The Wolf Of All Streets - Daily Howl: Bitcoin To Crash After The Merge? Guest: Dave Weisberger, CoinRoutes

Episode Date: September 7, 2022

Dave Weisberger, co-founder & CEO of Coinroutes is back! We discuss many issues including politics, why Bitcoin energy consumption is just FUD and propaganda, Binance’s decision to stop support to USDC, and why Binance is making a big mistake. And of course, the biggest question of the day: will Bitcoin crash after Ethereum’s merge? The episode was recorded on Tuesday, September 6, 2022. ►► Sponsored by Bullish. Sign up here https://thewolfofallstreets.info/bullish/youtube  ►► Get 20% off on your ticket to W3BX. Use my code: WOLF20. Register here: http://web3expo.live/  My special guest today is Dave Weisberger, co-founder & CEO of Coinroutes.  Dave Weisberger: https://twitter.com/daveweisberger1  Have you ever had your exchange go completely offline during days of high volatility? Of course you have. We've all been through it. Those days are no longer with Bullish. Bullish is a new breed of digital asset exchange that empowers users to trade with deep and predictable liquidity across highly variable market conditions. They also have incredible automated market-making and industry-leading security. I can't get enough of this platform and it's fully regulated.   JOIN THE FREE WOLF DEN NEWSLETTER ►► https://www.getrevue.co/profile/TheWolfDen  GET UP TO A $8,000 BONUS IN USDT ►► https://thewolfofallstreets.info/bitget   TRADE ON THE WORLD’S BEST DEX, BULLISH: ►► https://thewolfofallstreets.info/bullish/youtube  Follow Scott Melker: Twitter: https://twitter.com/scottmelker  Facebook: https://www.facebook.com/wolfofallstreets   Web: https://www.thewolfofallstreets.io  Spotify: https://spoti.fi/30N5FDe  Apple podcast: https://apple.co/3FASB2c  #Bitcoin #Crypto #merge  Timestamps: 0:00 Intro 1:10 Labor day 2:10 Bullish.com - check it out 3:45 Dave Weisberger 4:40 What’s going on with the crypto market? 6:20 Mass inflation 8:40 $10 trillion industry 9:40 Bitcoin's price may crash after the merge 11:30 Bitcoin’s energy consumption is propaganda 16:40 Bitcoin & politics 18:30 Financial tsunami 20:50 Mining: Ethereum merge hits gaming chip prices 23:20 What will happen to alts 27:00 Merge will succeed 33:20 Binance to stop supporting USDC 43:50 Hacker steals Bill Murray’s crypto 44:50 Elon Musk: 90% of Twitter comments are bots 46:10 LG Electronics launches NFT platform with Hedera 50:30 Vegas show - get your discount! The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment. Bitcoin To Crash After The Merge?

This is the Wolf of All Streets podcast, and what you're listening to is an audio version of my live YouTube stream. I would love if all of you would please go on Apple or Spotify, whatever platform you're listening to, and rate the show, give it a five stars that more people will listen and find this episode. Thank you for listening and enjoy. One researcher is predicting that long term Bitcoin will suffer massively after the Ethereum Thanks for listening and enjoy. regulate away proof of work. Now, I'm going to be curious as to what your thoughts are and going to discuss this with everyone's favorite guest, Dave Weisberger, who I'm thrilled to be talking with on this Tuesday morning, which feels like a Monday morning because of yesterday's holiday. I don't know about you guys or in the United States, but it feels very Monday to me. Either way, we've got

a great show coming up. I'm going to discuss all this news and more with Dave. Let's go. What is up, everybody? I am Scott Melker, also known as the Wolf of All Streets. And yeah, guys, it was Labor Day in the United States yesterday, the day where we celebrate labor by not doing any labor. The irony is thick, thick with that one. Really, I don't think anyone really knows what Labor Day is, except for an excuse to maybe go barbecue and hit the beach and not wear any more white pants in the Hamptons. Because if you're an American, you know that you're not allowed to more white pants in the Hamptons. Because if you're an American,

you know that you're not allowed to wear white pants after Labor Day. It's a thing. It's a real rule. It's a very serious, very serious rule. But yeah, I'm glad to be back in front of the computer and with the markets, although the markets seem glad to be doing absolutely nothing at the moment. Before we dive in with Dave, of course, I got to tell you all about, we're going to scoot it along. See, that thing doesn't move without my finger. Bullish.com slash Melker. Just click it. Click it.

Because then they'll see that you clicked it. It's good. You guys know all about Bullish by now, obviously. I actually was just meeting with them potentially at Mainnet, Masari Mainnet New York, which I believe is like September 21st through 23rd. They're doing all this crazy stuff. If you guys saw their booth in Miami, they had the mechanical bull, which was savage, savage, because I find that people that are in crypto, not that athletic, you know, and all getting absolutely crushed by this bull. Well, I think they're going to maybe have the bull again, but they're also going to have a dunk tank, which you might see.

Ryan Selkis from Masari has been talking about all the time. And the idea is that I might host the dunk tank and do like rapid fire questions at people about crypto. And if they miss, we get to dunk them, which I think is really fun. And maybe you'll even get to dunk me. So you guys should come to Masari Mainnet. You should do that. Anyways, that's it about them right now. I hope you are all, I see all you guys saying hi over here. What's up, Simon Sniper. What kind of car is that in your icon right there? What's up, Jeff? What's up, Des? What's up, Ian? What's up, everybody? You guys are here. Sorry,

I didn't scroll all the way back. So listen, I'm going to go ahead and bring on Dave right now, assuming that he's ready. And we're going to start. Listen, we did something different. I know, Mike, maybe Dave won't be prepared. I don't know. We sent Dave the news in advance so that maybe we could actually talk about some of these stories without you only getting my takes.

