The Wolf Of All Streets - Is The Spot ETH ETF Starting The Bull? | Crypto Town Hall Partner: Massa

Episode Date: September 7, 2023

Crypto Town Hall is a daily Twitter Spaces hosted by Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in the crypto and bring the biggest names in the crypto space to share their opinions. ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉  https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL  - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets    ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/    Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading 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.

Yo. Morning. Let me send out all the invites. How are you doing? Doing well, man. Trying to keep up. It's so funny how we go through these just dips in market news and then all of a sudden it's like an onslaught of these massive stories at once. I know. I know. You guys, like literally every time you guys, especially you complain like there's no news and then 24, 48 hours afterwards all hell breaks loose. It's like we can't keep up with the news anymore. It's the same. It's the same. It's not only in crypto.

Also, in the traditional news cycle, just a few days ago, the team was talking about how there's no news at all because we do the politics in news spaces. There's not much news happening. Sure. And a day or two later, everything goes fucking mental. We just can't cover everything. We have like a 12-hour space scheduled for Sunday.

Today, we have two spaces, one after the other. It's just mental now. Yeah. I think this was the first time that I got a message from your team this morning and said, due to a lack of news, there will be no finance spaces at 8 a.m. Eastern Standard Time. I don't know. I don't think that's because of lack of news. Probably uh danish having a lazy day danish had a meeting of course i'm saying but it was funny like we've never canceled one because of lack of news we always have

something to talk about here but i laughed because you know i usually well like half the days maybe i i come in there and i'll co-host with danish for fun every once in a while and that was the first i was like admittedly we just have nothing to talk about man so but is it actually like a news in the final space or is just danish being danish being busy i mean i think there's always something to be to be honest but yeah i think that uh it's a september lull danish telling us how amazing the u.s is going to be and how the U.S. is just a business. He's actually super bearish. But he's super bearish, actually.

I know. He's bullish U.S. He's bullish U.S. Bullish U.S. relative to emerging economies of BRICS, but U.S. as in just excluding, isn't it a vacuum? Yeah, bearish. He's definitely very bearish.

Super bearish. the bullish one is um yeah i fuck i can't remember okay shit i can't believe i forgot the name robert wolf mr wolf yeah yeah he's he's bullish as hell champion of the champion of biodynamics yeah yeah he loves it and did you that guy's a legend though like the fact that he shows up so regularly and participates in're talking about the ex-ceo of ubs i mean absolutely incredible that someone of that caliber shows up to have these conversations on a daily basis yeah i'm just happy to have the ceo of uh wolf of wolf of wall streets on uh on our show i mean that that to me is the real honor get a gold uh it's no banter let's get a gold guys

hold on both of you get a gold check mark it It's no banter. Get a gold. Guys, hold on. Both of you, get a gold checkmark. It boosts your engagement and everything on Twitter as an organization. Yeah, so I can get $114 instead of $111. Romy got it for all my accounts. So just hit her up and she could – oh, she's listening to this. So Romy, hit up. Isn't it like $1,000 a month? Bro, can you stop?

No, Romy doesn't like me, bro. Bro, just – no, no. Seriously, though, isn't it like $1,000 a month? She's the one that likes you. I'm the one that doesn't like me, bro. Bro, just, no, no. She's, she's, she's, she's, seriously though. Isn't it like a thousand dollars a month? She's the one that likes you. I'm the one that doesn't like you. I make sure my team also follow my footsteps and make sure Ran is blacklisted in our mind.

And she'll hit you up. She'll get it set up for you. Also, did you see the news before we kick off the crypto news? Ran, this is the news that you'll like. I just tweeted about it before this. That's why I didn't prep for the show and the um the election interference apparently there's a whole web of accounts fake chinese accounts apparently by microsoft found out about them that are

mimicking us in uh us voters and trying to influence the uh 2024 election that just came out about an hour ago. Who's orchestrating it? They all voted for Ross Perot. Huh? What did you say, Ryan? Who are they voting for? Are these Democrat voters? It doesn't say.

It doesn't say. Microsoft came out with this stuff. And also another thing, guys, you should see my second tweet. The visuals on, so I just know XX is working on videos. So if you look at my second tweet, I quote retweeted the designer, the chief designer of X, and she's putting a sample of how, obviously it's fake because Donald Trump's space or show is there. Obviously he doesn't have one. But it's showing how the shows will be, the live shows, how it's going to be a bigger bubble, et cetera,

to get more attention to live audio and live video on X. So that's another cool piece of news for anyone that's interested in X. Can we talk about the dumbest news story that I saw today? Don't tell me it's the Logan Paul and that guy. No, I'm talking about crypto because it is a crypto town hall. Did you see that there's this global wealth study that revealed that there are – It was yesterday. Wait for it, guys.

88,000. I know. Six Bitcoin billionaires and 88,000 crypto millionaires. Yeah. They really are so incompetent at their job that they could only find six Bitcoin billionaires in the world. There's probably six in our audience who just haven't told anyone i read the report they're talking about addresses they're looking specifically at addresses and they're saying how many addresses have been created that are thinking but i think look no doubt that you can say that crypto has

created more millionaires than any other industry in such a short period of time there's no doubt about that and we're not in the we're not in a great market. So, I mean, you know, even if you look at it at this point in time, obviously more people have lost. Right now, more people are negative than are positive in terms of crypto. That's for sure.

But nonetheless, crypto has created more millionaires than any other industry in the world in the last 10 years. And I always like to balance it out. And more people lost in crypto, more millionaires than any other industry in the world in the last 10 years and most i always i always like to balance it out and more people lost in crypto much more people lost than made money so it's like good and bad um i just think it's funny that i think it's funny that uh obviously any crypto bitcoin billionaire has good opsec and is not going to be publicly noticed as a bitcoin

billionaire unless we're literally talking about the biggest names. There's hundreds of them, if not more, out there that are not on these reports. Why would you leave all your money in one wallet? That's my point. Question, guys. Can I ask you a question? And we'll be quick so we can get into the news of the day. But one quick question.

And I was thinking about this for a few days. If you were a billionaire, would you – be honest. Don't think about what your audience wants to hear. If you were a billionaire, would you still do what we're doing today, like building out a media site and being the face of it? I would go full Richard Hart. I would just be – no, I'm just kidding. Yes, I would. I absolutely 100% would.

I don't – honestly, I mean mean you know how i kind of react to sponsorships at certain times and stuff i do this because i would be exceptionally bored if i didn't do this there's no question that no matter how much money i had i would show up every day right yeah i don't think for me there's nothing there's nothing that i'd rather be doing more than this i'm living i'm doing what i want. And being the face of it. And like actually you being the one speaking. Wow. Okay.

I enjoy it. No question. I enjoy streaming. I enjoy educating. I love educating. I've got a mission of, of building the most profitable community in the world. Like for me,

that's, I do it if they were, you know, I do it if I was a billionaire, a trillionaire, who cares? And ran as four kids. So anyone who's a parent knows that by Sunday night, the weekend has been your work week and you can't wait to get back to work Monday no matter what.

That is not my money. You know what, my wife, Mario, you want to understand this, but when I get, when I leave the office on Friday and I have to go home on the weekend, that for me is the hardest work that I do. Saturday, Sunday is the hardest. Yeah, that's going to work. Yeah. Then when I arrive at the office on Monday morning and I open my laptop, I get the same feeling that people get when they get to the beach and they open, they put the towel down, they smell the coconut. When I open my laptop, I get that whiff of coconut from the suntan. That's my feeling.

It's like, Oh, heaven. Guys, guys, I can move us. I know. I was going to say like,

I'm surprised. I was going to say you guys are full of shit, but you seem very passionate about it. I agree from a business perspective. Like I would still be doing what I'm doing in, in from a business perspective, but being the face of the media side, I would have said yes two months ago, but after the NBC hit pieces, not in a million fucking years. And I hate it. And I'm

building out media. Like this is, to be honest, this is the only, we do shows and everything from sports to AI, to gaming, to everything, politics news. The only shows where I'm personally there are major news, breaking news, which happens once every couple of weeks and this show, because you guys are great. Otherwise I'm no longer hosting my shows and i would never do it again so i'm the only the odd one out i'm surprised maria i kept saying to you you've taken on a behemoth you've taken on mainstream media you've taken on you know arguably mainstream media is the most powerful force in the world after the banking system and the drug cartels right and the and the drug the drug companies right which are actually drug cartels um the mainstream media is probably funded by those guys and it's one of the most powerful forces in the world now you're trying to disrupt

those guys you should expect whatever whatever you've got you should have expected i remember i remember you told me from the ftx days i remember i said to you when we sat in dubai at your house i said i said two things to you i don't know if you remember the one thing i said to you is the bigger you get the bigger the attacks are going to get and every attack is actually a good thing because the more they attack you you once you patch up that hole they can't hit that that same hole again they can't get through it again because they've used their bullet there and the second thing i said to you i don't know if you remember but i said to you don't focus on crypto but start focusing on sports and i said to you mom's in dive you know diaper diaper spaces i said you got to build multiple streams of spaces

and i see you've done that quite successfully yeah this is our diaper space good job i mean you laugh you laugh but there's a huge market for moms with, you know, one, two, three-year-old kids who would love to have a space. Weddings and babies. Weddings and babies. Those are the two things that people will spend money they don't have on no matter what. We'll dig into the space here. Let me read out the news. I'm going to do a quick recap of the news.

There's not too much today, like I said, but some important ones. I'll try to be quick because obviously we talked about other things too much um the first one is in terms of markets very briefly majors are flat all good news continue to be sold arc has applied for a spot etf a spot eth etf and the btc bids moved to the lowest level since march there's a death growth forget about this is forget about mine this is like i'll skip that let me let me dig into the big one okay before before we dig into the main news there's one thing i want mention, and then we'll dig into the news of the day. And that's something that kind of almost went unnoticed. The IMF and Scott, you noticed that as well.

The IMF and the FSB has warned the G20 against any blanket crypto bans. I'm going to read out two quotes from that. I think this is important. Number one, they said don't ban bitcoin the other one is blanket bans that make all crypto asset activities so that's including trading and mining illegal can be costly and technically demanding to enforce which means that remember how we had a debate last week what happens to bitcoin what happens to crypto and if you hold all your wealth in bitcoin if there's a global attack on bitcoin well it seems that we're moving further and further away from this. And then the clarity that we're getting in the US, thanks to the courts, seems to be

happening around the world. And that's, again, that's relating to the FSBs, the Financial Stability Board, whatever it is, of the G20. So this is global. And this is really good news. I know it's not the news of the day. And we'll dig into that next. And Ryan, I'll give you the mic.

