The Wolf Of All Streets - SELL TIME? BTC ETF Faces Decision Day! | Crypto Town Hall

Episode Date: January 2, 2024

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Merry Christmas. Happy New Year, Mario. It's like I don't even know you anymore. Man, I tried. How many times did I try? Can you hear me? Yeah, you tried to get in touch with me. It's definitely a private call. We can only talk on space. And your answer is I'm skiing. That explains why you

contacted me. I was skiing. I did ski. It's hard to take calls while you're skiing. I don't know if you know that. Where were you skiing? Yeah, I was pretty pissed that last week we were off to be honest i'm not blaming anyone i know that like we just there's no guests and ran wasn't around but man i thought we were taking a week off it ended up being like two and a half weeks i'm ready yeah i would prefer the third week but uh me and your different people by the looks of it yeah well ran to brand's taking his

third week ran oh he's going to be here this week no i think you took a full three-week break from everything actually yeah which i'm very impressed knowing him it must be driving him absolutely insane he's got a lot to recover from look at the markets holy bitcoin's up to 45.6.7 almost it's up 5. four percent theory is up two point five percent ted it was it's kind of dropping right now actually it's below 45 i think it was uh 44 981 at least on coin market cap you know it's like 45 9 a couple hours two hours ago now it's up 40. what do you think is leading this is the etf rumors today? Because you tweeted it. Yeah, I mean, I think there's an ETF rumor. So to be clear, the rumor was that the SEC could potentially tell some of the issuers that

they got approval this week. That doesn't mean we would get a public announcement of approvals, right? So it could be the SEC just quietly not announcing it yet, but telling them, hey, get ready to launch next week. But yeah, I think consensus is that we're going to get some news this week, maybe as soon even as today, that can happen. I do think that's what's driving it. But it's pretty interesting that right now, at least according to Matrixport, there was an article saying that right now, annualized perpetual futures. So obviously, the way that most people are trading derivatives of Bitcoin is annualized at 66%, basically interest to be long right now. It's about as much as it's ever been. Funding rates are extremely, extremely aggressive. It's very expensive right now to be

long. So I don't know if that's what's happening now. I'm not even digging into the data. But even if we're going to continue up, I pretty sure but even if we do i think we're going to see some pretty sizable washouts of all these lungs i mean it's historic levels of funding rates for people to be long right now yeah do you know what the source of the rumors uh was for the was it your tweet what was the source for the rumors? Sources. It was sources, not sources. I think it was from Reuters. And I can bring it up. I know I had originally seen it, I think, through blockchain, but then I dug into it and it was via Reuters. So it was a number

of sources, insiders, saying that based on conversations that they had had, that they thought that the SEC was going to start to signal potentially today. Now, I know that some of the question periods for some of them or the comment periods, excuse me, don't end until January 5th. So that's Friday. So there's also, you know, some speculating that the SEC won't do anything until everybody's had their comment period closed if they're trying to get, you know, all 14 or 12 of the 14, whatever it is, approved initially. But I mean, all that is sort of like forest, you know, forest to the trees. The details, I think that it's pretty clear that with all of the progress being made here, I mean, we have basically at this point,

I think we'll get into it with the panel, but we have, you know, Galaxy and Vesco saying that they're going to waive fees for the first six months. And we have a number of the issuers already saying what their fees will be. We have the APs, authorized participants, I believe it stands for, already being named, ironically, J.P. Morgan for most of them, even though Jamie Dimon apparently hates us. J.P. Morgan loves fees. This is really happening, right? I mean, the SEC has been expending significant resources and money and time to go through this process with each and every one of these issuers multiple meetings. I don't think they're doing that to gaslight us personally, although I would never put it past Gary Gensler to have that small percent chance that he goes scorched earth and fucks us all.

We should get the – who are the ETF experts that we always get? It's James and – James and Eric. Yeah, we're going to have them this week for sure. I had Eric last week on YouTube. It was great. I mean, they're feeling really short based on all those things that I just said. I mean, that was kind of a summary of his thoughts to some degree.

Yeah, I'll just tell the team now to try to get him on. But yeah, I'm just looking at the Reuters article. Recent Reuters report said that sources who spoke on the background of ETFs said the SEC may notify issuers as soon as Tuesday or tomorrow, Wednesday. It's likely that the SEC informs the issuers that they have been cleared to launch the following. Okay, so not only is there rumors that the decision will come in today or tomorrow, but that the decision is that they'll be approved today or tomorrow.

And then Eleanor replied to you. Eleanor couldn't join us today, but she replied to you. Let me see where her reply is. I got it open. There she is. While the SEC is surely unpredictable, it would surprise me if approvals were to happen tomorrow. From what I understand, though,

what I understand through conversations I've had with issuers, the SEC still has to review all the changes made to the S1s filed on Thursday, Friday, and make comments on them. If the SEC follows a similar approval timeline to the ETH futures in October, the agency will, after this round of reviews, communicate to the issuers a date they want the final S1 to be filed and make them effective in the subsequent 24 to 48 hours. The SEC staff has been off since Friday. So a Tuesday or even a Wednesday approval seems tight. But we shall see. Have you spoken to Eleanor about her comments? Yeah, I haven't. I think she was busy. And I'm hearing that from quite a few people. So, you know, you have on the one hand sources saying Tuesday, Wednesday. Like I said, this is like detail, right? Does it matter if it's Thursday or Friday or Monday?

I think that the consensus is now arguing over when it's going to happen and not if it's going to happen. And I think that that's pretty important. By the way, I'm digging in just a little bit. I always find this astounding. I'm looking at CoinGlass right now for their liquidation data and open interest and funding rates, obviously. The liquidations, interestingly, even on... And Dave Weisberger pointed this out this morning, but even on this major push up, it's been largely spot driven. So there has been very few liquidations even with this move above 45,000, up 7% or 8% just on January 1st and January 2nd.

