the spot. Go ahead, David, sorry. You can put me on the spot. You know, maybe we're basically just sort of stable, you're trying to bump around 90,000 and hold these levels. Yeah, Jordan's point about Trump benefits kicking in next year, You know, people only probably see that after they file their taxes. So maybe we see something start to trickle in from retail as, you know, we go into maybe February, March.

The next couple of months, it's highly dependent, I think, on what interest rate actions you get coming out of central banks. I mean, we're getting into that tomorrow. I think at 49, you're still cute. You could probably do it as long as you're on air. Listen, I mean, some of the biggest DJs in the world are well into their 50s and even pushing 60 now. A lot of my contemporaries who are much more famous, they still live that life at 55, 60 years old. I just like to go to bed at like 9. I understand.

I drink a glass of milk. But we'll know you as Rock and Scott. Go ahead. That's right. Rock and Scott. I like that. I see Joe's jumping up on stage. I'm assuming that's because he had some specific thoughts.

I don't know. Joe, can you hear? Yes. Good morning, everyone. Good morning. What's going on? Oh, nothing. I'm just very excited about this price action. Man, it's, what a time to be here at the death of the four-year cycle.

It's probably one of the most exciting things that has happened, I think, in the history of Bitcoin. So I'm pretty pumped. Well, last year's New Year's party at Sailors was 100K party, so this year we can rebrand it to the death of the four-year cycle party. This is big, guys. I mean, you know, we live in a very sentiment-driven world. We live in a narrative-driven world, as we all know, right? And the narrative shifting about Bitcoin, where it doesn't have to collapse and you don't have to engage in this market-timing nonsense, more like an institutional asset. That's massive, and I don't think people realize it yet. I think it's huge.

Yeah. Did you see my arguments yesterday? I don't want to go through them. Yeah. I mean. My brother in here, I appreciate your post because you're willing to go out there, right or wrong, right? I appreciate people, you know, taking a view. explaining it well and you're doing a great job. So I appreciate it. The TLDR for people is that

we didn't get the bull phase. So why the hell do you expect? Anything close to the magnitude of the bull phase, why would you expect or sell based on the bare phase being at a bigger amplitude than the bull phase was relative? So, I mean, that's probably the biggest thing. From a technical point of view, it doesn't make any sense to say the 33% is essentially half of the, quote, normal Bitcoin four-year cycle. But the bull part of this was half of what you might have expected it to have been you know if it had been previous cycles so you know even even on the their own argument it's it's fucked up and if you take into account gold or money printing or anything else then it never happened right so there was no bull part of the cycle so you know so we're

not in a cycle anymore we are in a in a market where the network is just relentlessly grinding higher and it's gotten more and more cheap as time goes on so you know short that at your will and it happened because of excessive leverage being flushed out. And, you know, unless the stock market crashes, it ain't coming. You know, all the pundits who have been taking victory laps for the last two months are going to look stupid. That's really the bottom line. Yeah.

Well, Dave, I mean, the analogy I use, you know, drawing on my trial or background is like a rubber band, right? If you stretch a rubber band really hard, right, it's going to snap back. It's going to snap your finger, right? And I think that's what you saw in a little. lot of prior quote unquote cycles. You know, Bitcoin quite honestly had no business going to 196 in 2017. And I think it's snap back real hard. And that's the parabolic move and the snapback where, you know, we spent a year trying to sort through that and what is what is the appropriate

price at that point for, you know, institutional adoption, you know, for people understanding the asset, for, you know, the hedging tools that needed to be there. And you didn't get the pull. The rubber band's like, you know, pretty slack right here, I think. I mean, you didn't get this huge move over. So if you didn't stretch the rubber band, why would you expect it to snap back so hard? And I don't understand why this is so difficult for people to get. Yeah, I love it. And Joe, thanks for jumping up. But we are eight minutes delayed on a conversation here that was planned with etherfi, as I mentioned before. So we're going to move on to that. Mike, do we got you behind there? I know we always have technical issues getting people on stage. So if that was

happening, welcome to X. Are you there? I sure am. Yeah. Hey, thanks for having me. Perfect. No problem. So listen, let's dive right into it. I've been seeing you guys, obviously, everywhere. I think better than me giving the TLDR, perhaps. You can give us an introduction to ether.5, the cash card, your other products, and I guess, you know, the simple elevator pitch for the listener.

For sure, yeah. So Ether is pretty straightforward. Our mission is very humble. We want to replace all banks. So basically what we've built is a full end-to-end alternative. to traditional banks. We call it a defy bank or otherwise known as a crypto neobank. But the basic idea is you should have a product that is fully self-custodial that gives you all the power of defy, but at the same time, all the functionality and ease of use that you've come to expect from fintechs.

And so with ether buy, you can deposit your assets. You can wire your money in through, you know, good old-fashioned fiat, euros, USD, whatever you feel like. You can deposit stable coins without any fees. You can then buy some eth or VTC and stake it. Use that as kind of your base yield. Then you can deploy it into defy with one click. Super easy and get great rewards. And then you can actually get a credit card that lets you either spend your assets one to one.

