Unchained - Bits + Bips: Why Tron’s IPO Matters & How Crypto Exchanges Will Win - Ep. 853

Episode Date: June 18, 2025

In this week’s episode of Bits + Bips, the panel digs into why Tron’s rumored IPO is more than a headline, what Wall Street’s quiet shift into stablecoins signals, and how exchanges are racing to control token flow, even as regulation hangs in the balance. They also explore: What the Israel–Iran conflict means for global markets, oil prices, and crypto positioning Whether banks can adopt stablecoins without threatening their own deposits If regulatory clarity will come fast enough to shape the next crypto phase How to tell if ETH’s revival has staying power Sponsors: Bitwise Hosts: Ram Ahluwalia, CFA, CEO and Founder of Lumida Steve Ehrlich, Executive Editor at Unchained Guests: Christopher Perkins, President of CoinFund Vishal Gupta, Cofounder and CEO of True Markets. Links Tron and Justin Sun FT: Crypto group Tron to go public after US pauses probe into billionaire founder Unchained: Eric Trump Claims No Public Involvement in Tron’s Nasdaq Entity The Guardian: Crypto entrepreneur eats banana art he bought for $6.2m Israel - Iran WSJ:  Israel Takes Control of Iran’s Skies—a Feat That Still Eludes Russia in Ukraine How Israel’s Mossad Smuggled Drone Parts to Attack Iran From Within Stablecoins and TradFi Unchained:  JPMorgan Files ‘JPMD’ Trademark, Hints at Bigger Crypto Offering Coinbase and Amex Team Up on Bitcoin Card as Exchange Reveals Broad Expansion Plans Bloomberg: Bessent Says $2 Trillion Reasonable for Dollar Stablecoin Market. WSJ: Walmart and Amazon are considering launching U.S. dollar-pegged stablecoins  Reuters: French Societe Generale became the first major bank to launch a dollar-pegged stablecoin The Information: Financial markets giant DTCC is exploring a stablecoin, according to The Information Regulation Unchained: White House Rejects Ban on Conflicts of Interest in Crypto’s CLARITY Act Timestamps: 🎬 0:00 Intro 📰 4:18 Why Tron’s potential IPO creates a dilemma for investors, and how Justin Sun’s Trump ties play into it 🛡️ 15:58 Should exchanges like Coinbase let investors trade whatever they want? 🏦 20:47 The reason why crypto treasury companies even exist 📊 25:59 What is driving the fierce competition among exchanges 💵 34:18 Can JPMorgan, Bank of America, and other TradFi giants succeed with stablecoins? 🤔 37:58 Will stablecoins cannibalize banks’ own deposit bases? 🌍 45:51 How the Iran–Israel conflict could shake macro markets and crypto sentiment 🚀 55:37 Why Ram and Chris are calling for an ETH breakout 📜 57:47 What are the risks if crypto regulation fails? Learn more about your ad choices. Visit megaphone.fm/adchoices

Why is this so exciting? Because now people, you're essentially abstracting all the operational complexity around crypto. And you can just buy these things that are pretty hot right now. And they take on meme-like properties. Are there some fundamentals? Yeah, I think so. And you touched on that with the fact that Tron is a major stablecoin distributor. And gosh, doesn't this also fit into this massive theme that we're seeing right now? Hi everyone, welcome to Bips and Bips, exploring how crypto and macro collide one basis point at a time. Today, we're going to talk about Trong going public. You'll get our reactions to the Israel around war, the impact of progress on the Genius Act, and also the White House rejecting conflict of interest rules related to the market structure bill that are known as the Priority Act.

The first is some introductions. I'm your host, Stephen Ehrlich, High Scribe of the Unchained Kingdom, and I'm here with, with Ram Alawalia, Master Wealth, Leader of Lumida, and two special guests, Chris Perkins, Master Strategist of Coin Fund Holdings, and Vishal, Gupta, Lord of the True Market Sledgeer. Now, we're here to discuss the latest stories in the world of crypto and macro.

Just remember, nothing that we say here is investment advice. Please click Unchained.com backslash-slash-bits and bibs for more information and disclosures. So, Chris and Vishal, I know both you are new to the show. So before we get into anything, I'd like to just ask you both to briefly introduce yourselves to the audience. Chris, why don't you go first? Sure. Chris Perkins, president of Coin Fund, one of the managing partners. My career I started as a U.S. Marine fought in Iraq, came home, and then I went to Lehman Brothers and got blown up again,

ended up at Citigroup, ran a couple of derivatives businesses, and I've been full-time crypto for years. That's me. Hi, yes. Vishal Gupta, CEO of True Markets, non-custodial, stable coin-centric hybrid C-Fi D-Fi Exchange. My past, I ran a derivative Zest at Goldman in the list of derivatives world, left. TradFi ended up in fintech and crypto, was an early guy at Circle as head of USC in 2018 launching USC from zero to half of a billion in market cap. I left there to join Coinbase's head of exchange, took it from 20 assets to 235 assets.

launched two derivative exchanges there, one under the CFTC regulation in the U.S. and also one internationally is a coin-based international exchange, the perpetual futures exchange out of Bermuda. And we did a lot of work there to kind of bring markets up. True markets is the next evolution of markets, you know, in a post-FTX world. So we have a lot to talk about today. I mean, we're going to discuss the newest entrant in the crypto treasury craze, focused on Tron. We're going to discuss some of the macro implications for the current Iran-Iraq

war, and its associated impact on markets. And then I'd like to also touch on some regulatory news. In fact, a big scoop that one of our reporters at Unchained Jason Brett broke on Friday night, where it looks like the Trump White House derailed a major breakthrough in negotiations over the Clarity Act because it would place restrictions on his and his family's ability to continue their crypto profiteering. So we're going to get to all that. But before we begin, just two quick items of housekeeping. One, just a disclosure. Nothing that we say here should be considered financial advice in any shape or form. So please keep that in mind. Check out unchaincrypta.com backslashdbats and bips for more information. And finally, before we begin,

I'd like to just take a brief pause so that we can hear from the sponsors to 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. So when we were planning the show, I think even as late as this morning, I think we were going to start by talking about the Iran-Iraq war and everything that that entails. But then we had some, I guess we called Breaking News this morning.

Perhaps it's no surprise to anybody. Justin Sun, the founder of Tron, he's sort of going public through a merger with a NASDAQ listed company that most people had not heard of, raising $210 million to create a Tron crypto treasury company. The stock is up, the stock, which is called E. SRM Entertainment is up to 657% so far today. And this, there's been a wide, there's been a long line of companies engaging

in this sort of behavior of the last couple of months following the sale or playbook. This one was really interesting to me for a couple of reasons. Me, for one, it's Justin's son. I mean, he's a very polarizing figure in crypto charismatic, but also polarizing. The last story I ever did at Forbes was a profile on Justin that was the cover for the

April issue of the magazine. And a real focus of that story were his tie-ups with the Trump administration. I mean, one thing that immediately kind of stood out to me, and I'm going to go to all of you guys to get your reactions as well. But the SEC had been investigating Justin and Tron for years, alleging things such as unregistered securities offering, selling TRX to U.S. customers, and even accused them of a fraud through wash trading TRX tokens during some of the early days of the Tron blockchain. So these were serious charges. But one of the things that I, one of the things that really kind of stood out to me about this entire escapade was that Justin's son was actually Trump's crypto savior. You guys probably all remember this.

