Unchained - Bits + Bips: Reasons to Be Optimistic After Bitcoin Falls Toward $100K - Ep. 938

Episode Date: November 4, 2025

Bitcoin has fallen below $102,000. “Uptober” ended in blood. But while retail traders are terrified, institutional conversations are heating up. In this episode of Bits + Bips, hosts Austin Campbell, Ram Ahluwalia, and Chris Perkins are joined by Teddy Fusaro, President of Bitwise, to unpack the week’s market turmoil. They dig into why institutions are finally comfortable allocating to bitcoin, how Ripple is building an ecosystem that can’t be ignored, and whether Tether’s staggering $500 billion valuation makes sense. Plus: the shrinking odds of the CLARITY Act, the merging of TradFi and crypto rails, and why the competition in the payments space is so hot. Sponsors: Binance Mantle Hosts: Ram Ahluwalia, CFA, CEO and Founder of Lumida Austin Campbell, NYU Stern professor and founder and managing partner of Zero Knowledge Consulting Christopher Perkins, Managing Partner and President of CoinFund Guest: Teddy Fusaro, President of Bitwise Links: Unchained:  Ripple Hits $4B Investment Milestone With Palisade Deal Extreme Fear Returns to Market as Bitcoin Breaks $104k Support Solana ETFs Draw $44 Million as Bitcoin Funds Bleed $191 Million Stablecoin Volume on Ethereum Breaks $2.8 Trillion Record in October Bitcoin ETFs Record $470 Million Outflows Amid Fed Rate Decision DL News: Clarity Act has 80% chance of passing by 2026: Bitwise The Block: Tether's annual profits top $10 billion as Treasury holdings swell Timestamps: 🎬 0:00 Intro 📈 3:03 Why Ram is still bullish on markets despite recent carnage 💧 6:03 Why a slingshot economy will soon send liquidity back into risk assets 🏦 9:18 How institutional sentiment now differs sharply from crypto Twitter 🚀 16:43 Inside Bitwise’s clever move to launch BSOL 🌊 21:20 Why Chris says “you can’t sleep on Ripple” 🔗 25:28 How TradFi and crypto rails are starting to merge 💳 29:38 Why every company suddenly wants to own the payments layer 💣 30:53 Exlporing Tether’s biggest challenge —and whether it’s worth $500B 📊 39:52 ETFs vs. digital asset treasuries: Teddy’s take ⚖️ 46:48 Why the CLARITY Act is unlikely to pass in 2025 Learn more about your ad choices. Visit megaphone.fm/adchoices

The sentiment in the conversations that we're having with financial advisors, with platform that house broker dealers and wealth managers, with the home offices that work to approve crypto products to make them available for financial advisors and throughout their wealth management networks, has never been more positive. I'm not telling you to buy the token or not buy the token, do your research, I don't care. But the point that I was making is that you really can't sleep on REPL. The only question for Heather is,

If you're looking at the equity is $500 billion to a higher price. You can buy OpenAI half a trillion or you can buy Tether. It's like the meme of the two buttons. I see a future for stable points where the distributors and the consumers are going to suck all of that profit out of Tether. And that's not to say it goes to another stable point issue where it sort of distributes throughout the market. All right. Hello, everybody. Welcome to Bits and Bips, exploring how crypto and macro collide one basis point at a time.

So I'm Austin Campbell, high scholar. High Scholar of Zero Knowledge Group, self-described in recovering grouchy fixed income trader and professor at NYU Stern. Despite the best efforts of crypto, Twitter, I also remain the moderator of this podcast. Joining me today are Chris Perkins, the Golden Hand of Coin Fund, part of the city crypto mafia, and somebody who has assured me before the show that he has even more hot takes today about things that the crypto market is getting wrong. We also have Rahm joining us today. Rom is the founder of Lumida Wealth and joining us from Money 2020 to take time out. Oh, no, that's last week.

Rom this week is back in New York. Still recovering. Same thing. It's just a blur. Yeah, joining us from the parties here. And we also have joining us as our guest, Teddy Fisaro, warden of the Bitwise reserves, president of Bitwise, who demanded we give him a game of Thrones name, and here to talk ETFs, macro, and investing with us.

we'll continue to have some excellent guests going forward. So I really hope you're going to enjoy the show today. We're going to be talking about October. We're going to be talking about some views Chris has on a token yet to be named. We're going to be talking about the Fed. We're going to be talking about the Clarity Act. We're going to be talking about capital markets as they pertain to crypto and more if we have time. So without further ado, just remember that nothing we say here is investment advice

and that is general advice. Don't take your investment advice solely from podcasts. Check Unchained.com bits and bibs for more disclosures. Finance is the world's number one crypto exchange, trusted by over 290 million users. With industry leading liquidity, security, and a wide range of digital asset products, finance is the place to buy, sell, trade, and earn crypto. Download finance today to get started. Mantle is pioneering blockchain for banking of revolution,

evolutionary new category at the intersection of Tradfi and Web3. Follow Mantle underscore official to learn more. Let's move to our first topic. So I've got this one titled, guys, October or it's Uptover. What happened to October this year? Bitcoin fell below 106K early on Monday. Spot Bitcoin ETF saw almost 800 million in outflows from October 27 to 31. Basically, none saw inflows.

There's fear in the markets. Chris, you were pointing out to us earlier. The fear and greed index is now in the low 40s. There were some small positive green shoots. Ethereum ETFs had like low double digit millions of inflows led by grayscale. And Solana pulled in $421 million to a digital asset vehicle. But overall, investors seem to be reacting to some of Powell's talk and other things in the market. So I want to start, Ram, what do you make of what's going on out there? So first off, there's looking forward, then kind of where we've been. I'd say looking forward, things are fairly constructive just on risk assets. I think over the last few months, people have been concerned about a recession. I still don't see evidence of that.

