Unchained - Bits + Bips: Why XRP Might Have Been The ‘Most Hated’ Rally Ever - Ep. 744

Episode Date: December 4, 2024

In this episode of Bits + Bips, hosts James Seyffart, Noelle Acheson, and Ram Ahluwalia are joined by Alex Thorn, head of research at Galaxy Digital, to discuss the surprising mainstream buzz around XRP’s latest rally, dubbed the “most hated rally in crypto.”  They also analyze the new Treasury Secretary’s ambitious economic plan and what it could mean for inflation, fiscal discipline, and market stability. Meanwhile, Ethereum struggles to reclaim its narrative as the go-to blockchain, even as its ETH/BTC ratio shows signs of life. And in a moment that captures the personal side of crypto’s rise, the team reflects on Thanksgiving table conversations, where bitcoin and digital assets became unexpected stars.  Show highlights: Why the newly appointed Treasury Secretary might be the right person for the job Whether the December rates cut is unnecessary How Marc Andreessen brought Operation Chokepoint 2.0 to the spotlight How Facebook’s project Libra would have benefited the US Dollar hegemony Whether the U.S. Congress will pass stablecoin legislation in 2025 Why Ram believes Ryan Selkis would be a good Crypto Czar How people have been asking more about bitcoin during Thanksgiving Whether the XRP rally is a negative indicator What James thinks about the filings for news ETFs, such as WisdomTree’s XRP Why Alex thinks that ETH could continue its recent rally The impact of MicroStrategy being added to the Nasdaq-100, aka the QQQ ETF Hosts: James Seyffart, Research Analyst at Bloomberg Intelligence Ram Ahluwalia, CFA, CEO and Founder of Lumida Noelle Acheson, Author of the “Crypto Is Macro Now” Newsletter  Guest: Alex Thorn, Head of Firmwide Research at Galaxy Digital Links Politics Unchained:  Trump Taps Hedge Fund Manager Scott Bessent to Be Treasury Secretary The Trump-Connected Brad Bondi Is A New SEC Chair Contender and Pro-Crypto Investing: How Scott Bessent Plans to Reshape the US Economy with His 3-3-3 Rule Macro Investing: US manufacturing improves in November as orders rebound, input price gains slow Operation Chokepoint 2.0 Forbes: How ‘Debanking’ Tech And Crypto Companies Could Kill Businesses Marc Andreessen and the CFPB: Debunking the Debanking Debunkers by Nic Carter Unchained: Regulators Are Limiting Banks Serving Crypto Clients. Does That Violate the Law?  Unchained: Killed By Politics, Ex-Diem Boss Says of Meta’s Stablecoin XRP Unchained:  XRP Becomes the Top Traded Token on Binance and Coinbase, Hits Almost 7-Year High XRP Rallies 70% in a Week to Top Solana, Tether Market Cap The Block: WisdomTree files with SEC for spot XRP ETF Ethereum Unchained: Ether Gains 19% Against Bitcoin in a Week After Months of Underperformance  Timestamps: 00:00 Intro 02:15 Why the new Treasury Secretary could reshape the economy 06:28 Is a December rate cut unnecessary? 15:18 How Marc Andreessen spotlighted Operation Chokepoint 2.0 19:54 The missed opportunity of Facebook’s Libra for USD dominance 26:48 Will stablecoin legislation finally pass in 2025? 31:28 Why Ram thinks Ryan Selkis should be the “Crypto Czar” 34:45 Bitcoin conversations taking over Thanksgiving dinner 39:48 Is the XRP rally a red flag for the market? 48:15 James’s take on new ETF filings like WisdomTree’s XRP 55:48 Why Alex believes ETH could extend its recent gains 1:01:37 What MicroStrategy’s NASDAQ addition means for crypto Learn more about your ad choices. Visit megaphone.fm/adchoices