But I wanted to mention, other than two two important things today this is important news that was kind of skimmed over by by the media but uh let's dig into today's main news guys so who wants to take it dude let's talk about the ethereum uh spot etf i think that's the biggest news i mean there's a couple of things one is i see we've got gareth here and I think we should be respectful of his time. And I wanted him to come and talk about the death cross because we have a death cross. The last time Bitcoin hit a death cross. By the way, a death cross is a sentiment

and momentum indicator. It's when the 50-day moving average crosses through the 200-day moving average on the way down. And what it is, it's a sentiment and momentum indicator. The last time, the last two times that Bitcoin had a death cross, we went down 66% and 33% respectively. So we should probably talk about whether this is anything to worry about. The good thing about a death cross is that usually when you have a death cross, you usually get a bounce towards where the cross is. So we could actually expect a bounce. But if it's correct, we could actually go down. That's the first bit of news.

And we should be respectful of Gareth's time. I think the other bit of good news is Kathy Wood playing 3D chess with the SEC and BlackRock in applying for an ETH ETF. There's a lot to talk about there because... Spot. ETH spot ETF. Specifically spot, just for people listening,

because we've had a slew obviously of ethereum uh futures etfs applied for recently on the one hand on the one hand you could say she's being delusional we haven't even got a bitcoin etf here but on the other hand if you analyze this a bit deeper what you can say is you can you can say the following after the grayscale ruling the we spoke about this yesterday we said after gr the gray scale ruling, the reason why the SEC disallowed the ETF is invalid. And unless they can come up with something else, then theoretically, they have to approve the Bitcoin spot ETF. If they do come up with another excuse, then the gray scale can always go to court and say, hold on a second. But if you had the opportunity

to decline and you didn't decline on this, why are you coming up with another reason now after the fact? Once a Bitcoin ETF is approved, you'll remember that the main reason why Grayscale won the case and the SEC lost is because the court said that you can't approve a futures ETF and not approve a spot ETF because you're acting capriciously. Now, we're now in the same situation with ETH. Under the assumption that ETH is actually a commodity and Bitcoin is actually a commodity too, and ETH futures, we got headlines the other day that the SEC is now ready to approve ETH-based futures ETFs, then there would be no reason that they don't approve a spot ETF, because then they'd go back to the court and say, hold on a second, you're doing the same thing as

you did in the Grayscale case where you approved a futures ETF, but you didn't approve the spot ETF for something that's very, very, very similar. And therefore, if this assumption is correct, it could mean that the SEC would actually be forced to approve an ETH ETF within less than it's very, very, very similar. And therefore, if this assumption is correct, it could mean that the SEC would actually be forced to approve an ETH ETF within less than, say, a year. So we could actually see all the Bitcoin.

My thesis is that all the Bitcoin ETFs are going to be approved this year because the SEC is now in a corner. They can't just approve the Grayscale one and not approve the BlackRock one because it's the same rule change.

And therefore, I think that we're going to get all the Bitcoin ETFs this year. And I think within about 240 days, we get the ETH ETF. Yeah, I didn't see James on stage. So do you want Gareth to talk about the death cross and then we'll go to James on the ETF story. Yeah, let's get there.

Because James, we discussed that yesterday. Unfortunately, we couldn't have you. So getting your take on this is probably the second biggest piece of news in the last 24 hours. But Gareth, let's get that death cross update. You guys, when you start talking about market technical analysis, for me, let's say the 50 or the 200. And basically, that just tells you that the short term trend has now moved to the downside. It still tells you that the longer term trend is still positive, but it is a change in kind of sentiment indicator. So again, you're now talking about a death cross. Now, the term death cross gets everyone scared. In general, as a trader, I don't pay too much attention because, again, it's just something that is fun to talk about. It's got that kind of scary name to it. But in general, like Rand was saying, is that what you'll notice is oftentimes that will cause retail to

kind of get scared and dump and cause selling. But then it'll create too much of a negative environment and you could see a snapback to that moving average. So really, the way as a trader, I'm looking to play it. This is more of a shorter term. If we dump out, let's say, to twenty four eight or twenty three thousand, I would probably be a buyer in the near term. I'm still in the camp that I think we're starting to see the decimation of tech stocks. The Nasdaq is getting crushed. Apple's down two of the biggest days in a row that it's had in a long, long time. And my bigger concern. That's because but that's just to be clear, that down two of the biggest days in a row that it's had in a long, long time. And my bigger concern- That's because, but just to be clear, that's because of the news in China. Apparently China's banning iPhones in government agencies

or something. So just to point that out, it's based on Black Swan. But just to keep in mind that it's still the biggest company in the NASDAQ and in the market. So the point is, if that starts rolling over, does it cause a kind of a vacuum effect where now we see like Nvidia getting crushed today and different stocks starting to cascade? And the reason why that's important for crypto is that if the markets start a kind of liquidity suck, meaning things are just getting panicked, you can actually see that kind of selling rotate into crypto and kind of accelerate the crypto decline as well. So just something to keep an eye on. You want to keep an eye on the stock market if you're in crypto, because it does

have a kind of a play on that. The last thing I'll say is that the recent news, whether it's the Bitcoin ETF filings or the Grayscale news or the Ripple news or even the Ethereum spot ETF, those are all amazingly bullish for crypto longer term. Those are what I would call fundamentals. And I talked to Ran about this earlier. It's like planting seeds. You're not going to get the plant to sprout right away, but you're building a base for a healthy crypto environment. So short-term technicals, people are fearful.

That's just going to create selling. But longer term, I've never been more bullish on the crypto space or Bitcoin. Yeah. I mean, as far as technical analysis goes and death crosses, I don't know. If I was going to open a restaurant called Nothing Burger, it'd probably be the first thing on the menu. There's nothing that's more of a lagging indicator than death crosses and golden crosses. They're based on MAs, which are based on past price action. I do think you're right that people sometimes panic about them, but there's a long

history on different timeframes of these being absolutely almost counter indicators if you look at them. The death cross is a reaction of this drop, obviously, from the top, not of anything that's happening right now. Yeah, I agree 100%. I think that's kind of where it comes in, where if we do see that panic little sell-off, as a swing trader, at least, I'm going to use it to accumulate and buy in looking for a snapback kind of rally. Yeah, exactly. And interestingly, the grayscale pump went right up to that same sort of level right before retracing anyway. So we already have seen price kind of up to where that death cross would be, right? Yeah, exactly. Exactly right. So I think the bigger story here is more for me, at least,

it's more watching to see what the Fed's doing, what's the dollar doing. I mean, these are the bigger macro indicators that I'm following. The death cross, again, it gets headlines. People have fun talking about it. It scares the retail crowd. But in general, it's going to be the dollar. It's going to be yield. It's going to be the economy and the Fed that are going to play the bigger role in where the market goes based on probably what the markets, the NASDAQ and the S&P do. Perfect. Mario, you think we should move on to the ETF? Yeah, that's the big news. Before that, I want to say, I look around this panel and this has to be my favorite panel that we've had yet. Literally, there's no NFTs faces. I know almost every single person here personally. Let me bring up an NFT, guys. I need an NFT photo that's credible. It's a good speaker on the topic to bring up just to make Scott feel worse. So please request.

Any NFT guys request. All right. Let's go to James. Okay, James, change your picture to a CryptoPunk and let's talk about the Ethereum spot ETF. Yeah. So it's actually, it's two ETFs. So yesterday, the first news came out when um arc filed their s1 which is basically prospectus the first filing to send the sec um and that's when the news really broke but what i was waiting for was those 19 before filings

which i've talked about here relentlessly that's what starts the clock um and yesterday at about 5 p.m we saw those hit the hit, basically. The CBOE filed them. And it wasn't just for ARK and 21 shares. It was also for VanEck. And the reason we didn't see VanEck also file an S1 is because they filed their S1 all the way back in 2021 and never went through the process of filing that 19B4, which is the one that you really,

that's where you go to the SEC and ask permission to list these things on exchanges. So we have two ETFs right now, Ethereum spot ETFs that have been filed under 19 before rule changes. So the deadlines for them, that's I know that's going to be the first question. The final deadline for them, there's no way that we can't know for certain until like certain steps take place, right? There's like a 20 to 25, 30 day time period before we know exactly when the deadlines are. But I'm guessing May 23rd of 2024. So that would be the final deadline.

James, I have a question for you. So I want to go one step back around the Grayscale ETF and the fact that the judge ruled for Grayscale against the SEC. And I read a whole lot of opinions that the fact that they ruled out the reasons why the SEC declined the ETF could actually mean that the ETF is kind of approved unless the SEC can come up with some kind of valid reason not to approve it.

How do you feel then? There was a legal term. We use the legal term. I just can't recall the legal term. If anyone can recall it, maybe you can. I believe it's the technical term. Yeah, there's something like that. Yeah, yeah, yeah. So one, we don't really know, right? I work with a litigation analyst who spent years as an attorney in finance dealing with things similar to this, but this is kind of unprecedented, right?

There's no way to know like, oh, this has happened before. And when that happened, they did x, y, or z. So we don't know exactly what's going to happen. All we know is there's a time period here before we're going to be definitively know exactly what happens next with the grayscale case. Is there implicit approval? I really don't know. The real thing here is basically trying to figure out what what comes next. And the things are, the SEC has a couple options, right? They either have A, approve, which I think is the most, the simplest, easiest way to go about this. And the SEC can spin it positively.

They can delay, delay, delay as much as possible. I don't know how much they can delay, probably not beyond May 2024 at the very, very latest. So by then we would potentially have an ETF. But the real deadlines to watch are like early 2024. I think we can see approval in October. But the other option, which I think is unlikely because it would be very bad for the SEC, is they could deny for other reasons, which you spoke about. So if they want to lean toward –

If they did that, though – but James, hold on. If they did that, then surely Grayscale would go back to the court and say, look, if you were going to deny for other reasons, why didn't you put them in your original denial? Yeah. So I'm hosting a webinar at 11, and I'm going to get into this a little bit. So I have to jump at 11.45. But I agree 100% with you. Essentially, what it would be is like you spent years denying ETFs for all these reasons. We proved those reasons are no longer viable.

