The Wolf Of All Streets - Why $10 Million Bitcoin Isn’t As Crazy As It Sounds | Avichal Garg

Episode Date: September 26, 2026

Avichal Garg breaks down why Bitcoin could eventually reach multi-million-dollar valuations as adoption expands from retail and institutions to AI agents. He explains why autonomous agents will need crypto wallets and stablecoin rails, how AI is already changing the nature of work, and why the convergence of AI and crypto could create an entirely new digital economy. Learn more about your ad choices. Visit megaphone.fm/adchoices

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What if $5 million or even $10 million Bitcoin isn't as crazy as it sounds? Today, I'm talking with Avi Shal Garg about why Bitcoin could eventually become bigger than gold. Because Bitcoin is so much more toughball than gold. Like, anybody on a phone can get it, right? Like, the size of these markets is so enormous when you can get the entire world on them that I don't think it's crazy that Bitcoin ends up being bigger than gold in the phone of the time. And why AI agents may create an entirely new wave of demand that almost nobody is pricing in yet. These things are going to be sitting on assets and a huge use case is going to be AI.

agents trading. To me very clear that agents will have wallet. Because an agent can't KY speed, it has to have a crypto wallet. We also get into autonomous AI companies, the future of on-chain capital formation, which crypto assets could actually accrue real value, and why the next generation of global companies may be created, funded, and operated almost entirely on blockchain rails. The convergence of AI and crypto can be much bigger than we're prepared for. Let's go. Today's video is brought to you by Kalshi. You probably know Cali for prediction markets, but now you can also trade crypto perps directly on the same platform. That means Bitcoin and other major crypto assets with leverage on a platform that's U.S. regulated by the CFTC.

Calci has the lowest perps fees in the United States, and you don't need to be trading millions of dollars to get exclusive benefits if you sign up through my link. Trade just $100,000 in volume per month, and you unlock a bunch of VIP perks like one basis point-taker fees, private invite, to Kalshi events and more. You can sign up using my link in the description and you'll get $25 when you trade your first $50. Because you made some waves recently by saying that Bitcoin going to $5 or $10 million isn't crazy, right? So walk me through the assumptions behind that kind of number because those really get people going. Yeah. Well, the intention, well, by the way, we've been saying this for a long time. So the intention is not necessarily to get people going. It's just it's one of these things where I think

if you look at the basics and the math on this stuff, you can kind of reason your way through it. And the way we've always thought about it is this is digital gold. It's a fixed supply asset. It's easy to transport. It's easy to subdivide. It's a global liquid market. You know, I think people at this point have probably heard the arguments for Bitcoin. And I think, you know, people in the United States sometimes or people in the West sometimes forget how easy it is for us to acquire gold. You can go to the store and buy some or you can get some gold features or whatever. in a lot of the world, you can't get gold that easily. And people want it. People want dollars in gold.

And so what you finally have is the ability to get a digital gold equivalent, not literally gold, but it meets all the same requirements. And actually in many ways is superior. And so I think as institutions have figured this out, they're coming in. I think eventually the sovereigns will figure it out, they'll come in. But this is just that much more accessible to retail all of the world. And so I tend to think as many people will have Bitcoin as old gold.

And if you just look at the market cap perspective from like a net dollars perspective, how much money can come in, you know, if Bitcoin and gold get to a similar market cap, you're talking well in excess of a million dollars per Bitcoin if they're at the same market cap. And I think there's a very straightforward argument that because Bitcoin is so much more accessible than gold, like anybody on a phone can get it. I think one of the lessons of the internet is when you put things on a phone, you actually get TAM expansion, you get addressable market expansion. Like back in the day, people used to talk about, hey, how could Uber possibly be worth more than $10 billion? Because the entire taxi industry is only worth $10 billion without sort of realizing that when we put Uber on one of these things, all of a sudden 10x as many people can do it. And so Uber is worth $100 billion, that's bigger, you know, 10x bigger than the tax industry used to be worth. And I think that sort of TAM expansion is underappreciated. Like if I told, you know, if I told, you know, if

If you went back 15 years and you told your friends, hey, there are going to be multiple companies worth more than a trillion dollars. There are going to be 10 companies worth more than a trillion dollars. Some companies worth $5 trillion. Like, nobody would have believed you, right? Like the size of these markets is just so enormous when you can get the entire world on them that I don't think it's crazy that Bitcoin ends up being bigger than gold in the fullness of time. And so very quickly, you can do that sort of one-to-one map and you say, wait a second, oh, this is even bigger. And that's only addressing humans. Yeah.

So the TAM truly expands with AI agents, you know, we get right into that part because I know even, you know, at electric capital, I think you guys talk about AI now as much as you talk about crypto and certainly about where the two meet. But if Bitcoin becomes digital gold to AI agents or a savings account, we're talking about even exponentially larger potential numbers. Yeah. Yeah, it's tough because these numbers can get so large that you have to be a little careful not to sound like a crazy person. But yeah, I mean, you know, you look at agents and they certainly have to use crypto. I mean, those are certainly the rails that agents will have to use. Now, whether or not on the front end, I think today it probably starts with, you know, you delegate a ramp card or a visa card or something to your agent and it can go buy flights for you. But, you know, slowly, like you know, what Stripe is doing on the back end, that's actually going to move to stable coin rails.

It's actually what it'll move to. So at least the infrastructure will be crypto. But I think it's to me very clear that agents will have wallets and they can't, because an agent can't KYC, it has to have a crypto wallet, right, a cryptography-based wallet. And that will have U.S. dollars in it. And then very quickly you start saying, well, what other assets should I own? And I think owning things if you're if you're a non-sovereign digital entity that doesn't have a physical presence in a particular jurisdiction, having non-jurisdictional money, I think makes a lot of sense.

parking your assets in non-jurisdictional money to some degree makes sense. Or even if you think about, you know, most of the trading of the world is already bots. It's already AI agents. It has been for some time. That's what happens with electrified trading. So, you know, these things are going to be sitting on assets and a huge use case is going to be AI agents trading. And these are very natural assets for them to trade as well.

