Unchained - Bits + Bips: Why Investors Are Looking at the Jobs Data All Wrong - Ep. 882

Episode Date: August 6, 2025

Subscribe to the new Bits + Bips channels! 📺 YouTube  🎧 Podcast → Apple Podcasts, Spotify, Pocket Casts, Fountain🐦 X / Twitter  Last week’s macroeconomic data came with a twist: a massive job downward revision from the Bureau of Labor Statistics. But is it a recession signal, or just statistical noise? In this episode of Bits + Bips, Ben Werkman, chief investment officer at Swan Bitcoin, joins hosts Ram Ahluwalia, Noelle Acheson, and Steve Ehrlich to examine why markets shrugged off the data, and what it means for crypto. The panel also discusses: Whether markets are mispricing macro risk How Strategy’s latest capital raise may reflect rising treasury company risk The future of tokenized equity and how Coinbase could unlock private market value New regulatory signals suggesting the U.S. may allow banks to hold crypto The rise of “super apps” blending payments, trading, and custody Thank you to our sponsor! Mantle Hosts: Ram Ahluwalia, CFA, CEO and Founder of Lumida Noelle Acheson, Author of the “Crypto Is Macro Now” Newsletter  Steve Ehrlich, Executive Editor at Unchained Guest: Ben Werkman, Chief Investment Officer at Swan Bitcoin Links: Macro BLS Drama CNN: Trump says the Bureau of Labor Statistics orchestrated a ‘scam.’ Here’s how the jobs report really works NYT: Big Downward Jobs Revisions Could Be a Warning Sign for the Economy CNBC:  'The revisions are hard evidence': White House struggles to justify firing of BLS chief over weak jobs numbers Trump fires commissioner of labor statistics after weaker-than-expected jobs figures slam markets  PCE Reuters: US inflation warms up in June as tariffs boost some goods prices Tariffs  NYT: Trump’s Tariffs Are Making Money. That May Make Them Hard to Quit. FT: Donald Trump to raise tariffs on India over Russian oil purchases CNBC: EU will delay planned U.S. tariffs for six months to allow for trade talks Crypto earnings season Coverage of $COIN and $MSRT on Bits + Bips:  Strategy Had a Massive Quarter: Impressive Numbers, But Are They Sustainable? Coinbase Missed Earnings, But the Bull Case Is Still Intact, Analyst Says Unchained articles: Coinbase Veered From Its Neutral Stance With Base. Could That Bet Go Wrong? How Michael Saylor Plans to Ensure Strategy Keeps Its Bitcoin Forever Coinbase Expands Into Tokenized Stocks and Prediction Markets How Robinhood's New Crypto Strategy Could Help Its TradFi Ambitions Timestamps: 🎬 0:00 Intro 📉 4:25 Why Noelle thinks we’re looking at the job numbers all wrong 🍔 16:23 Whether the BLS revision is actually a nothing burger 🧊 19:33 How investors are managing to shrug off all the macro noise 🏢 32:37 What surprised Ben about corporate bitcoin adoption and how earnings are shifting the narrative 💰 37:57 Why Strategy is raising capital at sky-high premiums 📊 44:40 How Robinhood and Coinbase stack up by the numbers 📜 51:11 What new signals reveal about the U.S. rewriting financial rules 📱 57:43 How “super apps” are changing the game for crypto and TradFi 📈 1:05:18 Where the panel sees markets heading next 🏛️ 1:13:17 What it might take for governments to start holding crypto Learn more about your ad choices. Visit megaphone.fm/adchoices

But I think broadly, you know, both Bitcoin and other digital assets, they're here to stay. They're getting ingrained in our financial system, and I don't think that there's any unwinding that. And as you start getting more clarity from the regulatory environment, so like the Clarity Act, right, figuring out who's the commodities are going to be, or the CFDC is going to be overseeing versus the SEC is going to be overseeing. That type of clarity in this environment is going to be huge for adoption. Hi, everyone. Welcome to Bits and Bits. The show where Crypto and Macro collide one basis point at a time. I'm your host, Steve Erlich.

I scribe of the Unchain Kingdom. I'm here with Noel Atchison. I seeer and keeper of the Crypto is Macro Now newsletter. Hi, everyone. We will be joined by one of our other major, meet co-host, Bram Aloalia, maestro wealth at Lumida, but he's going to be joining a bit. And our special guest today is Ben Workman, Breaker of Banks. Welcome, Ben.

Thank you for having me. So, Ben, before we dive in, why don't you just give us a quick minute overview? Give us your background. Yeah, absolutely. So currently I'm the chief investment officer at Swan Bitcoin, but I do several things out here in the digital asset space. And one of the main ones has been I've largely worked as a public equities analyst for Bitcoin treasury companies.

So I'm a part of a group that was started about a year ago called MSDR True North that does a live stream every Wednesday night. covering all the movements of micro strategy they've kept discussing for a long time so covered that for a long time prior to that my background was in commercial distressed credit i was a management consultant for a long time working with fanny may for about a decade and then i also founded a company that does algorithmic trading for digital assets so bitcoin was uh was 2013 so it was an early love for me although i screwed it up for quite a while in the early days until i figured out exactly what it was I was trading in and out of. But I corrected that. And this is where I'm

dedicating all my time these days. Really happy you guys had me out here. Yeah. Well, we're happy to have you. Just a quick disclaimer here. Nothing that we say is meant to be investment or financial advice. Please see un-chained crypto.com backslash bits and bibs for more details. Mantle is pioneering blockchain for banking of revolutionary new category at the intersection of Tradfi and Web 3. Follow Mantle underscore official to learn more. Hands up, everyone. We've got exciting news.

Bits and Bips, our Macro Meets Crypto Show, is officially spinning off into its own podcast feed, YouTube channel, and X account. If you've been enjoying the deep dives into interest rates, monetary policy, and how they intersect with the crypto markets, make sure to follow Bits and Bips wherever you get your podcasts on YouTube and on X. You'll find the links to YouTube, X, and other podcast platforms in the show notes. If you're watching this, there's a QR,

code on screen. We'll be posting here for a few more weeks, but starting in September, Bits and Bips will launch on its own feed. For now, we will publish longer clips from the show on those accounts. Remember, go to the show notes now and subscribe to Bits and Bips. That's Bips, plus sign Bips, spelled BIPS, on YouTube, X, and wherever you get your podcasts. A lot to discuss, I mean, there's crypto treasury companies, a bunch of major crypto firms, rapid hood, coin base, and strategy, I'm sorry, all reported earnings this week to varying receptions from the analyst community. But I think we need to begin with some of the big, just macro news, especially coming

out of the United States over the last couple days. I mean, Noel, I was thinking, well, President Trump was not able to fire Drum Powell, but I guess he's going to be settling for the director of the Bureau of Labor and Statistics. So I want to kind of, I want you to walk us through what that really means. And then, and also get your thoughts on the latest results from the FMC meeting. I know that the rate staying still was expected, but there was some significant disagreement among voting members, first time in 20-something years that that's happened. And expectations are for a rate cut in September, assuming that, I guess the data makes, The data is what the people, the governors and various voting members expect.

So walk us through that, please. I will, and I will preface all that by saying, holy cow, I think last week has to have been one of the most consequential weeks this year so far for both macro and crypto. It was really quite epic. Let's start with the macro stuff and the FOMC, as you mentioned, Steve, was no surprise except for the two dissents. Now, again, not really a surprise, but it is a big deal. last time we had two dissents was, I think, in 20, quite a while ago, 2020, I think it was.

Actually, I think it was 1993. No, that was the last time we had two dissents from governors, which is why it's significant. I shouldn't be correct on this. It is more, and the reason that's significant is that a dissent from a governor carries more weight than a dissent from a Fed president. And why? Because governors are always on the committee, whereas Fed presidents rotate in and out. There's four every year, and they just rotate. Now, so if a Fed president dissent, like Hamak did, I think it was in January, well, you know, she's going to rotate out soon. You can sort of grin and bear it if you really disagree with her.

But if you have a governor dissent, then that governor is there forever and will continue to dissent until either the governor changes his or her mind or the FOMC starts to converge to that opinion. When you have to dissent, but again, that's a very different mess. So unusual as well, and this is another reason why it's relevant. I'm not going to go off track here, but it's worth pointing out that the fact that we have not had very many dissents since the beginning of the century, really, is a testament to how coherent or cohesive, I should say, cohesive the FOMC has become. Descents used to be a lot more common. They're not so common now to the fact that we're even talking about it. And is that a good thing? Or do we want more debate within the rate-setting committee of the largest economy in the world?