I would say the level of inbound I'm getting around digital assets has never been higher. And it's from a new layer of parties that have previously not engaged with me personally on that topic. Hi, everyone. Welcome to Bits and Bips, exploring how crypto and macro collide one basis point at a time. I'm your host, James Safer, Tadfai Archmaister, Lord of Bloomberg's End. Today, it's just me from the original crew. But before we begin, we have some exciting news. Our team's growing. We're thrilled to welcome two new amazing co-hosts. They've been on the show before, Noel Atchison, author of Crypto is Macro Now newsletter,

and Ram Al-Alualia, founder and CEO of investment firm Lumida. We had the both of those guests in the past, as I said, and we all thought their expertise and insights would make bits and bibs even better for diving to the worlds of crypto and macro. And there's more. We're moving to a weekly format, which is part of the reason why we're adding some more hosts. So with so much happening, the markets, the bull market that we're in, we hope our new schedule helps to stay ahead of the news and hear from us more often.

Just remember that nothing we say here is investment advice. Please check unchain crypto.com slash bips and bips for more disclosures. And today we're also joined by Alex Thorne, the Bitcoin Viking of House Galaxy. Alex, before we get in, why don't you give us a little background in how you're relevant to our conversation today. Yeah. Hey, James. Hey, everyone.

Super happy to be here. I've been a fan of the show. How long has it been running now? Like six months, it feels like maybe longer. Time goes quick. Yeah, it does. It does go quick. We're still not organized, but it's okay.

Well, I mean, I'm, I know all three of you pretty well, and I'm very happy to be here with you guys. I'm head of research at Galaxy and spent 12 years at Fidelity Investments before I joined Galaxy in 2021. So thank you for having me. Happy to be here. Yeah, great. Nice sweatshirt.

Shout out Pub Key. I'll be there tomorrow, ironically enough. All right. Let's get into it. I mean, the first things we'll talk about are like the whatever you want. It's actually all the stuff on mainstream media and mainstream financials right now. Trump and his nominations and what's gone in the macro world. So basically, what is your views on what has happened in the world of Trump and what he's

going to do in the administration? Are the reasons believed that Trump's fiscal agenda won't be as aggressive as we initially thought? What do you think about yields? What's going on rates? I'll go over to you first, Noel. What are your thoughts on him choosing Besson to be his treasury secretary? Do you have any complex thoughts here? I confess I wasn't very up on my Bessent lore when the choice was made, but I'd done some

digging since then. And the market seems to like it. But let's face it, that is what matters. Bond traders seem to be treading gently into the vigilante territory, not exactly, but making their feelings known and they seem to like this, which is very good news for not just the bond market, but pretty much all markets. Obviously, Bessent has a hell of a job in front of him, especially when Trump is now threatening 100% tariffs on anyone that makes us.

slight little move away from the dollar. So it's going to be a challenging time, and he sounds like the right man for the job. Let's hope he lasts. I'd echo that. I think Besson is maybe one of the most impressive Treasury Secretary's we've seen in 15 or 20 years. Like Noel, I did some homework after he was nominated. I was looking at his writing in the stock process. And the intellectual caliber of this individual is off the charts.

He's not like a former Goldman Sachs executive who's a manager operator. He understands how markets works. He understands the economy. And he's focused on keeping the price of oil down, increasing U.S. production. That helps markets, keeps inflation at bay. He's also focused on a growth agenda that ties into Trump's policies around deregulation. He understands the role of tariffs. And he's actually not like a tariff hawk.

He's soft around that. He's actually more conventional in that sense, which I think was. good and markets wanted to see that. So we may be seeing a preview of Trump's strategy around tariffs, which is using tariffs for negotiation, as opposed to kind of like core policy. I thought it was a very impressive selection, and it speaks well about, I think you can have a growth in the years ahead. Alex, you have any complex thoughts on Besson? I mean, real quick, I'll just say his whole 3-33-3 deal, you know, cut the budget deficit, 3% of GDP, push GDP growth, over 3%, increase the production of oil by 3 million barrels. I don't know if he's going to be able