So I think invariably you end up with some percentage of these assets being held by AI agents in the fullness of time as well. And that's not even getting at, you know, I think the really weird stuff, which you might be getting at Scott is like 10 years from now, these things are smarter than humans in many respects. But they don't exist in a physical place, right? So it's not, it's not like you know, you and I exist in a physical jurisdiction. Even a company, which is not a physical thing, has a jurisdiction like a Delaware C corp.

These things don't really. It's just a piece of code that can run anywhere. So does it live in the Cayman Islands? Does it live? Is the jurisdiction of the server that it's running on? Is it, does it have to have a Delaware embodiment of some sort? And that opens up a lot of friction with the legal system. So KOC is just one of them.

There's all sorts of questions around. It's like liability or free speech. Like what happens if these agents are just saying stuff? And so this whole category of agents, which we haven't quite gotten to yet, but I think we will. And then it's five to 10 years around autonomous agents, which are basically like humans, but they don't have a physical body. and they don't live in a jurisdiction,

I think it opens up a whole new can of worms. And I think those entities certainly will start to think about how do I think about where to park my assets and I think digital assets are almost certainly will pork some percentage of the money. Exactly that. So I think this first iteration that everybody's excited about is the one that you presented first,

which is they're obviously not going to plug into JP Morgan. So they're going to transact in stable coins or some sort of crypto or on blockchain rails. But they're doing that all. on our behalf, book my flight, you know, pay for this thing, accept the payment for this thing. When they become truly autonomous, like you said, you have to start thinking of them as humans would think,

and they're gonna also want to store value and have a savings versus checking versus yield versus all these things. And they're gonna start doing the same things that we do. I'm actually surprised as you think five, 10 years, maybe faster. I don't know. I don't know.

Yeah, I mean, the fringes of it will happen first. And for all we know, it's already happening somewhere on the internet. You know, somebody's already released some code and it's autonomous for all intents and purposes. And these days, you know, you can run, you can write code, you can ship it, you create an app, you can get paid for it, you get paid for it on, you know, you can run the inference on near like Venice does.

Like, you know, you're pretty close. I don't think you're quite there yet. There's still some real friction points in terms of actually receiving money and things like that, but we're pretty close to have an autonomous agent. So yeah, it could be sooner than five years too. We'll see. I wonder at what point they start acting in their own interest. and not in hours.

Yeah, well, I mean, that's a motivation for an agent that's not attached to a human and doesn't answer to you and doesn't have your KYC behind it to go out in the world and succeed, right? What does a success look like to an autonomous agent? Does it care about making money? What does it care about? Yeah. Well, I mean, that's a big open question, I think, in AI safety and alignment is how do you, how do you try to do these things in a way that at the very least isn't misaligned with humans?

But I had this idea of like, what is your objective function for the agent or what motivates you? I think this is a pretty gnarly one. You know, I would note we kind of are seeing this already, not in the public context, but inside the enterprise context. Like, you know, there's the first wave of a lot of enterprise AI agents were sort of agents that acted on your behalf. Like you gave it your credentials. You could see what you could see. And we're starting to see the second wave. And the second wave is agents that are basically employees, right?

You can sort of tag the agent. you can give it a name and it has its own permissions, it has access to documents, it has access to drive, it has, it can create stuff, it can create tasks and linear and just uses all the APIs to do this. And you can give it an objective function. So you can create like an invoice bot and its job is to process all the invoices at your company. So in the sense, we're actually starting to see the beginnings of the autonomous agents just sort of scoped inside the enterprise because then you don't have these harder, um, jurisdictional questions and legal questions and so on.

But we actually already have autonomous agents inside companies. How much have you started using them? Oh, a lot. A lot. We have a team of engineers in-house, and so we play with all this stuff and we build stuff. So we actually have both systems. We built an in-house system that actually will probably open source pretty soon, which makes it really easy to build an agent that has the same permissions that you do.

You can delegate permissions to it as a sort of as a co-worker, as a co-pilot. And then you can create jobs and it'll do things, but using your permissions. And the hard part of that is getting all the permissions piece of it right. Like how do you really control access and make sure that the agent can't accidentally do something nefarious or blow up or accidentally send, you know, emails to everybody in your contacts? There's a bunch of sort of safeguards. You want to put a place for that. And we also have a system, which is a different system, that it creates essentially AI coworkers

and has access to the CRM to, you know, you can come to a meeting, it can record the meeting for you, but literally, we have names for the agents. And so you can just invite Marshall to a meeting. We'll record stuff for you. And so, yeah, we actually have all of the systems in production in house already. It sounds like you're largely using them to sort of amplify the power of your humans and not necessarily to replace them yet. Have you already gotten to the point where, you know, you can fire people because the agent can do their job? Well, what we've noticed is there's a lot of tasks the agents can do, and then there's a lot of stuff that they can't do. And so what it does is it shifts the job.

So we don't have any less work. We're just able to do more now. So, for example, we had this invoice processing thing, and it was a lot of work previously. Get this invoice from somebody who want to make sure it's a real invoice, double-check the amounts, double-check it against the contract, put it into a row in a database somewhere that says, we have processed this thing. And then, you know, there's some, typically in companies, there's like some sort of compliance or workflow of like somebody tease up the wire or somebody else checks the wire.

And you can get rid of 90% of that work using an agent. You can go read the contract. You can go check the invoice. You can read the invoice. You can put in the way base. And so you did all that work. And so now this human that previously had to do that has other work that they can go do. So we haven't, at least for us, we haven't.