And like initial claims data is fine. Earning's growth is stellar. It's very strong. The CAPEX boom is still here. So we're entering Q4 retail sales. Seasonality is very good. So I'm fairly constructive looking forward on risk assets. One thing we have seen since April bottom is that high beta assets have shot up meteorically.

Right. So high beta assets, whether it's digital assets or whether it's like quantum stocks, have done really quite something. And, you know, the opposite of that are like Warren Buffett quality compounder stocks like insurance companies. Insurance companies look really cheap like today and over the last week, things like Allstate and Progressive. So if you think about markets as a contrast between these two types of mindsets and P&Ls and customer segments, this other area is also poised to rally. So I think we're going to see more of that.

we've also seen distribution in Bitcoin at the 120, 125K level. That's something that we've seen consistently. I've talked to people that are saying they're doing that. It's a real phenomenon. You know, where we stand tactically today, though, on digital assets, obviously we're at a very key level right now around 107. This is the area where stops get flushed out. Everyone's watching that 107 number.

And now we're at like 106.5. So if there was a bit of a flush lower, I think that would actually be a tactical good entry point. But I'm more constructive than most people. I would say from where we stand today. Chris, do you agree, disagree where are you at? I'm actually very constructive. But Ron, before I get into my views, I mean,

there's been a lot of talk about the TGA, the Treasury General account. You have the government's shut down. I mean, from my perspective, crypto is very, very sensitive. to liquidity. And it looks like we're about to transition from a QT to a QE regime. I think that's incredibly bullish. It almost feels like the slingshots happening where money's coming out of the system currently. The government shut down. The TGE is growing. And eventually, the government's going to get turned back on. I don't know when that's going to be. We can look at prediction markets. I think prediction markets are generally constructive right now. But you know, you're an employee. You've

been tightening your belt a little bit, you've been making it through these times, you're not getting a paycheck, then all of a sudden you get this massive, you know, this paycheck that's, bigger than, you know, all your back pay right before you're going into holiday season. It feels like a slingshot. It feels like liquidity is going to come moving back into the market, very abruptly. And that's done well in the past. So I know, I'm very constructive on the setup. I know that fear and greed is, as we talked about, I think 42 right now.

It feels like a really interesting entry point. I don't know if I would wait further personally. But yeah, want to get your take on the liquidity situation. Yeah, I think overall I agree with what you're saying. Like I think having a position now and then waiting to see what card the market turns over next and responding to that, I think is an interesting way to do things. I actually am not. I don't think the liquidity cycle plays as much a role. Like the liquidity cycle apparently is correlated with like everything.

It seems like it's one of these things upon the YX as you see this go up and down. And I think a lot of it has to do with the fact that just competing attention assets out there, like quantum stocks and other things, people got excited over the summer. You know, a lot of what we see now isn't dissimilar to what we saw last year around the same time, actually. And, you know, you saw these kind of stair stepped down in terms of lower highs and lower lows. and just more apathy setting in and people start to give up. And that's usually when things are a good time. I agree with you on the Fear and Greed Index 2.

So, yeah, I mean, I think it's like a range between 107 to 120 and change. Or in the lower end of that, that 106 and a half is an interesting flush liquidation area. you know, you could, you can participate in that. I mean, meaning you get some position in there because it may not happen. If it does happen, I would actually double my position. And that's how I would approach it. Yeah, but there's some fundamentally very strong things happening. Like China is being de-risked overnight.

I feel like the market kind of like ignored that. You also have a lot of like positive regulatory stuff going on. Like Trump was on 60 minutes last night. And maybe he forgot, you know, CZ's name. or whatever, but, you know, still very, very constructive. We've never had this before. And Teddy's smiling. Yeah, the 60 Minutes reference was funny there, Chris.

I was just going to say, you know, bitwise, we primarily talk to professional investors, financial advisors like ROM, institutional pools of capital. And the only thing I was going to say about crypto sentiment in particular is that price action has been bad, challenging. and sentiment on crypto Twitter has been bad. But the sentiment in the conversations that we're having with financial advisors, with platform that house broker dealers and wealth managers,

with the home offices that work to approve crypto products to make them available for financial advisors and throughout their wealth management networks, has never been more positive. So I realized that that's a different, audience or a different group. But in the last couple of months, the second half of this year, we've seen more progress from those channels and more excitement from those channels that at any point in the history of the company. And so I find that dichotomy to be interesting. It takes

a little bit more time for those pipes to get open and for those platforms to make product available, but something that we pay close attention to is the sort of difference in that sentiment. Maybe it's a longer cycle. Maybe on Twitter, we're obviously all terminally online and paying attention to every few minutes how the sentiment changes. But in audiences that are a little bit away from ours, I think that there's a real significant amount of excitement and momentum. So we're going from QT to QE. I mean, aren't you talking about a new flippinging? And that Flippinning is going from retail to institutional? Yeah.

Is that what's going on here? I think so. And it just takes longer. On that part, Chris, I agree. Like as far as relates to recruiting it, going from QT to QE is a big deal. I mean, this is what's set in motion, you know, post-COVID 2021 highs and the monetization of debt and NBS and treasuries. Now, I don't think we're going to see anything of that magnitude there, but, you know,

you've got a new Fed chief that's going to come in. there'll be a shadow chair, probably is going to be Waller. On the margin, you're going to see lower rates. So part of this is a time frame question. I think we're both constructive. I'm going to share my screen quickly here. This is an open source tool, by the way, that we share with the public. You guys can take a look at it.

It's at Lumida-a-a-com slash crypto. But this is the Fear and Greed Index that Chris was referring to. Generally, you want to be a buyer on the green. And this is pretty cool. We've got this LLM saying there's signs of distribution, which is absolutely correct. You've been seeing that at the 121 level. And seasonality is positive in early November. The sentiment is negative, as Teddy pointed out.

