Unchained - Bits + Bips: Elon vs. Trump, Bitcoin Supply Shock Brewing, Circle’s Wild Valuation - Ep. 849

Episode Date: June 11, 2025

This week on Bits + Bips, the panel tackles the biggest themes driving crypto: Circle’s triumphant IPO, ETH’s institutional tailwinds, and the fast-shrinking Bitcoin supply on exchanges. Plus, what Gemini’s IPO ambitions tell us about the state of exchanges, and whether Ram’s call for a BTC breakout is about to hit. Also on the docket: Is Circle really worth its sky-high valuation? Why exchange fees are stuck in the 1970s ETH: the quiet trade that might be heating up Oh, and yes, they talk about the Trump–Elon feud too 😅 Sponsors: Bitwise James Seyffart, Research Analyst at Bloomberg Intelligence Ram Ahluwalia, CFA, CEO and Founder of Lumida Steve Ehrlich, Executive Editor at Unchained Guest: Sal Ternullo, Managing Partner at A100x Ventures The Conversation: The blow-up between Elon Musk and Donald Trump has been entertaining, but how did things go so bad, so fast? Unchained: Stablecoin Giant Circle Raises $1.1 Billion in Its IPO Early Circle Backer Slams IPO in Expletive-Filled Letter  BlackRock’s IBIT Becomes Fastest-Ever ETF to Top $70B  Blockworks: Gemini files confidential S-1 with SEC in road to IPO The Block:  Trump’s Truth Social files S-1 with SEC for Bitcoin ETF 15-day streak brings Ethereum ETFs to record high cumulative inflow value Metaplanet unveils $5.4B equity raise plan to accelerate bitcoin accumulation Cointelegraph: Bitcoin supply shock? Percentage of BTC on exchanges nears 2018 levels CoinDesk:  MSTR Boosts Stack Again Strategy to Raise Nearly $1B With STRD Preferred Stock Offering to Accumulate BTC Bloomberg: Metaplanet’s shares surged 22% after unveiling a record-setting $5.4 billion stock rights program aimed at growing its bitcoin holdings. Timestamps: 👋 0:00 Intro 🧠 1:28 Why the market is ignoring the Trump-Elon “break up”  📈 16:47 Is there a reason for Circle’s eye-watering valuation? (And what it means for  crypto VC) 🏦 30:25 Why Circle may struggle to compete with traditional banks 🚀 38:34 Why exchanges should rush to go public 🌐 46:40 Why Ram thinks that the market is immune from more bad news 🔥 57:16 The secret signs of a coming bitcoin supply shock 🧾 1:03:58 What’s behind the bitcoin and ether ETFs’ recent momentum and if it will last Learn more about your ad choices. Visit megaphone.fm/adchoices

I would be patient and stay long because I think the likelihood that we see a blowoff move upwards is far higher than what we see on the downside and probably have a greater percentage change in price. Hi, everyone. Welcome to bits and bips, exploring how crypto and macro collide, one basis point at a time. Today we're going to talk about a whole bunch of things, mainly the Trump and Musk blow up, the circle IPO, some macro topics, and again, Bitcoin Treasuries continues to be a hot topic. But first, some quick intros.

I'm your host, James Safert, Tradfai Archmaister, Lord of Bloomberg's End, here with Ron Malawalia, Master of Wealth, leader of Lumida. How's going? Steve Erlich, high scribe of the Unchained Crypto, Kingdom. And then also joined by Sal Tarnulo, first counsel of the Venture Court at A100X Ventures. Yeah, that's here, everyone. We're here to discuss latest stories in the worlds of crypto and macro. Just remember that nothing we say here is investment advice.

Please check Unchained Crypto.com slash Bips and Bips for more disclosure. Before we begin, let's take a minute to hear from the sponsors who make this show possible. Crypto moves fast. It's why Bitwise launched the weekly CIO memo, a jargon-free summary of what's moving crypto markets, written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. All right. Let's get into Elon and Trump. I have a take on the market angle here, but like, I don't know. Obviously, this is also just like drama, but like it's kind of like when I was watching this stuff blow up, it was like it was so viral. It was so intense. It was like, I don't know, bravo housewives type stuff, but with people that actually matter. You know, so yeah, let's just get into it. What's your what's your market takes?

here. We'll go to you, Rom, first. Do you have an overarching take of what's going on here and how it impacts markets? There's no real market. What drives markets are earnings growth, inflation, policy. This is a tempest in a T's pot. It really impacts Tesla more than anything else. But even then, as relates to Tesla, it's not impacting Tesla's long term or short-term earnings growth. So, you know, you got a short-term reaction on the late tale of last week when this was brought into the public eye and Tesla sold off. But those are just short-term reactions. It's not an enduring reaction.

I have a few questions. One is I want to know how did Elon really get that punch in the eyes, not his son, which he claims. Was it Bessent? Was it Navarro? It's one of those two, I believe. It was notable that the All In show did not have a pod this weekend, right? And that show is at the kind of overlap of Musk and Trump. And now the house is divided.

And they had a recording, but it was not released. I took some satisfaction in that. Like when narratives are pierced and threads splinter, you got to choose sides. What side are you on? I feel like Elon, he's more American than most Americans. He's created extraordinary wealth, hundreds of billions of dollars in value. I'm not even a Tesla stock fund. This is just a fact.

He's created enormous innovation in driverless cars, in technology to help people walk and have vision again, to do high-speed underground trains, to build a renaissance for American space. Star Satellite and inspire engineering. And then he went to government. He went to Washington like Mr. Smith and said, I'm going to go cut costs. He slept on the floor, these federal buildings, brought in talent, which was not compensated. And he got a rug pull. He went in with the mandate to cut costs, which the American budget desperately need.

Not desperately. We'll get by, actually. We'll come back to that. I think we'll actually be okay. But it's the right thing to start to rein in this excess. and, you know, he was rebuffed. So I feel bad for him. I was surprised that Elon took very sharp blows to Trump.

You don't do that. You don't take a shot at the king. What's the expression go? Do you take a shot at the king best not miss? Right? You know, I mean, he said that the reason that Epstein files weren't released because Trump is in them, they doubled down on that. Yeah, he had some other claim that was pretty incendiary.

You don't do that. I think it was just a bad move. I was surprised to see that today, Trump said he wishes him well. So, so far so good. Elon is saying that he wants to start a third party. You could kind of do the kind of people who'd get around the hoop for that. And starting a third party is hard, but he's actually credible. He threw over $100 million in the campaign.

I'm sure the social media algorithm was modified. He can help shape outcomes in a material way. Ultimately, I think competition is good for the United States. Competition in general, whether in athletics or academia or business or politics, competition is just good. So I think however this plays out, it'll be good. Last parting thought, there's a scene in Dante's Inferno, the Ninth Circle of Hell, where the count is like eating and cannibalizing like the Archbishop. And it reminded me that scene. It's about kind of intertribal warfare, the consequences of disloyalty, and it reminded me of that.