And I think the first one's important. But first, Dave, how are you, man? How's everything going? Well, I'm probably one of those rare people that's glad to see summer sort of coming to an end. Then again, I live in Miami where we can wear white pants all year round. That's right. There's no New York white pant rules in Miami. We encourage white pants in Florida all year. That's right. Definitely. Yeah. I mean, the summer's been kind of a dead, of, you know, a dead boring market.

A lot of people out, you know, it's just it's one of those things that, you know, your perspective changes when you when you when you move down south. So we'll leave it at that. But I think this this sets up to be a very interesting month, which is why it's pretty fun to be talking about it. It is. I mean, we've historically had sort of a, you know, people love to call it September because it's generally been a relatively rough month for markets and Bitcoin in particular. But then we know it has happened historically in October, which is massive moves. So much so that in 2021 last year, October 1st sparked basically an entire 45 day run that was absolutely out of control. Right. Do you think that seasonality will play in here or do you think there's much bigger forces at work? Well, I mean, seasonality always plays in if nothing else from volume. Right. I mean, people, one of the hardest things you actually had one of my favorite tweets all summer

where you made the point that that doing nothing is really, really hard for traders. So hard. It's a lot easier to do nothing when you're on the beach, when you're like this week, some people are still at Burning Man, et cetera. It's really hard to do nothing as you get towards the fourth quarter of the year and you want to justify something. If you're at a trading firm, you need to justify something to your bosses or your P&L. If you're on your own book, you're looking at it saying, OK, I got to do something between now and the end of the year.

Plus, there's also year end bonuses that get that get deposited and people want to decide to do something. You know, in short, doing nothing is is becomes harder. And as a result, we've seen all sorts of interesting things in the fall. I mean, my thesis is when we talked over the summer was that we have this eye of the hurricane. Now, I don't know what the trailing edge of the hurricane is going to look like. I think there's a really interesting cross currents on the macro side that we definitely want to talk about. I don't know if you sent that to me in news, but what's going on in Europe is playing out exactly the way that crypto has talked about in June. And it's pretty gnarly to go with the,

come with the summer surfer metaphor. There's a real chance of mass difficulties with regard to people freezing to death in Europe, right? And in mass inflation in terms of natural gas, which will then feed through their entire ecosystem there. So that's a very big deal. We have the Ethereum merge I know you want to talk about. That is a very big deal. But I mean, my opinion on that is probably slightly different than a lot, certainly slightly different than the person that you were talking to.

Mine as well. I believe that in the short run, you can have all sorts of really interesting cross currents. And it might very well be that Ether is going to be the ecosystem for all smart contracts, NFTs as they go forward, et cetera. Or it might be that it won't. And there's a value proposition for that. I tend to believe generally in buy the rumor, sell the news. I wonder if that's going to play out here.

I think there's some reasonable thoughts as to why it won't. But the fact of the matter is people are focusing on a ratio between Bitcoin and Ether when the sum total of the market cap of what will be smart contracts and the sum total of the market cap of what will be a base layer for internet money is so far below what its terminal state is. There's all sorts of analogies, but it reminds me of kids squabbling on the playground talking about the value of their toys instead of adults arguing over, well, okay, you know, how do we propose or how do we move our ecosystem forward to get to where we want to go? Because at the end of the day, there will be an internet money. There will be a base

layer that is a non-sovereign store of value. The world has really only gone since 1971 without one in the entire history of humanity, right? Gold has kind of fallen off that perch and Bitcoin has helped demonetize it. It's still there, but it's not really there. Silver is certainly not money anymore. And, you know, you have to look at it and say, okay, we're in the digital era. Will it be a digital asset? The answer is yes. Well, if the answer is yes, and the global money supply would indicate that the total value of that base layer, at a minimum, if it was just a reference price, would be somewhere in the 10 trillion range. And if in fact, it's the total monetary supply, it's 10x that. Meanwhile, we're sitting here with the entire market cap of crypto is less than a 10th of that. And that includes, by the way,

the backbone for what a lot of people believe, myself included, will be a new financial system, a new system for valuing and transacting in art and music, real estate, you know, et cetera. So really, I find these internecine squabbles between Bitcoin maxis and ETH maxis. I mean, they're childish. And I know it's horrible to call people who are wealthier than I children, but they're acting like that. Yeah. It's also pointless. It really it's sort of like, you know, talking past each other, not talking. Right. So the idea there being that, I mean, we're squabbling squabbling over scraps when we're rising tide lifts all boats and when the market cap of the entire ecosystem is as large as you're talking about, it won't matter which one's dominating slightly or up 5% or down versus

the other, basically. But I want to just bring up this very specifically, because this guy's making, I disagree as well, but he's making a very specific case here. And it's not, you know, I think you read this headline, Bitcoin's price may crash after Ethereum's merge. And you think he's saying like, on September 15th, price is going to go down in Bitcoin. But when you actually listen to it, his argument is that with time, assuming a successful transition to proof of stake, that basically regulators, it's not a point against Bitcoin, he's saying regulators will say, well, we don't need proof of work at all, the energy FUD, and we'll basically regulate away, as he said, anything that's

proof of work. Let me ask you a question. This is a really simple thought exercise. If Ethereum is to achieve its goal, its goal is deflationary right now. Its goal is, and if you talk about probably the best single easy article for your readers is to go on Crypto Hayes' Medium. I forgot what he called it, but it was written in August.