Really significant to see that and not have major liquidations of shorts. But that's because, like I said, seemingly everyone's long. And even just looking at the last four hours, there's been nominal 50 million in liquidations, but it's 90% long. So if you want to know how degenerate people in crypto are is that price touched you know 45.9 it's currently at 45.1 and you've seen 50 million dollars basically in people getting long and somehow losing all their money when bitcoin's gone up from you know 40 whatever to 40 almost 46 in two days um quick just on the other timing of it you said the timing doesn't matter

much there's one one point to point out is that people are talking as we put in the title sell times that people think will will sell the news of the ETF approval because it's been beyond priced in. And we're good to get the the thoughts of the panel on this. But that's one point on why it matters on when the ETF will be approved. But the good to get the thoughts of the panel got Sammy Preston, Andrew Simon, Toby Rio, these are first time you thoughts of the panel. We've got Sammy, Preston, Andrew, Simon, Toby, Rio. I think it's the first time you're on the space, Rio. Good to have you, man. Oh, hey, what's up, guys?

Good to be here. I appreciate the invite. Not at all. So, Sam, maybe you can kick it off. Your thoughts on the markets today and the last week, week and a half, and the whole ETF discussion and rumors? Yeah, thanks. Happy New Year, everybody. Yeah, I think this is a lot of

speculation around the ETF launching. I think it definitely could be a sell the news event, at least initially, because these things won't start trading for a month or a month or two afterwards. And maybe the market is kind of getting over its skis a little bit. But I think they're maybe underestimating the long-term impacts of the ETF. I do think it's an extremely important event, a landmark event for Bitcoin. And it's just been very interesting to see the competition play out between these ETF issuers. I mean, we now know some details around the fees, the Valkyrie. Their annual sponsor fee is going to be 80 BIPs.

ARK Invest, 80 BIPs. Invesco Galaxy, 59 bps, Fidelity, 39 bps. And Scott mentioned the Invesco Galaxy kind of waiving the first six months of the fee. And so, they're going to start competing heavily. And you're starting to see the marketing campaigns start to come out. And as that continues, I think what you'll see is really interesting things, especially if the regulators start to allow like in-kind redemptions. You might see these ETFs competing for things like maybe they'll allow physical delivery of the underlying Bitcoin one day and maybe they'll charge a little bit of a higher fee. But maybe that'll entice some investors to choose between these ETFs. I think the fees also kind of highlight maybe why spot Bitcoin is superior in some ways,

because obviously it doesn't have fees, there's no counterparty risk there. But I think these ETFs are a big deal. And I think they're really a big deal because of these large institutions like broker dealers, banks and RIAs who are restricted from owning spot Bitcoin, because of investment mandates, they can now come in and get exposure to Bitcoin. And there's been a lot of models from people like Galaxy and James Butterfield over at CoinShares kind of estimating the potential inflows. I know James, I really liked his model. He estimates that there could be about inflows that could result in Bitcoin price being about $141,000 after the first year, just by looking at some of these

RIAs, broker-dealers, and banks, if they allocated a very small percentage of their assets under management to this spot Bitcoin ETF. So I think it's a big deal. I think the market might be getting it over its knees a little bit. And there might be a little bit of a short-term sell-off initially. But I think looking out six months, 12 months, this is a big deal, and I think the price is going to reflect that. Toby? Anyone who sells crypto at any point

in the next 12 months can stay. Crypto has been... I've been in crypto since, I think, 2013. 2014, if I'm being a little less conservative, but 2013 is when I started to look at it. One of the things, and before I came into crypto as a securitization lawyer, right? Now, securitization was the process of taking assets that were not traditionally very liquid, chiefly bricks and mortar housing, and turning them into tradable securities, which had access

to the global capital markets. What the ETFs represent is the first time in history ever. Now might be, in my opinion, the best time to start a crypto business, period, ever in the entire history of the industry. What we are looking at is a firehose that's connected liquidity from the mainstream financial world where crypto is still, comparatively speaking, a rounding error. They do single deals. Single deals in TradFi are $10, $20, $30 billion or more.

In crypto, $10, $20, $30 billion, if you poured that into a single cryptocurrency, you would send it to the moon immediately because liquidity is so terrible and trading volumes are so thin. So this is a long-term structural change to the crypto business. I think we're looking at anywhere from 10 to 100x across the entire industry over the next 24 months. And really the only thing, you can try to trade it, I guess, if that's your thing, if you're good at it.

But for everybody else, I'd just say stack and hold. I think this is a very major long-term permanent irreversible structural change did you say 100x as in bitcoin 100x over the next 24 months um conceivable i don't know there are going to be lots of there's going to be a lot of 100x's that happen within i mean bitcoin's what 800 billions that'd be what 80 trillion maybe maybe not 80 trillion but i think think you're gonna see a lot of little 100Xs everywhere. Oh, yeah, like, like, like, like, Bitcoin, sure. But like,

that's, that was 100X, you shook me a bit. I would love it. But it just gave me a thing. Well, Bitcoin, Bitcoin 10Xing, I think is certainly within the realm of possibility. Okay. Totally within the realm of possibility. Okay. Totally within the realm of possibility. Man, that'd be a different world. Yeah, I mean, I've heard people say, I know we had this sort of opinion from Rand for quite a while, which he revised, that he didn't think we'd ever see an off-coin season like the ones of the past. And this is not offering an opinion on whether it's good, bad.