You should be able to tolerate dissent and get back to civic debate. It's true for the protesters on campuses that are disrupting education, but it's also true in, I think, Trump's inner circle. You've got to be able to have debate. You've got to have like a Lincoln cabinet mindset where you're trying to find the best ideas and let truth rise to the surface to make the best decision you can. Yeah, I mean, overall, like the, it's funny, two things I noticed. One, Kosh Patel, the head of the FBI, was in the middle of recording a live podcast with Joe Rogan when all this started happening on Twitter. And J.D. Vance was in the middle of recording a live podcast with Theo Vaughn while the middle of, and they were both like, oh, God. Like, I'm not like, blah, blah.

J.D. Vance, like, commented a little more than Kosh Patel was willing to. But, like, it's just funny, like, the whole ethos around, like, you know, people calling, like, like saying Trump helped one because of these podcast things. And then like these guys were in the middle of doing those podcasts and all this drop. But I think like overall, my overarching view is like Musk wants to cut costs. He wants to save money. And like that seems to be the real big blow up here. Like the big beautiful bill is going to add to the deficit.

I know Trump camp will just say they're, you know, trying to save and continue the tax taxes that were, that they did the tax cuts and jobs act. They just wanted that to continue. And without it, there would have been a huge hike on taxes for every day. Americans. Okay, that's true, but it doesn't matter. Like, you let Musk do all this work. And yeah, he saved billions, maybe tens of billions of dollars. And you're just going to add a couple trillion to the deficit, arguably. There's a lot more than be done. This isn't everything in the bill.

But I think this kind of goes back to like, what does Lynn say? Like, nothing stops this train. Right. Like, this is like the Republicans, they are going to blow out the deficit because they're going to focus on tax cuts. And the Democrats and liberals are going to blow out the deficit probably too because they want to give more money and do more things like Medicare, Medicaid, any sort of thing along those lines to help everyone, essentially. So they want to hand money out and tax the rich. And all of it is just like spending more money. And like if you are going to be someone that's going to go in and preach like some level austerity and not spending money or not giving tax cuts, you're never going to get elected. So like we're just kind of like on this path.

We're like, nobody's going to stop the deficit spending train that we're on. Sal, you're nodding your head. What are your thoughts overall on this whole process? Like, how does it impact crypto or macro at all? Or do you disagree or agree with anything Rom and I said? No, I agree with this setup. I just think it's a disappointing outcome to what was kind of a source of hope in two regards. Like, obviously, one on rain in, spend, you know, put some arms around excess and then hopefully push forward into a new path.

And I think this is the story of how a brilliant entrepreneur. hits, you know, a brick wall in the context of government and mixed incentive schemes. You're highlighting James, like the incentives of politicians to remain elected, whether Democrat or Republican, are not directly aligned with the mandate that, you know, Elon was pushing forward alongside Trump. I think Trump, in a relatively diplomatic fashion, recognizes the reality of what the current state looks like in both the House and Senate and played into favor to the best possible outcome that it could. It seemed to me like Elon after what,

130 days of as Ron was describing, sleeping on the floor and making huge tradeoffs in terms of the energy effort and time that he could put forward into his companies, you know, hits huge frustration. And for me, it was disappointing to see it boil over in such a public fashion. Because I think some of those points around the Dante's Inferno analogy, like there may not be, you know, full reparations around this.

And so maybe a parting of two-aligned camps, I think he'll walk back the discussion around the third-party concept, although candidly I would support that. Part of this issues that we find for 30 years of stalemates is because of a two-party system. But that's been a really hard challenge and has been tried many times over. Overall, hopefully they can mend, but pretty disappointing to see the public spat. I was walking home from CVC. my wife was calling me telling me about the spat because it had overflowed from X to Instagram and to TikTok and all this things. I'm just like, oh, man, couldn't believe what she was telling me.

By the way, did you see Elon also gave a nod to J.D. Vance. He actually, I think the second defense is he supported like Trump's impeachment in tweet. I was like, what are you doing, buddy? You're bringing the wrath on. You don't, you don't, like, these are two serious shots. What apparently started this is over the weekend, Elon's preferred leader of the NASA wasn't appointed. And that person controls budget for SpaceX. And it's like, come on.

How does Elon not get the win on that for everything he did? So I could see being pissed on that account. And now what I read this morning is that, NASA is looking at alternatives, like the NASA director is looking at alternatives. And now you're seeing competitors to SpaceX like Rocket Lab, along Rocket Lab, by the way, go up a couple points because of the potential share shift and revenue. Yeah, I mean, the New York Times actually did a podcast talk about this and what they came

away with. And obviously, like, there's people here hearing that I listen to the New York Times podcast, probably freaking out. So they do a lot of good work over there still, despite some of the Like when they cover crypto, you listen to it. I'm like, you didn't talk to anybody who knows anything about this. Like you have no idea what you're talking about. And they have these guests on their supposed experts.

All right, I don't want to go down the sidetrack, but it's crazy. But they basically said it was the spending first and then the Isaacman thing, who was supposed to run NASA, which all in actually had Isaacman on their podcast this week to talk about not being the pointy. And he was very cagey around it. But like, one, he sounded like he would have been awesome to run NASA. Like I loved everything that guy was saying. It sounded awesome.

But it really came down to the fact that he had, like, contributed to a bunch of Democratic politicians. And Trump was like, I can't have this guy running NASA. But at the same time, it's the guy that Musk wanted. He probably wouldn't very good, though maybe put a lean to a blitz on SpaceX. But then again, SpaceX is miles and miles ahead of everyone else in the industry. Yeah, I mean, Steve, you didn't get a chance to chime in yet. Like, what are your thoughts real quick on the Musk-Trump breakup and what it could mean? Yeah, I had a couple.

I mean, one first, I guess, I'm upset that S&L is done for the summer because this week's would have been epic. Ron, you said to Dante's Inferno, but actually when all this happened, it made me think of House of Cards, season two in particular, when Frank was sort of fighting with, what was his name, Raymond Tusk, that billionaire from St. Louis that was like a backer of the president. And they kept going back and forth and having this like unfragile. alliance, or I guess fragile alliance is the right way to say it, until it eventually

broke at the end of season two, and Underwood won. I forget the exact how it all worked out, but Underwood ended up winning, and I think Tusk went to jail or something like that. Musk and Tusk, that's actually kind of funny. But the thing is, it was a good reminder, I think, in some ways that, like, although

these two are obviously very powerful people, they are not equal in any way. And if you go back in history, Like every time that there's like these oligarch billionaires that are trying to partner with the president or prime minister or whatever and then there's a breakup, it's the oligarch that suffers. Like do you guys remember like in 2020 when Jack Maa criticized Chinese financial regulators and they abruptly pulled the Alibaba IPO? It was like in the summer of 2020. And then we didn't hear from Jack Ma for like months or years until that. I mean, this happens over and over again.