Would it be susceptible to group-think otherwise? Maybe that's part of its malaise recently. But then again, dissent does create uncertainty in the market, which is also not really a great thing. So those are just some philosophical debates, takeaways from the FMC last week. There was one thing that I took away from the FMC that's very relevant to what I'm going to get to next. which is the jobs data. And you had Powell himself saying that he doesn't pay much attention to the payrolls number because it is noisy. He pays attention to the unemployment rate and that is in balance.

I think he said that like seven times or something like that. The unemployment rate shows that the job market is in balance. And that's very important because that's their mandate in balance employment, keep inflation controlled. And that's why I am still convinced there's no rate cut coming in September because the jobs numbers that we got on Friday don't debank that. They don't show that the job market isn't imbalance. Yes, there was a miss to the downside, 73,000 payrolls jobs added for July versus the 106,000 was the consensus estimate. Bloomberg, in Bloomberg, Anna Wong at Bloomberg, is usually spot on. She was going for 160,000 added.

And we saw the ADP earlier that week, earlier last week, adding 104,000, I think it was. So for such a low read, 73,000 from the BLS, that was a surprise. But what was a total shock was the downward revision of the previous month and that of May. The total downward revision for the two months came to 258,000. Jobs revised downwards, as in, no, we didn't get this addition. that we thought we had. And that's, we haven't had a downward revision like that since 2020. And so that is, that was a shock. And, well, then we had the whole drama of Trump blaming the BLS commissioner and firing her some early. I'll get to that in a second because that, I think,

is the most dangerous thing that's happened for quite a while. But to come back to the actual numbers themselves, we are looking at this the wrong way. We know they're noisy. We know the Fed thinks they're noisy. And do you remember way back when Steve, I think it was two years ago, when we started to see the job numbers padded by government jobs being added. And this continued all the way through to the end of the Biden term. Most of the payroll additions were coming from government jobs, many of the months that I looked at closely. And that obviously produced some good figures, and obviously when Trump took office, that ended. So we know this. So let's strip out the government jobs from the numbers that we saw. There was a downward miss as well, and there were

downward divisions in previous months, but not as much as you would expect. Private non-farm payrolls. And again, let's smooth a little bit more. Let's go for the three-month moving average. Private non-farm payrolls, three-month moving average rose by the lowest amount since last August, which is really not that long ago. In other words, private new payrolls are stable. Now, also, let's go back to last August. You remember we had a bad jobs report, which was a shock to the market. We also had a scare from Japan, and the market freaked out, much like it freaked out on Friday. We had smart economists last August calling for an intermeeting rate cut. Now we got to save this thing. We're getting that now also.

And the question is, when private payrolls are actually not doing too badly, then what actually is the Fed supposed to do here? A rate cut isn't going to bring back government jobs. So my point here is that the market is well overreacting. There is nothing on the table to suggest that a rate cut in September is warranted, especially given the mistake the Fed committed last September when it got spooked and delivered a 50 basis point cut. And the 10-year yield went up 100 basis points over the next four months, and it's still roughly 70 basis points higher than it was before the September cut.

So I don't see Powell and the committee wanting to make the same mistake again. They are cautious by nature. Inflation is creeping up. We saw that with the PC data last week. And we're going to see, in my opinion, some ugly PC prints and CPI prints in the months to come because the tariffs are not being eaten by the exporters. Now, where was I heading with this? Oh, yes, the BLS commissioner firing is arguably the most dangerous thing to happen so far,

whether you blame her or not. And to be honest, this is a problem with the processes. It has been a problem a long time with the process. And they know this, which is why they actually had a committee of experts from academia and the financial services sector, studying how the data collection can be improved. Lutnik, like two weeks after he took office, he disbanded that committee, kicked them out, and budget cuts mean that they have, the BLS in fact announced last month that it was reducing by 8%

the number of households and businesses surveyed. So data is a problem, but firing the BLS commissioner isn't going to solve it without giving the BLS a lot more budget to invest in upgrading. the processes. But that's not going to happen, obviously. And let's say we get a good payrolls number in the next read. Will we trust it or will we think that it's a politically influenced announcement, a politically influenced report? If it's a bad report, well, we can imagine the BLS commissioner, whoever he or she is, is going to be rushing up his or her CV as well. So the trust in the payrolls data is out the window. But it doesn't really matter because Powell has said he

doesn't really pay attention to that anyway. It's the unemployment rate that is the one to focus on because it's more stable. It's hard to imagine we get a negative jobs report right after replacing them. One more thing on the unemployment rate, again, another reason why there's no reason to cut rates in September is the unemployment rate is lower now than it was a year ago. The bad jobs report I referred to earlier in August 24 that threw markets into a total tis, unemployment had ticked up to 4.3%. It's lower now. It's within range. It's been stable for quite some time. It's lower than the historical average average

unemployment rate is 4.6%. Okay, there's some high years in there, pulling that up. But let's say you want to take a more stable period. Let's say you take the 20 years leading up to the great financial crisis. The average unemployment rate in that period was 5.5. All right, so Ben, let's come to here. Noel gave us a lot to unpack there.

There's no one better, frankly, at explaining all this for us. And it looks like Rahm is here as well. too. So, yeah, I'd love to get your reactions. And in particular, I mean, Swan Bitcoin, I mean, you guys are focused on Bitcoin. And when the world's most, the world's largest economy, the world's most important economy, and frankly, one of the world's, I guess, ostensibly most trustworthy governments is now potentially niggling with data to make it more politically appealing, that seems to be tailor-made for Bitcoin. So I'd love to just kind of get your thoughts to all that. Yeah, it absolutely does. And I think that the major theme with all of this is market

trust. And what is this going to do to market trust if people start to feel that they're politicizing economic statistics, right? That introduces questions every time you're coming to the release of new data coming into the market. And what that's ultimately going to do with the yields, it's going to make a risk premium into those. And ultimately, you might start seeing people moving towards safe haven assets, of which, you know, we believe Bitcoin is one of them. And it's held up through a lot of market turmoil in the past. You know, it was really resilient during the initial round of tariffs when everyone was expecting it to ask or to act as this incredibly risk on asset. And rather, it did the opposite. And it maintained incredible stability. But, you know,

I think that this is going to be a major shockwave in the markets here because when you have a firing of someone in the position that we just saw, you know, that's going to have impacts for the Fed and what they're going to do for rates, right? They rely very heavily on the BLS data. And I know Powell says that he discounts a lot of it. But if credibility gets questioned, sometimes what that makes you do is pause and do nothing. And right now, it seems the market's consistently waiting for rate cuts to show up. A lot of people even think that they're really late, even if a lot of the economic data is still coming in rather strong and not necessarily supporting it just on a data-driven approach. But if you can introduce uncertainty into that data, it's going to bring

that uncertainty back into the markets. And when market trust erodes, the markets begin to act erratically. So I think that we're gearing up for a period of time here where we're going to see a lot more volatility entering the markets. I don't think we're entering a stable period, and this is going to take some time to settle. This isn't something that washes over overnight. So anytime you have something this core to the economic data and to the actions that are taking to stabilize the economy, you've got to keep your head on a swivel because this is going to result in a lot of movements. And until we see a few cycles go by where we're getting new data and they're introducing more transparency into the metrics that are coming out, investors just simply aren't going to trust it.

And they may choose to start opting out of that and moving into more of the safe haven assets while they wait for this all to get settled. Ron, I want to, yeah, I want to come to you. And just to kind of build on what Noel and Ben had been saying. One thing we didn't get a chance to discuss yet is the fact that Trump is going to be able to replace a Fed governor months before I think he expected to. We all know who somebody main candidates are, Kevin Warsh, Kevin Hassett, I'd love for you to talk about what that might mean from a signaling point of view for the Fed because I know I think investors were worried about a potential shadow Fed governor. And then also, I mean, just your general thoughts on what's happened last week.

I'll start with the whole BLS data. Look, this is a nothing burger. Once again, this is the year of the nothing burger. I just shared my screen here. This is a guy on Polly Market who essentially has made the bet that nothing ever happens. I love this idea. It's a meme. It said nothing ever happens.

bet. Jerome Powell out as Fedshar in 2025. No. Ukraine recognized Russian sovereignty. No. U.S. National Reserve. No. Russia Ukraine sees fire. No. Nothing ever happens. So, no, I think this is a nothing burger. I think the people that perceive those fears, they sold their stock on Friday. Someone else bought that stock. And in that moment, in an exchange, that risk was priced in. Do I like what's happening? No, of course not. Of course not. What I prefer wasn't happening. Of course. Is it a Nothingburger?

Yes, it is. So Trump repositioned two nuclear submarines off the coast of Russia. So what? Doesn't matter. Nothing Burger. The time to have risk off was last week when no one saw any risks. So on the Fed governor appointment, this is just a more televised TV. The broader story is that Trump has a pressure campaign to get rates going down.