And now you're coming up with different reasons. One way they could get around this is those 19B4s I talked about, they go through a specific division of the SEC called Division of Trading and Markets, right? So that's the division that looks at the 19B4. And then the S1s, which is the first one we saw from ARK and 21Shares yesterday, the prospectuses, go through other divisions to make sure things are okay. And those are divisions, divisions like investment management and court finance, might be able to highlight some different things.

But again, I think that would also send them back to court, right? Like no matter what happens, they're going to end up back in court. And there's a significantly good chance that the SEC would lose again in such a court. But again, if the political wins above Gary and the people that he reports to want him to do that, it could happen. We think I personally think that's highly unlikely. We think Ethereum futures ETFs are coming to market in October.

The first one will be, the first one will be Valkyries holding Bitcoin futures and Ethereum futures on October 3rd. And we'll see some pure Ethereum futures ETFs

in early October. And then I, I don't know how I'm going to deny spot Ethereum after that. Hey, can I ask a quick question just on the GBTC victory?

If that was a meaningful victory, then why has the discount slipped back all the way to where it was before the victory? The markets were saying that it meant nothing. Yeah, I mean, my personal opinion is that the markets are wrong, but that's that makes a lot of sense.

Yeah, also remember, just remember it's 25%. Yeah, it's also 25%. And then it went to 16. And now it's back at 19-ish. So it's not like it gave it all back. But I'm with you, David. I'm surprised that it didn't compress more.

But then again, we don't know the timelines here, right? I just talked about there's a potential chance that the SEC could go back and say, like, you need to reenter this entire process again and go through 240 days, in which case we could be waiting another long time period before this thing actually gets approved. James, I had a conversation with a few lawyers, and they said that that's a highly, highly, highly unlikely scenario. And if that happened, the Grayscale would have another case against the SEC.

And the reason why they said is they said, look, Grayscale did everything right by the SEC. And the reason why they said is they said, look, Grayscale did everything right by the book. The court ruled that the reason why the SEC denied it is not valid. That's not grounds for making them start from scratch. It's actually the exact opposite. They can't do that. Yeah, I'm 100% with you on that.

Our litigation analyst thinks it's more likely that I do. So I kind of defer to him. So I think it's more likely that they're going to say like here's some deadline we're going to come up to a decision we just don't know what's going to happen technically it's still with the courts because the sec could do those appeals in different ways the en banc hearing who knows but that by by october 13th we'll know what's happening next right um and then ironically right after october 13th we have these these filings from Bitwise and BlackRock and VanEck and all these guys that are due October 16th. So theoretically, maybe something happens October 13th

and they punt again in October, and that puts us into potentially November or into early 2024. But I just don't think the SEC has the ability to keep kicking these down the road at this point. I agree with you. I agree with you. Yeah, I think that that's good news. Everyone agrees. We do have a bit of, I guess, we'll call it breaking news, but we're going to go right back to the ETF. Ryan Salameh, former executive of now bankrupt cryptocurrency exchange FTX, is due for a proceeding of interest in Manhattan federal court on Thursday.

That's today. Such appearances normally suggest a defendant has reached a plea deal. So this is obviously, this is the guy who was, we'll call it, I guess, SBF's right-hand man. Looks like he's going to rat out. I don't think anybody didn't expect that. Where is Trabucco? Where is Sam Trabuco?

Dancing. He's right here. Hold on, guys. He's right here. Let me get him on the phone. I'll do it at the end of the space. We'll have a live interview with Sam Trabuco. Sam, come, bro.

We'll have a chat on Ryan wants to speak to you. So we'll have Sam in an hour, everyone. Retweet the space for Sam Trabuco. Comment if you like it the reason the reason why i'm asking is because like if you think about like sbf's cronies and all the people that he partnered with you have uh you have uh salami you have uh caroline you have gary wang you have um uh the one that's partners with scari mutu now brett uh what's his second yeah like we know where all of these are we like we kind of know who's engaged with what and then the one person who we haven't

like threw out this whole thing who was a partner he was the ceo of alameda and we haven't heard anything about is trabuko just let me another piece of news as well regarding to ftx so we talked yesterday about the tokens ftx talk is moving around and people were speculating they're going to be sold. But FTX said that it's just been moving tokens to a custodian. Just thought I'd mention that because related to yesterday's news. But Scott, I know we've got a pretty great panel and I'll give you the mic back. But I want to go back to, I don't know who asked the question, I don't know if it was Marshall or someone else. If the news is that big when it comes to Grayscale, then why is the discount reacting the way it did? James, that question was asked to you and you said you just

think the market is drunk, but is there another explanation to it? Is there another side to the story? We're all bullish about it, we're all treating it as major news, but is there someone that has a different take? I think we should go to Bailey. Hey, and Dave, I know it's late at night where you're at, but you've obviously been more on top of everything Grayscale related than anyone. So obviously, maybe you can answer that question, but then we can start to talk about the fact that Arkham has seemingly found their wallets, and maybe you can just give us generally what's happening with GBTC and ETH. Yeah, so I'm happy to talk about the DCG criminal enterprise. I also have a bone to pick with James, a respectful bone to pick. So if I could ask James a couple questions from some of these nasty grams called Bloomberg intelligence reports that have been sent out, I'd love to get his feedback on that. But yeah, I think that the discount came back because the market was expecting a victory on the litigation. I think the timeline is just as mysterious as the timeline was before the litigation. In fact, I think my personal view

is that winning the litigation is actually bearish for the discount closing because now the timeline i mean i've talked to people who think that it could be 240 days before we just get a rejection on an on a new basis so we could easily be looking at a multi-year process going forward in fact i think that the fact that what do you say that what do you say that based on i mean i'm i'm you you know, like, I really want to hear... So there's basically three paths that the SEC has. One of them is to appeal. They have 30 days from when the decision happened to appeal

for a variety of reasons. Our legal analysis does not think that they'll appeal since it was a unanimous decision also based on who the judges were, et cetera. Okay, we're in agreement. so the next step is they can accept um based on the people that i've talked to based on former sec officials that i've talked to they think that it is extremely unlikely that they uh just approve this application and even if they approve the application it doesn't mean that that gbtTC is forced

to convert into an ETF. Like there could still be, there could be an approval and there could still be a two year timeline between approval and actually converting into an ETF. And then the third bucket is that they could just come up with a new grounds for rejection. No one knows what the timeline is in order to deliver those that that new rejection so you know at the i think the most conservative i've heard is like that 240 days from the time that they got the decision um like how long ago was that two weeks ago so 240 days from there so they have 240 days to come up with another reason I think that there's plenty of other reasons to deny. No, no, no. I don't think that's right. The only way that they could get 240 days is if they made Grayscale

reapply. And all the legal opinions that I've heard, and granted it's not tens of legal opinions, is that the SEC could do that, but then they would face the threats of legal action. So I've asked about this. What type of legal action could Grayscale do? It wouldn't be Grayscale. It wouldn't be Grayscale. It would be the holders of the Grayscale shares,

and they could take the SEC to court for losses. Because once there's been a court... Before there was a court action, they could do nothing. But once there's been a court action, and these guys can then show their losses, and they can show their losses because the losses are very measurable here because it's a difference between NAV and the discount, then they would have a claim against the SEC for destroying value. Because once the courts ruled that the SEC should have approved the ETF and that the disapproval was not valid, then the clock starts ticking for a case. And actually, if you read the letter

that Davis Polk wrote the SEC, they said, just want to read you like one line out of it. It says, first, each day that passes without listing the trust shares in the New York Stock Exchange archive is another day when the trust existing investors bear unjustified harm in the form of shares that traded a substantial discount in their asset value. The harm could be avoided if the trust were treated the same as the Bitcoin futures ETP. 600 basis points in anticipation of the eventual rule representing more than $2 billion in value

return to investors in a single trading session, which even then was more than $3 billion below the trust's net asset value. Now, you typically put a line like that or a paragraph like that into a legal case when you want to show someone in a very nice way that, look, there is actually a case against you and the case against you could be for $5 billion. Yeah, so I talk to probably more grayscale shareholders than anyone out there. I can tell you that there is no one that I've talked to that's a grayscale shareholder who's planning on bringing a case against the SEC at this time. No, but that's – I mean, come on. That's not a great – this is a one week old ruling.

And only once the ruling had been made was the open to the legal. And the feedback that I've gotten is that who needs, who will, who should be bringing a criminal or not a criminal complaint, a complaint should be grayscale and that the situation in timeline is unprecedented. No, sir. No, sir. It's not grayscale because grayscale is not carrying the losses. The people that are carrying the losses

are the holders of the shares. Grayscale doesn't have a case because Grayscale is not carrying the shares. So they don't have a damages case against the SEC. Who does have a damages case is the holders of Grayscale. Okay, so what's the next step here?

You're saying as a shareholder, I should bring action against the SEC and the SEC. I'm saying that in the United States, a smart lawyer will round up all of these guys and institute. I don't know if it's called a class action or when you represent multiple shareholders. And they can now, after the court ruling, they can file against the court ruling they can file against the sec for and and they can't quantify the damages so this is what i'll do i gotta jump in i gotta jump in here i'm an ex davis polk lawyer a this is david towel and b i'm also a part of the gbtc litigation that's being carried out by quinn on previous fees. Ram, we don't need to talk

about it. I sent the link on Twitter. You can take a look at what the allegations are in terms of previous fees. But in terms of going forward, the action could be brought by either shareholders or it could be brought by the company on a derivative basis for its shareholders against the SEC. Either one works. I don't know if Grayscale is going to go to the pains because at the end of the day, Grayscale is in a very strange position, right? At the end of the day, they don't want their fees to go away, right? Their hand is being forced to ask for an ETF. If they had their way, they wouldn't be asking for it. And frankly, if they didn't ask for it, they'd be in a lot worse trouble. But at the end of the day, they really don't want to win,

and they don't want to win on a very particularly fast timeline. They happen to have great lawyers. I think they're, having been an ex-Davis Polk guy, incredibly talented. The fact that Joey Hall is doing this is incredible. He's one of the smartest, most well-connected guys there is out there. Even when, you know, 15 years ago when I was at the firm, you know, he was he was a legend then. So I think they'll do the right thing. But in terms of forcing the hand of the SEC, you know, I think shareholders have to do their part. And I think, you know, this is not a plug for the Quinn litigation. But, you know, I'm sure if, you know, Quinn was asked, will you bring this shareholder suit as well, you know, separate and apart from the shareholder suit that they are actually being paid by Alameda to bring against GBTC because Alameda is one of the biggest holders

of GBTC. But there is another firm that's carrying that litigation on contingency, so nobody has to pay. And they would bring this shareholder suit as well. It's just a question of, you know, is the shareholder suit going to go ahead and do anything? Is the SEC moving on their own anyway? But maybe it's worthwhile. So Dave, the short answer to this is, David, if you want to contact me, we get on the phone with Quinn and we can ask them.