And it's kind of interesting that Musk did not anticipate that coming because when the happened, Trump was going to be the one that's going to win because they have the guns. Like the U.S. government are, that's where the actual power lies, as we learned from Frank Underwood. And at some point, I mean, I mean, Musk probably has to endure on Trump, but Trump doesn't have to face the voters again. So that was kind of inevitable. And then the one other thing that I thought of, too, because I know we want to move on, it's sort of underscored for me, going back to crypto, how important it is that we get crypto legislation passed while we can. Because at some point, you need Congress to settle these

rules and laws for now and hopefully for always. And if we get a new government in place, a Democratic government that wants to appoint Gary Gensler 2.0, they can do that. And again, the power between private industry and the government for now, it falls in the government. So I know crypto did pretty well under Gensler, all things considered, but it's really important to get this settled now because a new government could come in and do a complete 180, just like Trump did to Biden's policies. Yeah, I mean, Stephen, I think you get the nail on the head with this because that's actually the biggest risk to this space in particular, is a broader derailment of policy if there's

fragmentation and ultimately the spending bill doesn't pass, that become the next iteration becomes priority. Then you have to fight upstream around stable coin regulation and getting the genus hack through. So I think distraction and disorientation from this is actually the biggest risk towards the legislative agenda for crypto. I don't think you'll slow it down. I mean, I don't think this will slow it down. But one last fictional references, I love the Frank Underwood one, but Game of Thrones reference.

And Littlefinger confronts Sersay and he makes a threat and he says, like, knowledge is power. Then Sersay has her guards put a sword to his neck. And she says, she says power is power. Anyway, last fictional reference there. I'm sure we'll find some more in the next hour. Yeah, I mean, I just hope like some this like settled. I mean, one, yes, you, Sal, you said it was disappointing. At the same time, I like love watching it blow up.

It was so entertaining, but I agree with you. It's just kind of sad that like two men were going to blow. Arguably two of the most powerful men in the world. Like you have the richest man in the world who literally has the most successful rocket company in the world, one of the most successful car companies in the world at the president of the United States. And they're just going to blows like high school kids on social media. I get entertaining, but it would be a lot better if there wasn't these types of people doing it. Let's move on to the Circle IPO.

So Circle IPOed, I think, what is it, $31, I think. It's now trading at $118 a share, roughly just under $26 billion valuation. I guess I'll turn it over to you guys. Let's go to Sal first. Where do you think of the valuation here? Do you think $26 billion is the right valuation? I mean, we're chatting about this on the introlet as we were coming into the episode, but Ron pointed this out, it's like where crypto speculation hits public market sentiment.

There has been a lot of stuff floating around an X comparing, you know, value of Coinbase as it relates to value of circle and context of the revenue share agreement they have, which is an interesting comparison and potentially arbitrage opportunity, but I think it misses the point on the broader competitive landscape that staple coins will enter over the next two to three years. So I think it's a very exciting moment for everyone who was in the prior rounds of circle that backed Jeremy and Sean and team through multiple pivots in iteration, even pre-existence of USTC because they pulled a rabbit out of the hat multiple times

to see that company through and ultimately found product market fit at scale. So it's a huge win for the industry. But where it sits today, I would say, is not consistent with how we look at fundamental valuation, especially on a forward outlook. Yeah, I mean, you just look at this and it's like, it's like the valuation is 50% of the US, like this USC in circulation, like essentially, which I don't know how you get into that. I mean, I know tether and circle are very different businesses, but I look at them and it's just like not only that, but like tether's, I mean, circles like costs and expenses are like

order of, like tether is so much more profitable. It's not even worth discussing. So like I'm looking at this valuation. I'm thinking, damn, what do you think Tether would be going public for if they ever IPO to U.S. markets, which I would bet that's never going to happen. But what are your thoughts, Ron? Like, do you think that you think it's overvalued right now at $117,18 a share? Well, I think that what's the, what's the trailing PE ratio?

I think it's a balmy 363 times trailing. I mean, so it might be a little bit overvalued, right? It's an on-chain digital bank. Banks are usually valued at price to book value. Competition is coming. There's a distinction between a trade and investment. Here I'm giving you the investment lens. The investment lens is, yeah, it's overvalued.

The competition is coming. I'd love to get Austin Campbell's view here. He's one of the, my favorite humans and very sharp on stable coins. I caught up together with him last week. And he said, look, imagine the big banks get together and launch a stable coin and they have distribution. They can integrate it with their offerings. They can integrate it with Zelle. That's going to happen.

They're going to approach Coinbase. They can provide distribution. They can integrate in ways that Circle may not be able to. Stripe can do the same. And Circles margins are high because they're paying $0, zero payment for holding digital currency. That has to change. The innovation is that now you have digital currency in a wallet that accrues interest. That's an amazing innovation.

To have digital currency, just accrues interest. Like the concept of having a wallet where you get more dollar bills over time when you hold it. That's the metaphor. That's the analogy for what this is. But you're now seeing a proliferation of stable coins. Stable coins are like the hottest theme in venture capital, which probably means you want to run away from the hills as a venture investor. but you're going to get a bunch of players enter the market, and they are going to compete on yield.

I'm having a number of conversation with stable coin insurers because we invest in private yield generating opportunities at Lumida. So stable coin insurers want reliable enduring sources of yield so they can pay out to their end customers and differentiate their product offering. That's going to happen. Cather has got a better mode and they're better positioned. They own the international scene.

They're linked up with Cantor and Howard Lutnik. They don't need any capital, though, so that capital raise is not coming anytime soon. But an amazing success. I think the other take is that this is going to relinquify venture markets. You have the core weave IPO, which was also this commingling of crypto and AI. They start an Ethereum miner. And now you've got this other IPO. You're going to see a few more.

You're going to see Cracken, for example. What about chain analysis? you know, what about a Falcon X? That's going to reinvigorate venture capital ecosystems by creating distributions to LPs. And the LPs are saying, show me DPI. They're saying, show me the money so I can re-up in your next fund. And that's very healthy for the venture ecosystem within digital assets. Yeah, I mean, well, you brought a venture.

Before we go to you, Steve, I don't mean to have you go last again on this topic. But you brought a venture and you said, like, I'm curious, Sal, like, what are you guys seeing on the stable coin? Like, how many, like, what are you seeing in that side of the investment business? Yeah, I mean, it was a dry spell on DPI to everyone. And the conversation that you're appearing in the fundraising context was the impact of the denominator effect on institutional investors being overweight private markets with 21 and 22 marks rolling into the portfolio diversification. models, no DPI and liquidity to re-up and reallocate, which led to, I don't know if you guys saw the cartograph of venture raises by emerging managers through the last 15 years. In 2025, albeit only halfway through the year, tracking to 2009 figures for emerging managers.

And naturally, that's a pretty wild comparison. I think we'll benchmark out slightly higher because the second half of this year will be driven by a number of these IPO and M&A events. But the fundraising environment was super, super hard. The last fall months largely driven by what ROM was describing, which is investors not getting liquidity to re-up. So I'm hopeful we have a little bit more time left in our fundraise. I'm hopeful it gets easier.

I don't want to be a fool in that hope, but it does seem like this is momentum towards a broader wave of public market offerings and probably continued M&A traction. So we'll see where it takes out. But if you remember, like, even six weeks ago, post liberation day and macro trade stuff, like there was a whole conversation as to whether or not Circle would actually even pursue the IPO track at this point or they would delay it. And I think they took a bold step forward and look at how they've been rewarded thus far in public markets. So hopefully that shows a number of other companies like Cracken that the path forward might have uncertainty around it.

but public markets are clamoring for exposure to mature companies in the space that can really be looked at through a fundamental lens, whether or not their value appropriately based on that data. Yeah, I mean, we were looking at Circle as like getting acquired by Ripple or Coinbase potentially. But real quick, Sal, before we go to Steve, like you talked about like the fundraising side and distributing capital from investments, but like how many deals are you seeing that are in the stable? You said you were expecting like a lot of competition in the stable coin space. I'm assuming that's because you see a ton of people trying to build in the stable coin space and potential deals and PowerPoints to come across your desk.

