Unchained - Bits + Bips: AI Jobs Wipeout, Bitcoin as a Risk-Off Asset and Few Rate Cuts - Ep. 765

Episode Date: January 15, 2025

This week, Bloomberg’s James Seyffart, Lumida’s Ram Ahluwalia, and guest Tom Dunleavy explore whether the “Fed pivot” is officially dead, how AI will impact the job market, and what Tether’s move to El Salvador means for U.S. stablecoin policy. They also debate whether bitcoin could ever be a risk-off asset, how sovereign nations might already be accumulating BTC, and what the Coinbase legal win against the SEC signals for the future. Plus, why volatility is still king in crypto and what lies ahead for the global markets. Show highlights: 02:12 Whether the “Fed pivot” is officially dead and whether rate cuts are coming 08:37 What the impact of AI will be on the jobs market 13:27 Why the markets have been chopping so much and whether it’s the bottom 18:00 What Trump could achieve for the crypto industry in his first 100 days 23:02 Whether the US sold the Silk Road bitcoin 25:27 Why bitcoin will not be a risk-off asset in the near term according to Tom and Ram 31:08 Whether sovereign nations have already started buying bitcoin 36:49 Why Tether moving to El Salvador is a loss to the U.S., according to Ram 40:26 How the L.A. fires will have an impact on the political landscape in the U.S. 52:06 How Coinbase just achieved a “huge win” against the SEC Sponsors: Stellar Build Better Hosts: James Seyffart, Research Analyst at Bloomberg Intelligence Ram Ahluwalia, CFA, CEO and Founder of Lumida Guest: Tom Dunleavy, Partner at Master Ventures Learn more about your ad choices. Visit megaphone.fm/adchoices

I'm sure he'll get executive orders in to stop selling crypto. But I think the ambition of the eight items that Joe noted in his report versus the reality of what's priced in the markets, I think there's a gulf. So markets need time to cool and reset for a few more months before we move higher. Hi, everyone. Welcome the bits and bips, exploring how crypto and macro collide one basis point at a time. I'm your host, James Safert, Tradfai Archmaister, Lord of Bloomberg's End. here with Rob Al-Alawalia, Master of Wealth, leader of Lumida. Happy New Year.

Today, we're also joined by Tom Dunlevy, Guardian of the Capital Thrones at MV Capital. We're here to discuss the latest stories in the world of crypto and macro. Just remember that nothing we stay here as investment advice, please check unchaincrypto.com slash bips and bips for more disclosures. Did you know the stellar blockchain already powers over 550 million tokenized assets in 180 countries? join the build better movement at betteron. Stiller.org. All right.

Before we get into it, Tom, why don't you give our listeners a little background on who you are and what you do in the space and we can get into it? Yeah. Thanks, James. Appreciate you having me. Appreciate having a noble title. It flatters me.

It's fantastic. So briefly on me, I spent 10 years in Tradfai, managing traditional portfolios, worked at the D-Strecht Global Advisors, and a number of other investment houses. moved over to Masari at the perfect time in 2021 as everything was collapsing. It's been a few years there as a senior analyst before moving over to my current role,

MV running the investment side of our business. MV has been investing, building, and incubating businesses in crypto since 2019. We've invested in over 250 individual pre-seed and seed stage companies that I run the investing and fund side of our business, which has a venture fund, any at liquid fund. and it's been most of my time on the venture side. Great. We tend to focus a little bit more on the liquid side, but we do love a little venture.

Our counterparts over at the shopping block, the other unchained podcast tend to focus more on the venture side. But I guess let's get into the Fed a little bit here. We have to talk with them every week. I mean, they have control over everything going on the markets. I'll go to you, Rom. Is the Fed pivot officially dead? What do you think?

Yeah, the rate cuts are mostly priced out, right? You had a strong non-front payrolls report last Friday, exceeding expectations. And then the 10-year went up on the news. It's at 4.8%. I think it could get up the five if it does. I think that's the end of it. But what you've seen since the Fed cut rates 50 bips in September is the short end of the curve has gone lower and the long end of the curve has gone higher.

So the markets have repudiated the Fed because markets are expecting higher inflation and they don't see the need for rate cuts, which has been a view. I've had and talked about for a while. And by the way, it's a lot of people that were talking about rate cuts over the summer. And essentially, the Fed got pressured into cutting rates when they never needed to. You've got a strong economy. Yeah. I mean, I would say my two cents was, I don't know.

There are some inklings that things have like started slowing. Like momentum has kind of slowed a little bit in many things. We still definitely have a strong economy. I don't know if it was necessarily like a complete mistake to cut. but what you said is definitely true. I mean, we were pricing for two cuts as of our last recording, like, just a week ago. And now we're basically pricing for one cut, and the second cut isn't expected to come until, you know, the end of 2026. So we've basically completely priced out the idea of two cuts.

And I don't even know, like, we're pricing for one cut sometime towards the end of 2025. Is that really even viable? Like, at this point, I feel like we're just on a complete pause and there's just, you know, this is what we're looking at here. Yeah, I think one of the Fed's biggest concerns is really the housing market. If you have rates at 5% on the 10-year mortgage rates above 7% are just not tenable for any individual. So I think it's really challenging to keep rates this high for this long. They don't have a direct impact on the mortgage market, but 10 years a big factor in that. So I think we're going to see a few more cuts this year than are likely, or that we're actually have priced in right now.

And the biggest tension in my mind is really sort of the inflation. dynamics that Trump's going to have with this policy, so tariffs, immigration, pushing back against the disinflationary policies, which are AI. And how much you buy into the AI story and how much job cuts are actually going to happen in 2025 based on that are going to play into your view on whether the Fed cuts, we're just talking before the show that, you know, Bloomberg just projected or had a story about 200,000 job cuts just in financial services in the next few years. So I'll report from the WEF, we have 41% of companies talking about that they're cutting jobs because of AI in the next few years. I think we're still massively underestimating how many jobs are going to be

lost AI and productivity gains. So growth up, you know, those inflation numbers likely down based on that. And I think we're all talking about these AI bots and talking about things like AI in the market, but we're not really pricing it into what's going to do to the broader economy yet. I'll challenge one point there, Tom, which is that mortgage. rates were lower the day before the Fed cut rates in September. That was the local lower mortgage rates. So unless the Fed is going to engage in quantitative easing, I don't see how rate cuts would help them. In fact, mortgage rates are going higher because the Fed is cutting rates into Goldilocks, my thesis, right? Cutting rates into a ripping economy with record retail sales and

job growth, record asset prices. Asset price so high, people actually paying off their credit card debt. Now, people on Twitter are worried about people paying off their credit card debt. They get worried when they also grow their credit card. In matter what, whichever way, there's something bad, right? Then the Kobesi report comes out with the OA caps headline. So I don't think it has a zero impact, though, on what broader mortgage rates are going to be if the 10 years spiking. I think the 10 years has been spiking because of other things, primarily because of Trump, the election and outcome and the inflationary impacts of his policies. I mean, Powell said that in his last news conference, rate. So I don't think that's a direct corollary. I mean, certainly happen at the same time,