He talked about the reflect, and he was quoting George Soros. And he's talking about how the reflexive property of assets. And basically what he said is the price of Ether rises, it'll get more and more deflationary, creates a virtuous circle. Think of the end game. How does something like that, which is being staked in order to control a network and a network used for stuff, become a global store of value? It could be, which is controllable by those nodes.

The answer is it can't. And so the issue is, is talking past each other. Now, regulators, it's interesting. There's a narrative going on. I mean, look, at the end of the day, propaganda can win. And certainly we've, as a species, have done stupid, stupid things, evil things even, at the direction of propaganda. But make no mistake, the whole proof of work, proof of stake notion as it comes to energy is exactly that, it's propaganda. I mean, the fact of the matter is that Bitcoin achieving its ultimate vision, the amount of energy as a

percentage of what it's doing will be minuscule relative to the amount of, certainly the amount of energy as a percentage of what it's doing would be minuscule relative to the amount of, certainly the amount of primary energy it would use would be minuscule compared to what the global financial system is using today. And because it can use wasted energy and because it could be used to stabilize grids, it actually serves an incredibly useful purpose. But those facts don't tend to matter to regulators, but you have to ask yourself why. And the reason is simple. And I'll call it out, just like I called out the SEC before the Wall Street Trust. It's health interest. So the Wall, you know, I was on with you a year ago, and I basically said Gary Gensler is political and is not using cost-benefit analysis, has an agenda, and literally doesn't care about investors. Now, at the time, that seemed rather radical. Now we've had multiple mainstream publications,

including the Journal of the Financial Times, saying the same thing. So I'll say the same thing about, quote, regulators that are going after Bitcoin's proof of work. These are people who are paid by the financial institutions. They're paid by the big banks. That's where their donors are. All you have to do is look in the US. Why we don't have a merged CFTC and SEC? It's really simple. The SEC is owned, if you will, or overseen by the banking committees. And the CFTC is overseen by the agriculture committees. And they both have huge donors or or donor bases. And no congressman or senators are going to give up if they're on one side or the other.

The other is no donor base. So you have a lot of people in Congress, and this is the same pattern plays out in other countries. Although, interestingly, you know, we'll see what the new PM in the UK is going to do. I've seen some interesting things about her, but potentially being pro some of this stuff. The reality is, is the old financial system is going to hold on tooth and nail to every piece of economic rent they can. And when they hold onto that economic rent, what is that going to mean? That's going to mean getting their old friend, Elizabeth Warren, who loves to yell at them, but she needs to have someone to yell at. Because if she doesn't have

someone to yell at, then they can't donate to her campaign and they can't do things. They can't provide a foil for her. So she needs to have someone to yell at, you know, and like, and in that kind of Hector and Skullmarm way that she does. And the truth of the matter is, if Bitcoin does achieve where it goes and Ethereum does achieve where it goes so that you have defy replacing a lot of the economic rent in crypto a lot of this stuff a lot of these these organizations are going to face disruptive change now they will adapt and they will survive but that disruptive change is always feared and always pushed against so a lot of the the fud on the energy side that we hear

about is politically motivated. So does that make it non-dangerous? No, it's dangerous. People do stupid things. I mean, people look at the heat wave in LA and they look at the heat wave in Europe over the summer and they conveniently ignore the fact that we've had the mildest hurricane season in three decades, because if a big hurricane season would have been proof of devastating, you know, climate change narratives. The truth of the matter is the amount of Bitcoin is absolutely, you can't even measure if Bitcoin mining stopped, you couldn't even measure the impact of climate on climate change. You know, Bajon Lornborg did

a really great editorial in the Wall Street Journal where, I mean, he's a climate scientist and he basically says, yeah, you know, there's issues, we should be focusing on adaptation, et cetera. It's not that it's not happening. It's that trying to move the U.S. to net zero, even if you succeeded, would only have a small impact. And Bitcoin and its impact on the U.S. going to net zero is literally almost immeasurable. So this is all propaganda. And there is a danger. You know, your friend on CoinDesk basically isn't wrong. People will seize upon whatever they can.

But at some point, it becomes obviously a bad idea to push it. And because it's unfortunately becoming politicized, you're going to see it be a state by state thing. And, you know, Texas is not going back. And so, you know, in terms of the U.S. and there are other countries out there, I think it'll get very interesting. But my general belief is while we're going to have to endure this through lots of cyclical things, what you'll see is the next bull run will happen. And then when it's weak at the top of that bull run, FUD will start again and we'll have yet another down cycle and the volatility will increase, yada, yada, yada. I mean, it's cycle, rinse, repeat, Scott.

And we've seen it. Everyone who's been in Bitcoin longer than I have since I started in 17 has seen this and it is still following the same trajectory. Yeah, I agree 100% with everything you just said. And I can see people in the comments say, hey, Dave is scaring me. Me too. Not as much as Harry Dent who came on and said Bitcoin is going to like a thousand. I don't know. But it is scary because what you're describing is basically rational thought having to overcome political motivation. Right. And that's not something that we necessarily see regularly happening. So he could be right that they will attempt to regulate it away if common sense doesn't win, which I think then just comes

back to, I mean, the power of our industry to educate or start to replace, frankly, some of the money that's going into those politicians' pockets? Well, I mean, look, let's also understand that in the world, there's always this, and I always use this analogy a lot, the Federal Reserve is doing this. This is a right-hand, left-hand, you know, do the real stuff back here, but make lots of noise over here. So what's the Federal Reserve doing? Well, they're raising interest rates here. And if you looked at, once again, go back to Mr. Hayes, but he actually documented it really well in his most recent initiative, they're actually been injecting some liquidity into the system. And that's been my theory all along. They will

continue to raise rates, but put in liquidity in order to cushion impacts, et cetera. If you look at what's going on in the Bitcoin world, there's a lot of smart money in there. And a lot of those people are very, a lot of the people who are invested in Bitcoin, slowly investing in Bitcoin and have been becoming part of those hodlers are not the people, not the cypherpunks from the days of yore. Yeah, sure, there still are plenty of those, but there's a lot of smart money there. And if you look at the trading of Bitcoin, it certainly doesn't feel or look like it's going anywhere near zero. In fact, resistance becomes support, yada, yada.