to hit any one of those, but I mean, if that's what he wants to do, it's be interesting to watch. I will say, I'm also kind of, I tend to be more biased towards people who actually operated in the market versus the academics. I don't know if that's because, you know, I'm used to being in the market, like talking to people in the markets, and I just, I don't know, it's just my personal inclination. So I'm genuinely happy to see that he was named. Alex, any thoughts? Yeah, I agree with that point, James and also what Noelle and Rom said. But I, you know, I think one important thing to remember also is the market expecting not a lot of fiscal tightening or debt reduction out of Trump's administration. That's been the anticipation for months, right? I mean, we've thought of the tariff agenda is probably inflationary and no president has reduced, you know, the deficit and thus the debt in decades. So I would say, I think, It's starting to look like there's a higher chance that there is some deficit reduction or debt reduction. I don't think it's likely yet, but I think a pick like Besson is a very shrewd and good pick that makes it more likely that maybe there is going to be some belt tightening.

And at least it's being talked about. When's the last time we heard it actually be talked about with a possibility of something being done? I mean, it's obviously a lot of it comes down to world events, which are not cooperating at the moment. But it is, as you say, Alex, it's finally on the table. And doesn't this feel very different to 2016? These do feel like grown-up choices. These do feel like there's a path that will be followed. It feels a lot more organized and well thought out.

Well, I mean, some of them do. I mean, other ones are just solely picked, I feel like, because they are very loyal to Trump and he's going to be able to get across whatever he wants. He wants people that aren't going to push. back on him, though. I don't know if Besson in my mind, I feel like he probably would be one to push back on it, but I guess time will tell on that front. Let's move on to rates, macro, any sort of economic data, non-farm payrolls, PCE, inflation. Let's just talk about rates right now real quick, and I'll just say what we're looking at. Right now, markets are essentially pricing for cut in December. So December 18th is the next meeting, we're at like a 76% chance of them cutting. So this is what it looks like now.

For a while, it was actually way lower than that. But no matter how you slaced it for the last few weeks, the market has been pricing that there's likely to only be one cut between December and January. Still seems to be what the market is pricing at this point. There's been some comments out of different people here. I mean, noel, me and Noel was just talking about some of the quotes that came out from different Fed officials. But yeah, it's looking like we're probably going to get one cut between December and January at some point. And then there should be some sort of pause in the coming days because inflation isn't

really continuing to go down in the way I think a lot of people expected them to. Yeah, we saw that with the PCE, which was definitely showing some stickiness. And there's really not much signs, especially with long-term yields, keeping mortgage rates high, that that's going to change any time soon. The last mile was always going to be the hardest to deliver. but it really is proving harder, harder to deliver. The probability jumped 10 basis points just a couple of hours ago, which is kind of amazing on the back of Waller's comments.

He was giving a speech today at a conference and the part that James was referring to that I was reading out earlier because I thought it was absolutely brilliant. I've never heard this in a Fed official speech before. He says, and I can't do the accent, and I'm really sorry about that because it would be better. Here we go. He says, overall, I feel like an MMA fighter

who keeps getting inflation. in a chokehold, waiting for it to tap out, and yet it keeps slipping out of my grasp in the last minute. But let me assure you that submission is inevitable. Inflation isn't getting out of the octagon. I thought that was so cool. Look, if Trump was listening to that, and he referenced World Wrestling, he'd be the next that chair. He's now qualified to replace Jerome and is like, that guy knows how to read the route, right?

They're picking up the Trump vives. It's a good point. That's the audition, right? That's the audition, right? That's the audition. That's the audition. Look, this is the rate cut that no one needed, but we'll get because the Fed's precommitted because of Ford guidance. And I, you know, backstaged earlier.