but in a lower 10-year-all, all SQL is going to help mortgage rates. I kind of like sit in the middle of you guys. I think we are going to end up seeing cuts later in the year. I mean, we are at like relatively high rate. Who knows where the neutral rate is? I've talked about it on here before. I think QT is ending. So that could help some of the assuasion concerns that we have about the mortgage market. So I don't know. My inclination is I think we're actually going to get a couple cuts towards the end of the year. I mean, the one thing I will say of some of what changed. I mean, we were pricing for one cut sometime around mid-year, May, June, July, started moving out. Now we're not, the cut isn't priced to like Q4. And even then, it really doesn't get priced till like the very

end of the year in December into January of 26. So we're basically not, we're barely pricing for a cut. I think we're going to let the Fed, they say they're not political. They're 100% just going to have to wait and see what Trump does. Like, is he really going to enact a lot of the things he's talking about and how inflation are inflationary are they going to be like Thomas talking. So I think all of that needs to be played out first. I think the key thing to focus on is a CPI print this Wednesday at 830. It's the most important data point coming out of the Fed's meeting. And if it comes in benign or soft, markets will rally strongly.

If it comes in hot, then I think you have a one to two day sharp, violent, in a correction, the market will rally after that. I mean, if it comes in hot, we people, I mean, already people are talking about potential hikes. There's like, there's like odds of hikes now out there in the way the things are pricing. They're low, but like that's that's on the table, particularly if we get a really hot inflation print. Yeah. And you've had, this is going to be a really challenging inflation print. You know, oil is up 10% last month, which on the top line is not great. Core goods, which have been a disinflationary driver, have been, are going to turn around as people are starting to stockpile ahead of the tariffs.

new cars and a few other corporate services have been negative in the month off or multiple grants the last few months. That's probably going to flip in this reading. So that means really, you know, the housing component has to do the heavy lifting, which has been ticking down a bit, but is very, very liked what's actually happening in the real economy. Yeah, my one comment that I did want to make real quick on the, I didn't really talk about employment and AI's potential impact. I don't think it's necessarily going to be, I don't know what, we didn't really get into the details. My view is I think there's just going to be less hiring, which seems to be what's happening in the market now. People are spending more time unemployed. There's less people getting

hired. The unemployment rate's still pretty damn low. People are still finding jobs. It's taking longer. Arguably, it's more normalized before it was so hot that you were like fired and you had a new job within like a couple weeks. That was what the data was showing. That's not showing now. So I think it's more like these companies are doing things like forcing people back to the office. They're going to like kind of let things roll off and let people move around. I don't know if necessarily like we're going to see like hundreds of thousands of job cuts due to AI. I mean, it's possible. My view is just like maybe they're just not going to grow the workforce in the way they were planning and it's just going to kind of, you know, find a stalemate. I don't know if you

guys, do you guys think there's actually going to be massive layoffs over the next couple years due to AI or do you think it's just like what I was talking about, just letting it wien off? So there's an article in the Wall Street Journal. I'll share my screen here and it's about employees complaining about return to office policies. So the point of this is one, employers feel like they've got a little bit more power over labor. That's one. But two, the other side of this is that people are also, they may be on the sidelines and there might be longer duration of unemployment because people have more assets and are searching

longer and more discerning. It could actually be a sign of consumer strength, too. I do think, though, it's fundamentalist about normalizing back to, like, a 2019 level. Yeah, agreed. I think we're in this weird period where people don't fully appreciate what these tools can do. And you need the actual tools to proliferate in an organization and then get up to the higher levels. And people see, like, wow, this can actually do the job of 10 analysts. Or, wow, this can do the job of all these lures that I'm paying.

Or, wow, this can actually write code. It's like, all of a sudden, once you understand how to use these tools and they keep progressing, it's going to be a little bit of a period before we can actually displace these jobs, but I think it's going to happen a lot quicker than people think. So I do think these impacts are going to happen likely in the back half of this year. What industries go first? Tough to say. My broader concern is really we're sort of hollowing out the apprenticeship class for every single industry.

So how you gain a corpus of knowledge across multiple industries when you don't have time to do these medial tasks that now AI is doing. How do you gain knowledge in an area if AI is doing while you're writing and summarizing and researching and reading for you? So I just wonder the long-term kind of growth impacts on the economy more broadly. If we just have a bunch of people who are relying on these spots, does it potentially accelerate everything or does it sort of make us lose this base level of knowledge that you almost have from doing these kind of apprenticeship level tasks?

That's true. Yeah, you're right. I mean, like you need less analysts. We know we eliminated using AI more often. I think phase one though is AI is a productivity tool. It's like the plow for the farmer. They can get more done per unit of labor. This is a meme that I think captures different phases.

This is from like a coding perspective. This is the sniper meme. Is that what they call it the sniper meme? It's not sniper. This is, yeah, it is sniper meme, right? So the first step is, you know, coders use stack overflow. Stack overflow gets disrupted by chat GPT and Rupplin all these other coding tools.

But engineers level up their productivity. You have 2x engineers become 5x engineers, right? 5x doesn't become 10x yet, though. This hasn't happened yet. Then over time, you have AI can actually just code entire applications from scratch. That's not this year. That's not next year either, though. Maybe in the next year, we'll see.

And then management disrupts engineers. So you go from productivity enhancement, which augments labor, to labor substitution. that's when you start to see these displacement. I don't think that's this year or next year, though. I just don't see which industry it'll happen. The industry that is benefiting the most from this is engineering, like meta and Google. They are slowing the pace of hiring. They're cutting for performers.

So you are seeing some of that there, but you're not seeing net job reductions. Microsoft also is trimming the fat, but you're not seeing net layout. And then finally, you know, at some point, you don't even need management. You have AI agentic, you know, virtual machines. And the owners just say, here's the course, plots a vision, plots a path, and then the AI just executes. But that's going to be a few years beyond that, maybe five years from now, let's say. Interesting.

We're all coming up, let's be sure. It'll be interesting to see how this all plays out. All right. Let's move on to markets. Bitcoin dip below 90K today. We're recording this on the January 13th, Monday, January 13th. For the most part, things have been just chopping sideways. We keep going between 90 to the peak was 108.

Bitcoin, all coins mostly, for the most part, are kind of doing the same. There's a lot of this sideways chop. We go down low, though we did hit a new relatively near-term low today. Like I said, below 90 for the first time since we broke above 100. What do you guys think? Like, we're chopping sideways. Are we going to go higher? Do we go much lower?

I mean, I saw Tom Lee today on CNBC basically saying he thought we could retrace down to like the $70,000 range before we rip higher and have a very strong 2025. Do you guys think we're heading lower from here? I mean, I know we can get into it a little bit later. Joe, who's not here today, Joe McCann, is relatively bearish. What are your guys' thoughts on where we're going from here? So we saw almost a billion dollars liquidated in the past 24 hours in Bitcoin and Ethereum. And there was actually extended leverage positions, particularly on Ethereum, going into yesterday 112. Pretty surprising.

