Unchained - Bits + Bips: Bitcoin Hits $75K as It Starts Catching Up to Gold

Episode Date: March 18, 2026

Ram is bearish on equities, oil is keeping the Fed frozen, and Bitcoin is holding up anyway. The hosts debate whether crypto has bottomed or whether worse is still ahead. --- Thanks to our sponsor, Nexo! ---- Three weeks into the Iran conflict, oil is keeping inflation elevated, rate cuts are getting pushed out, and hedge funds are being forced to sell good names just to reduce exposure. So why is Bitcoin holding up?  Ram sees a market on the right shoulder of a bubble, with industrials like Caterpillar at 35x earnings and no real capitulation yet in equities or private credit. Chris is watching trading desks pick up the “short-gold, long-Bitcoin” trade, and sees Ethereum's fundamentals quietly strengthening. Austin wants to know what happens to DeFi the day a major stablecoin gets compromised on a censorship-resistant chain with no network-level controls.  And all three are asking the same question investors need answered now: does the Iran conflict end fast enough to stop oil from triggering a true inflationary regime, or is a harder correction still ahead? Hosts: ⁠⁠⁠⁠⁠Ram Ahluwalia⁠⁠⁠⁠⁠, CFA, CEO and Founder of Lumida ⁠⁠⁠⁠⁠Austin Campbell⁠⁠⁠⁠⁠, NYU Stern professor and founder and managing partner of Zero Knowledge Consulting ⁠⁠⁠⁠⁠Christopher Perkins⁠⁠⁠⁠⁠, Managing Partner and President of CoinFund Learn more about your ad choices. Visit megaphone.fm/adchoices

When WestJet first took flight in 1996, the vibes were a bit different. People thought denim on denim was peak fashion, inline skates were everywhere, and two out of three women rocked, the Rachel. While those things stayed in the 90s, one thing that hasn't is that fuzzy feeling you get when WestJet welcomes you on board. Here's to WestJetting since 96. Travel back in time with us and actually travel with us at westjet.com slash 30 years. Hey, everyone. Welcome to bits and bibs, where we explore how crypto and macro collide one basis point at a time.

I'm your host, Austin Campbell, high scholar of zero knowledge group, here with my co-hosts, Rahm Al-Alawalia, Maester of Wealth, Leader of Limitah, and Chris Perkins, the Golden Hand of Coin Fund. We're here to discuss the latest stories in the worlds of crypto and macro, and we have a couple of those to go today. But before we start, just remember that nothing we say here is investment advice. Check unchained crypto.com slash bits and bips for more disclosures. And before we begin, a quick commercial break. Introducing Nexo, the premier digital wealth platform.

Receive interest on your digital assets. Barrow against them without selling. Trade a variety of cryptocurrencies. All in one platform. Now available in the U.S. Get started today at nexo.com slash unchained. Quick note before we get into today's episode. Bits and Bits Now has its dedicated feed.

We're spinning off from the unchained feed and moving to a new. new podcast and YouTube channel. So if you want to keep up with our weekly live streams and macro meets crypto breakdowns, make sure to subscribe to bits and bips directly. We won't publish there until March, but subscribe today so you can be ready for launch. Be sure to subscribe to the new feeds at unchained crypto.com slash bits and bips. All right. So before we get into the macro topics of the world, despite all of the turbulence, the conference circuit continues relentlessly in this space. I know DAS is coming next week. But Chris, you were somewhere interesting recently. Do you want to give us the download on FIA?

Yeah, so I used to be on the board of FIA and last week I attended their annual conference. It's called FIA Boka. It's kind of under the radar for crypto people, but I'm telling you, it's the place to be. And the reason why is that derivatives, as we've talked about, are probably the most important asset I was saying in the crypto space. You know, as you're thinking about how the market's mature. And it's been really weird. Over the years, it's kind of ebbed and flowed with with with with crypto participation there was a famous brawl like literally between the SBF and Terry Duffy a few years back and then the crypto people pulled back um but it's where every exchange in the world shows up the intermediaries show up the regulators show up and this

year a lot of crypto people showed up I mean I met with you know everyone from cracking um polymarket was there calci I'd say that the two they were joking that the pretty girls in the room were a calci and polymarket um but you know what were people talking about obviously prediction markets, perpetuals absolutely in focus, 24-7 markets. Hyperliquid was like kind of a little under the radar. It's just starting to be talked about. I don't know about you guys. I was watching Hyperliquid all weekend to see what happened to oil after we bombed

card. But yeah, super interesting times. And if anyone gets a chance, I recommend going. A lot of announcements, a lot of regulatory movement. What do I take away? I think prediction markets are going to have a tough go going forward. Why? Because they're running out of friends in D.C. A lot of Democrats don't like them. A lot of Republicans will side with the states. And so I see there's some volatility on the horizon. That said, you know, they're the prettiest girl to dance right now. Everybody wants to dance with them and, you know, and prediction markets are here. Perpetuals, a lot of focus on getting them in place in the U.S. Some of the problems we have is like outdated market structure. And like that, kind of goes hand in hand with 24-7 markets. And so do we take out the intermediaries like I testified

in Congress a while back? How do you make it all happen? What happens is there's no expiry. And it's speaking to Chairman Seelig, you know, he's on a mission and he's going to get it done. And then 24-7 markets, man. Like if you if you cannot figure out 24-7, you'll be obsolete overnight. Many of the traditional exchanges have views. The other thing is like dance partners, right like cracking is out there you know really pushing x stocks you had um ice with their okay x announcement and so everyone's looking to you know who are their dance partners going into the future i think a lot of deals were done behind the scenes uh but yeah definitely a conference worth going totally different than than the crypto conferences that i attend that i typically attend but i go

every year what do you think so here's my uh first thought hearing all of that the prediction markets thing, which I know we're a booming topic, you know, in the world writ large. How do you think integration of those markets is ultimately going to play out in the United States? Because to me, it feels like to get that right, we've got to have it under CFTC jurisdiction at the federal level. I think a 50 state framework for this is going to largely brick a lot of these things because the nuance between all of those will be catastrophic. We have enough regulators of financial products. But then the other part is I would imagine over time, regulators are going to have views on what kinds of trading activity is permissible, e.g. like insider trading problems who can

participate in markets, but also what kind of markets writ large are permissible. Like I saw a report on Twitter today of some journalists in Israel, like being harassed and attempted to be bribed and then threatened with death because he wouldn't report that a missile landed in Israel when and Maddened, and there was like millions on polymarket riding on this. So I'm curious as to how you think all of that shakes out. There's two things that I think about. The first is around insider trading. And I think this is an absolute joke. Insider trading is illegal. Always has been, always will be. Sometimes it's hard to quantify. But to the extent that you blatantly use inside information and manipulate markets, you're on the other side of the law. So good luck to you.

