The Wolf Of All Streets - CZ Pardoned!? Will This Derail Crypto Laws? | CryptoTownHall

Episode Date: October 25, 2025

This Crypto Town Hall live stream centered on the recent pardon of Binance founder Changpeng Zhao (CZ) by the Trump administration, a move that has sparked debate within the crypto community and mainstream media. The goal was to unpack the political, legal, and industry ramifications of the pardon, contrast CZ's situation with figures like Sam Bankman-Fried, and examine the broader context of crypto regulation in the US. The hosts and guest speakers also explored macro issues including the impact of institutional financial innovations (like Bitcoin being used as pristine collateral), money market liquidity, and the current cycle in markets, offering a broad discussion of what's next for crypto both legally and in the wider financial landscape.

Good morning, everybody, and welcome to Crypto Town Hall every weekday here at 10.15 a.m. Eastern Standard Time. Dave, I know you're co-hosting. I thought you had to drop for a second. I don't know if you could hear me, but I know Dave is trying to shuffle his mic at the moment. Obviously, the key topic of the day here is CZ's pardon. Very polarizing, obviously, decision by the Trump administration, those who are deeply, obviously entrenched in the crypto industry, many thinking that CZ's case in the first place was lawfare by the Biden administration, that he served his time, paid a massive fine for a crime that nobody has previously gone to jail for. It was already free and effectively that this pardon is just erasing of a bad decision from a previous administration. Of course, others view CZ as a different kind of figure than that and think that this was some sort of bribe or

grift and of course that means we have to argue endlessly about it on social media a pretty unbelievable situation to be quite honest what i find interesting personally is that when i scroll social media or group chats with friends of mine nobody seems to have the story straight it's a very clear idea of what normal people who are not in the industry are being fed and how wrong it is if you read my group chats, you would literally think that Trump showed up at the prison with a suitcase full of cash and sprung him directly from jail, you know, and bribed the guards on his way in. I mean, that's really the way that they're presenting it. And I think most people don't even realize that CZ is free and out of jail and effectively has been living his best

life with $90 billion in net worth already. So just really interesting here, you know, I just discussed this on Friday 5 with NLW this morning. He was more on the unhappy about it side. I was more on the happy about it side. I guess we can dig into it here. His point was nothing to do with CZ, though. He really did believe that this pardon makes life more difficult for the industry in the United States. I don't necessarily agree, but that was his take.

Dave, you're good. Can you hear me now? Yeah, you're good now. Okay, yeah, I don't know what it is. I can't get X to work on my. computer again. It's just annoying as crap because phones get interrupted. But anyway, look, lots of people have lots of views on CZs, a polarizing figure for sure. There's a couple of absolute certainties here. It is absolutely certain it's going to make, complicate the political

situation. That's just fact. You know, we can argue it or not. It is equally certain that the timing of this is highly likely to be a response to the fact that the political situation had broken down and people like Gallego acting with faux outrage, I think this is classic Trump timing it to tweak them and basically say, I don't give a crap, you guys don't want to abandon this industry and be looked at this way, so here goes. I wouldn't be remotely surprised if that were true. But it is going to complicate the political situation. So there is that. Then again, it's done and you've got to live with it.

The thing, the takes on this, though, are insane, right? You know, it's like, everyone's like, well, you know, people are like, well, you know, CZ dumped FTT. That's what NLW said and all sorts of other stuff about whether he's a bad actor. That was not what he was convicted of. What he was convicted of was effectively turning a blind eye to U.S. people, generally the big market makers and active traders using Binance and a period of time. That's what, you know, and not supervising and that having and that on the platform,

their AML processes were shit, meaning that there's some amount of bad actors that were using it. By the way, every single foreign crypto platform at some point in time probably is guilty of the same thing. By and large, almost every major international bank has been fine for ignoring suspicious activity reports and all sorts of things that amount to the same thing under the same acts. And he's the only person to have been personally prosecuted for it. I used to have the stats, Dave, but I don't have it in front of me that there's an amazing site where you can basically see all the fines paid for similar crimes. Yeah, it's a crazy.

I mean, J.P. Morgan, I mean, J.P. Morgan was Epstein's banker, right? I mean, it's not like. Yeah, I mean, right. And not one person at J.P. Morgan, not one has even been prosecuted, much less convicted. Also, the fact is he served his jail time. He did serve it. So the only thing the pardon does, realistically, because he doesn't have to pay his fine, it's not like the personal fine, which was, of course, to him a slap on the wrist. You know, like $50 million. Four billion bucks? No, no, no, no. That was that was Binance. That was not him. But it's, his personal fine was $200 million, $150 civil and 50 criminal. But he is not paying that back. That Trump's not

handing them the money. But he paid, you know, he literally served. time in jail. He's literally the only CEO that did, you know, other than people like Elizabeth Holmes and SBF. Now, SBF I'm going to get to in a heartbeat. But, you know, the only real question is, does the pardon, what it allows, is it allows him to be back in the industry, whether at finance or someplace else, that it does. And you can argue good, bad, or indifferent. I think that the unbalanced people would probably see good. There are lots of people who are still really upset about the way he, you know, his, as NLW put it, his ego fighting with SPF, you know, triggered a mess. A mess is, by the way, a woeful understatement.