I think people were trying to position ahead of the election and got a little too far out in front of their skis. So this to me was that leverage liquidation. And it's almost like the election or the inauguration was a. sell the news event, and now we've dipped enough for our, you know, almost 20% gloss off those highs for major crypto assets. And looking at the most popular sectors like AI coins, were actually 40, 50% off. So you've had this ridiculous alt coin washout in a period of almost just a week. So I think we're pretty close to the bottom on these levels. And we'll pivot pretty quickly in the next week or so. But, you know, if we get hot CPI, you know, a lot of these macro data points

that make the situation even worse rates rising again, then we could see a bit more. But I think this is pretty close to the bottom, basically, that leverage situation. Well, let's take a look at Joe's right up, right? Joe's not on the show right now. He runs asymmetric, which is a crypto hedge fund. My conspiracy theory is that whenever Joe misses the show, he's selling Solana, and he came out in a parish. So it's been my theory there.

Let's see. When Joe's back, you should buy, I guess. He's like David Sacks on all in, right? He's got bigger fish to fry. He can't be hanging out with us, giving away his alpha. So here's the, here's Joe's update. I just put it on the screen right there. You know, this is one chart I see all over.

This global liquidity annualized versus Bitcoin. Global liquidity is trending lower. Yeah, we need, you need central banks to, you know, just start pumping things, whether it's China or the Fed to stop QE, all these things. I mean, theoretically, if Bitcoin really is following the money supply, I mean, everyone, people have been saying for a long time, we should be much lower. But there's a lot of things happening in the U.S. that are very positive for Bitcoin and crypto more broadly. And plus, you have sailor buying every week. Again, he bought today.

So he's approaching the blackout period, I think, for micro strategy earnings. I think it's two weeks before. So it's in a next week or so I don't think he can buy anymore. This is a really good conclusion that Joe has here. he says, well, what is one to do? He says there are many potential catalysts for Bitcoin and crypto generally in 25. One, a strategic Bitcoin reserve at the federal level, strategic Bitcoin reserves at the state level, strategic Bitcoin reserves at other countries globally, removal of SAB121-21. You know, that's the SEC-1-21.

That's almost certainly going to happen on day one, too, the SAB-1-21. I agree. I agree. As well as maybe some basic form of the strategic Bitcoin Reserve, like not selling. clear regulations, stable coin bill, market structure bill, U.S. banks offering prime brokerage and training services, consumerization of Web3 crypto, and a Chinese bazook of liquidity. He says, he goes on to say, however, these potential catalysts are just that, potential. In the meantime, one must continue to reserve the flows.

And we have been monitoring the flows for the Coinbase premium indicator. And he's saying that the discount is negative. You know, he's netting out that he's tactically bearish. That's a lot of potential for upside, but timing-wise, we're not there yet. I want to stay on the strategic Bitcoin Reserve conversation real quick, because I see a lot of people, like, one of the critiques is like, people are like thinking the government's going to buy millions of Bitcoin, blah, blah, blah, and like when it doesn't happen, it's going to be a net drag. For my point of view, I think most people aren't really expecting Lomas's bill necessarily to pass in Congress, which is the bill that would actually have the U.S. government going out and buying Bitcoin.

I know there's talks about Trump finding different ways through like keeping up the U.S. dollar and the Exchange Act and things like that to buy Bitcoin potentially. But my base case, and what I think most people I talk to, the base case is the U.S. government is just going to hold the Bitcoin they have. So I think it'll be bearish if Trump doesn't manage to do that. I think that'll be bearish. But I don't think like not getting the, you know, these other bills for the strategic Bitcoin Reserve getting through.

I don't think that'll necessarily be bearish. I think that'll be relatively neutral, maybe a little bearish. But I don't think there's that many people really thinking that the U.S. government's going to buy a million, four million bitcoins and own a huge chunk of the supply. Yeah. And Polly Market right now has a 31% chance that he'll create a Bitcoin. Coin Strategic Reserve in the first 100 days, which I think is materially low for, we just think about the calculus for Trump. He wants to fulfill on campaign promises day one. He's,

crypto was one of the big parts of his campaign that got him elected and a number of the representatives. I mean, just like the numbers on Stanley Crypto. Dot org, you know, across the board, crypto was, was what won the election for Republicans, you know, besides the broader discontent in the country. So he's going to He's going to day line Want to give something to crypto So Saab 121 is definitely one piece of that

Washington Post just reported That that's probably a day one executive order He can to your point Also put a day one executive order Using the Treasury Exchange Stabilization Act Which is used to buy or sell foreign currencies That they can actually purchase or buy Bitcoin I think that's likely in the first hundred days

and I think it's because he wants to fill a campaign rob us. But number two, and probably most importantly for Trump, is because he is all about his bottom line. And as president, he could absolutely deliver 10, 15, 20 percent returns on the SP 500 through a number of policies, but it is much much easier for him to deliver 200, 300 percent returns in crypto and other related, digital currencies. And guess what? He's all in crypto, not only via the presidency, but also through personal holdings as well, which seems across the board. So I think it's, I think it's almost a certainty is going to do it in 2025. And I'm a fader of anyone who all differently at the moment. So the act you're talking about where like, you know, to stabilize the U.S.

You think they're going to use that to actually buy and hold Bitcoin on the federal government balance sheet, essentially. Because I'm not so sure. I don't know if he's going to get that through, but I do think he's just going to be able to figure out a way to hold the Bitcoin they're ready hold. Well, that's provocative. If that happens, Bitcoin goes 120, 150 fast. If if the time I'm saying it's true, first time I heard that, by the way. So, you know, I think there are two components here. One of the technicals and the fundamentals. Technically, whales are selling on strength. SEC Gensler resigns, chair resigns. Bitcoin pumps past 100,000 whales sell. Paul Atkins nominated Bitcoin pumps 107, whale sell.

This happened three times now. So whales are selling on rallies. That's one. Two is you've got the Q4 animal spirits that are now receding. You see that in other categories like Tesla and Uranium. So they're retrenching. They're pulling back. You see it in Twitter momentum stocks that are receding.

You see it in declining open interest. You see it in micro-strategy. It's all receding, right? So those are the flows Joe's talking about. I think Joe is right about that. I agree with Tom's point, that short-term liquidation, that's tactically bullish on a time horizon measured in in days, right? But the factors in Trump's control are limited. He needs acts of Congress to get a real Bitcoin reserve. And he doesn't have 60 senators. So he needs to do

a reconciliation bill to get a budget passed and get material wins on the board. And he may not be able to get everything he wants in here. I'm sure he'll get executive orders in. to stop selling crypto. But I think the ambition of the eight items that Joe noted in his report versus the reality of what's priced in their markets, I think there's a gulf. So markets need time to cool and reset for a few more months before we move higher. So that's a good point. You talked about like whether or not the U.S. government sells.

