Unchained - Bits + Bips: Who Wins If the GENIUS Act Passes, and Is Bitcoin’s Rally Over? - Ep. 869

Episode Date: July 16, 2025

Bitcoin broke its all-time high. Meanwhile, stablecoin legislation is about to pass. And the macro picture is a powder keg. In this episode of Bits + Bips, Steve Ehrlich, Ram Ahluwalia, and Noelle Acheson are joined by Austin Campbell to break down what’s really driving markets, and what could break them. From the GENIUS Act reshaping stablecoins to tariffs putting pressure on the Fed, to the Pump.fun ICO and memecoin mania, nothing is off limits. And with crypto ripping, is it time to ride the rally, or take some risk off the table? Thank you to our sponsor! Bitwise Steve Ehrlich, Executive Editor at Unchained Ram Ahluwalia, CFA, CEO and Founder of Lumida Noelle Acheson, Author of the “Crypto Is Macro Now” Newsletter  Guest: Austin Campbell, founder and managing partner of Zero Knowledge Consulting Unchained:  Bitcoin Sets New All-Time High, But Eyes Even Bigger Gains PUMP Traders Make Big Options Bets on the Token Surging Past Its ICO Price Grayscale Files Confidential IPO Paperwork Timestamps: 🎬 0:00 Intro 🚀 2:22 Why bitcoin is hitting new highs and what’s really driving it 🧘‍♀️ 5:29 Why Noelle says market complacency can’t last forever 🌍 9:06 The surprising way bitcoin looks when you stop measuring it in USD ⚖️ 11:49 Whether this is the moment to de-risk your crypto exposure ⛏️ 16:50 How bitcoin mining stocks are made to be traded, not held, according to Ram 📜 18:57 Austin’s thoughts on the odds of crypto legislation passing this summer 🏆 20:48 Who the winners and losers will be if the GENIUS Act becomes law 💳 24:51 Whether payment giants like Visa are under threat from stablecoins 🚧 29:15 What kinds of firms could actually disrupt the U.S. financial system 💰 34:00 The pros and cons of deposit tokens compared to stablecoins 🌐 37:06 How stablecoin legislation could reshape global macro and finance 🧪 44:32Whether Pump.fun’s ICO was extractive or necessary 🏛️ 56:55 Why Grayscale wants to go public and what that move could unlock 🏦 1:04:15 Whether traditional banks have the talent to win the stablecoin race 🌠 1:08:15 Why Stellar might be the blockchain dark horse in this cycle Learn more about your ad choices. Visit megaphone.fm/adchoices

The Bitcoin rally is being driven by what? Probably some reserve allocation, but I do think it is largely speculative. You've got to think not so much what Bitcoin's going to do, but what does everyone else think Bitcoin is going to do? And Bitcoin is one of the very few assets that fulfills two key criteria here. One, it is both a risk asset and a safe haven. There are very few assets that can say that. And two, it is one of the very few liquid assets trade to say that is global. Hi, everyone. Welcome to Bits and Bips, exploring how crypto and macro collide one basis point at a time. I'm your host, Steve Ehrlich, high scribe of the Nchian Kingdom, and I'm here with Ram Alawalia, Master of Wealth, leader of Lumida. Gail Acheson, and today we are joined by Austin Campbell, High Scholar of Zero Knowledge Consulting. Austin, good to have you here. Why don't you just introduce herself for a second? Oh boy, do you really want me to do that? Um, so I was going to say, I think the best description that's been given of me was by my friend Alex over at Galaxy who called me a quote, grouchy fixed income person at one point on his podcast. And this is factually true. So I've been dealing with stable coins in crypto for longer than I want to admit. And this crazy hair is in fact because I'm a college professor. I love the hair. I love, I love the glasses. So we have a lot to talk about today. I mean, Bitcoin over 120,000 ether over 3,000. apparently there's something happening in D.C. related to crypto. One of the biggest ICOs we've

had in years. Just plenty of gray scales going public. Plenty of things to discuss. Before we do that, though, just a quick disclaimer. Nothing that we say is meant as financial advice. Please see unchain.com backslash bits and bips for more information. And before we dive in, let's just take a brief moment to hear from sponsors who make this show possible. crypto moves fast. It's why Bitwise launched the weekly CIO memo, a jargon-free summary of what's moving crypto markets written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. All right. So I think there's a lot going on, but I think it makes sense to really kick off with

the price action. At some point, I think it'll be boring to talk about Bitcoin hitting a new all-time high from 120 to 121, 122. But right now, it's still exciting. You're usually my go-to person for this type of thing. So I want to talk a little bit about what you're saying? And really, like, what's driving this momentum after we waited months to see some movements and how high do you think it can go? Yeah, briefly, look, I think there's a short squeeze. We need to pray for Jim Chanos. Let's all take a moment now. Hold hands. Just pray for Jim Chanos. This guy, he's been shorting Bitcoin, shorting micro strategy and long Bitcoin. And there's a short squeeze underway. And the backdrop of all of this is you have Crypto Week. So what is Crypto Week?

The U.S. Congress is looking at three bills. One's the Genius Act around Stable Coins. The Second is the Clarity Act, Digital Asset Market Clarity Act. And the third is the Anti-CBDC Surveillance State Act, which would prohibit the Federal Reserve from issuing a central bank digital currency. So you have news headlines in the background. You also have Bitcoin, which had very low levels of volatility, start to move back into a high volatility asset. You know, there are a lot of option traders around digital assets in Bitcoin.

So they're buying call options on this. Bitcoin is a very interesting asset because it's an awesome. You can double click on this too, but it's a high positive skier asset. So there are a few periods in the year where it really gets going. You want to be involved when that's happening. And most of the years actually just kind of decaying. But when it's going, when it's going, it's going from low vol to high vol regime, and you've got a backdrop of good news flow, and you've got positive seasonality.

And what if, what if Trump says we shouldn't tax Bitcoin? Wouldn't that move Bitcoin to 125K plus? And so that's where we have to pray for Jim Chene us here. Well, I, the whole idea of him not, I can't imagine that ever happening. I can imagine him saying it. Am I imagine that happening? How? You can't imagine a lot of things that happened in the last nine months?

I guess that's true. I can imagine him saying it. I don't know how that could become law. And I'm pretty sure an executive order can't make that happen. Austin, but good background, obviously wrong. Austin, I want to come to you in a second. But, Noel, you're our real macroex for here. I know last week, Rambo talked about just a very, I guess a favorable backdrop where

everybody was pretty much ignoring. I think that time was about 12 Trump tariff letters. And no one's really sweating what could happen on August 1st. and it's kind of led to increased risk-taking where dips are now just a buying opportunity, not really a sign for caution. What are you saying? The same kind of complacency risk

that we've been seeing so far, and I still maintain that it can't go on forever. There is no such thing as a perpetual motion machine and this kind of complacency. All it would take is one fright for a stampede for the exits. And while there is obviously a lot, going on that's good in the market at the moment. These valuations are stretched and there's just a lot of risk. When you are in any single asset group can move on the back of a truth social post,

that is a crazy market in which fundamentals don't really mean very much. So Trump can send out as many letters as he wants. It's not really going to be taken seriously by a market that really is in crazy territory without any anchor to fundamentals going forward. No one knows what impact tariffs are going to have. No one knows what impact the geopolitical realignment is going to have. And that's one of the reasons I think that Bitcoin is finally starting to move. We know that the tailwinds have been building for quite some time. I don't think there's anything to do with fundamentals, though. This is simply to do with craziness. And Bitcoin is one of very few assets who that can't really be affected by a truth social post, with the exception perhaps of what Ram suggested, no tax on Bitcoin.