It hasn't resulted in us replacing humans. It's just changed the nature of the work. And so now all this work that was getting done by humans, we don't have to do. And so they need to shift your people to do other stuff. I is a very interesting question, by the way, of like, what does it mean that? for what is the valuable work that humans can do. And we have some ideas on that. But yeah, we haven't really seen less work, which is shifted to work.

So it just makes you more efficient and get more done as a company, right? And that's what I've found as well generally, right? Yeah, that's right. Yeah, that's right. So you also can replace, but it still requires a human to step in and manage it, which still is work. It's actually, I would say for me, it's been more work for me, but I'm doing 10x what I could in a strange way. So I did get rid of a person or two, and the AI agent can do their work, but it requires me to do more management than it would have if it was a human myself. Yeah, that's right.

I think it changes the nature of the work. It's a lot more management. Also, I think it changes what's valuable work. So like the communication layer, what is the goal, have we thought about the goal properly, becomes a lot more important because this thing sounds off. We just do a bunch of work really quickly. So knowing that you had the right objective is important. But also, I think a lot of the human-to-human stuff becomes more. important we've noticed. So, so, you know, if you can just create a document or a memo or whatever,

the real value is like, did you get on a plane and go shake somebody's hand or did you go have dinner with them? You know, like it sort of shifts the human dynamic a little bit, I think, is what we've noticed. Yeah, I think the dynamic might be different at bigger companies. Like I think a bigger, bigger company like a meta or something has just has a lot of, there's a lot of people in the mix. And so there may be a lot of fat and you want to cut that fat. But I think that at the same time, what we also see on the startup side is the efficiency of some of these companies. Like, you can do so much more with few people. And I think one of the properties on the internet is like when you get these kinds of technological unlocks, you know, people talk about unlocking the long tail.

I can think about iTunes. Because you got digital distribution, because you got cost of distribution on zero, you unlocked all of these musicians that previously just you had to go to the record label and a fixed cost of producing music was very high. And I think now there will likely be a lot of products and services where the fixed cost of producing that cost or service previously was comfort. It was too high. And so you couldn't have a sustainable business. But now that the cost of producing that good or service has dropped by 100x because an agent can do 90% of it, a human can step in. And like a two person plus 10 agents business could be sustainable in a way that it wouldn't have been sustainable before. So I actually think we'll get this, kind of like the internet created entirely new categories in music and art and, you know, social media and streaming.

You got these like podcasts, right? You just got entirely new stuff that you couldn't do before. I think we'll actually get entirely new businesses that are like one to 30 person businesses that couldn't have been sustainable before and are actually fantastic businesses. So hopefully all these people that it doesn't make sense of the big tech companies will rotate out and go start a bunch of small companies, which I think is better for the world, actually. Yeah, the notion of a single founder unicorn, you know, like one guy spins up some bots and creates a billion-dollar company. I think that we're close to that and probably we'll see quite a bit of that. The music industry example you gave is great, it's very close to my heart that I did for,

you know, two decades before I was here. But it's interesting because the cost of production goes to almost zero because, you know, anyone can make music and it's accessible via technology. And I'm sure AI is helping with that. I haven't experimented with it yet. But actually the distribution piece is maybe the bigger one, you mentioned, right? Even if you, you know, spent the money to create an album and it was spectacular, you needed a record label to distribute it and put it on the shelves. And obviously,

that changed, you know, with iTunes and all those things and the sound clouds of the world, but you still couldn't necessarily get seen. Now you can have your agents go out, run out there, market this thing, distribute it, post it automatically to every single platform, tweet about it. I mean, when you think about that in the context of music extrapolated to everything, it's really endless possibilities. I mean, for people to create things. Yeah, 100%. And I think the create portion is the key portion from my perspective, too.

So like the internet took the cost of distribution going down to zero. But now you have the ability to create stuff using an agent at 100 X the velocity. And so like, what does it mean if you, like, as a musician, if you had some idea for some sample or some beats that you want to do, you fire up 100 agents. Yeah, and fire up 100 agents and you get 100 versions of it. And but that human taste element is still really important. I think on top of that is like, okay, well, which of these, which of these beats or

melodies or whatever sounds great and is what I'm trying to express. But the throughput that you get now in terms of being able to produce just goes up 100x, which is phenomenal. Yeah, it's insane. So we're talking about all of these use cases, all these things happening, all the things that will theoretically happen with it using blockchain and finance. Are you actually using it in any way where it's transacting for you using crypto? I have not yet.

I have yet. Yeah. We've seen a lot of agents that are doing the trade. or, you know, can act on trades for you, but we, we, I personally have not. I'm always a little skittish about anything that uses the money directly. Yeah. It's like, it's like, you know, Steve Jobs never allowed his kids to look at an iPad. Yeah.

Like people are like, I'm not letting this thing out into the wild. Yeah, yeah, yeah. That's right. Yeah, you got to be a little careful, I think. So, but it's interesting to see people, people using it in this way. I mean, the, I think one of the lessons with this stuff is it, it tends to start on the fringe. It tends to start with young people or people in the developing world or the ultra wealthy or the ultra poor. You got to look at the fringes, the artists.

They're probably the first people that will figure this out and use it in an interesting ways. I think kind of the mainstream people are probably a little bit slow to use this. And I think that's why I still a few years out. Hearing us talk about it, it reminds me a bit of our Web 3 bubble in the last cycle, you know, we talked about art and music and gaming and all the ways that blockchain would innovate that. I think AI is obviously is much more obvious how that will happen, by the way. It's a good pivot, though, because I don't hear anyone talking about Web3 anymore. And I haven't seen a massive resurgence of any of those previous ideas yet.

Right. I would think that we would have seen music royalties blow up using blockchain, right? Or NFTs come back in some more meaningful form. I certainly thought gaming was going to be a thing. So do you think any of that comes back or do you think that we've moved on to greener pastures? I think it does come back. I think it's a few years out. So it's interesting you mentioned some of those use cases.