The casino is always open, in my opinion. And I really believe that if TradFi gets deeply involved because of the ETF, then for better or for worse, we will absolutely see those 100x massive moves when people get bored, quote unquote, with Bitcoin and the liquidity finds all coins. They haven't even heard of it yet. I think on, was it with Coin Bureau recently, that once those TradFi degens were bigger and trade with more size than any crypto guys do, find out about this, that it's probably, like I said, again, for better or for worse, we're going to see massive moves in the altcoin market. Yeah, absolutely. We were talking about, happy new year, everybody. Welcome to 2024. Thank you. about and happy new year everybody um welcome to 2024 um thank you uh if it was your first four-year cycle holiday period uh before the halving uh then welcome and i hope you're with

us next cycle and you hold all the way through um but i do believe that there are a bunch of people i don't do it they've been involved for too long to bother doing it. Because there's too much returns to be made from investing over trading. But if you are, I'd expect similar to what Sam was saying that I think I think you got to think of who are the people that are going to be buying. So if you're in TradFi, you knew these ETFs were coming or you were speaking with all the people applying. So you would have

definitely tried to position yourself ahead of it as an individual. Maybe you couldn't within your funds because you didn't have the mandate to be able to do it. I think all the Bitcoin people were already in. And as we had the altcoin crash, a bunch of people would have repositioned themselves from crypto into Bitcoin. And then once it started pumping again, maybe people started moving more over. Definitely. I think people are in the, let me try and get a bunch more Bitcoin by owning some kind of getting ahead of some kind of shit coin or something at the moment. So I think a lot of people are in that mode.

I mean, do you not think that people, at least people that are still trying to, that don't have volume, like it doesn't make much sense to me to dump all your money in bitcoin when i i think things like ethereum are obviously going to have more more upside whether you believe in the ethos of it or not like it's kind of tough for me to like tell people that don't have volume to just dump it in bitcoin when it seems logical that that eat is going to do quite quite a bit more you know sure yeah i mean if if you want to create taxable events and try and beat the market and risk losing all your bitcoin then then many people will try to do that well i mean you still have the same laws around unless you're holding bitcoin forever and ever and ever but like

i mean i guess if you're never going to cash out sure yeah that this is an interesting point but you got to think about the noise that's going to be created around bitcoin over the next three six and nine months and what i mean by noise is yes you have the having but nobody outside of crypto and bitcoin have any idea what having even means. But what they do understand is a BlackRock commercial, is an Invesco commercial, is a Bitwise commercial. They understand those things. They understood FTX commercials too. Exactly right.

And what happened during those commercials, the interest in crypto was at all-time highs. And where did prices go during those commercials? They went to all-time highs. That's my point about Bitcoin here, is that, you know, is it a sell time right now? No, it's not going to be a sell time for the next 6, 9, 12 months. Because the noise around Bitcoin, the noise around ETFs on

the CNBCs and the Fox businesses of the world, on commercials on sporting events and commercials in other spots, it's going to be everywhere. It's going to be in the faces of retail consumers in a way that it's never been.

That's indisputable. And Andrew, go ahead. Honestly, it's- Dan, quickly to your point. Consumers are going to be buying Bitcoin though because I'm- Yes, I do. I absolutely do. A lot of retail consumers are pretty low IQ and I think they're going to be buying a monkey

haircut coin on something. Yeah, to Rio, I don't think you're wrong but to his to andrew's point i don't know if you guys have seen i i just actually watched them uh earlier this morning but there's a bitwise commercial already for uh it's the most interesting man in the world and he says he mentions satoshi obviously guys right now they don't have tickers and there's laws around the way they can market these financial products but these 14 companies are all trying to get ahead and be the first to market so we have bitwise van neck and hashtags and all three of the commercials are simply for bitcoin they're literally just bitcoin commercials not bitcoin etf commercials not uh barely even for the company but that's what we

are going to see because that's what they can very easily legally do right now is literally just do commercials for Bitcoin. We've never seen anything like that. And that won't slow down, it will evolve over the next three months. And then it will evolve again over the next six months. And then we'll evolve again through nine months because of the competition between all 14 of those for assets under management, right? It will evolve and evolve and evolve. It will find itself into different corners of society. And people will be like, I don't necessarily understand it, but I want access to it. Look at the performance of it.

I want to put some money into a Bitcoin ETF. And what happens every single time money gets deposited into a Bitcoin ETF? They got to go out and get spot Bitcoin. This isn't rocket science. Yeah, but it's not rocket science, guys. No, no. Traditionally, we haven't seen that, right? Like we see this ETF like circle jerk almost every every cycle.

It's always going to happen. But either way, like people just put in their money and dumb shit. You know what I mean? And like it just I don't see that changing, especially with Bitcoin. We're not talking about just dumb, degenerate crypto folks. They're coming for fun. We're talking about 62-year-old folks that are like, you know what? I'm going to add this to my IRA because my financial advisor thinks it's a good idea to allocate 2% of my portfolio

to Bitcoin. You've got to have the confidence. No disrespect. Hold on. Hold on. Let me talk. Jeez. So like you have, I don't hear any cypherpunk talking.

You know what I mean? Like this is all boring crap. You know what's going to happen? I can help you with that. Hold on. Hold on. Do you understand why this is happening right now? It's because there's CBDCs that are going to be coming out.