So can you talk a little bit about that too? Yeah, we've seen like an in an inordinate number of deals that are playing in the stable coin space at different layers of the stack. Maybe six to nine months ago, there was a lot of conversation around, you know, how do we design application specific or purpose built where one networks? We've done a project in that space. And then more recently, we've seen a bunch of, projects that are looking at XUS stable XUSD stable coins, which candidly from a market traction

and adoption perspective has been quite dismal. But you are starting to see a little bit better product market fit for specific payment corridors. So thank US to Latin America, some of the Asian kind of jurisdictions that collaborate tightly in a trade context. So I am of the opinion that stable coins broadly are generally overvalued from a deal perspective right now. We've been super prudent and of 20 deals in this fund have one in that category. And I think it's arguably on equal terms in terms of innovation and infrastructure versus what you've seen Tesla, mixing words, tethered you with plasma. So that project called One Money from Brian Schroeder, who was the former CEO of Binance US. But yeah, the deal values are quite high on stable coin projects,

species that have been clamoring after them, the bridge acquisitions set the terms, in terms of what the forward outlook on an M&A path could be. So we'll see how it goes, but generally proceeding quite cautious on our side. All right, Steve. What's your take on circle? Do you think it's, I mean, I don't know if you have a strong opinion, whether it's under value, but what's your view here? It's interesting.

The IPO had me think of a few ideas came to mind. I mean, for one, we were talking about power in the first segment, and that, I started thinking about that again, just in relation to the profitability of USDC for Coinbase vis-a-vis Circle, which I know we talked about. I mean, there are some numbers like Coinbase might be like make 10 times, but USDC might be 10 times as profitable for Coinbase as it is for Circle, which seems to be kind of crazy and unsustainable. Two, I actually did a profile in Jeremy Aller for Forbes a couple years ago,

and in that story, I interviewed a congressman who asked, who has to remain anonymous. But he sits on the House Financial Services Committee. And I asked him the very question that I think, Ram, you mentioned. Like, what happens when J.P. Morgan and Wells and all these other banks, if there is legislation, if they decide to launch a stable coin. And this congressman said to me, they're just going to crush circle. And it's funny, Tether thinks the same thing.

I interviewed Powell, because I've done multiple stories on him, too. And Palo said the same thing to me. But he said, we're focused on international users. Like, let JP Morgan come and do their thing. They serve a different client base. So all that was kind of fascinating to me. But the one thing I just wanted to point out quickly, too, is I actually interviewed Circles Chief Strategy Officer Dante Desparte on Thursday, I believe.

The whole conversation was on the record. I wrote a story about it, but like most things you guys know, I can only fit a small portion of what we talk about in the story. And a couple of things I wasn't able to fit in. And for one, I actually asked him what he thought about the big disparity between circles, profitability, and coinbases. And I actually asked him twice. And he kind of demurred. He didn't really want to get into that.

But then I also asked him, this is a wildly successful IPO. And it seems in many ways to be divorced from just the pure financial fundamentals that we've spoken about here. So I said, like, what was the story that you sold to the investors that they're looking past that and giving you credit for much more? than just your balance sheet may suggest. And frankly, it was a little bit tough. His answer, it was a little bit tough for me to read. I mean, I know people, stable coins are just these homogenous products, but they're not entirely because circle is behind the scenes.

They're spending millions on R&D to build out infrastructure, to support 20 different chains, to make it easy to move tokens from one chain to another. Integrations with different payment providers and platforms. Regulation is big one. I mean, they're mica compliant. They're compliant in the UAE. They're compliant in Japan. I mean, they're doing all these things.

And the big bet is that it's all going to pay off and they're going to have this critical mass scale that will give them a moat against the money center banks. I mean, that plus hype, it must be what all these different investors are betting on. But these valuations are so far divorced from the fundamentals that there's going to have to be a climb down no matter what. I mean, nothing can stay like this forever. Yeah, you brought up the Coinbase versus Circle divide. I mean, Jeff Park had a great friend of the show from Bitwise talked about like there's an arm here to play. I mean, just looking at this, it's kind of insane. So like I said, Circle's like just about $26 billion in market cap.

And Coinbase is like $65 billion. And they get a lot of their like profitability from the yield that they, I think they split 50% of the yield with Circle. And I think anything that's actually minted on Circle, they get to keep us like all of the yield over a certain period of time. But I mean, it comes back to me like a huge part of this business is tied to like rates. So if we ever get into a situation where we'll talk about macro next, but if we get a situation where race get cut, I mean, their profitability is getting hit hard. And they, their expenses, you were you were talking about it, Steve, and they didn't really give an answer. They pay their executives extremely well. Their costs to like the people that work there, they have a lot of people to work there and they pay them very, very well, which is the main difference that I see.

Like compared to like, you know, revenue or profit per employee, I mean, again, circles are very different business from what they're doing. You kind of talked about it. but it's not even remotely in the same ballpark is what Tether is doing. So, yeah, there's definitely going to be some ARB there. A bit more on the banks. The other edge that the banks have is they can re-hypificate. So today what Circle does is they invest in treasuries. If a bank can re-hypocket and they have on average 10 turns of leverage,

if you look at the ratio of their liabilities to equity, they can make more money. So they can make a more lucrative bid to Coinbase. And Coinbase is the distribution part. Now, yes, USTC's built brand. But again, consumers are savvy. They're going to go to whatever has the highest yield and the highest quality. And they're going to go to other brands they recognize too. And those banks will install those stable coins in their offerings.

They'll make them native. So, yeah, I think circles on top position. By the way, 20% of circles market cap traded today. So this is like a meme stock. This is not a, oh, what did the investors get on board with? This is just crypto interacting with public equities. I question there, Ron. Like, isn't the stable coin bill going to prevent them from doing any sort of, you know,

rehropocation and, you know, yeah. It should. Well, so if you're a bank issuer of a stable coin, though, why would you prevent it? Why would you be prevented from rehypification? That's your bread and butter business. If you want to expand lending to Main Street, you should want to have banks involved here. otherwise all the circle deposits are financing the largest of the federal government. Yeah.

There's no way that a Genius Act is going to allow rehypotication. I mean, it's a very strict regulatory. It's going to be pretty narrow. And again, one other question to ask Dante, which I know is on the minds of lots of people, is there ever going to be a world where they're going to be able to share yield or where they're willing to share yield and with their customers because it's so high, at least right now. And basically the answer he gave, which I agree with is that that would invite a much wider regulatory sort of net or set of regulations than what they're dealing with now, which is already somewhat complicated. Because then it's technically a security. And I know banks sort of have exemptions from having to register with the SEC to offer things like savings accounts and stuff.

But it becomes much more complicated. And that would lead to rehypification and all those other things. And frankly, at least I got the sense from Circle is they don't want any part of that. I mean, they can't. They're a non-bank. So they can't. So they're at a structural disadvantage. Yeah.