And the CFTC did put out guidance. And they said, guys, let me remind you, insider trading is illegal. And we're going to catch you. So, like, to me, that's not even a discussion. It's a rampant. Wouldn't you agree, Chris? I was pitched by a hedge fund. And I said, what's your edge?

Oh, you say, we have friends in D.C. I'm like, what are you kidding me? That's illegal. So I agree, I think you're saying it's right. But by the way, this fund was run by like some 20-plus-year-old kids. They have no idea what they're doing. Well, I think, you know, what's a, what did they say? F-A-F-O?

It's just a matter of time, right? Like, the law is the law. And, like, this is an issue that we've dealt with with crypto from day one where we kind of, like, ignore, like, you know, common standards of law. And we're like, oh, it doesn't apply because I have this new shiny technology. Insider trading, illegal. If you use it for prediction markets, illegal, you manipulate markets, illegal. So I think eventually people are going to come around.

And if to extend something's on chain, it's probably easier to prosecute. So that's one issue. Go ahead, Ron. Just briefly, I would say it's illegal, but it's happening, right? The day before the Venezuela raid, oil fuel services, energy stocks ramped up. You saw people ramping into energy before the Iran conflict. You see kind of the Pelosi Act and people are front-running Congress. So people are saying, hey, if they can do it, why can I?

You're seeing growth in apps that track what Congress is doing. So anyway, go ahead. Yeah, look, I don't even know what there was to discuss. I did notice that Trump did talk about the Stop Insider Trading Act twice in the state of the union. I think that's probably how he's trying to navigate ethics with the market structure bill, but who knows? But the other point, Austin, that I think is going to be the battleground is really gaming. Gaming is kind of outside the CEA.

And so, like, how we define gaming is going to be really key. To me, that's the battle because, like, and Kalshi is, you know, pretty concentrated on the gaming side. I think that's going to be the battle. what products are allowed, which ones are not. And by the way, I've seen some amazing hires. Like I linked up with a buddy of mine who just took over the institutional BD role for Kalshi. World class guy, like world class. So good investment going on.

I met with the polymarket team. They're thinking about their business model, how they're going to expand it. I thought it was super exciting how, you know, what are we seeing? We're seeing this massive collision, this intersection. How can I take what I'm good at? How can I take my distribution, my liquidity and extended into new exciting directions? I mean, like hyperliquid right now is doing like 30 something percent non-crypto products. And so like it's just so exciting to see these worlds coming together because I guess I'm the bull on the show.

I'll say I'll be embarrassed. Go ahead. There we go. Here we go. I'm actually like very bullish on prediction markets overall. I think the question is what they're going to cover because one of the things I've been keeping an eye on is what call she runs into in terms of like courts. And right now there's been a split. if you look at U.S. states that are ruling on is Kalsh what's doing covered at the state level and

essentially gaming or is it covered at the federal level and more like CFTC contracts, the answer from several different federal judges has been none of us agree. Right. So that topic is going to, quite frankly, fast track itself to the Supreme Court. Because for those who are not deep into like U.S. jurisprudence of law, the fastest way to get to the Supreme Court is to have different federal judges giving you different answers to the exact same question because at some point that needs to be resolved because it can't be that something is federally legal in New York but federally illegal in Arizona for the exact same conduct. It's like one law allegedly across the land. So Chris, I think a lot of what's really interesting about the future here is which way does that case pattern. Unless, I mean, the other

alternative is they slip something in through markups in clarity, which is something that they could do. It's not, it wouldn't be easy. Nothing in clarity is easy. But like, You could make that the lay out of the land if that's what it takes to get done. And we're going to see some final, and I don't have any information that this is going to happen or not happen, but you could see that. But go ahead, Ron. I would say, look, I'm bullish on usage and adoption. I was always a fan of the Iowa electronic markets to track the presidential campaigns. It was the only legal market for decades.

But I'm bearish on enterprise value creation here. Draft Kings is down 30% in the last three months. genius sports is down 50% now has a scorching hot for PE of 60 times earnings so these private market companies are even more expensive than that now they're getting competition from all corners including NASDAQ that wants to show up like the high school kid that shows up to the playground and takes the marbles from the small kid that's happening now so i think in general private venture capital is a bubble prediction markets are in a bubble too and you should try to sell the stock if you can.

This is also where I'm super interested how things work out on the gaming front because as much as prediction markets are on the way up, you know the gambling and gaming companies are not just going to let that fight pass them by. This has been their turf. Yeah, like we talked about this a little bit, even on the derivatives front,

like hyperliquids edge right now is this 24-7 reach. The big boys are coming and they're going to have that capability. So how do they extend that moat and move faster when that's going to be table stakes before you blink an eye? All right. Well, let's move on from here because the world is moving extremely fast and we have a bunch of other things to catch up on. So we'll start with the one that we're always talking about now, which is Iran. So to give the updates on that front, we're in week three of the conflict with Iran.

Today we heard that Israel has limited and targeted ground operations that will be occurring in southern Lebanon, Dubai International, airport, which for those who are not paying attention is basically the world's busiest airport, suspended all flights this morning after a drone hit a fuel depot near the airport. It's the third incident in Dubai since the war began of this sort. A missile hit a civilian vehicle in Abu Dhabi. Trump has been trying to bring allies in to deal with the Strait of Hormuz problem. He's saying that NATO faces a, quote, very bad future of allies don't come to help, said the U.S. will remember countries that don't help and will help. I believe he said that the French were scoring an eight out of ten and that nothing is perfect, but this is France. So what did you expect on that front?