But that would never have been a problem if SBF hadn't basically embezzled customer funds to do the shit that he had done and replaced it with shit collateral, you know, as FTT. But the real issue here is he, FTX or Sam, was a massively bad actor. He criminally defrauded and harmed people at a level. that he was convicted of that nobody else would do. It is not even remotely the same thing as CZ. And if he pardons Sam, that would be a shitstorm that I can't even imagine. I mean, that would be such a bad look.

You know, it would be like pardoning Bernie Madoff, arguably worse. It was Bernie Mavis is dead. The bad look would be if he commuted P. Diddy. That I can't tolerate. Yeah, that would be. You're right. That would be in the same, but Gary, I agree. Yeah, agree. I mean, you and I agree on all. Non-starter for me to, like, I will go fucking ballistic against Trump. He can't do that. That'll destroy his reputation.

Yeah, absolutely. You know, it's like Biden didn't have much of reputation to destroy when he commuted the sentence of a bunch of people who basically were in the same sort of zip code as P. Diddy. But P. Diddy is higher profile. And you're right. And, you know, it's just, but that's what this is about. I mean, and people are, you know, very emotional about this topic. But the truth is what actually matters, what actually matters is whether or not we're going to continue a political impasse or we're going to get somewhere in terms of making the U.S. capable of being a hub for innovation. That's what matters. And I'd love to hear what everybody else think. So I've gotten to speak my piece. It's, to me, this is much more about emotion than it is about actually impacts. I'd love to know at some point, guys, where inflation is going to come from, all this hyperinflation that I was being terrified about. well i mean yeah i i never never mind i i could i could go on that one richard you have we

do that one next yeah let's do that one next richard what's up hey guys yeah look i mean i'm unequivocally going to come out in support of cez i mean if you've been here from the day finance launched um the one thing that is undoubtedly the most common thread with cez he's present always been He's never hidden away from any kind of controversy. And, I mean, you just have to go around to the conferences. I mean, perhaps this is a, you know, looking at from a purely crypto lens. He's extremely loved. He brings so much up and attention to any conference that he attends.

And maybe we've, you know, we're all seeing it through relative tinted lenses. You know, I think with this most recent market. wipe out, people asking some serious questions. But once again, you know, Binance didn't waver. They, they were front-footed with dealing with this debacle. You know, they came out with immediate compensation and I'm sure there'll be more that comes out of this. But my take on the business is like Citi is front and center. You know, he's online, he's engaged, he talks with people, he's constantly on spaces. This is not somebody that's hiding or trying to run away. from controversy. So, you know, perhaps there's some, you know, from a political point of

view, questions would be asked. But if you truly are somebody that considers yourself passionate about crypto, I mean, this guy is nothing short of a hero, you know, what he's had to endure. And he's survived everything. Let's not forget every single issue we've had since 2017, he's survived at all. And I think he deserves our support. However, this plays out between the political parties in the U.S., that will take its natural course, but I really believe that, you know, as crypto people, I don't believe the crypto community are polarized about this. Maybe political people are polarized about this. I don't believe crypto people are polarized about this.

Yep, I see this exact same thing. I'm more on your side, Richard. I think that, look, if you talk about billionaires that have done bad things for society, CZ isn't even in my, even close to the top. I mean, you know, I'll start probably with Reid Hoffman ending up with Bill Gates trying to make us all eat bugs and doing what he did with the pandemic and the vaccine shit. You know, there's so many billionaires that have done societally worse things. We could go, we could have an entire space, you know, target the billionaire that's done the worst things for society. CZ's not going to even be in the conversation. So the sole question really is people who are but hurt about different things that finance has done over the years to become what it's

become, but nobody can argue that the market would be in the place that it's been at the same level of institutional acceptance without CC. I mean, if you want to make that argument, you're being intellectually dishonest. You might not like some of the ways that it happened. You might not like some of the bare-knuckle stuff. And believe me, I know, I ran a company, and I think that Binance is actually a much more professional, better actor in the space today than it was five years ago. I have direct personal receipts on this, but that is not a reason for someone to be, you know, to have a criminal record, you know, that whether you expunge it or not when he was the only person targeted. And I think you're right. He stands up. But anyway, that's, you've heard enough of me. Carlo and then Adam. Yeah. Good morning, gentlemen. I have perspective on this as well. Good morning. God. You got to say it. You don't know. Good morning, Scott. I've hired Dave as your good morning assistant now. I love it. Good morning. Geez. Look, I got some firsthand experience on this because I actually was in New York City speaking at NYU when Sam Bankman trial was going on, got to see testimony from the government's forensic accountant who broke down where the 12 billion in fraud went. And I agree with Dave. There's just no comparison. CZ got to see him speak at token 2049 in Dubai. And you cannot deny that he's. He's definitely passionate about this sector, passionate about the technology, and he's also smart. Look, he made mistakes. He wanted access to the U.S. market. The government had the internal communications from the company players about what was going on as far as geo-fencing fuckery and trying to work around the restrictions. Is he good for the money transmitter violation, probably? And that's why he struck a deal. He paid. Should that have been

handled administratively, probably, but it was a different agenda for the DOJ. We know from what's happened with a samurai wallet, what's happened with tornado cash, that that administration and that DOJ weaponized the money transmitter law, and that is one example of it. But he knew they had him. He knew he was not going to win a fight with the United States, and that's why he took the deal he did. Sam Bankman-Fried knew, I would venture to say.