Yeah, I'm about to be on the phone with them. I can ask them before we even get off this Twitter space is what their view on this is. If you can, that would be great. I know, Jock, I think that transparency would be great if you could do that. Did James? James, by the way. Yeah, he did. He left a while ago, I think that transparency would be great if you could do that. Did James? Yeah, James, by the way.

James, he did. He left a while ago, I think. Yeah, he told us. They have their huge webinar at 11 o'clock. Yeah, yeah, yeah. Unrelated, I know. But we'll bring him in again, David, and it will be good to have you guys have a discussion on the space. We can also do it privately, Bailey.

We can do that privately. No, I want to wait. Let me – In public. That's – Let me jump in. Of course you do. Let me mention today's partner, guys, if you don't mind. So I'll mention it quickly now before we continue the discussion.

And by the way, I want to go back to the breaking news you mentioned about the FTX plea deal. Sam's going to be in a lot of trouble. And for anyone that doesn't know, Sam is in jail right now. We talked about this a few days ago um there's a lot of speculation there but let me read out about the partner that we have masa and scott i'll give you the mic right after but um a pretty damn cool project uh they're going to be on later i think i'm not sure if they're on the panel already i don't think they are they'll be on shortly uh but masa is a decentralized blockchain and they're based on parallel blocked technology so you know to of simplify for anyone who's not too technical like myself, they're able to process thousands of operations per second with minimal energy consumption.

So they've gone in the testnet phase of over 5,000 nodes. The cool thing, like the biggest selling point they have, and Scott, I would love to get your thoughts on this. They're the first blockchain to feature autonomous smart contracts and decentralized web hosting. Scott? Yeah, I think this is definitely in it for the tech folks. It's really, really, really cool and solves a lot of problems. But we are going to actually talk to them at the end of the spaces. So I think we should. Yeah, but anyone that wants to check it out. Yeah, anyone that wants to check out, the team is pretty dope and I'm pretty impressed. You want to check out their Twitter.

They're one of the projects that we like on a personal level, not only because they're partnering with the show. But if you want to check them out, there's a pinned tweet at the top. We're going to chat to them later in the show. There's a pinned tweet. Just go on your phone for two seconds, click on it. We're in the midst of a bear market, and that's a pretty good time to have a look at projects that are still building despite the conditions. And if you did that back in 2019, 2020, probably the right thing to do. And you could do it now. And I'm not saying to invest or anything. I'm saying check them out, support them, and have a look at what they're building. The tweet is pinned at the top.

Just go on your phone, everyone. Hey, Mario, I want to... Bailey, real quick. You said something very casually in passing when you first started speaking. I think, I don't want to misquote you, but sure, I'm happy to talk about the criminal enterprise of DCG. I can't let that one just casually pass by. Did you see the news today, which I was literally dying. I mean, I understand that Genesis is obviously in bankruptcy. So when we speak of Genesis, we're really speaking of their lawyers, but the understand that Genesis is obviously in bankruptcy. So when we speak of Genesis, we're really speaking of their lawyers. But the fact that Genesis is effectively going after DCG for loans. So we effectively have a company that's lent themselves money, didn't pay back the loan, is now suing themselves for a loan that they didn't pay to themselves.

Yeah, I mean, I think most of these facts had already been mentioned in one form or the other. What was new information as far as I could tell is the first time I saw the loan agreements for the specific loans and the specific dates at which they were done. And when you put together the timeline and also the terms on the term sheets, it tells a pretty shocking story. I think one of these loans specifically where Barry borrows 18,000 Bitcoins from Genesis after 3AC blows up, he knows the situation that's unfolding. He understands the solvency issues that are facing Genesis, and he borrows 18,000 Bitcoins with no collateral down, no margin call, no term limit on the loan, meaning that he could keep the loan open in perpetuity if he had wanted to, paying a 3% interest rate. And based on the other loans, I don't know if this loan had a different circumstances, but based on the other loans, it looks like the interest rate's not even due until you repay the loan.

So he took an 18,000- No interest, effectively, right? Effectively, no interest, no collateral, no term limit, no nothing. He just took a I mean, to me, that's just theft. He just stole 18,000 bitcoins. And then the game that he plays is, you know, on November 10th. So this is like the day before FTX blows up. He hits up Genesis and he's like, hey, we're going to repay that 18,000 Bitcoin loan. But instead of paying back the Bitcoin, instead, we're going to pay with GBTC shares.

So here's a bunch of GBTC shares that are the liquidity is shit. And you're not going to be able to get a fraction of what of the value of what we're saying these are worth. And they just unilaterally tell them this is what they're going to do. But hold on. what we're saying these are worth. And they just unilaterally tell them this is what they're going to do. But hold on. I mean, let's just, again, I'm all for it, but I mean, we need to be a little bit more analytical about it. First of all, let's agree that how Barry Silber's played this

is one of the smartest guys in the world because he's, you know, he's been on the brink of what many people have thought was insolvency and stuff like that, and he's still fighting, and he's still going strong, and he's he's a very very very smart guy so was sam so was sam bankman freed but continue no yeah but but he but hold on barry's not doing anything fraudulent he's not doing anything fraudulent he's playing by the rules he just knows the rules so well that i'm pretty sure that he's illegal to take a loan from a financial institution that you own that are on terms that are not commercially standard terms. And I don't know if there's a place in the market that's going to offer you an 18,000 Bitcoin loan with no collateral down, no timeline to repay it.

I mean, great. These are allegations. We don't know the facts here. We don't know the facts here. Second thing is it was common practice for people to take Bitcoin put bitcoin put them in the trust and get the gbtc shares and theoretically what you're saying is completely 100 legal like he he was he could very well if the value of the shares was x amount on a certain day and the shares were backed by underlying bitcoin there's no reason why why he didn't he there was no reason why he couldn't have done what he did.

I can tell you why. They're not the same thing. Because 18,000 Bitcoins, if I want to go sell 18,000 Bitcoins, I can get a cash value of those Bitcoins. It's going to be within a few percentage points of the value of the Bitcoin. If I want to sell 18,000 Bitcoins worth of GBTC shares in a market that has questionable liquidity i could hit the price of that 50 so it's not it's not at all the same uh dollar value um they're not the they're

not the same instrument i hear you look i hear you but i think from a legal point of view i think that i think legally they are the same instrument legally Legally, value is value. Well, now Genesis is suing, so we're going to actually get to find that out, right? Yeah. And I think when you're doing a transaction like this, it has to be an arm's length transaction. It has to be on commercially standard terms. If you're getting special terms because you own the entity, then you don't get to make the case that you're two separate entities. And if they're not two separate entities, then that means the debts of Genesis is actually the debt of DCG, which is what the Genesis shareholders should be claiming. DCG owes them their fucking money.

And, you know, I think that like the, the, these aren't allegations because we're looking at the loan documents. I mean, this is the first time that I know of that these loan documents have been made public. And yeah. I think you're right. And David, go ahead. I think you're right, but I want to highlight.

I think you're right. But I just think that Barry is very, very, very, very smart. He knows – I mean, the fact that he's lasted up until this point, the fact that he's lasted up until this point without being able to be taken down, you can see he's playing a game of 3D chess. He's very, very, very smart. He's definitely smart. So, hey, I've got to hop onto this call with Quinn Emanuel real quick. I'll be back shortly, but I just want to say before I bounce, if anyone is an ETH shareholder or a GBTC shareholder, but now specifically ETH, please go to greyscalelitigation.com. Sign up

for Quinn Emanuel's derivative action that they're bringing. David, thank you for dropping that name earlier. And join this litigation. We're about two weeks out from a very important date on it. And this is kind of our best chance to apply pressure as shareholders on ultimately getting our Bitcoin and our ETH out of those trusts. So I'll be back in just a little bit, and I'll let you all know what Quinn says about your comments earlier, Rand. Man, we're getting conversations with the lawyers in real-time reports.

I love it. Tal, Dave, I saw you lifted your mic, so you have a comment. Yeah, I just wanted to mention two things that have been mentioned that I think are important in terms of certainly planting seeds and relating to Bitcoin. The FASB rule change, I think, yesterday is important. It's not going to open floodgates. It's essentially now Michael Saylor being the only corporate holder of Bitcoin. David, can you give us a rundown of the FASB thing just real quick for people who don't know?

Yeah. So as far as I understand it, I'm not an accountant or a CFO. But from now on, you will not have to do what MicroStrategy has been doing in terms of their Bitcoin holdings on an accounting basis and simply going ahead and not recognizing any gains and only recognizing losses effectively when the price of Bitcoin trades down on their holdings, you now have to, as you would do for any mark to market asset, you would have to go ahead and mark your Bitcoin and crypto holdings at fair value. And I think that that makes sense. They're liquid. There is a market for them. And so therefore, it now makes sense. It's, it's practically it doesn't do anything, right? It just is simply, you know, the way it shows up

on people's financial reporting on on companies, public corporations, financial reporting. But I think, you know, one thing that we would need the ecosystem, aft class would need for purposes of of ever hoping that there would be widespread holding of bitcoin um as a store of value amongst public corporations is that public corporations could hold it the same way they hold any mark to market aspect yeah david david yeah but david don't just to be don't clarify it's not only for Bitcoin. Isn't that for the entire crypto ecosystem? I think it excludes NFTs, it excludes wrapped tokens, but that's for crypto in general, not just Bitcoin. That's correct. That's correct.

So I think that that's an important development yesterday. I don't think it's earth shattering, but it is important. I do think it's earth shattering, David, but I'll let you finish. Actually, I want to hear, David, why don't you think it's earth-shattering? Because we talked yesterday about why it's so earth-shattering. It's not earth-shattering today. I will clarify. I do want to hear David's thoughts. Let's get David's thoughts. Because they said 2025.

I just don't think the floodgates are going to immediately open on corporations loading up on Bitcoin. Why? 2025, Mario. First of all, even beyond whether they want it or not, these laws are not going into effect for two years.