I mean, this last week there was a huge news. Basically, at the end of last year, it only became news in like a week. or two later, but the U.S. was cleared to sell, the DOJ was cleared to sell like $6.5 billion worth of Bitcoin. There's some people speculating that they've already sold. One, I guess the first question to you guys is, one, do you think the DOJ actually sold those Bitcoins that they were cleared to sell? And two, if they actually sell, what does it say about the Strait of Bitcoin Reserve? Like, in my mind, like, I won't, one, I don't think they sold personally. And two, that would just be so absolutely petty after the president's coming in saying he wants to hold the Bitcoin

and all these things that just unload it like days before weeks before he gets into the office would be unbelievably petty. But I don't know. What do you guys think? I don't think they're likely to saw it also. Just listen to a gentleman who specialize in asset seizures, not just in crypto, but also in gold and other dots everything across the board that the U.S. government seizes and his job is literally to sell them. And he said, you know, this process takes years. It is not like a month's solid process. And it's not. once they have the authority to sell it, there's an additional process for further claimants and then they have to liquidate it over a period of time. When the U.S. has gone into this process

in the past for other assets, including Bitcoin, the most they've ever sold for Bitcoin is a $200 million slug at one time. So to think they're going to sell a $6.5 million market order is just like ridiculous. I mean, they want to get the best prices just like we do for our assets. So it's going to be over time. It's likely not going to be until the back half of this year. And, you know, this is just the latest spot on the timeline, right? Just the right at the perfect time for ruining. The government in Germany could have learned a thing or two with how the U.S. government handled sales like this with the way they sold into weakness on a weekend, dumping Bitcoin to 50K. There was reporting from CoinDesk during the 23 cycle that showed that

that DOJ was sensitive to market impact and was reluctant. to have legal actions. And I think they're, yeah, they're thoughtful about this. And they're also slow. It's the federal government. They're going to have a meeting to decide when they sell. And then another meeting decide who does a sell. So I agree.

They're going to want some continuity here. And I don't expect any sales happen. All right. One more thing with markets that I wanted to talk about and hear your guys' thoughts. I mean, no matter how you slice it, most people will try to argue with you that Bitcoin is a risk-off asset. it's a store of value, it's a hedge it gets currency debasement. There is no argument, though, in the last year. And with different spurts of it breaking, there's been significant correlation with stocks

and the NASDAQ. I mean, today we had this Jan Vannek, the CEO of Vennak, basically say as a true Bitcoin or my biggest gripe is the fact that it's like completely going up and down with stocks and the correlation that we see there, acting like a risk on asset. I guess, one, do you guys think that's going to stop at any point soon? or is it still going to act like a leverage play on beta? And if so, is that a good or a bad thing? Go to you, Tom, first.

I see you shaking your head. Listen, Michael Saylor, if you want 40 to 50% Kager, it's going to be with volatility, man. Like, that's it. I mean, if that's what works, but I think over the next few years, like I'm a seller on the idea that anytime in the near future we're going to have it as a risk off asset, unfortunately. But that's not the role plays in most portfolios if you're a financial practitioner. And, you know, if there's some little component of storage of,

value, dollar debasement, et cetera, but primarily you're using it for the upside if you're an asset allocator right now in the future. Yeah, I agree. You know, in the banking crisis last year, you saw Bitcoin rally when bank prices were going down. So it really had a very unique role in the portfolio. But today, Bitcoin is correlated to Tesla. And it's brought in the speculative juices. So I think Yan is correct. One more point just about because the strategic reserve, I think, is immensely important. If you have a big bulk case on Bitcoin this year, like we do, saw our target for the end of the year's 250K,000. The strategic reserve has to be in the conversation. My base case, as I mentioned earlier, is that it will be approved through the Stabilization Act.

So the Stabilization Act just needs the Secretary of the Treasury to order the purchase of, and its discretion can be any sort of, it even extends to equities, securities, gold, et cetera, in the name of preserving and defending the U.S. dollar. And he just needs to sign off from the president. So you have percent who's for Bitcoin. You have Trump who's very pro-Bitcoin. If they wanted to, they can make this happen really quickly without any orders of Congress or bills. It's just more of the appetite, which I think is there. All right. So I'll go ahead. What don't this belong in the Federal Reserve balance sheet? So normally the FOMC would govern the buy and sale of short-term treasuries to create liquidity and withdraw liquidity. And you

click the composition of the Fed's balance sheet. So properly speaking, that's where Bitcoin should be held. I mean, you can hold it at the balance sheet of the fed, just in the same way that the federal balance sheet includes the Strategic Petroleum Reserve for oil. That's not the Fed. So I guess that's what they'd be talking about here. Would they need congressional authority from a budget perspective? Yeah. And this is probably where Lomas's balance sheet tricks come into play, right? Do you mark up the gold that's held at $40 or something right now to the true market price for whatever they wants? Tough to say.

You probably get approval if you're doing something like that for sure. Yeah. And on Mobyrault, Besson, being one of the people that would just need to sign off on this, we did get, there's been a bunch of, you know, financial releases about like who holds what. And Bessent, while he's a many, many, many times over a millionaire, he holds somewhere somewhere between $250K and $500,000 worth of the I shares Bitcoin. that he will divest. Pete Hankseth released that came out today as well. He also holds $15,000 to $50,000 worth of Bitcoin. So we're seeing more and more people involved in this Trump admin

are holders and arguably Bitcoiners. So, I mean, that's a positive thing on the fact that if you think, obviously Besson believed in Bitcoin if he's holding that much, a couple hundred thousand dollars worth of Bitcoin. So maybe he will sign off on it. I'm not as optimistic as Tom, but I don't know if I'm as bearish as Rob seems to be. I do think they're going to find a way to just hold the Bitcoin that the federal government holds. I think there's a trade ahead of the executive orders. I think there's a short-term tactical idea because the EOs will come. And if prices are low, then I think going into that, you can benefit.

But the Strategic Petroleum Reserve, that authority flows from an act of Congress. What Trump can do is choose not to spend funds provision. by Congress to cut the deficit. Congress can say, hey, go get an aircraft carrier and he can just choose not to procure. But the compulsion to spend must, I don't know that that's Yeah, the exchange stabilization fund is actually under the Gold Act of 1934. So there's already precedent on the books, just whether they utilize that precedent to leverage this in the Bitcoin. Yeah, I heard this from one of the, I don't remember which DC Bitcoin think tank. I'm sorry. if somebody's listening to this.

But that was the first I heard of it. Tom, do you know who wrote about it first? It was a couple weeks ago when I first heard about the Exchange Stabilization Act. But it was one of the guys, I don't recall. Okay. Well, I apologize to whichever one of you guys it was. The other point that was brought up earlier, like, does Trump family is long crypto, right? Don Jr., it's called the Trump put.

When Bitcoin drops a certain level, then he says something on Twitter. The question is, how many times can he pull off that stunt? before you get the avoid-that-cry wolf effect, right? I mean, you need to have the reality and substance show up. But it's going to be an interesting dynamic that unfolds the next months. One point in Joe's note there that we didn't hit on is the, what do you guys think about states adding Bitcoin as well as other sovereign nations adding Bitcoin in 2025?

Because that's certainly part of the thesis. Even if you don't believe the Bitcoin Strategic Reserve happens, the game theory of all of these folks accumulating, out of the potential of it happening is super important. I think there's already countries that have started doing this potentially, and we'll hear about it in the next 18 months, potentially after we hear more stuff from whatever the U.S. is going to do, whether it's a Stabilization Act or whether they're just going to hold the Bitcoin we have or what have you.