Like, you know, it's almost like the first time people come up with these ideas. The ideas are right, but it's too early. Technology is not there yet. The world's not ready for it. The markets aren't ready for it. And it takes almost 10 years for people to digest it for the tech to catch up. You saw this with the Internet. So you're right.

like Instacard is a huge business, but Webvan was one of the biggest flameouts from the late 90s of grocery delivery. And so took those 10 years in between for the infrastructure to catch up. And that's all infrastructure, not just technical infrastructure. It's like, how do you actually acquire users? Right. That's an important part of the infrastructure. So, you know, when I look at the Web3 ideas, I think we're kind of in like 2017 ideas at this point. we're approaching 2027.

And so if you go back to that era, people were talking about a lot of straightforward financial use cases. So things like, how does insurance work or reinsurance or why isn't stable coins or why isn't Wall Street run on this stuff? And how do you do private credit and real estate and these kinds of transactions on chain? And we didn't get to the art and music and gaming stuff, I think, until like 2020. Yeah, like, yes, we had NFTs earlier. Yeah, pretty early.

Yeah. And so I think that stuff will happen, but I think it's a couple more years out. I think it's like 20, 20, 2930. We're just starting to see the very beginnings of it, kind of like we saw the very beginnings of NFTs and gaming like 17. So I was just talking to a company actually earlier this week, and they're playing with this sort of skills-based games in crypto. And so literally because the AI can now vibe code a game,

and you can create puzzle games, or you can create games of skill, and you can allow crypto to be the money backbone for that. There's sort of this, like, they're experimenting with this new genre, of game where you can go in, invent a game, put it into the marketplace. A bunch of other people can come play the game. If the game is really popular, you get some cut of the money from the fees of the game,

and everybody that's playing the game can have sort of prizes inside the game. So it's like a really interesting marriage of AI, code gen, and crypto, because all the rails have to be crypto for this stuff for work for micropayments. And so the fact that people are experimenting with this stuff, I think is really interesting, but it's probably going to be a couple years before people really. see it take off, I think. But I do think it will come back. It's interesting. You have a longer time frame than I kind of mentally modeled it because I always kind of say, you know, we have a defy bubble and you have an NFT bubble, Metaverse bubble, all these things, and maybe three or four

laterers are the next cycle they come back, but you're actually right. I think it's more of an eight to 10 year time horizon for those things. I wonder if that can be expedited a bit by AI or any of these things. But we're amazing, though, in crypto of identifying those things. exceptionally early and speculating heavily on them and creating these massive boom and busts. I mean, it's unbelievable. It's really wild. Yeah. I mean, if only for that reason, if I think people paid attention to what the speculators

are doing, they're actually often directionally right. Like they're not close enough to the tech or the markets or the users to really understand if it's possible. But a lot of times these guys are actually very correct about this thing is going to happen. They're just seven years too early. I mean, ride sharing was a thing, but it didn't work. before iPhones. Yeah, all these ideas.

Social networking, right? And actually, I mean, one of the, there's a couple guys from the late 90s that were doing this, but like, you know, Peter Thiel, Reid Hoffman, Mark Pinkis, you know, they were all playing with social networks in the 90s. And because they were playing with it in the 90s, when they saw Facebook happen and they saw the social boom happen

in Circular 2005 with MySpace and Facebook and Twitter, they could see it. But it's because they were playing with the stuff. 10 years early. And so yeah, I think you do have to be patient. But if you're in these communities that they are good at spotting stuff early, like the real, the real value actually is not in like the speculation early. The real value is like, oh, when it happens for real, I'll be able to spot it because I'll know it's real. Because you participated in the, yeah, because because you participated early.

Yeah. Yeah. But that's just it's almost like I think of it like a tuition check. Like if you if you're willing to play the long game then like those early couple of years, if you're playing with it, don't don't bet the house on it. But like, learn what makes it work or what's going to make it work and who needs it and why and how it's going to take off in all its muscle that you build such that when it's actually real, you can say it's real this time. Like you have to know that it's not real at first time in order to see that it's real the second time. Yeah, it's a good lesson because it encourages you to take the time to play with things,

even if you think they might be slightly nonsensical or they won't work, just touch it all and keep your ear to the streets because those are the things that will eventually emerge. I mean, with that in mind, obviously you're deploying capital. So you take all of this and you put it into some sort of model and decide, where you actually want to write a check. So right now, what are you most interested in it? And how do you, I guess, you know, value something or approach it to know that it's

something you actually want to put money behind? Yeah. Well, so the second part of that question is easier to answer than the first. A lot of what we do is very people-centric because we're very early. So we're, you know, first money in typically or, you know, first institutional check. And so a lot of it is you're betting on people. And so what we're really sort of banking on is can you Can you identify somebody who's truly world-class at something?

And really, the core of it is have they figured out something that's true about the world that nobody realizes is true? It's sort of that, like, you walk into a, the way I always described is you walk into a conversation, believing X, and you walk out of the conversation believing not X. You're like, oh, wow, this person totally changed my opinion about the way the world works. That's a really good signal. It doesn't happen out often. So for us, that's the primary thing, but we have the good fortune of being really early,

and so that's the leading indicator that we look at. In terms of the areas that we're really excited about right now, we've been thinking a lot about what happens when these agents are smarter than humans and proliferate because our time horizons are 7 to 10 years. And so a lot of what we've been thinking about is what can the agents not do? And what does that mean for where value occurs? So I'll give you a concrete example of something that I think becomes more valuable.