Yeah. Before we move off for this topic, do we want to, there was a lot of backlash with the way that, you know, the IPO was allocated. I mean, number one topic on this is Jeff Dorman from ARCA had a long, a long letter out there that was very, very aggressive and upset about the way that, you know, the IPO is allocated. I think they requested 10 million or five, what did they request? 5 million and got 10 and got 135,000. So I don't know. I guess I'd be kind of annoyed there too as well. I mean, like this kind of to me like brings back to like the fact that the IPO is a very like Wall Street market.

It's like a different market versus circle, which is typically used to paying in defy. And like I feel like a Wall Street bank can't not like you're going up against Blackrock here. Like they're going to get the allocation that or at least a bigger portion of the allocation. So like there's this tension here between sticking with your defy friends and family, if you will, versus like you need to have a successful IPO. And see, if you said it was a very successful IPO, I would argue that the bankers left too much money on the sidelines. I mean, they price this to $31 a share. I mean, granted, people are locked up and who knows where it's going to sell all of a – Everyone here has said basically they think this is overpriced.

But like, you know, it could come back down more into that range. We'll see exactly where things set a longer term. But Sal, what do you think about like that trend over there of Wall Street versus defy and the allocations that certain people got? Yeah. Yeah, I mean, I was saying this before. Like part of what Jeff was describing in that Fred, you know, was around like in the context of crypto and web free, there's all of this ecosystem incentive alignment. And people who are backing, you know, businesses who are backing each other have aligned incentives towards outcomes. And that was at a mismatch with how this IPO road show and allocation structure came to.

play. And so just Wall Street clashing with, you know, ecosystem incentive structures. And I would be super frustrated as well on the allocation, but not surprised because every investment banker that's involved in this road show has five or six more IPOs lined up and is looking to pad the books of all the different buyers to make sure they have a seat at the table in the next one. So, you know, empathy for the frustration. I think he ended up pulling the tweet tweet read down. But I'm not surprise that that's how they shook out. Yeah, I feel, I feel bad for Jeff. I can share a bit more how Wall Street IPOs work and share personal anecdote. But if you're an IPO, uh, banker, like, your primary clientele is not the CFO who's doing the first and last IPO most likely. You take a

company public once. It's the by side because the buy side has to show up for every new deal that's offered. What the byside wants, the byside gets. That's actually the banker's primary clientele. So the investors that get dibs on the allocation table are those that make the most money for the bank. Who are those? Those are players like 0.72, Millennium Technologies, Citadel. And you'll notice a number, if not all those players, are also flippers of the IPO. They're not. long enduring capital. So it's actually not the best capital for an issuer. An issuer wants stable diamond hands that believes in the thesis. You can get that in a direct listing like what Google did when they went public. And they didn't have an investment bank to bring both sides

together. I love to see more of that on chain, by the way, topic from another time. So I had an experience like this last summer where Lumida, we managed to get on the cap table for for Brad Jacob. Brad Jacob is like the Roll Up King. He built waste management and United Rentals. You know, Tracy and Joe interviewed them, James, a few times on their show. So we got on that. Fantastic interview.

The guy is like an Uberman. He literally wrote a book called How to Make Billions. And you can only write that if you've actually made billions multiple times, never went to college, just serial roll-up billionaire, built it with his hands and his tenacity. So we managed to get on the cap table at 9.14 in a like next to Sequoia Heritage, the Walton family, Duke universe. These were like personal friends of Brad, like phone call money for Brad. We had an angle into the CFO. We raised $40 million into an SPV.

We spun up in two weeks. These deals happen fast. Like, oh, it's going to happen. Circle, they're looking at M&A. Two weeks later, they're going public. That's how fast these things go, right? And then I saw this article in the Wall Street Journal. I'll share it on the screen here.

And this is from July, this is 11 months ago, okay? They said Brad Jacobs QXO raises 620 million as Kushner to the board. And then what happens is I get a phone call three hours later. I, Ram, by the way, yeah, your allocation, it got cut back. We're sorry, we're saying your wires back. Here's 90% of your capital back. That costs us. Look at QXO now.

That's $20 a share now is $9, 11 months ago. So that costs our LPs and our firm millions and millions of dollars. It sucks. It's terrible. And we hustled. We did hard work. I mean, he did more than I did. Jeff actually helped make that business success.

We just hustle to get on the deal. That was our value at it. Yeah, I mean, he stuck with them through SVB and all those other things. Like, it was, Circle was in rough shape and multiple times throughout this whole thing. The other one we didn't talk, you were talking about potential IPOs. I mean, earlier this week, it was reported that Gemini filed a confidential S-1 to go for an IPO. Obviously, the Winklewals Twins Exchange. It was one.

I have a list of companies I'm expecting to go IPO this year, and that was one of them. So that's good. But the first thing I thought was like, not very confidential. If somebody's breaking the news that a confidential S-1 was filed, do you guys have any thoughts on Gemini going public? I know you guys, multiple people mentioned Cracked him, but. Gemini seems to be next up. I don't think confidential means it's, like, secret that they're filing.

I think it's just that they're, like, they're not releasing, like, how many years. Exactly. I mean, my thought about Gemini is really just, I mean, they went through hell with all the SBF, FTX stuff. I mean, they, I mean, they faced inquiries from the SEC, and I know that went away with the new administration, but the OJ with the Earned program, et cetera. And frankly, and frankly, I haven't really heard a lot from them. since all of that happened. I know the Winkleweye are insanely rich just by themselves and they're big.

You say WinkleVi? Is that like a proper term or? I've heard it before too. I know multiple people do it. I met the twins actually at Bitcoin Vegas. That's just my long way of saying that I'm really curious to see what their numbers are going to be. I don't know what the rationale is for not releasing,

like filing a proper S1 yet. I mean, maybe it's just that they want to see what the market looks like in time it because they have to know as encouraging. as it was for the Circle IPO that is clearly unsustainable. But, I mean, their volumes are not particularly high, and their platform is relatively expensive. And, I mean, they took a huge hit reputationally when they got tied up with Gemini and the earned program and all of that stuff. So I'm really interested to see what kind of story they're going to try to sell to investors beyond just, hey, we're next in line.

and people are putting $500 million in random companies buying XRP. Why not give it to us? I mean, that's kind of what I'm interested in. Yeah, I mean, the few things I would say about Gemini. They definitely took a hit when Genesis, you know, blew up with the FTX thing, and they had all their money with Genesis and the earned program. The one thing I will say to Gemini, they're the only people I know, and at great cost to the Winklewals twins and Gemini, the company,

they made every single one of their customers hold that were in that earn program in kind. Not just dollarized. So a lot of the FTX people are like their whole, but they're whole at Bitcoin when it was worth $16,000. So yeah, they got their cash back for what they held in most cases, but they didn't actually get it back where Gemini is, I don't know of anyone else that did that in crypto,

which is in my opinion, huge win. The other thing I would say is that the one thing I saw all over at Bitcoin, Vegas, they just launched a Gemini credit card where your rewards can be in crypto. It defaults to Bitcoin. So that's another. their growth area. The other thing I'm saying against, we've got all these exchanges, Gemini, Cracken, Coinbase, their fee, like, I look at, like, the fees for, like, trading.

