Unchained - Bits + Bips: How Stocks May Decouple From Bitcoin—and Why TradFi Should Love a HYPE DAT - Ep. 972

Episode Date: December 5, 2025

In this special double-feature episode of Bits + Bips, Unchained executive editor Steve Ehrlich brings listeners two of the clearest investor perspectives on where the crypto markets may be headed next. First, Owen Lau, Managing Director at Clear Street, breaks down why crypto equities remain so tightly correlated to Bitcoin—and what might finally cause that link to break. He unpacks the growing role of stablecoin revenue, Coinbase and Circle’s evolving business models, and why a market structure bill in 2026 could reshape the sector. Then, in the second half, Bob Diamond and David Schamis of Hyperliquid Strategies explain why they believe Hyperliquid and its HYPE token represent one of the most compelling opportunities in digital assets. They walk through the rationale for their DAT, Hyperliquid’s performance during extreme market volatility, and the broader ecosystem being built through HIP-3 and beyond. Sponsors: Mantle Host: Steve Ehrlich, Executive Editor at Unchained Guests: Owen Lau, Managing Director at Clear Street Bob Diamond, Founding Partner and CEO of Atlas Merchant Capital David Schamis, Founding Partner and CIO of Atlas Merchant Capital Timestamps: 0:00 Introduction 1:23 Owen’s outlook on crypto stocks—and what really drives them today 5:19 Why Coinbase’s stock is struggling while revenue goes up 7:47 Why so many crypto companies are spending heavily to expand distribution 10:58 Whether the 10/10 crash changed how analysts evaluate public crypto companies 14:41 Will public crypto companies enter prediction markets next? 17:02 How Coinbase and Circle are positioning themselves in this emerging area 23:00 What Citadel Securities’ push for SEC regulation of DeFi means for the industry 24:55 How a market structure bill could reshape the outlook for altcoins 27:03 Would a public crypto company buy a DAT trading below its NAV? 28:59 Has the window for crypto IPOs already closed? Part 2  32:57 How David and Bob first got into crypto  38:57 Why a DAT for Hyperliquid is necessary  42:40 Why they say their stock is a major opportunity right now  45:55 How running an altcoin DAT differs from doing one for ETH or BTC  48:54 How the DAT deal was structured—and Paradigm’s role  51:38 How they’re avoiding the big sell-offs typical in PIPE deals  53:11 Why there was a gap between announcing the DAT and executing it  55:14 Why Sonnet Therapeutics will remain operational post-transaction  57:51 Why the 10/10 liquidation event made Bob more confident in Hyperliquid  1:04:19 The broader Hyperliquid ecosystem—far beyond the DEX  1:06:42 Why David says perps are far better products than options  1:10:12 Why regulatory clarity is critical for Hyperliquid’s long-term success  1:13:37 What HIP-3 unlocks for builders building around perps  1:14:46 How prediction markets could integrate with perpetuals  1:15:49 How Hyperliquid can compete with major exchanges and crypto giants  1:21:18 Why Hyperliquid’s feed is so much faster than other chains  1:22:28 The $1 billion shelf offering—and how they plan to accumulate more HYPE Learn more about your ad choices. Visit megaphone.fm/adchoices

That's kind of the reality in the blockchain adoption right now. We need to build infrastructure. It takes time. You have to be patient and invest in these companies longer term, not just for the next three months and six months or so. Hi, everyone. Welcome to Unchained on air. I'm your host, Steve Erlich, executive editor at Unchained,

and we have a really special lineup for you today. First, we're going to kick things off with a Bits and Bips, interview conversation with Owen Lowe, head of FinTech Research at Cleo Street, and one of the top at least analysts covering the entire industry. And then we're going to wrap up with a conversation with Bob Diamond and David Shamis from Hyper Liquid Strategies. The top hype dat that actually just started trading this week when its business agreement was finalized. And we're going to get into a lot of details about what it's like watching a dat in this environment. how the stock's been doing so far in his first couple days of trading,

what it's like running an Alkcoin debt as opposed to one focused on Bitcoin ETH and a lot more. But before we get into our first conversation with Owen, I just want to take a brief moment so you can hear from the sponsors who make this show possible. Mantel is launching the Global Heckathon 2025 to accelerate the future of real world assets with a $150,000 prize pool, backing for from a $4 billion treasury and direct access to buy bits seven million plus users. This is the ultimate ecosystem for builders. All right.

So welcome, Owen. Thanks for joining us. You're a long-time friend of the show. Thank you for having me a Steve. Good to be here. So let's just kind of like get into things right away. I want to get your sense of the purpose of this conversation, I think is really, I want to get a sense of how crypto stocks are performing that aren't of the

the crypto debt variety or Bitcoin miners because they've been in the news a lot. Bitcoin miners have largely been ascendant despite really challenging economics because of the demand that comes from their facilities from AI developers. That's have been struggling for their own reasons. But one of the things that I like about you is that you cover exchanges, you cover circles, stable coins, kind of a much, wider cross-section of the industry. And that's what I wanted to kind of get into here with you.

So maybe just to begin, I'd love to get your sense of the market and really how it's impacting some of these other companies and in particular some of the strategic decisions that they're trying to make right now during this spares period. Yeah. So there are always two key factors that affecting crypto equities that I cover. So you mentioned correctly mentioned. cover Coinbase, Circle, and bullish. And I would say the two factors are, number one, the macro factors.

It is related to interest rate, it is related to tariff, and some other like broader macro theme. The other one is the fundamental factors that you try to get into. And I can talk more about that from both perspective. From a macro standpoint, you know, there are lots of news flow coming in and out. We had like tarot meals, and then about a month. or maybe like two weeks ago, the market has priced in a very low probability of December

rate cut. And since then, the market has turned and pricing at a higher probability of December rate cut. So you saw how that changed the sentiment and also the price action for Bitcoin. The interesting thing is there's still a very high correlation between Bitcoin and the equities I cover. To be fair, I don't think that's a good sign because Actually, when Bitcoin goes up in Zhang or when you see volatility, there's actually higher trading volume. So interestingly, when you see higher trading volume, revenue is actually higher. But you see some of the names I cover when there's high volatility, the stock goes down, but revenue actually goes up. So you see that dislocation between the fundamentals and also the sentiment.

That's why sometimes I would say over the past two weeks, I actually see. see more opportunities to get into these stocks, the stock I cover compared to many other stocks. So I think that's kind of the introduction or maybe the key point I want to send it out. Yeah, that's a really interesting point because one narrative, and I was actually going to get into this later in the conversation, is that fundamentals for crypto, the actual network fundamentals seem to be good and improving, but sentiment is very poor. And I actually wanted to get your sense of how, like, I hear about that a lot in the context of the price of Bitcoin and Eath, but I wanted to kind of get a sense of does that carry over into equities?