But it looks like I mean, I feel pretty confident that we're not going to break the lows of the last trading range unless there's a real financial tsunami and we see a 50% drop in risk assets, in which case Bitcoin will follow Nasdaq and be lower. But the truth of the matter is, if you have this sort of right hand, left hand with the Fed, and I can't see if it's all in the camera, the reality is that I think Bitcoin will delink at some point and you'll see another- It always has. Yeah, you'll see another move higher when the market starts to recover and people start to inject liquidity. And obviously there's so many cross currents this fall, right? You know, the Ethereum merge is something that is definitely will have an impact.

I mean, people, there are people who all they do is trade the ETH, the ETH Bitcoin ratio. And those people are going to, it's going to trade. It will probably look like if the Ethereum merge is successful, it will look on paper like a parabolic move upward. Does that mean Bitcoin has to drop? Well, maybe a little. It doesn't have to move that much for it to start looking parabolic. But what generally happens with parabolic advances, Scott? Well, they fade to the end.

We know. Listen, I actually I have that. I happen to just have that chart here. Let me see if I just have that chart here um let me see if i can uh get that up here yeah i mean it already looks parabolic if you look down to the june you know the june lows this is on the daily chart but i mean yeah it's it already looks that way and we just started what does it look like what does it look like if it doubles uh ought to you know doubles off yeah previous all-time high you know oh yeah

because the previous all-time high is still right now up here so this is a small move when you zoom out there's move there's room for for that chart to move and honestly if the merge is successful i expect it to break the previous all-time high but that's but that's gonna be because ether would be running now their ether will be running mostly because market makers left a short cover the spot as they unwind their, their, their, as they unwind their futures positions, which have been backwards for a while. And that will all, you know, there's a lot of stuff, a lot of internal. That, that, that trade is backwards because everybody wants free, uh, hard fork coins.

Right. So if you're going to buy buy spot, you have to short the future. And so therefore you end up in backwardation, right? Ask yourself how long lived the rally on Bitcoin when there were hard forks around Bitcoin were and what the value of those hard forks were. I actually wouldn't be surprised to see that Parabolic Advance break down at the merge and then restart as the sort of supply actually diminishes but i guess

it can play no anything can happen i'm not i'm not talking about from a technical point of view yeah i mean what are the odds that the hard forks of ethereum are anything other than you know five ten percent shadows you know or less you know what's ethereum classic worth and why is a fork of ethereum worth you know what's the point why should there be? It has no value. Just miners that don't want to. I mean, that's actually the next topic that I have. I mean, like miners are going to hold on for dear life because they've invested a ton of money. But actually, I mean, I have I have this right here. It was literally the next story.

Ethereum's merge starts to hit gaming chip prices. Right. And people, I mean, you mine Ethereum. They're both proof of work, but using gaming chips to mine Ethereum and you're using a different kind of rig, obviously, for Bitcoin. So there's nuance there. But basically, I mean, it's already happening, right? These guys have nothing to do with them. And it's actually crushing the manufacturers because not only can the manufacturers not

sell their cards, we have this flood of used cards coming onto the market, basically. I mean, the numbers are already pretty astounding. I think they're trading down, I have it here, 45% in price from the last quarter already and seeing like, you know, 13% decline year over year. And that's just, I mean, and the argument there is that not only is that going to affect Ethereum, I don't think it affects Bitcoin, to be quite frank, but every other proof of work chain where these miners can then take those coins and go mine and increase difficulty, right? I mean, that's right here. Look, there's an article on that right here. I mean, if they emerge to swamp other coins with miners, right? And that's from a mining CEO.

Right. So basically, you'll see a hyper competitive industry where there's overcapacity and it doesn't look or feel any different than, I mean, lots of other examples. I mean, I'll never forget in after the Internet bubble in 2002, the value of cable operators and fiber operators, people who had built out network infrastructure. Now we've we've caught up to it, obviously. You know, these things take time. If there aren't use cases for other coins that miners are mining, then, well, those miners are screwed. They will fade into the, you know, they'll fade into the ether, as it were. And so be it. But what does that have to do with the price of the underlying chains and the value of the underlying coins? I mean, mining is still at its core validation one way or another to secure a a network what it means though scott

and this is the one thing that is important and the one thing that i sounded all like a bitcoin maximalist on anything the ether accepted as proof of stake is the biggest concern with a lot of the the alt coins and uh and some of them you, we can call it some people will call them shit coins, but a lot of altcoins is will they be subject to a 51% attack? Well, understanding that a mining deluge, which swamps profitability could potentially harm the integrity of alternative coin chains. Now, this is like playing chess six or seven eight moves in for ahead depending on lots of other variables so it's not the kind of thing that i would tend to want to invest upon and god forbid anyone invest upon my opinion here you know this is this is not

investment advice this is do your own research but if i were talking if i were investing in any alt coin in any serious way, I would want to understand the mining setup. I want to understand the network integrity. And I'd want to think about what happens if there is a glut of mining capacity that can shift to that coin. And what does it matter? There are some that it won't affect at all. And there are others that it'll affect in a big way. So everyone really should research that but that is absolutely i mean look it's it's economics i mean supply and demand you have all these gpus and the used gpus in particular that you can't necessarily use in virtual reality rigs and augmented reality which is is taking off at the same time and there are use cases for gpus right i think they're going to