And then ships have started to move through the strait today with some degree of transit occurring two tankers carrying LPG to India, I believe, sailed through. And so Iran is now claiming that the blockade might only apply to enemy vessels. The EU is working on things. All of this, though, has led to oil spiking back up in price. So I'll start right here is what do we think is going on with Iran from a geopolitical and military standpoint first, Chris? So there's different levels of warfare at the tactical level. It's been just absolute destruction. The U.S. military has been performing exceptionally well. Taking out target after target. I watched the briefings by Admiral And what they did is they've moved past like live munition sites.

Now they're going back into the logistics and the supply chains. So very, very, at the tactical level, it's been absolute dominance. That said, the Iranians are effective with low cost asymmetric capabilities, things like mines. We've been talking about that. And mine warfare can be very problematic, et cetera. The other thing that happened last week is that we set the 31st Mew, which is a crack marine unit. It's called a magtaft for Marine Air Ground Task Force out of Okinawa. I used to work with those guys, and they're steaming over to Iran.

That puts, you know, a Marine infantry battalion, about, I don't know, 1,200 people or so Marines, right there within striking distance. And they have a variety of missions they can execute. The one thing I was noticing was Lindsay Graham had this really interesting tweet around Card. The island of Card, we talked about it, controls 90% of Iran's oil experts. We hit the military installations around it. but it sounds like we kept the oil intact, the oil rigs, et cetera. And at the end of that, he talked all about Karek, and then he said Semperfy at the end as the 31st Mew was sailing.

So he's teleghing that the Mew is going to do something to secure those oil assets. I don't know if that's planned or whatever, but that Mew will give you some extra capabilities. Now, I think we'll continue to really dominate at the tactical level. They can't really fight us back that well, and you're seeing various other things happening. What I'm more worried about is just strategic level of war. And so if you look at Vietnam, you know, we also did very well in the battlefield,

but ended up losing that public will to continue the fight. And so I think it's really important that the goals, the mission, and we start showing, you know, continued success, the economy, et cetera. Trump's got to find a way to keep that oil in check. Now it's come down a little bit. And then fundamentally, before I turn it over to you guys, I've really noticed that crypto's stayed very, very strong. I'd love to get your take, Rahm and Austin.

But it's really doing well. I called around to the trading desk before I got on. A lot of talk around the short, gold, long Bitcoin trade. And, you know, I think this all feeds into this thing that we've talked about over and over again. Real politic, trust is breaking down. Where do you go? Because real assets, commodity are going to be in focus. that brings you to things like Bitcoin, ETH, and the rest of the crypto environment.

So it feels like between some short squeezing that's going on, it feels like crypto is starting to, it feels like it's bottomed and it feels like it's well positioned. But we'd love to get your take and happy to talk about any other thing else. We'll stay on Iran for a bit. So a couple quick thoughts. One is Trump often does what he says. Now, we'll see about the whole third term thing. But he's talked about tariffs in the past.

He did tariffs. He's talked about offensive operations against Iran decades ago. He followed through on that. He released the Epstein files, granted a lot of redactions and the UAP files and all the rest. So if you want to understand how long this conflict takes, listen to what Trump says. And what Trump said today was the multiple levels here. One is he invited help from NATO. He said, if we don't get help, we're going to learn from that.

He's always questioned whether NATO allies would be there to support him. At the same time, he said, we actually don't need your help, but I just wanted to see if you would come to our help. That's what he said today. And he also said the UK offered to send two aircraft carriers now after the U.S. didn't need the help, but not initially. The reason why I point this out is that the correction of last year really accelerated when Zelensky was. ejected from the White House. People around the world looked at that and said, what just happened? My theory of the world isn't stable. I'm going to take risk off. And so if NATO is challenged, you could see something like that happen. He's opened the door to that, to the public. So that's one.

The second is what are the objectives? Trump today said, if Iran had nukes, they would nuke Israel and not just Israel, but all of Iran's neighbors, including Saudi Arabia, and by the way, the evidence is look at what they don't with these missiles or attacking civilians or attacking all of their neighbors, including two of their allies. So my read on this now is that Trump's objective is to control the uranium. That is the standard, I believe, he is setting. And he's also pointed out at prior presidents who didn't take action. He said he had a phone call with one of them who said he wishes he had taken action. My read of the situation is that Trump won't stop until there's some control on the Iranian.

You can get control either through control of the material or working with the political leader that you have some confidence in. But he also said, we don't know where the son of the Ayatollah is. Last week he said he was disfigured. He may be dead. So it's hard to see how you arrive at some negotiated settlement without a leader to deal with. I hear you on the uranium, but I think you're missing out on one big commodity, and that's oil. He wants the uranium and the oil. Do you agree?

Oh, I agree. I think the whole conflict, the bigger backdrop is actually about China. Yes. The two ways to compete with China are U.S. dollar hegemony. Petra dollars are part of that, the pricing of petra dollars, and also being able to choke China with oil. They have that objective in hand. It's imminent.

They're going to get that objective. But once they've gone this far with Iran, you're taking up the state leader in the first hour of action, right? That was a coup d'etat move. You know, you can't walk that back and say, look, I got the oil. We're good. You guys keep the uranium here. Let's go check back in another presidential admin.

He's not going to want the fallout from that to be on his hands. He's going to want, I believe, to control that uranium. Yep. I think you're right. And by controlling the oil between that and Venezuela and our own domestic production, we're down to Russia that we have to deal with vis-to-vis China. And I do think it does put a pretty tight rope around China. And it helps prevent what they're seeking to do, which is probably take Taiwan, buys them some time.

Russia. How would you control it, Krista? Like, logistically, how do you control it? It's not easy to do. We talked with general spider marks last week. Someone's got to be on the ground, open up a cabinet, do a counter measurement, or put it on a, you know, Apache and retrieve it. Or you have to have someone you trust whose representations you rely on. We don't know who heck that person is.