But I think you're right, see, I think that's unlikely. We are likely perhaps seeing no tax on small transactions, but that's a whole separate bill. It'll work its way through Congress. Right now, Bitcoin does look like a safe haven in a fairly crazy market. It is still a risk asset, though, will always continue to trade as such. And it is one of the very few risk assets that is not coming up for earnings season this week and the potential risk that the guidance revisions are going to be getting us. So I think what we're seeing is macro craziness. We have CPI out this week, and everyone's going to be breathlessly waiting for the figure, as I will as well. And we'll going to gasp if it comes in higher or lower.

But in the end, it doesn't matter. It's theater. The CPI hasn't really moved for the past year. It's trending down, but the PCE, which is what the FedExha, hasn't really moved for the past year, isn't it is not expected to for the next couple of months either. And in the end, does it really matter? Is it going to change the outlook for rates? Does the outlook for rates even matter in this market fairly untethered to fundamentals?

So my bottom line is Bitcoin was due for a move like this. It's not based on fundamentals. It's based on a haven in a really crazy storm. Yeah, it's, it's first thing. I think you're hitting a bit of decoupling between Bitcoin and the broader macro markets, which they've been highly correlated for the last couple of months or so. And also, I want to come for you in a second. But I actually published a piece, I think, on Friday, where I surveyed a couple of

ammoists to see where Bitcoin could go. And one CTA, Katie Stockton from Fairfield, she told me that 160,000. by like the end of the next year is sort of her big picture estimate the 135 this quarter is the more reasonable one. And that's just because of the fact that it finally broke out of this narrow channel. And even though there's some signs that Bitcoin is slightly overbought at this point, that's normal. And with everything happened with the Genius Act and just this risk-on environment, it's going to keep moving. East over 3,000. It recently surpassed its 200-day moving average.

which recently underwent a golden cross from the 50-day, crosses the 200-day. And it's something that also is a good long-term indicator of bullishness. So, yeah, so we're, yeah, we're pretty interested in what's going to happen next. Austin, let's come to you. What are you saying? Well, so one, I think we're in a market regime where a lot of the short-term signals that people would normally rely upon are getting, I'll put. politely say somewhat less reliable. Like Noelle, you mentioned CPI and the U.S. government's currently

like just back of the envelope estimating about 30% of CPI because of staffing shortages right now, which tells you if you've been a trader, people are going to overreact to prints that are actually just a couple of bureaucrats having a few beers and they're putting something at a spreadsheet. And the reality is you should be looking at like three to six month moving averages on a lot of these things if you actually want to derive value from them, so to speak. So one is I think the market is maybe misinterpreting some of these signals. And I don't mean that many nefarious way. I mean, you know, a little bit like having lived through 2008, when regime change happened,

it takes people a while to get used to how the new things work. And the other one we're seeing on that front is we're going back into levels of dollar performance that we haven't seen since the 1970s, right? If you look at like your day performance of the dollar, it's, you know, not great. One might expect Bitcoin to be up in dollar terms in that environment. And what I always remind people is if you really want to understand what's going on, look at things from multiple angles. Don't just look at Bitcoin price in dollars. Look at Bitcoin price in euro.

Look at Bitcoin as a percentage of gold prices or total gold market tap or things like that. And try to find sort of the macro and comparative value positions from a couple of different angles. And I think if you do that and you're following what's going on in the market, it should not surprise you if Bitcoin is running. And it also should not surprise you if Bitcoin continues to run, right? Because to present a totally different argument, gold is up significantly like year over year, right, as we're looking at price terms. And if you believe in Bitcoin is digital gold and that our real target is a percentage of gold, then just gold running will drag Bitcoin along with it.

Now, I'm not saying that argument is bulletproof. But again, as you look at multiple narratives that emerge and you're looking at like a comprehensive global macro picture, it's pretty constructive for Bitcoin right now. And to close that out, to Rom's earlier point, Bitcoin historically delivers something like the majority of its gains on a handful of trading days per year. So if you were trying to hold on to this asset thinking that you're going to time the market in Bitcoin,

I'm not saying it's impossible, but I am saying you probably need to be the kind of psychopath who spends 80 to 100 hours a week nailed to a desk monitoring markets like I was when I was still at JP Morgan, if you want to capture those moves. moves with any degree of reliability. And if you're not, the correct strategy for most people with a very right-stueed high volatility asset with a profile like that is just buy it and forget about it.

Ron, what's talking about right now with your, I mean, Bitcoin made this major move. We talked about how it has more room to run. But there's a wide world of other Bitcoin adjacent investment opportunities out there right now. Yeah, look, on Bitcoin, I agree with all that's one said, too. Look, I would take one difference there. I think Bitcoin's better traded than huddled, but I think overall I agree, the, you know, the nature of the skewed, the asset.

Like, you're supposed to remain involved in these uptrems. Otherwise, you're missing the point. Otherwise, you're investing at the worst possible time, and it'll bleed, right? There are a few things to look for. One is when funding rates get elevated, then it's time to start looking to de-risk. That's not the case currently. So putting rates like the demand for leverage in the category.

We're not seeing that right now. The second thing to watch is how prices respond to the potential legislative actions or the lack of legislative actions this week. If you recall back in November, December, you have three big headlines, including the appointment of our current SEC chair, and you had short one-day positive price movement, and then they faded. So you have to watch for those things.

I would say that probably have no more than two weeks of rally left, maybe my guess. That doesn't mean a lot of can happen in those two weeks, though. So this is the time when you've got to be like Austin, back at GAP work. I think, look, I think, you know, I'd be constructive, to be clear. But I think towards the end of the month, you know, some of those metrics can change and maybe it's time to readjust.

One thing we have to bear in mind with on terms of gold is the central bank buying, institutional buying, and the rotation out of the dollar reserves. I mean, it's happening slowly, but it is definitely happening. The IMF produced some new figures yesterday showing that the percentage of dollar reserves and total global currency reserves has dropped 10 basis points. Sorry, the 10 whole percentage points over the past 10 years. And that is just of the currency reserves. That's not even taking into account the amount that's going into gold. Now, Bitcoin doesn't have that narrative, but nobody knows central bank is rotating into Bitcoin that we know of just yet.

And if they are, they're fairly small, so we're not going to hear about it for a while. The Bitcoin rally is being driven by what? Probably some reserve allocation. But I do think it ties into what Ram was saying. I do think it is largely speculative. You've got to think not so much what Bitcoin's going to do, but what does everyone else think Bitcoin is going to do? And Bitcoin is one of the very few assets.

that fulfills two key criteria here. One, it is both a risk asset and a safe haven. There are very few assets that can say that. And two, it is one of the very few liquid assets trade to say that is global. What the SEC chair does is important because the United States is the world's largest financial market, but it's not the only driver. What happens in Hong Kong is important. What happens in Shanghai is important?

What happens in Lagos or Mumbai? They're all also important because a Bitcoin in Athens is exactly the same as a Bitcoin. in Seattle, unlike other assets, even unlike gold. Gold has to be re-smelted before it can be transferred to the United States, for instance. So there are two features that Bitcoin has that virtually no other liquid asset trading in these crazy markets have. So I do think what we're seeing is accumulation, not just the short-term trading, although there's definitely a lot of that, but there is also the longer-term accumulation

going on. Price will always be set by the short-term trades. That's just simply how markets work. and they are generally the risk traders. So runs right and that Bitcoin is for trading. That is what moves the price. But the longer term set it and forget it, that is what works. And in the end, as, you know, as Austin was pointing out, the short-term noise,

the short-term theater of the economic data points, and even the regulation is sort of in the price now, all of that is theater. It's the longer-term liquidity profile, the longer-term demand that is going to decide exactly how much Bitcoin goes up. between now and the next 12 months. There was an ancient whale that sold billions of Bitcoin. Was it last weekend? Yeah, I think it was. You absorbed that supply.

Yeah. It's a good sign. That's a very good sign. If you did that two years ago, we're not, that would not have been successful. One other funny, I guess one other mark in the pro column for Bitcoin Ronell is that it's tariff immune.