Like you mentioned, especially the non-data equities. So the fact that you brought that up for Coinbase is particularly interesting. It's funny, the Coinbase narrative, I mean, they've been trying for years and years to sort of pitch themselves as sort of a more diversified play on crypto and to break this correlation with Bitcoin, not just by diversifying trading volume away from Bitcoin and Eth to but then also building out their subscription services revenue to, I think, be at least 50% of the total net revenue as well to sort of smooth that seasonality. Can you maybe get a little bit more into that, like sort of the divergence between the revenue and the price? Because

that seems very atypical. And frankly, something I think would be more applicable in crypto where the traders don't pay as much attention to fundamentals, but it's happening here too. I'd love for you to get a little bit more into that. Yeah, I think there are lots of factors, that still high correlation, part of that may still reflect that the immaturity of this market. So if you look at the traditional market, if the stock price or the broader market S&B 500 goes down, if you look at some like traditional exchanges, like their stock price actually went up in that down market. But you don't see that in crypto market. So part of that again, maybe it reflects immaturity of the market, maybe over time. That correlates.

could break, we'll see. And then the second point is, you're right, Coinbase has been the first thing away from the trading revenue as well, even though you don't believe in that high correlation, or you believe in that correlation. In some sense, part of the revenue, it's actually kind of like non-volatility-driven,

which is like stable coin. They share around like over 50% of half of the revenue from Circle for the reserve income. So those revenues, are more stable and predictable compared to training revenue. So over time, my prediction is that correlation could break between Bitcoin price and crypto equities or maybe crypto exchanges. But in the near term, I still see like people still try to tie that equities, fundamentals

to Bitcoin price regardless of the fundamentals. Because I agree with you. I actually see a lot of traffic companies embracing crypto. And we saw the news from, I think Van Gogh. Bank of America, they started to open up their offerings to their clients. And maybe over time, you can start to allocate from 1% to crypto to 5% to crypto. So those are the incremental money, the fundamental that support the blockchain adoption longer term. Yeah, the capitulation at Vanguard was particularly compelling just given how obstinately opposed

they were to all this for so long. I don't think they've quite reached Jamie Diamond, J.P. Morgan, or Larry think BlackRock territory, but we'll have to check in in another year or two and see what happens once Vanguard starts launching their own ETFs and tokenizing stocks and running perhaps their own ethelayer too, not reporting, just some fun conjecture. Okay, so I want to one other big difference that I'd see is like there's a lot of R&D happening when it comes and a lot of spending from some of these companies. And let's talk about Circle, I mean, bullish, coinbase, et cetera, to build out product

lineups because they're much more diversified than ADAP, for instance. So at Bitcoin miners, again, in your own particular category. So I know you spent a lot of time talking to these executives because they think, I mean, quarters, months, years, years ahead. And I think in one of your reports, even talked about how Circle, there's a mismatch between expenses and revenues because of some of the work that they're doing to build their arc blockchain and sort of expand their distribution platforms. So can you talk a little bit about what's happening there and how you pay attention to

what's happening behind the scenes and what investors can do to understand how all this will translate into future revenue and growth? Yeah, I think because we are still in the very earnings in terms of the blockchain adoption, we need to build the infrastructure first. And then we can ask people to come in and use our services, right? You cannot just like magically create an infrastructure, then people would come in. First of all, the number one thing, just like Circle you mentioned, they have to build a layer one.

And then they have to build more utility and functionality. You have to attract people to come in. You have to provide more incentive for people to come from maybe your competitors to your platform. So number one, it means that number one. You have to spend first. and the revenue would come later. But it's fine. We understand that you're investing for the future.

Some people may not like it. I like it because I like company investing in the future. So I like that trajectory. But the bottom night is they have to prove that eventually they can get the revenue in maybe one or two years. So that's the bottom line. The second point is it also takes time to get the people in. So you need sometime maybe, I don't know,

maybe three to six months to invest. the infrastructure, and then you may need another six to 12 months to attract customers to come to your platform. So, and then maybe after 12 to 18 months, you start to generate revenue. So that's the mismatch I'm talking about. You need to invest first for the future. Those are a good long-term project. Why? Because blockchain can make the transaction faster, cheaper, 24-7, and also global.

So those are the pitch to customers to come into your platform. And I think those are good pitches. And once you have that value proposition, you have to still convince the customers to come in. So that's why it takes time. There's a mismatch. I'm not too concerned about that. But that's kind of the reality in the blockchain adoption right now. We need to build infrastructure.

It takes time. You have to be patient and invest in these companies longer term, not just for the next three months and six months or so. And how does all of these projections and, And a lot of this, again, was issued based on some Q3 earnings, which I know each company reports on slightly different days and weeks, but we're two months now almost from October 10th and the massive wipeouts of liquidations and this very bearish climate. How does any of that impact, like either what you're saying or some of the guidance that was issued from the companies that you cover? I also presume that maybe the answer depends on what happens. I mean, we're not in an air market yet, but the climate is certainly bearish. And there's a wide variance in projections for what next year is going to look like.

Yeah, exactly. So taking a step back, like it really comes down to your view about the next year. Are we getting into? Like sometimes, like, I think I know some people talk about crypto winter right now. some people don't believe in it, some people may believe in it. To me, what I'm looking at is, like you're right, looking at the guidance and also look at the price action. So you mentioned the massive liquidation $19 billion on October 10th that actually may dry, you know, up a little bit of that liquidity. But when I look at these stable corner USC market cap, it actually has increased quite a bit over the past two weeks.

So it's not like people are just taking the money, convert from USDC and USD and, you know, put that into the bank. I haven't seen that. I actually see market cap of USC keep going up. So what that means is there may be some auto-de-leveraging, like some mechanical robotic sell-off that creates some kind of panic that drive all the equity markets. But as a human being, we can dissect and filter out this noise. and use our analysis to make a call that is it actually justified at this level. That's why we upgrade bullish about a few weeks ago, because we felt like that liquidation drove down the price.

At the same time, the fundamental was still very strong. And since then, the salt actually recovered quite nicely. So to me, from like the human investing standpoint, I actually see this as an opportunity, not a risk. So, I mean, there's still a risk, always a risk of investing. But what I want to say is we have to come down to our own analysis, you know, based on all these factors and evidence so that we can make a call that is different from the robot. Oh, and a few more questions on the exchanges that you cover, Coinbase and bullish,

and then I want to go to Circle for a couple of specific things. But for one, I really want to get your sense of prediction markets and how, either of those platforms might try to utilize them into their operations. I mean, that's clearly between Cali and Polymarket. The rising star of all of crypto seems like every other day they're raising billions and increasing their valuations. But I haven't heard much noise. Robin Hood's recently launched.

I know Gemini either is about to launch or has announced their intention to launch. Coinbase seems to be a. national place to do something like that as well. So what are you hearing about that? So I think more and more brokers and like these crypto exchanges will launch prediction market offerings at some point. Like you saw the news. I mean, there was like many speculation out there that I think Coinbase is partnering with Kaushi and I think there was a leak report out there. There were some pictures of Coinbase prediction market as well. They have a system update event in two weeks, and I'm going to San Francisco to listen to that as well.

So there is a high probability that they will announce something in two weeks about maybe prediction market or tokenization or international expansion or maybe even agentic AI integration, that kind of good stuff. So to me, further diversification for platforms such as, you know, Coinbase and Polish make It's lots of sense. For Circle, I would say, yeah, just keep going into the B2B cross-b border payment, layer one, and those are good channel for them to further diversify the revenue stream. Okay, so, yeah, we'll have to keep a lookout for that.

I know Bullish is more institutionally focused. You actually put out a report about a key hire they just made for CoinDesk to try to monetize their retail audience, but prediction markets certainly seems to be a retail play. So out of the two, I mean, I know they're in different worlds in terms of size, at least at this point. It seems like it might be more of a Coinbase play. I am curious, though, I mean, Coinbase has had some successful launches, but they've also had some flaps. I mean, their NFT exchange did not do well. Base has been successful in terms of getting traction, getting a lot of tension, but you and I have spoken many times about how it's still a long ways away from meaningfully contributing to Coinbase's bottom line.

Is there anything in particular that you think when it comes to point basis strategy in prediction markets that's going to be really important for them to get right? So first of all, they need to get it out first. So I think the issue right now is they make the announcement a few months ago, but we are still waiting for the new products to come in. So I think the first step is they need to launch a product. Maybe it's in partnership with Kaushi or some other platform. We don't know. We may know that in two weeks. The other more technical question is, do they want to follow what Robin who just did last week or so,

which is form a joint venture and have their own so-called CFTC license, DCM and DCO license? I know it's getting very technical. But what that means is they are going to be their own exchange and launch the product, like the event contract product on their platform. That's what Cracken. They acquired those licenses. Exactly. A DCM and an FCM, although they've announced anything related to prediction markets yet.