And earlier in his written draft trip says, look, as you pointed out, like it doesn't look like inflation's beat, but I think we're going to cut anyway. There's really no need for that. And you're seeing the Fed set the groundwork for the next. inflation cycle. That's my view. Yeah, you have to be concerned. If you look at that the like the 1970s, right, like if you compare to the the Volcker era chart, I don't know if you've seen this people. I mean, you have to adjust the axes a little bit to make them line up right. But like there is a serious risk of reinflation in general, particularly with

the unknown, you know, Trump, new Trump administration policies, what what they could do. if you look at that the Volker era of inflation and cutting, it makes you frightened. So I'm sort of in the, I guess it would make me in the hawkish camp here of like there's not,

I don't see a huge need to cut necessarily. Like everything seems to be doing okay. You know, except for the national debt, which of course can't bear these rates for that long. Yeah, there need two data points to add to that. One, the Atlanta Fed in their GDP NAMP model yanked up expectations for GDP growth for Q4 to 3.2% from 2.7%. The economy is doing just fine, and there's no sign that the rates at this level are restrictive at all. And the second data point comes from a survey that was released, I think, a few days ago, from absolute strategy research.

They surveyed an asset allocators. 60% answered that they expect inflation to be higher 12 months. from now, almost 60%, so as you say, Alex, inflation expectations are not gone and they matter for how inflation actually unfolds. And the Fed knows this. Yeah, it's going to be interesting. You know, it looks like Kevin Warsh might be the next Fed chair. We'll see the path to that happening. But if that's the case, Kevin Warsh would eliminate forward guidance, which is what put the Fed in a box here. So, yeah, it's going to be quite an interesting year ahead. The Fed just has to not screw it up and they're making a mistake by cutting rates into the Goldilocks.

You know, we're going to have Black Friday sales data is coming out. It's strong. Consumers are spending. And they just change the behavior. They wait. Americans like a good deal. They go shopping on Black Friday. I think I do like two thirds of my retail spent on Black Friday, this three weekend, set it up for holiday.

It's part of the game. It's part of the behavior. It's part of the culture. And I think tomorrow we'll see data showing Cyber Monday was yet another record sales. I'll push back a little bit on the accommodated versus restrictive stuff because I do think like rates are still really high compared to where inflation is. And I'm not saying we're not saying we're seeing signs of it causing tightening in the in market, but I mean, 25 bips.

I can't imagine that's going to like, you know, theoretically, I guess it maybe could be the straw that broke the camel's back and we end up seeing a reignition of inflation. But I don't think that's a real concern. I think they're going to do 25 and then there's plenty of bandwidth for them to pause and wait however long it takes to see what's going on with these other numbers. So I'm, I kind of get it. And I'm with you, Ron. They said they kind of hinted they were going to do it. And you can't like give all this forward guidance to the market and everyone starts pricing a bunch of stuff in. And you should really refrain from like completely changing your direction

in my mind for things when you absolutely have to, like when they went twice in September. That just made sense, right? To me, at least. Check out this charge thrown on the screen there. Yeah, this shows it's one of the different measures of measuring inflation. Sticky price, consumer price index, less food and energy. So this includes a basket where the price level changes less frequently. And you can see that, you know, we're at still 3.9%. We still have a ways to go. And the rate in decline is lessening.

And that doesn't take into account the effect of tariffs. Well, tariffs is a whole. Do we want to get the topic of debating tariffs, informationary, We have no idea what's going to happen there, but it does look like tariffs are going up, whatever. Yes, there's some level of tariffs coming to markets. I don't know if there's a polymarket market on that, but it should be in the high 90s. The trick then is to only focus on services inflation. Forget about goods inflation, right?

Yeah. Do you have anything to add on this before we move? No, I think you're right, James overall, too. that like there's not it's not that there's a writ like a high risk of reinflation right now like things look pretty decent and i and i think you guys are right like if you're with the fed guiding right what would be the surprise probably not cutting in december would be the surprise and they don't want to surprise markets there's plenty of i think room to do this cut it's just um it's a real i think it's a real fear though like especially with the unknowns of trump so i i wouldn't expect

i mean i would guess at the next meeting after that there's a pause unless some kind of crazy data comes out in general. And really, like, they should just be keeping it slow. Like, I'm thinking back to the most of my adult life when rates were near zero. And there's very few tools in the policy kit for the, you know, central bank when the rates are zero or near zero, right? You can't cut. I mean, we're not in Europe.