The successor to Powell will be dovish, and that's bullish for risk assets, especially rate-sensitive names, especially high loads of debt names. It's going to be bullish for commercial real estate. It'll be bullish for small caps. They'll be bullish for junk stocks. Be bullish for digital assets. It'll be bullish for animal spirits. And next year, you've got the World Cup coming and elections midterms.

So next year, you'll be seeing significant movements higher in risk assets. I think that we all can acknowledge at this point in time that everything becomes politically charged right now. And that amplifies a lot of these messages, even if the broader impact isn't going to be substantial. You know, anything that has any potential politically charged movements behind it or motives, you know, it results in the media picking it up, running with it and pushing it in, incredibly hard. And we see this, and that's probably why that bet works so well. And I think

that's an amazing bet. It's right curve. Right curve. Like left curve says Trump make market go up, number go up, market go up, right? Right curve says, economy's fine. This is noise. Earning growth is higher. Mid curve says, you know, Trump derangement syndrome. I'm not saying you have that. I'm just trying to like what Trump is doing is bad, bad, bad stock market, down, down, down, nope, that's not what's going to happen. Quite frankly, we've seen. that we have an incredibly resilient stock market. I mean, just look at the performance over the last year. I mean, everything's been incredibly resilient,

despite the constant barrage of what would normally be perceived as very bad news. And it's been amplified louder and louder, and the stock market has continued to, you know, waver in the moment and then shrug it off after. Actually, can I throw a question that, Ben? Ben, what do you think would change that? Well, quite frankly, I think we're getting fear fatigue out here. And that's starting to change it on its own.

I don't think you see a period in time where narratives aren't getting amplified quickly. I think that that's a part of capturing attention. It's part of the business model, right, in the media in terms of how they're going to capture the attention of readers and watchers and listeners. And so I think that over time, it's taken more and more chaos to attract eyeballs or ears. But I think over time, the investing community is starting to look at all of these events. they don't have these long-tail impacts that they were told that they were going to have. And so you take a step back and you start to look at the broader macro environment and just look at what's really happening and try to see, is there anything dire that breaks the system?

It can shake the system, right? That's okay. The system gets shaken every week with something. But there hasn't been anything systemic that's breaking it yet. And I think because of that, investors are starting to shrug off news and, you know, they're going into a well we'll see type of a mentality. They're not going to overreact anymore. There used to be the periods where you would see the whipsawing performance in the SP 500 as anything would come out. Markets would react incredibly negatively or incredibly positively and it seemed like we had this

period in time where we were just whipsawing with price action. And that started to stabilize. You're still seeing movements, but not the same amplitude of those movements. So I think investors are simply fatigued from fear. Everything is supposed to scare you. Everything is supposed to make you go to cash and they're not seeing that happen and anyone that's sitting on the sidelines and staying out of the markets entirely is falling behind. So it's becoming riskier to take all of these narratives at base value and assume the worst from everything. So I do think you're starting to see a shift in investor behavior with all this news. I just think they've simply seen too much of it and now they've got a pretty good data set to show that this doesn't end up having the doom and gloom scenarios

materialized that they were promised. If I could push back maybe a little bit, Ben, and also Ron, Rom, for what you said. I can certainly subscribe to the belief that Trump's arrangement syndrome is a real thing. I, like, people who have followed the show long enough know that I have some strong opinions about Trump's politics and policies. And when Pete Hakesh, when he was doing that briefing about how the Iranian strikes occurred, and he was like scolding the media, like, you guys want Trump to fail, you guys want Trump to There is a strong contingent of the American population that wants to see the worst, anything he does in the worst possible light and say every single thing is the end of democracy,

the end of Armaged. So trying to say that you're firing the BLS commissioner, like maybe that doesn't quite fit the bill. But I don't necessarily believe it's completely a nothing burger either. It just is covering, it could cover up other weaknesses. I mean, we've seen, like some of the earnings that have come out, I see a lot of, especially like consumer-focused businesses, eating the tariffs right now. They're starting to pass through some prices, but the profits are going down. There's only one way that's happening.

There is a little bit of weakness there, even though as you've mentioned, and the labor market is still relatively strong, notwithstanding everything else. And I mean, look at the Greek example from over a decade ago. When statistics, if statistics start covering up weakness, that creates the potential for like high-impact events that you don't know quite when they're going to happen. And I think that the economy, the stock market in particular right now, it keeps setting highs. I don't think it's too risky to say.

It's being really, it's being drawn or driven by the tech stocks, by the AI stocks and still covering up a lot of weakness. And if this weakness is going to be extended because of poor data, and I have sympathy for whoever's going to be the BLS commissioner next, because for one thing, who's going to trust that data? And for another thing, as you said, well, they're not going to have the resources to get the date. It's the same issue with the CPI. Like that, there's delays there.

I think investors need to just think about how they might want to protect their portfolios from some of these longer, like some of these higher impact scenarios where if everything falls out, what do they do? Maybe it's not the most likely scenario. Maybe it's not the most likely scenario for next six months or so. But I do think that it's, I don't think it's completely a nothing burger either. It's just hard to figure out the right amount of weight to put on it, my opinion. Yeah, I agree. I totally agree with you, Steve. You'll have heard me often fret before about what I call complacency risk.

I've been monitoring the VIX, which has been absurdly low, given how much risk there really is in the market. And I'm not just talking about the U.S. The VIX until last week was at its lowest since February when arguably things weren't quite as unstable yet. So there's complacency risk. The move is also showing some other things. And complacency result, low volatility indices are great for collateral and therefore great for market liquidity. So things keep going up. But we know that that never continues forever. Nothing stops this train. Yes, but eventually the track is going to run out. And how it runs out, that's what we just don't know. We also know, though, from studying history, that crises emerge where we're not looking. Everyone is focused on the U.S. market. We're focused on the jobs data. We're focused on the inflation data. We're obsessed with what's going to happen with the FMC. That's not where the crises are going to be building because anything that could happen there is, as you said,

I'm already priced in. We're not focusing on what's going on in Japan where we could see the resignation of a prime minister this week. You're not focused on what's going on in Europe, where we could start to see states wish to secede because of the divergent approach between the U.S. and China. We're not focusing on any of the other risks that could be emerging in the Middle East

with potential escalation of a situation, of hostilities between nuclear powers there. So the risks, I don't agree, I think the risk to watch actually is going to be in Japan, but if not, it's going to be somewhere we're not all focusing on. And nothing lasts forever in markets. And so the assumption that, yeah, this is going to continue, because why not, that's where people get hurt. A few quick reactions.

Their primary considerations and their secondary considerations. The primary considerations for asset prices, especially. especially equities, earnings growth, disinflation, favorable regulatory backdrop, policy. All those are going in the right direction. Tariffs one-off negative shock for inflation. We're going to pass that like a kidney stone in the next three months. Markets are looking past that right now. We've got deregulation coming.

Trump this week and talking about 200,000 income tax cuts. So those are the primary considerations. There are a lot of secondary considerations that will keep you up at night. They'll wake you up in the middle of night and a cold sway. Iran did something with Israel again. Doesn't impact earnings. Doesn't impact inflation. Not changing deregulation.

Not changing fiscal spending. So what? Doesn't matter. Here's another fun fact. If you look at the aggregate valuations in the S&P, they're comparable to where they were in 2021, which is causing a lot of anxiety. It's good to have that consideration, that thought process.

But if you look at each name one by one, Amazon was 100, P-E ratio back then. It's in the 30s. And I don't know. I'm just saying it's, if you can take the same story down the line for the other Mac 7 stocks, buying larger cheaper than they were back in 2021. And as for the market rally, actually the whole market's rallied.

Abercrombie and Fitch is up 40% in the last three months. Norwegian cruise lines is up 40% in the last three months. Garbage stocks like coals, a department store that's face. the onslaught of e-commerce disinterneumiation is up 54% massive short squeeze underway. So Max 7 gets a headline because of the market cap way, but this has been in everything rally and it has been supported by fundamentals. Yes, tariffs are bad for policy. The point, though, is that those negatives are priced into asset prices in April.

They were extremely low. Abercrombie Fitch had a six times PE ratio with double digit earnings growth. Norwegian Cruise Line had a eight to nine times PE ratio with double digit earnings growth. Those are like 2008 type valuations for that sector. That's why it's priced in. That's why this is mostly nothing burger. Ben, I'll give you a chance to react to this. And then we're going to have to take a quick break for ads.