say that the government had him, but his inability to accept that and his hubris caused him to go in a different direction where he said, F, you, I'm going to trial. And the government gave him exactly what he wanted. He got his day in court, and his defense was not acceptable to the jury. They didn't buy any of it. And the judge didn't buy any of it at sentencing. And he's, in my opinion, I see no reason for him to get a pardon because while Trump, clearly doesn't care. Trump's going to do what he wants to do. And Trump's a businessman. And Trump probably looks at CZ and says, look, it's a cost of doing business. But I'm going to throw you a pardon here for this. So we can perhaps talk about bringing you back into the U.S. market in a

regulatory compliant way in this new era. Sam Bankman Fried's a different thing. Politically, his family's not at all aligned with this administration. And I can't see Trump having any incentive. Although he can do it, he enjoys absolute power to grant these pardons. I can't see any upside, especially when he's got critical crypto sector players at his beck and call who would probably advise him on this and say, look, man, we've been in the sector. We know what happened here firsthand. We saw the contagion effect of what he did to the market. And this is a very different thing. So I just can't see that happening. We could speculate about it. There'll be prediction markets about it. But I just can't see that happening. It's funny when you're talking about

prediction markets, Carlo, because I'm like, how many people are, you know, using a VPN to trade polymarket and stuff too? It's, it's kind of hilarious that he paid such a price for that sort of thing. But your question to you, though, is do you think like CZ's pushing for this part? And I mean, do we, is the general vibe, my vibe is that he's, he wants to go back, start leading finance again and try to bring this thing public in the U.S. Maybe I don't know. What was your vibe you got at the conference about that? Yeah, look, I think he would, certainly, I would predict. I don't know him personally, but I think he would love to have the opportunity to take back

the reins of his company. Now, you have to understand there's a nuance here. The company also was convicted and sanctioned, and the company has very stringent limitations and requirements for regulatory oversight. Whether this opens up a path for him to take over the reins of the company again, I think that's possible. And it's very clear that this White House is open to crypto. It's very clear that crypto has the attention of this White House.

I mean, we saw reports that you've got Coinbase, you've got Ripple, and you've got Tether, helping to pay for the expansion of the White House, for the ballroom. I mean, this is kind of the reality of where we're at right now. So, CZ, certainly understands how the world works. Carlo, can I ask you a question? Has anybody dug into what the pardon actually means for CV, considering he's already paid his fine, done his time? Like, what does this actually allow him to do? If it gets rid of the restrictions, it gets rid of any restrictions on business.

Right, but Binance is restricted. And CV has been bullposting, like, meme points in exchanges for the last few months and talking about Binance openly. Yeah, but that's not the same thing. No, but there's very strict rules. in virtually every financial services business about convicted felons and almost always you would be blocked from being involved in anything that's money transmitting. You would certainly have been blocked if they got FTC, you know, CFTC or SEC licensure, he would have been blocked. Right, but I thought it was like a two-year ban, not a lifetime ban or something. Maybe I don't remember correctly.

Also, also to factor into that, he also, if I'm not mistaken, after his time served under federal sentencing, he was required to be on supervised release. For three years. Right. So this erases the remainder of his supervised release term. Yeah, this is a because that restricts his movements. And also, if you're trying to come into the U.S. in a regulatory compliant way, having a big fat conviction on your record for violating the Bank Secrecy Act is not going to favor well for you. So I think it's a big win for him. Absolutely. Yeah. The company, different fight. Yeah, exactly. And so realistically,

As I said, you know, you can boil it down for the simple people in the group chats and all the people talking about it. What it means is he can personally be involved in crypto businesses in the United States. And it's same, you know, and it gets rid of that. That's the sole question that this has impact on. And by the way, in the United States, it's a very broad term for obvious reasons. So it's that's what it matters, Scott. And, you know, look, you could you could look at every aspect of this if you want. But that's really what it boils down to. And there's just a lot of emotion here. Anyway, I saw Richard first and then Ajit. Yeah, I've been in a bit of a rabbit hole of the last couple of days. I mean, but I have been following as much as I can. But what is the polarizing view on it, Scott?

I'm curious to know, man. There are a lot of people who think that CZ is a bad guy who's done bad things. Not even that, Dave. I mean, people are saying that he paid $2 billion, or effectively, like, moved money around to fund USD. to buy himself a pardon and that he's financially involved with the Trump administration and their crypto plans.

I mean, that's the, that's the quote unquote accused rift part. Like if you read the mainstream articles, Wall Street Journal and such, it's, you know, convicted, criminal buys himself a pardon. That's basically it. Right. By the way, Scott, your take on Elizabeth Warren's take on this was great. you actually got a drive for a community note to correct her where she was up in arms about him being pardoned for money laundering. While yes, it was a conviction based on lax AML standards and

so forth. It wasn't an actual charge of money laundering. And you've got to be commended for calling that out. She's such a ho. God. Elizabeth Warren. Anyways, yeah. You know, I reached out to her an interviewer, strangely, they have not responded to me on my multiple requests. I've tried about 50 times. Weird. Weird. Strange.