But early last year, I'm sorry, late last year, Trump's defy exchange, if you can call it that, World Liberty Financial was, was destined to fail, it was not going to raise the $30 million necessary to actually launch. And Justin stepped in and saved it. And now they met all their finances. And coincidence or not, the SEC investigation into Tron went away. He was the biggest holder of the Trump meme coin, attended that dinner last month. And now he is launching this project where the Trump family seems to be intimately involved, even though I know the FT reported this morning Eric Trump was going to be part of the

I think he denied on Twitter a couple of hours ago that he's not going to have a formal role. We'll see what that all happens. But there's a lot here. So, Ram, I know you always have some interesting. I'll be brief. I mean, I think you highlighted it well. I'd also add that he spent $6.2 million to buy the banana in the art auction. And I believe he promptly ate the banana on the spot as well. Talk about like, that's crypto flex, cryptoflex, crypto culture flex right there. You know, what you've seen since the new SEC chair has been in place. I like the new SEC chair, by the way. I had a chance to meet him before.

And he's a kind of libertarian market oriented guy. But there are a lot of people like Richard Hart that you're seeing charges dropped in enforcement actions. And you know, you got to keep enforcing the law. And I don't know the matters or facts around just and son or Trump. I'm not coming on that specifically. But there is a complete change. And if you're in like team Trump, you know, investigations seem to go away.

Yeah. I can actually tell you a quick story before I go to you, Bachel and Chris about this, about the banana. Because when I spoke to Justin for that story, I asked him, like, what was your strategy for, like, how did you come up at $6.2 million? Did you have a limit that, I mean, he's a billionaire many times over. And it's funny. I mean, he has a bit of a team because he is a bit of an art collector.

And he has people that kind of help him understand. like what something could be worth, so he doesn't do something completely egregious. And even in this case, he told me that his team had absolutely no idea. I think he got up at 7 a.m. or whatever, his time, I guess because he was in Asia. And he just kind of did it. And he told me he had no idea it was going to become this big of a story. I don't necessarily know if that was true or not. But it became just a massive worldwide spectacle.

Everyone knows him now is the banana guy. and that's just it's just kind of interesting. But the one other thing that I'll point out to, and then, Bachel, I'll go to you next. Everyone thinks of Justin as just this kind of charlatan, like, carnival barker. There's no substance behind all of the flare. And one thing I did pick out from my reporting is that Tron, for all of its perceived fault, is a real blockchain with real users,

and is actually the market leader in terms of state. able coin having USDC on, I'm sorry, USDT on chain. And it is widely used, especially across emerging markets for legitimate commerce. So as much as everyone can criticize Justin and question some of his antics, he did that. And I think that when people are going to explore whether or not it makes sense to buy into this company, that's something that will also factor into the considerations. So, Bachel, why don't you share your thoughts? So I think the real The real story to me is that there is now a real pipeline in the United States for crypto companies to go public. We obviously see a lot of bidders in the circle IPO, and that's been taking those numbers up.

You know, Justin's a real player in the crypto space. If you've been in the space for a long time, you recognize this space on the big posters at the conferences, and everything from Poloniacs to some of his investments in the stable coin space on both the stable coin and exchange side, like he has an ecosystem. It's largely XUS, given the prior stance of the SEC with TRX. But, you know, the reality is like he's got an ecosystem. He's looking to monetize it. He's bringing it to market.

And the U.S. market seems to be open for crypto platforms to go public. And this is one of many. I think everybody's kind of running at the door at the same time. So it'll be an interesting couple of months. And I think Justin's is taking advantage of. of market bidders. Chris, what are your thoughts? We got a lot of thoughts.

So I love the point around regulation. It's gone from an absolute headwind to a tailwind, right? This would have never been possible under Gary Gensler's SEC, not by a long shot, right? So I'm absolutely not surprised for a couple reasons. Justin's son, love him or don't love him. He's always, you know, he's always there wherever the trend is. And right now the trend is, hey, let's go public. Let's do a reverse merger.

Let's offer a pipe and off we go. I mean, this is a top 10 token, Tron, right? Like, obviously this was something he was probably going to do. Why is this so exciting? Because now people, you're essentially abstracting all the operational complexity around crypto. And you can just buy these things that are pretty hot right now. And they take on meme-like properties. Are there some fundamentals?

Yeah, I think so. And you touched on that with the fact that Tron is a major stable coin. distributor. And gosh, doesn't this also fit into this massive theme that we're seeing right now? Kind of like stable coin summers here, guys. But long story short, these public equities, they have a little bit of fundamental value based on the token. And then they catch on those meme-like properties. And when you look at this, it's a top 10 token. A lot of them are doing pretty well. Espet, you know, Ron was talking about it earlier before we started, you know, taking off again. And as they take on meme like properties, they get really, really interesting.

So I think you're going to probably see more of this. I think the thing about as we get into some of these other tokens, you can do some really interesting things because a lot of them have yield, like intrinsic yield because you can stake them. It opens up a whole new type of opportunities. But yeah, not surprised by this one. I think we're at the beginning of the story, not the middle or the end. It'll end eventually.

I think you're going to see consolidation. But who better to launch the Tron, you know, equity, the crypto acquisition company than Justin, right? And who better than Joe Lubin to do it for Eith, right? So I don't think you're going to see a massive proliferation. You need to have that figurehead and he's the right figurehead for Tron. Yeah, I really think that it's interesting how you mentioned the mean-clin concept because I think even with Bitcoin, especially perhaps with the exception of strategy, I mean, all of these are sort of leading into that. a little bit, even though there are some fundamentals that can be tracked.

But I think this one in particular is going to have to rely on it because I know we don't want to get too much into just talking about Justin's reputation, so on and so forth. But it can have real consequences in the U.S. regardless of whether or not the SEC changes its position on him. I mean, for instance, again, when I was reporting the story, and this was news before this, I reported the story. But, I mean, Circle, I believe, does not allow USDC on Tron. There was a pretty public feud between Justin and Coinbase that I think was resolved the last week or the week before when Coinbase delisted WBT when news broke that Justin was getting involved in that project because I guess concerns that he would have access to the underlying Bitcoin. And Justin sued Coinbase to, I believe, try to get a temporary restraining order to prevent the delisting of it. And he, I believe it was last week, pulled back the, or withdrew the suit with prejudice, so we can't bring it up again.

These are, so people, companies, like legitimate institutions that may invest in a Bitcoin Treasury company, a Solano one, even in Ethereum one, so and so forth. I wonder how much investors are going to see those as different qualities than Tron just because of Justin's reputation and some of his high-profile clashes. with blue chip firms, at least here in the United States. Does any push out? Yeah, let me jump in. I'd say historically, it's been interesting with TRX and even BSC tokens.

It was, as a US exchange, you just couldn't list those tokens because you couldn't pay the gas fees because they're considered securities. So there's like a little bit of historical, you know, background on that. It wasn't, I don't, I wouldn't say that anything that any of these exchanges, did, specific to Justin or even Binance, was because they didn't like those ecosystems. I think that there was this historic protocol, like if you couldn't, if the gas was being paid and something that was deemed as security, you couldn't list the thing in the U.S. enabled to change.