I think there's people out there already doing it. States, I don't know, I don't know enough about the state level laws about what's going to happen. I mean, how many states have filed now? I think there's like eight or something. There's a bunch of states that have filed for strategic Bitcoin reserves at the state level. So, I mean, theoretically, the odds are, I mean, maybe one of them, some of them will get through. So it's possible. But I wouldn't be surprised to see Texas do it.

You know, I don't know. We'll see. I'd agree. I think some states in the Middle East, I would guess Saudi Arabia and UAE. If you look at Saudi East 13F filing, though, it's not noted there. They have a disclosure obligation. So, but I don't know, maybe there's some other vehicle. they put it in that doesn't have the disclosure obligation.

But I expect it's one of those two. And Saudi loves to DGEN. If you look at their 13F fund, they throw money, like call options and a lot of stuff that not all that makes sense either. Well, I mean, they wouldn't have to report Bitcoin directly if they bought Bitcoin directly, right? Like if they bought like one of the Bitcoin ETS or something along those lines, they would have to report it?

But would they have to report a purchase of, like they don't have to report a purchase of gold or purchase of Bitcoin directly, would they are? I don't know. Well, I think that the SEC 5. filing is part of the 13F, so it links to some registration. So if it's in that asset, you know, but, you know, there could be some other entity doesn't have that reporting obligation. So what do you think, Tom, do you think state can do it?

Yeah, I'm unsure on, I think nation states will be accumulating. I think they're reporting requirements for them. I mean, Saudis are a little bit different, but most states don't need to report this. If they could obfuscate it, I'm sure they will. But on the state level, so most states, States, state pensions, you have an approved list of assets you can actually invest in. I remember when I was advising these sort of plans back in the day, we actually had to get approval to invest in private credit because they could only invest in AAA securities

with the bond portion of their portfolio. So that's what a lot of these states are going through right now is like, hey, we can invest in Bitcoin as part of our broader asset allocation. Hey, state legislator, whoever else to approve it, approve it. There's six or seven states that are through this process right now. we're thinking about it. And it's really just like the education phase that we're getting through right now. I think later in the year, you'll start to see smaller allocations here. And one of the arguments says, hey, you already invested in a lot of this stuff through your venture sleeve in your portfolio. So adding a direct allocation to it for a very small portion of your portfolio

is a reasonable risk to take. And once that starts happening, starts happening. One state does it, another state does it, the precedent set. And all of a sudden, it doesn't becomes happy with anymore, particularly if the US government or others are signing off on first as a Bitcoin. The Stellar Development Foundation has launched Build Better, an initiative inviting bold ideas from the Web3 community. No coding or technical experience is needed. Share your vision for better finance, creativity, or access, and see it brought to life in Stellar's next hackathon. Developers will build real-world solutions on Stellar's fast, scalable, and sustainable blockchain. Submit your idea for a chance to win from a $30,000 prize pool.

Get involved at betteron.steller.org. The future of Web3 starts with you. Sticking on a somewhat related topic, did you guys see the letter that Elizabeth Warren sent to Scott Besson regarding basically saying she's going to go after crypto and anti-money laundering and all these different things? Did you guys happen to read that letter? I skimmed it. It just seems like typical Elizabeth Warren stuff.

Looks like she's, I mean, she's the ranking member now that Sherrod Brown is out. Bernie Moreno took him out in Ohio. So now Elizabeth Warren is the ranking member on the Democratic side. She's going to be a thorn in the side of any sort of pro-crypto people on the Senate Banking Committee. For sure, that's the one huge takeaway I took from this letter. I don't know. Did you guys look at it by chance or do you have any strong thoughts? I'm trying to look up the stats here.

Elizabeth Warren says sent like a letter per day or something crazy like that per day. She's been in the Senate. She's just like she has her own AI minions like sending these things out. And she's passed literally one bill in her entire tenure in the Senate. So she does a lot of her work behind the scenes. And it is as a Massachusetts resident, it is like the most absolute friend. And even more than anyone else in the country. So Lord, I can't wait to her term is over.

But I think, you know, her impact is going to be obviously very muted in terms of the influence. So she's going to have not having a ranking seat in this new Congress. Looks like we lost wrong. Yeah. I mean, yeah, barring any like extreme catastrophe at the midterms, like at least for the next four years, she probably won't have any power. But she's just going to be a thorn in the side making clips talking about how bad crypto is most likely in any sort of Senate banking committee hearings. Let's say something a little

more lively that I guess isn't really super critical, but it's very interesting in the crypto world. This came out today. Essentially, we came out today that Tether, which was based in Switzerland, is officially moving its domicile to El Salvador. To me, this jumped out of me because, one, we had all this stuff. We talked about it on here, Tether earned like $10,000, 10 plus billion in profit. We're not talking revenue. With, they're reporting $10 billion in profit. Again, it's what they're reporting, but based on how much treasuries they hold, who knows exactly what their expenses are, it makes sense that they have many billions

of dollars in profit. Looking at El Salvador's GDP, based on the World Bank's estimate from 2023, is $34 billion. I mean, this is like the biggest acquisition. I mean, it's not an acquisition, but it's kind of insane to think that a company of this side is going to like a small country. And also point out the fact that like, tether alone is one. of the largest holders of U.S. Treasury securities. So now, like this company that owns a ton of treasury securities is going to own, is going to be based in a really tiny South American

country that technically is going to be one of the largest holders of U.S. Treasury. So I don't know. Do you guys have any more complex thoughts on the topic than that? And I'll go to you first, Tom. I think Tether is worried about legal implications. I know, is that I conference a few weeks ago and, you know, Tether, a CEO or chairman or whatever, wasn't in person in the U.S. because he didn't, I don't think he felt very safe, unfortunately. And this is just another extension of them moving to El Salvador. I mean, I think authorities are potentially just, you know, maybe in the next administration or not, but in this administration, they have a bit of a spotlight on them, given how much money they have. I mean, they're one of the most profitable companies in the

world, especially on a per employee basis. And a lot of their, assets. They're starting to broaden from not just investing crypto to new and interesting things. They're investing in longevity. They're investing directly in crypto startups. They're really spreading the pie. So I think in terms of moving to a Bitcoin native country, I think El Salvador makes a lot of sense for Tether. Extraordinary business. They are bigger than all the regional banks. they're bigger than truest, they're bigger than PNC financial. You know, JPMorgan does $30 billion in profit. And as Tom pointed out, like the headcounts list in 100.

That's like $50 million per employee, an incredible business to own. I'd love to have a slice of that business. You know, Tether's got such a funny journey. Like I'm fairly sure there were periods in 2022 where they were below NAV, but now they're not. and they're printing money. And it just shows you also a failure of U.S. policy around stable coin, right? Like, those are profits that could have been earned by American Dobbinsiled business. But, you know, Senator Warren and others kind of push that business offshore.