And I compare it to, like, what I'm used to in the ETF world when I'm looking at spreads and transaction fees. And, man, they are juicy fees. At some point, it's going to have to come down. So if I were, if I were in exchange, I'd launch now when they're still able to charge, you know, some of the recurring fees, even on Coinbase, I think it's still like 3%. It's absolutely insane. That's like 1970s Wall Street fees to buy and trade stocks. Sorry. I didn't mean you go on that guy. I agree. I think this is all late cycle behavior.

The IPO cycle happens every couple of years. I wouldn't be surprised. It's a kind of a hypothesis that I have right now is that Q4 would be a top in digital loss just by seeing the flood of new issuance and IPOs and you know, just the peaks in animal spirits that you're seeing emerge now. So just keep your wits about you. You know, when Coinbase went public in April 21, that was the top in Bitcoin miners,

which is kind of like a high beta leading expression on digital assets. And then Bitcoin started to follow a few months later in September and November. So I think your, you know, clock started, right? Maybe six months away, maybe Q4, maybe after these bills get passed and people have kind of peak you for you. So I think it's important just to maintain perspective, just enjoy the ride. The last leg of these rallies can be very significant, right? The last one third can be like half the rally, actually. But I think you got to kind of keep your head about you.

I think it's going to be interesting to see what the relative pricing structure is of the next wave of exchanges versus where Cueva sits today and Circle sits on a benchmark. And I just can't imagine that the euphoria that we saw over Circle continues to trickle down across the next three or four exchange category listing events. I do think they'll happen. But I'm just interested to see like at what point do animal spirits get exhausted over. clamoring for the next, you know, issuance opportunity. So I appreciate Ram's point of keep your head about you because I think timing wise, we're looking out towards the end of this year, Q1, 26th, I do think there's going to be a pretty wild explosive moment that comes in relatively short order. And if the IPO market continues through that time frame,

I was just going to reinforce it. But we've all lived in this space long enough to know it doesn't last forever. So great. One other point is Robin Hood is focusing more and more on crypto, E Toro when public recently. So competition is intensifying. Coinbase was the dominant leader. People rallied around Coinbase, especially when they're litigating or facing litigation for the SEC really kind of both sides.

Now you have increasing competition so that that should lead to fee compression. You have proliferation of ETFs, which is indirect competition. as well. So it's a it's a different backdrop than it was two years ago. Yeah, that Q4 timing. I mean, there's I think I just think there's a decent chance we could see some all coins get approved for ETF wrapper this summer potentially. We're going to see basket pilots in our opinion approved this summer. But even still like the deadlines for a lot of these other alt coins, there's like 10 of them on file right now. Are that is that Q4 time range that you guys are talking about the final deadline and we think they're going to be

so like we can see like it's not just the stuff you were talking about that the the ETF world, we could see everything. Another, one of the anecdotes. So in the dot-com era, and you guys remember this, 3-com spun out a business called Palm Pilot. Palm Pilot went public. It was worth more than 3-com, even though 3-com owned 99% of it.

So these mispricings and arbitrage between related entities are phenomena that you see as you get closer to the top, kind of nonsense stuff. So, you know, we are seeing something like that, to Jeff Park's point, we're on the relationship between Circle and Coinbase. Before we move on to macro and then we'll wrap up, even though there's so many other topics we can get into, we've got to hear from our sponsors who make this show possible real quick.

Hi, it's Matt Hogan, the chief investment officer for Bitwise asset management. Each week, I read a five-minute memo on the biggest topic impacting crypto. This week, I take a look at Circle's blockbuster IPO and what it tells us about how to build a comprehensive of crypto portfolio. The TLDR, if you're just holding crypto assets like Bitcoin and Ethereum, you may be missing one of the most valuable categories where crypto is going to accrue value. Check out how to fix that at bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. All right, guys. Let's move the macro real quick, I guess. Rom, what are you watching right now?

macro. We talked a lot about jobs last time. It looks like hiring slowed in May a little bit. So a continuing of this like not hot jobs market, but also not completely dead. And anything you're particularly watching with rates and markets and macro? Yeah, look, you know, so much bad news is priced in. It's almost like this market's inoculated against all sorts of risks. And you meanwhile, you've got Ray Dalio who keeps pining the table around the imminent demise of the U.S. debt. I don't think that's going to happen. Larry Summers also was critiquing the big beautiful bill and terror saying that that could cause a recession. I don't think that'll happen.

I'm not a fan of tariffs. I'm not a fan of excessive spending either. I just think it's hyperbole. They're just overreeding into it. So what are the risks facing the markets? Well, one is tariffs. So is that Best Buy this weekend to just take a quick look at what prices are doing. Prices didn't go up.

I talked to their sales associates. Prices didn't go up there. They are going up in auto. So auto sales were accelerated forward. Parents bought cars to their kids. They just want to get ahead of it before even their kids were kind of of age to drive. So auto inflation was up two and a half percent year of year. So you are seeing that in, and that's a big ticket item. So large durable goods, you are seeing that. But in areas we have deflation and natural deflation like semiconductors and plasma TVs and electronics, you're not going to say. see that and that, you know, that makes sense. So, so the markets seems to be immunized from tariffs. Austerities off the table. It's immunized from that. Inflation's in a doubt still declining. I expect you'll get a summer whiff of inflation. You know, the claims data looks fine. I wouldn't be surprised if there's a, some volatility in unemployment, like some bad news.

That's temporary. Seems to happen every summer. But a lot of people are just overly bearish in a backdrop where you've got strong earnings growth and baby boomers of $60 trillion in assets that are spending. They're spending on cruise lines and travel and leisure and restaurants. So overall, I mean, I don't see economic weakness. I don't see economic weakness. Yeah, KAPEX spending is up. The government spending consumers hanging in there like a champ. Consumers are changing their consumption basket.

Yes, that's happening. But overall, I think things are fine. I think productivity growth is a story that Ray Dalio and Larry Summers are getting wrong. The AI story is real. We are seeing innovation. The adoption rates are faster than we've seen of technologies in the internet. It took 10 years for online trading to become a thing. We're moving much faster.

And that can be a provider of relief for the fiscal spending and inflation issues that we have. Yeah, I mean, I think that's a good point. I mean, overall it comes down to like we're going to keep spending and it's a matter of whether we can grow ourselves out of it. It seems like Besson, even over the last couple of weeks, just change his tune on that topic. He seems to say we're going to have to grow ourselves out of it, which is like AI, I guess. It literally comes down to AI in my point of view. But Steve, I mean, if we go back and we look at what's going on with trade, the most recent reports that have come out, like our trade deficits cut in half. So like your difference between your imports and exports basically because we stopped importing stuff.

because of the tariffs over the last few weeks in the most recent round. So how much of that is actually stopped versus going to pick up again now that there's 90 days stop? The other thing I would point out is that U.S. and Chinese trade officials are meeting in London, I think today to like kind of hash out a bit of a deal here. So what are your thoughts here? I mean, we're looking at Chinese exports that are at the biggest collapse since 2020 to the U.S. specifically. So like basically trade between the U.S. and China has all but halted. not completely. So Steve, what are your thoughts on the master side? It's really easy to cut your deficit when you just stop buying things.