But Ben, go ahead. I think what Ron just highlighted is absolutely correct here in the U.S. markets. And you do still see froth showing up largely in the high tech names now, right? You're seeing a lot of capital flowing. I mean, Palantir just had a massive beat on earnings, and I think they're trading in the 600s on a P-E ratio at the moment. Like, you're seeing a lot of capital flowing into the sectors where people are looking for disruption right now.

And AI is always going to be the highlighted area focus for that. the next, you know, probably for the next several years, as it starts coming in and we start to see what disruption that sends down the pipeline to all these other industries. So I think investors will stay on their toes watching earnings happen and watching for these periods of disruption to come because there's no doubt that we are currently in a technology boom. And we're waiting to see what that impact is. You hear a lot of current discussions about AI becoming deflationary in the United States. And that's going to come with a lot of its own challenges. So, So, you know, we certainly have a lot of corners to look around right now.

You know, you look at all the macro globally, like what you said, Noel, about Japan and about the EU, but just in the innovation space right now with all these new AI companies emerging and people trying to wrap their head around what that's going to do to some of these more traditional industries. There's a lot of places to keep your eye on, and I don't think that's going to change anytime soon, but it's going to open up opportunities. You did also see a big movement of people going risk off for a long period of time when you saw. the major run-up in gold and Bitcoin at the same time. You know, those assets have been keeping momentum for quite some time. Silver did the same thing. So you have had this trend of some capital looking for that risk-off approach right now. And it just seems everything has continued to go up and to the right. You just haven't seen things stagnate too much yet. And I think that that's going to continue here for a little bit still. Okay. All right. So let's take a quick break so we can

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paying the price. Strategy put together, I think what at least one analyst told me was its best quarter ever, and that wasn't just aided by the fact that they were now allowed to use New FastB guidelines to mark their holdings to market. So three different stories. Ben, I know this is something that you pay a lot of attention to. So why don't we go to you first? So what are some of your key takeaways?

Yeah, strategy, I think, is certainly capturing the attention of a lot of investors, you know, posting a $10 billion net income. And it shows that shift in fair value accounting for the Bitcoin on the balance sheet, which is their primary business at this point, right? They are a Bitcoin treasury company. So, you know, a lot of people now overlook that core operating business, right? The software side, that's really not where they're generating their value. They're generating the value through the treasury operations and particularly now through these

preferred products and the arbitrage in the market to be able to grow Bitcoin per share, right? They're putting themselves on a Bitcoin standard. And what they did kicked off a huge flurry of activity in the digital asset space. You're seeing all these new treasury companies coming to market. And what you're starting to see now is several different value propositions coming. And I think that highlighting those earnings, because they've been so quiet for so long, because they could only mark down the value of their Bitcoin, this is really going to be a wake-up moment. for a lot of corporations, particularly corporations that have been looking at just putting balance or Bitcoin on their balance sheet, even if it's just replacing some of their existing

treasury assets. The one thing in this space that's always kind of surprised me was we almost went backwards in the way these companies came out to the market. What I expected to happen was you would start seeing corporate Bitcoin adoption, but it would really start in the hedge category. You would have the corporations that just started replacing one to five percent of their balance sheet holdings, whether it was cash or U.S. Treasuries, and they would move that over to Bitcoin as a hedge against deflation and monetary debasement. And I thought that would be the first growing segment. But what we saw was strategy come out and run a highly successful playbook, particularly this year, where they saw a lot of those gains really come to light. And now they're posting earnings and

they're posting guidance that they were never able to do before. So when you post earnings of $10 billion and you post guidance of $24 billion, the market starts to take notice. You know, But you did get a mixed bag across the board with earnings from the other companies as well. Coinbase is going to be an interesting one because where I really think that they're going as a company is I think they're going to be the platform where you get the unlocking of stranded unicorn equity. You see the big push for the tokenization of equity. And I think that's a major unlock, particularly for these private investments where VCs really can't get their gains out of those companies and being able to tokenize that equity and sell it through a platform like Coinbase. I think it's going to be a really big opportunity in the future.

So I think people are watching for the legislation to come through and to clear up. But, you know, right now they didn't hit what the estimates were and the market reacted very poorly to that. Now, Robin Hood on the other side, they've started putting out a lot of new news recently. You know, they're starting to push further into the blockchain space as well, even setting up their own in order to be able to do some of this tokenizing of equities. And I think that's a theme we're going to see persist here. And so there's kind of a race to see who's ultimately going to dominate that space. And we don't have clarity on that right now, but I think it's going to keep a lot of eyes on the earnings from both of those companies because it appears that they're both starting to go after similar economics. And we're going to have to see who the winner is there.

But, you know, a lot of movement in the market. And, you know, the one thing I will highlight that I found to be quite interesting because now you're starting to see more companies adopt it is the way earnings are getting announced. And strategy did something really unique this time, which is, They went out and they did a full live stream of the earnings. They were reporting the earnings live. They were bringing in analysts from the community in to ask questions and giving them a dedicated segment on the back end. The earnings call was it was a little over two hours, I believe. It was very long.

And what they're doing is taking a significant amount of time to educate the investing community on what they think the value proposition of their business model is. And you're starting to see other companies start to adopt this. similar is doing something very similar. And I think that over time, you're going to see that translate to other companies as well. These are complex business models. It's very tough for investors to get their heads around all the moving pieces, but seeing executives come to the market and directly engage with their investing community and take the time to really educate them on what they're doing and why, I think is a pretty powerful movement in the spirit of transparency. And so what

I'm looking for is for that to continue to make its way into more of the big name companies, particularly in some of the Mag Sevens as well, to see what the benefits are of truly coming right to the forefront and engaging your investors directly through your earnings. Ben, one quick question, a follow-up related to strategy. I guess two things really kind of stood out to me from the earnings. One, and I wrote a story on this on Friday, but their desire to move away from convertible debt, so their balance sheet is essentially bulletproof in the sense that they're not subject really to liquidations.

and it seems like they're boxing themselves in, and maybe that's not the word terminology, but they're almost restricting themselves now to just, what's the word, premium, preferred shares, preferred shares, because I think they said they're not going to issue any more common shares unless they're trading at an MNF of 2.5 or higher. I don't think they've been there for quite some time. I mean, as of this recording, it's 1.7, 1.8.

And so it doesn't seem like they're going to do that, except that maybe pay dividends and other stuff, other obligations that they have. So what does it mean that they're really trying to restrict themselves to the preferred market? As far as I know, they're the only company that's done that. I know Metaplanet, I think, is actually trying to do that. Now they would be the second, but they're in an entirely different world than strategy. But what does that mean?

And what does that mean for all the other companies that don't have the ability to do this? Yeah, strategy has been the pioneer in this space. And as a part of that, you have to effectively create the markets for each of the products that you're introducing. And you are starting to see some of the follow on. So, yes, Metaplanet, they announced that they're trying to launch the preferreds in Japan, which I think will be very powerful products because of how yield star if the Japanese market is. You also saw similar scientific adding that to their shareholder vote to be able to put a preferred class of shares out there so that they could raise capital the same way. But strategy really started, they started with effectively a cash purchase. They used some secured debt in the early days, which made investors very nervous because

then you do have those loan to value covenants where you can be liquidated. And they started to find ways to de-risk. And they did that first with the convertible bond market and going with non-recourse debt. The problem that happens when you get really large and your focus is on metrics like Bitcoin per share and Bitcoin yield is it takes significantly more. capital to be able to increment those metrics. So if your primary KPI as a company is we're going to increase our Bitcoin per share and thus our Bitcoin yield for our shareholders, you have to find the most efficient way to raise that capital at the highest premiums. And that's ultimately what

they're doing. So with the convertible bonds, when they would go to the market, they would be able to raise capital at a 35% premium to what the stock was trading at at the time, all the way up to 50 to 60 on the high end. But when they're going into the preferred, you know, they're not getting any of the selling in the common stock equity anymore. They're primary customers for the convertible bonds where the convertible arbitrage desk, the hedge funds on Wall Street. And that comes with effectively 50% of the shares being sold into the market or shorted into the market right when those offerings close or when they go through the pricing period.

What they're doing now is they're trying to take the pressure off of the common equity. And that's why you start to see this focus on removing their equity sales from the market. So that was traditionally done through the ATM. But the ATM is a de-levering instrument for them, right? So effectively what they're doing is they're selling equity. They're able to take the capital that they raised, go buy more Bitcoin. That Bitcoin goes onto the balance sheet and it effectively starts to de-lever the company. Well, the ATM was becoming the primary capital raising tool. And because of that, the company was continuing to become more and more de-levered over time. And so what they're trying to do now is focus on scaling out those preferred

equities. And those preferred equities are far more accretive to their KPIs than the convertible bonds ever could have been. And so what they're doing is they're targeting these different pockets of capital with different structures and the preferreds. They can be very creative in the way they structure these preferred products. And you've seen it with them launching four of them already. The most recent probably being the one that has the broadest appeal. And if you're if you watched on stretch, STRC, what they're really going after is bank accounts, money market accounts, right, things that are stable. They're trying to build a product that has stable capital, right?