It's not something we're investing in. But I think if you think about the defense industry, the government is not the U.S. government is not, the DoD is not going to the Department of War now, is not going to decide to say, hey, let's just let the agents do the buying for us. Just give it a credit card and like a purchase order and like let it decide what to buy, which weapon system to buy. And on the other side of it, you can't like use the agent to like close the deal. You might be able to do some compliance work. You might be able to do like the regulatory filings. But what you're going to have to do is show up to a dinner and shake hands. And that and that is a very important part of the process. So you have the these like defense subcontractors. And I think they actually become way more valuable businesses because it used to be that they were these sort of consulting heavy people, heavy businesses. And I was seen as a cost structure. Now you could take a bunch of the work that they're doing, automate it, but the critical

thing that they have are the relationships, right? Some guy who went to West Point and some guy who went to the Naval Academy and they were both in Iraq at the same time and they shake hands over dinner. And like that, there's no way to replace building that trust. And so I actually think a bunch of those companies become far more valuable. So I think anything that has deep human relationships, things that have manufacturing, atoms, things that involve health care, things that have regulatory modes like fintech where you need to get licenses. These are essentially barriers. These are things that the agents can't do yet. And I think those things become far more valuable, whereas the cost of production of software basically collapses to zero.

And now you're competing against the entire world for software. So I think software, pure software, starts to look a lot more like direct-to-consumer. So it looks like that. It starts to look like the beverage industry. Right. It's like what is the beverage industry? It's like carbonated water and like some flavoring and some colors and some vitamins. And like that's kind of it, right?

But like you have a brand affinity for Arizona iced tea or you have a brand affinity for Red Bull. Right. And so it really becomes a packaging game, a marketing game, the branding game. And I think that's that's software, pure software is becoming. It's really a branding and a packaging marketing game now. And so if you really want to do sort of technology investing, I think you have to go to the places where that's not the case. You have to go to the places where it's hard to do the technology.

And a lot of those regulatory modes, you know, where are there physical atoms, where you have to interface with the real world, where you have to interface with humans. So we're spending a lot of time in those areas now. I'm hoping people just still want to watch humans have conversations. They will. I think this becomes more valuable. I'm hoping that, you know, this kind of thing is still AI proof to some degree.

I think it very will be. You know, there's another analogy here that, that I think about, which is the watch industry. So like in the 70s, early 70s, you had the thing mentioned the quartz movement. So you get these sort of physioelectric devices and they were very accurate. And so watches before that, they were a tool

to keep time and to measure things. And all of a sudden you have this new technology breakthrough that is way more accurate and way cheaper than a manual wristwatch. And so that a whole industry had to evolve. And it evolved and it became a luxury industry. It became a boutique, you know, craft industry. But it's at all-time highs now.

Like Rolex is one of the most valuable brands and companies in the world. And if you go down those rabbit holes of AP or, you know, Patac or, you know, go even more niche, you have these phenomenal artists, basically, that can make fantastic businesses and make a lot of money doing it. And that industry is worth far more today than it was 50 years ago. And it's because it's essentially like proof of work, right? It's like only a human could have done this. And the fact that only a human could have produced it is what, makes it valuable to other humans.

So I think things that are sort of high craft and are made by humans actually become more valuable in a world where AI just can create a bunch of content. But you have to do it with crafts. You have to do it well. So smart. I've never thought about that with watches. Clearly, technology has become better and cheaper with time.

But your average watch collector doesn't care to necessarily wear an Apple watch or a very cheap watch that keeps the time just as well in theory. Yeah. Yeah, yeah. Yeah, I mean, you can go like Fijorn. You can look at like, you know, when you get, you get the craft of the thing. I think, I think the closest is basically it's a proof of work. It's like it took a human X hours

to do this. And I know it took a human X hours to do this is what makes it valuable. So which blockchain narratives or crypto narratives are you primarily focused on with all that in mind? I know obviously you said it kind of depends on the founder, but I would imagine that there's some areas that you're generally looking at. Yeah, it's basically I would say three categories. One is I think the store value chains are still very interesting. So for us, that's primarily Bitcoin and Eath and not financial advice, obviously. But, you know, I think those have ascended into sort of prospective store value territory and people are paying attention to those effectively fixed supply, easy to subdivide, easy to transfer, all the all sort

of checkmarks that you would want. And they appeal to different communities. And so that's one category and sort of a unique category. I think the second category is anything that has some sort of fee mechanism built into it and deals with financial assets and transactions. And I think you could put Solana into this, you could put hype into this. And I think those categories of things, you know, I think lighter. I think will continue to be really interesting a lot of defy. And our take on those has always been, you have to be very mindful of the fees on a lot of these and you have to think about what the fee take rate is and then you treat it like an equity,

Except I think the big thing here is these are assets that take fees and dollars and make them available to people all over the world who don't have access to dollar instruments. So if you're in Vietnam, if you're in Nigeria, if you're in Turkey, you can buy into these things and you may not be able to get actual U.S. equities. You can get an ADR, but you can't get the actual equity. And so to own a piece of a thing that produces U.S. dollar cash flows and can effectively give you a distribution of U.S. dollars and the form. of buybacks is a really valuable thing. And the way that the market will express that is a much higher PE ratio, in my opinion, than you get on the US equities markets because the buyers have fewer alternatives and they really value that cash flow more than somebody even just buy some equity on Schwab. And so this category of things that have financial use cases,

which is what blockchain is and crypto are really good at, and can generate fees, I think is valuable. And then I think there's this emerging category of applications that use these primitives, that could not otherwise exist. And I think things like Venice, NIR, and I think there will be a host of other applications that essentially use distributed compute, confidential compute, zero knowledge proofs, and proof generation.

It's basically using the infrastructure of crypto to do interesting things and other assets, I think is kind of the third thing we're looking at. And some of those things will look like companies. Some of those things won't even look like token networks. So there's, for example, like it turns out, you know, in Cryptoland, we had this really interesting problem of smart contracts securing a lot of code. And there's a technique from computer science called formal verifications. You can verify your code.