I think we all remember some of the stories, even a couple months ago, people rushing to send gold from London to New York to front run the Trump. tariffs, I mean putting on planes and votes and whatever Bitcoin, you don't have to worry about that. So it's kind of interesting. So let's turn, I guess, to actually one more quick thing before we get to D.C. I'm curious if anyone's been following the Bitcoin miners, because they're kind of the unsung

heroes in all of this. And they've been struggling, but I know that they've been booming a little bit today or so. What is, is it anyone following them? And like, what does the outlook? I mean, Ron, do you invest in it? Which ones have been struggling? I'm looking at like iron. It's up 6% today.

Yeah, today's the exception. I'm just talking like the longer overall trend where, I mean, they've been struggling needs to be Bitcoin, micro strategy, the other treasury companies, because they just face really challenging economics in the sense that the revenue gets cut in half every four years. It's capital intensive. And frankly, like, when they put out like our nine or ten figure investment, they get minors, they're forecasting Bitcoin they'll get in the future, whereas tragedy companies can get it today.

So I'm just interested if any of you have been following that because this is one sector that hasn't gotten a lot of attention recently. I would say it's a carrying the coal mines. It's a lead Bitcoin, actually. The moves in the miners preceded the moves in Bitcoin. So keep an eye on that category. We're seeing new innovation around Bitcoin mining. We recently invested a Lumida on an off-grid.

Bitcoin mining technology where they take the excess natural gas that can't be part of the pipeline from these stranded wells. And that's used to mine Bitcoin that costs like $30,000. It's pretty cool for Bitcoin. But you're seeing some of that new technology. But it's an incredibly competitive category. As you know, it's an extraordinarily competitive. Bitcoin miners are also meant to be traded, not huddled.

It's a difficult, difficult business, right? You've got to have cheap energy. You've got to have the latest miners. You know, as you know, we discussed before, they're trying to pivot to like a data center place. And course, that's an example of that and Tara Wolf and Iron. And Bit Digital announced that they're, I guess they're foregoing and going full salwana, which is, I think, a new form of capitulation in Bitmine.

They're going east. So that's just something to the track. Okay. All right. So let's get to what's happening in D.C. because it's crypto week. The House is going to be very busy. Austin, I know you go down to D.C. a lot of me. You've testified in front of Congress. I don't know how many times. Let's get your read on it. I mean, the three bills that are going to be discussed. But I'm really interested in like what you think some of the practical impacts of this will be. I've heard that the stable, I'm sorry, the Genie Act may actually become law. And the other ones are just more for discussion. But what are the practical impacts of this? Because, Crypto's gotten where it's gotten to even today without any legislation. Yeah, so I'll say, one, I agree if I'm ranking odds of what passes and becomes laws and what hits Trump's desk and he signs that I think genius is number one by a mile. Clarity is number two, but far back, like for me, below 50% easily because it's got to get to the Senate, you've voted on. And there's, if I'm being honest, a lot of hair on that.

It's a real complication. and some of what's in there. So some of the skepticism around it is not. I hate crypto. It's, uh, does this work? The CBDC bill, I'm going to be honest with you. I don't even know what they're trying to say in there. Like I read the thing and I'm like, does this ban fed now?

Was that the goal? I think that like there are literally definitional issues in that bill passing it as is just breaks all kinds of stuff. So I don't think it's going anywhere. But again, to understand how Congress operates, Steve and to bring this all the way back around, the best predictor of a bill actually passing. is that it's been in a couple of Congresses in a row, and everybody's gotten comfortable on definitions,

odd structure, on how it works. And I think genius is the one that's there. So if we look at genius and assume it passes, I think there are, I'll politely say a lot of misconceptions about what the impact of that will be. And I think people need to think a little deeply about this. So one, one of those groups is going to be, call it regular way companies that thought they were going to launch stable coins.

If you read the Genius Act, there is a prohibition on companies that don't primarily do financial business launching a stable coin. That means this whole bit about like meta, about Amazon, about Walmart launching a stable coin is congratulations, you were going through the treasury to get extraordinary approval to do these things, the procedure for which is not even set up yet. And I expect them to be relatively grouchy about for antitrust reasons. And then by the way, it can be revoked by a future administration. even if you get it. So like buyer beware on that one. It essentially is, I'm going to say the inverse of the Bank Holding Company Act. Like if anybody's read the BHCA, it greatly restricts the kinds of things that certain financial companies could do. And that's why J.P. Morgan does not have like a social media empire. And that's why Bank of America is not like an automotive manufacturer. This essentially implies the

reverse, right? That is to say if you are outside the financial world, you also can't jump that wall from the other direction and become a conglomerate by coming from outside it. Probably good, logically consistent, but they are losers as a result from a like, hey, I was going to go launch this business perspective. I think another set of losers is likely to be small banks, right? You have these very bundled entities that exist at small scale. So take like, you know, some small bank at Arkansas, it's probably got 30-ish people working for them.

And it is their job to make loans into the local market, where I'm going to be honest, I do think they have an edge, but then also collect deposits from all over the place, run a first class, you know, anti-money laundering and anti-financial crime program. And by the way, manage your interest rate risk and understand what the Federal Reserve is up to. And I'm going to say they have an edge only in the first one, right? Like banks are these incredibly dense and bundled objects at small scale for kind of no reason. And so now that you have stable coins coming in and can potentially offer a better deposit product to people who purely, want to use the system for payments, I think a lot of these things are going to be forcibly

unbundled by market forces. So if that's true, who are the winners? One, consumers. Right now, if you're an American and you have a bank account, here's the deal your bank is probably offering you. I'm going to take your money. I'm going to pay you zero. I'm going to go loan it to a bunch of people. If it goes right, I pay myself a giant bonus. And if it goes wrong, you get stuck holding the bag. That is not a fair trade from an economic perspective. There's a real. reason consumers have been rebelling against banks for a while, this will accelerate that process. Two, weirdly, I think the big banks are going to be winners here in the stable coin race. One, somebody's got to manage those assets.

Two, somebody's got to trade all the bonds that are going inside of these things. Three, a lot of them have the scale to launch their own in a built-in consumer base already. And four, the main thing that you could do with stable coins now is engage in like what's called reverse repo, which is a fancy way of saying overnight lending against treasuries. Well, who has all the treasury collateral and borrows in repo markets? The answer is the big banks. So what is going to be happening here is sort of a restructuring of U.S. macro markets internal to the U.S. The other big winner is globally, anybody who wants to get their hands on dollars safely, right? There are many, many, many, many people offshore, somebody used to run a

relatively big stable coin who want access to dollars and can't get it in their local system and or they don't trust their local system so they don't want to leave their money there. So I would say the other thing to understand about dollar stable coins is exactly as Noelle said earlier, that central banks around the world are moving away from the dollars. This gives people in countries an ability to get into dollars and out of their local system of norms and into dollar norms, which in many ways is a gigantic expansion of both financial stability and human rights.

Is Visa a MasterCard at risk or the issuing card issuing bank? that run those rails from a revenue perspective. In the short term, no, in the long term, yes. Right. Like, in the United States, our payment system largely works. I don't think transformation is going to happen here overnight because there's not like a burning need to get rid of like credit cards. Like the system is not on fire and collapsing and not working.

But over time, as stable coins become more prevalent and the rails are more open access, people are going to ask, especially merchants, hey, why am I paying so much to use this system? But that, Ram, as you know, like that sort of financial market transformation is a decades, not years type question. Well, after, look at the success of Stripe. These developers adopted their APIs. Stripes grown very quickly. I mean, the merchants, they live on one to two percent net profit margins.