Exactly. So I don't want to get into like too much detail, but what that means is if they have the DCM or DCO license, then they can launch their own event contract. They can clear that contract. They don't have to white label or partner with some other prediction market to have that product. So they can control their own destiny. So that's what Robin Hood did about like a week or two weeks ago, that announcement. That's an important step.

The question is, will other broker and platform follow that model? Yeah. And that's also what Polymarket did, which is what enabled their reentry into the U.S. They made a purchase a couple months ago or something. And just were able to be able to. Exactly. This is an important step because once you have that license, you become a regulator platform. then you are not become like so

like you're not like that opaque that maybe people don't trust you and all kind of good stuff but again the following night is if you have the license you're being a regulated platform if you have the DCM or DCO license you can also like put out your own

contract and control your destiny so that could be a logical next step for many brokers to think about and I also wanted to ask about going back to a coin I'm sorry circle when it comes to prediction markets. To me, like, this isn't,

this hasn't been discussed very much, but I know it's in the air supply a little. Like, is there a world, I mean, where, like, what is Circle doing to try to help protect its distribution on platforms like Polymarket? Because right now, they're getting all the yield. Polymarket's not. I know that there are some more,

there's some things happening behind the scenes to, like, sort of like, stake or generate passive yield through stable coins and other things that are deposited in these event contracts that sometimes don't settle for months. People don't want to forego those gains. But it could be a, I don't know if a vulnerability is the right word, but obviously Circle is going to want to protect its market share in these platforms. And like, what are they doing to protect them? Do you have any sense? So I think the number one thing they're trying to do is to increase the visibility and try to list circle on as many platforms as possible.

So example, it's a partner with, let's say, Coinbase, right? They have the partnership already. And then they had a partnership with Binance. They announced that last year. What I am seeing what they're trying to do is to have more partnership with many platforms so that it can drive the adoption of USDC within the trading ecosystem. So that's the number one thing because their revenue reserve income still contribute a very vast majority of their revenue base. So they want to increase the market cap of USC as much as possible.

That can drive high adoption. The second one is, again, go back to the layer one, right, the arc. So now I think lots of the USDC run on Ethereum, some may run on PODC. Solaner and some may run on Aptos and some other layer one. Maybe longer term they want to have their USBC run on their own layer one as well, right? So that could also retain some of the fees within their own ecosystem. And then they also just launched a pretty interesting project called Circle Payments Network. So that essentially tried to disrupt the offices like the remittance, the

the FedWire path. So that is another interesting project that they want to try to get the whole network effect so that they can also tap into the cross-border payment capability. B2B, again, we talk a lot about, this is a huge opportunity. Based on my estimate, I think the total transaction amount is about $40 trillion.

So think about just to the amount, $40 trillion. if you can take a fee of 1% or 2% that, you know, $40 trillion, that becomes a billion dollars increment of revenue opportunity for... Bigger than the total US debt, I guess. Right, exactly.

Yeah, so that is obviously quite huge. One other question, and then we'll start to wrap up here. I wanted to get your thoughts. I know this isn't directly in CoinBasus Crosshairs, but they do have a Daxon integration with the BASAP, etc. or Citadel's comment letter to the SEC about potentially regulating dexes as broker-dealers, especially now that they're getting involved in tokenized stocks.

And one of the big concerns is that they don't want two different sort of regulatory regimes overseeing the same underlying security. Do you have any initial thoughts on that? I mean, it will be a long debate. I don't have a strong opinion on, this one. But I would say this is a strong debate. My bottom line is we do need a clear regulatory framework for the whole ecosystem so that we know what the boundary is. What we don't want is, you know, we don't have any clarity. I don't want to go back to like what we had two years

ago because that just give the agency opportunity to go after this platform. I would rather have a clear regulatory regime or bill to govern these platform, then we have nothing. Now we have nothing. So what I recommend is, you know, like everybody come down and discuss and debate, even though it could be a long, long way, but find a framework that works for, you know, most people. And then we can go from there. I just don't want to go back to two years ago that agencies can go after and send Wells notice to all this platform on a daily basis. So that's what I don't want to see. Yeah, I don't think anyone wants that, even the people sending those as well as notices.

Okay, so just a couple things to wrap up here. I want to look forward, look ahead a little bit, and help some of our watchers and listeners in a very official, not financial, not investment advice kind of way. Understand what's going to happen next. one question that comes up a lot is how clarity in particular is going to help the exchanges, especially the ones you cover

bullish and Coinbase and it's bullish. I think they got with a bit license and now they're really trying to end up in the US. Coinbase is obviously the largest exchange in the US. We all saw what happened to Circle Stock when

Genius Act was signed into law about a month after it IPOed. Do you anticipate something similar? happening with clarity when it relates to either of these stocks. And if so, or even if not, can you maybe give one or two kind of concrete reasons why? So my prediction is I still believe whatever clarity act or whatever the market structure bill, the Senate would come up with. I hope it will get past in 2026.

And if it get passed, I think that would give us, I quite like, the Orchcoin summer. So now we only have clarity on the stable coin, maybe clarity on Bitcoin and also Ethereum and maybe some other like maybe two or three other coins. But we just don't have the clarity on many other odd coins. So my expectation is just like Genius Act. Like when we got Genius Act pass, we saw a little bit of stable coin somewhere. So hopefully Clarity Act or Market Structure Bill get passed next year. then we'll see another maybe inflow of both like capital and also people coming into this space.

So I think that will be a very strong positive to the sector next year. I just don't know when. I hope I heard that it's still going on. And some people said that it can get past by the end of this year. I don't think it will happen by the end of this year. But hopefully early next year, then we'll hear what's up of. from the Congress. Here's another question.

I'm not sure you've been asked yet. If you have, let me know. There's a lot of talk. I mean, that are all trading at, not all, but many are trading in significant discounts

to market cap. And that premiums are well below one. A lot of talk about matchmaking, M&A. Do you get any sense of a company like bullish or a coin base trying to engage in acquiring or partnering with any of these companies,

it could be a smart way potentially to get a lot of crypto on your balance sheet below spot price. And I know in particular, Coinbase is starting to make some noise about buying and holding crypto on its own balance sheet. So I have heard anything related to either Coinbase or Circle or bullish wants to buy any deck. I would say from an analyst standpoint, I would rather see the management invest their capital into longer-term project,

like building the infrastructure, partner with some traffic companies, or building the bridge and things. I'll building like prediction markets and tokenization projects and things like that than buying a debt company. But that's just my perspective. I felt like if you do more infrastructure or create more infrastructure for the longer term, that would help the multiple and also long-term revenue growth because I'm not sure whether debts can give you

a lot of revenue growth from that perspective. But if you get into, let's say, B2B cross-b border payment, that's again, it's a $40 trillion opportunity, even though if you penetrate into like 1% of this market, your incremental revenue opportunity is huge, it's massive. So to me, from an analyst standpoint, I would rather than to go to create a use-deck capital for longer-term project. Okay. Fair enough. And last question. A lot of the IPOs, I mean, Circle had one of the, I guess, some of the successful IPOs of all time, at least in terms of percentage growth. It's given up virtually all of it by now, the vast majority of it. A couple of other recent IPOs have also fizzled and companies are trading well below. I mean, bullish is one of them. Gemini Space Station is another. And I'm just curious.

because there's another set of companies ready to IPO. I mean, there's Crackin, there's blockchain.com, Fireblocks is rumored. There's another, I'm sorry, I think Chianelis is another one that's potentially rumored to be doing it. So what are you thinking when it comes to new IPOs in crypto, has the moment passed or like do you think there's going to be delays? What should investors think about when,

keeping in mind this recent history of significant surges on the days or day of or days after trading, but now with a few months of perspective, they've come back down to, I guess, more reasonable premiums and multiples. Yeah, I mean, I wouldn't comment on the stocks I don't cover, but the two stocks I cover Circle and Bullish. I also went through the process. Actually, both stocks are still above the IPO price. So Circle, I think IPO at 30. $32, even though the stock came down a lot, but actually it's still 100% above the IPO price. And for bullish, I think the IPO price was about $37. And the stock today is trading at around $48. Again, this is also above the IPO price.