In effect, you can turn code into mathematical statements. This is the same technique that's now being used by the AI foundational lab companies to prove all these math theorems. And so a lot of the state of the art of that was pushed by crypto people. over the last decade because the best testing ground for it was smart contracts that are securing lots of dollars a little bit of code that secures a lot of value but those techniques now and those systems are tremendously valuable to AI safety AI security and and code generation because if all the code is generated by AI you need to know that it's secure if you can't you don't want to generate code for like some medical device or some hospital or a nuclear powerpoint using AI generating code and

it has a bunch of bugs so it turns out this technique and these technology and these technologies is pioneered in crypto, very, very useful now in this new AI co-gen world. And so you could look at a business that does that stuff. Like there's a company called V12 that were investors in. And it's the former Zellic guys. Zellick was this premier auditing firm. And it was a bunch of capture the flag guys, like guys that sort of try to break into systems. They're white hat hackers.

Yeah. Yeah. And they built this company that is using agents to do a lot of security. And so now you can have a team of security engineers that are all agents, basically finding an audio of your code and doing relation stuff. So these businesses that were pioneered in crypto and the techniques were applicable in crypto. Now it's applicable everywhere.

And I think people don't quite fully appreciate how big that's going to be. So we're spending a lot of time on that kind of stuff. There are so many crypto things that are coming to markets everywhere near you that maybe didn't expect, I mean, 24-7, 365 trading, perpetuals in every single market, prediction markets. I mean, all of that is obviously kind of financial, but and of course, stable quite, but there's so many things that were created in crypto, whether that value accrued to us or not, I don't know, are being adopted quite, quite literally everywhere. Yeah. Well, I mean, even the biggest AI data center companies, right? You look at like a

four miners. Yeah, that was the one I was thinking, takeaway miners are not big way. So, yeah. Yeah, they were writing data centers. Exactly, right? So, which, which actually, I think is a great sign. It means that I in some sense, I think it's the end of crypto because we had this turn. We had these sort of boundaries on what the industry was or what it meant. But like, what does it mean if the biggest crypto companies are actually running GPUs in the data center, right? And what does it mean if the AI safety code stuff is actually coming from a bunch of people who were pioneers on that cryptography side and program on the nature side? Like, I think you can't it's very hard to put bounds on the industry now. It's just kind of the infrastructure and technology is

baked in everywhere, almost to the point where you can't really say, like, are you investing in crypto or not? It's just there's technology and it's useful for stuff. And that's what you want, right? There's a time in history of mobile where people used to have startups walk into a room and pitch and say, oh, I'm a mobile company that does XYZ. And then there was a time at which you said, like, why are you even saying that? Like, of course you're going to use a mobile phone as part of the stack, right? Of course, that's how you're going to acquire users. I think we're kind of getting there now. It's like, yeah, like, I don't, does it, yeah, you're just a trading app or yeah, you're just a

They're still talking about tokenized stocks and not just talking about stocks that we're correct. I mean, that's been great. Yeah, I mean, because that's just how stocks are going to move and it's not going to matter what the plumbing is, just like I don't know how my email or iPhone work. Exactly. So I think it's a great sign, actually. It's a sign that the industry has matured to a point where it's actually useful.

Because once it's useful, you don't talk about it, about the technology anymore. It sort of disappears into the background. Yeah, I like that. So there's a couple threads I want to pull from the sort of three investable examples that you get, Dave. So number two, I think we're very clear. seeing a move towards utility and people being able to value tokens in the same way that they value companies, which I think aligns with all of the names that you gave. Do they have to have not only

the favorable utility in tokenomics, but also the buyback as a part of that? Like, is accruing fees enough, or do you have to actually do something to sort of, yeah, I don't want to say pump the token or create an artificial floor, whatever day? is, but I think it's not just that hype for liquid is successful and earns a lot of money, right? It's that they use that money to buy back tokens. Yep. Yeah. So I think that it's an excellent question because it gets at the heart of something that is, I think we're still pretty immature on in these stuff networks. Right now, I think there are sort of only two stages. I think there is the prospective fee switch with

prospective buybacks stage where people are like believe that at some point the fee will switch on after there's enough market share and that that will somehow accrue back to the token. The second is that you've actually decided to do that. And the expectation from the market right now is you should take as much of your fees as possible and do the buybacks. And I think it's because people are short-term greedy. I think the place we will get to is not only are there fees, but there is some delegated responsibility to some group of initially humans and eventually AI that is really good at deciding how much to give back. And when you're in growth mode, you don't want to give back a lot. You want to actually grow a lot.

You just want to earn market share. And so you want to take all those fees and give them back to LPs. You want to give them back to users. You want to invest in customer acquisition. You want to invest in product development. And at a certain point of maturity, you can potentially start to do some buybacks, and you can turn the dial on how aggressive you get. And that's long-term greedy because you want to own market share in a large and growing market

before you start to sort of give that back to the token holders. And if you sort of say that and you describe that, that starts to look a lot like equity, right? It starts to look like what companies do with boards and CEOs. And I think we're basically like speed running the evolution of companies because, you know, these joint stock companies and LLC is eventually C-Corps, we've got boards and we've got CEOs. Like that evolution took 150 years or 200 years and we're just going to speed run it in 10 years.

But I think eventually people will figure out that making strategic long-term decisions accrues more value than just doing dumb buybacks all the time. But we're not quite there yet. Yeah, interesting, because right now we debate, like, should it be 50% or 70% or 100% and people are more excited about hyperliquid than they are about pump fund because they're buying back more. And then you present this kind of vision where we lose, to some degree, the decentralized narrative or the decentralized nature of it by becoming more like a company. Kind of an interesting place.

And then you actually touched on what was going to be my next question, which was the third thread. When you mentioned Venice, I thought about the equity versus token argument, which I think is going to only proliferate further as these things become bigger. Because obviously a lot of people in that case were excited about the Venice token and then they raise equity. And the question once again was how does that value accrued to the token? We've seen a lot of examples of that. So how do you frame that? I mean, would you rather own equity or a token or both?