If that, you know, gas stations have encouraged consumers to shift their behaviors by offering incentives on cash. Don't you think merchants could adopt stable coins quickly? I mean, you need some technology layer. Square was an example of them until they got co-opted by taking investment from Visa, so they stopped the mission to disrupt Visa. But shouldn't there some new technology come along that enables merchants to swipe at a lower cost? So you would think so, but I'm going to point out that even in the United States, Stripe is relatively small, right?

like as a percentage of total business happening on all these rails. I think, you know, it's easier for me to see this having sat at like J.P. Morgan and City and looking at like global international wire transfers, which, you know, annualize, that's what, 1.25 quadrillion numbers, which is a number so big, it sounds like my 10-year-old made it up. But like that market is still not that big. I think internationally we're going to see more uptake from merchants and then it'll come into the United States, not the other way. because in the U.S., Rom, I agree with everything you said,

but the reality is if I want to pay with a card and buy something at like Barnes & Noble, it works fine. The place where that's totally jacked is that, like, I am a supplier in Thailand selling to somebody who is like another business in Finland, and I've got to go through the international correspondent banking system to make that payment. It's terrible.

And so it'll start there, and by disintermediating that kind of work backwards. Like, put differently, if you look at the most successful, Fintech that disrupted payments globally, it's probably what? Like Ant Financial AlliePay, they're in China, not here. Right. Well, to that point, look, Google, Apple, and that a stand to benefit, the regulations allow

them. The fact that when you swipe using your Apple Pay card, and there's a digital, virtual representation of this credit card is bananas. They can authenticate you. They're on the internet. They can move money. There's no reason why they can't stand to benefit if the regulation permit them to compete, which I think would be a better world.

That'd be the right direction of travel. Yeah, I don't disagree. And like, you know, payments are a complicated space, especially because the concerns between consumers who care about things like, you know, just day-to-day efficiency, ease of use, small-scale fraud type stuff versus like large businesses sending $100 million international wires are not fully aligned, right? Like the transaction preferences there are not monolithic. change there, I think will be complex. I also think the blockchain world has done itself no favors by

like actively misunderstanding how payments work. You have so many people who are like, oh, I can push the thing on Solana. Like, what's the problem? And it's like, that's like saying my car has tires. What else do I need? Like there's a lot more that goes on here with payments, guys, right? And so I think we're still in the very early innings there is kind of my point in disruption. I think the bigger like sort of set of disruption is going to be offshore dollar markets really in place number one and then moving downstream sort of into U.S. markets and the people, maybe this is an unpopular opinion, but the people best situated to disrupt the U.S. markets are the big players who are already themselves in U.S. markets. Like ironically, the company

most likely to disrupt like U.S. financial market structure with the stable coin might literally be J.P. Morgan. Let's talk about that for a second because I'm interested in, I mean, the thoughts are Austin, but everyone else. I mean, the idea of the big banks being best suited to benefit from this. I certainly understand the point of them managing the collateral and earning fees from that. I mean, BMI, I think just the nets to deal with Ripple to manage 500 million of the Ripple, or Ripple staple coin, although I guess the cynic in me would say Ripple was basically just paying them to manage their own money because I don't know who's mincing Ripple UST that's not to come. But anyway, but one thing I've heard is that it's hard for the big banks.

How are they going to find a way to, like I have maybe five different financial services providers. I'm not going to want five different types of stable coins in my wallet. Like that's one of the benefits of a circle or a tether because they don't have a bank and they just want to be everywhere. I mean, Ripple, I guess, is trying to do the same thing. I'm really curious what's going to happen, but I think it's Finaster doing a deal with a bunch of local banks to create a stable coin there. And then the other one with OUSG, the one that was being created with a bunch of other exchanges that don't have their own stable coin yet. I mean, what's that look for those?

I mean, how important is it for a stable coin, even essential as one, to not be beholden to a certain bank? Because I can't imagine that these banks are ever going to work together to create one. and people don't want to have to manage all of those different types of stable plans. The regional banks should cooperate. They need to offer each other. Otherwise, they're entering a world of obsolescence to Austin's kind of earlier points. But the big banks have the edge and they have the tech budgets. So to your point on Finastra, Finastra, FIS, Jack Henry, these are Picks and Shovels, infrastructure, technology providers to the banks.

They should offer some kind of technology. I'd prefer if a startup did that. but it takes forever in a day to get anything to the bank system, primarily due to the Federal Reserve supervision and FDIC and third party vendor management and regulation, regulation, regulation. But the regional banks and the community banks really need a stable coin sure remain relevant. Yeah, I don't disagree with that. I would say, though, I think stable coin fungibility is really a misunderstood topic.

Like the reason historically they haven't been fungible is everybody's doing them very, very differently. Right. If you look at Tether, which is like this offshore thing with significant mint redeem, that won't even tell you what the reserves are in totality, sometimes even in part, it isn't the kind of thing that you could generically accept. On the other hand, if, you know, let's just take a theoretical experiment, if all the banks essentially said, hey, we're just going to create a like stable coin, we'll all use it and you can redeem in and out of it with in-kind contributions of T-bills, that thing's just a collateral lockbox and it's interchangeable for all of them. And yeah, it could be wrapped as like JPM's coin on their platform and B of A's

coin on their platform and Wells Fargo's coin on their platform. But that's like infinitely fungible, right? Like everybody will take T-Bill collateral and derivatives markets. So I would tell you, I think that is an under-explored market structure problem because we haven't had the kinds of people who think about interoperability at that scale involved in stable coins at all as of yet. Right. And I think the other part is you've got to be careful what you mean when you say a stable. coin. So somebody in the comments referenced JPMD, that's a deposit token. Right. That is literally representation of cash on J.P. Morgan's balance sheet, which is definitely not fungible with other banks, right? If you believe it is, I'll give you as many Silicon Valley bank deposits as you want for

JP Morgan deposits that'll want a year ago and change. Right. Like bank deposits are not fungible. But it would be relatively easy to make a stable coin that's relatively fungible and mutually acceptable for these people. Again, as a former derivatives guy, you can write a CSA, right, which is a collateral agreement for derivatives that just specifies a whole bunch of treasuries and throw all those in a box and it's acceptable to literally everybody, industry standard. So this to me is an architecture question as you look at genius and how you build the stable coin and why the preferences here may converge pretty quickly to a handful of form factors that become mutually acceptable to people. Then, as Rahm was pointing out, you're now in,

in, I'm going to call it a distribution race. So if the regional banks don't work together with each other, all of them are setting themselves up to be absolutely crushed by like the big three or four. Because the combined customer base of like JPM Chase Wells Fargo, right, as you're putting that Bank of America, as you're putting those people together is like, okay, more than all the other banks combined. You need Zell for stable coins. That's the answer for the regional banks.

Yeah, I guess. I'm actually really interested in the idea of deposit token versus stable coin because I think what JPM is doing is that the positive token on base. And from a bank's point of view, I mean, that seems to be like eminently more, eminently easier and more profitable because you don't, you can leverage out. You can lend it. I'm really curious. You're actually talking about this a week or two ago in one of our internal unchained chats.

Like, what's the FVIC going to say about the positive tokens? Is it just the simplest things backed by the positive bank? How do you make sure to your point, Austin, that if these tokens exist, they don't create undue risk? Like, do they have to all be under FDIC insurance limits? Is there some sort of regulation that has to be there so that people can feel comfortable using them? Because, like, a deposit token is so much more profitable theoretically for a bank than a stable coin. One, I don't actually think that's true. I think that's a misunderstanding of how bank funding works. So I'll start there. But two, I'm going to say, I think the FDIC insurance debate is a complete red herring.

And the reason I say that is people think about FDIC insurance because we're talking at the scale. of like two-legged human beings where it is feasible to stay under 250K for the FDIC limit. One, most small businesses that are high turnover, low margin businesses, definitionally cannot stay under the FDIC limit, right? They just can't. If somebody's like even a regional grocery store, the idea that I can keep a bank account under 250K while people are buying like tomatoes and milk and, you know, whatever with a one to two percent profit margin, not happening.