It's not going to be volatile to the movements and the common equity, and they're actively trying to manage that. And thus, they're trying to create a product that effectively gives you a, you call it a 9% interest rate if you were sitting in your bank account, but a 9% dividend is what they're kind of trying to lock in and it floats with SOFER. There's some mechanics there. innovating in the space in terms of where they're going to raise the capital to continue to be able to push this strategy forward. But now they're doing it in a way where they alleviate the pressure

from the common stock. If people are selling in the open market now, that's not strategy. And I think that's the message they're trying to send because investors were starting to get concerned that it might be all of the ATM selling, putting too much sell pressure on the equity and thus reducing that premium to the net asset value. So they're signaling to the market. Here's our new criteria. We're not going to be selling opportunistically unless we're above two and a half. We'll only sell when we have to fund these dividend obligations for the preferreds or the coupons on the existing convertible bonds and we'll sell more above four, right? They're trying to put in clear guidelines out there to the market. Now, whether that itself will raise them up to the two and a half,

that's yet to be seen. Right. We're not going to know. The NAV can expand and contract for a lot of reasons. And some of those are as simple as investor sentiment around Bitcoin at the time. If there's a lot of excitement in the run-up in Bitcoin and the speed at which they think that strategy is going to be able to raise capital, that can expand. But we don't know what the steady state's going to end up being at yet. Recently, we've seen it in the 1-8, 1-9, 17, kind of that range. But right now what they're trying to do is introduce a bit more certainty out into the market around themselves, saying there can be a lot of causes for this. We're not going to be one of them. But the other thing they're doing

is they're putting a model out there for other people to follow. They're trying to say, here's how you're going to communicate to your shareholders, be very transparent in the way that you're executing the strategy so that they can go out and do their own analysis to determine what their valuation's going to be here. And you have a huge wave of companies coming in the market. You want them to scale this responsibly. So ultimately, we'll see how investors react to this over the long term. But I think that the step for transparency is very good. And I think that the fact that they're trying to increase that leverage to get some more movement back into the common equity will help ultimately with expanding that premium of it. I'll show you some key stats on Coinbase versus Robin Hood.

But just to frame this up, here you have two founder-led businesses going head to head, and they both understand the connection between community and capital. They're leading to equities and into crypto. Let me give some key stats in rabbithood. So their revenue is up 45% year over year. Their EBITDA margins improved. They've acquired new customers. They're at a record $3.5 million.

So they've been on fire, both from a performance perspective and from a customer acquisition perspective, too. So on Coinbase, in 2023, people wrote Coinbase offer debt. I was one of Coinbase's biggest champions on Twitter. I was running quarterly threads on Coinbase. I think they, not I think I know they played an important role in fighting leadership for the industry and contesting the actions of the SEC. Extraordinarily grateful for what Coinbase accomplished. That said, you know, this report was this was a bad, bad quarter.

Their revenue declined from the prior quarter. The trading volumes dropped. And really the crown jewel in Coinbase is the revenue from USC. That's that's it. And I think about those business lines, ETFs are increasingly taking market share. You can face off with BlackRock. BlackRock can stand behind those reps and warranties better than any asset manager in the world. You have more liquidity around ETFs than on-chain transactions or doing a transaction in exchange where you're going to pay

fees in the level of points. That's one. Second, you're seeing increased proliferation of stable coins. Stable coins are the hottest venture theme. It's up there with AI. It's an extraordinary amount of capital going to this. So, 200 fintechs looking for a national bank charter. So Coinbase is on defense. I think we've seen the highs for Coinbase as a stock price for the foreseeable future, as measured, say, in months, maybe longer. Robin Hood's expensive now. It's just, it's a question of value. It's got momentum, though. It's certainly cheaper than Palantir, which has a peg ratio of six and a, you know, PE ratio of 425. It's kind of mind-blowing, but it's got momentum. Momentum works until it doesn't work,

right? So I think Robin Hood has executed extraordinarily well. They're linked to tokenization as well. they have a layer two. I mean, you got to imagine the people at the Coinbase management who are like, what the hell are they doing or the how do they figure out how to do a layer two? The other thing with Coinbase is you got Cracken coming on the scene. They're going to do an IPO next year. That creates another source of competition for Coinbase. Coinbase is they had an announcement.

They're trying to get more into the European market. That's more of Cracken's home turf, home territory. So they've got a, you know, they're looking for new avenues to expand. They're looking for a bank charter is what I read recently. They're looking for a bank charter. They want to get more into payments. So, you know, they're taking a few different shots on goal. But none of these have product market fit.

The bank chart will help them unlock greater earnings through a hypothesation, but then they're going to get multiple compression because there'd be a bank. Rob, have you had a chance to look at bullish's F1? That was filed today. I'm curious. Do you have any thoughts? Who's F1? Bullish.

What's the ticker? I think B.S. L SH, they filed confidentially and I think it was public this morning. I'm not sure if you guys have used to. I have no. Yeah. Well, so Figer has filed for an IPO. Figure Mike Kagnos company?

Yep. That'll be an interesting P&L to take a look at. It's basically a HILAC business with like a fintech rapper and buzzwords as far as I can tell. He's the guy that created a SOFI, took a public, and then, and then some allegations, and then they brought in another CEO, Anthony Noto, take it from there. One overlooked benefit of these large crypto companies

now coming to market that we first saw when Coinbase listed and certainly when Circle listed, but for me, the biggest benefit, because I'm not an investment advisor unlike you, is just getting a look at how these companies work, is getting the details of the P&L and the receivables and how much their CEO is, paid and like how it works under the lid is what I find really interesting.

What's the most surprising takeaway for you? I haven't had no chance to look at them yet. It's the kind of thing you sit down with a big, big glass of whiskey on a Saturday night. Like Circle's earnings power and the revenue that Circle, the Coinbase makes from Circle, I think that's the thing that is the aha moment for, especially people in Trotify and that are,

They're critical of digital assets. You look at that. That's real revenue. That's real earnings. Can't dispute that. Yeah. And it's like the mainstream are realizing that these are actually real jobs. People who work in crypto can build real businesses and make real money.

What's amazing is how many, I call them, I guess, legacy VCs are completely off sides because they dismissed or ridicule digital assets. A lot of venture is in the payments in fintech and like wealth tech category. And there's, you know, you have these are crypto-native VCs, like Six-Man Ventures and Multi-Coin and Coin Fund and A16Z. And then you've got these Trad-Fi VCs. Then you got some, you know, those are your Sandhill Road VCs. Then you have folks in the middle that are hybrid, like QED, for example. But this quadrant on the left-hand side, the Trad-Fi folks, they are off-sides.

digital assets are being advanced through regulation. I don't think they've done on-chain transactions, so it's an incredible rug pull. And I don't want to go off tangent, but this does tie into something else. We have to mention it's relevant to the earnings, and we'll come back to that. And that is the report last week

from the President's Working Group on Digital Asset Markets, and the speech by SEC Chair Atkins announcing Project Crypto. They brought us to a new threshold. Finally, we're getting details on the vague promises that President Trump made when he came into office about we're going to get some frameworks, we're going to make America the crypto capital of the world, et cetera, et cetera, et cetera. We're now getting details on how they're going to do that. It's now actually feeling real. But what I really took away was that this is not just about digital apps.

asset ecosystems. This is about rewriting the rules for traditional finance as well. Atkins was talking about eliminating a lot of the licensing requirements so you can have non-securities trading on the same platform as securities, a simple change, but it's actually pretty epic. Banks are going to be able to use crypto assets, and there was quite a lot in both of them about how financial institutions will be able to use decentralized applications. All of that, I thought, was absolutely astonishing. But what we seem to overlook was that most traditional institutions don't have a clue how to do this. They don't have the talent, and they're going to have a very hard time hiring the talent because crypto people don't want to work for a bank for reasons. And so are they going to be able to,

so what's the alternative? They buy companies, in which case investment bankers are going to be rubbing their hands right now unless there are other exits in play. But this changes the whole venture capital landscape. There's been VC funding of crypto companies has been relatively thin so far this year compared to others. I mean, there have been some big announcements, but not as the, not the flood we once saw. But now they are more interesting because there is a more obvious exit in the short term insight. Yeah, two inside baseball, wrote real quick statement, two inside baseball stories to share with you. So when is Aerobor, you guys might have heard of Aribor. It's Palmer, Lucky's bank partially backed by Peter Thiel.