She's just going to talk her book. She's going to talk her book and there's no change in that. Yeah. And listen, a lot of people accuse me of saying, hey, you're being nitpicky. But saying somebody pled guilty to money laundering is wildly different than somebody saying that they did not put the protections in place on a platform that they were. were running that allowed some money laundering to maybe happen on that platform. And then you add to that, Scott, that her major ally in Jamie Diamond has now decided that

he's going to let collateralize Bitcoin be on the ledger. Did you see the meme that Jeff Park posted? I shared it. I shared it. You got to share it. It's so good. That's going to be the next. We need to talk about that.

But let's go to, you know, I think there are a couple of hands of Jeton and Panos. And then we do want to talk about that specifically because that's a way bigger deal. people realize. Yeah. So, you know, people may have their personal politics about whether they love or hate Trump, which might be driving this. And there might be this entire conspiracy around whether there was bribery involved. But on the topic of whether this has beailed crypto laws, regulations or the industry, I must tell you that I work with regulators in India, Dubai, and earlier in Singapore, and when I talk to people, I feel this actually is a positive. It was not too long ago where any activity that you would do in the business of crypto was viewed

suspiciously and probably still is that way. So the fact that there is a legal action, whatever it might be, the fact that somebody's been given a pardon and the fact that that major industry player, CZ, is going to be back in action, I am seeing within the crypto circles as being very welcome because it is not as if you are guilty until proven innocent. So politics apart, I think this is a good thing to happen. Dave, I can't see hands and you have to go. Pardon us.

Yeah, just to touch on CISI and what you guys were saying, as far as the pardon goes, obviously a lot of factors come into play now because he's got his rights and his freedoms back and he has now more business opportunities, maybe even stepping back up as CEO for Binance. I think one of the biggest impacts for him is his reputational aspects. But what I'm very interested in is for him being pardoned, that basically shows clearly there was overreach towards him and the crypto industry.

So what does that mean moving forward for regulators and the industry if one of the biggest guys has been pardoned and it's literally showing that there was overreach and that he shouldn't have gone to jail? Well, I think that it would be very hard for someone to argue that the Biden, DOJ, and Biden, basically the entire administration directed by Elizabeth Warren, wasn't targeting crypto. I mean, we all felt it in many different ways. And it's, it was, I mean, as far as I can tell in my short lifetime on this planet, which is longer, sadly, than most of the people on this, on the space, It was pretty damn unprecedented for an industry to be targeted unless you consider, you know, in such a way. So, yeah, I mean, that's true.

Whether this proves anything or not, I don't think we needed the prove, but I think your point is well taken that we know this. That it's a new, it's a new world. Should we pivot to Jamie Diamond? Yes, pristine collateral. Yeah. CJ, you're my guy. You're my pristine collateral guy. What do you got?

Oh, my goodness. My heart jumped a few beats this morning when I saw that. This is so important. This is so big that it's, I'm not sure there's anything going on that is bigger than this right now. And the reason is because the, this is an acceleration, right? This is beyond the Wall Street narrative of digital gold. Digital gold is money, right? And digital gold is a store of that.

value. But beyond that, there's a financial premium that will be added on to Bitcoin when it is recognized as a pristine collateral. So I think the two things I want to hit home here for most of the people who already have my view. This is the way I'm thinking about it. Number one, the upside on Bitcoin is the path of least resistance as the asset class matures and evolves from a store value to a financial tool because there's much more. use case for it. Like people always ask, how do I use my Bitcoin? Well, when it's a collateral and eventually becomes recognized as pristine collateral, there are many, many, many ways you're going to be able to use your Bitcoin, just like investors use real estate to add leverage to their position. So that will create a premium, that will create an added layer demand on the asset class, which will bring about the result we all want, which is a higher fair market value price. Well, but I think, but CJ, it's so much bigger than that. Let me put this. in terms that people should understand. In pre-1988, equities was treated at the same way crypto

was treated today, i.e., you know, equities and non-U.S. Treasury sovereign debt, if you're in the U.S., was treated as you needed to reserve 100% risk capital against it. The 1988 Basel Accords effectively allowed banks to create what are called haircuts on risk assets that in a much more programmatic, rational way that allowed for securitization. The business that developed in terms of stock loans, securitization, we're talking overall trillions of dollars worth of business. We're talking tens of not hundreds of billions of dollars of profits and utilization and financialization.

The entire bull market in many of these things was triggered by that 1980. decision because it allowed for full use in the financial system. So now we have a financial system that Bitcoin sits on the outside. And what these banks basically just said, they put their line in the sand and they're like, look, this is the only way that what they're doing could happen is if Basel and if banking rules change. And they're basically saying, listen, we need them to change because we don't want to lose to companies, no offense, CJ, but companies like yours who can innovate the crap out of us because they're hamstrung by capital rules. It is a very, very big deal because if they get that done, we're not, you know, people don't

get the fact, but basically that is the, in many respects, the final boss for Bitcoin to become part of the financial system in a way that is a multiplier on its value. So I can't underestimate, you can't underestimate how big this will be, but it's only the first inning of this story, but it is a very important first inning. And it's only for institutional clients first. Let's be clear about that. Oh, absolutely. 100%. But only for institutional clients means only for a multi-trillion dollar market. And question, Dave, a quick question for everybody. What do you do if you're sailor on the heels of this news? Because you're holding 600,000 Bitcoin. You're offering a full suite of products,

including a dividend product now on the low end of the spectrum for consumers. customers, does this pivot strategy to open its own bank over Bitcoin? Well, it would allow it. And if you're sale or you're looking at your chops. I mean, if the Basel rules changed, given everything that he's already built, I don't know what the multiple would be, but his MNAV should be far closer to J.P. Morgan's MNAV to book than where it is today as it's currently sitting. Not to mention the fact that he becomes a crazily attractive takeover.