So how do you achieve that objective? You're talking about uranium? Uranium, yes. Yeah, I mean, you can have the IAEA international inspect. I mean, I'm sure there's ways to do it. I'm not an expert in it. However, I think that's part of the goal for sure. Like none of that neighborhood needs a nuclear armed Iran if there's a power vacuum.

And look, what are they still looking for? They're looking for that strong man to take charge, just like the Venezuela model. And to spider's point last week, it may take a little bit longer. But I don't think you're wrong. I think one thing that would be very interesting is where does this leave Russia, right? I have a thesis that Russia started all this in the first place. They're getting their butts kicked in Ukraine. The whole world was lining up against them.

And they said, let's start a little bit of trouble in the Middle East. Iran, go for it. Like, let's get these guys off our back. I've always believed that. And I think that that's distracted a lot of the world's attention to the Middle East. So tactically, it gave them some room because all of the world now is focused. on Iran. Oil prices are up. Russia is benefiting from that. I think we even gave them the ability to trade for the next, I forget, month or so, despite sanctions, to bring more oil into the market.

So right now, near term, I think Russia is a big winner. But I think medium term, the tide's going to turn because as we start, as this thing ends, I think the focus is going to pivot back on Russia. So I'm going to go the other way on two of those points. Nice. One, I don't think Russia is a big winner here. Right, like following just Twitter. I'm saying right now. I'm just saying here and now, like today, but long term, no, this is, they're going to get squeezed.

Not even today. I think one of the things that we're finding, like I've been following a lot of the Oson counts around the Ukraine and Russia conflict. One, I think Russia's losing ground again in that conflict. I think they're succumbing to some of the Ukrainian tactics with drones. I think they're running out of people who actually want to fight who are qualified and you're seeing like the degradation of Russian resources. So one, I agree with you that this created a distraction for Russia,

but I don't know that that was a good thing. And part of what it's done is sort of woken up some of the other European nations as to how big of a problem this sort of situation is. I think Russia's options have already collapsed. to the internal situation in Iran, here's what I'm observing and what I'm starting to get more worried about as time goes on is we're seeing reports now of the IRGC going with Khomeini's son because he was essentially the guy they thought they could control, causing a rift with some of the clerics, causing a little bit of a breakdown within the internal order. Exactly, Rahm, as you were saying, like, who are we negotiating with? who's really in charge over there, what's the situation on the ground? By the way, as both ourselves and Israel continue to just hit IRGC forces wherever we reasonably can. And choke points now

that would otherwise be controlling the protesters. Correct. I wonder if there's going to be a much more prolonged process of figuring out who's in charge of Iran before we get out the back end. Because remember, you know, I think part of what colors are thinking is what's happened recently. So if you look at like a Venezuela, we essentially kidnapped Maduro and another guy stepped in. But there's plenty of historical models that show that actually things are way more chaotic than you think. And there was no way to predict things at the start. Because like as a reminder for everybody, like let's take a famous collapse in history. If you look at the French Revolution and you were in France at the start of that,

and somebody asked you, well, I want you to bet on the eventual winner, you're looking at like Lafayette versus the left and like Robs Pierre hadn't even emerged yet. But by the way, anybody you could possibly pick was the wrong answer. Because there's this Italian dude named Napoleon who's going to turn out to be the right pick. And you're not even going to know that until many years forward. As I watch the fragmentation in Iran, is that where we're going? I guess becomes my question. Well, it's a great perspective and I love the historical reference. It's like the core underwrite for markets is how long does this conflict last and when do the tankers move through the Strait of Hormuz at a regular pace?

I would say the key information now is that this conflict would take longer than anticipated. There are missiles still striking from Iran. It's week three. Now, the percentage decline has been substantial. It's down 90%. but missiles are still getting through. And the commentary from Pete Hexseth isn't really focused on the Strader-Humuz yet. And as Chris pointed out, there are other primary objectives right now, taking out the launchers, then logistics.

Just Strader-Hermuz is a topic, but it's not really addressed in these press conferences. So that's a big question. And the longer oil stays at these elevated levels, the more risk there is for an inflationary regime, which is terrible for asset prices. It hurts consumer spending. It makes it hard for the Fed to cut rates. Rate cuts already being kicked out. It hurts consumer discretionary stocks.

It's an input into the cost of all retailers. And that is something that I am concerned about. So there is a material likelihood of a correction. They really need to get the oil moving expeditiously, like now, tomorrow, the day after. If they don't, then I think after options expiration this Friday, you'll have more downside volatility. At what point? So right now, Trump's saying, hey, China, you need this oil. I don't need it.

I'm self-sufficient. You know, get it out yourself. But to your point in time, it's going to hit the American consumer. And so what does he do? Hitting now. Gasoline in California is $8.50. I think the last John Galt just left from Miami. So, yeah, no, I mean, it's hitting the consumer now. I will pile in here to say, is that hitting the American consumer or the California consumer?

California has, like, as somebody who grew up in California, has been shooting itself in the foot and then stubbornly reloading and continuing to fire on the topic of energy for, like, decades now. That's the quote of the episode. I mean, look, I'm just calling it like it is. I know this is allegedly a crypto podcast, but like California energy, like policy is stupider than some of the NFT projects were. Just to bring it back to Marcus. We had we had four down days in the S&P, which it's historically highly unusual not to get a relief rally, which is what we had today. Yes. And there's a lot of dealer pinning effects. that happens before options expiration. And the rally today was kind of lackluster, given the amount of the decay in the VIX.

So, you know, you should be cautious. This is not like, oh, hey, let's go up into the right. This is not that kind of environment. You know, what I saw in the markets most of last week, what felt were like VWEP sell orders. it was just consistent orderly selling. So yeah, I don't like that. There are opportunities that will open up and emerge. I think it's kind of remarkable that the SMPs only down five points from all-time highs,

given the trauma of news that's hit markets from multiple angles. I mean, a question that I will ask out that is, much of this selling is people like, call it voluntarily de-risking versus involuntarily de-risking after the whipsawing an oil? Like, there are rumors running around the street that several of the major hedge funds are down like billions of dollars on some of these oil trades. So I'm wondering if what you were seeing last week, Rom, was people being forced out of positions, de-leveraging, debalancing, right, these sorts of things versus, call it people who are otherwise liquid, have no margin concerns.