So no fees, no nonsense, no extra FX charges, nothing. Just spend your fees, spend your crypto directly, or you can actually borrow against your crypto portfolio at currently at 4% rate. So a better rate than, you know, you can get any rate. You can 4% rate against your entire portfolio? That's, yeah. Yeah, that's, those are. We obviously have people on here constantly, and it's usually, you know, 9 to 12 seems to be the market rate for borrowing against crypto. Is that accurate?

I don't want to miss quote. Yeah, no, that's exactly right. Yeah, and that uses just the normal defy market rates. So, and that tends to be a lot cheaper than anything you can get from, you know, a traditional bank or, you know, obviously from a credit card that typically would charge you 30% for, you know, for boroughs. And it works great. It's super easy. The main, if you want to simplify the value proposition for somebody who's not, you know, super deep into defy,

It's that you have the equivalent or an alternative to a checking account that pays you a great deal. These days, I think it's 7 or 8% on your stables, but that varies with D5. So earn 7 or 8% these days on your stables and get 3% cash back on all your spending. I mean, that's a better fintech product than basically anything else that's out there. We also have a crazy promotion going on right now called Cash. which is where if you refer a friend or you get referred, you get 10% cash back on your spend for cashmust for two more days today and tomorrow.

So yeah, it's super easy you can get signed up in a minute to go to ether.5 and check it out. I think it's great. I'd love to hear feedback from users. So feel free to message me on X or telegram or whatever. So tell me what you think. Obviously, you guys have a huge element here that's non-custodial liquid restaking. So maybe you can break down how this works with staking versus restaking and defy.

I mean, you kind of just gave us the broad strokes, I think, of how you generate the yield. But, I mean, do people who are deeper in the weeds and aren't normies who maybe just, you know, understand that this is a banking alternative? Like, how do you explain the restaking and that side? Yeah, we try to keep it simple. Honestly, we try to abstract away all the crypto complexity. So when you're using Etheri, you're not dealing with, you know, seed phrases or signing random hex transactions and any of that bullshit that you've maybe come to expect if you've tried to use Defi. It really is meant to feel like a just a simple fintech product.

The underlying yield on ETH comes from staking and restaking. So, you know, for those of you that aren't familiar, staking is basically the mechanism that keeps. keeps the Ethereum blockchain secure and it's part of the consensus mechanism. Basically, you deposit your ETH into a special contract. And in exchange, you get to run a part of the network and earn some fees on it, earn some rewards, which these days are, I think, around 2.5%.

Now, that's pretty complicated if you want to do it yourself, but protocols like etherify, let you delegate the complicated part and just earn the rewards. So you deposit your eth and all the complexity is taken care of in the background. Restaking is a concept that was pioneered by eigenlayer, which is another DFI protocol that Etherfi works closely with. And the idea there is, in addition to securing Ethereum, you can secure other crypto economic networks. In an exchange for that, earn additional rewards.

And so these days, those additional rewards are around, I think, 0.25, maybe 0.3%. So it's a, you know, it's a 10% increase in your staking rewards. And so, yeah, and again, all of that complexity is handled for you in the background. You don't need to know, you know, or all the mechanics of running a validator node or delegating your stake deeth. You basically just deposit ETH and all this stuff is taken care of for you. Yeah, that makes perfect sense. Can we dive more into the card? Is it a credit card?

Is it a debit card? Obviously, I know that it's a visa card works with Apple Pay, offers up to 3% cash back as I'm reading through this, but you also said it allows you to basically spend your assets one-to-one. Yeah, exactly. So it is, you know, this is a technical distinction, but it is a credit card. A Visa debit card is just a different thing that doesn't work everywhere, that a normal credit card would be used. And so it's important to, to, that this is structured as a credit card. That being said, it is a fully collateralized credit card. So you're either directly spending your stables like USDC or USDT, or you're borrowing against your portfolio. So if you have, for the sake of argument, you have $10,000 of stuff in your ether 5 vault, let's say some that is stable, some that is ETH, some that is BTC, you know, HeathPy token, whatever.

You've got a bunch of stuff in your portfolio. You basically get a credit, a line of credit, that lets you spend or borrow against those assets. So a very common pattern that we see is users would deposit into our DFI strategy vaults, that, you know, a representative yield might be you're getting 8% rewards on that. Again, this is variable, but let's say for the sake of argument, that's what it is. And then you're borrowing at 4%, and so they're basically kind of arbitraging those two.