They raised it at $3 billion valuation with a PowerPoint, Palmer Lucky, basically, a guy who founded Anderil, who also sold the VR goggles business to Meta. So really capable individual. They raised $275 million of that. They want, as what I'm hearing is they want to build Silicon Valley Bank 2.0, focused on crypto, enabling stable coin payments and infrastructure.

It's a big category. That's one. Other thing is, I mentioned earlier, there's 200 of these bank charters in application. To use some perspective, in the last Trump admin, you had a handful of these get approved, like Anchorage and a few others. What I'm hearing is that you're gonna see dozens

of these get approved between September to December because they wanna get ahead of a potential change in the midterms. They wanna give them as much room to run to advance stable coins. So you heard it here first, but that's, that's transformational. Yeah, that would be awesome because the more people, more users familiar with stable coins, the more users are familiar with tokenized assets because they are the settlement asset for tokenized securities,

tokenized bonds, whatever. And that is going to be of great interest, not just to the tokenizing startups that are now huge companies that we all know and love, but also traditional financial institutions are drooling at the thought of being able to charge more investment banking fees that helping companies raise money in different ways. Don't overlook the fact that these stable coin issuers are massive purchasers of U.S.

Treasuries. There's a lot of incentive to get clear regulation around stable coins because they're able to build in directly the reserves that they need to hold in U.S. treasuries and they create this buyer within this asset that's supporting the spread of the U.S. dollar globally.

So there's a huge, huge amount of incentive for the administration to get these, you know, approved and mainstream and being used because it's just going to strengthen the case for the U.S. dollar. And now they've got a consistent buying group for the U.S. Treasury. So I think a lot of people overlook that, but they're very incentivized to be supportive of stable. Well, it drains liquidity from Main Street, though.

So there are second-order impacts. That dollar is no longer at a bank that is turning around at lending and creating new credit the rehive publication. I think over time, the liability side of a stable coin, should gradually start to resemble something like what a bank liability set of the balance sheet should look like, except for the fact that community banks invest in commercial real estate. Stable coins can't do that. This is going to be the issue around stable coins and regional banks for the next few years,

to the extent they're more successful. I think some, any banking regulators listen to the show, I'm sure a couple of them just shuddered with that last sentence. They used to have, um, but, uh. Why? What's the risk of the banking regular? Let's spell it out. Oh, just the fact that you want the liability to stable coins to match longevity, all sorts of ways that could go wrong. If it doesn't go in that direction, then you're depriving liquidity to Main Street.

That means less auto loans, less mortgage loans, less small business loans, less commercial real estate loans. Yeah. I understand that point, too. I'm not quite sure what the solution is, But like you say, you don't want stable coin issuers all of a sudden handing out mortgages to people or like being the back end for credit cards and things like that. It doesn't mean they have to, I guess, always be stuck to like short-term treasuries. Look at Maker. Maker rebranded as Sky. They are providing financing to real world assets on chain. I met with one of the leaders there.

He was an X-structured products, secure patch products leader at Hildeen. you know, he was like a vet in the 2008 crisis. I was like, yeah, he knows what he's doing. You know, I don't know, why not? Why not? You know, we want banks to do lending. I think if you have the right teams in place, you've got the right systems in place. Plus, we don't really see the auto loans,

or we don't really see Main Street bakeries going without funding just because the commercial banks don't have as many deposits. Finance is like nature. If there's a demand for it, it will appear in some form or another. Well, I'm glad you brought up the presidential report in Atkins speech, because there was one thing in Atkins speech in particular that was interesting to me. He supported the idea of super apps in finance. And I think sometimes there's different people have different definitions for what is a super app.

I mean, is it like AliPay out in China? I know that Elon Musk wants X to be a super app. I mean, Coinbase now, they want to have a super app. But super apps can be horizontal and they can also be vertical. And in crypto, I know that there was a lot of fear in the past about some of these exchanges being too vertically integrated. There's a reason why the New York Stock Exchange doesn't have a custody service. And all these things are separated out from a risk management and security point of view.

And I know that there were times in the past where executives at Coinbase not to pick on them, but they understood that there may have been a need for them to sell off certain parts of this business in order to sort of assuage concerns from regulators. Now, that never came to pass. But if these super apps are going, especially crypto-focused ones, are going to be allowed to be vertically and horizontally super, that creates a tremendous opportunity for them because they know exactly what their customers hold.

They can customize me through targeted ads and offers and all sorts of other things like that to really cross-sale, maximize the profit for the customers. But it also creates some tremendous, challenges from risk management point of view. I'm talking about privacy and security. But if you're a stockholder in Coinbase or Robin Hood or say Cracken or any of these other companies that are coming public that have a large base of active funded accounts, that's got to be music to your ears because to me it seems like I know that the SEC is not always the

company that deals with monopoly concerns in the U.S. that's more than FTC. but you have to think that this is a regulatory perspective that's going to apply to the whole of government, at least under the Trump administration. So maybe they won't have the same concerns as like Mark Zuckerberg may have had these thinking of Western acquisitions because they have, I guess, the green flag from regulators to really try to become as big and as integrated as possible. I'm curious if you guys have any opinion on that, but that was something that stood out to me just because of I feel like going back years and years ago that the Gha companies, if you guys remember those, they would have loved to have had that type of perspective or free-reveined from regulators. I can jump in on that because I've actually been doing a lot of research on this. And in fact, I'm writing a piece for American Banker magazine this week on precisely that,

on the super apps in banks that will now be facilitated by the Working Group report and by Project Crypto. The super app in this case, you're right, it's horizontal, it's also vertical. Robin Hood is a good example because they're going both. They're offering more and more products to get more and more clients. They're also building their own chain. I think Stripe is another example. Circle is trying to be that with its payments network. And we're going to see banks, of course, obviously drool over the engagement and client data

that they can get with their super apps. And we're all used to dealing with a bank via a mobile app or a web app. Well, that then becomes a wallet in this on-chain environment that the two, two reports are essentially proposing to the traditional financial industry. But what we tend to overlook is one of the reasons banks haven't been able to do that so far is that building in the current legacy system is difficult, struggling to get archaic technology stack. One, talking to archaic technology stack two, obviously takes years. And so the whole idea of everything in one place is just not feasible in the like system, which is just why it's only been done by

and newer companies by the revolutions by the Roman House. But a bank working within a digital asset ecosystem with its own chain or using others, it doesn't really matter. It is much more flexible, much easier. And therefore, the engagement between clients and their banks will start to change. But what I'm particularly most interested in is the blurring of the boundaries between the old and the new. What will the difference be between the bank and Robin Hood, for instance?

No, I agree. I think 100%. I think you're going to see Twitter rollout crypto trading and bank capability and deposit saving. And it's going to be difficult for these small banks to compete. Again, that's important back to Main Street. Small banks and regional banks do Main Street lending. How do they remain relevant in the future? Who knows? The other piece are like the Googles and the metas of the world. So the way this Genius Act was established, it advantages non-banks. Non-banks have. Non-bank includes like a technology firm like, say, X, for example, or Robin Hood or Coinbase, it advantages non-banks in a way that historically they did not have parity versus banks, because banks are subject to strict regulation around safety and soundness and bank secrecy act and any money, all this stuff. Non-banks have a seat at the table. That was one big, wow, this actually happened kind of thing. So now, but the other hand, though, is that the Google's,

and the medives of the world are not advantaged, actually. They're still left out in the cold and Amazon I put in that bucket, too, which kind of makes sense because they need competition. I think I own two out of three of those businesses, by the way, but they need competition. It's good for the economy to have that. But yeah, I think you're going to see a lot of lending and banking markets and capital markets transform within the next 10 years.

Yeah, I was just going to say this is going to be a major culture shift within the banking community. So I came out of community banking early in my career. And particularly after the global financial crisis, when things really got shaken up, there's a serious risk-off attitude. And being able to overcome that and try to really adopt technology as the way that you're going to interact with your consumers is going to be tough. And it makes me wonder whether moving towards the super app is really going to be more of a build or more of a buy approach within the bank. banking community. I think that in the early days, they're going to be hesitant to really go and

invest in what it takes to build these out and understand that type of relationship between all of the products, but then engaging directly with your end consumer through them. And they may be incentivized to sit back and wait and let this develop out in the market and keep themselves in a position to acquire somebody that really makes progress down this path and let them initially take the risks and get through some of those initial hurdles and then find a way to integrate them later. I think it's going to be harder than I think it sounds. I think it sounds like a no-brainer idea and these banks should all be pursuing it and finding the way to get this integrated into their business model, but that culture shift is going to be a tough one. Yeah. I remember I was at

Citibank when the Goldman Apple card announcement was made and the fear that I saw on the eyes of some of my colleagues there just because of how much power Apple had me. No one knew that the card was going to end up up being kind of a flop. But just the idea that I guess at that time Apple, if it wasn't the world's most valuable company, it was in the top three or five or something. I mean, these big banks realized how vulnerable they were to like the brand loyalty that some of these tech companies engender. And it's really kind of fascinating. So we've spoken a lot about crypto and macro trends, et cetera. We haven't really talked about crypto prices yet. And, and, we haven't really talked about crypto prices yet. And I always wanted to make sure that we have a chance to sort of talk about

where the market is at this point in time and ensure of what our viewers and listeners should look for in the weeks and months ahead. It's sort of, I think the industry is in a little bit of where do we go next. I mean, Bitcoin had a big climb up and now it's sort of, it's sitting above, I think like the 50-day SMA and some of the larger ones, ETH. I think they're a little more comfortably above. XRP bumped off its 50-day. it seems like there is a little bit of bearish momentum among these tokens and then by extension to broader market, but we're still on a broader bullish optred. So it's kind of a Rorschachs test in a way.