the dumpster a lot of these but that's the point and on its way to the dumpster what happens and i don't know the answer to that i'm not i am nowhere near uh versed enough uh actually we have an interesting conversation surrounding this going on in the chat that i just want to address because i know that you'll have thoughts on this post merge lots of staked eath could be sold says chuck i just want to clarify basicallyaked six to 12 months. You don't have to worry about a glut of supply hitting at any given time. So it would be very, very spread out as to when those coins would hit the market, not saying people wouldn't sell them. But most people who have staked ETH now are doing it because after the merge, they expect

the yield to double. So there's not a, I'm sure there are, I'm not saying it will, but that's the expectation that the yield will increase. I don't think most people staked in the contract just so they could sell at the merge, but I could absolutely be wrong. But either way, much like the Mt. Gox sort of FUD with Bitcoin, this is not one huge tranche of supply hitting the market at once. I would love your thoughts, Dave. Well, I mean, that's part of the reason that in the beginning of the summer, I thought ETH would rally into the merge and then the merge would be a saleable event. That's what I thought would happen. Obviously that did not occur. You know, the risk markets, risk assets all around the world have been faltering or as the Fed has gotten more

and more, more, you know, know aggressive and rate rises and so while relatively uh eth has rallied it certainly hasn't rallied an absolute term so the real question is you know is it still a sell the news scenario part of the sell the new scenario there's two reasons there's always two reasons there's one the speculators uh will be driving the price up and they need to get out looking at open interests looking at funding rates, that really isn't happening. So that's moderated that opinion. Right, although Ethereum open interest

is higher than Bitcoin right now, which is not something that happens too often. So you can see, like you said earlier, that this is the trade. It's just not as big as you would have anticipated and not being played in a way. The open interest is higher, but the basis is negative. Correct, right. Which does not indicate that the primary, but the basis is negative. Correct. Right.

Which does not indicate that the primary, that the opener are long. The opener, you know, the opening. I mean, shorts are paying to be short, right? So it's a fascinating cross current, but Chuck's point is non-trivial. I mean, look, it didn't work out that way, but there was a time period when, you know, a one large firm that that is now in bankruptcy proceedings was betting the farm on stake deeds and he's converging. Right. Well, what is converging means? It means that, you know, but it's a non, there's a non-trivial percentage of the state ETH out there that frankly will have to be sold. Oh yeah.

People have to take profit. We're not talking about individuals. We're talking about firms who have assets in bankruptcy where they need to be sold to pay off the creditors, where they'll wait until the the two converge and then at that point it's liquid you know that is a non-trivial point as well but once again there's lots of cross-duty as i said you know there's the market making so i don't know which way it goes at this point i usually have a stronger opinion right now i guess i am moderately bullish into the merge because i think it will succeed. And I would probably fade any

parabolic rallies after the merge, but who really knows where it's going to go. But as I said, these cross currents are complex. This is not as simple as a normal, you know, I think that so-and-so is going to blow out earnings. They do blow out earnings. And then you see the stock drop and you go, why the hell did the stock drop? The answer is because everybody thought they were going to blow out earnings. Right. You know, it's it's it's not the same area. And the market generally reacts the wrong way at first anyway. So good luck with that.

I mean, listen, it's amazing. You hear that hearing you sort of like quietly describe, obviously, three arrows, capital involvement in this market and how that's going to continue to resonate even through things like the merge, right? Because it's just that they have to get liquid in bankruptcy and so does Celsius and so does Voyager to some degree potentially. It's that those currents are affecting everything. That event isn't that the series of events that we saw and i'll actually be talking about this in the sorry i'm doing a talk on lessons from uh from the you know you're there nice and it's uh without going into what i'm going to talk about at incredible length what i

would say is something very simple two points need to be made. Point number one, it will trigger a better market in the end where people are understanding counterparty risk and understand what are the actual risks that they're taking, whereas right now that's not at all clear to a lot of people in crypto. That is important. On the other hand, it is something that has caused confidence in crypto to take a hit. I mean, my folksy way of putting it, when people come into our offices or people hear what I do, the first question is, is this crash going to continue? What's going on? Is it dead? Are you guys getting out of the market? It's a different question. We haven't reached peak bearishness.

We haven't reached, oh, it is dead. I don't believe in it anymore. But we have lots of people questioning, lots of people wondering, because guilt by association is very powerful thing in the human psyche when they see that assets they thought were safe go poof people are like well then guilt by associate that with another method and obviously the the ogs and crypto will say well not my keys not my coins i hold it on my wallet they can't take it from me why would that impact my my you know my opinions the reality is the vast majority of people to get to global acceptance are going to need to be able to trust somebody nobody wants to manage everything themselves there's a reason why self-directed trading is still only a small percentage of assets under management it's just

a fact you know self-directed trading may be a lot of the trading, but people who still outsource their trading and their investments to financial advisors, pension funds, et cetera, that's not changing anytime soon. And so those institutions were set back a year or two based on what happened this summer until we get to some form of regulatory clarity in the United States. There's no doubt. And that's's a big deal and people need to understand that that doesn't mean that we can't continue to have cyclical ratchet ups over the course of whatever this this is going to be but it does mean it does mean the cyclical nature is going to continue we're not we are not going to achieve any sort of lasting lack of volatility sort of appreciation of crypto until there is regulatory clarity.