I have a few thoughts. I mean, I'm really interested to see what's going to happen with the talks between the U.S. and China, I guess today and tomorrow. I know a lot of things there today. He wasn't there for the first round. That apparently went well, but we all kind of saw how that turned out. I mean, we've spoken about this before. I don't quite know how this deal is going to work. I mean, China, because of their housing market crisis and all sorts of issues over there with declining consumption, I mean, they are forced to support the manufacturing base. And that's exactly what the U.S. is trying to curtail so we can grow our own. I don't know quite what that deal looks like. And so I'm kind of with ROM. I mean, things are just status quo.

We would get April's inflation numbers on Wednesday, and I'm really interested to see what will happen there. I do think expectations are a slight tick up, which could lower the chances of the Fed reducing rates anytime soon. And the other thing that's kind of on my mind a little bit, aside from just the Trump court, Trump trying to feel that international court, I forget what the exact name is that ruled his tariffs invalid. July 9th is going to be here pretty soon. And that's the day when his 90-day extension on the, I'm sorry, is it July 9th or July 2nd? I forget, but regardless, it's going to be here soon. week of July. We'll say that for now.

Thank you. When his 90-day extension is going to expire. And I'm wondering how companies and traders are going to approach that and when they're going to start incorporating that into their strategies and models. Because I guess if I'm Trump, I'd probably wait until like the very last moment to have an extension sank right up until then. No, no, no, they're going back into effect. They're dismissing it.

They're looking through it. Taco trade, right? Yeah. It's the taco trade. Trump always chickens out. That's all right. I get that, but I mean, he made such a big deal about this. Like, do you think he can really just say another 90-day extension?

I, he's too proud, I think, to do something like that as much as I do like tacos. So I'm, I'm kidding. The burrito trade is the opposite of the taco trade. The breto trade is like the overreaction that Trump would have in response to the name of the taco trade. The biggest thing that. Taco trade. Did you see his response to the reporter asking about it? He was like, I was like, oh my God.

Like, just asking about that might have made like global trade worse. Don't bring up the taco. Don't bring up taco. Just ex-nean taco. Yeah. So, yeah, that's kind of what I'm, that's, those are the things. They're slow walking this, right? Japan's slow walking this.

The Eurozone slowly walking. And then the Eurozone suddenly started trying to move faster. But how do you do that? There's so many different member countries with differing. goals and different agendas. China's slow walking it. They're all slow walking it. And Trump has shown his hand. And so everyone's shown their hand here. They're like, yeah, we want to get deals done. And they've chosen to embrace markets, which is great. I'm glad they chose to embrace markets. Glad they want to get deals done. That's the right message for the markets. Yeah, I mean,

I mean, Trump jumped when the bond market, you know, what he called, the yips in the bond market. A little bit. Yeah, yeah. It's just like all you need to do is show progress and be like, oh, we're making progress. We highlight certain parts of the deal and agreements they've come to. And it doesn't actually have to be in anything in writing. And he can save face, like very good at like making things, at least to his base and to certain people that's doing exactly what you're saying to me if he isn't. And that's what I assume that's what he's going to do when it's going to be more taco side than burritos.

One data point to share with all. So in Trump trade poor 1.0, which was Q428. again, you had a 19, 20% drawdown in the major indices, and then you have a sharp, furious rally like you're seeing now in Q on 2019. However, in Q2, 2019, you had another mini correction due to a renewal of tariff war back and forth with China. So those scenarios are there. Don't, you know, you don't be complacent. especially like now probably i wouldn't be complacent now because on the 16th the corporate buybacks

stop and now you're in the middle of the month the seasonality is not as favorable and you're probably going to set up for more breath expansion rather than more expansion of like technology all right sao what's your what's your macro take i mean you have it from both sides right you're seeing a bunch of deals and you are like trying to raise money so you have like a little unique insight that i guess rom kind of sees a little bit because he's always you know trying to make money as a wealth management side of things. But what's your macro take? Yeah, I mean, I'm kind of aligned in certain regards.

I'll pick up at where Rom left off. Like, we have what we're looking at no more than 30 days until the end of this period, ever runs slow rolling. I think the volatility bans that we would see following, you know, either an aggressive reaction from Trump, which I think is more likely. I don't think he's going to roll over and, you know, push out another 90 days here. but I think the impact on markets would be less than the drawback that we saw in April. I'm more interested to see how employment data shakes out over the next 60-90 days.

It'll be an indicator of where and when we start to see any expectation of the dot plot coming, you know, towards more favorable rates. I'm in a not-complacent patient weight in fee mode. And I think the second half in June is going to be quite telling. Yeah. All right. So that's it for macro, I guess. You want to have any last minute macro things before we jump on to two really quick talkets and wrap up?

Go ahead, Steve. Just one quick small thing because then I have to drop. But my last answer, I was talking about April inflation data. I actually may. So I just wanted to make that one quick clarification. I'm not sure if anyone else caught that, but I wanted to. I didn't catch it. So I hope that makes you feel better.

Anyway, thanks everybody for watching and listening. And I'll talk off now. All right. Thanks, Steve. All right. Yeah. Let's be real quick here. Let's get a quick take from Sal mostly because Ram and I have talked about our views on

this topic a lot. But really, it's just treasury companies, Bitcoin treasury mostly, but also some all coins. I'm curious to hear what you think, Sal. But I mean, just some stats here. I mean, strategy just did another like billion dollars essentially for purchases. Metaplanet did a $5 billion stock rights program and the surge 22%. So Metaplanet, Japan is doing extremely well.

And then also, like if you just look, I'm on Twitter, obviously, and I feel like every day I'm here, new company buying Bitcoin for the strategy or entering a new treasury strategy or the issue debt to get erased capital by Bitcoin. Or somebody who's already been doing it a little bit is leaning further into it. So here's some stats from this account I follow on Twitter. I started following in the Bitcoin ETF race. But from June 2nd to June 6 alone, he has 42 updates on this exact topic. 16 new treasuries added. So that's new companies doing this. just in the one week, 16 companies added Bitcoin totaling 4.4,000 Bitcoin, 4.5,000 Bitcoin almost.

11 companies announced for future purchases worth billions of dollars, including four that haven't officially launched yet. So, like, there's, that's 42 updates of these different companies that are doing all this different stuff. Obviously, the big dogs are strategy and Metaplanet and some others that are come 21s coming to market. But I'm curious, Sal, from your point of view, like, what do you think of all these things? Because, again, Rahm and I have talked about this a bunch, but this I feel like we couldn't not at least talk about this a little bit on the show today with all the announcements we've seen. Yeah, there's kind of like three points in my mind on this. Like point one is, and you've seen murders on this on X, but at some point there is a break and a supply shock.