Yeah. Well, there's de-leveraging happening, right? We had the de-leverging event starting crypto around 10-10 of last year, but pick an asset class, private credits de-leveraging, look at the gross leverage exposure that hedge funds have. They hit peak levels about a month ago. They're still in excess. So they're delegaging.

Good names are being sold off because they're de-leveraging. It's not about the name. The hedge fund has too much risk on. They have to de-leverage. The quant funds and their factors aren't working, they're deleveraging. Fundamental longshore, they're de-leveraging. The only players that are re-leverging are the hyperscalers that are issuing boatloads of debt, like meta and Amazon, including Oracle, to go buy more data center GPU compute from

NVIDIA, who expects a trillion revenue between now and end of 2027. So a question on that front then, if we're seeing everything sort of selling off in the manner that you're speaking about. Are we at the point now where people should just step back and let that go by? Are there sectors where you're starting to see value where you would step in and start lifting things like where are we in this cycle? Because I agree with you. We're seeing things like private credit starting to turn. You know, the valuations are extended. You know, like I'm looking at industrials, which is a major component of the S&P. And you've got names like Caterpillar and John year that are like 30, 35 times PE and GE Vernova and Terradine at like many, like

industrials are a bubble. They're a bubble. It's not only a bubble. Bubbles are great. They're a great way to make money. You want to ride the bubble up and then get out when the bubble pops, but the bubbles also popped. We're on the right shoulder of the bubble. So there's some value maybe in home builders if you believe mortgage rates come down, but the same time the 10 years going

up because inflation hurts stocks and bonds. They hurt stocks and bonds. You don't get the diversification benefit. So I think this is a time to get smaller in terms of your risk exposures and wait for a real capitulation. We actually haven't had that yet. I haven't had a real capitulation or where value really emerges. Where are you on crypto, Rom?

I was going to say, speaking, last Monday we were bullish. Last Monday, we were all bullish, right? For those people scored home, right? Bitcoin's 74K. I believe all of us said if we were buyers, would be buyers of Bitcoin there. That's right.

We were right last week. You're at a key level. You're at a very key level. You're hitting some resistance. Where are you on Bitcoin now? So this is 74 right now. I was just looking up. My view is that Bitcoin is running on

micro strategies, or I guess it's strategies, STRC issuance, that is keeping the machine going. And they are doing a great job marketing STRC. It's attracting new flows. They had record volumes last Friday. So when that marketing process starts to slow, then I believe the bid for Bitcoin will slow. So I would take chips off the table now. Okay. But then that's not, is that driving into alts too?

I mean, we're seeing of all the darlings, ETH is material outperforming. So what's that by the moment? Is that just Tom Lee or retail is saying, wait a second, Bitcoin, this correlation between gold and Bitcoin, which we've constantly seen, Bitcoin always trails gold. And the catch-up trade is now on.

We've been watching BTC to gold ratios. That's starting, it looks like it's bottomed, it's coming back. And then ETH pops up. And he's like, hey, remember me? Yeah. Outperforming at all. That's just correlation, right? China created the bid in gold and other commodities followed suit.

China's not buying other commodities. Something to note, the commodities are showing weakness now, too. Look at the DBC, ETF, look at gold, silver, or copper. It's an unusual state of affairs that we have right now in markets. You have, you know, this is a higher volatility, higher risk market, it better to wait for the fat pitch that it'll present itself at some point? Yeah, look, I still think that there's opportunity here in the crypto side because to your point, with the dollar decoupling, a lot of sovereigns bought gold.

And when they bought gold, gold went way up and Bitcoin didn't move. And then the Bitcoin maxis are like, oh, no, my store value, what happened? Like this whole digital gold narrative is breaking down, right? when it never did. And now that things are settling, they're like, wait a second. Now Bitcoin is starting to get a bid. The BTC to gold ratio is coming back. Wait, maybe the narrative never broke down in the first place.

And I do think that's a tailwind. On the east side, like, it's just, again, the fundamentals, the fundamentals of an institutional crypto market with a really weird, a delightfully weird asset. It's infrastructure. It's a tech company. And it pays yield. And it's ultrasound money.

and they're starting to get their head around that a little bit. And so I do think that that's going to be the tailwind on the east side going forward. Of course, we're having Austin and I are arguing over the role of the EF going forward, which we can talk about a little bit. But I don't know. I feel like it's still a decent setup for crypto. I said it last week I was right. But it sounds like you're neutral now, Rahm.

You're pulling back. You're pulling back. I'm more bearish than neutral. I'm bearish. I also want to throw a dart on this one that I think is maybe. something we don't see very effectively through the U.S. market's lens, which is to say one of the things that you've got to think about from a non-U.S. person's perspective with Bitcoin is that this is your way to get your money somewhere that is not exposed to your current system. If we're seeing increased

geopolitical shocks out of places like Iran, which could bleed into Russia or bleed into China, and you're somebody who's there, this is about the time when you're supposed to start buying Bitcoin, if you believe that thesis. And tether. And tether. Actually, yeah, tether supply expanding would be another thing to keep your eye on. Like, if I'm correct about this,

you should see Bitcoin price going up, but also tether supply expanding. But I would be watching for those sides as a countervailing factor to U.S. market forces here. Yeah, I would look at U.S. dollar also, like U.S. dollar strength. And if you have a flight to safety towards U.S. assets, then that doesn't help digital assets.

We'll see. You know, it's going to turn on facts on the ground around around. That's what the whole thing turns out. Yeah, 100%. And it's reading what Trump's plans and goals are. I'm saying that on the margin, it looks like the conflict will last longer based on his comments. What would Warsh do in this situation?

Let's just say we had Worse instead of Powell. What do you think would happen? That's an interesting question. I mean, in this situation for the United States, you're going to expect energy prices to go up. But the problem is cutting rates doesn't really help you the same way in a supply shock. That was kind of the lesson of the Federal Reserve in the 70s, right?