You can't cut to negative rates, right? Like, there's, so I like keeping those arrows in the quiver until they're really needed. And really, to me, it's more just about, like, how much can the fiscal situation. afford to pay these this this interest on the debt at these elevated levels i i don't know how long i know the answer is not forever so like i'm looking for it to come down but and you know it doesn't feel like and and you know rom and noel have presented some of the data like we're not really there on inflation yet it's certainly not as bad as it was um but you know the difference between three plus percent annualized and two percent annualized is significant that's a significant that's a

significant difference, right? So to actually get to a policy outcome where they, as far as I can tell, 2% is still the target, like, there's still a ways off. I think that's it for macro. We can move on. Let's get into a much spicier, more fun topic here. I mean, if you listen to any podcast or anything around in the crypto space where we are playing here, everyone has talked about Operation Showpoint 2.0. Specifically, I would say that was coined by Nick Carter. He's the one that was really pushing this. He did a lot of the research here. But recently, Mark Andresen of Andreessen Horowitz, a billionaire investor, went on Joe Rogan and basically just blew the lid off of this. And Joe Rogan's audience is so massive, way bigger.

Anyone in crypto has known this has been going on, knows people have been deep bank. No people have been losing access to the different variations of capital markets, the banking system. but now all of a sudden this has blown up. You have a bunch of congressmen now commenting on this saying they're going to investigate it. I will say he did get something wrong. He kind of made it seem like it was the CFPB that was doing this, which like in my, for what I know, like I've never heard the CFPB being involved in debanking people.

And if you look at it, they're kind of like doing the opposite. Like it was really more like FDIC, the Fed, the OCC, all these different other federal agencies. Ironically enough, many of them had like some sort of tie back to the Elizabeth Warrens of the world, literally Elizabeth Warren. So there's a whole bunch of stuff to go on there, but this actually seems to have finally caught the interest of politicians and mainstream media now. You guys have any major thoughts on what was said and what's going on? Noel, you want to go first?

I'll bring the European vantage point. Over here, it's somewhat, I mean, obviously, it's fantastic that this is coming out. It's fantastic that it looks like there's momentum to get to, one, accountability, you know, whose idea was this and who should be held responsible. and two, let's make sure this never happens again. In Europe, we have a slightly different situation, especially the UK, where it's not crypto. That has been the target of financial censorship. It's anyone who is at risk of touching anything remotely to do with money laundering. And I think that speaks to the bigger issue.

If you are a person that could, even through your job, perhaps, one day be exposed to a bribe, then you get debanked. If politicians debanked because of their political views and this is actually documented. So it's not anti-crypto, it's anti-any-one that just might rock the boat in any way, shape, or form, which is as shocking, really. And it comes down to the ridiculous suppression, the oppressive anti-money laundering rules, which are imposed by faceless, unaccountable organizations. So I think the choke point 2.0, tip of the iceberg, really, a global approach to money laundering needs to be re-examined. Yeah, I'll add to that. Look, there's another.

by David Marcus, who was the executive at Meta that was trying to create Libra and then DM. And he had a tweet this weekend talking about how Jerome Powell under pressure from Treasury Secretary Yellen said she would not quote unquote back him. Even though the program was compliant, he shared a letter from the regulator. Also, Senator Sheridan, who was the end of the Senate Banking Committee at the time, lost the election, by the way, due to a big crypto push there, which was successful, was also pressuring banks not to participate. The message was, like, we can't stop you,

but you will have additional scrutiny. No banks want scrutiny. You know, my former life before Lumida, I was the executive head of the crypto business like Cross River. So we were a part of the DM program. And then one week, it just stopped. And that, this telling is what happened. Like, no bank wanted to be a part of something

that's going to require or having to live through consent orders, consent orders or matters require attention. These are very debilitating for banks. You know, bank has a board, they get together once a month, meet for the entire day. The bulk of the focus is on compliance. You need new product approval, new product approval, including from your regulators. And meanwhile, you're negotiating with your regulator in other matters, like, are you compliant with the Compilien Investment Act? There's tradeoffs everywhere. And the regulars have a lot of power, banks are quasi public institutions. Our Vikram Pundit lost his job as CEO of Citibank, in part due to their failure to pass

the C-car stress test. So, you know, he was made an example of. So the board kind of postponed enough for their other considerations around that. But, you know, it's very serious when the regulator says, hey, you can go do that, but we don't want you to do that. And that's not a rule of law. That's not clear rules of the road. The other part about, you know, the Libra story is that it would have advanced.