Yeah, but the markets are forward-looking. News is news. If they know this is going to happen, shouldn't that be at least priced in? I know you're very bullish on this news, so is Ryan, who just glitched out. I'll bring it back up. David, we were extremely bullish on this. Ryan even said it who just uh glitched out i'll bring it back up but david we were extremely bullish on this it was like even ryan even said it's more more major than

the paypal news the paypal stablecoin which he thought was one of the biggest news of the year um are we overreacting your opinion david if so why no mario you're not overreacting i've said for a few days now on this on this space that i think there's never been a better time to buy bitcoin or gbtc um because of everything that's going on um and everyone has essentially you know kind of panned me i.e well where's the price movement um sure i believe that this is huge news but it's long-term news mean, is it another unbelievable reason to go ahead and accumulate Bitcoin here? Hell yeah. I think it's a great reason. And the second piece of news that I'm going to bring up, I think is also a great, great thing, which is the fact that

Riot went ahead, Riot, a miner down in Texas, was paid a ton of money, 30 million bucks to go ahead and not mine Bitcoin, you know, during a sweltering July and August. And I think that that's very important, because it flies in the face of the fact that Bitcoin is a very power related and energy and, and environment related negative. And I believe that that's not the case. As a matter of fact, when done right, when, you know, done in a symbiotic relationship with the power needs of the community, I think that Bitcoin mining can actually be a great benefit to the community. I think, you know, we had a while ago, about a year, a year and a half ago, you know, a lot of noise around, you know, the environmental effects of mining

Bitcoin. As a matter of fact, what's going on in Texas is actually a very good use, a very good test case for, in fact, how Bitcoin could go ahead and help a power grid. We got to go to Marshall Mario because he's an OG miner in Texas. And we're actually now seeing because of the sweltering temperatures that they're once again talking about blackouts and the usage of the grid. And this is just the perfect time to discuss this with him. Marshall, what do you think about what David just said? Yeah, it's a good point and actually great timing. Last night, Texas had a pretty big grid emergency. And I put a thread about this on my, I think it's my pin tweet. There's a last night, the frequency dipped dangerously low. And just to kind of keep it simple, that effectively means there could have been a huge problem.

And I posted some very clear evidence that miners responded in real time, including my own mind, that you could see physical empirical evidence that miners literally helped stop miners and batteries, not just miners, helped stop a huge grid problem from propagating last night. And today, around 8pm, expected to see something very similar. So I've got a whole thread about, you know, all that on my Twitter. But yeah, it's empirically provable now. Yeah, I mean, really incredible to David's point that we can see this in action. Marshall, the other thing that I sort of laugh about is we had the environmental FUD for all this time. And then the king of ESG, Larry Fink and BlackRock come in and go for a Bitcoin spot ETF, which to me was the final sort of death blow to this entire environmental narrative anyways.

Man, the news just keeps getting better. On a serious note, the news keeps getting better and better. Dave, I want to get your thoughts on all this, but it's like every day we're just stacking up. There's not much bad news. I was going through the agenda of the last few days to try to compare the number of news that were positive versus negative, and I'm just not able to find anything worth mentioning as negative.

Go ahead, Dave. So I want to go back to the, the FASB story because I think it's massive and it's massive for two reasons. One, you, we've been talking about it, which is.

That's a micro strategy. Yeah, exactly. Oh, the FASB story. Okay. My bad. Changing the accountingASB. Yeah, exactly. Oh, the FASB story. Okay, my bad. Changing the accounting rule is a very big deal. Now, look, I run a small company.

My accountants basically effectively said, and we have tiny amounts of Bitcoin in our balance sheet, but they basically make us go through enormous, it's just very painful, to the point where no reasonable person, no reasonable CFO, CEO would go to the board of directors and say, hey, you know, we have long term cash, we want to put some in crypto and Bitcoin in particular, for whatever reason, they're going to say they're going to look at the accounting treatment, and they're going to say no.

Now, so that's a big deal. It's necessary, not sufficient, obviously. But when you think about where Bitcoin needs to go to realize the 20x or more that those of us who are long Bitcoin for the long term believe it will be, this is one of those things that dominoes that had to fall. But more important, and I haven't heard anybody say this,

so that's why I want to mention it. Scott did a tremendous podcast with Caitlin Long, which I listened to long form in the gym a couple days ago. And she basically laid out a coordinated attack on crypto that started almost a year ago. Now, understand that FASB finally throwing in the towel and doing the right thing here is a very big crack in that attack against crypto. You combine that with the IMF and what they said, what you talked about earlier, this is a very big deal. In fact, the biggest thing that's been keeping down crypto

prices has been an all out war against crypto companies in particular, you know, and Bitcoin. And there are serious cracks in that. That's a big deal. Now, the next one that you want to look for is the and this is very arcane, just just I'll tell you now is the accounting treatment of hedging. Right now, if a company, a market maker is allowed, you know, it basically wants to facilitate a forward trade against, you know, whatever against Bitcoin. And let's say they do a billion dollars of forward long Bitcoin and a billion dollars short Bitcoin, they have to allocate $2 billion in red cap, in regulatory capital, because they don't allow those two things to offset, which is insane. But because it's Bitcoin, it's not been allowed. If that changes now, now you have even more

trading facilitated. And it's more of the things that the plumbing stuff that regulators and, and officials have been doing to keep the crypto industry down. And these cracks, you know, like the, you know, like anything else are likely to, to, you know, result at some point in, you know, in the future of Bitcoin, will all go away. Now, obviously, the Larry Fink stuff makes it more likely that that is true, because you're getting more traditional finance. But I think you cannot underestimate the importance of these roadblocks that have been put in front of the crypto industry going downwards. And let me add one more thing. We had one of our regular listeners, Chase Coleman, and he quoted me when I said I can't find bad news that quote no bad news

replying to me and he just gave me a list of bad news but all of it was and it's kind of different different point what Dave is saying is the point I was mentioning earlier I was going through it and in all of it is about Binance everything Binance experiences 10 billion dollars of net withdrawals December January so he's giving me news all the way from December to now September about the head of product quitting. My answer to that is like if this is the only piece of bad news you can send me, which is outdated. We knew there's risks when it comes to Binance for many months. I was looking at the last few days, anything new.

And I wouldn't count that as bad news. I appreciate you sending it. If there's anything else for anyone to send, just send it through in the comments. We do read the comments. But yeah, I would say like this is, you know say the Binance use is not really bad news for crypto. It's bad news for Binance and mild news for crypto, depending what happens. Could even be good for these. Yeah, exactly. I was going to say just really quickly, and we've said it here before, but we might have

new listeners, the kind of, I think, most shocking stat about the Binance thing that Rans pointed out a number of times, we had guests talk about when all this started not long ago, especially right after FTX, which was 10 months ago, Binance was at over 80% of the market, right? They had 80% of the volume transactions. That's down to 30% now in a matter of nine or 10 months. So the longer this takes- From what? Sorry, Scott, from what sorry from from what sorry scott from what to 80 over 80 percent to 30 of the crypto market on finance so that's obviously like listen i mean the sec literally killed finance us like uh whether and i don't think that was justified and so quickly so quickly man overnight just by even making those claims effectively they lost all their

banking relationships all their volume it it went to nothing. Sorry, go ahead, finish. I was saying we saw that in a number of jurisdictions. So that's a big part of it. But also like, you know, that the FUD is going to cause a lot of people and around other exchanges to just, as we've seen, withdraw their funds from exchanges in general. But point is that if they've gone from 80 to 30 percent, if that goes to 25, 20, 15, I don't know where it's going. But by the time we actually see something meaningful against Binance, they're going to be smaller even probably at this rate than FTX was when they collapsed. So it's very good news that this is a slow-moving train wreck rather than a massive DOJ action at one time. We don't know if it's going to end up being a train wreck or not.

Correct. I'm not saying... It's possible. It's like a slow-moving potential train wreck. And I also want to add, remember the concern initially when FTX collapsed, we're getting more and more centralized and funds move to Binance, similar to when Silicon Valley collapsed. All the funds moved to the big banks.

Too big to fail banks. Well, now we have the same thing. It was happening in crypto. And then the SEC jumped in. And you could say they've done a good thing, a bad thing. It's arguable, but now it's less centralized. And Binance representing 30% rather than 80% of total funds held in SEXs, centralized exchanges, was obviously a great thing for the ecosystem.

Talking about decentralization, Scott, if you don't mind, I do want to go to Masa because I was reading up on these guys during the show. Absolutely. These guys, they're on stage. We have two of their team members, the CMO and CTO, I think both on stage. I'll give them the mic and we've got a few questions for you guys first. Thanks a lot for partnering with us. Really appreciate you. And we're pretty strict and diligent. David from the team is pretty strict on who he brings on the AMA. He has some pretty dope projects. Masa has another one. So you guys are in L1, focused on being fully decentralized

and the ability to scale. You've got thousands of people, thousands of nodes, I think over 5,000. So I'd love to know more about your technology. I know it gets really technical. The more I read, the more I understand how complex it is

for the average Joe to understand. So Damir Ryan is not on stage, actually. But Damir, you are. First pleasure to have you, sir. But look, man, if you could kind of simplify it for the audience to kick it off. What are you guys? For the average Joe, what would it mean without getting technical? And then we can dig into the technicalities for anyone that is technical.

Sure. Thank you so much for the mic. So, the observation we have done in our case is that the Web3 space nowadays has lost its true spirit, which is decentralization. So nowadays, it's essentially impossible to deploy a full Web application, a full Web3 application that cannot be stopped by attackers. So, for example, when somebody deploys a Web3 application, they need to first host a website on centralized servers. They need to rely on centralized tools. They need to deploy their smart contracts on existing blockchains that suffer from centralization problems. And all these leads to hacks, leads to inefficiencies, and actually removes kind of the very purpose of the blockchain itself, which is decentralization.

Because if you think about it, everything could also be achieved with centralized systems. Google does about billions of transactions per second, no problem. The only advantage of a blockchain is really decentralization. So here we are working on solving this issue and putting decentralization back to the main spotlight of the space by creating this new layer one that actually solves all these problems one by one. The goal here is to revolutionize DeFi, put it back to its initial spirit and allow people to deploy full applications that can never be stopped, essentially. Demir, that's the selling point of decentralization. We all agree there.