You got to make sure not to cause even more inflation by doing that. To be honest, this feels kind of like the situation where the Fed sits on their hands, right? Because they're like, we can't cut our way to more oil. We don't want to cause inflation elsewhere. The thing that actually I think would contraindicate that stance is the job market starts cratering. It is a great point though, Chris. It has been strong and resilient.

It's like a change of character. There's no doubt about it, right? So it's hard to have conviction, I would say, one way or the other. I think if Worfers in the seat, it would be different. It wouldn't be, I'm Jerome Powell. I'm on an island. It would be Secretary Besson. Let's put our heads together.

What do you have? What do I have? And I think maybe there's some of that going on already. Maybe not. But I think it'll be much more coordinated. approach, which should in the end be beneficial for the economy, I think. All right. So on that note, talking about things that are beneficial for economies, we do have to go to a set of second ads from our sponsor. And then, Chris, you and I can argue about

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You can find the new Bits and Bips channels at Unchained Crypto.com slash Bits and Bips. You can also find us by searching Bits and Bips on YouTube, Apple Podcasts, Spotify, or wherever you listen. All right, everybody. Welcome back to Bits and Bips. As you can see, Ram cleared the floor so that Chris and I can now argue with each other because the Ethereum Foundation published a paper, a 38-page document defining what it is and what it is not. The EF describes itself as Ethereum's first steward.

They are now one of many, but like Julius Caesar, remain the first citizen. And the central principle is self-sovereignty, that users must have final say over their identities, assets, actions, and agents. They've introduced a framework called props, which is about censorship resistance, open source and free, privacy and security. They call these sort of the indivisible whole of Ethereum's development. And their explicit goal is eventually

to make the foundation unnecessary. I read this and Chris, I know we're gonna disagree someone on some of these topics and thought to myself, ah, so they are going back towards their cypher punk roots and making themselves an unappealing landing pad for, real world assets. And I think this is a view that's probably been a little bit misunderstood. So I'm going to give credit. I had dinner over the weekend with one of my smarter friends who's a trainer on the street that talk this issue through. I want to try to pose my objection through

the following framework, which is that you can think about sort of the asset structure on blockchains in the form of a Trilemma. And that means you can have decentralization, right, and like call it permissionless behavior. You can have real world assets and you can have smart contracts at various points on this, but what you can't do is have all three. And what I mean by that is the problem is not a chain that wants to be permissionless or self-sovereign in the way that the Ethereum Foundation talks about. Like Chris, you and I are both fans of Bitcoin and like support that as a technology in the world. So I don't think there's a disagreement there. I don't have a problem with the concept or existence of smart contracts, I don't have a problem with the existence of

RWA's. I think the problem is when you try to do all three of these at once, as somebody who's run one, you put yourself in an untenable situation. What I mean by that is let's actually take tether since we were just talking about them. Currently, there are, depending on where you look, anywhere from millions to tens of millions to hundreds of millions to billions of tether in most major, like, call it protocols that are being used in crypto. If you looked at Uniswap and Ave alone, there's a tonnet there. And then we have a chain that does not have like validator network or even coordinated protocol level controls, nor are those enforced. And of course, you have Tether is the real world asset issuer. So the hypothetical that I worry about here as somebody who's had

to be the paranoid person is what if somebody compromises Tether's smart contract keys? Right. If the North Koreans mint a trillion dollars of tether. Well, one, there's obviously not reserves to back that. The answer that you always get is, well, the issuer could just drop another contract, and that can be the real tether, to which I say, except you just blew up all of defy. Right. There's no effective way for Avey to respond to that. There's no effective way for uniswap to respond to that. The borrow-lend protocols are gone. Any AMM pool that had tethered it is gone. And so what I've been trying to communicate to people is if you, want to have this permissionless sort of ethos behind everything, which again, I do not object to that

on a standalone basis. You cannot introduce the layered complexity of smart contracts with real-world assets that are going to need to be responsive to call it non-chain concerns in a way that like the ETH token or Bitcoin does not. And that is the root of why I thought this statement was actually very negative for the future of Ethereum as a platform. for real world assets. Because I think the first time we have a grenade like that go off and people realize how severe that problem is, you're going to have a fight of RWA off a platform like Ethereum

and two chains with a lot more, call it command and control and permissioning. Conditional on you wanting to have the smart contracts. If you want to bring ETH back to a state where it's like, nah, you can do one-way sense and the transaction chains are not commingled, fine. But Chris, is this not, I'm going to say it in a way that it'll give us both a little bit of trauma, the 2008 interlinked counterparty credit problem if something like that happens? I have no idea what you're talking about.

All right, listen, man, I'm getting a lot of heat because I think that the Ethereum Foundation is acting as it probably should act in a mature environment, right? They're a nonprofit organization. And I've been on boards of many nonprofit organizations. Many of them try to do something for the public good. In this case, they're saying, hey, we're going to be the shepherds of the principles of this network. But, I mean, who's the foundation of the internet, Austin? Do you know who it is?

Say more. No, there's no foundation of the internet. Yeah. Right? You've got different organizations that contribute to the, but as a truly decentralized medium, nobody controls it. The EF does not control Ethereum. The EF does not force EIPs through by design. Do they have influence in the past? Yeah, probably. But in time, I would see them being more and more removed, focusing on those ideals and the direction and advocating for what they want out of this ecosystem that's controlled by the community itself.

You know, one of the things I was what, Nick Carter, we talked to him about. He's like, you know what, BlackRock is going to take over the validators, right? So who are the core developers today? They're a very diverse mix, right? And in time, that composition is going to change. And that community of core developers will help shape the network. But like, what are the roles of responsibility? responsibilities here. You have a lot of, and again, it really starts as like, what is Ethereum trying to do? What is its core differentiation? In my mind, it wants to be incredibly robust. Haven't gone down in 10 years, guys, more than that now, like very important, robustness, decentralized, censorship resistant. Like, that is their moat. As you start introducing some of the things that you talked about, those are great. And, you know, if you're Solana, high throughput, high TPS, your canton, hey, I'm going to do something private. It's going to be more controlled, more permission.