So what are they going to do? BlackRock's going to come in. All, you know, Valkyrie, all these other guys are going to come in. Yes, it's going to be really good for the price, but it's going to make Bitcoin crypto so boring. It's going to be so regulated that the the barrier of entry is going to be so much higher. Nobody, most people have not done a transaction on Bitcoin. When I show people like a decade ago, when I was trading Bitcoin, when I was sending Bitcoin for my friends, they were super excited. This is going to make things really boring. So yes, not to crash your party on the price. Yeah,

again, it's going to do 10x, we're to be super filthy rich or whatever but still it's like boring guys like the fun part is the decentralized part the permissionless side that's the whole point to ask you a question i don't necessarily disagree but you said that the barrier to entry would become higher i assume you're saying to actual spot bitcoin because of the confusion of what buying an etf is because i would say for exposure to bitcoin this obviously makes the barrier to entry the much easier right well they're nobody well okay this is a spot it depends on who you are they're not going to be able to hold their private keys so nobody gets to understand what I'm saying. Do you know what I mean? That's the nuance I was trying to get at because I think the

public perception is that an ETF makes it obviously much easier for your average person to gain access to the asset class. But for the people who really understand, they know that that's not actually getting big. But does it make it easier for them? Because I mean, we've already seen Binance.us, that was the first nail. And then we're going to have what other barriers are they going to make us have? Yes, it's definitely much easier to buy. Yes, the average person knows

how to use or the average person who is exposed to stocks knows how to use E-Trade or Schwab or Fidelity to simply buy something. So being able to buy it like they're buying equity, yes, I think makes it much, quote unquote, easier if you believe that that's viable. But then is it going to be permissionless? Say, for instance, you want to send. No, of course not. That's my point. Yeah. But that's my point that that yeah but that right we know that that only matters to you know a very small percentage uh which is not

a good thing yeah so just so i'll not with you let me let's go to sam and sam i'll go to you as well sam you mentioned something earlier i'll let you comment on whatever you want to comment on but you mentioned something earlier just waiting for the right time to ask you you said that you think that the etf has already been priced in but we had a speaker before the holidays say that that's it's been priced in within the crypto community only speak to people outside of crypto to try to find a world they still don't even talk about the ETF I think they won't talk about it until it's actually approved so there's that niche community that crypto community that knows or pretty confident that we're going to get really yes, can you hear me?

Sound like Mario you sound like Robocop. I think I caught everything. You got the question, Sam, I took off my Yeah, I got the question. Yeah. But I think that's right. I think that's kind of what I meant. Actually, you know, it might be pricing within the crypto industry. I just think it might take time, you know, for this ETF, it's, it's, people are talking about retail investors, but really, we're talking about the big money, which is the institutional investor. And if they have regulatory requirements

that prevent them from directly investing in Bitcoin, then the ETF is going to be attracted to them. Now, these RIAs, these broker dealers, these banks, and these other institutional investors, you know, big ships take a long time to turn and pivot. And they're going to get educated by all these big firms, the BlackRock, the Invesco, the Bitwise on what Bitcoin is. And it's probably just going to take time for them to understand to actually pull a trigger. And so it just could take a little bit longer than maybe what the crypto community wants to, you know, see happen. They want to see this thing just blow up immediately. You know, they're not very patient, I would say.

And so I think it's just going to take time. And I wanted to comment a little bit about what Toby was saying, because I think he's right. But I think as long as people have access to spot Bitcoin, and they can take self custody, and that's preserved, I think that's, that's a great thing. And that this is going to help just increase the price. And you have to understand that, you know, even in America, 6.5% of the population is on banks still, and only 61% own stocks. And that's just in America. Really, billions of people don't have access to US financial markets, and they won't have access to a Bitcoin ETF, but they will have access to Bitcoin, and they use it for different reasons globally. And so that's where the permissionlessness kind of comes in.

But they have permission right now. They have permission to go ahead and buy Bitcoin right now. Why do they need a spot Bitcoin ETF? Well, these large institutional investors don't. Hold on, hold on. I'm talking about regular people. May I answer? Look, everyone's actually right

on this panel. There's going to be four different pockets of money and everyone can use Bitcoin for what they want. So Rio, you know, he talked about this, are we suddenly going to remove the psychology of people thinking they missed the boat on Bitcoin, and they want to get a 10 100x on an altcoin? No, that still exists. And while the market's pumping, it's going to come back harder. There'll be people like me that will see Bitcoin as a hedge against CBDCs, censorship resistant, freedom, inflation, and we'll buy it every single month. Those will continue. There's going to be a new pocket of money, which is all the institutions

that can put it in a way that fulfills their mandate to bring in the largest pools of money. And there's going to also be the DGens within TradFi who've got hedge funds who are going to manipulate prices, wait for the next product ETF, and then also start being introduced to going down further down, owning it on their own and doing the DGen. These are all players in the market.

All we're asking is which is the largest pool of money. Who cares? We can debate around who's going to be the most. I'd rather it be my pool of money where people are using it as a hedge against inflation and CBDCs and what Toby's talking about. But the reality is that this is a market and all these players are now in it

and it's just new money and new ways and new participants in it. The Bitcoin ETF story is both a depth and breadth story. It's not just a singular story. It's a breadth of the story going out to significantly more folks and giving access to significantly more folks. And then the depth is liquidity pools that are much, much, much larger than they have been for the last five years. That's a story for if the subject line here for this space is sell time, right? It's not sell time when depth and breadth are both being enlarged. It'd be hard to unconvince me of that. Well, you guys will be unhappy to know that just now on CNBC,

I get the quote, now I can't close this thing, but Jim Cramer just basically came out and said that Bitcoin was unstoppable. Oh, thank God. Oh, it is sell time. Just like Dave Stern. I think it's basically over. Dave? Yeah, so I think we're actually toast, guys.