How does that, you know, or is it based on each individual scenario? I think it depends a lot in the scenario. And for disclosure, we own the Venice token. and have for some time. Eric's awesome. And I think it depends a lot on this specific scenario. I think it depends on the value cruel mechanisms. In some cases, you can actually get the cruel in both for different reasons.

What I like about it conceptually, though, is I think we have opened up the search space for possibilities. Right. So what we said is, kind of back to this internet example, when the cost of something collapses, you open up this tail of possibilities. It was not possible before. I think what these token networks did was they collapsed the cost of coordination. And so now you can communicate and coordinate globally at scale and try to align incentives. And maybe sometimes that looks much more like a commune.

You know, like a like we're all equal. You know, sometimes it looks much more like a company. Sometimes it looks, you know, like you actually only have governance rights over a pile of money. Like I think opening up this search space to explore. how humans can coordinate or how eventually humans and agents can coordinate with each other, I think is a good thing because there may be some new models here that we haven't explored yet, and it turns out for certain kinds of problems, that's actually better way to do it. And so conceptually, I like the idea of people writing all these experiments,

and then us figuring out over the next 10 or 20 years, which of these things is even possible. I've talked about this before in other venues, but I think if you go back and read the history of the joint stock corporation and LLCs and C-Corps. It sounds super boring. I think it's super interesting because it's sort of the realization that for most of human history, you only had humans. Your counterparty could only be human. The unit organization was a bunch of humans getting together and there's no way to pool capital other than like, I'll put in a certain amount of money and hopefully we'll track it. And so you needed a bunch of infrastructure and technology around humans and human coordination, and we got companies.

And so you could do things, which today seemed really straightforward and obvious to us, but at the time we're not, like, I'll put in a bunch of money, you go do a bunch of work, and we'll split that somehow. And now you can get more money than you have personally to go pursue an opportunity, and so you can build the railroads because no one person had enough money to build all the railroads, but the ability to put all the money in one place, and then other people have expertise can come in and build the railroads, and we can both share in the upside.

that's actually a technology breakthrough. That's like an amazing thing. And so the way I think about these token networks and smart contracts is we've actually created the substrate for a similar sort of coordination, right? We don't know what the outcomes are going to be yet. Like what does it mean for humans and agents to coordinate on work and how do you split those profits? And what does it mean for people to bring in money from, you know,

all over the world into a place and I can use the money to go do certain things. We've created coordination technology. And we should explore well all the potential combinations, nations of that are, and we might stumble into something that we totally would not have guessed. Like, you asked somebody in 1600 to describe what a C-Corp looks like, like they couldn't have done that, right? You had to go through the evolution for a while to figure out that actually a C-Corp is a pretty cool and effective way to coordinate humans. I'm thinking about this. It's funny. We talked about sort of the eight-year-to-10-year horizon

of things in crypto becoming viable. We had the ICO boom and pre-sales and all of this stuff that was sort of a early form of capital formation that didn't really work. I think it's fair to say it didn't work. I mean, it worked for some people, obviously, right? Which is fine. Maybe those were the early iterations of capital formation that will be improved upon and will exist on chain. I mean, you even have the SEC talking about reg crypto and you can raise up to

$5 million from non-accredited investors on a white paper with four years, right? I mean, those weren't things I ever thought would be imaginable from a regulator perspective. Take that aside, you're talking about now, like you said. I mean, you can do the same things a company would have to go through so many steps and so much red tape to do online with money from everywhere and everyone's brain and AI. So maybe that was one of those things. It was 10 years ahead of its time to some degree. I absolutely think so. I think that's going to come back, actually.

I think sometime over the next, I'll call it like one to two years, I think, like if you think about another sort of thing that this substrate has built, which I think you're, you're, you're, you're, getting at just I'll use slightly different words. Okay, so like what is a wallet on chain? And what is a set of smart contracts where you can pull money? I mean, to me, that starts to look like you can push a button or write some like one or two lines of code on a command line and you can create the equivalent of a company. You can create the equivalent of a cap table. You have the equivalent of a bank account, which is your wallet.

And you can put rules around that for who has access to what stuff. and you can hire a bunch of people and you can hire a bunch of agents to do work. And if you think about it, right, like, again, going back to this joint stock corporation, you know, in the history of this, when these things were first created, you actually had to go to the king to get a charter

to start a corporation. The king had to give you approval. In the United States, we didn't have kings, we had governors. So you might have to go to, like, the governor of Pennsylvania to get a charter to start a company. And so around like 1850 in the U.S. and UK,

we just said, that's kind of silly. why do you have to go to the king to get permission? Why don't we just create a process? You just fill out some forms, submit it. If everything's in order, we'll make it really easy to start a company. And you got this boom of corporations you created because the friction came down 100x. And what we just did was we took the friction down another 100x. Right now, instead of you having to file a Delaware charter and get all this work

and go get K.YC of the bank and all this kind of stuff, you've taken it down 100x where I just push a button and I have a company and a bank account and put money into it and I can hire a bunch of agents. Literally in like five minutes, I can have 100 employees in form. with agents and I can have a bank account to take money and I have an entity to accept the money and I can have shareholders, right? So when things go down 100x in terms of friction, you get 100x more of that activity. And so I think people are just starting to realize that maybe this is possible. So I think over the next couple of years, people will start to say, oh, this is actually

just a better, faster, cheaper way to create a company, to hire people using agents and to run my business. And so I should just do this here and then to your point, the capital formation piece kicks in and now anybody can participate. So that starts to look. look a lot more to me like a global private and public equities market. And all the pieces are in place to do that. And I think a lot of people in the world will say, well, I can't access the U.S. equities market as an investor. And a lot of entrepreneurs will say, I can't access the U.S. capital markets and venture

because it's so tight in San Francisco. And so now you just opened up that whole world. Like biology over a network state is kind of getting at this, right? Like talent is everywhere in the world. Capital is not. And when you can hire people anywhere in the world, you can hire agents anywhere in the world, and you can push a button, start a company.