These are all awesome. Like, in no way or shape or form. I'm trying to be in ethmax. I'm just saying that their moat, Ethereum's moat is a really awesome one. And it's the new internet. It's that settlement layer of the new internet, fully decentralized. Let them have it. Let the EF, you know.

And they're like, well, EF needs to ship. EF needs to ship. I don't think so. Like, yeah, like it's a nonprofit guys. Who has to ship? Tom Lee has to ship. You know, Ave has to ship. All these people that are building on Ethereum, those are the folks who are shifting.

And then they have to work with that community to direct the network in a way that appeals for all. So like, again, I think that people have been very hard on the EF. I think the EF is doing great things. It is over and over again, you know, helping to shape those ideals. And like, I don't know. I think that's my case, man. I'll say I'll say I do agree with you that people who think the EF should be shipping or like explicitly building or misguided on the role that they're supposed to play within the ecosystem. I think you and I are alive on that.

Like you don't want in the case of something that is supposed to be a public good, like the nonprofit foundation being the ones responsible for shipping everything, you want to have four profit entities doing that shipping. Now that works a little bit different on a chain like say a tempo. that is explicitly created by a for-profit entity. I think we can all agree that's a different model. I think the heart of my criticism is that I find the EF to be talking out of both sides of their mouth, and I'm not sure they understand they're doing that, which is to say, I don't have a problem with arguing for a decentralized self-sovereign chain to exist.

Again, I'm very pro-Bitcoin. I support that. I support some of the privacy coins. like I firmly believe there is a time and a place for that sort of thing. I'm also a fan of real world assets. Like guys, I used to literally run a stable coin like reserves and risk and like disclosure, everything, right? Okay, fine, totally down with those. I'm a favor of smart contracts. Like you and I both agree there's a huge amount of automation and tasks that can be fixed in traditional finance using smart contract technology that are profoundly broken right now.

I think what I'm worried about is they don't understand the tradeoffs that their own stances making, which is to say if you want to be like using the crops framework and focusing primarily on self-sovereignty and that external forces do not have control of the assets, I think you also have to say you shouldn't be putting RWA that have external control of those assets in smart contracts that will cause cascading I'm totally confused, right? Because today, if you have a stable coin and you know this, you can issue it on chain. Yes. But the assets are off chain. They're in a custodian and you have freeze and seize. Correct.

What's the issue? So my issue is that exact problem that you have explained. So theoretically, there's two ways for this to become a problem. Number one, I have this asset. I have the smart contract. Let's use Paxos as an example because I would. there. This is not a knockout pack. So I'm just familiar with it. You've got USDP. So I've got, I don't know, at the time, $2 billion of reserves in a bank, and I've got two billion tokens on

chain. It should be one token per dollar in the bank. Fine, easy to do. My concern is somebody compromises my smart contract keys and now there's 20 billion of USDP, and I still have the $2 billion in the bank. Now what? How do we remediate that in a way that will break a bunch of other things? How is that unique to Ethereum? I totally agree that like, like, you know, you need like cyber. I've talked about this a million times. Like, like cyber robustness, you know, you know, yes, people criticize solidity as a language all the time. But like absolutely security robustness, very, very important. Whose fault is that is your question? Is that Ethereum's fault? Or is it the issuers who smart contract wasn't designed the correct way? Like, I don't understand why this is Ethereum. Why is it okay to put it on Solana or Canton or whomever? I didn't, well, let me start by saying I didn't endorse Salada on this one. The contrast that I'll actually draw to that one will be something like J.P. Morgan's Ony, where the answer to what you do if that sort of break happens as you freeze the whole thing until you fix it. Right.

So what I'm saying is without the willingness to enforce any level of validator controls around these sorts of products, you're going to have a problem sooner or later. Right. Like the Bybit hack is a good example of Eath not interdicting that contra. So let's give an example of somebody went the other way. And although they could have done a better job and stopped all of it, they stopped most of it. If you look at the Cetus hack on SWI,

they actually did push through a validator patch and bring those assets and got them back. And I'm specifically saying when it comes to real world assets, if you don't adopt a framework where you're willing to have network level controls, it's a matter of time until breaks happen where bad things will occur. Well, and Chris, let me finish the point. where bad things will occur and you're not going to be able to find a responsible party who can fix the damage. Because to me, that's the key to getting into the smart contract. I understand what you're saying.

You're saying you want to have systems where you can roll back the chain is what you're saying. Specifically, if you're going to have a bunch of interlinked smart contracts, because here's the problem with USDP. As soon as that hack happens where you go from $2 billion to $20 billion, it's not that Axos has to freeze it and drop a new contract. They can do that. That's easy. You've saved all the USDP holders. Congrats. You just fucked every single uniswap pool with USDP in it. You fucked AVE if they took it as collateral. Morpho is exploding. Like any pool that had this as a composed asset is now broken. So unless they are all linked with you so that the moment you deprecate a contract, they freeze everything and have a liquidation like methodology, you have a problem. That's my point about the network level controls for these things where the interaction with the smart contracts in the RWA is what creates the problem.

Because as much as I would like to say, things won't get hacked. Things are going to get hacked. Look, hacking is a massive issue. I've been proposing policy solutions to that. Like everyone, write your congressman, give me my privateers back. But look, I think if a chain or an organization wants to roll back their chain for those protections, let them do it. And that that's fine. That that's not censorship resistant.

It's not self-sovereign. And like they're welcome to do that commercially. I don't know if you can have Ethereum rollback. The validators are too diverse. There's a million of them, right? So what does that mean? That means that as people build on that chain. By the way, I was watching, I love fascination.