target for the largest banks in the world. So, yeah, I'm sure that the people inside strategy are, look at this and are like, this is a good thing, and, but they don't have any way to, you know, maybe they do, I don't know, lobby, you know, Basel and the bank rules, et cetera. I mean, this is all that kind of grungy plumbing that people don't like to think about, but it's very important grungy plumbing. And CJ, you obviously think about this all the time. So, but I don't think people appreciate just how politicize this stuff.

and how important it is to have the major stakeholders who spend the most on lobbying and the most on the persuasion to be behind it. That that's why I think it's a big deal. I probably, Dave, thank you so much for that breakdown because you said it more eloquently than I could have. That was the, this cannot be underestimated. But what's so exciting for me is that as somebody who thinks about this way too much, you can just ask my wife about that. I can't get this out of my head. But what happens is when you first start working with, Bitcoin as a collateral, especially from the lender side versus the borrower side, there's some really big realizations that take place.

And that is what I think is like, yes, this is step one. There's a long way to go. We need to get from institutional to retail. We need to get Basel banking laws updated. We need to do a lot of things to make this have the effect that Dave and I see that it will have on the marketplace. But the long term effect of this, I think, is innovation. The long-term effect of this, like recently, we saw credit tightening.

We saw subprime auto loans flip upside down. Well, Bitcoin itself is a de-risking asset. So, you know, when you have mortgage and you have less than 20% equity, they'll get you, they want you to have a private mortgage insurance. And this insurance is supposed to reduce the risk for the lender. Well, the same thing can be done with Bitcoin. You have a Bitcoin mortgage insurance. But what about a Bitcoin auto insurance?

Bitcoin is, when you start to work with Bitcoin as collateral, it moves from a risk-off asset, excuse me, a risk-on asset to a risk-off asset. It is literally a de-risking, a de-leverging collateral when you integrate it into traditional credit products. And this is the conundrum of our time. How do we get interest rates lower without stating and anchoring and yield curve control? Well, it's not just the supply of money and the demand for loans. It's the risk element.

And this is where Bitcoin enters the equation. We can get the risk variable down and create negative risk. And by adding Bitcoin as a collateral component to tradify credit systems, whether it's a subprime auto loan, a mortgage, whatever it is, putting a little sliver of Bitcoin into that, some type of insurance product or some type of DCA strategy, it completely de-risks the long-term credit risk. What we call in credit, the longer the credit, the greater the duration risk.

That's what they call term premium. The longer you borrow money, the higher the term premium because the greater the risk, the promise is going to be broken. So, CJ, could I make this, can I, let me make this sense. You're very technical, and I understand what you're saying, but let me put this in terms for the audience, and please correct me if I'm getting this wrong. If today you want to get a mortgage on a house and you want to a Bitcoin back loan, the companies are doing the Bitcoin back loan can't give you loan to value on the basis of the actual

house. They can only give you loan to value on the basis of the Bitcoin. Now imagine a world where you can do both simultaneously. It is a very big deal. So pick an example. You have a $2 million house. You have a million dollars in Bitcoin. You don't have any cash. Well, if you can get 50% loan to value on the Bitcoin, well, guess what? Now you have $500,000 down payment insured by Bitcoin and a traditional mortgage or whatever a traditional mortgage rate is on the cash, which by the way will be an interest rate that's well lower than just the Bitcoin-backed loans because of a variety of reasons. That can't be done today. That can only be done when the capital rules change. And that is huge. And you don't have to take a tap the capital gains hit on selling

your Bitcoin. That's right. To me, I mean, I'm not shitting on what's being available in the Bitcoin back loan space and you guys' innovation. I think there's a lot of really cool stuff, but it excludes second home. It includes a lot of stuff. Getting this mainstream is a very, very, very big deal. I don't think I can underestimate that. And I just, and I don't, and by putting it that way, because there are a lot of Bitcoiners who don't own, you know, a hundred Bitcoin.

They don't own even 10, but they might own two or three, and they might not have enough money in cash to do a down payment, that all of a sudden, They can pledge their Bitcoin for a down payment. People will come up with those sorts of products once it's accepted as pristine collateral within the existing mortgage structure. So there's all sorts of use cases that become possible once the rules change. Now, the rules haven't changed yet. This is just a couple of banks basically signposting that they're going to push for it,

but it is a big deal when it happens. I mean, CJ, did they get any of that wrong? Like I say, CJ, isn't that a pretty good commercial for people's reserve? That was, Dave, can we bring you on? Sure. Not only do you have the content, you have that beautiful voice, too. No, I'm more than, by the way, yeah, you know, it's like, yeah, we all, we all know. I'm sitting here, you know, my most, most impressive unpaid job co-hosting this space.