Yeah, 100%. I just think there's going to be a huge amount of competition for that tether market shared in this year. And you're going to see banks, others try to eat into that. I mean, you don't have a business this profitable and without others. I mean, you've seen other potential stable coin alternatives. Athena MZero just launched another one like treasury-like alternative stable coins that give backs of this yield to investors. Sorry, I think here is a ton of competition in the stablecoin space.

The problem is Tether's sort of reached escape velocity, particularly in the emerging economies. Now, can that be reversed by one of these big players potentially? But outside of the U.S., if you're using cable coins, it's probably another. Let's talk briefly about the fires in L.A. I mean, obviously, Hart goes out to anyone suffering there. One of the big stories, this has been a couple examples of people saying they lost their crypto wallet seed phrases. It's not great. We can talk about the broader market impacts.

I mean, this thing, I mean, we've seen. seen massive fires and there's tens of billions of dollars in losses, this looks like it's going to be hundreds of billions of dollars in losses. We're probably going to see insurance companies potentially go belly up. Reinsurance is almost certainly going to be tapped. I don't know, Rahm or Tom, if you have any more complex thoughts on this. You know, it's like Allstate, the stock price went up today. We own Allstate. We bought Allstate this morning. Other businesses with direct exposure to California, let's say like Mercury, they were down 25% today because they got concentrated exposure.

A lot of these insurance companies, they've sold the risk off to reinsurance companies, number one. Number two, they've pulled back on insuring homes in California. In fact, California State is one of the largest providers of insurance because the private market has pulled back. Why did the private market pull back? Because state regulators have made it difficult for insurance companies to charge the appropriate premium to profitably insure. It's one of the few states that has not allowed that to happen. insurance company step back. So California state government will shoulder a bunch of these losses.

I'm not so concerned about these wide-scale negative economic impacts. And this is early data and early reporting. And we'll see how it shakes out. But like L.A. downtown is fine. You're really talking about like the palisades by the while. The economic destruction is significant. I mean wrong. But like, you know, L.A. is intact to the economic story for L.A.

still there. It's a failure of leadership at the state level, at the local level. It is incompetence. It's gross negligence. At a reservoir that was empty. Newsom called for an investigation. Investigation to what? You know that there was no water in the reservoir. What are you trying to investigate? What were the standards of safety that were not met? And why were they not met? isn't that what the question should be? So, you know, it's funny. I saw this comment from Brian Norgaard. Brian's the CPO of Tinder, and he's been documenting what's happening in L.A. And he's talked about some of the looting that he's seen take place. So people are taking, they're engaging in arson. And you're seeing civilians try to hold the fort and, you know,

stop that activity. And he said that one of his neighbors who, you know, voted blue down the line said to him, he's like, oh, like, I'm, yeah, like, I'm voting conservative now. The point is that there could be some political impact from all this stuff, right? I mean, people are saying, what the hell are you doing? You've got, you've got the head of the LAFD earning $14,000 a year. You've got the head of, like, the Department of the Public Waterworks at $750,000 a year. Does that make any sense? No. Yeah. I agree with a lot of that. I think we're going to have these. weird sort of domino effects, I think, from this. And it's more reflective in nature in terms of how

people look at California, high-stack states, particularly the area while is small in general that's been affected is extremely affluent. So if you have, I mean, it's going to take a year plus for claims, rebuilding houses, all of that. If you have all these folks who are getting Airbnbs or VRBOs or, hey, they're going to purchase a new house in another state probably, right? So maybe it's going to accelerate the move to Texas, accelerate the move to Florida. And what does that do to not only the tax base of California over the long term, but sort of the reflection on, wow, what was I really doing in the state with these really challenging politics? Like, yes, that's great weather.

But there's a lot of places in the country with great weather and some beaches. They were primary contributors to candidate Harris' campaign. I bet you eight out of ten people that live in the palace, these are studio executives, music movie producers. I think they're actually in the state because their industry is local. But they, I mean, think about what they're going through. They lost an election. They gave a bunch of money to Candida Harris, which is lit on fire money, and now their house burned down. I mean, right? So I think the funding sources to the D&C are going to shift. They're going to ask for different things. And there will be a consequence to the political dynamic. The pushback here, I

think is also not only on ESG, but DEI. There's a few policies there about clearing brush and others that ESG related bills could basically stopped. And then there's the DEI initiatives by a lot of the folks that were in power, including Fire Chief and others that stated like their primary purpose was DEI versus putting up fires and things like that. So I think it's really going to shine of light on this kind of identity politics, which the election certainly did. But even folks, as you mentioned, Rom, who voted blue now kind of got a look in the mirror and said, wow, okay, this is really, I think we've taken this about too far. Yeah, the environmental stuff you're talking about is like it takes, it takes literally years to get approval to do prescribed burns in areas

in California due to like environmental law and things like that, which you have, I mean, I don't understand it because I feel like we had, I didn't have this exact conversation on podcast, but I feel like all of these conversations happened in 2018 when that massive fire. Remember those pictures of like people driving through hell and like nobody learned, I guess nothing really came of it because they were like, we need to change the rules, we need to prescribe burns, we need to do better forest management, we need to do all these different things. And then like, not everyone forgot about it and nothing happens. So part of me is like, I don't know. I don't know if anything is actually going to change. I think people are just going to forget about it.

Granted, this is way bigger. And then going back to Rahm's comment on insurance, I mean, the other, ironically, you said pushing the move to Florida into Texas. The other big state that's like capping insurance premiums is Florida. I mean, you're going to two areas. And it's funny, there's a lot of people, there's been a few people out there that are very prominent free market thinkers who've lost their house flipping out about like different insurance companies dropping coverage and things like that. But in reality, it's because like the state won't let people raise the premiums to what they should be. And there's all these papers about these insurance providers being these, I've seen like reports for over the last four years about like these

insurance providers being evil for not covering these houses and dropping things. And then all of a sudden they dropped the houses and because they said it was a serious fire risk and they didn't want to cover it and then they burned down. And it's like, well, maybe they should have let them increase the premiums and they might still have insurance, but that's not what the states are. And a rational policy around managing force. It sounds like Trump is wrong on clearing the underrush. You get a lot of flak for that, right? So the DEI angle is an interesting one. You know, if there was a clip going around Twitter where the LAFD chief was asked about

the priorities and they cited equity and inclusion as priority number one. However, I'll say this, though. I listened to another clip from her. First off, I did some background. So the LAFD chief, her name is Kristen Crowley. First off, she came out and criticized the mayor for not providing the appropriate at funding, that's one. So speak truth to power. Cudos for that. She achieved the top score in the L-AFD highly competitive promotional exam to be fire captain. She rose through every rank in the

department. She serves as a firefighter, paramedic, engineer, fire inspector, captain one and two, battalion chief, assistant chief, deputy chief, chief, deputy. She trained over a thousand L-A-USD students in firefighting. So she is eminently qualified, is my conclusion from that, although certainly looks like the DE hire. But there's some nuance here, right? She seems qualified, probably massively overpaid, though. And yeah, it looks like they had misplaced priorities. I think the mayor is ultimately accountable and the governor.