So I think that that's like the underlying thing. I would say what happened with Rap Bitcoin at Coinbase, like there's listing procedures and there's a, there's a group there that has to make a decision based on whether or not they think the assets safe to trade. And assets are listed and delisted for many reasons, but I don't think that these exchanges were doing anything nefarious. No, I don't suggest that either. I think other people have. Yeah. Yeah, I mean, it's funny. Although I still have some questions about Coin-based listing Fartcoin. That seems very, very far away from the initial ideas of Bitcoin. But just one other... I'll touch on that for one second. I'll touch on that for one second.

initiative to list essentially be the Amazon of assets, so list everything we could. Now, there are certain coins that you just wouldn't touch, right? And like, if our coin is an interesting one, obviously, like, you know, it's one we can joke about, but the reality is there's real market cap, there's little users. You know, it's like, it's a difficult one. As an exchange, and by the way, like, I believe this needs to be evolution of markets where exchanges have traditionally been like gatekeepers, like, hey, these are the assets we're going to list.

And now we need to move towards like gateways where you're even seeing that at Coinbase where they're now. becoming hybrid C5DFI where they're going to say, hey, we'll list certain assets, but on the defy side, we're going to open it up all base tokens or whatever. I tend to agree. I mean, it's like, it's a meme coin, right? It's, it's, the regulation is clear. It's a commodity. And so if there's demand, why should they be prevented from listing it? It's business. Yeah. And I guess my thought was it wasn't necessarily that, I don't want to cast judgment on them. I just think sometimes my own personal belief is a commentary that I some ways I wish crypto had more real use cases

so that these mean coins perhaps did not have to have this this type of following. Well, one has a real use case, right? I mean, the Tron, well, the Tron Exchange is the premier blockchain for transacting the UST, which is used for international reminces. And USCT is the leading global stable coin, right? So they were talking about that far. top 10 token. So it's, but they, I mean, that's a real use case, by the way. That's competing after a Western Union, which got charging 7% fees. I don't know the economic value exchange between that token and the underlying business of the exchange. Is there actually a value of cruel mechanism that ultimately benefits, you know, that SRM ETF? That's what would be worth digging

into. Apparently, Justin Sons are going to contribute 210 million of the TRON token. into that vehicle. So there's some value there. It'd be worth it to do. But there is a real use case for international remittances. And, you know, it's a clever alternative way to bet on tether, arguably. Right. You know, you don't want to scratch that economic linkage better,

but you can't own tether. I wish I could own tether. The thing is throwing off gobs and gobs of free cash flow. Cantor, I guess Howard Lutnik owns tether. But is this a proxy on that? Yeah. Well, or is plasma? Do you guys see what happened with plasma? Yeah, the billion dollars of TVL deposited to get it on the $50 million raise. 100%. Yeah. So I think that's another tetherback project. That's one to watch. It's a layer one that's looking to be the next big payments chain.

Perhaps going head to head with trial, we'll see. But getting back to your meme coin, Steve, like the point is, is that we didn't have a choice for the last four years. That's the only thing that we were really allowed to trade. were things that were certainly commodities. Memecoins did that. That's why they went to a $140 billion market cap last year. You know, I always talked to people about this. So last year, IPOs, $30 billion in IPOs were raised, traditional IPOs. Memecoin market cap, $140 billion. So it just really shows you that, gosh, what would happen if we actually had regulators back in the time in the day,

would allow us to list things with value, but they didn't. Even ETH was questionable. You know, my point of view, I was the key DRI, the directly responsible individual at Coinbase, to do listings through the kind of run-up of new assets. And we would have this problem of quality. Like, do we want to be the purveyor of what people should trade or not? And the reality is, like, you want to be able to enable every asset you can for the client. Again, there's some quality metrics that we should consider and all the other things. But, like, the reality is that those listing processes are largely broken in a world where you can.

can just like create new assets on an hour by hour basis. And we don't count assets in hundreds anymore. We count them in thousands of millions. So like I think that the trend here and kind of like where things will end up going is leaning into defy to enable the longer tell assets. And these exchanges will have to kind of come off the idea that they have to be the purveyor of what is tradable or not. Yeah.

I was at cracking for a little while and I interacted with the listing team there. And I remember like this was 2019, 2020, me go on and on for weeks about. like listing a particular token or the first time we offered staking for tezzo so it was a big and now like these these announcements just come come in a rush uh i want to move on but but just quickly one last question about the about the crypto treasury companies and i'm curious what you guys think here i mean right now they're all they're all betting on having these continuous premiums so that they can raise money buy more crypto and keep these machines going and i also recognize that it's very early days and some of these premiums are just frankly unsustainable, even if companies

are going to be able to maintain premiums like strategy has. But I wonder if any of you have given a thought to what types of premiums might be appropriate for different assets? Like, is there a natural resting premium for a Bitcoin company versus a Salon company versus an Ethereum one versus TRX? Let me jump in a little bit on this one. So I think it's these vehicles exist because it's hard to get spot. It's hard to get spot. It's hard to get spot. exposure in crypto. If you look at in the United States, there's been like a degree of like regulatory capture with taking dollars and turning them into crypto in the United States. It's really just a few players that allow you to do so whether it's an exchange or a stable coin. And like with the new

regulations you'll see easier ways of getting dollars into the crypto world. You should find more more ways of getting exposure to spot, whether it's Bitcoin Ethereum or Shalana in an easier manner. And like that even goes for derivatives. Like if you're starting to trade an option on an ETII, for trading an option on one of these vehicles, that's also very interesting. So I think as these markets start to mature, those numbers, the premiums will start to come down because it's just easier to get exposure to spot safely. And like, you know, we still live in a world where the exchanges still kind of hold the assets. And that's a big problem in a post-FTX world.

And so we believe that, you know, if there's one big gotcha in a post-FTCS world that we need to fix is that the exchanges should be non-custodial. They should be using qualified custodians to hold the assets. they should be, you know, segregated off and to the side. And that's the future of exchanges. And that's why honestly I left Coinbase to build true markets. Non-custodial is the future. And exposure to spot in the US is extremely hard.

Let's make it easier. No, when you say it's hard, it is hard for big institutions and legacy players and even retail to buy tokens. It's not easy for them. They're not set up. But it's really easy for them to buy equities. And so like, what is the premium to NAB? Where does it settle?