So you ask about whether the moment has passed? I don't think so. I think if you are a soiled company, if you generate positive EBITDA, you have a good long-term vision and long-term project, I still think you can command a good multiple in this market. I wouldn't comment on any specific name you just mentioned, but to me, the bottom-out is that you can show the investors that you have the long-term vision. You really have, like that your project has long-term project. You're disrupting a specific area, or you creating an incremental demand that people really want.

I still think those are good companies that can go public and command a good market. a good multiple in the public market. So we'll see what come out next year, and I'm excited about this opportunity, actually. All right. Well, thanks everybody for watching and listening. Mantel has entered a new phase as the distribution layer connecting TradFi and on-chain liquidity. To accelerate this vision, the Mantle Global Hackathon, 2025, is inviting developers to build scalable RWA and DFI products.

Why build on Mantle? It's an ecosystem built for builders. You get direct access to ByBits 7 million plus users for potential listing exposure, support from the $4 billion Mantle Treasury, and mentorship from top VCs like Spartan and Anamoca brands. With six tracks, prioritizing RWA's and RealFi, and a $150,000 prize pool plus grants, this is your chance to deploy on a high-performance modular. L2. Register now. The link is in the show notes. We think that Hyperliquid, quite frankly, is the most exciting thing in the digital space today. This is sort of like micro strategy 10 years ago when lots of institutions had really had

no other ways to buy get Bitcoin exposure than through micro strategy. That's kind of where we are right now on hype. Hi, everyone. I'm your host, Steve Erlich, executive editor at Unchained. to break down the newest debt that began trading on NASDAQ, Hyper Liquid Strategies. We have David Seamus, CEO of Hyper Liquid Strategies, and Bob Diamond, the former CEO of Barclays and the executive chairman, to break everything down for us. All right, so before we get in, I'd love to just hear about both of your journeys into crypto. David, why don't we begin with you?

How did you get involved with this project? What's been your journey down the rabbit hole? Sure. As far of my journey into crypto, I've been a traditional finance guy for years. I've been doing basically private equity style investing into financial services for over 25 years. Banks, insurance companies, lots of stuff in between. In 2015, I made an investment in Bitcoin. I should have bought more. But once you have an investment, you start really focusing on things. And I would be hell. I held. I never said, you know, the only ones I only get, the ones I don't have anymore is over the years, particularly early on when I was explaining Bitcoin to people, I would like give away a little bit.

I'd send somebody $5 or $2 or whatever. And, you know, now it's like worth actual real money. But other than that, I've never sold any Bitcoin. I should have bought more, of course. But anyway, that was 2015. And it says a serious investment, the first thing we did is a first thing we did is a firm and the first thing I've done personally in crypto was in 2012. We invested in Circle.

We can obviously talk about that in more detail if you want, but that went very well, incredibly well, you know, four and a half years before the IPO. And then this last hyperliquid strategies is the second thing we've done professionally. And we were really made aware of hyperliquid, the blockchain and the exchange, calling it early part of 2025. We spend time studying it. We can go into this more detail if we want, but we got to know the paradigm guys.

It made a lot of sense to have a debt for hyperliquid for a bunch of reasons. And we got serious about it kind of in the late spring and we announced the deal on July 14th. All right, great. And Bob, I would imagine that a lot of people watching and listening will be familiar with your background in Barclays, but would love to just hear even more specifically

about your journey into crypto and why you decided to get involved in this project? Well, although David recommended to me that I buy Bitcoin in a much lower price than this, I did not. My introduction was 2021. We were introduced to the team at Circle. We engaged with a D-SPAC. We did a tremendous amount of work with Jeremy Aller and the team and coming up with evaluation.

And over the course of two years, when we're working with the SEC to have that approved. I'll come back to that later. I've got to tell you, Steve, it was for me, I'm a bit of a techie. Both David and I started kind of in the back office as IT people, David at Solomon Brothers and myself earlier than that at Morgan Stanley. And we both have a bias to tech.

We both have a bias to the infrastructure. And I was blown away the more I peeled the onion back on blockchain. and the contribution that could make to financial services. On the other hand, it didn't take along to convince me that stable coins were really going to be something that was natural, quite honestly. I mean, to do the opposite, to convince me that there's not going to be an institutional, digital version of major currencies would be impossible in this day and age. So the question is, is it a central bank developed initiative or a private sector? developed initiative and then highly, highly regulated. I was clear it was going to be the latter. Eric Rosengren, who's part of our organization, but at the time was the president of the Boston Fed,

was a great advisor and counsel to me as he was chairing the white paper from the Fed on the central bank version of the digital coin. So blockchain, stablecoin, the grounding I had there on the next two to three years before we ever even considered doing something different was enough for me to be very convinced that the integration of the best of traditional finance and the best of digital is going to happen. And then, you know, I'm getting ahead of myself. But my goodness, the tailwinds coming from this administration relative to Biden and Janet Yellen and Gary Gensler, who were frankly guilty of malign neglect in terms of financial services and what's best for the customer.

And I think the tailwinds now mean that there are traditional finance people like Bob Diamond and David Seamus, like Larry Fink, like the CEO of both Visa and MasterCard, who are really talking more and more about the importance of blockchain and stablecoins. And that leads to, as David said, it led to a very interesting opportunity for us with hyperliquid, which, quite frankly, we are even more excited now to learn about this initiative. We think that hyperliquid, quite frankly, is the most exciting thing in the digital space today. Great. Yeah, we're going to get into all of that. It's funny. I mean, thinking about like just juxtaposing circle trying to go public by a SPAC a couple years ago at, what, like an $8 billion evaluation. Well, originally, four. And was there a group? duration. Yeah. And then I think

that you doubled it. To nine, yeah. Yeah, but before it ended up not happening and now just a few years later, looking at what happened. Yeah, four and a half billion sounds pretty good in retrospect. Yeah.

Luckily for our fund investors, we did invest in the private round at 2.7 billion. So, so we did fine. All right, so you get to keep your jobs. So that's... This, exactly. All right. So So look, I mean, our audience is pretty astute when it comes to this type of stuff.

And I know they're well-versed in hyperliquid and is the general offerings that the platform and that the PURPStex provides. But we'd really love for some of you a minute or two explain like why hyperliquid and why you think that is the right vehicle for it. You know, you have an existing thing that's doing really well. You have real potential future growth that feels exciting in different areas. And then you say, okay, you know, where are the tokens being valued? The tokens are in equity, but they're equity like. You could use traditional financial valuation metrics to look at the tokens and to look at the valuation. And it's really not that expensive.

It's a pretty compelling valuation. And, you know, using the words crypto, high growth, you know, lots of operations. opportunity, lots of cash flow, and compelling valuation are usually not things that are said in the same sentence the ex parte, but that's how we think about the hyperliquid token. So then the last question is why in a debt? Well, one of the reasons that we think the valuation is pretty compelling is that it's not that easy to buy the hype token, you know, particularly if you're sitting in the United States, you've got to get on airplanes or people deal with VPNs or there's all sorts of hoops

you have to go through to buy something that we think is very interesting and exciting business today. And, you know, the ultimate need for adapt, the ultimate use for Adap is making things more accessible. You know, when Michael Saylor came out with micro strategies years ago, you know, that was creating, that was solving a problem for a lot of people that wouldn't find it easy to buy Bitcoin, whatever it was, 10 years ago. Today, it's a lot easier to buy Bitcoin. but it's not so easy to buy hype. So that's a long answer to your question, but it sort of pulls it all together

and hopefully that's helpful. Yeah, and that's helpful. Forgive me, hype is not available on platforms like Coinbase or Cracken or any of those for US. No. No, it is not. It's available, I believe, on Robin Hood in the US,

only recently. Okay. Okay. But I do not believe it's on any other. It might be available on Binance US, though it might not. I haven't checked recently. I think they announced it,

but I'm not sure it actually happens. But they're the only place where there's any real liquidity is on their own exchange. Gotcha. Okay. Bob, anything from your point of view? I promise them we'll ask you both to answer every single question. Yeah, I mean, I think David is given a very solid answer. But I think in my mind, this is a way to be an investor in the whole ecosystem around hyperliquid,

not just hype the coins. we found a very elegant way to create liquidity for U.S. equity investors, giving a highly liquid opportunity on NASDAQ. And when you think about the cash flow that's being generated, 11 employees, over a billion dollars in free cash flow, and the fact that over 90% of that cash flow is buying back and retiring the native token height, this is the economic equivalent of having a corporate buyback.