Your daily turnover will just push you above that. number. Okay. Now let's get to scale. Let's talk about Amazon. Let's talk about PayPal. Let's talk about Walmart. Let's talk about Apple. Like the deposit tokens are going to be safe or not safe based on the stewardship of a bank's ballot sheet. The FDIC insurance, unless we want to make it unlimited, is nowhere close to covering corporate needs for cash. It's a joke in that space, right? Like I ran a $23.5 billion stable coin and I could get $250k of FDIC insurance at a bank. I don't even waste my time. That's a rounding error.

I'm not thinking about it. We kept most of it in overnight reverse repo and bought private market insurance on the stuff that we had to keep in banks. That's how that works. Right. So that's a red herring. The part that matters and makes me feel safe or not, Stephen, to your point, is how do I think about the bank? And this uncovers the uncomfortable truth that U.S. financial regulators have been fighting with themselves about for a long time, which is, I hate to say this, but the big banks are. way better at that stuff than most of the small to regional guys. Like I ran a bank capital book

at JPMorgan. I looked at hundreds of bank ballot sheets. The big guys were just better at it. I trust Boney way more. And once you're a bank. And you've got hold of maturity losses because you bought bonds at 10. Look, even then their HTM losses were less bad than a lot of the regionals from. And so the point I'm making there is if you want the banking system to be safer in America, here is the answer that nobody wants to hear consolidation. I'm really curious to see what the real FDIC insurance limit's going to be now after the post-SVV world. We need to get to an ad, ads, and some other topics, but I want to tie a bell in the staple coin discussion. And, well, there's one question I want to ask you.

I'm very interested in the impact of all the rest of the world. Like, we've spoken a lot about how this is going to increase dollar access to pretty much anyone with an internet connection. and a lot of emerging market economies, they're facing some difficult decisions right now. The governments are trying to read what's Trump's tariffs. They're dealing with their own exchange rate issues and challenges for global economies. And looking at a world where theoretically,

most of their, I guess, citizens would be able to get easy access to dollars now completely outside of the control of the government. Like, what do you think is happening at central banks? around the rest of the world. I mean, what do they think when Gainysak comes into effect? And what's the bigger macro implications of all this? Central banks, financial regulators, and not just in emerging markets.

One of the reasons here in Europe we're going to be getting the digital euros because of stable coins. They are freaking out about the possibility that we're going to be moving towards a more dollarized system. And it's even deeper than that. I mean, today, Piero Cipollone, who's on the executive board of the ECB, was giving a talk about the You're again trying to shove it down our throats, again telling us that this is what we want because we need, he said, and I'm paraphrasing here, we need to be able to rely on a payment system that is always available across the euro area. And the reading between the lines, what they're basically hinting is that we want everyone in Europe off of the American systems of Visa and MasterCard

and Alipay, which is increasingly used here. We want them off of anything that isn't Europe base because we just don't trust these other people. And by the way, again, reading between the lines here, they haven't actually said this, we're probably going to ban their use or limit them in some way. And this is in the European Union, which is not exactly an emerging economy. Now, go to somewhere like Nigeria, which has been blaming crypto for years now for the woes of the Naira. One of the reasons the finance dictators were thrown in jail is because there's no other explanation than IRA could be doing so badly other than people diving into crypto assets on on license exchanges. Now, they finally come around to that. They're finally trying to get license

exchanges so they can control the capital that wants to leave the country, which comes back, which ties the whole stable coin narrative into a Bitcoin narrative. And that's just two words, capital controls. We're going to be getting them here in Europe and we're going to be seeing them in the emerging economies around the world because they just kind of afford to let that. that currency flight happen. And yes, stable coins are an attractive alternative. And anyone who can will. We've seen this in China.

China has not exactly been favorable towards crypto trading. But even Chinese officials have stable coin accounts according to reports. They keep their, for them, a store of value is tether, not necessarily Bitcoin. So, Noel, the European story is the value proposition that's been. told by policymakers to their people, hey, we need to control you so you can't escape with your money, or is it a convenience and lower cost of transaction story? They're telling us it's a convenience, lower cost of transaction story, but it is a currency control story. Again, this is what we want. We apparently, we're told, are very unsatisfied with the services

that we currently have. I can go to the supermarket and I can just wave my phone at this little box and I've paid for my groceries. It's very convenient, and I'm not fussed about the fees. They're not onerous. They're not exactly painful. And okay, maybe I'm speaking from a position of privilege, but I've never heard anyone complain about them. Yes, the digital euro is going to be lower cost.

But it is a digital currency issued by a central bank to be held in a wallet issued by the central bank with a limit of 3,000. You can't go above that. So practical, not really. But another question to awesome be like, If the deposit was held a central bank, what does that mean for the deposit gathering functions of banks? Exactly. Lend based on the deposits that they have.

Exactly. Are the banks happy with us? No, they're not. And many studies have been undertaken to prove just how much deposits the banks are going to lose. This is why there's going to be a low cap of 3,000. There's been a lot of debate about this. And obviously, higher cap makes it easier to use. Lower cap makes it better for.

for the banks and they've come up with a figure of 3,000, but again, who knows, like a change between now and the final announcement in October. What we have here is a central bank setting up a competitor to the banks that they are supposed to be regulating. And why are they doing this, rather than encouraging a bank or encouraging banks to set up pan-euro payment systems? There isn't an equivalent here in Europe of Visa or MasterCard because of the banking regulation. Why are they not encouraging a bank or even a private issuer to set up a pan-Euro stable coin? There's no such thing as a liquid widely used Eurobacked stable coin. Why? Again, because of the fragmented nature of the market. But instead of dealing with those structural issues, now, the European Central Bank knows

how to do this better and they're going to fix this problem. I mean, to say two things and then, you know, hand it off to Steve. I would say one, if Europe was truly serious about, about doing this well, they wouldn't have caved special pleading in Nika and required 65% of stable coin holdings to be in bank deposits that are not interest bearing. That was transparently put in by the French at the last minute as special pleading for the banks. Right. Like if you want to do anything other than screw your people, you wouldn't have done that. So if you're in the European Union and your look at what's being said, I want to be very clear, they are working together with the banks to screw you if you are a user of the system for payments. That's just what's going on

there because they're crippling innovation. But good news, it's not going to work. Because as a final point, when I was at Paxos and I was running BUSD, there was only one country in the world where people reliably could not get our stable coin. And that was North Korea. Because the answer is if you don't turn the internet off, people can get it because all you need is something of value to trade for it and the internet. All right. Well, this was a really great discussion. A lot more coming up. But let's just take one quick break to again hear from our sponsors. Hi, everyone. It's Matt Hogan. the chief investment officer for Bitwise asset management. Each week, I write a five-minute memo on the biggest topic impacting the crypto markets.

It's Crypto Week in D.C., with the House of Representatives looking to advance key bills on stable coins and crypto market structure. So I talk about what this means for the market, and specifically why I think it means the days of 50, 60, and 70% drawdowns in Bitcoin are gone forever. To learn more about my thoughts, check out Bitwise Investment. com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing.

All right. So I probably have about 20 minutes left or so. I want to touch on just a few of kind of the more newsy items that have happened in the last three of yourself. We've all been watching the pump dot fund ICO. I have some thoughts. I mean, I know Wara, I think she asked on Twitter or X whatever it's called today. Are we going to see a new surge in ICOs on Solana? I'm curious to kind of hear from you guys.

I mean, Humpdod Fund is, I mean, I think they've made some more close to $700 million in revenue, which is an insane amount of money for a project that was basically a Kickstarter. But the interest is dying down in the number of tokens graduating onto radium and all that stuff is slowing. And there's a lot more competition. Pretty much every chain now has a launch pad. So I guess really two questions. And I'll sort of throw it out to the group because I'm not sure who among years the better. But what make of just the fact that they sold $500 million worth of tokens at a $4 billion valuation in 12 minutes?