Like what happens to company formation? And what happens to innovation? And what happens to people wanting to pursue those opportunities? I think all of that will happen on chain. All the pieces are there for that now. And to your point, that was 2017. We're about 10 years later, right? So it's like it's about 10 years.

Yeah. And what happens when then those companies need some equivalent of going public? Yeah. Or becoming publicly accessible or, you know, will they list or will there be public markets that are objectively tokenized that have nothing to do with the New York Stock Exchange. Will that become a dissential? Like, I haven't really thought through these things in advance.

I think that's what happens. Yeah. I think that's exactly what happens, actually. I think you get over, I think maybe 10 years from now, I don't think it's crazy to imagine that you will have a parallel public equity market that sits outside the U.S. just sits on chain and anybody in the world can access it. And there will be disclosure requirements and various governments will say, hey, look, if you want to market your token to our people, you have to, like, register with us

and so on and so on. But that is not going to be the New York Stock Exchange and that's not going to be an NASDAQ. Those things will do great, too. I'm not saying this is like replaces them or disrupts them in any way. I'm just saying, I think there's an opportunity for that long tail of companies to effectively go public on chain. And that's going to be a very large and healthy market, I think. It's great for entrepreneurs. I mean, everybody, I think, is starting to feel like they have access to everything all the time, period, right? I mean, we certainly say with speculation, the exchanges are all becoming everything apps and prediction markets added with leverage on the prediction markets. You know, you can gamble on anything or, you know, you can express a position

with your money on basically anything at any time now. I don't think people have even thought about what that means when it comes to everything that's ever existed in capital markets existing in this parallel system, right? It's really crazy. I mean, the wallet is the start of it, as you said, but it's endless. Yeah, that's right. And, you know, it's going to be interesting because I think you'll get two flavors of it. I think you'll get the old version of these things will move to this infrastructure, but the interface will still look like the old interface.

So this is NASDAQ, nice, yeah, like. You'd be settling on chain, right? Correct. Exactly, exactly. Then you'll get sort of this like hybrid version, which will be the old guard using this infrastructure, but to. do things that they could not previously do. So you take something like the private credit markets,

if we're talking about AI infrastructure, right? All of those markets through like billions and billions and billions of dollars of financing that happens is happening with like PDFs and excels and emails getting passed back and forth. And there's literally the thing driving American GDP right now. And so the America GDP right now is being driven by like PDFs and emails and Excel sheets,

which is pretty crazy. That should be digitized, that should be settled instantly on some sort of blockchain like system because really you have this, complex market where it's, you know, Goldman and Apollo and Blue Al and, right, and, you know, Goldman doesn't want to use the Apollo system. Apollo doesn't want to use the Blue Al system. So there's got to be some sort of a shared public ledger that you can read from that anybody can participate in that, you know, yada, and you sort of describe what that thing needs to be from its features

and you realize it's basically a blockchain system with smart contracts and in cryptography and yad yada. So you'll get the application of these technologies into the old world. because it's now possible to do things that just wasn't possible before. And then you also have this like outside the ecosystem brand new stuff that just exists entirely on chain. And all three of those things, I think, are not happening, like in parallel.

For everybody who's paying attention, if you go talk to any of these entities, whether it's the people outside the system, people in the system that want to use the technologies to build a new system, and the people who just want to upgrade the old system, all of that stuff is happening in parallel right now. It's just, you know, you have to be paying attention.

Yeah, and I don't think people, in the United States, realize how good we have it and how much access they already have, so maybe we don't quite get it. But if you're somewhere else in the world that have never been able to buy Tesla stock, and now you can go on Coinbase OKX, whatever, or some decentralized thing, and buy an actual version of that stock, potentially with dividends and voting rights and all of those things. I mean, that alone is so mind-blowing, probably, for most people around the world. That's right.

You actually just remind me of the story. There's this old David Foster Wall. He gave, he's an American writer, and he gave this commencement speech. And I always tell it in the context of Bitcoin, but inflation. And you just highlighted that I think this applies to a lot of financial assets, which is, so the story is there's a bunch of the story. People should go listen to this speech. But here's the short version.

An older fish is swimming upstream and two young fish are swimming downstream. And the older fish knots the two younger fish and says, hey, boys, how's the water today? and the two younger fish kind of nod back and then they keep swimming. And after a while, one young fish turns to the other young fish and says, hey, what's water? Right. And it's a parable about like having wisdom and getting older. You start to see the water a little bit. And I think things like the dollar and inflation, Americans don't see the water because everything's denominated in dollars.

And so we don't really experience the inflation quite in the same way. Now, of course, like the last five years have been a little different. People are starting to understand inflation. But for like the past 70 years, Americans didn't have to think about inflation. But if you're in Turkey or India or Brazil or Indonesia or Kenya, like you had to understand the dollar and you had to understand the dollar in the world and inflation. And so those people understood stores of value in a way that most Americans didn't. I think you're exactly right. Most Americans don't understand how great

the American financial system is and how remarkable it is that we have these capital markets that make the economy work and finance and banking and mortgages and insurance and the equity markets. It's just an amazing piece of infrastructure that we have that most of the rest of the world does not happen. And so it's kind of like water again. We're just Americans don't see the water. And the rest of the world is looking at the stuff and saying, wow, this is amazing. I can't believe it because they can see the water. A thousand more things I want to ask, but I know that we're up against time here. Michelle, thank you so much for your time. That was really a different conversation than I've had before and you made me really actually

used my brain. I appreciate it. It's good to see it. Thank you so much. Where some see heroes and others see egos. Bloomberg sees the era of billionaire athletes. A fad to some, the future of money to others. We see crypto's trillion-dollar swings. The end of jobs or the end of human struggle. We see the endless funds fueling the AI hype. While others follow the noise, we follow the money.

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