And those marginal players that control the vast majority of financial assets in the world feel confident. Now, they do, interestingly enough, unlike crypto winter. And it is different. And at CoinRats, we have this perspective because we talk to everybody in this space and in crypto winter when we were talking to banks brokers etc i can't tell you how many conversations i had saying you know sometime around 2018 yeah we were gearing up to do this but now they're shelved indefinitely that was what we heard from every broker from every whatever health finra wouldn't approve wouldn't approve a single license and broker-dealers couldn't do anything. That's why Robinhood famously set it up as a subsidiary.

Today is different. It is actually different. Today, we're hearing, yeah, we think that we're part of the solution. So we think, you know, whatever, and I'm not going to give names, but, you know, very large players saying, yeah, we think that us entering the market will help instill that confidence. And so we are proceeding. They're still wanting regulatory clarity, but it's no longer indefinite in the future. It's just it's now a very, very clear path toward getting larger, widespread financial, you know, financial firms to participate. And that is different. Yeah. And you could argue that regulators, the asset, at least in the United States, that they may look most favorably upon would be USDC, because obviously, they know that they're generally backed and they've been working

closely with regulators. But then you see stories like this, Binance issuer of third biggest stable coin to stop supporting larger rival USDC, right? I mean, Binance controls roughly half the volume in the crypto space, right? If you go all the way down the risk curve, and they're effectively eliminating USDC completely from the platform at the end of the month. All USDC, I think it's not just USDC, but they're not, interestingly, nothing to do with Tether here, but TUSD, USDP, and USDC will automatically be converted to BUSD, BUSD, as I like to call it. This is a monster move by Binance to consolidate people, obviously, to consolidate their customers into their own stablecoin. I can understand why, as a company,

they would not want to allow the competitor. But USDC was gearing up for, you know, a flippening of its own of Tether, you know, 10, 20 billion behind in market cap. And they're just having a leg cut off here. What do you think of this? I think that of all the moves that CZ has made, I think this is the dumbest. I think that every time I can think of in my life when people have tried to use their critical mass to stop something that's disruptive to them, it generally bites them in the ass.

I think Sam is probably licking his chops. I think that this gives another opening for FTX to become, I think this adds to FTX's market cap, because it means FTX, which allows USDC to be freely convertible into dollars, it just makes it easier. The only thing that mitigates against this being an absolute catastrophe for Binance and basically forcing Binance to the retail fringe as opposed to the big institutional side which is what this mark move could do is there is a lot and and and and fairly uh this is a tough a tough topic but there is a lot of concern among many people foundational in crypto uh i i call me someone i don't i'm not foundational in crypto at all, I don't think, but I'm concerned as well.

And if I'm concerned, you can imagine about USDC's immediate knee jerk on the Tornado Cash. And the fact that USDC is centralized and therefore censorable is one thing that is going is seen as very problematic inside crypto if it were not for that the fact that they are basically me trying to kneecap a coin that is is a better hope i don't think you could find a serious crypto trader i don't think you could literally find any who wouldn't prefer to see uh usdc continue to push tether towards being more backed, more transparent, more auditable, because that has been a piece of FUD that's hung over the industry forever. And I think most of us think at this point they've gotten their act together, but it's not as clear. Whereas USDC, there's no question it's freely convertible. There is no breaking the peg because it can't,

because of the way it's managed. That's cash and short term treasuries. I mean, it's the most liquid assets. Most traders prefer that that stable coins throughout the crypto ecosystem be more like USDC. And so it's not a good thing for the ecosystem to see this sort of stuff. Do I think it really matters that much in the global scheme of things? Probably not, because there's very little volume on binance and usdc all the all the tether anyways yeah so it's it doesn't matter uh but it is really important to understand that that stable coins

are undeniably a huge use case for crypto and stable coins you know the biggest difference between a usdc style stablecoin and its natural competitor which are cbdc's is that usdc can't be programmed away from people you can't stop you can't control people's financial world like you can with the cbdc and so that's why there's a battle even in the us of whether we'll actually go that road you know why do you need fed coin if usdc is fully regulated or others yeah usdc becomes the proxy central bank digital currency without them having to do that i mean our good friend chuck said that just now usdc is just a couple steps away from being a uscbdc right and that actually may work out perfectly right and that that may be exactly what they want. Right. But the point that I'd make to Chuck is this.

I don't think he's wrong. I think that if you look at the things that the central bank cares about, our central bank right now doesn't care about being a political weapon for the ability to shut off people they don't like and censor people they don't like to basically stop them from spending which if you had a fed coin is a very real possibility but what they do care about is ofac what they do care about is money laundering and so the fact that cbdc the fact that usdc is playing I think, is a very bad precedent.

I want to be really clear. I'm not supportive of this. I think it's a very bad precedent to sanction code. I think that that should end up in front of the Supreme Court, should be a First Amendment question, not a lawyer. I read other lawyers on the internet who kind of agree. I agree. Who are angry. But the fact is the arm's length ability to have a private thing,

which can satisfy the number one goal, which is to prevent money laundering, but not be able to do the things that China is doing with their CBDC, to be able to move, to have people cut off from the financial system if their social score drops or if they protest the government etc that's actually pretty desirable to a lot of people in the middle of the political spectrum i'm not saying that i personally love it uh obviously i'm i'm much more you know libertarian you know you can all hear my freedom freedom freedom you

know screaming you know in my political when i get political. But the reality of the situation is, it is, it is clear the events of this summer do make it more likely that they will go that route. I mean, after all, keep in mind, the Federal Reserve is still, those are private, those are private banks. You know, it's like, it's not a, you know, it's not what people think. It's not a full extension of the government. So it is more likely than not given this, but, you know, we'll see how it goes, but it's a big cross current that goes on in the crypto world, for sure. None of that has a damn thing to do with Bitcoin's value though, because there's no version of the world where bitcoin's value has

anything to do with being a central bank uh you know currency in in the sense of the united states but it very well could be a store of value and yeah if you believe in hyper bitcoinization then maybe it could at some point in the future but it's really about a non-printable store of value as opposed to something that can print. Having a central bank digital currency does not in any way stop the government from printing more money. Right, so that's why it's Bitcoin.