And this is very different than just a pile of bitcoins and the valuation competing with an ETF and competing with a cash offering. So David and I believe that we have a team in place that can create real value for U.S. equity investors in this ecosystem. Okay. Okay. So great. So first of all, congrats on finalizing the deal and starting to trade. I mean, what's it been like the last couple of days as a publicly traded firm? seems like the price is doing okay so far. Yeah, so we trade into the ticker per P-U-R-R for hyper-liquid.

It's just in case, make sure everyone knows. And, you know, look, since we announced this in July, the premiums for Dats have come down quite a bit. Micro Strategy is sort of the leader. You can see everyone knows what's happened there. So, you know, we're trading at a modest discount right now, I find, I think there's nothing more unbecoming that a CEO completing about their valuation. So I'm not going to be one of those guys. But I do think that for any investor looking, who's interested in hyperliquid, right now is an awfully interesting entry point opportunity to come in. You're coming in again at a discount to where the underlying hype tokens trade. It's a U.S. equity. It's easily tradable. And I think it's very attractive.

Yeah. Okay. So yeah, I do want to get it. It's only day two, by the way. It's day day you of trading. So, you know, we're still watching. Listen, we like to liquidity. We like the direction that we're heading in. We have a lot of opportunities to be investors here as well. So this is a very exciting time. And I think, Steve, you know this. I don't need to say it. But for you and for all of your. listeners, you know, having that, Jeff, having been with him in Singapore, having before that already convinced ourselves that the blockchain being recognized as the potential future of finance is a real thing. This is an incredible operation that Jeff and his team have built. And now being in a position where we are kind of part of that team in spreading the gospel. And while it sounds simple, we're now listed on NASDAQ, but credit to David and the team to find a good partner as we did in San Therapeutics because we really needed to have a reverse merger partner so we could be listed publicly. It's a

huge advantage for us right now. And all the work that's been done in managing that whole process is paying dividends now. We're, you know, almost a billion. dollar listed public company and represent a tremendous opportunity for U.S. equity investors. And again, I'm going to say it. I think the single most exciting thing in the digital space right now and a layer one blockchain that is now poised to have other builders come on and put other non-crypto assets on the exchange. We have Nvidia, coming. We have Tesla. David, you can probably talk a little bit more about that. But, wow, this is just an incredible development.

Okay. Yeah, I do want to get into to all that what's coming. But as you mentioned, David, it's been a difficult time for debts. I mean, for ones focused on the flagship, Bitcoin, and Eith. But you guys run an altcoin debt. And I do want to kind of ask you what you think some of the key differences are in running a debt, even if it is the flag. ship one for a major old coin, as opposed to one focused on Bitcoin or eth like the most liquid tokens in the world. How does that impact how you try to put your treasury to work to how you manage liquidity to everything?

Yeah, I'd say a couple of things. One, certainly versus Bitcoin where there's no real staking yields. Having an asset with yield makes a big difference, right? the staking yield we're going to get and the interest we're earning on our cash right now is much more than we need to cover our operating expenses of the country. Right. So off the bat, like, we are absolutely stable and there's no issues there. Secondly, we are actively investigating ways where we can earn more yield on our tokens over time

beyond just the staking yield. I think that we want to be very careful, very judicious about that. that. I think that, you know, you can imagine how much my phone is ringing right now with opportunities to put hype to work beyond just staking. And, you know, we think in traditional finance time frames, not crypto, you know, in crypto world, you know, three weeks is thinking long term. That's not a ton of insult. That's just how the world works in the crypto world. We'll think hard about these opportunities, but we're not going to rush into them and we're going to be very careful and we care about things like credit risk and counterparties.

risk and all that stuff. You know, furthermore, how it's different, you know, look, the scarcity value we think is just very different here. Again, this is sort of like micro strategy 10 years ago when lots of institutions had really had no other ways to buy get Bitcoin exposure than through micro strategy. That's kind of where we are right now on hype. And maybe we won't be there forever. Maybe we will. I don't know. But that's a really important factor. And it's a really important factor. It's very different than, you know, the larger crypto datch right now, whether it's Ether, Solana or Bitcoin. They have other advantages.

They do lots of stuff. I'm not going to, you know, be negative or positive about them. They can come on and tell you what they're doing. But, you know, to me, it's just so obvious here. It's such an obvious thing. And, you know, if you believe that hyperliquid is going to grow the way it is, if you believe that it has a place in the future, like we all feel that way, it's just, you know, it's just really hard for me to imagine that getting an entry into our into hyperliquids through our

two per p u r wouldn't be just a great way to do it right now okay so let's go through some of the mechanics of the deal um because i just want to put all the numbers out on on the table right now um how how much hype do you currently uh have you bought do you currently erin at this point uh a few different numbers you're gonna be happy to have these things in front of me um so I believe right now we own 12.6 million tokens. We also have about, yeah. About 300 million or so in cash. Yeah, and then about 300 million in cash beyond that.

So when you asked about structure of the deal, those 12.6 million tokens were contributed to the deal in kind. So more than half the capital we raised came in kind, not in cash. But 300 million is still a significant amount of money. money. Oh, we have, yeah. I was just going to ask, I'm sorry. The Inkind tokens, did they come from the foundation or where did they, they came from?

They came from investors that we knew that owned the token. So Paradine being the most obvious one. They partnered with us on this deal. They're a co-sponsor with us. I don't know the number offhand. I think it's sort of publicly known that they own, they're one of the largest, if not the largest owner of hype. you know, they contributed some, but certainly not all of their hype.

And, you know, from going on there, we, you know, other people that had hype contributed here. And I'm curious, too, like, as far, I know those tokens have mostly been staked through Anchorage. Is that correct? Yes. Are those tokens under any sort of lockup, I, or the transfer restrictions or? Nope, other than the seven-day staking lockup, nothing beyond that. Okay, interesting. Because I have written a couple of stories in the past about debts and sometimes playing games with locked tokens that can still, quote-unquote, be staked or moved in different places.

And it seems like there's a lot that can be done with, quote-unquote, locked tokens. But that's not the case here. It's just that, you know, we're on day two. We will be investigating things to do with our tokens besides staking where we think we're going to earn, you know, a very handsome yield versus the staking yield. but we're only we're going to be thoughtful in juxtrous about it and as I said we might do it if we like it and we might we probably might we won't if we don't but at the moment 100% of that 12.6 or nearly 100 is staked with Anchorage and it's all freely like you can't unsake it and there's no restriction I can't state it anytime I want with seven days

notice and do whatever I want with it and then the cash is cash sitting in a bank account or earning interest right now. Gotcha and and the cash. Forgive me, but was this done through a pipe or was it just a typical equity raise? One of the things I'm trying to understand, too, is I'm sure you've seen some other dads. And when pipe shares get registered, there's big cell walls. Yeah, so the answer is it was the whole thing was the pipe, both the tokens and the cash. But because we used the structure called the double dummy structure, that's a corporate finance term, where we went out and got shareholder approval

and we achieved the tax outcome that we wanted because of all that, the way it was structured is the day we closed, meaning yesterday, everybody got shares that were fully tradable without any unlocks or anything that happened. So the stuff you're talking about, I know exactly what you mean, which are deals that got done, frankly, much quicker than we did.