It depends on the underlying asset. And it depends with. folks do with that underlying asset, right? Let's look at ETH. ETH has a yield if you stake it. That yields around 3%. And the problem is that it's almost impossible to get access to that total return product, you know, unless you know what you're doing in crypto. Yeah, you can buy the LST. But guess what? Most of the world doesn't even know what LST is, right? If you go to buy the ETF, you can't get total return. It used to be a regulatory problem. Now it's a risk problem because you have liquidity risk when it comes to unbonding. You need to have day, you have to have daily

liquidity. You don't know how long it's going to take to unbond. So you have to reserve ETH. Sorry, I'm talking fast. But essentially, you'll never be able to, it's very, very hard to get total return unless you have something like an LST or something that you put an ETF on. So it's hard, right? These equity companies have a lot more flexibility, right? They can stake. They don't have that daily liquidity requirement. They can go into defy. Gosh, they could probably even issue bonds and effectively get the cash, stake the ETH, make a premium, and pay it back. There's a lot more flexibility for the issuer, and it's just much more easy for the world to buy. Simple as that. I'll add to Chris's point there. I do think like free cash for yield will start to make

a contribution, where you can compare assets and you have a confidence. like staking and you're seeing variations of Ethereum projects with different levels of creativity or efficiency on the yield they can generate. And as an investor, you're going to look at that. And that's what happens in public equity markets. I don't see why it wouldn't happen here. Obviously, the other driver would be, you know, longer term expectations. But question for you, Vichael, you know, it's interesting because you've ex-coinbase

and I got a decentralized exchange. I was at the Coinbase conference last Friday. It did a much better job I thought than last year. brought in the founder of CO2 instead of Kathy Wood as like the main event. That was a win. And then number two is they launched a credit card that's offering 4% rewards paid in Bitcoin in partnership with American Express to customers. Obviously, that's in part of response to Robin Hood.

So you've seen these exchanges starting to compete for that retail customer and offering these very generous rewards. They're making the bet that they can acquire customers with a lead gen. in order to get the card, you've got to be a customer of the platform. A question for you is like, how do you see differentiation playing out? You pointed out that historically, Coinbase would focus on curation, you know, say no to a lot of the garbage that's out there. And yes, there's a lot of garbage that's out there.

Do you believe that they've got to just kind of open up? What are the prime, what's the primary axis of differentiation for an exchange like Coinbase versus Cracken and then versus on the map custodial side other than the. kind of the obvious fact that it's not custodial. So there's a couple things here, like, number one, let's just lay out the playing field here in the United States. There's really four exchanges that make up 99% of the volume. So there's actually like a very little amount of price competition.

If you look at what you're paying on spot as a retail client and one of these bigger exchanges, you're paying multi-hundred as a base of points just to put on a spot exposure. And that's very expensive, right? So there's lack of competition. There's a couple things that like, I think that, You know, for us, I see a different value proposition.

I see, you know, you want to be faster. It's really hard to, like, even trade some of these D5 protocols. It's hard to take dollars and turn them into something like a Trump token or the next token that gets listed. It's extremely hard. You want to be safer. And the whole non-custodial world is actually where I think even Coinbase would like to go as they lean into Dex's and other things like that. You know, I don't think an exchange should be holding assets directly with. and their confines.

And if they are, it should be a qualified custodian where all the assets are set aside for the client. And I also think that hybridization between the C-Fi world and the defy world, and you're seeing this in many different ways with hyperliquid and a bunch of other businesses out there with the idea of like a matching engine that's working in the cloud, but also like settlement on chain. There's a lot of, if you can hybridize it,

you can get the key benefits of essentialized exchange and get some of the key benefits of trading long-tale assets in defy. So there's a lot happening in this world. And I think we're just seeing an evolution. If you look at what the exchanges look like today, they look very similar to what they look like in 2014. Well, Michelle, I mean, isn't it the case that whoever wins derivatives really wins and that spot ends up going to zero? I mean, that's what we saw in traditional finance. I mean, there's a reason why I spot Nizzi, right?

Yeah. I think that this is not a winner take all world. I think Brian Armstrong thinks that like crypto will take over finance and there's going to be, you know, if there's a Goldman Sachs, there's a city group, there's JP Morgan. There's meant to be many of these entities. They're all kind of trading amongst themselves. They're working as partners. And I do think that, like, we will see a world where it's not, this isn't Facebook, right? This is, this is much more of, this is maybe.

Maybe it's winter take most, though. If you look at the volume distributions in the ETF space, power law distribution, you see that in a lot of markets. Yeah, but you can still build a profitable business. Like, you know, you have Coinbase with, you know, with probably a few thousand employees, you know, and they're building amazing products. I have 10 employees and we have an exchange and app and a bunch of other things and we can run really pretty lean in an AI world where you can just have best engineers, best product guys,

and you can just build something beautiful that's profitable. Again, you don't have to be the biggest exchange. I agree. I mean, the dog is a totally different area of opportunity than custodial. It appeals to different target customer. It's going to have a different value proposition. It's going to appeal the more crypto natives. You know, I just think that on the...

Let me give you a number here that we'll be a number here. throw you off a little bit. So like when when I joined the coin based exchange business, we were 35% of spot and US spot. And US spot was about 25% of global volume. When I, when I left, we were 75% of US spot, but US spot was only 4% of the volume. So like they became 70 and that's why we launched a perpetual futures exchange to be a bigger part of that bigger pie. Now the thing is, you expect the US market to grow. You expect to see again, in the stable coin world and the exchange world, these markets will fragment. So look at the stable coin world. US domiciled US denomel dominated, USC is 99% of that market. That pie will get very big and Stripe, PayPal, all the other players will start to come in, that fragmentation will drive infrastructure. And that's like some of the things that you'll build, you know, stablecoin clearing houses, lending businesses where you can use collateral across many stable coins. Coinbase has done an amazing job of integrating USDC into their platform, but you can't really use PYUSD as a as collateral for perps, right? You can't do that. So I think there's a world where those things all happen.

Let's move on. Chris, do you have a quick thing you want to add? No, it's amazing how it always goes back to stablecoins. And like the distribution, I was looking at circles financials, the amount of money that you can earn. I think we're going to have this massive stable coin arms race where everyone's going to be fighting for distribution. And I think that's going to be a huge opportunity for exchanges as well,

it's capturing that distribution costs. Just a quick follow-up question for you, Chris. And Chris, you identified another highlight from the Coinbase release, which they're getting into the Perps business. For those that, you know, that Perps is the primary vehicle for getting exposure to digital assets kind of globally. And you're an advisor to the CFTC. Do you know Drew's inside and out, given your background in Levin Brothers? How notable a development is that, first off, from just a retail access to perpetual swap? To me, that seems like a big deal. I don't know of any comparable company offered. anything like that. And then second, in terms of what this means for kind of coin based on its prospects.

Yeah, I mean, we have been lagging terribly as an industry when it comes to derivatives in the United States. And really, really, it started with the lack of taxonomy. And so as investors ourselves, it's very difficult to hedge because all you could access was really Bitcoin and Ethereum for anything listed. Perps are the obvious go-to product for crypto. There's been some real challenges around launching them here in the States. Caroline Fam at that conference actually talked about how Bitnomial already has a per product. So it's not like this hasn't happened before. Now, it hasn't happened for scale, clearly. There are some other impediments in the way like I testified in front of Congress. I think the thing about the CFTC, people are like, oh, it's like a more lax regulator. That's not true

at all. They're intense. And they have really prescriptive intermediation requirements. And so, like, I've been pushing for many years to take out that intermediary so that we can actually, like, really have direct access. I think that it's going to take a little bit of assist from guys like Brian Quintenz, who should be in the seat, hopefully the next couple of months, to really ensure and give these folks clarity, direct access, liquidity and scale. The devil's going to be in the details. I'm I want to look at it. And then we'll work closely with the CFTC to see what it takes to really grow that liquidity. This is something that is like so long overdue.

It's coming. It's going to be awesome. I just, I just, I think the devil is going to be in the details a little bit. Yeah. Let me just touch on one, a couple things here. So, you know, I was actually the team that helped lead the farex acquisition, which was a CFTC regulated DCM that launched our original CFTC futures at Coinbase. The PURPS product is coming out of that team. That was my team back in the day.