I mean, that's why still even in my mind, you kind of touched on it earlier when we were talking about the merge, right? People, you kind of asked the rhetorical question as to how does that in that process with staking become a store of value? And the obvious answer was it doesn't. Right. And that's to me why it's still clear that it's Bitcoin and everything else. And that's not a that's not an insult to the everything else. Right. I just and that's what I

think I wish like Bitcoin maximalists to some degree would understand that you don't need to be triggered by every time something that's called a cryptocurrency does anything. It's not a threat to Bitcoin. They're completely separate. And I really don't think that most people are viewing Ethereum as a future competitor to Bitcoin who rationally look at it. Well, there clearly are some. There's some, yes. But I'd say it's the loudest voices in the room. I don't think that's the consensus opinion. No, I mean, it's a different thing. I mean, you know, it is a different thing. I mean, in a world where a certain percentage, a very large percentage of Ether needs to be staked in order to control, you know, basically validate, what on the margin allows it to be used in smart contracts well the answer is the value of the smart contract has to be more than the value of the validation and so it's it's equilibriums that

have to be reached and you can model it all out but it's not the same as an asset that is underlying the value of everything those are different things And I don't understand in my mind why, as I said, it feels to me, I'll keep saying it. Every time I see these arguments on crypto Twitter, I think of children on the playground. I don't think of rational adults thinking about what their long term best interests are. I think it's people who are butthurt about one thing or another yelling at each other. And I don't really understand why we that that why we all have to be be pushed by that. But you know, hey, there it is loudest voices in the room. Yeah, makes perfect sense. Dave, I kept you far too long. So thank you for giving us the extra overtime. You know, I figured you'd stick around if I kept asking you questions. So we appreciate

that. I know everybody always loves sharing your opinion. So I just heard you're going to be at Mainnet. That's a sorry. Yeah, okay. Well, we're your opinion. So I just heard you're going to be at a main net. That's a, I'm sorry. Yeah. Okay. Well, we're going to do this in person then, cause I'm going to be recording there. We'll do another one. That's cool. Yeah. I'll be there the 22nd and 23rd. I have a previous engagement North of the border on the 21st, but I'll be there for the last two days. So should be fun. Well, thank you everybody. It's tagged in the tweet, but follow Dave,

please. One of my favorite people, obviously I'm one of yours. And now, you know, I'm competing for most frequent face seen opposing mine on the screen. I think we've probably had you here more than anyone else. So if that's a testament to how much we love you, obvious. Thank you again, man. Take care, Scott. Enjoy September. care scott enjoy september oh god everyone ladies and gentlemen dave dave weisberger so yeah we kept him a lot longer but uh that was kind of a fun format for me actually being able to have another uh and well-informed and often better informed opinion on the news that we were sharing i do have a few more stories uh but i didn't really want to waste dave's time thinking with them because they're not so serious discussing them. I should say the first one being this, and I would just title this story. Why?

This is why we can't have nice things, right? Hacker steals Bill Murray's crypto after 185 K NFT charity auction. Do you see this? Basically, they raised all this money for charity. The money went into Bill Murray's personal wallet, where by the way,

he holds hundreds, apparently of NFTs, a lot of them being blue chip and hackers immediately just stole the phones right this is bill murray like the arguably one of the most fun likable lovable amazing people on the planet and they just went ahead and targeted him and this guy has like a full security firm called project vancman which is hilarious because that's obviously his character from ghostbusters what What a good name, right? And they were able to actually divert most of the assets by writing a script to transfer

all of his NFTs into cold storage immediately and stop the bulk. But still, $185,000 hacked directly from Peter Venkman. Really sad. Stupid. It's really annoying, man. It's really annoying, man. It's really annoying. Like, leave us alone, man. There's a reason that we have,

people have bad opinions of the crypto space. Elon Musk says 90% of Twitter comments are bots. Binance CEO CZ agrees. Now, Binance CEO CZ definitely agrees because 90% of the comments are bots and 90% of those bots are pictures of CZ, right? If you guys have ever looked under a tweet specifically of Elon Musk or anyone in crypto, you get hundreds and hundreds of fake CZs telling you to click some phishing link that wants to steal your crypto.

It's absurd at this point. Twitter, listen, we all love Twitter. It's sort of the core social media platform for crypto, but it's also a breeding ground for absolute nonsense, bots, scams, and it's disgusting and it's annoying and it's almost, almost unusable, right? It really is. It really is almost unusable at this point because if you have a sizable following, you can't read the comments. You just can't. You can't read the comments, which kills the ability to have a conversation. Many people have gone private or turned their comments off altogether. But this seems like an easy problem for Twitter to solve.

It's not happening on, I don't know, Facebook. It's not really happening on Instagram. It happens to some degree on YouTube. But they just got to fix it. This has to be fixed. It's absolute nonsense. And the last story here, LG Electronics launches NFT platform that lets users buy and sell digital artwork. And this is with Hedera, of course. A lot of you guys obviously are fans. Actually, today's podcast that's out already on Apple, Spotify, et cetera, and will be out this

afternoon on YouTube, coincidentally Stanley is with Mance Harmon, the CEO of Hedera. So that's a really interesting conversation you guys should look forward to. We had that conversation at Consensus, rings very much true today. But basically, LG, listen, we've seen Samsung make some huge moves already in the NFT and crypto space. LG trying to play catch up here, using the Hedera network to offer an app that enables users to purchase NFTs via Wally PTO, whatever the hell that is. LG's crypto wallet for smartphones. So basically be able to basically engage with the metaverse, Web3, NFTs, etc. This is the first iteration of it on your LG TV.