So then why would Masa, what puts Masa ahead of, we were talking about Solana yesterday, obviously Ethereum is the leader by far, Polygon, why Masa, why do we need another L1, and what is the unique selling point? You do have one that's pretty technical. See how you can explain it. That positions you or that says like, hey, we need Masa along with the other L1s as a use case that others don't have

or there's an advantage that others don't have. Sure. So there are a few selling points here all around this concept of decentralization. The first one is the decentralization of the layer one itself. So you maybe know about the Nakamoto coefficient. This coefficient measures essentially how many people you need to corrupt in the blockchain to break the system.

And if you measure this coefficient for existing blockchains nowadays, you'll find that most of them are below 10. Actually, essentially all of them. So this is the first problem we tackled using mathematical research. It's been three years of research before we started this. We made sure that node running has very

low entry barriers, so anybody can just participate, can join, can become a staker, can produce blocks with just a normal computer at home. We don't need to run very hardcore servers. Nobody needs to join staking pools. Everybody can just become their own staker. So that's for the layer one itself.

And then we also solve two other problems, which are... So just on that point, before going to the other two problems, on that one, you're essentially removing the barriers to entry for anyone to participate in the blockchain, which allows it to be more decentralized. The higher the barriers to entry, the more centralized it is. So you guys really focus on removing those barriers. Is that a fair way to explain it? Oh, yeah, that's a pretty fair way to say it. So the entry barriers are double. First, sometimes the amount of coins to start staking

is prohibitive. So people join pools. Here we have lowered this amount to very low levels. And the second point is usually the hardware requirements. Very often you need very strong hardware to have a chance to produce blocks. And here we have also removed this barrier and the system runs on a normal desktop computer. And that's why on the testnet we have already about 8,000 people running notes. Cool. And before we get into it, I know your question 8,000 people running notes. Mario, can I ask something? No, no, I know your question because I have the same question. I'll let you ask it right now. He said there's two other

problems they solve because I interrupted him after the first. I wanted to know what the other two are before we get into the sexy autonomous smart contracts. But what are the other two problems, man? Yeah, so basically one of them is that when you deploy a smart contract,

the smart contract is just hosted on-chain. It doesn't do anything unless it's called from the outside. So the smart contract itself can never decide, for example, to do something by itself after some time or to automatically get triggered when something else happens on-chain. So to take a very concrete example, imagine I want to create a trading bot, and I want it to work in a decentralized way on decentralized exchanges. Nowadays, the only way to do that is to run my own servers on the side that are centralized,

that are going to observe the blockchain, detect arbitrage opportunities, and whenever they find some, they will send a transaction to the blockchain to execute these arbitrage opportunities. And as you can see, there's many choke points here that everything is centralized, and it can't run without me paying for the servers and running them myself.

So here in Masa, we allow smart contracts to be autonomous. So we literally allow them to emit their own transactions, to say stuff like, I want to be woken up in five hours. They can do that. They can do whatever humans can do. And it removes completely the need for any kind of outside trigger or any kind of outside server. So technically in Massa, for the first time,

you can launch, for example, a full trading bot that's fully autonomous, and then you can disappear. It's going to run forever. So that's the first time it's been done, and that removes a very big barrier for centralization. Mario, that sounds like one of your favorite things. Sounds like AI. One of my favorite things?

One of everyone's favorite things right now, but one where... You love AI. Yeah, Damir, is that in some way AI-based? And how much of a differentiator is that from traditional smart contracts? It's not AI-based, but it allows the system to be fully autonomous. So a smart contract can live by itself, essentially wake itself up. It doesn't need to be called from the outside. So this allows many applications.

For example, you can create trading bots, you can create self-evolving NFTs. You can create many things that are impossible without having to resort to paying outside services such as Gelato or Chainlink Automation or all these services that are just there to call periodically smart contracts for bookkeeping, essentially. So here we removed these intermediaries and everything is on-chain. That's really, really cool. Yeah, I want to jump in, guys. Can you talk about the front-end hosting service that you guys have as well?

Sure. And actually, also, I want you to add on to this. I want to learn more about your journey, like a bit more metrics, like how much have you raised? How long have you been building for? Tell us about the team. Tell us some of the sexy things that haven't been mentioned that are less techie. Sure.

So the team started with just three researchers. We were mathematicians, and we all have essentially PhDs in AI and physics. And we started in 2017, just doing math and theory for three years on the side. Back then, it was just a research project. And after three years, we realized that the paper we had written basically would be a waste not to implement it. It would be a waste to keep it just as a research paper. So we implemented it. And that's how the company started in 2020.

It grew very quickly. So we raised about almost a million from government grants and small investors. Then we sold for a small percentage of the tokens in the private sale for about $6 million. When was that? That was like a year ago already.

Okay, so in the bear market? Yeah, at the beginning of it. Oh cool, good for you of it, yeah. Oh, cool. Good for you. Continue, man. And so basically that was the first step. Then the team grew very quickly. Now we are 40 people.

The testnet has grown as well. So the testnet has reached about 8,000 people and we are ending the testnet now because we are ready to launch. How did you get 8,000 people in we are ending the testnet now because we are ready to launch. How did you get 8,000 people in the testnet? I'm curious. So we have incentivized the testnet. People are scored and there might be some kind of airdrop. So the people are scored

based on how efficiently they run the node. The airdrop, is that the Quest campaign you have coming up? No, that's yet another thing. I think Brian is going to talk about it just after. There's so much going on. All right, man, I'll let you finish off what you're saying and then we'll get into the Quest campaign. So the testnet, basically, it's very easy to run a node.

Anybody can just start a node at home with a normal desktop computer. You don't need to run any kind of huge hardware, no GPU nothing and that's why it's very easy to to join and that's why we have so many people and that's why it's so decentralized and that's why it's actually the testnet the master testnet is one of the most decentralized networks today okay that's good and tell us more about as you're talking about decentralization before getting the quest campaign that brian could tell us about uh you know this week vital about decentralization, before getting into the Quest campaign that Brian can tell us about, this week Vitalik spoke about node centralization,

I think it was a few days ago, as being one of Ethereum's main challenges. Do you guys play any role in solving this? Sure. Basically, node centralization has multiple aspects. One is the hosting. Many people end up hosting on AWS, for example, which is a problem. So, for example, which is a problem.

So, for example, in our testnet, we have incentivized people to run nodes on different servers by giving higher scores to people that have substantially different IP addresses from others. So basically, when many people are at the same provider, their IP addresses are close to each other. So we incentivize people to spread out their IP addresses to get better scores. Hold on, how does... So is that other blockchains that do this? I'm not technical, so if this is basic, let me know. But is that... It's pretty cool. Like, you give them a rating based on the IP address location?

So that's just for the testnet, for the incentives. Ah, okay, okay, okay. Got it, got it. But on the mainnet, we're going to have a little feature that prioritizes diverse IP addresses, which is beneficial for the node itself. It adds redundancy. And if, for example, I don't know, an internet cable is cut somewhere,

a fiber optics cable is cut, they have higher chances of staying up. So it's beneficial to nodes to connect to more diverse nodes. And because of that, it's going to continue incentivizing people to run like that. And the other... Before going to the other one, that's a good solution. Like Ethereum doesn't do that right now?

No, not to my knowledge. I need to recheck the code because it changes often, but not to my knowledge. Okay, cool. You were saying another thing? Yeah, and the other thing is delegation, actually. Basically, currently the problem is that if your hardware is not strong enough, or if you don't have enough coins to start participating as a staker, or your

gains are too unpredictable, you end up delegating your coins for somebody else to produce blocks and stake for you and give you rewards. For example, Lido, liquid staking, that's essentially it. And this is a problem for us because it's not you who are creating the blocks. It's not you who choose what's inside these blocks. So this is a very strong vector of centralization that Vitalika has also mentioned, by the way. And in Massa, we have completely removed the concept of delegation. You cannot delegate.

And that's on purpose, because it's very easy to run a node at home. All right, man. And let's get into the Quest campaign, because I know we're going overtime. I appreciate you staying a bit longer. Tell us, is Brian here? Is he on stage?

I can't see him. I don't see him. Yeah, yeah. So, Demir, you're on your own, bro. Can you tell us about the Quest campaign, man? Brian left you hanging. Okay. So, the Quest campaign is starting right now. The idea is that after the success of the testnet, now we want to explore another aspect of Masa,

which is to show people what amazing projects have built already on Masa, what's already there, what works, and to also let them try play with all the features, the decentralized web, the autonomous smart contracts, and show them showcase all the features by having some quests on our own platforms. The goal of these quests is that they're gonna give points to people when they explore new features on Massa, when they unlock achievements. And this is also going to teach people how it works and give them some points.

And also, maybe there's going to be some rewards. Brian is here, man. Brian is here. Just after he forced you to answer the question, he comes up pretending it's all accidental. Typical Brian. Yeah. Brian, tell us more about the quest campaign i mean the point is yeah i'm going to be here the point is that we've got such a robust

community with you know over 100 000 community members and you know ambassadors all over the world who are creating content and fostering community and thousands and thousands of node runners so we wanted to create something that was kind of unique and different than just any other blockchain. So basically we've created our own quest dashboard where people can be engaged and experiment with our building.

So it's kind of a gateway for newcomers to discover us and participate in a fun but customized way. So you can come to this dashboard and it's like a centralized hub where you can track leaderboard positions. You can get rewards like, you know, like possibly something at the end,

like maybe an airdrop or something like it. New quests are being added weekly and there's going to be new rewards at the end of each cycle. So, you know, the point is really just to get people easily involved and to keep coming back. People can just come to dashboard.masa.net. That's dashboard.masa.net to sign up.

And it's really just to complete. We're starting the first ones next week. So if you get in early, you can get more, obviously. And, you know, completing the first quest is really easy. Just connect to your Discord account. You can download the Bearby wallet. And you can do things like basically either send tokens to an address or participate with one of our flagship ecosystem projects, which is DoUSA, where you can do things like provide liquidity or do some trading or things like that. And then at this dashboard, you can check the quest status and leaderboard positions and come back weekly for new quests.