They're earning 8% and they're spending by borrowing it at 4%. So that's a common use case. And in other cases, people would just borrow against their ETH because they're bullish on ETH and they want to keep the upside. and they you know it's a great way to uh to borrow and uh and you know use that uh the crypto in real life so if in that case there's some theoretical like liquidation risk or margin requirements of price drops dramatically yeah exactly yeah in both of those you're taking on risk so it's not you know arbitrage is uh not a probably not the right description uh exactly because you're taking defy risk by you know depositing into the defy strategy vault and then you're you know you're

spending so they're you know you're taking an opinion about i guess the how big that risk is that you're taking got it and so you mentioned in passing there the eFi token so maybe we can dig into that a bit like what role does that play in governments protocol fees incentives how's it use as collateral, I guess, what's the role of the token itself within the ecosystem? Yeah, you know, we honestly kept it pretty simple. My background is, my previous company that they started was B2B SaaS, so software is a service company. It was really straightforward. You know, we made a product. We charged money for it. Users paid us, and then we grew the business. So that's the kind of like mindset, I guess, that we've taken to building Etherpies.

many ways it's it's really straightforward and so the token utility is really simple uh part of the protocol revenue goes to buy back uh the token on the open market which therefore ties the sort of the fate of the token to the success of the uh of the protocol we recently i think i think it was in last month or so actually announced a 50 million dollar buyback program where just every day we buy you know one to 300k of the uh token on the open market um and um uh You know, that's just the way that we're returning value back to token holders. Yeah, that makes perfect sense. Thanks for digging more deeply into that.

So how do you, like, I guess from a business perspective, how do you gauge what you would view as success? Is it based on, like, how much TVL? Is it spending volume? Is it more people using the card? And I guess with that in mind, like what targets do you have in the future? What are you building towards? Yeah, that's a great question. So there's a couple of things.

I mean, Etheri is already one of the more successful D5 protocols out there. We have, I think, about $8 billion in TVL, you know, depends on the price of ETH that day. So we're top five, D5 protocols out there. In terms of the card products, specifically, we're by far the largest non-custodial card out there. I think by maybe even an order of magnitude at this point. So doing incredibly well. But look, honestly, I measure my success in terms of the number of, you know, customers that we have, a number of people that we can actually help live their lives in this new financial universe

in a way that gives them the freedom and flexibility and ability to defend against government, you know, currency debasement or seizure of assets. But that's really what I care about. That's what motivates me day and day out. And we have hundreds of thousands of, you know, users now and growing, you know, incredibly fast. We're adding, you know, a couple thousand a day now. And so my, the real end game that we're aiming for is to be a viable alternative to traditional banks. Like we want to have millions of customers next year and hundreds of millions of customers in the years after that.

We want this, I think this is objectively a better model for financial services than the traditional model. If etherfi was a traditional financial institution, I think we were custodial and operated like a Tratify institution, with our current deposit base and revenues and customers, we probably have to have about 6 to 700 employees if you just look at comparable institutions. Whereas today, Etherfai has 35 employees. So there's just a, there's more than an order of magnitude difference in cost and which is efficiency. I mean, this is why we're able to give much higher rewards. We don't have to kind of screw our users with all kinds of hidden fees. We don't need to do that because we just operate much more efficiently. And we can pass that on as higher rewards and lower fees to our users.

And that's, you know, that's what gets me up in the morning. Yeah, so how can people get involved today? Yeah, super easy. Just go to ether.5. As I said, right now, we've got this, the biggest promotion we've ever done called CashMiss. So for two more days, you can get 10% cashback on your on your spend if you sign up for the card specifically. So just go to the EtherFi X account or anybody that's tweeted about it and use their referral code to sign up so that you can get that 10% cashback bonus. And then invite some friends and then you get cash back on their spend too. Awesome. And I guess I got like two more minutes. So beyond all of this, you kind of gave

the grand vision humbly at the beginning to replace the bank. Like, what's the five-year vision? I mean, if we can do that in five years, I'll be, I'll be pretty happy. I mean, that'll be a big win. I do think it'll, I mean, this is, it's going to take probably a decade or more to truly re-platform, you know, what financial services look like. But I do think this non-custodial model is is going to be the default model in the in the future and that's I think when we look back at the early days of the Bitcoin I mean I I got into it back in 2011 I bought box of Bitcoin that when it was 80 cents a coin so I got excited about it early on but in many ways the vision went you know unfulfilled because you know the the big

limitation of Bitcoin and the Bitcoin script that sort of underlies it is that it's not term complete. In other words, you actually can't, you know, you can't build financial infrastructure on Bitcoin. It's sort of, it's always just going to be a pet rock. And so the power of defy is exactly, you know, what in many ways I look at etherfi as the end game here. Like this is what we've been working towards and what many people got excited about in the early days of Bitcoin, which is creating a truly stateless financial infrastructure, where people, where the sort of power dynamics shifted dramatically from governments and central bankers to individuals.

So I'm pumped about that. I mean, I think this is really revolutionary. Awesome, man. Well, thank you so much and for sticking through it after the issues. We've got Mike here, obviously, give ether.5 a follow. see them up on stage. Mike, you're at, I don't know how to put it. Is it still a godze? That's how is that correct? Yes. Nailed it. Yeah, so, so Mike, you can follow him as well at Mike Siligadzee and check out the promotion that you guys have going for two more days, man.

Mike, thank you so much for your time. Thank you, everybody, for listening. Thanks. We will be back tomorrow for another crypto town hall. Have a good one, everybody. Bye. This space was downloaded via Spacesdown.com. Visit to download your spaces today.