And I'd say that we always knew that leverage and margin is what like really kind of leads the crypto markets, especially globally. And to try to bring those things to the United States was super important. Right. So I think that what you're seeing there is the teams just knocking down the walls, including the Derbit acquisition was a huge one of those. You know, I'm 15 years an options guy. I ran an options desk at Goldman. That was always on the, on the, on the docket. I would say that like as much as perps are very cool and they're very interesting. I think options are actually what will be the big enabler for retail trading in the United States.

So when you can really trade options in the space, that's when you're going to see the product kind of light up. We need to move on to another topic here. But before we do that, let's take one more pause to hear from the sponsors to make this show possible. Hi, this is Matt Hogan, the chief investment officer for Bitwise asset management. Most of us were taught to diversify our portfolios by holding a mix of stocks and bonds. But the thing we missed, both stocks and bonds are denominated in fiat currency. In this week's CIO memo, I use data to show that the world is waking up to this concentration risk and explain why every portfolio needs to hedge itself with some exposure to Bitcoin, gold, and other hard assets.

To read my memo, go to Bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. So one of the topics that was, I think almost all of us, I guess, most of us were at the Coinbase conference last week, but one of the big topics that came out of the whole Stablecoin discussion was what's going to happen when all of the big banks come into stable coins? I mean, B of A, CEO, Brian Moynihan has already said that his bank's going to do something

when the Genius Act or something along those lines passes. the Wall Street Journal reported that I forget the other companies that they mentioned it, but two big ones are kicking tires on stable coins. It actually just broke a couple of, I think an hour before we started recording, that JPM Morgan may have, I guess, filed something with the SEC to launch their own stable coin, which is interesting to me because they technically already have a sort of stable coin, but it's for, I think, internal transactions, nothing external. And the real debate of question is, what's going to happen to a company like Circle when the big guys

come in that have trillions and trillions of deposits. So I'm curious to see to see what you guys think. From my own experiences at the conference and talking to people, it seems obvious that they could swallow up Tether or circle as big as they seem. But at the same point, these are competitors. And one of the things that I think is beneficial to Tether. Me, Tether, again, I think has sort of de-aristic itself from the U.S. to a certain extent, although I know they're going to try to figure out how to make a work under the Genius Act. But Circle also, they're independent brands. They don't carry water for anyone.

They don't necessarily have to compete. They can try to partner with all these banks. They're not competitors. And when every bank tries to launch their own stable coin at some point because they want to get those profits, I see it as the same type of governance problem that has led to the failings of, like, I would call like tokenized proofs of concept and pilots from all. these different banks trying to create consortiums. I mean, if you guys remember R3 and Hyper Leisure and all those companies, I see almost trying to create stable coins falling victims of the same

challenge as that. So there's two different schools of thought. And when I spoke to people, I got answers on both sides of the spectrum. So I'm curious, Chris, do you want to jump in first? And I'm, I know this JPMorgan News was new and it's not necessarily confirmed yet, but it also makes sense. So what are your initial thoughts? Oh, I think the banks are going to love stable coins. I actually had a big debate at the Coinbase Summit with a couple of very smart people. They took the other side of the trade. It's a pretty amazing product if you're a bank. Somebody gives you capital. You take all the interest and you give them a token back. Citigroup has 200 million accounts. They have distribution already, right? Circle had to pay a billion

dollars to Coinbase last year for their 68 million accounts. This is a huge. going to be a vicious fight. It's going to be like a WWF battle royale. I think the trade of the summer into the fall, like once we hit prime time, everyone's going to come into the space. It's going to be a massive battle. And I think the trade is going to be this, what I call like the yield vampire attack. I take your stable coin, I dump it, I give you mine. Apps are going to issue their own because they're going to want to capture that yield for themselves. I think the banks are going to be very viable. They're going to use that distribution. They already have the the payment rails. I think Tether's made a name for itself. It's achieved critical mass when it

comes to distribution. The banks have it. Walmart's going to go for it. Amazon's going to go for it. In time, you'll see consolidation because their spread's going to go to zero, right? Because you have this fixed cost that everyone's got to pay and then everyone's going to be chipping away at that yield. So you have to scale to win. That's my sense. So let's a follow up to that. And then, Ron, I'm sorry, then I'll go to you. But I'm interested in how you think they're going to try to sort of find the right balance between regular deposits and stable coins because stable coin deposits, stable coin collateral can't be lended out, and that's a bank's business. And how do they do that in a way that they grow the pie

as opposed to cannibalizing one part of the business to potentially grow another? So the operating account is going to be very important. It'll always be important. And I think that they will maintain the operating account. People are going to need operating accounts to move money. They're smart and they will find ways to capture that yield and to drive forward. Look, money market funds didn't destroy banks. They've been around for a very long time. By the way, I think the stable coin regulation that suppresses yield is going to be really good for a lot of these tokenized money market funds. Why not? The line's going to blur. They're really the same thing at the end of the day. But they're smart. They'll figure out how to do it.

That's my sense. Yeah. So the genius that prohibits these stable coins from paying out yield to consumers, which in my mind makes no sense because consumers should be able to obtain some of the value. To your point, the bank is paying on zero and they get cash from the consumer to lend, you know, where they so choose. I agree with 100% of all your thoughts on the hypercompetition that's to come. And these banks have real capability and real reach. City, as you know, has got a vast international payments network. But what's going to drive switching costs, especially at exchanges, if there's no yield to pay to the end consumer. What's going to motivate the behavior change?

Yeah, you know, obviously running a couple of exchanges and the couple of stable coins, I've seen this. You know, the one thing I'd say is, this is a tale of two markets, right? You have the international stable coin market, which is driven by Tether and some of the other exchange, other stable coins out there. And then you have the US domicile stablecoin market,

which is really kind of what we're talking about here, which is 99% USDC. So we're talking about the USTC market, and we expect to see, PayPal has a stable coin already. You see stripes. You see the banks coming out. And so that market is what we're really talking about here first.

And like as an end user, you really, the dollars themselves are commoditized. They're all sitting in bank accounts. They're all dollars, right? It's the wrapper that we're talking about. Okay, well, who's the rapper? What does the rapper look like? Are they paying yield? They're not paying yield.

Who are they paying it to? Are they paying it to the end business? It sounds like they're not paying it to the consumer in this version of the genius. But like the reality is that's just version one and you may never, version two may be very different. And then you look at the exchange level, the exchanges are going to say, hey, I just need exposure to dollars. I need to be able to have clients come in with dollars, whether it's stable or not. And it could be a USC, it could be a PYUSD, it could be dollars themselves.

And they're just going to normalize that layer anyway. So, you know, some of the exchanges in the last couple years internationally would just kind of bundle them together, call it USDA, and then kind of handle it. Now you're seeing us like a stable coin market like true markets where we'll take in PYUSD, we'll take in USDC and we'll kind of help you manage it. And you can settle to either USDC or PYSD. So again, make it a commodity again. So I think that that's where it can all go and what you're going to see is with this fragmentation of the market, you're going to need infrastructure. With that infrastructure, you're going to see clearing systems.