I'm so glad. Seriously, very short term're actually toast, guys. I'm so glad I'm on. That is seriously bad every short time. Go ahead, Dave. Yeah, I mean, I think that, you know, just reacting to what Toby was saying, I mean, it disturbs me when we talk about, you know, the bifurcated kind of notion that all of a sudden, because institutions are coming in, that's a bad thing. At the end of the day, Bitcoin, to reach critical mass, if you want to get to hyper-Bitcoinization or a Bitcoin standard, you need everybody. It

needs to be a big tent. It's basically what Saylor has been saying all along. To get to critical mass, you need to get into people's consciousness. And the first way to do that, and the only way to do that, is to make it an investable option to people who are never going to look at a ledger, are never going to want to self-custody. They're comfortable with having whoever they have of their money, whether it's an RIA, whether they self-direct their own trading account, whatever, they want somebody else to handle their money. These are people who will always put money in banks and think of putting money in a mattress as rather stupid. And so they're wrong. I mean, we all

understand that, but it doesn't matter because you want to get most of the world's population in. The tying the CBDC to that, first of all, it's very different. The CBDC is still fiat, no matter how you want to slice it. So it's still an investment. And all I'll say is that the Bitcoin, this whole cash creation stuff is about form, not substance. IE, if any of these issuers don't have full Bitcoin backing for their ETF, they're literally committing fraud, which, you know, even this SEC would probably prosecute. So I don't think that it's a real paper Bitcoin. Now, the futures are paper Bitcoin, and that's something that definitely requires looking at. But just this one. problem. There's been $3.8 billion of fraud over the banks and banks get a slap on

the wrist. So what's going to stop fraud from stopping now? Nothing's going to stop that. But Toby, they could do that today with the futures markets. In fact, JP Morgan has paid billions in fines for manipulating gold. And gold, the difference is, with the futures markets in fact jp board has paid billions in fines for manipulating gold and gold the difference is is the futures markets are dramatically larger than the spot market but the bitcoin spot plus derivative markets dwarf the futures market well exactly but it would take toby what's your fraud still what's your proposal is it to remove free markets and ban the etf and make everyone use bitcoin in a private key or just open the free markets let financial products prevail recognize there's manipulation and fraud everywhere

and people go people do what they want to do absolutely not i think there's going to be two sides there's going to be a bifurcation. There's going to be half the people are going to go towards a centralized entity. And then half these people like me and other people that have been in this space for a very long time that understand Bitcoin are going to go the opposite way. And there's just going to be a split. So I don't think nothing's going to make it illegal. Look at gold, look at gold, Toby. Look at the size of gold paper versus gold held in custody. Central banks are the ones that understand the risk of fiat currency, so they hold it in custody. But the average person, unfortunately, and Toby, I think it's up to people like us to educate people in the difference, but the vast majority of money is just lazy. I mean, I educate people by paying in Bitcoin and then sending Bitcoin to people, to showing people how it works and how exciting it is that they don't need to go through any centralized entity for it. It's really cool. Right. I mean, you're right, Toby and Simon,

I 100% agree with you, at least on this topic. The fact of the matter is that the real fight, the one that we should care about are the bills that are coming out in the Senate and the idea of trying to ban self-custody. That's the hill we need. No disrespect that that can't happen because there can be bills that can go forward, but as far as enforcing those laws, good luck. No, it's hard. Impossible. No, it's hard. And look, I own. In 1933, a lot of people, believe me, I own plenty of 1933 gold. That theoretically should never exist, right?

So yeah, you're right. But still, the ability to get the average person to use self-custody, if it's illegal, it will still stay in a niche. Sure. illegal, it will still stay in a niche. Sure, but wait until CBDs come out, where the CBDCs come out, when it is illegal to send money to your friends overseas, trust me, they're going to want to send it really fast. Oh, no. Go ahead, Dave.

I want to get Raymond. After you, Dave, I want to get Ron to jump in as well. Go ahead, Dave. Yeah, I just wanted one point, which is just this is, and in fact, I think if Ron, if it's the same Ron, I think it is. Yeah, I'll let Ron talk because I think he's going to say the same thing. Ron, go ahead. I mentioned legislation. I thought I'd jump in here.

Yeah, I think, you know, legislatively outlook wise, I guess we'll focus here on self custody and the CBDCs, I think right now, especially on the CBDC front, the path forward for any bill or even like regulatory action to move that forward is going to be slim to none. I mean, I put that like at less than 1%, even less than that probably. So there's enough bipartisan pushback in Congress. We've had Powell and Yellen and several other high profile regulatory officials go on the record saying that they actually don't support a CBDC or at least developing one without congressional approval. So that's one thing to keep monitoring. So I don't think, you know, on the doomsday side, at least for the United States, I don't see that becoming an immediate threat anytime soon. Additionally, when it comes to the self-custody,

that is something we are very concerned about. It's been bubbling for a while. But the Warren bill is getting a lot of attention on Twitter. That's not as much of, we think, a threat, at least, I mean, moving into Congress. Warren hasn't passed many at all bills. She doesn't hold really as much power as the others. She does hold power in other ways. But when it comes to at least moving a bill like that, I think it's more of a red herring. I think a lot of folks just want to talk about it to Donald Elizabeth Warren. But there's other bills out there that are very concerning. And I think the one dynamic, especially recently in the news, is North Korea. That is something that we've been hearing multiple times. I know there's been a lot of focus on Hamas in the media, but North Korea has been making a lot of threats recently about annihilating the United States, annihilating South Korea, relaunching some tests.

And we've heard from officials both in D.C. as well as folks in Congress who have been saying we have intelligence briefings and a lot of our concern is North Korea. And we talked to a lot of these offices who are involved in legislation on self-custody and trying to clamp down on it, very similar to the Warren bill. They say North Korea. They don't mention Hamas. So I would keep that, especially for 2024. If North Korea makes any kind of an aggressive move of any kind, we're going to have a lot of pressure on self-custody. Hey, Ron, really quickly, like you said, you don't see a CBDC in the future, like in the short term future. I agree with that, but you don't want to be caught with being the boiling frog, you know what I mean? So this is how governments work. They slowly do things. They don't just all of a sudden do things other than the scamdemic that we had. They slowly do things

usually, and this is how they get on board pretty much the masses for this. 100%. But I don't think we're going to have any at least developments for something concrete anytime soon I think it's at least at this stage there's no way there's going to be a blind sign or anything like that compared to like other things like sneaking things into large bills that we've seen before for like tax

reporting and stuff that have affected crypto what about what about when it comes to Europe in terms of the European CBDC before the US? I am not a European expert, so if anyone else is, I'll defer to them. But largely, at least from the high-level conversations, I haven't heard too much on the European side. CBDCs are coming everywhere. It's inevitable, predictable, guaranteed. You can fight it as much as you want. It's coming to America. It's coming to Europe. It's already coming everywhere. It's inevitable, predictable, guaranteed. You can fight it as much as you want.