And we've been monitoring Bitcoin held on exchanges, which has plummeted in recent weeks and probably will only accelerate if this momentum continues. We know what that looks like. We've all seen blow off tops in the space, candidly outside of the rally around the election period. We really haven't seen the type of velocity and price movement that we have in prior cycles, probably because of scale and the nature of capital participating in the market today as compared to 21 or 2017. But I do think at some point this sets the stage for a pretty aggressive move. The flip side of which is, you know, a back of my mind concern around buildup of systemic risk over leverage in this space and feeling like point one is too good to be true. and relies on certain types of assumptions with relation to duration and time,

you know, time on maturity and debt obligations. So as I see like the really strong momentum, it always gives me a little bit of concern. And then the third point I've seen is just the emulation down the ladder. All the majors are moving towards a public company, digital asset treasury structure you saw what happened with the Ethereum iteration. We've already seen sole strategies go. I know of several others that are. are taking similar types of approaches and in assets that have different characteristics

in terms of mechanic design and inflation assumptions behind them. So I don't think the trend is going to stop anytime soon. I'm hopeful that we don't end up in a position where we have a buildup and a break, but it's been pretty remarkable. I would be wrong. If you're long Bitcoin though, I would stay along now just tactically. Q4 I think is a bit of a different story and maybe even mid-July. Bitcoin is just flirting with all-time highs right now, that capital is going to go by Bitcoin.

If there's less Bitcoin on exchanges, then Bitcoin is more sensitive to that incremental bid, you know, as you know, so it's a, you know, by the way, fun fact. I read that Michael Staler's average purchase point for Bitcoin is now higher than the 21 peak in Bitcoin. Yeah, it's 70K now after yesterday's purchase. There you go. So yeah, I think Bitcoin's long chaos too, a lot of chaos out there, right? Yeah.

I made the comment last time, like, I was taken aback by the depth of the retracement that we saw post, you know, liberation day. I don't think we're going to see that type of retracement again, even if trade wars flare up, you know, coming first week of July. So I'm looking around on this. Like, I would be patient and stay long because I think the likelihood that we see a blowoff move upwards is, far higher than we see on the downside and probably have a greater percentage change in price. Yeah. Yeah, funding rates aren't elevated now. There's no sign of euphoria.

And retail is still relatively absent as compared to 21. It's just it's not the same composition of capital that it was. And a lot of these institutional long duration bias investors are diversifying into retirement positions, you know, taking a five to 10 year view. It's just different today. I do think Ethereum is very interesting here, though, because that's less crowded. And the narrative of a micro strategy for Ethereum or multiple coming online can do really well. It's a nice catch-up trade. I think Bitcoin and Ethereum are both very interesting stories here.

Yeah, I would say the only come. I actually agree with everything you guys are saying. I think like getting really low levels of, you know, Bitcoin on exchange can lead to those blowoffs. It'll make like the incremental dollar, as you said, could, like, you know, impact prices a little more. But I would also say, like, in the commodity world, the saying is like the cure for high prices is high prices because, you know, more supply will come online. Though Bitcoin is obviously different, right? So in the commodity world, if you're growing wheat or soybeans or whatever and price is really high, farmers and people will spend more money to, you know, grow that crop and take advantage of those high prices. Eventually, as more supply comes in line, price comes down.

The thing with Bitcoin now, especially with the mining subsidy so far down, is like that new supply is going to come from people like selling their Bitcoin. It's not going to be from like new Bitcoin created necessarily. But I do think like higher prices is going to create more sellers and people are going to bring their money to their Bitcoin to exchange to sell. So I do kind of like discount a little bit of it. I don't I don't think we're going to be in the same level of like blow off top just because the amount of capital you need to, you know, to move these markets around. Though it is obviously at the incremental side of things. We saw positive news to look forward to in terms of congressional action exchanges coming online. My approach to Bitcoin now is I'm focused on off-grid Bitcoin mining through operators that are using cheap, free natural gas, and they're using that to mine Bitcoin.

So that's my angle. So I don't like paying retail from my Bitcoin. I like finding a dice discount to that. So that's my approach here at this stage in the cycle. Nice. All right. I'm just going to read all some stats about the ETS and then we'll wrap up. I don't know if you guys have any of your thoughts on the treasury side of things or Bitcoin pricing.

All right. So real quick, the Ethereum ETS now are like nearing in on $3.5 billion in net inflows. They had like a billion dollars in outflows and that retracement you were just talking about Sal. They're almost taken all the back. They're like $850 million in inflows, tons of consecutive days and weeks of inflows. The Bitcoin ETS have way more than retraced their outflows. ibit is now a $70 billion fund. It's one of the top 25 largest funds in the U.S.

It is the fastest to 70 billion by like an order of magnitude. It did it in 341 days. The next fastest is like over 2,000 days, I think stat courtesy of my boss, Eric Bautunis. But like the growth here is just absolutely in stain. So that's the first thing I want to say. Just those ETFs are doing exceptionally well. The other thing is Trump, true social file for a Bitcoin ETF that officially went through to the exchange.

They filed a Ness 1. So True Socialist launching a Bitcoin ETF. The final deadline will be sometime in February. My assumption is it will probably not have to take that long to get launched. Yeah, those are the main key things. And like I said earlier in the show, we're going to see basket ETFs likely get approved in early July. I think there's a decent chance that we can see some Alkoyne ETFs, Solana, XRP, Litecoin, potentially. Those types of names approved in that time range, too.

Is a maker? No. There is no maker filing. So how do we get a maker filing? We got to call Vance. We've got to get Vance on the show here, by the way, from Framework. People behind the Ethereum and Maker ecosystem. That'd be fun.

Yeah, get more in the weeds. All right. Any comments on that, guys? Man, it's wild. Most successful financial product launches ever. I love to see the flows on the east side. I think it sets up really nicely with what happened with SBAT. I think Ethereum is so mispriced.

So I'm excited to see where that goes. Last time I was here, I was saying it's a setup for a short squeeze. Sentiment was at all-time lows. You've seen major changes at the foundation, governance, communication, new personnel in place. A lot of chatter that's more positive today. And I think the institutional flows on the UTF side are reflective of that. So excited to see where that one moves. Yeah, look, I think it's exciting.

Like, stable coins are here. You're seeing Trotify, try to get their head around this. They haven't used stable coins as a customer yet. Now they're forced to reckon with it. At the same time, they see a bill that's going to advance stable. legal coin legislation. So it's a, there's like a gestalt shift happening in markets. You've seen Visa MasterCard stock prices are down one point today, down more than XLF. So it's more than just beta exposure. Look, I know that's a drop in the bucket. But someone

out there said, gee, maybe there's some risk for these legacy payment incrementaries or networks. There's a lot of stuff happening, man. It's really exciting. And I mean, like you guys, the money pouring into these things is just crazy. Anyone who's like completely down out of this space back in like 2016 needs to like do a complete rehash of what their thought process was. And I'm telling you right now, a lot of people on Wall Street still have the same views they had in like 2017. They have not readjusted at all. Jim Cheney micro strategy still. He'll be right in Q425 after he's liquidated and Craig Crane the bin on the way out. Right. All right. That's that's what we're going to end the show on.

Rob calling out Jim Chanos. All right. Thanks for joining us for this episode of Bits and Bips. So thank you to all you guys in the live stream. And also thank you to anyone watching this later on YouTube or wherever you listen to the podcast. We'll be back in one week to discuss more about how the worlds are crypto and macro are colliding. Until then, everyone.