Brian, can I end it with one tough question, if you don't mind? I asked that question already to Damir. Why do we need another L1? We asked this about every L1 that partners with us. I already have an answer from Damir and a good one, but I want to hear your know, to work at next. And I looked at the tech and I thought, you know, well, okay, the tech is solid, but is this just another professor coin? And, you know, you had talked about the tech here,

but then, you know, I came to realize that just the more the deeper I dug, I realized that, wow, some of these tech innovations, like the autonomous smart contracts he doesn't been talking about, really will and really can revolutionize DeFi. And I really think that that's where it's going. I mean, I think that the use cases of it, like decentralized games with NPCs that can interact without player triggers or evolving NFTs like crypto pets that can kind of autonomously breed online, you know, or those are cool. But, you know, these things that can happen in DeFi, like autonomous loans and, you know, interest accumulation and payment scheduling without external input and autonomously triggered liquidations and all kinds of things that can happen, limit orders without centralized bots, which is something that Deuce is showing off. That's really going to change the game of how

people interact and trade online. So revolutionizing DeFi is one big reason. Yes, the hyperscalability and the security and all the other good tech stuff. But the DeFi component is what attracted me. The other one that really matters to me is really what Damir kind of touched on, which is that I really think that Masa is the only project that truly aligns with the spirit of Web3. I mean, it's easy to scale and be fast and secure if you are centralized. But I think a lot of other projects that say that they're decentralized, when you look into them, have so many points of centralization all across

the stack and hoarding coins from insiders and all kinds of other things. And we're really putting our money where our mouth is and being truly decentralized across all layers of the protocol. And that's why we're all here to prevent hacking, to have fairness, to have uncensorability. And in addition to autonomous smart contracts, we've got an on-chain web, which is coming, where you can have truly on-chain websites. So I think that those are the two main reasons, and I'm super excited about them.

Yeah. And I'd say one thing for the audience, like decentralization doesn't matter until it does. And this is probably the best way to put it like everyone's like fine with centralization it works fine until then the issues with centralizing having one point of failure and having a very centralized attack vector and no one pays attention to it until we're forced to do so and you're brian you gave an example of that so guys i think what you're building is great i love what you're building during these tough times and what you've achieved. Your metrics are pretty impressive and we're really happy to have you partner with us today.

And anyone else that wants to partner with us, just hit us up in our DMs and make sure you also follow that red logo on stage. We've got six people on stage and a red logo. Follow the red logo. But I love Massa, guys. Scott, what do you think? I think it's absolutely incredible. And I think that they're sort of at the leading edge of what's going to be the next trend for the next market. I love the sort of meme that the best things are built during the bear market. And that's when everybody puts their heads down. But I think

that we're going to see decentralization certainly rise as one of the major narratives into the next bull market that we all know is inevitably going to come can you promise me today that it'll be the last day you say the word bleeding edge uh yes uh i cut myself shaving this morning and it was on the cool ryan you with us bleeding bleeding edge technology yeah bleeding edge technology gillette gillette razor revolutionary edge technology i would like to know, are you at five blades, six blades, or seven blades now? I don't know. Oh, by the way,

David's here, so maybe we now... Guys, we never do this, but maybe we need the update. David, did we get anything good from the lawyers? David Bailey, you there? Hey, can you all hear me? We can now, yeah. We can hear you.

All right, yeah. So I want to take – yeah, good. I want to speak to him. Good. Dave, you here? Yeah. So I just talked with Quinn Emanuel and Balch Bingham, and their response, they gave me permission to share this publicly,

is that while they have not done a full analysis on that, and the chances of bringing litigation against the SEC and winning are not zero, they're close to zero. And litigation against the federal government is next to impossible to bring. And they have really no interest or appetite in bringing that sort of action. So again, they said they haven't done a full analysis on it, but they as of this moment, there are no plans to, and they think it's extremely unlikely. Did they say the grounds other than the fact that they're seeing the federal government? No, we didn't spend a ton of time on it.

They spent three minutes. Okay. I want to ask you another question. So you mentioned that you're fighting to get the GBTC trust and the ETH trust done in such a way that people can actually withdraw their Bitcoin and the ETH or redeem for Bitcoin and ETH, right? Sorry, redeem shares. And that would mean selling of Bitcoin and ETH on the markets, right? No, it wouldn't mean selling of shares on the market. And our complaint is twofold. One is on the fee side, we want to be charged commercially standard rates. And we want the courts to enforce the

contract around how fees should be calculated, both, you know, looking back and going forward. And so there would be a clawback of fees for shareholders. Between ETH and GBTC combined, over the last two years, we've been charged $1.7 billion in fees. So we'd be seeking to close. But didn't you agree to that? Well, not you, but to ever bought shares from Grayscale, did you not agree to it when you signed the share prospectus agreement?

What we agreed to when we signed the agreement was that Grayscale, that when we joined, it was a 2% fee and a 2.5% fee on ETH. But that Grayscale had the contractual duty to monitor, reassess, and renegotiate fees to ensure that they were charging us commercially standard rates. And so if you invest in this trust in 2015, what was commercially standard in 2015

is not the same as what's commercially standard in 2023. And so as the fund has gotten economies of scale and as the product has become commoditized, there was a contractual obligation for them to keep the pricing model competitive. That's what they agreed to in the contract. So when we, when we. But competitive, competitive contracts But competitive contracts in Switzerland

and other countries have got a 2% fee plus costs. What product are you talking about that charges a 2% of NAV fee? Well, I mean, any crypto product that is holding, storing, insuring, and all the likes. I mean, if I was a judge, I would say 2% sounds reasonable. Well, how is it reasonable, Ray?

I'm telling you this. How is it reasonable for them to charge the same fees with $25 billion under management that they were charging when they had $50 million under management? How does that make sense? How is that the $1,000 X the AUM in the fund? I'll tell you. I'll tell you. At 50 million, they were probably taking a loss. At $50 million under management, they were probably taking a loss. They were managing. I'm playing devil's advocate here. I mean, I really wish that you guys do get it back. I don't think that the money should live with PayScale, but I'm looking at it from the point of view of

the market and the point of view of the market and the point of view of a judge. 2% is not excessive. 2% in this industry, I mean, most funds charge $220,000, but here there's no upside return and there's no real fund management because they're not actively managing. But I mean, 2% for custody plus safekeeping

plus insurance plus, plus, plus. To me, it sounds like a great deal to be honest. Okay. So Ray, let me ask you this question. When they become an ETF, if they become an ETF, what fees are they going to charge as an ETF? Because Michael Shaughnessy has already said that when they become an ETF, they're going to reduce their fees. But they're not an ETF.

It's a completely different structure. My question is, is it more expensive or less expensive to run an ETF versus a closed-end trust? They'll charge a competitive rate, and the competitive rate will be based on their cost base plus what the competitors around them are charging. And right now, the competitors around them are charging more or less. Or when you sign the document, the competitors were paying 2% and you agreed to 2%. The reason why I say this, I just feel like if you sign a contract and you agree to certain fees, and then you go back and you try and sue them because you're

not happy with the same fees you trust, you trusted. I was like, hmm, yeah, I'm not sure that that's a good thing. No, but Ren, no, no, Ren, but you're missing the point. In the contract itself, it says that they have an obligation to go ahead and reassess those fees on the basis of commercially reasonable. And they did. And I think they're commercially reasonable.

Come on. You can argue for one end. We can argue the other end, which is essentially it's a trust. There's no active trading going on at all in this thing. And frankly, there's no additional overhead for this company to go from 50 million to 5 billion. It's the same exact infrastructure necessary. So at the end of the day, this is not a two and 20 argument. This is more like an ETF argument. Okay, so maybe it's not at the low end of ETFs. Let's push it to the highest end of ETFs. What's it charging? Even if it was charging 70 basis points, it's still way off of 2%. And I think, I mean, I believe, I believe, you know, even if the truth is in the middle, it's still a lot of money. And if they were doing what you said, Rand, if they were actually fulfilling that contractual

duty, then they should have no problem with this litigation. All they need to show us is the process that they ran, the methodology that they used to determine 2% of NAV was commercially standard. They need to show us the board meeting minutes where they met and went over the methodology. They need to show us the email correspondence where they negotiated with vendors to get us commercially standard rates. They should have the documentation and the paper trail and the receipts to show us that 2% of NAV was the, uh, was a fulfillment of their contractual obligation to us, my instincts. And tell me that I don't have. Let me make a different, let me make a draw a parallel argument, right? I have an obligation. If you're a broker dealer, you have an obligation for purposes of your customers to get the best price possible for your account holder when executing a trade, correct?

And so, therefore, they have a fiduciary obligation, right, as trustees. And have any obligation to reduce their fees if they determined at a board meeting that the fees were fair. And I'm sure that, again, you're dealing with very smart people. This is Barry Silbert. I'm sure Barry Silbert was very, very smart and probably had this board meeting to speak about. I don't have information, but I wouldn't be surprised. Let's talk about the next part of what you got here. Can I just point out one key critical difference in this whole conversation about fees? There's one thing that makes this completely in a different category. If investors were allowed to leave the trust,

they can charge whatever fees they want to charge. Like we don't have a problem if they charge 10% fees if investors have the right to leave. The problem is- But sir, when you signed the agreement, when you signed the agreement, you knew you wouldn't be able to redeem. I'm not sure why this isn't used to you.

You literally signed an agreement. option yes but when we signed that agreement that was given with the caveat that they were going to change the fees over time to reflect what's commercially standard so you don't you don't get it both ways you don't get to say hey we're and they never leave and they deemed at this board meeting that this is commercially standard let's move on to the next chapter. Show us the paperwork. If you can show us that, then you're right. They're going to win this case.

So far, their response to showing the paperwork has been to say, hey, you need 10% of the shares to bring this complaint. That's what their response has been. Okay, cool. Because Barry Silbert's very smart. Again, you're dealing with the smartest guy in the room. That's the problem. This guy's untouchable because he's so smart. I've seen problem. This guy is untouchable because he's so smart.

I've seen him operate. He's untouchable because he's so smart. He's played everyone here. I'm just a redneck from Alabama, but I'm not going to back down because somebody is so smart that they're allowed to screw me, and I'm not going to do anything to try to stand up for myself. I mean, I know when I'm getting screwed over and when I'm not.

Anyone looking at the situation can see when the trading at a 20% or 30% discount to NAV, we're getting fucked. So, I mean... I'm going to say, I'm going to make a prediction. I like you very much and I really think this is a great course,

but I'm going to make a prediction that on that charge, on that action, you're not going to win. Let's go to the next one. Redemption. So, redemption is being brought in on an individual basis instead of a derivative basis. And the redemption argument is that they have a fiduciary duty to bring relief to investors

and that they have the ability today to offer a redemption program while they pursue their ETF application in parallel. So there is no reason why they couldn't be offering redemptions right now. The only reason they're not doing it- I don't want you to win that. Dev, I don't want you to win that. Because if you win that, because the GBTC and ETH are trading at such a big discount, it means that if people can redeem their shares for either ETH or Bitcoin or redeem them at net asset value, it's going to bring a whole lot of sell pressure onto the market.