Agreed. I don't know. There's going to be a lot of research that goes into what actually caused this, hopefully, and like what could have been differently. I mean, the one thing I will say is you see anything from like, anybody involved involved in like firefighting and firefighters here and there, they basically all said, I mean, maybe some things could have been handled better. There might be some houses that couldn't save some lives. But for the most part, like 100 mile per hour winds with what was happening, there was like,

no matter what was going to happen, this was going to be a catastrophic fire because of where it was when it started. There are stories of people that defended their homes. They, they man, like, that's not best practice, it's dangerous, there's a fire, just get out of harm's way, right? The people that successfully defended that. And I think one of the other points that came out there is the benefit of triage, right? A penny of prevention beats a pound of the cure and just light sprinkles, preventing sparks from catching. You know, those preventative measures stopped the spread. So, and the L-AFD, they weren't there.

They didn't have the water. They didn't have the resources. and they didn't take the preventative measures to prevent this from happening in the first place. I mean, anybody with a pool is now going to make sure they have one of those pumps, which I don't know. If I lived in that area, I'd have made sure I had a pumped after what I saw in 2018, what we saw in Colorado. Like, there's been a whole bunch of examples of people putting pumps in these pools to do this. But I mean, we're getting out of the depth of like where our expertise lies. Yeah, and it's just crazy how some of the regulations out there that are just more broadly, this is a challenge with regulations that have been on the bucks for years.

Like there's a law on the books in California. You know, you have a woodroof. A lot of these houses, I guess, were built a very long time ago. And it's like, you need some special permitting and, like, cross-season time to, like, actually change over that roof and, like, you know, things that are just like kind of common sense. But, you know, been in the books for ages. I'm hopeful something like Doers could, you know, clear that out at the federal level, whether that happens at the state level, who knows. But, yeah, way out of my area of expertise, thoughts and prayers everyone. It's a really tough situation.

And one, we seem to see a lot of more and more, I mean, between hurricanes and fires and earthquakes. It's just, um, well, they need to let private market insurance companies back in there. And, you know, private insurance companies will create incentives. You know, I bet you the guy who saved his house with the water, he's getting an HOA fine for doing something with the sprinkler system. Like, that's how bad it is in LA. But like insurance companies, they reward with incentives and they can modify. They'll look at your house and say, okay, what are the risk factors? do you have this kind of roof or that kind of roof?

And people respond to incentives. They need to let incentives play a role. But if those incentives run into dated, ossified regulation and zoning requirements that aren't responsive, that don't give maneuverability to insurance companies, then you're not going to get the right behaviors on the ground. Let's move on to the Coinbase lawsuit. So Coinbase just won a lawsuit against the SEC. Basically, I don't want to get like too far in the weeds, but basically, for those that don't know,

Coinbase was suing the SEC, basically saying they were refusing to enter into any sort of rulemaking. They were saying they were being arbitrary and capricious, so they were denying things. And the court basically completely repudiated everything the SEC has done. They found them under the same Procedures Act, administrative procedures act, where we got the Bitcoin ETF approved, basically saying the SEC was being arbitrary and capricious. They have also found that the SEC has been arbitrary and capricious in their handling of the entire space. So, I mean, this is pretty damning repudiation.

Basically, the SEC has been saying the laws on the books are enough to handle all this. We don't need to do anything else. Just come in and register. And then there was no way for them to register and then they'd sue them. And everyone in the crypto industry has basically been saying this is insane. There's no way to do this. And now this court has actually also found the same thing in the Third Circuit, basically saying a complete rebuke of everything the SEC has done under Gary Gensler with regards to crypto as far as I'm concerned. So one, shout out to Paul Graywall and the Coinbase team. I mean, they did a lot of work getting that four-year request last week, finding out that Operation Joke Point 2.0 was real and it was happening at the FDIC.

Who knows what else will come out. And now here they get another victory in court in the Third Circuit completely repudiating the SEC. So I don't know. Tom, do you have any thoughts here on what this means going forward or is this impactful at all to you? So very much in your world, James, it's certainly going to have an impact on ETFs next year. I mean, there's a few that are not deemed securities already under the eyes of the current administration. If this case holds and continues, I don't know the time when likely to see anymore throughout 2025. I don't know if we'd use sound effects on this show, but I would love to hit like a Hallelujah button in the background and just like, thank you to the Coinbase team and how much they put into the industry because huge one.

Yeah, look, I think we're losing count of how many court cases the SEC has lost to independent judges. These are not crypto DGens. They're reading the law. They're interpreting the law. They're applying the law. And if Coinbase was petitioning for guidance, they're petitioning for rule. They're petitioning for rulemaking.

They're saying, hey, SEC, you are our regulator. We don't have clarity on the rules of regulations. Give us clarity. That was what the suit was about. And the judge said, you're right. The SEC owes you clarity and they have not. I mean, this is what it's executive branch overreach, right? That's not what a regulator should be doing.

A regulator should be finding clear rules of the road. And I think it's going to, you know, it gets back to the, the need for disclosure, this FOI, the information request, that's a form of accountability on government when the individual can petition and say, hey, can I get transparency to decision making? If Coinbase is a highly successful market cap company, they can afford to pay the bills for that, but it shouldn't be that owner. It shouldn't be that expense. You shouldn't have to go to court.

So I think it'll be interesting to see what additional disclosure we get in the year ahead when the new admin takes over and they have access to these documents and they're not fighting disclosure. In fact, one of the key themes you're seeing in in Trump's messaging over the last 60 days is disclosure. Peter Thiel, one of his allies wrote an outbed in the FT, which is centered around disclosure. You know, Trump has talked about these UAPs over New Jersey saying they know what they're doing. I'll let you know what they're doing a day after I'm in office. Disclosure. I was just laughing at it. No, I want to read this quote.

I didn't read the whole document. It's quite long, but I did skim a decent chunk of it. And this is at the end. So I'm just going to read it out loud for those who are listening, and I'll skip some stuff. I apologize, but I'll do my best. So it says, this is from the court. This is not from some person writing on behalf of the crypto industry that works in the crypto industry.

This is from the Third Circuit. It says, so the SEC's haphazard enforcement strategy of targeting entities that are trying to follow the law does not give potential defendants the notice that due process requires. This is especially true because the field is novel. The agency has offered no meaningful guidance on which crypto assets it views as securities. The Dow report gives guidance only about the clearest crypto assets, tokens that look just like stocks. But what about stable coins, utility tokens, or even Bitcoin and Ether? Existing rules do not fit blockchain technology, but the SEC refuses to acknowledge to recognize this.

It's official silence and contradictory, unofficial signals breed uncertainty. Crypto issuers and exchanges are left across their fingers and pray that the agency does not fault them. I mean, I don't really, there's not much else to say there, but I mean, that's just such a strong. It reminds like a reading through this kind of gave me the same kind of feeling because I felt like that what's that meme from Zuland? I feel like I'm taking crazy pills. Like the whole process with the Bitcoin ETF, I was just like, there was people arguing with me that they shouldn't be approved and all these different reasons. I'm like if you follow the law, they should be approved.