But I think this is backward looking. You know, the Coinbase Premium Index, just for those that want to be tactical about this, is negative right now. So that's, you know, that is on the bare side of the ledger. But a lot of other names, I think, are set up too. Like the 10-year rallied from 4% to 4.1%. That added some pressure on small caps and other risk assets. But they do look set up now. I think you could get a rally between now and, you know, through the holidays.

I was going to ask Rahm about this idea on the distributions. I don't know if you wanted to get to that later, but I think that's pretty interesting. And I've seen some buzz on that myself. Folks that have lived through this three times, the third cycle, they're, you know, they're saying, hey, I don't want to do another cycle now. They're rotating, they're diversifying, looking at different kinds of assets. It's a real phenomenon, right? We saw, I think we talked about last week that there's an $8 billion Bitcoin transaction that Galaxy brokered between a like a Bitcoin whale and another buyer. So, you know, there is the four-year.

cycle crowd, right, the Fred Kruger's and the Michael Terpins of the world, that crowd and those followers will be net sellers and others that are entering the market like Teddy that you're talking about will be we buyers and that's the kind of distribution that's happening. But, you know, Bitcoin has acclimated to up to the 100K plus level now for several months. Like big, you know, big picture, this is just acclamation. And I'm curious, Teddy, from what you're seeing as you're distributing into the institutional community, how much of that is people who are really still just being like, yeah, Bitcoin is the thing I want versus branching out elsewhere in the space. Yeah, there's no question that throughout the year, Bitcoin has been the conversation. And when we talk to these types of investors, it's really about getting Bitcoin ETF approved first, getting comfortable with Bitcoin.

As a part of the portfolio first, the conversations that we're having there are about portfolio sizing, about what sleeve from the portfolio does it come from? Where do you take the allocation from? Does it come from a commodities bucket? Does it come from an alternatives bucket? Does it come from an inflation hedge bucket? How do you think about it in terms of like true portfolio construction questions in terms of implementation? and then portfolio sizing. The thing that's been challenging there with Ethereum has been the only other one that's been available in the ETF wrapper until last week with Solana coming online.

I think the story there is a little bit less clear to the portfolio strategists. It's another educational journey, if you will, where you need to talk to them about what Ethereum is, how it's different than Bitcoin. We think about that more as a high-growth software, technology type of investment versus this, you know, Bitcoin being a potential future store of value, gold alternative for the next 100 years. So it's a different story. It's a different narrative. Investors that are of the type that we're talking to are not as familiar as we are with things like Solana, Suey, XRP, what have you. And so the educational journey itself takes a long time. But I will say that with Solana coming online in the ETF wrapper last week, that conversation, at least the early returns on that are that it may be changing.

And so I think it has thus far been really a Bitcoin story, Bitcoin dominance, Bitcoin education, home offices, due diligence teams getting comfortable with Bitcoin. And then the story I think of 2026 is going to be whether or not that changes. Well, I'm going to use that as a jumping off point to move on to something Chris wanted to talk about here, which is getting a little bit off the beaten path of Bitcoin and talking specifically about Ripple. So, Chris, we were talking before the show. You were saying you think that the crypto community is getting some of that story wrong or at least missing some of it. What are your views here? Well, before that, can we just talk about B-Sol for a second.

I'm sorry. I can't. Teddy, that was an incredible launch, man. Can you just tell us about it? Yeah, I sure can. And so B-Soul, BitWIS, Salana staking ETF, the first fully spot Solana ETF in the U.S. marketplace. We were really excited to bring it to market on the New York Stock Exchange last week. It was also a really an interesting one from a regulatory perspective, where we, the BitWIs availed itself of this, what we, what we have been referring to as an automatic effectiveness clause on a registration statement.

which we were the first Solana ETF to use it. There have been a few other ETFs have now used it and a number of IPO operating companies that have gone public have used it. But effectively, what you can do as a registrant using a registration statement to sell securities publicly is you can change some of the language on the cover page of your prospectus

such that it will automatically go effective. after a period of 20 days, instead of waiting the normal course, the regular way, is to wait for the staff of the Securities and Exchange of Commission to affirmatively declare a registration statement effective. And you really wouldn't see this path used unless we had the unique situation that we have right now, which is that the SEC has been sent home because of the government shutdown. And we were, in the case of Solana, Bitwise, was the first would-be issuer of a Solana ETF to use this specific clause.

And as a result, we benefited from being first to market, which is sort of rare in these competitive ETF sprints that we've been in with Bitcoin and with Ethereum. And it was actually as measured by trading volume. B-Sol was the number one ETF launch of 2025, if you look at the first day's trading volume, which I think as a moment for the crypto community broadly is a kind of exciting thing, something that we're certainly very proud of, but something that I don't think a lot of observers necessarily expected. It's the biggest year for ETF launches and in the history of Western civilization.

So pretty cool to see a crypto ETF taking that mantle. got a couple months left in the year, of course, but it looks like it may be able to hang on to that achievement. So we're pretty excited about it. All right. Awesome. And congratulations from all of us. So, Chris, before we get to your views on Ripple now, let's roll two ads quickly. Finance is the world's number one crypto exchange, trusted by over 290 million users globally. With world-class liquidity, security, and a wide portfolio of digital asset products, finance makes crypto easy for everyone. Whether you're new to crypto or a professional,

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the blockchain for banking, that enables financial services on-chain. UR unifies and vertically aligns Mantles focus on payments, trading, and assets. MI4, ME Protocol, Functions FBTC, supported by developer grants, ecosystem incentives, and the industry-leading distribution platform through the UR app, Reward Station, and By-Bit LaunchPole. All economic activity within UR will be captured by Mantle Network to further drive value to token holders and establish its significance in blockchain for banking. Follow Mantle underscore official to learn more. All right. So clearly the equity market did not miss BeSole, but Chris, we were talking about things that were missed with Ripple.

So what do you want to get off your chest here? We were talking about it's a big week in New York City where many of us live. There's a bunch of conferences. A lot of folks are in town. So we've got smart con coming up the next couple days, which is ChainLink, very well-known, respected Blue Chip. largely an Oracle type protocol that's now expanding. So a lot of people are excited about that one.