You're going to be settlement systems. You're going to see clearing houses, as I mentioned, lending businesses. All these things will just kind of work. And so back to what we were saying before, we're talking about perps, like what do you, like if you look at Coinbase and you look at USC, I think 12 billion of the, whatever, $50 billion dollars are sitting at Coinbase's wallets using, being used for collateral and things like perps, what if they start allowing you to use PYUSD or some other stable coin, like a city stable coin or JPMorgan's stable?

Things will start to like fragility. It's like checking out and paying with your credit card of choice or buy now pay later. It's going to be more value because they can renegotiate with Spurkle and banks are to present different offers and banks will say here different forms of acceptance and now you have broader reach to more geographies. I'll tell you one place where I think there might be some competition here. If banks are prohibited, or I guess anyone is prohibited under the Genius Act from paying out yield. And from my discussions in the industry, I mean, that's not something that there's appetite for, obviously from the issuers, but also from regulators because that just opens up a whole new can of worms.

I'm curious what they're going to do when it comes to loyalty points and loyalty programs. At some point, customers are, they're going to want something for... Ask for yield. Isn't that reward for yield by another name? It could be, but... You're a meme for cash with a roar point, right? Or, yeah, I guess it could be cash or it could be. It's probably worth more. Coinbase pays yield on stable coin deposits, right?

Like, people are going to find ways to get that yield back. You know who's going to really benefit a little thing called DFI, right? So you end up with, why do you want stable coins? Well, they're pretty awesome at payments. You need them for collateral because you have to pay cash for variation margin for a shall you touched on that. Oh, and by the way, if you're in a developing world, you want it as a store of value. But it's not a store of value because it's an depreciating asset unless you go and you find that yield, which they're going to figure out because you can find it in defy. Well, that's what the

stable coin issuers say. They call it, I think, was like secondary generating mechanisms, like some sort of euphemism. Chris, you brought a great point there, I think, too, yeah, but people are focused on the first order impact of stable coins. We're looking at what's right in front of them today, looking at a circle, a few months from now, the story is really around Defi. And that actually isn't in the conversation. That's a Defi summer 2020 kind of story. How do you think about positioning within Defi? You've seen a proliferation of different Defi protocols emerging,

and then you've got the makers of the world, skies of the world. And these are generating free cash from yield. I can evaluate that putting my CFA hat on. How do you think about positioning that category? Well, first off, you know, look at what Secretary of Treasury Bestness said. We're going from a $250 billion asset class to $2 trillion, like in the near term, right? So that capital is not just going to sit there. It's going places.

I think a whole bunch of different borrow-lend protocols become super interesting. You guys know the names as well as I do. But I think there's going to be other options to go. And by the way, I don't know if you've got. have messed around with any of these AI agents yet. But take a look, commission an AI agent to optimize your yield and watch what happens. Like, this is going to be a huge unlock, not just for, like, I was, is it stable coin summer? Yes. That's going to lead to DFI summer. Heck yeah. And then decentralized AI summer is going to be there too, because the agents are going to go crazy

starting to optimize. Now, that's not going to be day one, but it's a major unlock. You get two trillion dollars coming on chain. I like that. I like the reasoning in the, kind of the causality that makes a lot of sense to me. Yeah, I mean, it does have, it does have to go somewhere. So that, yeah, that makes a lot of sense to me as well. And I'm very curious to just track how much these stable coins are used for, for real payments moving forward and not just getting involved in D5 for, it's still small numbers if you really compare like versus using in collateral and settlement

in both OTC and listed trading, which was the original use cases, right? Payments has always been that like pie in the sky. It does work, but it's not the big mover still, right? It's still small. All right. So we're getting close to an hour here. And I want to move on to the other big story of the week. The Israel-Iran war that's currently ongoing here.

And this is not a political podcast. We're not going to get into much of geopolitical analysis on what's going to happen. But it is having a real impact on markets. The FMC is meeting this week to make another rate decision, although that It seems like any real decisions or actions are going to be pushed, perhaps even into next year. But it's hard to sort of overstate how significant this is. I mean, Israel and Iran danced around each other for years through proxy wars and assassinations, but we're really careful to not break each other.

And then when that threshold was broken a few months ago, like you could even see the political calculus on both of those sides. Like both sides were careful to talk about to target military installations and sort of provide off ramps. And that is not the case right now, even though I know, as, again, we're recording, Iran has seemingly sent word to, I guess, some envoys in the Middle East to talk to Trump to try to get Israel to back off. I don't know what's going to happen there. I mean, Israel seems intent on destroying Iran's nuclear capability, either through just pure

destruction, which they haven't achieved yet based on reports or through some type of regime change. That's the situation where we're at here. And that's not necessarily what I want to talk about. But we have seen some big impacts on the market. I mean, oil has gone up, but it hasn't gone up to, it's gone up, what, like 8, 10%, not 30%. It's receding now. It's received. Yeah. Yeah. I mean, gold surged on Friday, but it's come back down. Bitcoin struggled, but it's sort of come back up. And we're at this status quo. A lot of people listening here. I mean, their investors, they're trying to figure out how to play the markets, either in Tradfi or in crypto. So I'm sure that you've all heard from clients.

What kinds of questions are you being asked right now? What's the, in a not official financial advice point of view, what are you telling them? You know, this is wider in scope and kinetic energy than we saw between April 3rd and April 19th of last year. When's the last time you had a direct conflict between Israel and Iran? That's one. Last year. Last year. Last year, last time you had a direct conflict between Israel and Iran. That's one. Last year, started with Israel bombing Damascus, and then Iran launched some rockets,

and then there was a face-saving de-escalation. April 19th was the bottom of the market. This mini correction and markets rallied ever since. That's one. By the way, two is geopolitical risk, the vast majority of time, want to fade it. Because they don't drive earnings growth.

They don't drive interest rates. They don't drive inflation. Nothing about meta-googles and the videos earnings are going to change due to this conflict. What it changes is risk premium and fear. It does impact oil. There was a refinery that was taken out in Iran. I would say, you know, in terms of this matchup, Iran is getting madhandle. The metaphor is like a basketball NBA athlete, kind of like putting his hand on the head of the other player.

And the other players can't really get a punch in there. I mean, there's some rockets that have gone through the Iron Dome. That's obviously unfortunate. All loss of life is unfortunate. But in terms of their kind of the matchup here, I mean, Israel is dominating the airspace. Like F-35s are running 200 sordy's. And Chris, of course, is from the Navy. You want to get his perspective too on this.

And now it looks like Iran is just kind of crying ungo and just saying, hey, we will enter negotiations when Israel stops bombing us, which is another way of saying, which I don't even what that even means. I don't even what that statement really even means practically. There's not much negative fallout here. Markets are up today. I wouldn't over read into the risk. I wouldn't over read into it.

In fact, again, the resolution of this should be viable. Israel's never had a set of circumstances where all the stars are aligned. They've got a president that said Iran can have a nuclear weapon, number one, number two, Iran is not a timeline where they weren't a pet to get one imminently. Number three, they're doing well and Trump likes winning. He's not seen liability. He's distanced himself from all of this. He said, hey, this isn't us.