I was watching it this weekend. And wouldn't you know it, the foreign minister of Iran was there chirping away, talking about how he felt on Zoom, like using the internet that he, they, no one could shut down. You can't shut down Iran mining Bitcoin any more than you can shut them from mining gold. Like if it's in their country, they can do it, right? So I guess the point is when you're dealing with an ecosystem like Ethereum,

do we need to invent and to ensure like if companies are putting their assets onto that chain, should they have controls? What do you have for securities? You have a transfer agent, right? Where you're tracking who owns what? If it gets hacked, you can you can address it through the transfer. for agent. Is that a perfect solution? No, it's not. Why? Because if the bad guys move too fast, they track it, it gets swapped into Bitcoin and off it goes. But what I would, I think you're

throwing out the baby with the bathwater. Let the ecosystem be censorship resistant, decentralized, and have the apps be very thoughtful in the controls that they put on to ensure that there's robustness. But I don't think that there is where I'm saying, I think the EF is talking out of both sides of their mouth is to put forward the statement that they put forward without also addressing that and proposing those kinds of fixes and quite frankly saying, hey, you should probably, like, as weird as this sounds, if we're going to preserve these principles, you should be doing less with smart contracts on this chain because you're going to create like a ticking time, Bob, if you do not. Right. This is the classic, like, if tether

gets hacked, they're essentially the AIG who wrote all the CDS, everything else goes. Look, yeah, and again, I think the onus is on those folks who deploy the smart contracts to make sure that, and, you know, I think cyber is going to be, there's some real big challenges coming up with, you know, the way that people are going to be able to replicate your voice and your likeness. There's also some, some, amazing defenses coming in. Agents are going to protect us. So it works in both directions. But again, I think that's something that's fully censorship resistant, open source, private, and secure. I think there's, I think there's a need for that in this world, particularly if you're sitting there in Iran and you're looking for access to dollar liquidity. You know, you're in a developing world.

You know, if you start entering into these systems and if you can censor them, they will be censored. And so I do think that, I do think that there's a role in the world for something that's censorship resistant, my two cents. And again, I don't disagree with the censorship resistance. I'm totally for that. It's the layering of all these concerns. Like the Jenga Tower of Finance. But the EF doesn't control Ethereum. They don't.

They're a nonprofit that tries to steward and set goals. And yes, they're influential. But they're not, if they were in control of it, it wouldn't be decentralized. So I just think people have been way too hard on them. Yeah. I suppose my complaint with them is I feel like you've kind of half-assed your mission statement. Right. If anybody from the EF is listening to be clear about it.

that one, which is to say, if you want to go that hard down decentralization and self-sovereignty, which, again, I'm going to consider big use. Yeah, and fine. Then you also need to go a lot harder on don't build like castles on top of a swamp on this sort of thing, because when it breaks, nobody can save you. And if it, by the way, if it breaks repeatedly, nobody's going to use it, which is going to be a big problem. And the other one is that's exactly how you attract the kind of regulatory attention that makes your life absolute hell. Because you know what will, like, cause a Biden era overreaction is going to be if Americans lose like hundreds of billions of dollars. A hundred percent, hundred percent, like, like rip trillions of dollars coming on chain. And these

ecosystems become very strategic, very fast. So, okay, where are you putting your real world assets then, Austin? Now you've got to answer the tough question. I'll fly with Ethereum. Where are you putting yours? So I'm a bunch of them, by the way. There are a bunch of them, So I'll talk about models that I currently find pretty promising for this sort of activity. So one, I a little bit like my friend O'Need, who although we argue about this topic, let's pick something that we have in common. Private bank chains are a bridge to nowhere. Those are useless.

Don't build them. Stop building them. All right. Because if I have to JP Morgan give the sales pitch to Goldman Sachs of, hey, guys, take all your trades, your customer info and all of your technology and put it on something I unilaterally control, that's not even a. discussion and vice versa. So stop with the individual private bank chains. That's stupid. What we should be looking at is one of two things. What I'm going to call public permissioned

chains, which is to say open access by default, but with way more controls around getting in and out. Some good examples of those. Avalanche has done some things with concurrent L1s or subnets or whatever they're called. I think are super interesting. I think Avalanche is super interesting. I think Stellar's two, one validator set for real world assets is super interesting. And by the way, not enough people look at stellar and their technology because they've been thinking about this for a decade. They are a very interesting one. Things like Canton and Tempo that, again, you can have a little bit of a harder boundary and validator coordination. These are ones that I think are more amenable. It's not just where do you put the RWA's, but when can I do complex things with them? Like if I just want to do one-way sends, Ethereum is fine. It's building these piles and piles and piles of interlinked things. So those I'm optimistic on. The other thing I would be optimistic. on but has not evolved yet, Chris, would be what I'm going to call a global version of DTCC, because I know people talk about Ethereum is decentralized, but let me propose this model.

If the thousand largest financial institutions globally got together to run a single chain, given how geographically and philosophically diverse they are, that thing would actually be surprisingly decentralized in many ways. Yeah. Yeah, DTCC is working with a number of chains. I don't know if they're all public. I know who they are. I think the really funny thing is that it's very hard if you're a DTCC or big institution

to potentially onboard Ethereum because you're like, wait, who do I talk to? Who's going to build this for me? Who do I sign the SLA with, right? Which is like awesome because it kind of proves the point and the value add. And I think that, you know, there's a bunch of folks who are like stepping into that void right now. But it kind of proves the differentiator in the use case. So look, I think all those projects that you mentioned, Avalanche, Canton, they're all doing great things. And that's the beauty of our space.

They're programmable. You can customize. You can over-emphasize TPS if you're Solana or even suey's out there. They're all doing really interesting stuff. But my point is that Ethereum's big differentiator. And the reason why it's number two in crypto is because of the. that promise of decentralization. Now, it's also interesting, that was the guiding light for many of the early adopters of crypto. Now, the folks that are coming in, a lot of them don't, they don't

follow that same ethos. So it's going to be super interesting to see how it evolves. But I guess we will leave it there. I was going to say, I will actually give a prediction to end the show, which is, I think, in the future, as people go back and look at episodes like this or look at the exact point in time we're at in crypto, we will be perceived by them as about how we perceive the 90s for tech, which is to say, I am more certain than not that the chain that ultimately most real world assets will go on has probably not been created yet. Or if it is one of the current ones, it will look vastly different by the time we get there than it does right now. But we had great music and clothes back in the 90s, so. So we're going to leave it like that.

All right. So if we're going to drop the mic right there, let's actually do that. So we'll call it here. Everybody, thank you again 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. Thanks, brother.