We also have Ripple Swell coming to New York City, which is their conference. And, you know, it's, I think maybe in certain cases I'm contrarian. And I'm not telling you to buy the token or not buy the token. Do your research. I don't care. But the point that I was making is that you really can't sleep on Ripple. They have, what, close to $130 billion in market cap. they're very much on the offense right now.

They're looking at, they just did a strategic investment in Bitnomial. They're looking to distribute RULSD, which is their stable coin. Austin, I'm sure you have a lot of thoughts on that. They bought Hidden Road. I've known those guys like, you know, gosh, going back maybe seven, eight years, I forget when they started, when they first started on Newmark Ash. And so they've created this ecosystem now that could be formidable if they execute. I don't know if they're going to execute or not, but I'm really curious.

It's like, I want to go down there. They have a ton of capital. And let's just put it in perspective. If they're around $130 billion, market cap of CME, around 90 last time I checked, haven't opened it up in the last couple of days, ICE, Intercontinental Exchange, around 90. And so I just see it as a very formidable, I guess, organization and institution. And I want to see if they're going to execute with that capital. That's my point.

Yeah, I will say I've personally described Ripple in the past, capital in search of customers in some ways. And that ultimately becomes the question here, which is where does distribution come from? You know, Chris, to your point on the stable coin, fundamentally, if you're looking at stable coins that have succeeded over time, distribution has almost always been the winning thing. I know I've said this before, but like all of the guys who have gotten above $20 billion durably have been attached to an exchange. So for me with Ripple, the question is, where are they going to drive that distribution? How are they going to drive that distribution? I think, as you,

you've said, they're taking more of a portfolio approach. And to some extent, I would say B2B more than B to C at times in the signals that they're giving out, I'm interested to see if it happens. I actually, in a weird way, think the biggest question is how much of the value accrues to the token versus elsewhere in the case of Ripple. So definitely not investment advice there, but it's a fascinating. 100%. Ram, Teddy, anything? I think I share exactly Austin's question. The smartest thing Ripple ever did was by Hidden Road, which was like one of these emerging prime brokerages, which the category needs, and they got a real business. It kind of reminds you like when AOL bought Time Warner, for those of us that were around back then, it's like,

you got this lot of value in AOL. They're like, all right, let's buy this, let's buy this real business. So, you know, but I have been seen more competition for attention in New York City, like billboards you've seen a lot of digital asset marketing just around New York City I'm still getting accustomed to that I'm still trying to adjust to that it still feels very unusual you know for me but I've been seeing like Ripple and Solana trying to go after it and on billboards now and it's like I feel like I'm an alternate timeline or we're like in a twilight still it's a good it's a good timeline I was down on Wall Street you know Solana has a has a building next you know right next to the floor.

Have you been there, Teddy? Yeah, we were there celebrating the launch of Beasol last week. Yeah. Very cool. Salana spaces, great team. Then you got these Kalshi, polymark, mostly, I see mostly Kalshi around town on the prediction markets with Mandami, which is, you're right, it's everywhere. Yeah, and I would just double down on the point that Chris made, which is that when you,

when you have that amount of capital to spend, you can do things like the Hidden Road acquisition. And as, as Rahm said, Hidden Road is a real business. It's a prime brokerage business. They trade derivatives. They trade futures. They trade options. They trade swaps. They can invest in these businesses.

And what we're talking about here broadly, right, with Solana, with Ethereum, with Bitcoin ETFs and crypto ETFs in general, we're talking about the merging of traditional financial rails with crypto rails. And when you have a company like Ripple that has the ability to, invest in these businesses that can help facilitate that kind of crossover, then you have something that's pretty powerful. And I think people may, people who look at the token or like to meme about it on X, forget that Brad Garlinghouse is a really impressively accomplished tech executive from who helped grow AOL. He helped grow Yahoo. These are, these are, these are,

seasoned executive, this is a seasoned executive team that understands how to navigate these types of transitions. And so I wouldn't be surprised to see them do more and to see them be a leader into the future with these types of things that Chris is talking about. I think that's a savvy call out by Chris and I think it's something that we should expect more of. So question for you. So Teddy, yeah, Brad is a credible person. He was leading the politics around digital assets going to this election. He got that right. But what's the the play, right? Like a great jockey can't make a bad horse rug. So I can see the play for Solana. I can see how stable coins are competing at the core value proposition of Ripple, which was to

enable money movement cross-border. So many players are solving this problem now. Ripple just seems flanked from all sides on that value prop. And we should at least be able to conceive of what's the go-to-market emotion that they can execute. And I can't conceive of it. I haven't seen them articulate it. So, Grie, they bought a great business. And I wrote, kudos to them. If I were them, I would buy Falcon X.

I'd keep buying businesses. I would just buy more businesses. Keep doing it. Isn't the play B-Sole? What's the play? Thank you, Chris. Sorry, I just couldn't help myself. But I agree with you, Rahm.

I think that is a challenge. But if I think about who has the ability what type of company has the ability to execute on that if they can conceive of the vision for it? Ripple is exceedingly well positioned to do that. I don't know what it is, and I don't know how the value achieved accrues to the token. I think those are open questions and those are things that investors need to assess. But in terms of being, you know, most of our businesses are constrained by capital or resources in some way, right? We can conceive of a bunch of things, but it's hard to execute them because it takes time and it takes

money. I think one of the things that they have an incredible advantage in is that they do have the money to do so if they can conceive of the vision. One of the things I'm watching for too is when companies like say, ripple is a good example of this, or actually, you know, another interesting example of this sort of thing could potentially be PayPal of when they start running the script that private equity is used over and over of let me find types of businesses where the exact thing that I have solves one of their big problems and that just rolls that over and over and over. Because if you think, take Ripple with the stable coin, three percentish interchange fees in the United States, you have a lot of high turnover, low margin merchants.