We support Israel, but that's not us. We don't want to get involved here. And if you're Netanyahu, he's got all sorts of controversy around him and allegations and investigations, et cetera. He was, he missed October 7th. He's got a folks in his legacy. If you're in Han Yahoo, you're going to consternified. your kinetic energy on this window, because once that window closes, you may not get another

shot again to roll back the clock on Iran's nuclear ambitions. So, but I wouldn't get, I wouldn't get overly concerned around this. I think, and Chris, I'll come to you, but I think the one concern, I mean, Rom, I agree with everything that you said. And actually, one, back to something, I actually used to work for a political risk firm, but I'm actually kind of impressed at sometimes some of the red lines that were crossed, like when the U.S. moved its Israeli embassy from Tel Aviv to Jerusalem, everyone said that was a red line and it ended up not being one. Sometimes we don't have those big manifestations that we thought. But the one real risk here that I could also see having a big impact on inflation in the U.S. and around the world, et cetera, is if Iran,

one big card that they still have to play is if they want to try to shut down or really impact shipping out of the Strait of Hamos, because that, Chris was in the Marines, actually, not the Navy. So sorry, Chris. Oh, I was kind of been both. I'd love to get your perspective, Chris. You're plugged into that world as well. What do you see in out there?

The world's on fire. And I think it's kind of part of the post-COVID hangover. So, like, let's go around the world. You have Russia, Ukraine. You got India, Pakistan. You got Iran, Israel. United States has been trying to pivot to Asia forever, but they can't. They keep getting pulled back into the Middle East and it's really tough.

My personal sense is that the people who benefit most from latest actions are probably the Russians, takes heat off of the Ukrainians, you know, and maybe oil goes up in the process and they're very, very happy. So their acts to keep some issues going on in the Middle East, it's a great distraction from their problems up to the north. You're probably concerned when their air defense systems of Russian supply and Iran have been taken out. And now you have air superiority from these American bill F-35s and makes you rethink how the Ukraine-Russia conflict might have played out. I mean, American technology is dominating. And obviously there is Israeli intelligence in concert.

Yeah, there's one thing that I find a little bit concerning. And that's the hypersonic missiles. I don't know if you guys are tracking this. There's some reported use of hypersonic missiles slipping through the Iron Dome. If those were ever equipped with nuclear weapons, that that would be something that would concern me. So I'm totally on, I agree with you, Rahm. Like, it feels like we're positioning towards de-escalation and stability. When I'm on the, what I'm looking out for is anything that would be a material escalation that would cause a sell-off. The problem we have in crypto is twofold. The first is that sometimes these assets are frontier risk assets and

they're super high, they're hypersensitive to all this stuff. So if you step back, though, I mean, feel very, very bullish. In a way, it's an opportunity because to many, of us, the market feels like a coiled spring. When you step back and you think about the regulatory derisking that we've gone through, the fact that the SEC calls you now and says, hey, guys, let's work together and figure this out. There are so many things that are positive for this market right now. Maybe there's, this is these are buying opportunities. And I agree with China and Russia are telling Iran, don't dare block the spray. China has a lot of trade running through there. Russia has a base there. They need.

access to their ports. Yeah. The other great thing that I haven't heard yet is that it was crypto that caused all this in the first place. The anti-crypto army

somehow involved somewhere, right? At some point it's going to come out that Iran is mining Bitcoin to finance it. But, Michelle, I know you want to jump in here and then we have to start wrapping up. Yeah, just a quick one. So like, you know, Chris said the world's on fire

and Bitcoin's trading about, you know, 100,000. And that should say a lot. You know, we're talking about a bunch of risk assets here. And there's like head torso tail assets and all coins will trade very differently than Bitcoin in the future. I think it's very telling that, you know, it's still kind of trading lockstep to the equity market. It'll be really interesting to see if these things start to decouple. And if Bitcoin starts to trade a little bit differently on the rest of equity market and into gold territory.

I agree with Chris, your opposition, Coiled Spring. That's what I see across markets, including equities. I mean, I would expect rotation for more of the animal spirit. its names and the names that I've run up the most from the April bottom. But I do think within digital assets, like, I do think ETH can really outrun other assets. It's got the short-term momentum. It's got the kind of micro-strategy story coming to it. Also, I'm curious about your thoughts there.

It has 10 years of history. In an institutional bull market, which I think we've been in, that's what they like. And it also has modularization. It's where tokenization tends to thrive. So I feel that that ecosystem, and look, they've made the steps, they've taken the steps necessary within the EF and their leadership to focus on what the market's asking, scale the layer one. And so you kind of have this like very nice, perfect storm coming together for that ecosystem in the midst of this institutional bull market. You know, but that doesn't mean that like, you know, the other folks are sitting around like Salana did some interesting things with the R3 deal, which I thought was fascinating. But maybe we can talk about that another time.

Yeah. Just because we mentioned Ethereum, I'd like to maybe just continue on that a little bit further before we wrap up. I mean, it's been on a bit of a tear lately. Influes and ETFs are surging. I think they're the highest that they've been since February. And a lot of the right things that are coming out of the EF and they seem to be getting their act back together. from my reporting on them, and we've all been in the space for years and years at this point, too. I mean, Ethereum has a couple of qualities that are not easily replicated by virtually anybody. It's very secure, entirely decentralized, and that's what people with real money like to say. How does it get the demand back, though? All that makes sense for me?

Momentum creates its own demand. It's eyeballs, it's product usage. I mean, like, Solana won it because of, you know, leveraging things like pumped up fun and all the other things that are happening in the meme coin world. And even just Trump, like, launching his token on Solana brought a lot of people to Solana for the first time. Like, that's like if you're, you know, we're Salana first. We launched on Salana for trading. You know, we looked at Ethereum. We looked at EVM.

We looked at Basin. Like the reality is like, if you're going to launch somewhere first, it's got to be Solana in today's world. And that used to be Ethereum a couple of years ago. Yeah, but Solana is called itself the decentralized NASDAQ. Of course, that makes sense for an application like you, Vishal, right? Like, that's the whole point of the monolithic chain. It's speed, TPS, and it does it really well. So it makes total sense.

It wasn't that. It wasn't like we're not leveraging it like on some high throughput low latency. We're not putting an order book on it. It's because of the assets. It's because of Trump token. It's because of all the other. It's interesting that too, but momentum combined with high short interest is a powerful combination. You had that in Coinbase, the 23, you had that in Carvana, 2023.

You're shorting means future demand. You have all these stocks long as being in Despex. That's creating another kind of bid. So one less thing I want to touch on, and then I'm going to kind of go around and give you all the chance to provide final thoughts. This is a big week from a regulatory perspective in D.C. And I know none of your lawyers, but I'm interested because of your associated angles in the business. how you're thinking about it. I mean, for one, we ever spend a bunch of time talking about stable coins, but the Genius Act is going to a full or final Senate vote tomorrow, which is

widely expected to pass and then it needs to go to the House, so on and so forth. One of our reporters broke the news on Friday that a hard-fought compromise between Democrats and Republicans in the House related to the Clarity Act, looking at market structure, was rejected by the White House because it would put handcuffs on Trump and his family's ability to profit from crypto. There are some real concerns now that that could, the stable coin bill seems likely to pass by August, but there's real concern that that could, if nothing else, delay market structure for a while if some sort of compromise there can't. I'm interested if any of you have thoughts on that, but in particular, how are you

approaching it from a fund management point of view, an exchange point of view. How would it, how would it change your business, your outlook in the short term and long term, if we don't get this market structure bill in short order, but there still is a friendly SEC? Yeah, I mean, I can see on the exchange side. I mean, the reality is we know what the exchanges should look like and these will eventually end up being like SROs to self-regulatory orgs to some degree at some point. So the idea that you're building for the future, you're going to have to separate out execution and custody, do all the things you have to do, you know, almost act like a securities exchange to a degree and make sure that you have the right trade rules and just do the right things over and over again. And then you should be setting the rules for what the ideal situation should be. And that's what we're trying to do.