US dollar hegemony, by the way. It was actually a way to put Libra on Facebook and on meta in the same way that Tencent and WhatsApp have their native currency through social media app. People exchange money through red envelopes. They live their lives on these social media apps and they engage in e-commerce and that is the future. China's actually head from a digital banking perspective, although it's centralized. And so meta, meta exceeded to every single regulatory request, including an element

that weren't even the ethos of crypto where Libra started, meaning they weren't while unhosted ballots and so forth. So it's great to see this come out. And it's like Return of the Jedi. So I'm glad to see you get the exposure that's out there. Yeah, it was great. And amazing and awesome to see David Marcus provide some real clarity on what exactly happened, at least in their mind to Libra.

You know, I think this has always been tricky because with Libra, I'm sticking with Libra for one second because I thought that was super interesting and new, basically new information about the players who specifically wanted it killed. You know, Libra like, in some ways, like stablecoins is threatening to banks in a variety of ways, but in particular, it would have had deposits, customer deposits, going to the stable coin issuer and left the liabilities at the bank, which create a credit crisis for banks. It's the similar reason why I think long term there's not likely to be a future for stable coins outside of the banking system. It's why stable coins, even though for the most part, they're,

you know, pretty effective and bland and boring and mostly working are such a high priority for legislators and policymakers in the U.S. because the separation of the liability and the deposit is threatening to the current banking system. So I think there was a lot. I mean, it was almost going to look like the IMF's SDR, right, sort of a supranational currency. The initial proposals, you might recall were a basket of a variety of currencies. I forget probably the Euro, the USD, maybe JPI, I can't actually remember what they all were. Yeah, that was Libra before DM, which was going to be, I think, just dollar back. So that was tricky. I think for Operation Choke Point, this is actually pretty hard to draw a line saying,

well, I can't force a bank to take on any customer that I want, but I also can't, I want to prohibit them from refusing or debanking people for XYZ reason. Like, that's actually a pretty tricky line to thread. It shouldn't be that hard as long as you, what makes it harder is when the regulators, particularly the Fed OCC and FDIC, blanket discourage people from working with entire industries. And that's what they did. There was a January 3rd, 20203 joint letter from the Fed, FDIC, and OCC. The Fed followed it up with the letter on that same month, January 27th, extending their guidance into state member banks, in my view, overstepping their regulatory authority. on paper explicitly warning banks not to get near crypto while actually saying that's not what

they were doing. But of course, they were doing it behind the scenes. Regulators were telling examiners were going into these banks and saying, whoa, whoa, whoa, like you shouldn't be dealing doing business with this company. That doesn't even talk about, and by the way, not just crypto. The other thing I think Mark Andreessen got wrong is he said it was like 30 banks, 30 companies that were debanked. I think he means his own portfolio companies.

It was hundreds. And it wasn't just in crypto. Also, fintech companies have been facing. Yeah, fintech companies have been facing significant scrutiny also. So we definitely need some kind of fair access rule reinstated or something to prevent, you know, it can't be like every four years or change in administration. Like everybody has to wonder if they get a bank account. Also, Caitlin Long, we're at Custodia Bank.

They're denied access to Fedmaster account. Das story has yet to be told. You know, there's a litigation there. You know, Caitlin will tell that at some point. Also, we're going to learn about the backstory. with Silvergate and signature banks. So Silvergate was going to be the stable coin issuer, and they received approval from the Fed to acquire DM's technology.