Like at what point does somebody just start rolling up like grocery store chains and modernizing their payments architecture or something like that? I'm watching a lot of large bank rolls in this space and a lot of need for distribution. So the other way you can do it is by going in through the back door. Right. So that's what the merchant acquiring firms are doing, like Stripe, like Shift 4, even FIserve and Jack Kenrae, they're trying to get after. Like everyone is on the mission for payments. You've seen payment stocks haven't really gone anywhere, including PayPal's. I think part of this is a brutally competitive category because the TAM is so massive.

And you're going out the best in the break. Like, Stripe has declared that they got this new layer and they're trying to, they're trying to grow up for the whole prize. They've just announced it. They're trying to get after it. And they kind of don't care. And they have a shot at it. We'll see what happens.

I mean, that was the main thing from Money 2020, by the way. It was stable coins and a gentic AI were the two big buzzwords. Side point tokenization also. But it was to a level where people don't even want to tell they're talking about. I mean, I saw firms that were tokenizing assets in their internal database. There's no like transactional. Like it was just, you know, you're just wrapping this thing with a token on your data. What is the value?

What are you doing? Yeah. What are we doing here? Telling, oh, we're tokenizing. Like, okay, what to what end? What are you going to do with this? Yeah. So tether's kind of similar, isn't it?

Like, I talked to Bo Hines. I saw him earlier this week. And, man, they're coming back strong. I mean, very similar in a way. Don't you think, Austin, would love your take. Well, okay, so let's set the table on Tether for people because I think everybody is forgetting the scale of that enterprise if we're talking about money, which is 10 billion year-to-date profits. They are the, what, 17th largest individual holder of U.S. treasuries globally. It's something like $135 billion.

And as of like today are probably the single biggest. call it tradfi player in crypto purely because of those holdings. I also think to go back to a point we were making earlier, people do not understand how much work tether has done on distribution in the global south. As you look around there, it is a brand that people trust. It is a thing that people use and it is something that actually has a degree of market penetration that people don't fully expect. If you just look at stable coin transfer volumes on things like Tron and where it's being used, there's a hell of a lot more than one would think. Like, I've got a debit card I can fund with Tether.

And I'm an American and I'll tell you, actually, that thing works pretty well now. So my thought on Tether, Chris, is that the big gap they're going to have to jump is from being kind of an offshore pirate ship sort of operation, which I don't mean as an insult. That was the right decision under the Biden administration to stay out of the United States and stay as opaque as possible. Versus if you really want to go for gold and global payments, you're probably going to need to be more. transparent, more interoperable with institutions, and more willing to play within the bounds of something like the Genius Act. So to me, the question is, can they solve that internal tension? I'd be curious what you guys think, but they have a big opportunity, but they've got a hurdle they need to cross.

Isn't the edge in their favor, though? Like, wouldn't you say overall it's there to lose? So, like, Bo Hines, getting Bo Hines from the executive branch to eat this? is an extraordinary move to bring them into the fold. Howard Lutnik is involved, so you've got two connections to D-Sbee. And then Tether USA has a stable coin called USAT, which will be the first licensed stable coin compliant with Gino-Sai, issued by Anchorage,

OSTC, Chargab of Bank. Not only is it there to lose, like they're reading, if your circle, you're looking at that and saying, okay, competition is fighting at our heels, and they're politically well-connected. The other part is they are finding a way to benefit from USD-T, their international stable-coin counterpart, the one that everyone knows,

to benefit from that liquidity. They want to make it interoperable, have minimum bid-ass spread when you shift from one to the other. They're thinking about all the right thing. So I agree. The only question for Tether is, if you're looking at the equity, is $500 billion to a higher price.

You can buy Open AI half a trillion, or you can buy Tether. It's like the meme of the two buttons. Yeah, another one. Right. I mean, they're probably both going to go up in this market, right? But like what, what's truly a better investment? Heather, you said 10 billion free cash flow and 500 billion value.

You know, the stable coin market gets to what? The $10 trillion. They're a presumptive winner and beneficiary. They're probably going to remain the dominant international leader. Where's the competition? That was so much domestic U.S. competition. Companies are not. Investors don't like competition.

We don't like that competition. International, they own the roost there. I'm trying to make a decision around that. Like, should I, how would you look at that, Chris, as an investor? Like, is tether equity a good deal or is it expensive or fully priced? How would you look at that? We're early stage guys. So I'm going to, I'm going to keep it out.

I'm going to reserve my opinions there. But look, when you look at tether fundamentally, it comes down to distribution. You either got to pay for it or you already got it. And all these other folks are, they're paying a lot of money for that distribution. I mean, look at the deal between Circle and Coinbase. Not easy. Tether has no desire or need to give away any of that interest. So that's going to go to their bottom line.

It's going to become a massive ore chest as it already is. And it's just going to get bigger. Now, there's some fundamental rates pressure that's coming their way, everyone's way. But, dude, they survived for how many years when rates were zero. So they're formidable. And they have distribution and they have utility because for me it's a quest for vendors to accept the stable coin. And once you have something that's genius compliant, it's all the same. And so like I don't know how difficult it's going to be for Boh Heinz and Howard Lutnik and all those folks to go to the major corporations in the U.S.

and say accept it because they already have that utility and acceptance overseas. Now maybe not as institutional as I'd like yet, but it's coming. It was to battle for acceptance and utility to have the distribution already. So Chris got to where I was going on this one, which is I think Tether may win on that front and I'm bearish on the valuation, which is to say, I think the lesson of these markets is that the profits ultimately end up with the end customer distributor because that's where you can't disintermediate people. Right. If I'm like an Amazon, right, I'm looking at the stable coin market and saying, well, I can't launch my own stable coin. but what I can do is BWIC all these stable coins against each other to see who gives me the best deal. And whoever does, I'm going to favor them.