But the people got shares that were unregistered. So, you know, you had a huge percentage of the shareholders sitting there with unregistered shares, they couldn't sell. And then at some point in the future, whether it was a month or two months or whatever it was, three months, you had some day where the stock dropped probably a lot because everybody got their shares. So for better or for worse, we've done that already, right? That was yesterday for us. We're now past that.

Every single share of this company, other than the sponsor shares that we received, which have a one-year investing, other than every single share and every single investor that put up money, whether it was tokens or cash has freely tradable shares right now. And they could sell right now, they can sell tomorrow, no restrictions. All right, well, that's good to hear. And I'm curious, too, just about the timing of the deal. I know that there was a slight delay because I think there were challenges reaching forum on November 18th.

Can you just briefly explain what happened there? Yeah, so in order to get one of these deals passed, we had six votes, I believe. I hope I'm getting these numbers precisely correct, but I think two of the six votes required not only 50% vote of the people voting, but it actually required at least 50% of the total outstanding shareholders to vote yes. And we had said this publicly, so this isn't a big secret.

We had to delay for two weeks just because we were trying to round up those shareholders to vote. The actual votes were coming in, I think, you know, above 95% in favor of the deal. So there wasn't any serious objection to this deal. There wasn't like some big proxy battle ago. Yeah, I saw that in the founders.

Just there 95%. It was the fine art of fine. Small investors who had been contacted in years. We were chasing down people in airports. I can't tell you what went on over the last three or four weeks to get this. It was amazing, amazing system. I'd get this done. Of course, we're doing this for Sonnet Therapeutics,

which is a company that we weren't involved in in the beginning. So you can imagine. We were working together, though. Their team was great. It was just really hard to herd the kittens. I can only imagine when it's like to try to find some of these shareholders that maybe didn't even know they own shares in Sonnet. Exactly.

And then you have to explain what hydroliquid is and what a dad is. Totally. And, you know, I had people. I was literally making phone calls myself. You had people saying, oh, I want to think about it. I'm not sure. I feel that the deal. You had people that didn't even know they were a public company.

Yeah, I said, look, I have your name on a list. You got a proxy, you know, as far. As far as, as, you know, we're concerned, you own those shares on October 20th, which was the record date. So there was a lot of this stuff going on. It was really, it was an amazingly manual process. But you got to the finish line. That's the important thing. Gotcha.

And then I think I saw Sonnet's going to remain operating as like a sub entity. Can you, because I know there has been debates as to whether or not it makes sense to have an operating company or not. Can you maybe walk us through why it made sense to do that? Yeah, I think to be a dat under the current regulations we all live by, you have to have an operating company doing something. It doesn't have to be the one you bought originally. It could change over time. Owning tokens in treasury is not considered an operating business. So day one, or day two, as we are in today, we need an operating business and that's sonnet, which is more or less identical to what it was before we closed.

I think over time, over, you know, I don't mean like days, I mean months and years. It may make sense to, you know, for Sonnet to have a different home and it may make sense for us to be in different business and different operating business. It may make sense for maybe some of the Sonnet assets to do something and us to keep other things. We'll consider it for better or for worse. It's no longer a meaningful part of the total market cap of this company right now. It's small relative to the total capital, so it's somewhat immaterial. But we'll obviously figure out what we think is best for us and our shareholders. And, you know, and also best for Sonnet and their mission, which is quite a, it's a great mission.

I mean, look, they're trying to cure cancer. And God knows, I hope they're successful or someone like them is successful. So let's get a little bit more into the hyper-liquid ecosystem, as has been well documented by us and plenty of others throughout the, the last 12 months or so. It's been a rocket chip. It's been one of the real breakout stars of all of crypto, perhaps only matched by the likes of polymarket and prediction markets. But where do you think it is now? It's been a difficult two months or so for the industry. And hyperliquid in particular faced a lot of pressure on October 10th with some of the mess of liquidations and some controversies surrounding its ADL policies on that day.

So I'd love to just kind of hear from your perspective or Bob, whoever, like what happened that day and kind of what it means going forward, especially as the market is sort of stuck in a little bit of a lull here. You know, I look, Bob, I'd love for you to chime in to add anything around October 10th, which we spent a lot of time looking at and discussing amongst ourselves. But I think two things happened on that day views to be hyperliquid, and they were both more or less the way it's supposed to work. So one thing that happened is that the system ran as far as I know with a 100% uptime. And I think there are a whole bunch of other exchanges, major ones like finance, that didn't do that. So off the bat, like it was up 100% of its time for its customers doing what it's supposed to do. The second thing that happens, I think a lot of people got a lesson in how ADLs actually work and what it means to be. a PURP exchange. So what I mean by that is a PURP is a derivative. For every long, there's a

short. For every short there's a long. And I think everyone know, every time you put a PURP trade on on hyperliquid, it shows you at what price you're a liquidation is. If you're long, you know, Bitcoin at the time, which was at 117 and you're whatever, 10x long, it tells you at you know, 1-10 or whatever the math is, that you're going to be liquidated out. When that happens really quickly in the time, like, you know, whatever it was, 430 and October 10th, they're liquidating longs. The exchange never sat there and said, we're going to take positions. Their job is to pair off longs and shorts.

Their job is not to take positions in either direction. And if there are literally no longs left or a lot less longs left than they had before, they have to have the same number of shorts left, vice versa. And I think that there's, I don't think there's any debate whether what happened with some of these ADLs was against, you know,

hyperliquids rules or terms or anything like that. I just think people didn't like to feel for it. Didn't it feel right to them? But that's how they have to function. And by the way, as we all know, it didn't take long on the October 10th for Bitcoin, we'll use Bitcoin as the best example,

Bitcoin to rally back. You know, if you fell asleep at, you know, 4 p.m. on October 10th and you woke up midday on the 12th, you know, Bitcoin went from like 117 to 115. But along the way, it was quite a couple days. And, you know, that's exactly why they had to do that, right? If they were just sitting there, you know, with a bunch of, you know, naked positions, you know, that would have been a problem for them. And it's obvious that's not what that's how the exchange is doing.

And the exchange, yet it's an exchange. it's not hundreds of billions of dollars of capital looking to take positions. Bob, I know you're... Listen, I thought it was an incredibly fascinating day. The blockchain that was built by Jeff and team behaved and operated exactly as advertised, not a second of downtime. Incredible liquidations and transactions and volatility. and volumes, very, very, very impressive.

And, you know, I'd like to say we knew that would be the case. We did know that would be the case. But, boy, you feel better after a serious stress test like that. And I think one could not have created a more challenging stress test for, you know, an exchange that's been built in the last three years and is gaining this much notoriety and volumes and credibility. So to see a market action like that and volumes like that and operations like that and not a single break and not a single second of downtime feel terrific. Right.

So what else are you excited? By the way, I don't know another exchange in the world that can say that. Yeah, it's interesting. I mean, I know that like Dex's in general have been very proud that like during periods of acute market stress they haven't necessarily gone down. But yeah, I mean, I know there were issues with finance and questions about their ADL policy there. And for years and years in the past, there was always this joke on Twitter like is Coinbase down yet because they historically, like during times of peak trading activity even regardless of whether or not it was bull. bullish or bearish. There was always that joke that we got really exciting. Coinbase would go down for a little bit. I don't think they've had that issue for a while. I actually used to, I used to work your cracking, and that was like a little joke that we used to have, although we were always jealous. It's not as if Coinbase is customer base as opposed to ours. But yeah, it is something that is certainly, it was a learning experience for a lot of people that didn't know. I guess I thought ADL stand for Anti-Defamation League or something like that. that they never actually knew what it meant in terms of finance.