But yeah, no, it's, but people need to understand what all this stuff means. And so many people, especially on crypto Twitter, get involved and not understanding the real world implications. This has very major real world implications. Now, if you play the chess board out and you say, well, okay, cool, what does that mean? That means that the number of people who are selling Bitcoin this year, which is the reason the price is where it is, almost none of them would need to sell. They would do what Bezos does. Scott, you have the best way of expressing this? Buy.

Yeah, buy, borrow, die. I borrow die. And you don't hear sell. and that that matters right you know but look there's a long way to temporary here it's not happening immediately but it's telling you this is you're now you now have a really good idea of where it's going and once this happens there's this is this is one of those things that you it's not going backwards that's right this is this is the acceleration of institutional like he sub adoption so we know what regular people want bitcoin they need a savings vehicle

They need to protect their purchasing power. But big, you know, G-Sibs, big institutions, they don't really care about that. They have billions of dollars of cash flow and they're running a business and they want to capture as much market share as possible. They don't really have a real reason to adopt Bitcoin unless their customers are demanding it. This is the institutional use case. This is the argument that can be made in the White House of how to sustainably lower interest rates without stating and angering in yield curve control.

this dynamic, this narrative, I believe, is the real bull market narrative. Yeah, I agree, as opposed to look. And with this story out there and these things going on, I just find market action rather amusing, right? Because the market action, you know, Bitcoin was up when gold was down. Now gold is up and Bitcoin is down. There's obviously speculators, you know, pushing between the two. And there's no new money, you know, well, there is new money coming into Bitcoin, but they're still selling. It's basically range-bound boring trading at the same time as we're seeing tectonic stories.

And these tectonic stories, maybe they take months, maybe even years, but probably months, before people really understand them. And that's what's going to change things. So, you know, if you want to know what real alpha is, real alpha is understanding this. I mean, Gary, I mean, have I made you even more bullish? I know that that's not all that easy. But, you know, you've been in these markets a long time. And you see how long it takes for some of these stories to play out, right?

Yeah, it's coming, though. It is most certainly coming. And the interest rates are helping us. Like, I don't see, maybe you guys don't want to talk about inflation, but I just don't see where this inflation is coming from. Well, the thing that people always forget about inflation, Gary, is just how important gas prices are in pretty much everything you buy. I mean, I actually, this is totally, you know, totally ridiculous.

I'm going all Peter Lynch again. But, you know, I cooked, you know, we have our outdoor barbecue here in my apartment. I cooked, you know, T-Bone steaks yesterday. And the T-bone steaks, I happened to notice were at my local publics were, they were good ones, and they were cheaper than Costco, or what Costco usually is. And the reason is because gas prices are down across the board, and it's easier to transport this stuff. And people don't understand that when you start calculating inflation, that's what's going to matter. Now, if oil prices do, in fact, spike up for one reason or another, you know, sanctions, et cetera, that could reverse it. But until then, you know, we're not, on the consumer side, it's pretty muted.

On the services side, it continues to explode. But it's a question of what you're looking at, right? We did get the CPI report that came in a little bit cooler than expected this morning. So to your point there, Gary, you're looking at inflation. Markets seem to like a little bit, though. Yeah. And look, you've got also, you've got to remember, you have $7 trillion right now in money markets and rates are about to get cut, which is going to now incentivize people to get out of those

money markets into higher yielding vehicles. So you're going to see that money flow into stock market, Bitcoin, and this and hopefully an end to the government shutdown should be the opening for the final bull leg that we've been waiting for. That can't be understood. Like, what Carlos just said, it's so important, Gary. That's the answer to your question. Where's the hyperinflishing going to come from? That's

why I brought it up, dude, because I don't hear anybody talking about. I don't care about CZ. I mean, CZ's good guy, good. He got his deal, paid his fees. Interest rates coming down, shit. I mean, there's $7 trillion sitting in money market funds that can move at the switch of a phone call.

Yeah. And it's, Dave, how much is that is retail? Because I know it's retail and institutional last time I checked it was like I think it was four trillion retail somewhere just over three trillion I mean it's probably there's these are very big numbers CJ there's both that there's also trap bank deposits right that earn virtually nothing uh that are going to get freed up because of of other things we always talk about I don't want to mention stable coins because then carlo will we'll spend the rest of the well we don't have that much time together I mean Scott needs to leave in a minute but look the the truth is that

These things aren't switches, but they are. Everyone who says, oh, well, I've heard scenes lots of people on crypto Twitter, Gary, say, well, you stop talking about money market funds. Those are different investors, et cetera. We saw it in the pandemic. We understand that the marginal player, it does matter. And at a certain point, everyone makes their decisions. You know, it's, I think the two year is probably the most important benchmark for that because of, you know, various and sundry stuff. It's also CDs.

there's a ton of CDs that roll over and people won't renew when the interest rate is a percent or two lower, right? So all of this creates people to push out on the yield curve. And whoever just said it, it's right. It's out on the yield curve. Some will end up in stock. Some will end up in Bitcoin. Some will end up on products. More will end up in products probably like what strategy is offering.

And he probably won't have to offer 10% to be able to buy Bitcoin. What percentage do you think, Dave, of that $7 trillion might roll? Are we talking 10%, 20%, it doesn't work like that. It's all marginal, right? You know, it won't be all at once. But ultimately, you know, it's the amount of money sloshing around the economy. Make no mistake, the U.S. government alone is pushing $2 trillion into the economy this year in money in order to fund the fiscal deficit.