It's coming to America, it's coming to Europe, it's already in China, it's everywhere. You just need to learn how to fight it in terms of your own sovereignty, your company's sovereignty, your country's sovereignty. But it's coming. What do you mean by fight it? How do you fight it? Yeah, but I'm looking just quickly before you talk about fighting it. Norway's fifth round of CBDC trials focuses on wholesale aspects. That was two days ago. You got another country.

He doesn't say the country. The IMF put out a piece a month ago. CBDC development enters the next phase. So, yeah, we haven't been keeping up with it. It hasn't been the talk of town. It's not as exciting as the ETF. But, yeah, as you said, Simon, it's progressing everywhere, slowly but surely. Sorry, by fighting it, I just mean owning Bitcoin.

There's HSBC to advance digital currencies, TBDC pilot. Yeah, let me – yeah, Rio, go ahead, and then we'll go to Sam, and I've got a few questions for you, Sam. I just wanted to make one point. Like, I mean, I've been around since 2016, I guess. Every cycle I kind of notice the same thing. We talk about institutional investors coming in and people making this a part of their retirement, but what I keep seeing every single cycle is younger and younger crowds coming in and just making the market just more stupid.

I'm wondering if this cycle is going to different than that because I from what I've seen over the last couple months it it's it's not it's not gonna be any different I I'm just wondering why we think this time it's gonna be all about Bitcoin when it just like Hasn't been the case the last three cycles Yeah, I don't think we're actually saying that i think we're still gonna have the shitcoin cycle we're still gonna have the bitcoin cycle but now we're adding the etf cycle and the hedge fund cycle to the mix i don't think anything you think that's enough to raise bitcoin 10 to the i don't know who said 10 100 x whatever but like just the etf alone is is is powerful enough to do that no but but the four-year cycle itself go ahead yeah exactly what

what scott was i think about to say is just the four-year cycle has had diminishing returns every four years and i expect that to continue um but the diminishing returns still outperform every single asset class around there with the exception of if you want to go deeper and deeper down the the crypto risk cycle yeah i mean i i mean i just put 300 dollars in a jito pool and made 27k in two weeks like how are you going to convince like and i'm 30 like i know what i'm doing like how are you going to convince young kids like not to do degenerate shit that's what i'm concerned about no one's trying to convince them people learn about altcoins and bitcoin by going through the cycle,

either making a shitload of money, then becoming more risk adverse and wanting to get more conservative to preserve their wealth, or by losing all their money and then wanting to go into Bitcoin and learn a lesson. The cycle has always taught people that, and people are into this stuff. In the end, I think most people, they end up at risk off as they get wealthy, and that's when you end up in Bitcoin. That's what I'm saying. You have to get wealthy for Bitcoin to even matter, and I think that's...

No, that's not true. If you want to make money fast, then you definitely have to take higher risk but just simply buying bitcoin holding it every month has made people incredibly wealthy it's just not as fast you just got to go through a whole cycle like not a whole site no i'm talking about like waitresses and waiters that are trying to invest in crypto like they're not they're not making they're not making life-changing wealth by investing in Bitcoin. Hold on. Yeah, but they're also not going to drive the price of Bitcoin up. Those people on that fence are irrelevant.

We're talking about wanting to onboard the world, right? So it's like we got to think about that. No, you're talking about speed. So if people want to take higher risk and get wealthier faster, then yeah, that's one methodology. But it's also the methodology to blowing up all your wealth. In TradFi, if you can find an asset class that will produce 10% returns consistently, then that's enough if you're following a longer-term investment strategy to reach your retirement goals.

Now, if you've got an asset class that has generated 113% every year on average, then within a few years, you can make intergenerational wealth just by following investment principles. Now, if you want to take a percentage of that and gamble that for 1000% returns, then feel free to go and do that. And you can risk manage it. It's just like the rules don't change it's just literally do you want to invest in get rich quick or do you want to you know or do you want to do it another way and and get rich quick sometimes works and that's what crypto and altcoins is go ahead sam yeah i think this is an interesting conversation and i don't know i would like to hear toby's

thoughts on this but i've always thought of the the ETF as a potential top of funnel, where it could kind of get people interested in Bitcoin, and then they invest a little bit, they get skin in the game. And then if you own money, if you have money invested in something, you start to learn about it. Perhaps people will then start to learn about Bitcoin's attributes that makes it special, like it's decentralization, censorship resistant, and all that. And then they'll take self custody once they kind of go further down the rabbit hole. And that's what I hope for. Maybe I'm optimistic. I just think, you know, fighting against Wall Street Bitcoin adoption is a futile endeavor. It was always going to happen. And as a community, we should accept it and focus on building tools that enhance people's ability to take self custody, preserve the right to self custody, as well as preserve the network's decentralization. So I don't know if, Toby, you have thoughts about the top-of-funnel idea with an ETF that kind of pushed people into self-custody eventually. Well, I agree that it's going to get people more interested in Bitcoin. But the thing is, I don't trust BlackRock.

I don't think you should either. I don't trust BlackRock. I don't think you should either. I don't trust these banks. We shouldn't trust these banks. And so with that said, what are the governments going to do to raise that barrier of entry? I know that the U.S., like for instance, my wife and I, we renounced our U.S. citizenship in 2019 because we could see what was happening in the U.S. and we wanted nothing to do with it. I just moved to Argentina. And I didn't want to be stuck in Binance.us. So can you imagine what's going to happen in the future when people think right now, yes, it could be a really good idea for a spot Bitcoin ETF. But who knows what these banks have in store?