And what does that mean for capital raising our CEOs? And then what does it mean for mean tokens? I'll jump in real quick. So just to orient everyone. So pump.com is a decentralized platform that enables a launch of name. coins built on the Salon a platform. A few observations. One is one of the best performing themes you today in the equity markets is memes. I get a record from Goldman every week and they go through the thematics and memes are up 30% year to take. That's one. Second, Robin Hood just

hit $100 last week. There's a lot of excitement, a lot of hoopla, then went back below $100. third coinbase had $100 billion in market cap you just had a pumped-out fun ICOs trading somewhat below that kind of reminds me of ape coin those folks remember from 2021 although not as dramatic as that ape coin was like a there's like too much demand the gas fees are too high and all the rest but I would say that you know I think the meme coin season is going to soften for the next few months and then we hibernate, and then it comes back around October. And this kind of goes back to the earlier point in the night around where I think we have maybe two more weeks to run.

I think momentum and high beta assets have had an incredible run, and you're starting to see softness in those areas, maybe two weeks to go, something like that. Brown, a quick follow-up. I mean, this is a question I know everyone's been asking. What was the point of it? Because it was already a highly profitable company. I mean, one of them was profitable in the entire industry.

Did they really need to raise this money? Or was this them just saying, you know what? We gave this away for free. And more is always better. So why the hell not? I know there were a lot of questions about this leading up to it. And frankly, I'm still not sure that we've gotten good answers on. I mean, aside from just we want to be bigger and grow, like what was really the point

of dealing this ICO. Hypothesis. It's community and capital. That's the big theme. This is something Tom Lee talked about at the personal conference a few weeks ago. It's the idea of turning shareholders into customers. Look at Robin Hood and Vlad has done with their customers.

It's getting evangelists out there, ecosystem growth, and that has other benefits, like more awareness. Yeah, I agree. It's not about the capital. It's not about the capital. They could have just air job tokens if they wanted to do that too, I guess. I mean, if you look at pump.

fun in general, it is kind of like peak gamified financial nihilism, right? It's something like the overwhelming super majority, like 95% plus of traders on there are not making money. Seems to be going to a handful of insiders. There has been a significant amount of economic activity so far, whether that perpetuates into the future and the correct analogy is a casino or whether that doesn't, perpetuate into the future and the correct analogy as a mobile game, I'm not clear on. And if you're not clear on that yourself, is the people running the thing. And you might be in

category number two, you should sell a token and collect that money while it's there. So I'm going to be honest. I don't think this is a complicated story. This is like, are we surprised that the people who built a DGED casino that is systematically strip-minding the community or systematically strip-minding the community? Like, that's what they've been doing, right? This is just another outlet for it. And the community is here for it. I think this is about more than mean coins, though, because again, they've been around for ages and they're going to be around for age. So this is about ICOs.

I think Lauro's onto something. I think we are coming into a different ICO season. I still remember, like it was yesterday, the 2017 very uncomfortable hype, but this is very different. Back then, you had an idea. You didn't even have to have a napkin to sketch it on. And you can launch a token to pre-fund it. There were actually no rules. There was a ton of froth.

It was all on Ethereum, which was itself pretty new back then, and it was uncomfortably crazy. This feels like a real business taking advantage of its community to raise funds. Who knows why? It doesn't really matter. It's got $800 million of revenue since it launched in January last year or something incredible like that. Other on-chain businesses are going to be looking at similar ways to engage their community. And this is a new type of on-chain equity issuance that I'm. I've been waiting for.

We've heard so much about tokenized equities. I'm still in the camp of, you know, why really are we doing this? Where's the big innovation here? The real innovation is in on-chain equity issuance. And that's going to be interesting to see, assuming we can keep our heads on our shoulders and insist on certain amounts of disclosures. I mean, I wrote a paper about this with V. You did.

It was an excellent paper. Everyone should download it and read it because not only do you learn a lot about the tokenization. and the on-changing. You also learn a lot about how just simply capital markets work. Yeah, and I would say the interesting part that I sort of look at, you know, this is going to sound, you know, maybe interesting coming from somebody who's been in the space for a while. I kind of don't care about most tokens.

Fundamentally, in the long run, the game I feel like we're playing, and Larry Fink has talked about this a bit, is the tokenization of the majority of assets to make it more efficient, more liquid and more transparent to trade them. And, Noel, exactly as you said, If we can't get to a world where this is a better system than the one that we're replacing, people will not use it. Like if you believe Pump.com Fun is the future crypto will fail and token prices should be

way, way lower than they currently are. Right. I just want to be clear with people about that. In the long run, like all of Joe Wisenthal's jokes about the scouting cash flows of Bitcoin aside, if we can't generate real business here, it doesn't ultimately have a future. It's just a casino and casinos go out of style. We still exhausted. And I thought Noel's pointing around the fact that it's a real business that's

in deep to the community. It's an alternative capital market. I think that's right on the mark. You're saying if we see more of this, it's bad for crypto's future. Well, I'm saying particularly if we do it in the pump. Dot fun extractive way where the gains ultimately go to a small cabal of insiders and there's no disclosure. Right.

Because it's a matter of time until people either check out on that or something really bad happens and governments drop the hammer. Yeah. I know about it. I mean, Masari had an effort to standardize disclosures. There was an initiative to get the SEC to lead on this, and Ganswer failed to do that. But, yeah, you do need a standardized disclosure cost. You've got to have disclosure of conflicts of interest. You know, what are the vesting schedules?

How do you know insiders aren't selling or dumping or VCs? How do you know you're not providing liquidity to parties that are checking out? So those are all areas that need to get worked out. I think private market solutions can help address that, particularly because it's been a failure, the SEC to lead anywhere on this, at least in the past. That's a tricky thing, too, because, I mean, especially for an ICAL, like, Conf, it's practically banned in the U.S. So the SEC would not even get involved in any way with that unless they find them. I don't know if you want it to either. I like that even alternative capital market with market's regulation.

That's kind of, that's a fascinating way to reach you. in the comments asked what the paper was that Austin was referring to. It's called crypto and the evolution of capital markets. You can download it on SSRN. That's where I got it from. And it's co-authored with Twong V. Leia and a strong recommend. Crypto. I want to just hop in to say that she deserves the majority of the credit. It was her idea to do this in the first place. So like if we're talking about this, I would say she did a lot of the heavy lifting and deserves the credit. Yeah. I'm briefly look. Finra is a private body. self-regulatory organization has powers delegated to it via the SEC through an act of Congress,

but it started as an association. That really still remains the right approach for digital assets, but it takes industry leaders to come together. FINRA prior to FINRA is called NASD, the National Association for Securities Dealers, and then it involved into NASDAQ. And the issue you have is no single exchange. or needs to get together, wants to surrender oversight to another body, which itself has economic value, right?

Who wouldn't want to own the NASDAQ, for example, right? That's the issue. You need Coinbase and Cracking and Robin Hood and Gemina, all these players to play well together. And Finro is also run by the by side, which makes sense. That's the end customer. It's the party writing the investment check. They can drive accountability.

Hey, I need these standards. I need these disclosures so that I can participate in your market. But those still remain the gaps. We're not going to solve it this year after the next bear market. Maybe we'll solve it then. We'll see. I think that went by tried to put something with that together years ago, but I don't think it won anywhere.

And so did the head of galaxy Novigrats. Everyone tried to do something. And I don't know how they approached it. they're always at the center. It's like, oh, okay, well, this exchange, we're going to lead it. You need, like, a Pauline Brooks or like an Austin, someone that understands markets regulation to put it together the right way. I don't think Austin, I think Austin, you only have like two or three different roles.

So I think you're, I think you're a lot of time in it. Yeah, you have time to do it. Yeah, my copious free time. What do you relate to the pump out fund ICU and then we'll go on to one or two other things. So I wrote a story over the weekend that a lot of hedge funds, and basically institutional investors were buying bespoke options rates

over OTC dust on a token through Falcon X, like into the tune of hundreds and millions of dollars. And I was really curious like what they were doing. I was told that they were buying like well out of money options trades and the expectation of the price who's going to keep going up.