Cool, man. You know, I think it's cool that we're doing things like this and seeing it in the crypto space. And if you show this, as David and I were kind of discussing, if you show this to the hardcore Bitcoiner, they would just scream about how it's a scam. And in some way, LG should be doing a deal with, I don't know, Bitcoin developers to make Bitcoin TVs. I have no idea. But like I said, this is where, in my view, it becomes very clear that there's Bitcoin and everything else. Everything else, a very cool evolution of technology that blockchain will become an underlying technology in many of the things that we use that you won't think about.

It'll just be powered by a blockchain. You'll go on your TV, you'll buy NFTs, you won't think about what blockchain is doing it or how it's doing it. I think that is great. I think it's good for the world. And I think that that is absolutely no threat to Bitcoin, right? Takes nothing away from the value proposition or importance of Bitcoin. It just happens to be on a similar underlying technology. Tommy wants to know he does not have a TV anymore. Well, then have fun not being able to trade LG NFTs, right? Scott, do you know if we get hard forked ETH on hardware, software wallets? I have not dug in so deep to the specific logistics. I know a lot of exchanges have already announced their support for the forked coins. I'm imagining that you will. I mean, generally in the past, hard forked coins have been supported by the big hardware wallet companies.

It would be very a major violation of the ethos of crypto if you'd have to move your coins to an exchange to receive the fork. But, yeah, I mean, we'll see. Jordan Peterson eviscerates Twitter CEO in his latest video. I will have to watch that. Russia stopped the pipeline. Well, fuck, says the shall in 015. Yeah, well. We have economic sanctions, they have energy sanctions. I mean, Dave alluded to it earlier. You know, there's gonna be a lot of people freezing potentially. But we didn't even

talk about and listen, I'm no expert on but we're already seeing reports, at least anecdotally, famous chefs in the UK, things like that, saying literally that their electric bills have 10x in the last couple of months. So yeah, it's very sad, obviously, that people are going to freeze. That's a bigger problem. But also think about the amount of businesses that will potentially just be evaporating. If your energy bill for a restaurant was $2,000 and goes to $20,000, your margin is gone and you're now operating at a loss. I don't care who you are, right? You can't have a 10x increase in something that you've planned for and calculated at effectively a fixed rate over time to go up 10x and still remain in business, right?

And so I really think that those, it's going to send, likely send Europe into a major recession, of course, which is probably arguably already happening. But the implications of that pipeline shutdown, obviously, and the sort of energy crisis in Europe, I think, is going to be that that may turn into the you know, we talk about, obviously, the Fed and policy and this and the merge is going to hit right when the next inflation print hits. The Fed's going to have a meeting. We have a lot to do here in September. It should get exciting. But it could be a very, very ugly winter for markets if this energy crisis in Europe plays out in the way that we're sort of talking about here. Yeah, I mean, Sam says depression. Potentially, I don't like to be too hyperbolic or exaggerate too much.

I don't really know what will happen. I just know that it's really bad, right? Not ideal. So I should mention to you guys, I mentioned this on a show before I go. Vegas, and Dave, I see you back there still watching. You're invited. So I'm going to talk to you about that offline but vegas from october 10th to 13th there's a show called webex it's w3bx it's a

conference uh october 10th to 13th uh and i'm hosting we're trying something new here i'm hosting an entire stage so basically anyone who's caught up with me at a conference before sees me huddled in a corner kind of shooting podcasts like 12 in a row all day without eating, drinking or going to the bathroom. Kind of when I get to when my hustle gets to really shine, I'm going to be doing that basically live on stage for four straight days. We're going to have people hosting masterclasses. So it's not all just me. It's a very retail focused show. So I think it'll be a

lot of it will be focused very much on the basics masterclass. What is DeFi? What are NFTs? You know, what why is Bitcoin important? So I'm gonna have other people who are experts. Basically, I'll host it and then they'll go ahead and give those masterclasses. We're going to do panels. I'm going to do a bunch of live podcasts before days, you guys. And so it's in the description below. There's real I get nothing out of this, to be very clear. I just want people to show up so that it'll be great. You get a 20% discount on your ticket. They have all kinds of levels of tickets. It's in the description. But there's an opportunity we're going to do. We haven't planned everything yet, but I'll be hosting happy hours where you can literally just come hang out and talk.

I want this to be very informative and educational at first, but also an opportunity for me to interact sort of with you guys, with the community, get to know people and just have a really good time for four days. So we're going to be live streaming the whole thing. If you can't make it, then we're going to be taking a lot of it and, you know,

publishing it as podcasts and stuff later. It's going to be really awesome. So if any of you guys can make it to Vegas during those dates, October 10th, the 13th, I'm going to keep telling you about it. Uh, it's the first time I was sort of like putting my name on a stage and,

you know, so I'll be, we're inviting our own guests, uh, and lining it up. I think it's going to be really, really awesome. So I hope,

uh, any of you guys want to come, I don't know, go hit the driving range. Cause it's at the wind. They got a golf course in the backyard. Uh, that's and,

uh, you know, have some drinks and see some amazing content. Dave, we're going to bring you. We're going to get you there. Anyways, guys, that's all I got for you today. We'll be back tomorrow. And I think we're going to try to keep pushing towards this new format

where we, you know, kind of let the guests give their takes on the news as well. So it's not only my bad takes and horrible opinions. That's all I've got for you guys today. I will see you tomorrow. Thanks and peace.