And then there was a lot of sort of misperceptions or misconceptions about how it worked. And there were people very loud on Twitter that had profitable short positions. Yeah, like, why were they liquidated when, like, they were in the money? But, you know, as you mentioned, Dave, like, at some point, there has to be matching sides on each order or else the book itself is taking large positions that can be untenable. Right. Yeah, so I get that. Let's talk a little bit more about the ecosystem, though. You talked about the billion-dollar sort of annualized revenue, which obviously is very laudable.

I think the only company that would really laugh at that is Tether because they seem to make that every single month. But what are some of the other numbers that you're looking at that kind of give you a sense of the growth of this ecosystem in terms of Dablecoin, TBL, user growth? I know the numbers have all dropped a little bit of less couple months because trading volumes across the entire ecosystem will go down. But what are you seeing? And I'd also ask you maybe to expand this beyond just the decks to, like, who's building on the hyperliquid EVM? And how is that growth sort of fitting into your broader narrative? Yeah, I would say, look, I don't think we have any secret things we're looking at that. people don't. We look at TVL and we look at the open interest and when we look at volumes,

you know, the most interesting one I think, not the most interesting one is when you look at, you know, centralized exchange volume versus dex volume over time. Clearly, there's a large portion of the customer base, the crypto customer base out there that likes trading on dexes and that's coming through when you look at just, you know, that mix over time, especially in the last two or three years. So, you know, Jeff and the team sort of hit the nerve at the right time when you look at their timing here and all that. So that's sort of the crypto world.

Then, you know, the other stuff you look at where, you know, the TAMs are just unbelievable are on the real world asset side, right? So, you know, unit is a company we know. You know, they're the ones that built spot trading on hyperliquid. They're the ones doing trade X, X, Y, Z. where you're trading equities on hypoliquid right now U.S. equities and hypoliquid. And, you know, the TAM there, you know, maybe the best thing to compare a perp on U.S. equities to is to options trading in equities. And, you know, you look at someone like Robin Hood, a huge percentage of their revenue are allowed, you know, zero-day options that could trade on that platform.

I personally believe, and this is something, I'd be curious, Steve, if you agreed with me on this, I personally believe that a perp is a much better structure. It's a much better type of contract for almost anybody to trade, certainly retail investors than an option. I mean, options are complicated, right? You've got to worry about expiration dates and a bunch of Greek letters and all sorts of stuff that it's, you know, black shoals models. Like, I know it's doable, but there are a lot of, you know, very well-paid people at all the big investment banks that know how to trade options, you know, with degrees from MIT.

A perp is, you know, here's the, here's the price I'm getting in it. Here's how the funding rate works. Here's where I get liquidated. It's just so much simpler. And it's so much more sort of natural when someone thinks about buying, you know, a position like that with leverage. And, you know, the tam on that is just, it's just massive. And I think part of all of our job, part of the whole ecosystem's job, is to figure out ways to sort of grow things like that.

Equity is such a easy example. So it's sort of the first one I'm giving. You know, the company Ventuals, I don't know if you followed them. Ventuals is set up their own HIP3 market for pre-IPO companies. It's really cool, right? You can trade SpaceX or companies that they expect to go public in the future beforehand. And, you know, that's doing the world the real service, right? That is allowing for price discovery on a company before it does an IPO.

You know, as we all just witnessed, circle IPO to $31 a share and then shot up into the 200s. And now it's, I think, still, you know, it's in the 80s. You know, clearly, J.P. Morgan didn't price that thing right. And if there were some markets with some real liquidity trading pre-IPO that gave you a real window into that, into the price, it would have meant a lot. It would have meant a lot for the people who are selling shareholders in that deal. That's not insignificant for like the whole system we live in. So, you know, look, I think that if all hyperliquid ever does is what they're doing now in the crypto side,

I think the sort of way the token is valued is compelling. And, you know, there's nothing to be upset about buying at these levels. But there's just so many opportunities with mass of Tams. all over the place in the ecosystem. That's what really gets us excited. And that's why we think the valuation is just super compelling. Yeah, I mean, I certainly agree that curbs can be a much more elegant product than options. Although, if you ask, I mean, sometimes it just comes down to sort of the U-X.

I mean, Robin Hood is so good at it. I mean, using them as the example that people don't appreciate how complex the type of products are that they're selling or that they're buying. and they like the idea of there's lottery tickets. Like, perps, I mean, I guess depends on what kind of leverage you want to take out. But options, like, you can be like, why I put down $100 here. And if it hit ticket on this date, it could be paid out however much. I think people like that idea.

And I guess the other point is just also perps. I mean, people like us, it seems pretty implicit and easy to understand how they work. But there is an educational barrier for other folks to understand, like an auto-renewing, future is and and what funding rates are and stuff like that. But, but they do seem to be a very elegant type of product. I think now is a good time to talk about HIP3 because that is like, it does seem to be really fascinating. I mean, if it's in line with like Daxes and how people can like, could want,

AMMs could like launch like liquidity pools and markets for other tokens and now the same things happen to here. Maybe you could kind of compare and contrast a little bit that and this also might now be a good time to include in the discussion like plans potentially for for hyperliquid to come to the U.S.

and if they are going to be making markets and these types of products and there are there are U.S. companies that are already doing this. I know architect is another one that's doing some of this like how does that fit in with this sort of permissionless listing process? How does that

kind of fit in with plans to take on the biggest capital market in the world? And, Bob, you want to make a talk about regulation and what we see coming in clarity? Sure. And I'll chime in. Yeah. Listen, I mentioned earlier the tailwinds. And I think stepping back, what's the approach of this administration from a regulatory point of view?

It is not to focus on regulation of crypto, which sadly the previous administration was kind of avoiding or, debating and it was more discussion than action. And what I love about their approach is that there should be one regulatory framework for financial services. It's complicated enough in our country. So integrate between digital and traditional finance one set of regulations. And I think that's the direction we're going in. And I think the key words are keep them simple, understandable, workable and integrated. And I feel so good about that direction because I think if you're an investor as we are,

if you're building on your platforms as the people we invest in are doing, having some vision of where regulation is going and how they're going to get there, and having a clear indication that they want to keep it simple, straightforward, and fostering innovation. You can't ask for more than that.

And I think it's put, frankly, the U.S. in the last 12 months has moved from being a laggard to a leader in digital assets and digital asset innovation. I think Europe is beginning to fall back a bit and is going to need to catch up. And we want everyone turbocharged here. We don't want it to be the U.S. ahead of this person.

And we want it to be like a race to be the best. And I think we're moving in that direction slowly. And as I said earlier, Steve, in my mind, when we fast forward two or three or four years, one, there'll be an integrated regulatory environment for financial services. Two, there'll be more of a level playing field of the major economies around the world. And three, there'll be a recognition that we're not just trying to add digital capabilities, to banks. What we really want is we want digital banks, and that's a big difference. And that's what, that's what, that's what, that's what, that's what, um, uh, hyperliquid is, is teaching us. Yeah. And,

you know, back to your question about hip three. I mean, the, the, the, let's say, you know, for argument's sake, someone listening to this right now says, you know what, these guys convinced me, you know, perps for a pretty cool product. There's a lot you can do with it. And, you know, I want to, I'm going to go build something. You know, the thought of building your own perfect change, right? The thought of creating an order book and all the programming and the and the work behind that to do it yourself. It is daunting. It's really hard to imagine doing that, but you don't have to because you could, you know, use hyperliquids.

They built it already. You can use their systems as a hip three builder. It takes a half a million hype tokens. So you can't do it for free. You have to have some substance. You have to have some capital. but that is so much less both in time and cost that it would take to replicate it. It's just super impressive.

And again, this is just where we are today. People in the ecosystem are talking about HIP4. That's not officially been announced. I don't think there, I'm not sure that's even officially being thought of by the foundation. But there's been some user suggestions on Twitter around HIP4, which is basically it's sort of the similar thing. for prediction markets. Prediction markets are different, right?