So Tether, keeping all of the interest income, I think will be the Achilles heel. Because if I'm like PayPal and I offered to them, I say, hey, and whenever you get Tether, just convert it to my thing as soon as it hits your platform. Like, I will remind everybody, Binance used to auto convert a bunch of things into BUSD, and it did very well for them. So I see a future for stable coins where the distributors and the consumers, and the consumer, are going to suck all of that profit out of tether. And that's not to say it goes to another stable coin issue where it sort of distributes

throughout the market. Great and thoughtful perspective. Now, I agree with that. You see the punch government, right? So I guess two things. On valuation, the bulk case, you're like, I'm struggling with this issue too, like legitimately trying to assess this. I've been hunting for tether stock for like two and a half years.

finally it's available like 500 billion dollars like that all that Austin Campbell movie not Austin Powers movie you know like one million dollars that's different austin billion dollars 500 billion dollars you want to play so circles 1304 p.e ratio 134 p.e ratio this is a 50 trailing PE ratio what's the forward valuation we don't no, we don't have a DCF model. I've been seen it yet. If you look at it on a comps basis, it's not bad. And then internationally, this is the question that also is raising around who captures economics. Tether International, USCT doesn't need to comply with the Genius Act.

They're doing private credit lending. And that business is a attractive business from a net interest margin perspective. It is a dominant leader. I don't see any competition going after that business. They're already entrenched. I think one question would be, I know this is a total left field out of consensus point of view, which is why I find that interesting is, you know, Trump and Whitkoff and their family have a material equity interest in this world Liberty financial, which I kind of dismissed, not kind of I did dismiss like months earlier. What is this? But, you know, they brought in a new CFO who is ex-GSR. That's a credible guy.

They got rid of some knuckleheads that they brought on. They had all sorts of missteps. And now they have the power of the US government to open doors and do business development. And they have a stable author called USD1. They did an error drop promotion. Like I'm like, gee, these guys are actually thinking like crypto natives. I think that that is an interesting mispriced potentially asymmetric opportunity at the at the data level. not at Wolfie itself, not the governance token, not, you know, at the doubt level.

So that's something I'm trying to get my head around too. It's a complex story, though. It's a very complex. Wow. We read Phil's Ram on Dats, finally. I love it. Only took like three episodes. Have you bought Beasol yet, though?

Yeah, I don't know. Thank you. You know, at a certain price, every asset, we're thinking of look at, right? There are no bad assets. They're no bad prices, right? You know, to go the other way on. Dats for a minute. And I want Teddy's thoughts on this one. One of the previous big arguments for Dats was, hey, we can stake things. And, you know, I feel like there have been some important

developments in that space. Teddy, where are you on like the DAT versus ETF fight now? Yeah. So I actually think that there will be, for each protocol that matters, I think that there will be a dominant ETF for Solana. I think that will be a bit of was an ETF. But I think that there will be a dominant ETF and there will be a dominant debt. And I do think that there are things that are interesting about Dats that are differentiated from ETFs. You know, the Dats can do things that an ETF is never going to do. You know that when you invest in an ETF, it's going to take your dollar and it's going to buy the crypto and then it's going to stake pursuant to whatever its staking policy is. B.S. Stakes 100% or aims to stake 100% of

it's Solana, but every ETF is going to have their disclosures and their process around their staking. And that's what it's going to do, right? It's going to be the plain vanilla beta exposure. Maybe you're going to get your staking rewards like you do with B.Sol. But that's it. The data is going to do a lot of other things, right? It's going to take advantage of whatever capital structure opportunities there are. It can borrow. It can leverage the capital structure. it can lend, it can trade options, it can stake, it can hedge the downside, it could take advantage of market timing opportunities when it's able to. It's going to be a different type of investor that wants that exposure is going to be like a more active, dynamic type of exposure for you,

but the management team matters, their expertise matters, their ability to raise capital matters, their ability to be pragmatic about market cycle matters. And I think there are investors, that are going to want that. I mean, you look at each one of the protocols that are out there now, and each one is likely to have three or four DATs in the short term, but I think we're going to see consolidation there over the next six to 12 months, and one winner is going to emerge for each protocol on the DAT side. And then I think you're going to have kind of like three legs of the stool, ultimately,

where you're going to have an ETF, and that's going to be, financial advisors, people who just want beta exposure to the asset and some staking rewards in their retirement account or their brokerage account, you're going to have the foundation or the lab's entity that can support the protocol in a lot of different ways. And then you're going to have the data, which will work with the foundation to the extent that it can or the labs entity. It can play some other different games with borrowing and with leverage that the ETF is never going to play. and I think that will be kind of the full stack of the ecosystem for each one of these protocols are chains. And I wouldn't be surprised if that's the world that we fast forward to in 12 to 18 months.

Well, what stops that's from buying the ETF? I mean, there are probably some structural advantages to that as well, right? You get better accounting treatment. You go from an intangible asset to a tangible asset. Boom, improves your books and records. Then you can avail yourself of the U.S. equity capital markets, borrow land, collateral, etc. right? And it's kind of like ethos align. Totally right, Chris. I think, you know, a surprising trend that we've also seen at Bitwise,

not just for Solana, but for Bitcoin is that a lot of long time early investors in these protocols and assets, Bitcoin investors that I never expected would be interested in holding an ETF have wanted to swap out their spot crypto holding for holding of the the same way that Chris just described. It turns out there are still significant benefits to hold in your crypto exposure inside the traditional financial system. That's a thing that investors can still benefit from. And I get questions from people like, oh, is this ethos aligned with what the idea of Bitcoin

is all about? But I think that a lot of those early investors who are dyed in the wool, Bitcoin pointers see the advantages that Chris just described, whether it's leverage or general treatment from your wealth management platform, estate planning, charitable giving. There's a ton of reasons that investors can benefit from holding their long crypto exposure in the ETF wrapper. But those types of folks are not necessarily going to want, you know, management of a debt who's going to take on leverage and, you know, maybe try to create some more upside through different capital structure arbitrage mechanisms. So I think it is really an