And but short-dated. They would not tell me exactly like what the expert was on those. But it certainly like there's two groups of people that bought into this. I mean, the retail investors, which, frankly, God bless them. And they've been right and more often than I thought, but they're also wrong a lot. But then there's the institutions. And I'm really wondering what their motivation is. Like, do they really think this token's going to keep going up? Because it's hard to,

it's hard to forget just some of the challenging economics and the trends that we've are discussed here. Or are they doing this just so that they can say they're involved and they can use it to waste more money from other LPs and get involved in the next deal because they just want keep, they want to keep their name in the news. I think there's the potential of the institutional role in this, especially if the token moves one way or another. It can lead to a lot of volatility the next couple of days or weeks related to pump, depending on when those tokens actually get released and what they do, because there's a lot of action happening on the token. We had the scenes that people don't necessarily know about. So here's one other topic I wanted to discuss.

we saw that Gray Scale filed for a confidential IPO. That was one that I know was on a lot of people's short lists as far as who would be next. But I guess the one, I guess like not so secret secret about Grayscale is that

pretty much they make almost all their money from GBT set. And they've been trying for years to pivot and diversify. I mean, they have a suite of other products, but none of them really have any meaningful AUN. I guess I either probably does too.

I don't remember the exact numbers. And they actually have a lot of of Ethereum Classic because that was one of Barry Silputs big bets years and years ago. But they're looking to get to the rest of our products. I would imagine looking to get into stocks and equities and more traditional assets. So I'd love to kind of hear what you guys think about it. And maybe one way that they're going to try to position it. And again, it's all confidential.

And like they can't talk about it is this is going to be the first tokenization IPO. Is that a way to try to sell this to investors who, you want to get exposure to this asset class and maybe miss the boat on Robin Hood. I don't know. What do you guys think? Look, their AEM is actually below peak. It peaked in 2021.

They charge high fees. You have increased competition from players like BlackRock and Fenneck and others. Why would you want to invest in that kind of business? It's an incredible windfall for Barry Silver, who knows DCG, like, Now or never, this is the time to do it. And it doesn't make any sense for an issuer of niche esoteric products like digital assets to move into the mainstream.

And the mainstream is already covered. We have investment products for weather derivatives and insurance link knows. Going into the mainstream doesn't make much sense. So I'm not particularly intrigued by that kind of opportunity. You want to see how to think about pricing it. Obviously, at the right price assets are interesting. but I don't see the gross story for that business. I'm also going to reveal a bias here and say, having worked in an alternative asset manager,

I think those businesses run significantly better being privately owned because spaces go through boom-bust cycles and Altsworld and sometimes the right amount of business to do in a space is very little or none. And that is incredibly punishing if you are in a public market. And by the way, don't have a bunch of other offsetting revenue. right. And so a company like that benefits from having a private owner who understands those cycles and is willing to just ride them through. Going into public markets for grayscale seems to be to be a recipe to IPO, have the IPO pop because we're in crypto like sort of, you know, hype phase, have it tank after that and then end up getting acquired by somebody very cheaply and that person will be the ultimate winner here because they'll just be adding a diversified thing to a lot. larger platform. Right. Like, it's going to be hilarious to be if the ultimate buyer on very cheap terms ends up being like Vanguard when they finally figure out they need to do crypto.

Let's, I mean, let's just try to, I mean, even brainstorm for a second here, though. I mean, obviously, there's smart people running, running great scale. It's almost in a way, it's kind of funny because they're sort of like the sacrificial of ant for all of crypto. They made all this possible by suing the SEC so they could confer GBT into an ETF and in so doing, I mean, they, in so doing, they opened up a world of competition that is leading to the discussion we're having now. But, like, what is, like, what are they going to try to sell to investors? Because we're going to ask that first question.

They're going to look at the AUM. They're going to see the products, and they're going to see it's concentrated in GBTC, maybe ETH, and they charge exorbitant fees that nobody wants. I mean, I know they have those many products, too. And I'm curious, like, what's happening with those. I would imagine those, those are obviously more competitive from a fee. standpoint and the legacy ones. But what is from your perspectives? You guys all have great different perspectives from the industry. What is the growth story for Grayscale that they're going to try and sell? Rom, you're shaking your head. I agree. No, I agree. I put the bonuses on Grayscale.

I'd love to hear from y'all. By the way, I would add that Coinbase did sue the SEC petition them for Worldworking. So Coring Blakes played a very important role in getting to where we are now. So I'll pile in and say, as much as I hate to say this, the pathway for grayscale in terms of success is essentially being like, hey, we're Ripple, which is to say we've got a big brand, we can raise a bunch of money based on that. Retail loves us. And by the way, we'll take that bankroll and figure out the business part later. Right.

Like that is a thing that appears to have driven value. Again, I'm not saying I endorsed it, but some people will be seduced by that kind of narrative. Is the brand strong now, just given all the issues they had around genesis? and the discounted IVs and the allegation self-dealing and the New York Attorney General accusing them, the parent company of committing fraud. I mean, what's the story? It's not an exciting story. Rom, you are like 82 times more informed than the person they are trying to sell this to, though. But the people that are informed have the most AMM also, though.

If the law versus Genesis are whales, they're there. I was sorry, I was going to see. I mean, I think their brand is still good. I don't know. I mean, I guess most people understand the dynamic from DCG, Grayscale, but Grayscale's also been in operation for, I don't know, over 10 years, 12, 13 years, something like that. I mean, they've never been hacked. They've done what they've said they're going to do.

I know that they angered a lot of their community by not, like, voluntarily creating redemptions, which led to perpetuation of the discount. But I think he also gets some goodwill by. by getting TFs over the line. I think it has a good reputation. I guess the real question is just, what's the growth story? Like, how are they going to compete?

I was actually going to do a story or profile on Michael Sondenshine, the former CEO, about that very question. And then he resigned, I think, like, two weeks later, or I'm not entirely sure if there was a resignation or exactly the mechanics of how that happened. But he left and they brought in somebody, I think maybe from Goldman Sachs that has much more experience,

like running a broader business, like a multi-asset. class business. I'm very interested to hear what happens. I'd want to look at like Falcon X, fireblocks, the chain analysis. These are the infrastructure companies behind the scenes help make things work. Hidden Road, I would have said. I think they got bought by Ripple now. So that's going to go somewhere into history whenever see them in the public markets again. But I think that thread of IPOs is interesting to consider. I haven't looked at the numbers, evaluations and we're saying that's an area to focus on. Any of their thoughts on this discussion or other IPOs,

deals that are coming out? I mean, it seems like a lot of the MNA activity now is related to Bitcoin or crypto treasuries, but we're still talking. I have an IPO I'm working out, but I can't talk about it. Oh, give me two more months. Otherwise, the price will go against me, so I'll just wait. Well, so coming back full circle to the stable coin conversation, One question I had, and I wonder if Austin has any insight.

And this is, do the banks have the talent they need to be able to get into the stable going to be acquiring the startups that are going to be struggling their weight? So one, they definitely don't have the talent that they need at banks. I may have recently told somebody very senior at one of the very large banks of the U.S. Relying on your internal people for blockchain stuff is like saying, I've got a bus driver on staff. good for our F1 team, right? It's not going to work. You don't have the talent you need.

They don't know the game. They don't know how to do it. However, I'm not certain acquisition is the way that banks will go about doing this for two reasons. One, most people who are good in the blockchain space are not going to work at a place where they have to be on desk five days a week, wearing like nice clothes and quite frankly bound by like 8,000 compliance policies and doing like 82 hours of training. They're just not going to do it.