I think people can see what they want to say. And then adding to, I think, some of the confusion or just ambiguity is a lot of these crypto treasury companies, I mean, they're starting to struggle. I mean, look at Bitminor. Bitminer. I mean, they're announcing all these massive purchases, but the stock is still down, I think, 70-something percent from its recent high, and it's not seeing a big bump, even when Tom Lee announced that $1 billion stock repurchase plan,

which I think some people, casual readers may have thought that he was buying a billion dollars with the stock right away, whereas it was just a plan to theoretically buy it at some point in the future. So we're in this spot. Ben, I mean, what are you seeing right now? What are some of your expectations? Are there tokens outside of these top few that are really standing out? I know viewers and listeners want to kind of figure out where the next boom's going to come from.

Yeah, I do think we're still in a broader bull market. And just to be clear, I'm a Bitcoin guy, right? That's where I spend most of my focus. That's where most of my time is spent. But, you know, you do see broader corporate adoption happening with several of these other coins. I think we even saw a Dogecoin treasury company that popped up, which is certainly going to lead investors to think that we might be getting to a frothy period with all of these digital asset treasuries when you start seeing that occur.

But there's still a tremendous amount of capital that's sitting on the sidelines. So when you think about companies like Nakamoto or like Strive that have, you know, $750 million sitting in escrow still waiting to come in to make their Bitcoin purchases, now you've got more than 150 companies that are Bitcoin treasury companies that are out there actively accumulating Bitcoin. You know, there's still a huge amount of capital that's coming into this space. And I don't think that corporate adoption trend is going to stop anytime soon. And so I still see us solidly in a bare market here through the rest of the year. You know, there's the argument that could be made as to whether we see a much elongated cycle now just because the buyer has changed. You know, in the early days when the Bitcoin cycles were very predictable, right, that four-year cycle, a lot of that trading was leverage trading on all these different brokerages offshore.

You had a lot of VC capital that was in the environment. And so you got these big liquidations and cascading liquidations that were. would happen when ever fear started entering the market, now I look at it and I start to see a structurally different bid building up underneath Bitcoin in particular. Because all these corporations are coming out, you're starting to see the softening of all the stances from all the nation states. If there's even an off chance that the U.S. makes any type of a move and any type of acquisition, that would send a huge shockwave. I've not holding my breath for it. But if it happens, it would certainly ignite some excitement back in the space. But I think broadly,

you know, both Bitcoin and other digital assets, they're here to stay. They're getting ingrained in our financial system, and I don't think that there's any unwinding that. And as you start getting more clarity from the regulatory environment, so like the Clarity Act, right, figuring out who's the commodities are going to be, or the CFDC is going to be overseeing versus the SEC is going to be overseeing. That type of clarity in this environment is going to be huge for adoption and de-risking entrepreneurs that want to build in this space, no matter which token they're building with. So I see a long runway still coming. And I think at this point in time, I sit directionally long and just let it continue to evolve around you. Yeah, look, I think

last week, actually last two weeks was bearish on digital assets, primarily because unfortunately the Genius Act was also Nothingburger for Bitcoin too. Paul Aiken said it was a Nothing, but there's no buying. The report that came from the White House didn't say, we're going to go buy Bitcoin. There was nothing there. And there was a sell-the-news event. The good news is we had a flush and there's a reset, and that's behind us. And I think actually this week I'm constructive on.

I agree we're still on a broader bull market. But I'm not terribly excited. I'm more interested in Ethereum right now. I think Ethereum will have relative strength. I don't know. I think maybe around October I'll be kind of more. interested. It's like a lukewarm opportunity. I put it that way. Maybe you got a couple of days of rally here. But if you think about what the ECC chair said, if you look at what the OCC will be

unlocking, the primary beneficiary that will be programmable money, stable coins, how these interact on-chain to create new experiences and the growth of stable coins. So that, you know, that benefits Ethereum. One thing that I'm looking into, like, what's going to be a newest evolution in the crypto treasury companies? If they replace Powell with a big dove, though, Bitcoin goes to the moon. Okay. So this is a thing, like you can make a view here, but if there's an event that happens and,

you know, like what's Trump's son name? Again, he's got like a meme coin after him. Barron? Barron. If like, if Trump is like, that's it. Barron, I'm going to nominate you as a governor. going to say that's a good thing. I'm not saying that'll happen. But with Trump, you kind of have to, you have to see what, you know, dodge and weave here. I'm interested in what's going to

have, like new evolutions of crypto treasury companies. I mean, Ben, we spoke a little bit about how Seller is creating all these new classes of preferred equity. And then that seems to be a model for all of his adherence to try to reach. We sort of graduate past just like common stock ATMs to do something that's a bit more lucrative and less dilutive. I was also talking with like a couple of analysts too. One trend that they think is going to happen, almost like VCs, by like big chunks of discounted tokens that sometimes are locked up for years, that's going to be a new one here with some of these, with some crypto strategy companies, especially for some of the longer

tail assets because we're starting to see saturation in Bitcoin and Ether and so on. And I understand what you guys are saying that there are. is still a huge tam. I mean, there's lots and lots of money, lots of lots of companies that still might want to come in and work on these, the big blanche of assets. But if you're looking for that edge, that might be something to pay attention to. And one analyst even told me that he could see this potentially being a competitor to traditional crypto vCs as a way of kind of like generating money and excitement. I mean, this whole industry, I mean, Rob, you always talk about animal spirits, it feeds on excitement. Like when Bitcoin is at its lowest, like,

realized volatility in a year, that's not exciting to people. Like, people want something you get excited about and then you can build off of and copy and like and feed those animal spirits. So I'm, like, I'm wondering what's going to happen with that next. Governments have been very quiet. I know, well, you follow in particular treasury purchases from foreign governments and looking at gold and and then I mean we've spoken I mean you spoke about stable coins buying treasuries and we've talked about that in previous weeks as well when are like when our governments and not just like El Salvador but but like some of like the larger economies when are they going to start outcating a little bit towards towards

Bitcoin one interesting fact that's our story I saw I think France because there are a huge nuclear energy manufacturer they want to use there was a proposal I think in the federal legislature to use excess power to mine Bitcoin I'm wondering if that would go on their balance sheet. But once you get a little bit of an allocation there, maybe that's where this next boom comes from. But I'm just sitting by here and we're always talking about like what's going to be the next stimulus. Like what's going to be the next big idea that gets people going and sort of like refreshes the cycle?

Those are a couple things I've heard. But I feel like crypto needs one of those right now because just the Genie SAC, I don't think quite did it. Maybe the Clarity Act will. I don't know. But, yeah, Rahm, it looks like no one, no one thinks it will. I think that it's going to take something more exciting than the, like having clarity and who's regulating, what types of assets. I think that's good overall for the ecosystem.

You know, you just want to get rid of all the ambiguity so that these entrepreneurs can move forward with building and creating new solutions and disrupting the way that the legacy system's always worked. I think that's very important. And in the treasury space, you do see periods where there's a huge amount of excitement. And early on, a lot of people are looking at it and wondering, are these Bitcoin treasury companies actually taking a lot of wind out of the sales of, you know, altcoin season? Right. Is it taking that capital now that people had access to leverage straight out of their brokerage accounts and they had levered plays on Bitcoin where they were replacing their

altcoin bets with equities? And, you know, over time, it seemed like there was more excitement that reentered into the alt-coin market. So I don't know that it necessarily took away alt season. But it certainly drew in a lot of new capital because it was such an easy on-ramp for people to start getting exposure to Bitcoin and any of the companies putting out of the balance sheet. What you do get is you get an education and capital raising very quickly. Because when you see these new companies entering the market, they're coming to the market through a lot of different deal structures. And I think now you're starting to see investors sit on the sideline more as they're waiting for the initial transactions to settle because they don't necessarily know about things like lockup periods for pipe deals. And so they don't know when new shares are entering the market.