And I don't want the sell pressure onto the market. Yeah, but what you're not appreciating from that view is that there's already a massive number of people that are in a hedged trade on these trusts. And so the sell pressure is already materialized. No, tiny, tiny, tiny, tiny. Relative to the 20 billion that we're talking about here, I'd probably say 1, 2, 3 billion are hedged and 18 billion is not hedged. And the minute that you allow people

to redeem it for actual Bitcoin and actual ETH, you're going to put a whole lot of selling pressure on the market. I don't want you to. How much redemption do you think has to happen before the market price converges on the NAV?

Because I think if you put $1 billion of pressure... to happen before the market price converges on the nav because i think if you put one billion dollars much more than the market much more than the market can handle with currency that's the problem to me to me to me i don't want you to win this case if in this case you're going to crash the price of bitcoin the only time that i want this to happen is when all the etfs get approved and then i can pray to the crypto gods that the demand from institutions because of the ETF will be bigger than the supply because of the GBTC overhang on the market. And that's the only time

that I think it's worth fighting for. Otherwise, what you're fighting for might be the worst thing in the world because you're going to fight for something that's going to crash the price of the asset. Absolutely, it's not going to crash the price of the asset. A couple billion dollars

in buying pressure on these instruments is going to return the price to the asset. Absolutely, it's not going to crash the price of the asset. A couple billion dollars in buying pressure on these instruments is going to return the price to NAV. It's a one-time sale. It's a one-time sale, Rand. It's a buying opportunity. Of $6 billion minimum worth of Bitcoin. Why would there be $6 billion

in selling a Bitcoin? Because right now, as you take the trust, what is the gap between the NAV and the value of the trust? How much in dollar terms do you think it would take to drive the current price of GBTC to NAV? I think that you're going to create $6 billion worth of sell pressure. No, no, no, no, no. There's $6 billion of arbitrage, not of sell pressure, of arbitrage. you would have to close that money, it's going to close. No, to close that arbitrage,

to close that arbitrage, you're going to probably need five or $6 billion. You're going to get five or $6 billion worth of selling happening almost immediately. Your view is that if one instrument's trading at 20 billion and the other instrument's trading at 14 billion, to close that gap, you need $6 billion of selling to occur to close the gap. No, I think if you put $20 billion of an asset onto the market that has been locked up

and you open it and you unlock it, I think, again, there's no mathematical formula so we can carry on. We can keep arguing for this because it's a rhetorical argument. But ultimately, I think it's going to put a lot of selling pressure on the market. I think at least one third of the trust

is actually going to hit the market and be sold. And the only time that the market can absorb is if an ETF is approved and all the institutional pressure can actually soak that up. And so to me, I think that you've got to be careful what you're actually fighting for here. Because rather than don't do anything,

let them convert into an ETF. Let them put the SEC into a corner. Let them convert into an ETF. And then when they approve the Grayscale ETF, they'll approve all the ETFs. And then at least we've got someone to soak up all the selling pressure. Otherwise, you are throwing a poison pill onto the market, which may smash them up. You think you're doing good and you are doing good. I

believe that you have the best intentions, but I think that you may destroy the market if you win this. That's the problem. Well, first off, we're not going to destroy the market. Second off, I think it's a very silly argument to make. That's the equivalent argument to make that it would be good for the price of Bitcoin if Coinbase shut off withdrawals. It's not good for the price of Bitcoin. You're affecting market sentiment for a million shareholders of this instrument. We want the market to be a properly functioning market. We want to eliminate scams in the market. We want to eliminate bad actors in the market. The bottom line, it's fundamentally bullish when investor rights are protected and when investors are treated properly in the market, it increases confidence in this entire industry. Right now, this is looked at as a joke.

So, you know, I think that long term, fundamentally, it is bullish for investors to be able to enter into investment products and then to work as expected. And then I think the amount of actual selling that's going to happen to arbitrage these things back to NAB is pretty minimal. And then you look at how much is being unwound in hedges, and I think that the hedges probably match the amount of financial transactions that need to happen to converge them. So I disagree with you on that. I agree with you on the first point that the market should be allowed to operate efficiently. I disagree with you on the second point. I was saying another thing. By the time you get this thing to court, and by the time you either win or lose this court case, an ETF will already be approved. And amongst the

ETFs will actually be approved, the Grayscale GBTC Trust will already be approved. That is fantastic. But I can tell you that the fact that we're sitting here at a 20% plus discount to NAV is the market telling you that we have, you know, with the time value of money, three plus years before this thing becomes an ETF. That's what the market's telling you. And I think the market is pretty efficient in pricing things. And I don't believe, I mean, I don't know if anybody believes that the ETF is three years away. I mean, I think it's a very small minority of people. I'm saying GBTC converting. And I'm also of the view that there's no economic incentive for them to even convert into an ETF. I have the cynical view that they actually want to max out on the fees and so they may never convert. No, I don't think so.

I mean, they're fighting so hard that they have a lot of egg on their faces if they never convert after taking the SEC. Ran, really quick i mean regardless of what you think it would do to the market a i think it would be a very quick dip that would uh not permanently destroy the market i think that's hyperbolic and would probably be a sale but i think that everyone here agrees that bitcoin in and of itself is or should be one of the last free markets on earth and you should be cheering for the free market, not for what you think will temporarily help price. I mean, I hope they win because it's the right thing. I agree with you.

I agree with you, but I would have loved for it to be a free market. I'm asking whether we want to shock the market or they want to take a much more strategic view. I agree. Every time we've thought that there's going to be a want to shock the market or they want to take a much more strategic view. I agree. Every time we've thought that there's going to be a supply shop on the market, it's been pure conjecture and has literally never happened. I mean, you're talking about the biggest public holder of Bitcoin here, right? Who hasn't been allowed to sell? Can I say just one thing that was told to me?

Chatham House rules applied in this situation, so I can't attribute the quote to exactly who said it, but an individual who owns one of the largest ETF companies in the world, a pioneer of the space, said that his view is that the GBTC trust will never convert into an ETF. It will never be redeemed. And that 30 years from now, it won't be redeemed. And that the price of GBTC is going to zero as Barry takes out 2% of the Bitcoin from the trust every year until the trust is drained. Okay. That is- I've got to be honest.

I've got to be honest. That is a scenario, but it sounds very, very, very dramatic. More realistically, when the grayscale is publicly making a noise about taking the SEC to court, winning, pushing the SEC less than a month later to meet with them to talk about conversion and ETF, I think that it would be very, very, very funny if after they got all of this and won all of this, they say, oh, we're not doing an ETF. Come on. I mean, I hear you that it is a scenario, but we also have to be realistic.

Okay, well, I'm sure to any GBTC shareholder in this room hearing that that's a possibility, that their GBTC is going to zero, that's a shocking potential outcome. But what is the probability what is the probability to try to apply as much pressure as possible on on grayscale i want grayscale to become an etf that's good for grayscale shareholders but our efforts are in parallel to that we don't we don't stop them from bringing uh becoming an etf by bringing pressure so there's no reason not to do these things in

parallel tracks. And if they become an ETF, fantastic. Okay, I can get my Bitcoin back. Awesome. But if they don't, this is our best vehicle. We want, Dave, trust me here. What we want is we want this to happen here. We want all the ETFs to be approved at the same time so that the one can absorb the sell pressure of the other. Otherwise, we're going to get a massive market dip. And with the liquidity that we have now in the market and the appetite that we have now in the market, the market can't afford it.

The market can't afford it. We're not in the market where we can absorb another O-Ping. But Ran, that also implies that we won't be in this exact same market by the time that happens. And that's obviously not happening today. Yeah. Whether it's this market or slightly different. The problem is that there's bigger fundamental issues in terms of on-ramps and off-ramps,

in terms of liquidity in the market. And I think, again, the way to get more people interested in this market and to bring in new money into this market is to get the price to go up. If the price goes up, people will get interested again. If we do this and the price goes down, we're going to kill more interest. You could say, you could turn around and say,

okay, well, you know what, that's great. That's a good buying opportunity. But I also think it's going to do a lot of damage in the short term. You're going around in circles. At the end of the day, no matter which one of you is right, and I have my opinion on who's right, buying GBTC along with joining the litigation sounds like a phenomenal trade. Because even if Rand's right, at the end of the day, Rand, you've admitted that the ETF approval is likely to come before this litigation is over, right?

Which will close the GBDC. 60% of my Bitcoin holdings, when the discount was between 45% and 35%, I kept in 60% of my physical Bitcoin and I bought GBDC. And it's been one of the best trades I've ever made. That's how bullish I am about that trade. Great. So then that's great. I'm with you. Right there with you

at the same distance. And Ran, you do appreciate that as long as this vehicle trades, since they're not doing any new share creation, there is no new Bitcoin being purchased in the trade. So all the buying activity that's happening of people buying GBTC, that's just removing from the market purchasing power, purchasing demand that would be flowing in a spot Bitcoin

in other forms or fashion. Right now, it's just a liquidity sponge sucking buying activity out of the market. Exactly. That's the problem. Exactly. That's the problem. If you open it up now, you're going to get the overhang of that. And that's my concern. Anyway, listen, guys, I've got to jump. I've got a dinner that starts in two minutes. I do wish you well on this journey. I really wish you do win. I've given you my opinion as to potentially why you won't win and what the risks are. And I also think, I mean, I hope that we get an ETF before you can get this thing to court. Well, I agree with that. I agree with that. Well, for anyone who's listening to this, who doesn't want their shares to go to zero

and doesn't want to leave it to chance,ayscale litigation.com go and sign up join the litigation it doesn't cost you anything it is super simple to join and uh let's put the squeeze on barry until the right thing happens whether it's an etf uh a conversion or uh uh or if there's not on that point i'm gonna end this space because no joke i'm in the sauna and i had my headset. I'm not kidding. The headset melted about four minutes ago because this took so long. So I have to buy another fourth headset.

But I really appreciate it, David. I appreciate you jumping on, having that discussion so openly. And I appreciate the sponsor, our partners for the day, for coming on and answering your questions, having a nice chat. So, Masa, thank you so much, guys. Anyone who wants to check out Masa, check out the pinned tweet above. And before my phone melts as well, I will wrap up the space. Thank you so much, everyone.