interesting and dynamic marketplace that's emerging here. I'm going to take what you're saying one step further, Teddy. I'd say I think ETFs are going to be the dominant form of holding crypto from most casual investors because the other big advantage of the ETF is you don't have to worry about the private keys, right? Like you are not doing the job of managing your own private keys. You're not going to get hacked. You've hired like a group of professionals who do this at scale and have some of the hardest

infrastructure in the world to handle these things. If you're looking at like a coinbase or a not. dig or a BitGo, like that is a whole different level than I wrote my private key down somewhere and put it in a safe deposit box. And so if you look at like deadweight losses among casual investors from just like lost private keys alone, there's a very good argument for the average like non-deep expert to use the ETF. It's totally right. And actually, Austin, that point that you made, it applies up and down the stack. So it doesn't just apply to the person who's got you know, $500,000 worth of Bitcoin or $2 million.

It applies to the person who has $100 million as well. I talked to a guy at the end of last week. He's got $100 million worth of Bitcoin and it's on a ledger device. What happens if, you know, he's now managing his own entire personal security hygiene on his own? What happens if he gets hit by a bust? Does his, do his heirs and family know how to access that? even if you move it to one of those great institutions that you mentioned, Coinbase or NIDIG or BitCo,

you're still at $100 million now, one of their smaller clients, right? The Bitcoin ETFs are the biggest clients now of the custodians. They have the best protocols. They have independent third-party audits. They have procedures, entire teams that are managing this stuff. So diversification of quality risk is a big deal to, you know, normal investors just the same way that it is to massive whale-sized investors.

All right. So as we promised on Twitter prior to this episode, so we're legally obligated to do it. Chris, you were in Washington earlier. You were talking to folks about the Clarity Act and what's going on down in D.C. And I will remind everybody, the Clarity Act was one of two big pieces of legislation that Congress has been working on in crypto. It's more general market structure legislation covering both centralized exchanges and elements. of defy. So unlike genius, which is already law, the Senate is still chewing on clarity. Chris, where do you think we're at on that one? Yeah, so we've got a couple of things going on. The Clarity Act actually came out of the House. We also have, I think it's when we're calling

the RFIA out of the Senate. It's a really, when you go to D.C., and I went down last week, everyone you talk to, the White House, Senate, House, Democrats, Republicans, they all really want to get something done, it seems. But, I mean, I had a very interesting conversation with one of the senior senators who's really focusing on getting it done on the Democratic side. And there's really two issues that are going to be tough to overcome. One is that if you're a Democrat, it's really the conflicts with Trump. They're just so upset that he's involved in, even though I guess we said it earlier in 60 minutes, he didn't remember who CZ was, but they're so upset that he's profiting off of crypto and he's got world liberty and his family and his kids are involved.

They just can't get over that. And so they're very focused on addressing that conflict issue. That's issue number one. Issue number two is national security. And we're seeing that that's the vector of attack that Senator Warren and folks are pursuing. Why? Because if you want, it's very hard to criticize innovation unless that innovation is impacting national security. national security, always the Trump card. And so those are the two main issues that need to be addressed. I personally think it's going to be really freaking hard to get done. We have so much going on in the government right now. The government shut down, right? You have time is everything. And even though I think Bozeman, who is the chairman of the Ag Committee, said that, you know,

we're going to have this, you know, we're going to have a vote on this before Thanksgiving. I just, we saw how hard it was for genius. This is so much more complex. Aside from those two issues, you're really dealing with a phenomenal reshape of power. Like in our country, we have the Ag Committee. We have financial services or banking. And like when you're shifting power of an asset class, that's why Gary Gensler was so obsessed with his asset. He saw it as a huge power grab. And look where that left him. And so the issues are much bigger here. I don't know how they get over conflicts. Like what my advice is, is like, look, we've got conflicts in crypto for sure, but we also have a lot of conflicts in equities in other asset classes. And so like the answer

is not banning people from using crypto. To the contrary, you want people to be able to use it familiarize. And like, where do you draw the line now between equities and crypto? What happens when you tokenize it? Like, why don't we just have an overall conflicts discussion, guys? And then on national security, you know, I've been pushing this policy solution for a really long time. I think we need privateers. I think we need to unleash the private sector to go on offense, but that's just a Marine speaking and our birthday is coming up. But anyway, the story is like those are some, everyone's positive.

There's still some really big issues to tackle. I'm bearish. I don't think it gets done this year. So I'm going to say something that both agrees with Chris and then maybe takes a left turn on that, which is that I am bearish on clarity getting done this year, both for many of the reasons Chris just said, but also I think people have, I'll politely say, underestimated how much of an educational lift that's going to be in the Senate to get moving with the bill that also includes DFI.

I think if they want to get something done this year, you're probably taking clarity and chopping it up into smaller dishes and maybe pushing a few of the pieces through as opposed to getting the whole thing. But the other thing is I would say it may be long-term bullish for the space for this not to happen. And what I mean by that is having Congress take this. seriously, take their time on it, think about it, try to fit this into call it a bigger revamp of U.S. capital markets writ large probably increases the long-term odds of success for the space, right? You've already got companies like Bitwise who are integrating these products into traditional capital markets and doing a very good job of that. So the work is being done brick-by-brick

day by day to move these things. And what we need is like constructive tools to continue that process. Because right now we've got ETFs, but like, can I clear an interest rate derivative on chain right now to get rid of a clearinghouse and just bilaterally post collateral? No, it's not possible. And so, Chris, I think it may be a good thing if that doesn't move. I don't disagree. Like we are in a really amazing environment right now where we have the CFTC and the SEC. see, once we get sealing in there, I mean, it's off to the races. We're going to see coordination and principle-based partnership. The other issue that nobody talks about is Chevron. And so let's a step back. There used to be this thing called the Chevron doctrine. And it was actually