You know, so for instance, somebody was talking about in 1933, when, you know, the US so called ban gold. Yes, I heard about that. And people, you know, turn in their gold pretty much. But you know, they can ban it all they want. But you can hold your seed phrase in your head. And not a lot of people are going to be able to do that. You know, they're not probably not going to be able to learn it because it's on a it's on a brokerage firm you know what i mean it's on a spot it's a it's on a on something else they did they're never going to hold self-custody philosophically yeah philosophically i think 99 of the people on this space agree with Toby, but we're talking about the price of Bitcoin now and over a longer term. And so I come back to breadth and depth, right? There's a big difference between people that shop and spend time at GameStop. up the back half of the Apple store in the Genius Bar that's gotten dramatically larger over the past decade because 50, 60, and 70-year-olds have multiple Apple products.

That's the point we're at right now with Bitcoin and Bitcoin ETFs. Instead of the Genius Bar being one little spot in the back of the Apple store because there's few people coming in to engage with Apple products, we're now at a point where that will get bigger and bigger and bigger and bigger because of the breadth and the depth of the Bitcoin message that's going to go across retail. It's just, it's going to happen. It's going to happen. So, so in terms of sell Bitcoin right now, no, no way. And by the way, across my feed, I say literally every day by Bitcoin and self custody, don't sell your Bitcoin to black rock by Bitcoin and self custody. So do that. But the reason why you do that is because the genius bar is going to get bigger and bigger and bigger and bigger. 15 years ago, your grandparents didn't have a computer in their house, right? 15 years ago, they were still using a jitterbug as their phone because that Apple phone, that's too weird. I don't know how to use it. That doesn't exist anymore, right?

It's the same narrative right now over the next however many years with Bitcoin. And the reason why spot Bitcoin ETFs are there, it's a good idea, right? Andrew, can I ask you a question? So what I'm getting at this is banks are the ones that are going to make mass adoption happen. Is that it? No, retail customers will make mass adoption happen because banks have access to lots of people, 50 plus, that have a ton of money, a ton of money. And they have zero allocation. They will be dead before this is mainstream. They're going to be dead for this is mainstream they're gonna get all this mainstream i probably won't yes yes they will and by the way i would say i want to circle back to the point you made about the etf being top of funnel um hey i i agree with that i think a small

percentage of people who get into crypto through anything other than self-sovereignty and bitcoin there's very few people i should say who get it from the very beginning, right? There's very few people who the first Bitcoin they buy, they immediately move it to self-custody. They get multi-sig. And it's about like, you know, the use case of gold, the same reason that boomers bury gold in their backyard. I think that's very few people.

I think the vast, vast, vast majority come in through some other avenue. For me, I first bought Bitcoin in 2016 because I was a trader and my DJ friends, the DJ at the time, told me I had to go to this thing called Bittrex and I had to buy the Ripples and I had to buy the Ethereums. Everything was plural back then because we were redacted. And frankly, what got me eventually very interested in Bitcoin and self custody was trading Doge cycles, right? Doge before Doge became Doge, right? And so I'm not going to say I'm proud of that. And that's the way that I should have come in. But I was making a bunch of money trading Doge and eventually... You'd be proud of that.

Yeah, either way. And if we're gonna like we can be a Bitcoin maxi about it, and we can revise history and pretend that most people are coming in for the right reasons. Or we can admit that the bulk of people who've been onboarded into Bitcoin eventually, even if it's only one out of every hundred, have come because they bought NFTs or because they found out about Doge from Elon Musk. And yes, we lose 98, 99 percent of those people get flushed each cycle. But that 1% is still vastly more than the people who come directly in through Bitcoin. So I think everything is a top of funnel. I want to know what the right reasons are. That's a hard definition for me because people come to crypto, at least from my age, like my generation. I just turned 30.

And people come to crypto for financial freedom, right? They don't really come to crypto. And I understand. I got Bitcoin filled before I came into crypto. That's, I came in on the philosophy side of it. And then I started realizing people were coming to crypto because they're broke. And that's, to be honest, that's the audience that is flooding into crypto. And they're not really thinking about anything farther than like financial freedom and in whatever terms that means for them so like I don't I think that we're going to keep saying that and I don't I don't I don't think many

people care about Bitcoin except like you know the people in the speakers right now Simon yeah just want to work through the the scenario So let's just play it out from here. So let's say the Bitcoin ETF is approved. And then we enter into a Great Depression like 1933. highest performing asset in a decreasing stock market and a bond market that has a bank crisis and maybe the credit rating of the US government gets downgraded because it enters into geopolitical war and China becomes the next power. Let's say we're in that world. Then the Bitcoin ETF would probably be the highest performing asset in their portfolio. And then let's say the US government decides, I know what, let's ban Bitcoin. Okay, so they take everyone's Bitcoin ETF and they convert it into dollars or a CBDC and gives them a fixed rate for their Bitcoin, just like they did in 33 with gold. And so you end up with a bunch of dollars instead of your ETF. And then you go

into other countries that are allowing you to buy Bitcoin with your dollars. So you convert your dollars, you find an arbitrage, and then you go into self-custody. So all roads lead to the same result in the end. It's just a question of how you got there. Let's take the other scenario. You make a bunch of money out of shit coins, and then you gamble and you don't get the risk management right. You get a thousand X on one of your coins or you get the right NFT. And then suddenly you realize that you're wealthy where you would never have had wealth before. At some stage, you start to realize I want something a bit more stable. I don't want to put it into dollars. Dollars depreciates my wealth.