You can't do M&A at a bank unless the regulator, specifically the Federal Reserve, approves you to do that. So they have to prove the business plan, and the bank must be in good standing. So we're going to learn what happened there. They have not told their story yet. I know they want to tell their story. Massive rugpool, and most important,

get rules in place that at least people are told why they're denied. of the most pernicious things is not being able to get a bank account without any reason. And that makes it harder for you to get a bank account. And these days, while indeed there are alternatives, you can't pay taxes if you don't have a bank account. Yeah. And I'm sure there's people out there listening to this. I mean, I know there's thousands to thousands of people to listen to this. There's probably people out there like, this is being over exaggerated. And if you're not in the space, like I can tell you, I know multiple people personally who have been, have lost bank accounts, have had their bank access revoked. I know multiple people who have talked to

about this stuff and seen it in the back end firsthand that these examiners and bank regulators basically told them you can't have more. I don't remember the numbers 10% or 15%, but like a certain number of your deposits can't be related to crypto. And like that was never put in writing because they learned from Operation Chokepoint 1.0, just don't put this stuff in writing. And Trump put an end to what they were doing with Operation Chokepoint 1.0. Then he went out of office and here we go, 2.0 all over again. So I'm just hoping there's some sort of as as was already said, fair access rules that are put in to prevent this stuff from happening. No matter how much you might dislike an industry, it just doesn't make sense to just be able to debank people

because they're involved in that industry. And I think all of it, I don't think all of it was necessarily just the regulators. I think some of the banks were just like the other banks, the bigger types of institutions. I think they were happy to go along with this. They're happy to kill FinTech and crypto in many ways. It's the smaller upstart banks, Silver Gates, signature bank, those people involved. They're the ones that were on the side of this because they saw a way for them to gain market share and really grow their business. But the JP Morgan's of the world, they would much rather like completely own this stuff and not allow upstarts to get in there. 100%. JPMorgan has the largest e-commerce payments network. And they stand to lose and other

credit card issuers that move money through debit ACH, especially credit card, where they have a 3% interchange fee. And stable coin puts all of that at risk. So of course they're not going to be supportive of this. But hopefully we get this back on track and get innovation and enable stable coins to challenge these legacy payment rails. And that helps consumers and it helps merchants, which is where the benefit is. One would think that that's where Elizabeth Warren is focused. If you're a corner bodega, small business, earning a 2% net profit margin, you're paying 3% in interchange. That's the balance of whether you're profitable enough. I have a question for the group, how soon do you think will see stable coin regulation pass in the U.S.?

Foley passed, like signed into law by President Trump? Next year. Next year, I think 2025. First half second? Second half. Yeah, I'd take the owner or I guess the long, I would take the longer side of that bet. I would even say maybe like 35% chance it happens next year, more likely in 26.

Wow. Wow. that's sure that that's good a variant perception there Alex Ls why I mean think about how much stuff they have to work on right like they you got a they've got a razor thin majority in the house now the Republicans but they have both houses of Congress the White House they're going to try to move much higher priority stuff I think earlier tax stuff immigration stuff all that stuff takes forever you're not going to see most of the like second tier of cabinet won't be approved and confirmed until like April or May like you're already talking about

about almost halfway through the year before I think a lot of real work starts getting done. So to me, I do think it is high priority. There are a lot of stakeholders to manage when it comes to stablecoin legislation. And so it's not that easy. And I don't think it's that high a priority. I mean, I think it's a relatively high priority, certainly high priority in like financial regulatory circles, but with things like immigration and taxes, where I think they'll probably go after tax, extending the tax cuts, tariffs, all that stuff is going to be much higher

priority and it's going to take a while. So I think there's a good chance of it happening next year, but not that high priority, I don't think. We'll see. I'll challenge you a little bit. So on immigration, like I think they'll be the executive branch driven. I don't think you're going to get immigration reform. No one's really talking about that.