And I felt like I was losing my mind and reading that circuit, the ruling on the Bitcoin ETF in the Grayscale case, I was like, finally. And seeing this is the same sort of thing. It's like the SEC has just been acting ridiculously in this process the entire time and seeing this is just, I don't know. It's good to see. I mean, even if you are not necessarily pro-crypto, I mean, you have to admit the SEC has just been arbitrary and capricious and not allowed any possible way for this stuff to get through. And the fact that a lot of people in politics and how political the SEC has become in this process just, it stings.

It really, I'm not a huge fan of what has happened over the last couple of years. To Rums' point about disclosures, I think we're going to see a lot of the behind-the-scenes action here once Trump comes in office, particularly around Operation Chope's who, Gwino, a lot of the things that have happened at the SEC, because to any logical outside observer, it doesn't make any sense based on current laws or the reasonability test of good actors trying to provide services to the industry that they, you know, chose to do business in. I am interested to see if Trump actually jumps a bit further and starts disclosing all the things he's talked about from Area 51 aliens to like, I mean, conspiracy. Joe Rogan's going to have content for daily for 20 years.

This stuff comes out. I mean, he was already president. He didn't do it. So, I don't know what's going to change now. Prior to the election, he said, if elected, he would share, would disclose. But he's kept his cards close to his chest. But again, he reiterated that just three weeks ago. He said, yeah, they know what's going with the UAPs.

last week he had a meeting of the Republican governors at Mar-a-Lago, and they were talking with his UAPs. And yeah, he said the day after the inauguration, he would share more. I think the American public's ready for this stuff, right? We've grew up watching third, was it encounters of the third kind, first contact. We're ready for this stuff, right? Yeah, well. Science fiction. Hey, I would love, love, love, love to see, like, more information about what they have.

But I don't know, I'm not holding my breath. I hope I'm wrong, but we'll see. Any other thoughts here? Any other topics before we wrap up here, Tom or Rahm, anything we didn't discuss that we should before. I mean, a week from today is when Trump is going to be inaugurated. So any thoughts on that front or? Look, I think one is, you know, the EO's coming out of that, the executive order. is going to be fast and furious and many and what to process them.

They'll be a very high level. Some of them will be very direct guidance, most be a high level. I think in a week or two will be post-processing them. That's one. We'll start to get more clarity. Markets need more clarity on all sorts of policies from Medicare Advantage and Healthcare to crypto-trop the Treasury to financial regulation, to utilities regulation, to nuclear regulation.

So we still don't have much clarity. I think providing clarity will help markets and it'll reinvigorate animal spirits. You know, the markets have given back a lot of the gains since the Trump election win. And yet what we see are record job gains. We see consumer confidence and small business confidence. The latter's at three-year highs. Those fundamentals haven't changed. So I think we'll learn a lot.

I'm most excited about disclosure. I just really want to see what the hell is going on out there. What's the bigger story around Greenland? Yeah, I think it's more about the Northwest passage as the high sheet melts. That's strategic area, so close to Russia, strategic base that would make a lot of sense. So I think there's like game theory behind this. I mean, I think Trump's, someone says something to Trump at the country collaborator whenever. And he was like, well, that's not a bad idea.

I mean, all of a sudden he throws it out there and he sees how people react to it and he kind of moves around with it. But in terms of what I'm excited about as well, executive orders. you know, or what I'll be focused on for sure. He did 29, his first hundred days. Obama did 19, Biden did 42 in their first 100 days. So you can expect a similar number, I think, this time around, which is, you know, very, it could be very wide ranging in terms of, you know, 29, 30 executive orders across a wider intrav industries. And you can certainly expect crypto to have a few on there. Yeah. I mean, one, the last thing I'll say is, one, I think SB 121 is repealed almost immediately. I think

that could be done essentially via executive order. I don't know. This Congress, I mean, if last Congress was got, it got through the Senate and the House, it's going to get through this Senate and House. And I don't know, I would assume he's going to do something to try and just get it out with an executive order first. Time will tell. On Greenland, that is interesting.

I actually do have some thoughts wrapping up. One, there's just like this theme online that like people, like, there's this thing called the Mercantor projection, which basically like, because you take a globe and you make it flat. It makes certain things look much bigger than they are, much small. And Greenland's one of those things. It's like way smaller than it looks on a stint or map. People are like, he just wants it because it looks big on that. And I really don't think it is. I'm with Tom. It has to do 100% with the ice sheets melting and new passages opening up. I think that probably has something to do with why he wants Canada. He's talking to Canada about this stuff in the same way, making them

the 51st state, you know. I think all of it is just is a ploy for him. He's going to negotiate. I think what he wants is a giant base somewhere on Greenland, Guantanamo Bay Nile somewhere I think. He also has a base on Greenland, and it's operated, guess what, by the U.S. Space Force and NORAD and United States Space Command. Greenland also is home to a lot of rare earth materials.

Yeah, as the ice melts, yeah, true. So I think we have the base on the defense side now. I'm not a conspiracy theory guy, but that is my conspiracy. there's a link between the UAPs, Greenland, wearout material, NORAD, US-based commandos. That's what conspiracy theory guys say

before they start talking about Alex June's stuff. Take your tinfoil hat off, Rob. So if I set the over-under at one, in terms of Panama Canal, Greenland, and Canada, if any of those have, let's call them, you know,

either acquisition by the U.S. or something akin to it, are you guys taking the over or the under? I don't think it happens, because you need the sovereign to vote as referendum. By the way, I think Trump would actually get double-digit votes in a referendum of at least 40%. Yes, in Canada.

I wouldn't be surprised. I think that's quite right. First off, the guy who's campaigning to replace Trudeau now, I mean, he's apparently pulling, like I don't track Canadian politics pretty well. But he's channeling a lot of Trump. I think there could be 30, 40%, look, there's a lot of disaffected people in Canada too. And look, everyone wants to be United States. Capital flows are going to the United States.

That's why the dollar's wrong. They want to buy U.S. stock. They want to put people, they're trying to, immigration is a part of that. So the United States has a great story. And I think in a referendum, you would get a not insignificant share of it. I'd love to see a poll on that. And I love to see a bet on polybracry. market around this too. Yeah. So I'll say I'll take the over assuming there can be like an

asterisk. Like I don't know that he's, I don't think he's actually going to have, you know, Canada joined the U.S. or actually take complete control of Greenland or same thing with the Panama canal. But I think he's going to, he's going to extract something and that's what his goal is. Who knows what his ultimate goal is. But this is his starting of like whatever negotiations these are going to be. So I think I would take the over, probably. But if you're saying strict exactly what he said, then I'll take the under. All right, you heard it here first. Rom thinks that Canada in a referendum would vote 40% to join the U.S.

I'll take it. What a poll. To see this. There's no polls. I just, they're afraid to be. I don't. Yeah, yeah. I'm going to say no.

I don't think that's going to, I think it'll be lower than that. I think there's too much like, you know, nationalism in Canada. They're very happy to be Canadian up there. All right, guys. that's it for today. Thanks for joining us for this episode of Bits and Bips. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding. Until then, everyone.