Because, you know, something can go from a 1% chance to 100% chance very quickly. So you have to have the systems be somewhat different than a normal perp market. But think how cool that would be, right? Like we have two, we have polymarketing calcium right now. They're, you know, both big and both kind of dominant. Although, you know, they're big relatives to where they came from before, which is zero. But they're not, you know, there's still a lot of growth ahead of them. Same concept, right?

if someone listened to this wanted to go compete with Kalshi, you know, holy cow, that's a lot of work to build your systems, your back end to be able to do all that stuff. But wait a second, what if there's something you could just use that someone else already built to build your own front end? Like, wow, that's pretty exciting. And that's, you know, a really, really, you know, great way to bring more competition to these growing markets. So speaking of competition, I want to just talk a little more about the market.

and the defensibility of what hyperliquid has built. I mean, we all were tracking, I think there was a chart showing like hyperliquid growing market share vis-a-vis finance. And but since then, finance launched Aster. And I think last month, actually was the first month where Aster had higher volume than Hyperlipate, even though both were obviously very large. And you pointed out that you see a very large. Ham, that could probably make everyone happy.

But, like, what lessons do you think could be learned from that? And in a world now where every major exchange, the Robin Hoods, I mean, they're all getting involved in perps in the U.S. around the world, prediction markets. Everyone I've spoken with has been very impressed with how hyperliquate was able to bootstrap this liquidity and get off the ground with their HLP and, et cetera. But how do they keep doing that and how do they defend their turf? in a world where, I mean, finance and finance is launching their own prediction market now, too, where, like, people that have these huge user numbers already could not quite copycat,

but I think you know what I'm saying. Yeah, look, I love Bob's opinion on this, too, but I would say that a couple of things. One is it's absolutely impossible to have thought that there would never be any competition here, right? You look at the success that hyperliquid has had over the last three years, particularly over the last year and change, like, of course doesn't it be competition, and of course others are going to come in. And generally

speaking, you know, competition makes everyone better. You know, the idea, you know, no one's sitting here saying, you know, how can there ever be more than one bank in the United States? There's lots of banks in the United States. It's still a pretty good business for lots of them. So the idea that wouldn't be ever be any competition

is kind of crazy to think. You know, imitation is the highest form of compliment or whatever that term is. And I think like any business, hyperliquid is going to have to work hard to stay ahead of the competition and to provide their customers with the best experience and all the usual things.

It's not like, you know, they have some immortal position that they, you know, they're not subject to the laws of gravity. Of course they are. We're pretty confident in their ability to execute. And I think, frankly, the biggest challenge they have and a lot of people have here

is just getting the sort of word out to the outside world. You know, lots of people in crypto know what hyperliquid is, but a lot of people don't. Believe it or not, we're raising this capital. You know, I reached out to someone. I'm not going to mention his name, but he's a relatively well-known and a very large it coin holder. I never heard of, never heard of Hyperlid.

Maybe today he had. I was in June, July. Maybe today he has. But, you know, there's a whole world out there of people that will find things to do with this, whether it's HIP3 or whether it's, you know, build or there's lots of stuff up there. And, you know, to me, it's more about the expanding Tam

than it is fighting with Esther over, you know, the two percentage points of market share. That's where the future is. Listen, we didn't do all the work from July till, two days ago to get this publicly listed to kind of sit on our laurels and watch the market. The work actually starts now. And David and I and our team are in this not just for the medium term, but really for the long term. And what we see is we've built a structure, serious, you know, hype position, serious cash position,

a plan going forward that this will be the dominant blockchain where builders can come in and build other exchanges on top of it. As David said on CNBC yesterday, there's a lot of people running around saying, this is going to be on chain, that's going to be on chain, this traditional business will be on chain. Hyperliqu is actually doing it. We have U.S. equities trading in form on hyperliquid.

We're actually doing it, and we're three years old. We have over a billion dollars in cash flow. We're just beginning. And this is not only the exchange and exchanges of the future. The blockchain is the financial underpinnings of the future. And three, four, five years from today, I do believe that the blockchain will be the underpinning of financial services writ large. I don't think it will be specialized in sector.

And you're going to see more. more people like Bob Diamond and Davis Seamus, who grew up at Solomon Brothers and Morgan Stanley and Barclays, who are now really, really comfortable with what's happening in the blockchain, stable blockchains and exchanges. So we're on a journey here, Steve. This journey is these very, very early days. We've done a tremendous amount of work and thinking and have some great partners to get where we are today. But, man, the work's just starting. You know, we have a really good structure with a really strong cash position.

Steve, I just pulled up while we're sitting here a chart total, sorry, top chains by fees in the last 24 hours. This chart looks pretty similar every single day, but hyperliquids at 2.4 million. Solana is at $670,000 and Ethereum's at $425,000. Is that a total? What's that? Is that from Token Terminal? No, I'm using Artemis, analytics.

Artemis, I assume they're all similar enough. But the point is, like, you know, how many people you think really understand that and that, you know, that the tokens are trading at levels that are like sub-SMP 500 P multiple. Yeah.

It's actually like that. Think about that. When I was at Forbes, I wrote a big story in the magazine called them the $20 billion crypto zombies and I pointed out like 20 billion dollar layer ones and looked at their fees as one of the metrics and I mean some of these companies or projects had made like less than a million dollars a year in fees and it was all traded anyway I know we're close to time but I just want to um before we wrap up I want to look a little bit to the future I know you you file for a billion dollar shelf offering I don't know if any of that has been sold yet or um or like what the plans are

especially again going back to this difficult debt climate where it's hard to raise money when you're training at or not below one. So it's kind of like what's the plan there to continue to accretively accumulate hype? Yeah, look, I would say, you know, first and foremost, we are fiduciaries to our shareholders. We are, as you can tell, we're really into hyperlickly, really into the ecosystem. them, we are not religious zealots. So we're going to do over time what we need to do to accrete our NAV per share, accrete our book value per share, which is what you're supposed to be doing when you're a fiduciary to a public company. What does that mean? That means when we're

trading at premiums, we're going to be thinking about issuing stock, as you said, you know, in our S1 that we filed. And in the opposite time, we're trading at discounts, we're going to think of the opposite. We're going to look at it in the opposite. And, you know, again, we're not zealots, we are looking to be good for duciaries to our share. Needless to say, you know, when we're trading in a discount, we're not going to be operating the same way as if we're trading in a premium. And before we wrap up, because I know we're just about a time, I'd love to just hear any final thoughts from, I guess, me, both of you. Listen, I said mine already. I think we're just beginning. There's been a lot of hard work

that's been done since July when we announced this initiative. We hit a critical point of going through all the complexity of regulatory approvals, shareholder votes, and NASDAQ approval, and we're a publicly listed company with real scale, a real strong cash position. We have our options open. As David said, we're not in this to do daily trading kind of thing. We're in this to create a listed opportunity for U.S. equity, investors to invest in an ecosystem that is at the very, very early stages of being one of the

dominant institutions in the digital space, and that's hyperliquid. We're in it for the long run, not the short run. This is an investment of our time and our resources. And I think it's very early days. We're very excited about it, Steve. As I said at the beginning, and I'll finish with it, We think this is the most exciting opportunity in the digital space today. Yeah, look, I would say that if you spend time with the hyperlifid people, you know, at their big event in Singapore during token, they had a big banner up that said the blockchain to house all the finance. These guys are thinking really big. This is a super competent, super hardworking management team, not in crypto terms and any terms.

I put these guys against anybody, any management team on almost any business around the world. And they're thinking big and there's so many paths to get that big. And again, there's not a super high cost to enter this. And there's not a super high cost to be part of this future growth. And it just seems to me that, you know, in the future, more and more people going to know what hyperliquid is and they're going to be wondering why they didn't get in sooner. All right. Well, with that, yeah, thank you, David and Bob both for your time.

Thank you to everybody for watching and listening. And be sure to tune in next week for more episodes of Bits and Bipsy interview and Unchanged Live.