They have to. Yeah, Matt, remember when the Fed was raising in, interest rates. It wasn't just about attracting new demand to issue new debt. It was about pulling liquidity from the marketplace. And that's where all that money went and parked itself in that yield. And now that it can't get that yield, it's going to go out the risk curve. These people who were investors were incentivized to become savers. And now that the pendulum swinging the other way, the savers are going to be incentivized to become investors. And that demand, it can't be just gauged on a one shot. Oh, you know, when we hit this point, X percent is

going to shift. It is marginal, as Dave said. But the front running, I think, is happening right now. We are forming the base in these assets right now, which is why I believe we don't see that, you know, Gary asked a great question, which is where does the inflation come from? But behind that question, the foundational element of that question is, how strong is the economy? And And can we maintain 3.8% GDP and where's that growth going to come from? Where the hell is the inflation going to come from? People get positioned into cash equivalence. Like Dave said, they go into the two year.

This is why the Fed watches the spread between effective federal funds in the two year, because the two year leads the way. But this time around, there's no guaranteed white swan, black swan, liquidity crisis, whatever you want to call it, typically there is something that is foreshadowed. a price crash and the market participants will get into the two year and that will bring down the rate the yield curve they'll go out the yield curve that will invert the yield curve giving us the weak economy signal but this time I think it's more evident I think the psyche has changed it's more evident that the prices are going to go up and there's not necessarily a guarantee that

they're going to come down like they did during the 2020 COVID liquidity crisis giving you this great entry point. So therefore, establish your positions now as you're front running this exit of liquidity from being a saver to an investor, get these assets now. And that's why Bitcoin's been trading at $100,000 for a very long time. Never in its history has it's traded at this kind of elevated level relative to new all-time high for this amount of time. What are we doing? We're forming a base. We're forming a foundation for explode. growth. And much like what happened in 2022, they were talking about like interest rates. They talked about it. And there was a little bit of front running. But once they actually started

lowering interest rates, boy, the liquidity went from a stream to a river. And that's what's happening right now. We're talking about lowering interest rates. People are smart money is getting positioned at where they need to be. But when they start really lowering interest rates significantly, and that probably takes place next May when Powell gets replaced, that's when the real big moves are going to come. And you have now until then to really position yourself before that stream turns into a river flood, and there's no guarantee between now and next May

that there's going to be some type of liquidity crisis that offers lower prices. So screw the cash equivalence. We want gold, silver, Bitcoin, and other hard assets that can't be printed. And I think that's why we're seeing the bid on that. instead of on the cash equivalents, an anticipation of a weak economy and where's the inflation, the dynamic, the psyche has changed.

That was very eloquent. You know, from a macro point of view, I tend to boil it down every time I argue with McGlone, who looks at numbers on charts and ignores the amount of liquidity that's been injected into the system over the last five years, and it is ongoing with 10% projections of increased liquidity out as far as the eye can see. And it's not just the U.S. by the way. It's also China. It's also the rest of the G7 who's printing.

You need to understand to keep an eye on the denominator. And so when we talk about $7 trillion of money market funds, I mean, understand there's a change. We know by May Powell's gone. We are pretty confident that by May, the person who's going to be running the Federal Reserve, believes that the interest rates are, that interest rates as a tool to curtail aggregate demand to stop consumer inflation isn't a smart process. They believe the people who believe, you know, like Stephen Moran, he's actually said it. He thinks the neutral rate is half a percent.

That's just factual. That's what his last paper said. So understand what that means. That means these are people who believe that goosing that if you, in fact, lower interest rates, yes, it will create asset inflation, but they believe that it will also have massive productivity gains to subdue consumer inflation. And this matters. This was a stated policy for years that we sort of got away from in the pandemic, and it bit us all in the ass.

And whether or not you like asset inflation, and there are lots of societal reasons to say that it's a bad thing because it makes housing unaffordable, it increases wealth disparity. That's not relevant. If you're an investor, what you care about is, are is this administration for the next three years going to target asset inflation? And the answer is yes. and so shorting that basically means you are betting on the probability that there will be a black swan and you know i know i don't see joe carlos or in the in the he likes to make this point it's like you know if you're a dumer and you're predicting this stuff that's great and the one time you get it right you're going to look smart but you know over the next 20 years there will be black swans

that's absolutely certain but betting your financial future on black swans seems like a losing proposition and that's effectively what he's said right I mean, Adam, from a Bitcoin perspective, I mean, you know, you guys have been in this for a long time. This is what you wanted to see. This is literally the way the playbook works, right? It really is. But, I mean, I just, CJ, to his point, it's like you're pushing the cycle so far out. I just know very few people who think that it's going to go, I mean, through May next year, like, that's the start of the super bubble.

Like, I just, it could be. I would love it. would be amazing, right? I just, vibes don't, they don't, they don't, they don't work that way for the, the people who still believe in the cycle. And there are lots of us. I know Dave is kind of talking about the end of the cycle, but certainly us who believe in kind of the cycle of human nature and stuff feel like, I mean, it could happen. I hope it happens, but it just has that really, really hard to get my head around. Yeah. And, and but Adam, here's the point. The point is, is that the Bitcoin cycle was born on three data points.