You know, this is not my first rodeo. This is somehow my fifth crypto exchange. I helped run Polonex, Coinbase spot, CoinBist, Deribs, Coinbase International Exchange is now true markets. And we know what a market looks like. We know how to do this well. And we are just building what we think the regulation should be. And kind of I was in Capitol Hill last week, like saying all the things. Like, I'm an operator.

We know how this is supposed to work. And we're going to teach you guys how markets and exchanges should work in the crypto. I agree. I think clarity is going to be harder because it's not just right now in our country, we have securities and we have commodities. And when you figure out where these digital assets end up, someone stands to win and someone stands to lose. And so when the Ag Committee and the Financial Services Committee, you know, they're acts to control as much as possible. So it's just a much more complex political process. That said, I think we're entering into a brand new regime where you have Atkins and Brian Quintens.

These are guys who get along. They've talked about each other publicly. And it starts there with that relationship. What I'm looking for are two things. First is taxonomy. What's a commodity? What's a security? Right.

Give me that. And there's well-troddened rules. on how we can operate with those two things in mind, right? And I think the commission, the chairs can work together to help provide that clarity. We'll establish precedent. Maybe it gets tested in the courts, hopefully not. But that's the first thing is taxonomy. Second thing is enforcement when it comes to fraud manipulation and abuse, right?

They're fully empowered to have that power today. The CFTC has full authority to go after fraud manipulation and abuse, as does the SEC. So once those lanes are defined, they need to do their jobs. So that's what I'm hoping for. Will we accomplish that at the agency level in the absence of law? I think so. And I think the next few years could be very, very exciting. That's one area that I'm most interested in because, I mean, I certainly, I'm getting a feeling of sort of invincibility from the crypto space right now when it comes to things coming out of DC, whether or not we get Clarity Act.

I mean, one data point that I'm looking at pretty closely now is the decision by Yuga Labs to essentially a proposal from Yulal Labs to convert Apedal back into just a for-profit company. It almost created the impression to me that they don't have to kind of go through the decentralization theater of the foundation model. And I know we can have a whole discussion about the validity and utility of a foundation model versus maybe some sort of public benefit corporation. versus a regular corporation. But at this point, I feel like outside of just straight up crime, fraud, that DC, for the most part, wants to let crypto breathe and innovate while they work on creating this legislation. But what I don't want to have happen, and what I fear is going to happen is one or two bad

actors are going to take advantage of that, like it's happened in the past. And that's when retail is going to get hurt. I mean, it's important to have the right types of disclosures. It's important for there to be something. security and custody standards for exchanges, all the things that we take for granted in traditional finance that are not uniform today, despite the best intentions of the good companies in the space and regulators like Brian and Paul, who I think we all know and respect as people and also their qualifications. That's the real risk I see from us not getting that legislation passed

in due course. But, Ron, why don't you go ahead? Right, I agree with kind of everyone's comments here. The Shaw was hinting at that with segregation of duties concepts and, you know, the need for transparency. Hey, blockchain provides transparency. I'm not too worried about a lack of clarity. Like consider the significant non-consensus rally digital assets had in 23 when Grayscale was litigating the SEC. When the SEC was taking Coinbase to court, when you had Elizabeth Warren championing this anti-crypto army, it was a wall. a worry kind of rally. And now fast forward to December of last year when Paul Atkins was nominated,

risk acid sold off. You had three headlines, risk assets sold off because you had clarity. Market opportunities are actually more significant when there's a high degree of lack of clarity. It's really the change in direction. When you're going from clarity to lack of clarity, asset prices sell off. When you go from lack of clarity to clarity, asset prices rise. When you have complete clarity, then it's hard to dream big anymore because you are at the top of the mountain. So I'm not really worried about a battle or people looking to get wins on legislation. I think that's actually healthy. Okay.

So we're just about a time. So what I'd like to do is just go around to everybody. Give you an opportunity to share any final thoughts. Or one thing I always enjoy is hearing any sort of contrarian. opinions that you may have about the markets that our listeners and viewers would like to share. Vishal, why don't you go first? Yeah, I would say in the U.S. markets, you have two really interesting markets here. You have the exchange market and you have the stable coin market.

In the stable coin market, it's 99% U.S.DC and the exchange market is 75% coin base. And I think those pie pieces, those pies are going to grow very big, especially in a post, you know, in a regulatory clarity world. You know, where the US spot used to be like, you know, it's probably four or five percent right now. It'll be 15, 25 percent of the market again. Those markets are going to change. And I can't wait to see the stripes and the PayPal's and the banks really come in and create this fragmentation. And then we should be all building into that.

So I'm really excited about that. Chris. Yeah, look, if the treasury is right and $2 trillion of bare assets are coming on chain, the thing that worries me is not regulation anymore. That risk is gone. It's really hacking. cyber risk and operational risk. That's going to be the thing that we need to really focus on because we have, I mean, $2 trillion coming on chain. The North Koreans are everywhere.

So I look forward to having discussions around how to solve for it. I personally think the answer is actually in our Constitution. And what does that mean? Privateering. Privatering needs to get, needs to come back after 200 years and we need to empower the private sector to help defend our entrepreneurs. That's my take. You're privateering and entrepreneurship and that sounds fantastic too. Look, short term, I think this week, things are looking very constructive. I think institutions are off-size. They have PTSD from tariffs.

Hedge funds net exposure are too low and the benchmarks running higher. So they're going to get forced to chase and that creates a bid. I think retail investors got ahead of them. That's one. Number two is earnings growth has been strong, 11% year over year. analysts took down estimates quite a bit in the April correction. They have to now catch up, lift those higher. So even though evaluations have moved up, there's still more room to go.

I do expect we'll get breadth expansion to cyclical parts. You see that in financials, consumer discretionary. Retailers have priced in some of them close to recession or high levels of tariffs. Cruise lines similarly, and there's a lot of opportunity out there. And I think that's true in digital assets. All these markets are connected. That's what I'm trying to trace them all out. I think one year out risk assets will be higher also.

It's just a very constructive picture. I don't see the 10-year blowing out on the deficit concerns. Productivity growth is solid. You probably get a labor market spook sometime in the summer. It seems to happen every summer. But I would look through that also. I wouldn't be too concerned. Like these markets climb up a little worry.

I'm not seeing things that derail earnings growth. Maybe you get a whiff of inflation over the summer. That would be a viable opportunity going into Q4. Okay. All right. Well, great. Well, Vishal and Chris, thank you for joining bits and bibs for the first time. Rom. Always good to see you. Thank you, everybody, for listening and watching. We'll be back in one week to discuss how the worlds of crypto and macro collide. Until then, have a good week, everybody.