So then you end up in Bitcoin. And then you just go through the same cycle. So I think you're completely right, educating people to try and get them sooner. But the entire history of financial history says to people that they only learn that when they lose money or they only learn it under extreme circumstances. And then once you've learned it through experiential losing your money, you tend to realize now, wouldn't we ideally like everyone to get there in the first place? Well, that's been the last 15 years in Bitcoin's history. The next 15 years, they may need to lose it all in order to learn the lesson.

I think it's going to take a long time for people to learn that lesson. Well, it just has to happen. The way you learn it is by it happening. Yeah, Dave, go ahead. I mean, look, at the end of the day, it's an interesting generational divide. And it's an interesting juxtaposition. So cash, you know, older people like cash. Younger people don't. They want to just use their card. It's exactly the opposite with Bitcoin, because effectively, you know, any attempt to confiscate or say no cash in the United States is met with derision

and it's generally considered politically a loser. And what needs to happen is the education needs to be such that people in the United States need to understand that the same reasons that you want to hold on to and have the ability to have cash is why you need to be able to self-custody your own Bitcoin. If that connection gets made and the right for self-custody of Bitcoin is maintained, then eventually that education you guys are talking about will happen. And the fact that we get to critical mass and people buying it through brokerage accounts or whatever, that's just a method, right? The key battle is to be able to hold on and be

able to use cash to say, I don't want the government to know that I paid $50 to this guy and have them come after it. And just a whole brouhaha over $600 and less Venmos being reportable to the IRS, which kind of shows that there's still that spirit in the U.S. It's really important for that to be the narrative, because really, we could all talk about this as much as we want. If the current state of law stays the way it is, then it's unarguable that a Bitcoin ETF as a method to help gain Bitcoin into the global consciousness to reach critical mass is good. Without that, yeah, there's a real issue. Adam? And Toby? Yeah, just wanted to add

one more point as well. I got to jump, guys. Mario, Scott, everyone, thanks for having me. I got a meeting, but thank you guys. Godspeed, my friends. Cheers. Just one more part I got a meeting, but thank you guys. Godspeed, my friends. Cheers. Go ahead, Simon. Cheers. Just one more part to the conversation is tax.

So there was obviously a generation of people that self-custodied their Bitcoin and are trying to figure out what to do to fix their tax mess. And they ended up in a bankruptcy or they ended up in an exchange. And now they're having all those transactions reported to the IRS and trying to figure out what to do with that. Not speaking to anyone in individual, but there's a bunch of people that are in that situation. So once you enter into a new tax environment, self-custody means that it may be tax inefficient. And so then you start managing,

well, what if I could hold it in a tax deferred Roth IRA and all those types of stuff. So then the ETF comes into the equation. And if there's a way of doing it within, you know, through self custody and that type of thing, but tax really comes into the equation because the next decade, the IRS and all the tax authorities around the world certainly know their money that they'd love to collect the higher the price of Bitcoin goes. Yeah, I agree with that. Dave, did you have a point?

And Toby, I think you had your hand up actually. Go ahead, Toby. Yeah, I mean, I do sound like the Debbie Downer, but I mean, I agree with pretty much everybody that this is going to be really, really good for the price, really good. And prices do attract the masses. But I just don't trust banks. That's all. I don't trust banks. I don't trust BlackRock. They've gotten to, what, $11 billion with asset center management for not for being the nice guy. You know what I mean? So 11 trillion, 11, sorry, 11 trillion. Yes. So, you know, and they pretty much own the SEC. You know, what is it these banks and custody people are like Coinbase or whatever are going to allow people to get their own coins and be able to use it for however they want, especially with what I said about CBDCs, which may not come this year,

but next year and the next year after that, they're coming. So I mean, that's just one of my warnings. Yeah, I think that that's valid. I think, I think, you know, sort of goes back to Sam making the best point to me, which is everything's a top of funnel, then the onus becomes on all of us, I believe, to do the education and drive people down the right road, right? And that's what we're not going to bring in millions of people by screaming at them about self-custody. I think we need to capture the ones who get here for the quote unquote wrong reasons and drive them in the right direction because they've already taken the first step. I mean, that's really my opinion on it. So Toby, I think we actually all agree in theory, right? Price will largely go up. None of us, I don't think, trust banks necessarily. So we need to do whatever we can to bring everybody else in the right way. Mario, I think, go ahead, Simon, then we're going to wrap up. Simon, give us some. Yeah, cool. I was just going to say everyone on here should certainly be listening to Toby.

Everything Toby has said, I completely agree with. but i don't think people are on here to figure out how to buy an etf i think they're on here um and and the the purpose of these spaces is to educate people on the things that toby is saying but uh the masses are going to come in through etfs and then end up on this space and then they need to listen to toby and everything he says. Totally agree. The Toby's points, especially about banks, couldn't be more correct when two and a half weeks ago, Jamie Dimon is giving testimony at Congress about how Bitcoin should be banned. It should just outlaw it.

And then effectively, J., JP Morgan is the authorized participant on what will probably be the biggest spot Bitcoin ETFs, right? So, you know, kudos to Toby. And that's the message that should be sent. Self-custody should be the message that gets pounded and pounded and pounded by people that have been here for a long time and know the right way to do it. But at the same time, there is a reality. And that reality is, is that these products, the messaging about these products, the breadth to which it's going to fan out over traditional finance over the course of, you know, the next several months, It's an opportunity is what it is. We're going to be running Bitcoin commercials, guys. Huge companies are going to be spending

millions of dollars running commercials, which they are right now that are just specifically for Bitcoin. The job then becomes on those of us to understand it, to get people past the finish line and do it the right way. I think that's all we got for you guys today. I think we're going to be talking to CTF and to death until we actually start seeing these approvals over the next few days. So thank you, everyone. We're really super excited to be back 1015am Eastern Standard Time tomorrow and every other weekday. Thank you, guys. See you all.