And I think that that can scare investors sometimes when, you know, really there's probably points of time where you should be looking for opportunities if you understand those events, but many don't. And so they may go to the plays that they view as more safe. You know, a company like strategy where you know exactly how they're raising, They've got tremendous scale already. They've already entered the fixed income market. And so that's where they're raising a lot of their capital. That's very interesting. So I think that you do see periods where investors go far more risk on and they can go further

out the risk curve within the treasuries. And then they go risk off and they move to assets like strategy where they understand them and they've got a really long track record. In terms of what happens with nation states, you know, I still think we're a little ways away from seeing the accumulation. But I do think it comes because I think ultimately it does become. strategic to a nation to adopt in some capacity the only real true decentralized monetary system. I think that as a country, you can't ignore that because it's not something that you can control

yourself. And so if you can't control it, you should have at least exposure to participate in it. Because if you see the U.S. adopt it, you're too late. The U.S. can print dollars if they need to to go acquire Bitcoin and they can start buying up huge amounts if they chose. Now, I don't see that coming right now, but it's a possibility. And if you're one of these smaller nations that doesn't have your own fiat currency that you can print yourself, you may start looking at this going, there might be an opportunity here for me to change my economic standing globally through a decentralized asset like Bitcoin. So maybe I should start adopting this early before the bigger guys do. And you saw El Salvador do that. So I think that

you will see this happen. I think that Bitcoin is still too small as an asset. where it's not quite popping onto their radars, but that can change in a hurry. And I think it only takes one or two events to really reignite that and get those conversations started. And it could just be one, you know, if you get one G7 that comes in and decides that they're buying or accumulating and holding it, you know, that could be a real game changer here. So if there's a lot on the horizon still, I still think we're very much in the early innings of this whole thing. One thing we're overlooking when it comes to nation state adoption. And I've been following this for a while, And I've been wrong. I thought we'd see central banks by now holding it more often.

I know that some are. We haven't been told about them yet, but it is happening. We're overlooking the energy question. And we have seen already many developing nations set up state-sponsored Bitcoin miners that at the same time help finance the construction of energy grids in rural areas. We're seeing state developing countries use natural resources to provide the energy needed for the Bitcoin mining, which, of course, gives them big. Bitcoin on the balance sheet. She automatically, Kenya started doing this quite a while ago.

Their state-owned electricity company started using Bitcoin mining to help clean up methane emissions. So I think that's how it gets in the backdoor. Now, this is not enough to kickstart a wave of buying. I think you're right. I don't think we're going to see that. Unfortunately, one thing we also tend to overlook is that what kickstarts a wave of Bitcoin buying when things break. We saw that with the banking crisis in 23, and there's a chance we'll see that kind of a catalyst again. When Bitcoin is doing really well, it often unfortunately means that things are getting kind of scary up there.

A few quick thoughts. One is Bitcoin was a commodity in the Biden admin. It's still a commodity now. So the Clarity Act doesn't help any of that. So where's the catalyst? I'm still constructed, as I said earlier, between now and your end. That's one. You need monetary mischief.

I don't see sovereign wealth fund. I could see SWF adoption, but not sovereign adoption is a difference. And SWF is investing for the sovereign, whereas Bitcoin on a central bank balance sheet, I still see that in the near term. Countries don't like to be held accountable. That's really what it comes down to. They like to issue bonds, devalue currency, engage in seniorage, print money, devalue, and tax their people through those activities.

They don't want accountability. Why would they do this? And if you are issuing a bond, emerging markets have learned these lessons of issuing dollar-denominated bonds. They cannot control dollars. If you issue a dollar-denominant a bond in you're in Thailand, and the dollar goes the wrong way, then you effectively have run to the bank in terms of that your debt market.

They can't control the dollar. So I think it's going to be hard to get emerging market adoption. And the more Trump makes Bitcoin America first, the more miners in the United States, it's harder for others to get involved. But I'm open to being proven wrong. I'd say strong views loosely held. I do like the general thesis that you can think of Bitcoin as an international money and it has a virtue overgoal that it's portable.

I think those are important attributes. So, Ben, the way I'd like to end the show when I get the host is by asking all of the panelists to share either some thought that was left on the cutting room floor that you're itching to get off your chest, or I'm interested in hearing contrarian views from Akana class and people that like to start a little bit of a TIF on X. So I'll go to you first. If there's just anything you're dying to share with us or just any genius ideas that popped in your head over the last hour. So you want to eliminate this. Yeah, no, I don't think I have any genius ideas that popped into my head here yet. But hopefully I'll have a few here coming shortly. But, you know, in general, I just, I look back and we've come such a long way over the last 12, 18 months.

And I think it's very easy for everyone in the space to believe that we've reached saturation out there in the market and that everybody is aware of what's happening in this space. And I think we have to realize that it's actually a very small contingent of people that have any idea what's going on here. So when we hear all these ideas and we're seeing them in the news and in the media and we're thinking that, well, this has reached the masses and everyone's already aware of this and the opportunities are being taken, And all you have to do is step outside and start talking to people and you realize just how early all of this still is. And there's such a long way to go. And this is going to be such an exciting space for the foreseeable future. I don't know when it ends. I don't think it does.

I just think it keeps evolving. And, you know, that makes me excited because I see a ton of innovation that's going to come from this space. And there's been a lot of hard work, you know, making this no longer a taboo subject just to even bring up where it can now be openly discussed. So I think we're still in the early days here, even though it feels like we've made such huge strides, we've got a long way to go. And there's plenty of excitement left out there for this. I'll extend Ben's comment to global, to other jurisdictions. And again, we do, we focus mainly on the U.S. market because it's the world's largest financial market. And arguably it's the fastest moving at the moment.

This didn't used to be the case. But it is now the fastest moving. And obviously the trend set here is triggering scrambles in other jurisdictions, which, which may not be as large, but when you add them all up, they are as meaningful. So we tend to overlook that Bitcoin is a global asset. It is as valuable in Athens as in Kuala Lumpur. So that, I think, is a very overlooked trend. What's happening outside the United States is arguably as important.

Yeah, I would say, you know, fade the NFP bad vibes. The economy is growing. not in recession as the prices will finish the year at all-time highs we continue to see strong productivity growth in the economy I think a lot of this NFP noise is driven by a clamp down on immigration you saw lower NFP growth post revisions after immigration controls are there but it's not a recession so I still see people that are just overall scared of the markets and I think there's still plenty of opportunities that are, you know, that are mispriced out there. And just for me, one thing I forgot to bring up during our discussion about the crypto treasuries,

Trump media also reported earnings. And I know that the, I forget the exact numbers, but, I mean, they weren't tremendously high numbers. I think they actually were cash positive, which is unusual for them. But in terms of their Bitcoin performance, I mean, I mean, they put a ton of Bitcoin on the balance sheet, but they're also reserving, I think, $300 million of, like, what was it, like the two or $2.5 billion that they raised for options trading. And as far as I know, that they're the only company that has really come out and said, we're going to earmark this money to play in leverage derivatives trading. And it could be, that means a lot of things. I mean, it can mean like options on the spot price of Bitcoin.

It could be ETFs. I know some of the new SEC will make it came out and made it easier to do that. But that the volatility is going down that means they have to take on more leverage to try to make up these gains. And I'm always afraid that certain Treasury companies that they don't have appropriate risk management tools, that's going to be a trend that maybe we're going to see more of and maybe it won't always be announced. If we're talking about how things could potentially go wrong, that's one way that these companies who start trading. And that could fall below one. if they, if they're not doing like arbitrage plays and relatively safe plays with options,

but they're trying to really express the direction and they get it wrong. So that's something that I'm going to be paying attention to as well. And maybe Ben, when we have you on, again, we can talk about that, talk about that more because it was pretty interesting to me. With that, Steve, before we wrap up someone in the audience comments, asked a question about the YouTube channel. So maybe now's a chance to do that, do your announcement again. Terrific.

I get to, you guys get to hear more of my voice. Bits and Bips is going to have its own YouTube channel. And this wasn't one of you guys, was it? It was a loyal listener? It was a loyal listener. Terrific. Crazy Diamond. So Bits and Bips is going to have its own YouTube channel and its own podcast feed.

And you can subscribe by going to unchaincryptive.com backslash bits and bits and bips. Or you can click on this QR code right here on the screen. And thank you for your excellent question. With that, I would like to thank all of our guests for joining. Well, as always been terrific having you want. I'll have to everyone again. And thanks to all of you listening and watching for the great rest of the week.