came out in the Reagan era. And what it said was that the tie goes to the regulator. And what it did was it allow regulators freedom to fill in the gaps because generally speaking, markets move much faster than laws. And so you kind of refer to your subject matter expert regulators to move with the markets and fill things in. The problem that we had, and Austin and I have talked about this a lot, is that certain regulators overstep their bounds, and we know who they are. And they ruined it for everyone, because that's kind of probably the ideal solution. And now you're left in a spot where if it's not in the law, the tie doesn't go to the runner, it doesn't go to the regulator. So you have to get more prescriptive on those laws. It makes it even

harder. And so honestly, right now, I like the idea of collaboration, regulators working together for principles-based outcomes. The thing that people don't like, though, is this whole idea of states. And the issue is that for commodities, we don't regulate commodities. Essentially, they're regulated for fraud manipulation and abuse at the federal level, and that's great. But if you're in exchange and you're getting some heat from some states right now, you want what's known as federal preemption where there's one federal law. It makes it a lot easier. And so that's the drawback is like if you're in exchange, you know, or other folks, maybe it's a little bit more challenging. But I do think we're going to be in this kind of golden age of coordination once chairman appoint ceiling gets in.

I think Chris's point on Chevron is an excellent one. You know, in the banking sector, there are hundreds of rules, interpretive guidance that can be challenged judicially. And if you look at where we've been to the last two years, Coinbase and others have successfully litigate. with regulators. This is a relatively novel and modern phenomena. You're not supposed to sue your regulator. It's like you work it out in the back and you move on. And there are all sorts of really odd and strange rulings.

For example, a certificate of deposit is not deemed as security, but if a wealth manager picks which CD is best in a pool of CD, somehow it magically becomes a security. It's just a weird thing. No one ever, I know Austin appreciates that one. But no one never litigated that. They're like, okay, regulator, you got us. We'll go on to the next one.

But there, like barnacles on a ship, there are so many of these Byzantine rules that do need to be cleaved away. The tradeoff, though, is that Congress actually needs to act. And Congress would rather delegate it to the regulator to get stuff done. I'm not sure whether Congress wants to actually establish a clear view and have every politician being held accountable. to that view. There's also less freedom in a term you don't have the flexibility. You have less flexibility to deal with the edge cases that inevitably come up in the administering of regulation.

But just to pull on Chris's thread a little bit, I know Chris is very plugged in on this topic. So I think if we don't get it done this year, Chris, how does that change, if at all, your outlook for what happens in Q-1, 26, or the first half of next year? I have no idea. Perhaps we go more modular, like Austin suggests. Look, I don't want to, I know there's a lot of good work going into getting something done. I hope that it gets done and I hope that it gets done right. I have seen some, the one thing, like the other thing that I talked about that's really important is defy.

People are really, really struggling policymakers and getting their heads around defy, even though to many of us, it's pretty simple. This is technology. go after the behaviors and the activities, but leave the technology out of it, they're just like, but what I don't understand what decentralized means. And that seems to be another real hot spot when I'm talking about national security. So I don't personally mind slowing down to make sure we get it right. Maybe that's modular as Austin States. But I just know in the current form it's going to be tough,

but there's a lot of people working hard, despite the fact that some of their stabs have been furloughed in certain cases. Now, that's definitely true. Teddy, as somebody who is like actively in the capital markets plus crypto space daily here, what are the things you most want out of clarity? Like what do you think would be wins for both the industry in America on that front? Yeah, I think it's, I think it's defy. It's right now a very difficult thing about operating a regulated business, which is what

all of the, the things that Bitwise does are, is how do we, how do we, participate in defy? How do you comply with the existing rules in defy? There are some people, many of our competitors who say that you do your best and hope that the forthcoming legislation will clear it up for you. But it's been very difficult to navigate that path. We think that these tools are out there are so powerful. We want to offer these solutions to our clients and potential clients, but what's the way that you do that? And so I think that my understanding of things is that the existing entrenched power that be are now attempting to slow down the defy path to having clarity, as it were. And that's where we would really like to see a regulatory

sandbox, the ability to experiment, the ability to do things with some, at least basic guidelines. But we see every day, a lot of our clients who are in this zone, of crossing over between Trad V, fully regulated, et cetera, and having the understanding and the ability to do things in Defi as clients and users of crypto assets, we see how powerful Defi is, how much better it is than what the existing infrastructure gives you. And the question is, how do we truly make it so that that can flourish here at home in America? And I think that we need clarity in order to give entrepreneurs and businesses, the ability to actually carry out and conduct that experimentation and to develop those businesses.

So that's what I think is the most important. I'll pile in off the back of that and say to bring it all the way back around to our previous discussion on Bitcoin as well, it might not even be the necessity of using those things at all time so much as the possibility to use them. Because once you have the ability to do things that are permissionless or peer to peer or essentially uninterdicted, it forces the behavior of all of the people in the system to improve because now your client, who was previously completely locked in, has the option to be like, screw you, man, I'm going to go with that thing.

And it's like, yeah, it's the credible threat of like, I'll take my business elsewhere in a system where you can move assets around and there are permissionless like elements that I think really, ironically, has the potential to greatly up the game of the tree. traditional financial space. Like Chris, I know you and I talk about 2008 a lot, but I think having a lot of this technology and the transparency around it and the ability to automate some of these things that in a 24-7 fashion would have made that a lot less painful, not just because we have some solutions, but some of the conduct would have been less egregious going into it as well. Yeah, look, we hyper-centralized everything after the crisis. Everything, $700 trillion,

because we didn't have a technology that could allow us to do something else. And like, think about it, I'd probably rather decentralized risk than centralize it. It's probably for makes a much more robust system. All right. So we'll drop the mic right there. I want to stop and say, Teddy, thank you so much for coming on. This has been really nice to have you aboard. And for everybody else, we're going to continue to do this show going forward. So this has been bits and dips. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding. So until then, take care of everyone. Thank you.