You're going to be like, hey, here's my valise. you prop and they'll be like, no, and just exit stage left, if you want to look at the successful model for this, maybe the best so far has been standard chartered with Zodio, which is actually they will spin something out and hire the people there, right? Like, you got to put it in a different corporate entity that's removed from a lot of that BS, because if you don't, again, go think about all the great people in blockchain and tell them you're spending like 60 hours a week in a dimly lit trading floor at 270 Park Avenue and answering to like eight layers of risk people, right? Immediate no. I can actually speak to that from experience because I spent nine months at

Citibank and it was it was funny. I focused more on just regular payments, but any time, and this was in 2018, 2019, anytime I mentioned crypto or stable points, I mean, you know, they just saw people bristle and and even when they wanted to kick the tires on things, it just, I mean, we have to get so many approvals. It was like trying to watch hair grow. It was just absolutely brutal. I left because of familiar reasons, something to do with Citibank. But during

that short period of time, I was optimistic on what the bank could do to integrate digital assets in its business. And I became discouraged relatively quickly. So, I know we're getting close to the time, even a little bit over, but this has been a fun discussion. So

I'm glad that we'd be able to talk about a bunch of different topics. Ram and I think Noelal, I mean, you guys know when I get the chance to host, I always like to end by asking people to either share one thought that has so far been left on the cutting the floor or even better some sort of contrarian opinion that you may have that could set the internet on fire. I have high hope for you, Austin. So with that, maybe Noel, I'll go to you first. And I'm just interested in any of the big thoughts that you have related to macro, crypto, or something that. is a little bit against the brain. I will come back to what I was saying at the very beginning.

Right now, the macro noise is theater. It's fun. I tomorrow will be watching the market overreact to the CPI data, whatever happens. But right now, there's so much uncertainty that it's all quite irrelevant. Okay. All right. Austin, how about you? I'll say, as we think about this space, increasingly bringing assets on chain,

none of the current public blockchains bar maybe one or two will be the winners. Right. As I look at this as a capital markets person and how you have multiple layers of controls and like error reversal and transaction monitoring and things like that, public blockchains is currently constructed or completely unsuited to that use case, barring maybe some of the really off the beaten path ones. Like what was the last time anybody talked about stellar, right? Or like avalanche subnets.

But I think the results will really surprise some people in this space over time. Austin, I'm going to hold you to a name. What are the one or two blockchains that you think are going to be the winner? So I mentioned stellar. And the reason there is basically this. Like, think about the example of we tokenize houses. Grandma's house is an NFT, the ownership of it. And there's a hack in the North Koreans end up in possession of this.

Right. We cannot as a rule of law matter have the result be the North Koreans get Grandma's house, right? Like, that's not workable for anybody. So then you're going to say, well, we need an ability to get that back. And the answer I'm going to get from a lot of crypto people is, well, yeah, the issuer's ease and control so they can quad that back. And my answer to them is that works until the issuer's private keys are the ones that

were hacked. And at that point, you need network state control for these kinds of things. So if you look at an avalanche subnet where you could have a permission validator set where they could enforce consensus among themselves and both box that asset in from leaving and bring it back against the will of whoever owns the wallet. Or you look at Stellar, which uses something called Byzantine Federated Consensus, where you can have a group of Tier 1 validators that are essentially auto-forking that chain away from the hack.

You're going to need something like that. Like, there will for real-world assets be validator-level controls of chains. They will be highly configurable. They may be open access. But the Bitcoin style of permissionlessness does not work for real-world assets. Just a quick follow-up one. And we were talking about this a little before we began reporting. Stellar was one of the blockchings I classified as a zombie when I worked for Forbes about a year and a half ago.

That's one I imagine based on your comments you don't necessarily agree with. But my question is, like, my share for something like Stellar, even if the technology is terrific, which, again, like my story back then did not criticize the technology. at all. I mean, brilliant people are at all these blockchains. But very few people from I can tell were developing on Stellar then and it's just like the mind share is not commensurate with the market cap. Like how do you, even if they could do everything you say, how do you get them to come and put stuff on Stellar? The mind share of all blockchains is a rounding error. Right. Like let me remind everybody about exactly how early we are, right? Like the total market cap of the crypto industry is what like two to three trillion dollars.

Right. Like I used to trade, I'm one guy at JPMorgan, a derivatives book with a larger Tam than that market alone, much less all of global financial markets. Again, international wire volume, $1.25 quadrillion. All of crypto, all of the devs in crypto are pretty much a rounding error on this stuff right now. I do not think people understand if this works just how early we really are. And one more quick one for you. Sorry, Austin. And then Ron Mofodrio and we'll finish up. But I wanted to ask you, I mean, the news that Tether is not just going to be discontinuing mincing on certain blockchings like EOS and Algaran and Pusam, et cetera, but they're going to be freezing any assets, I think, in the fall, that have not been removed. How do those blockchains respond to something like that? And Tether is the oil for all of this. I would imagine that they probably have at least one or two other stable points, maybe on their chains, but very, very small.

I mean, is this the end? Or are they just going to default back to having their native tokens as sort of the oil and do what they can? I think if your goal as a chain was to compete for crypto mine share and crypto trading and that happens to you with Tether, you're dead. Right. And the reason I was referencing some of the other chains is they are orthogonal to what people were doing. Like one of the, I remember the article you wrote. And I remember at the time, I said, I don't think Stellar belongs in here. is certainly from a crypto native perspective, they were a zombie chain,

but I don't think crypto natives, wherever their target market, right? Like, we may look back at that story and be like, oh, it was a little bit like plaid, where quite frankly, they were four years too early to market, and it took time for everybody else to catch back up. The thing to look at for things like that are people trying to do everything differently. But if you look at Algo, if you look at Aos, they weren't trying to do things differently. They were trying to do the thing and failed. That is a different case.

That's it. Okay. Ron, sorry for the delay. Yeah, no, I think quick headlines. Like, earnings season starts on earnest tomorrow with the banks reporting. I think they'll be the exceed expectations. Analysts have lowered the bar too much for Q-2 earnings. That's constructive.

I believe that tariff affected or tariff-exposed names will beat expectations. Also, I'm seeing it in the markets right now. Names like Abercrombie and Fitch are doing well, for example. I think I mentioned this theme before. I love the international banks. all over the world are benefiting from policy and also a weaker dollar. I think these high momentum, high beta categories will start to rotate to more and more meaner version.

It already has happened. It's already happening. I think that'll continue to happen. I mentioned how Robin's at 100 just rolled down, Coinbase at 100 billion. These are like peak sentiment, high five moments. Then like the ball passes somewhere else. I wouldn't be surprised if like energy does very well. commodities in general doing well. Bitcoin's doing well. Natural gas is doing well. It's like a name I like

in Energy's is a small cap called Riley Exploration. I love small caps right now too. I give you four ideas. There you go. And then just just quickly for me to wrap up. I'm just really interested to track what's going to happen with the Quinn miners. I actually track them quite closely when I was at Forbes and I think I did one or two stories on them since I've moved over time. Shane to one focused back in the spring on how they're going to adapt to tariffs. But it's interesting, you have a miners are pivoting. Like, Bitcoin miners are pivoting the assets that are not Bitcoin. And they have a very lucrative alternative now to transition towards HPC.

These guys are, though the workforces, I mean, there might be billion dollar workforces, but they're the workforces of the industry. And they are in an incredibly tough environment. I know we're nowhere near having an issue as far as, like, security of, the Bitcoin of the blockchain, et cetera. But I mean, it's just, it's just in some ways, I guess I'm just trying to say, like, I'm rooting for the miners. I hope they continue.

Like the price goes up with nothing else. So that, I mean, we're all happy, but for them in particular, because they're doing a lot of hard work to make this entire thing run. And I can only imagine what they're thinking when they hear about crypto treasury property is raising a billion dollars in like two weeks. So they can basically like buy all the Bitcoin in front run what the miners are trying to do. So I know the miners are. doing some of that as well with or put it on sheets. But I just think that's, I mean, it's

nothing like actionable, but it's just something that's on my mind because they do really hard work. It's complex. It's difficult. And it's very adversarial economics, especially Dore. That's just what I wanted to share. With that, Austin, thank you for joining us in the well. And Ron, great. As always, thank you to everybody who watched and listened. And we'll be back next week with another episode.