It's been entrenched in the community. It was created, it happened for a very rational economic, marginal reason, which is the having changed the supply huge, and frankly, people were worried the network was going to fail. And then, but even, you know, as more and more halvings came down, it become less and less important. And you see that. Dave, I get, Dave, I get it.

I believe your thesis, but I still believe humans are just like, Oh, literally just monkeys who do monkey things, you know. We're in agreement. That's why we are where we are. That's why we have this sort of unprecedented basing action within a few percentage points of an all-time high for a year, you know, or for many, many months. So, yeah, that's what's going on.

And macro does play a role, though, because, you know, in 2012, 2016, these halving cycles were really unimpeded by significant macro conditions. 2020 was the first time where we had a global macro issue and then look at what happened during that halving cycle and this is somebody who wrote about the having cycle going into the 2016 having who was levered up very aggressively because of my understanding of the doubling of the cost of production and a new price discovery cycle but when you look what happened in 2020 in 2021 we were at 60,000 what happened China mining ban the miners had to sell the bitcoin down to cost of production so they could relocate. When that process was done, it shot right back up to 70,000. And then what

happened? The Fed started talking about raising interest rates and going on an aggressive hiking schedule. And that forced us into the bear market, which caused cascading liquidations. So yeah, the having is really important. Yes, the cycle is there and it's relevant because there is a doubling of the cost of production and therefore a forced price discovery to access the value proposition of the Bitcoin network, not arguing against that, absolutely believe in it. However, macro plays its role within these cycles. And there's no, you know, you don't need to have a bear market before you have another halving. You can have another having in the middle of a bull market. What's the difference? The cost of production goes up. And if the price is already far enough

above the cost, well, then things will just continue going on. If cost gets pushed above price, well, then the miners who in the earlier days had more of the supply would then, you know, affect the price more often. But I think going into, it's the opposite of 2022. The macro is now working for us instead of against us. And we are going to get a cutting cycle, which will accelerate and probably, you know, create a misunderstanding in the marketplace of these four-year having cycles having to take place with all the psyche that goes with it.

And let's not forget the other thing you didn't mention, which is an enormously important thing. is Luna happened, and we had the GBDC Widowmaker trade, which then took out end number, you know, whether it's Celsius, Voyager, and then ultimately FTX, all was part of a massive wave of force selling. And unless there's, unless we're missing something, we just had a liquidation event that was on a scale of Luna and basically almost not even a ripple into Bitcoin. Yeah, some all coins got crushed. And a lot of people realized that holding all coins as collateral for positions is probably stupid. And so they're going to be permanently, well, permanently, but, you know,

the discount to Bitcoin and Bitcoin dominance is increased. But we just had that. And if there aren't any bodies floating in the top of the pool that creates force selling of assets from it, then that is a massive difference. And it shows how much more robust the system is right now than it was in 22. There's 22 there where these massive structural issues. And let's not forget that at the peak in 22, the Bitcoin network itself was one-sixth or one-seventh, the overall size and strength. And we didn't have any, and we had a completely different regulatory environment, completely different international environment, completely different institutional environment. And we're literally only double that.

I mean, hell, that's a Tuesday in a tech stock these days. I mean, you know, Gary has pointed this out many times. So, you know, it's a very different environment. And people always want to think that history repeats. It rhymes, but it doesn't always repeat. Richard. Richard, are you speaking? Can anyone else hear him? Because I can't. No, I can't. Hey, Dave, I got to jump, but I just want to leave the room with, leave you with one last thought here.

October 24th, 1929, the headline came out on the newspaper. The Wall Street was in panic as stocks were crashing, right? History was on this day. Back then, they didn't have Bitcoin. Today, October 24th, 2025, we do. We do have Bitcoin. So be smart, be safe, tax that's at all. A little bit of history for you on this day. Love it. Thanks, guys. Have a good one. Okay, guys. I think it's getting time to get close to rapping for the week.

So any final thoughts? I mean, Richard, your mic's gone. Are you trying to say something? I got one final thought as he tries to reconnect. And I just want to add to all that, for everybody in the room, what we've been talking about, the psychology of the market cycle. So remember, it's not just the having cycle. It's the psychology within the market as well.

everybody is bearish and afraid that the cycle's going to end, it's not going to end. When everybody is super bullish and million dollar Bitcoin is inevitable, then start piling up some cash. Just remember the psychology of the market as well. Mike McGlone says it best. Selling when they're yelling, buy in when they're crying. Yeah, I just want to, I just want to add. There's a good read tagged on the spaces from James, your colleague, Dave. For the listeners, it's probably some good weekend reading, but very compelling case for QE. So, you know, cycle, non-cycle, when you're looking at it from a macro point of view, you know, it's a feds back into a corner. That's a fascinating reading there. So I strongly recommend it.

Yeah, and anyone who wants to hear James, you know, and I, you know, debate McClone and talk about the macro. We do this every Monday at 9. So that'll be the next thing that I do. Anybody else, Carlo, final thoughts? Okay. Well, in that case, enjoy your weekend, everyone. The markets are doing what the markets are doing. But, you know, let's touch grass, enjoy life. And CZ or not CZ, politics or not politics, macro or not macro, the world will continue to march on. Take care, everyone. Thank you.