They should, but I don't think that'll happen. The ideal way for the Republican Party approaches is to set up tax extensions for next year going into the midterms. stable coin bills already drafted. It's bipartisan. It's the low, it's the low hanging fruit. Low hanging fruit, right. I agree. It's not, it's not a top party for them. I don't believe it's bipartisan, first of all. There's still significant disagreement about who can issue and what and which regulators would regulate, right? The key question is whether there's a state pathway or it's only national banks or are non-banks allowed. Is it the Fed that oversees them? Is it, there's good questions

about that still. So I'm not, but I mean, that's, it's a, it's a relatively low priority compared to like what Trump ran on, I think, but it's, it's up there. It's more important, I think, for the banking system and banks than than most other issues they face at the moment. But, um, fair enough. Yeah. And Coinbase, their fortunes will turn on this bill. Obviously, so will circle, right? Coinbase makes their net interest income, makes their profits primarily from USC and they're a non-bank. Yeah. Well, So Visa and Stripe and all those that have invested in platforms, would the answer be different if Trump did decide to appoint a crypto SAR? I don't think so.

You don't think they go faster? I mean, they have leadership. They have focus. That crypto czar question is a funny one. It's like Doge, right? It's like the Department of Government efficiency, right? It's not a department. It's not clear.

I think the effectiveness of that role is going to solely depend on the, you know, the ability of the person who is appointed to it to wrangle the parts of the government, what type of consensus they're able to build and whether they're seen as a credible voice for President Trump. I think, and that really, it's sort of whatever the person makes of it, like, because they're not going to have any statutory authority over any of the government, most likely. So I like the idea. I mean, to your point, to your point, it is aligning with NABank versus Bank,

versus Stave, versus Ferry. You need leadership to get stuff done to make tradeoffs, the lead within agenda, bring parties in a room, and address objections, you know, one by one. So I like the idea of it, even though I agree. They don't have any real power. Yeah. Yeah, I do too. I think it also signals the seriousness of the president on this issue, right? It would be very good news, but I can't think of any high-profile crypto person who would want that job just because of the high likelihood of failure, given the difficulty of navigating the halls of power. It's an opportunity. Brian Brooks would be a great candidate. I thought Ryan Salkis would be fantastic.

He was the self is the first one that came to my mind. He actually hit it at Twitter that he would do it. He would bash heads together. You're right. He'd bash heads together. He might make a lot of enemies too, though. You got to be. I don't think he cares. I think the reason will actually, if we can go there on this topic, it would be ideal cryptozar. The reason why I think Ryan would be ideal is because one, he has clarity of vision on the policy to implement. You have to start with it. You have to have a point of view initially, including on the minutia. And there's even more minutia than state versus federal and non-bank versus bank.

Issues, I'm doing with Fourth Amendment. And is crypto-Fintech 3.0, which means the K.Y, say, AML regime applies. Or is it distinct and not custodial and invokes ideas of self-sovereignty? Those are two different branches of the treaty. And the other key thing is the self-regulatory urbanization. And Ryan knows that. The issue I have with someone from Coinbase or any exchange running this is that they have a bias. So there's a reason why there's been no self-regulatory organization, which is really what the industry needs.

Because there's so many detailed regulation you need in this market, in the same way that FINRA has created detailed regulation around, you know, broker check. Congress is not going to pass a law saying brokers have to report this and that infraction. But it's an important regulation to have. And the industry put that forward. if you have a if you had coinbase an executive from cornbase lead is it would advantage coinbase and that's that's the issue with every SRO thus far is that it advantages the party that leads it because the big opportunity is to lead the SRO NASD which was the nonprofit organization became NASDAQ which is training the public markets today was just at all time highs that's the

economic opportunity that creates a conflict of interest from anyone exchange leading on issue. You truly need someone's third party. Ryan runs Masari. He's a third party person sees all the issues. And he threw Brad Garland House and XRP under the bus, which I like. I like that. He's like, look, it's going to enrich XRP share all of token hole. I was like, yeah, he's right. So you need someone that's like that, I think, in my view. And it's about executive decision making. It's not about yes, there's some consensus. You need clarity, clarity of you and and fashion heads together and getting stuck up. I will add real quick.

So my colleague, Nathan Dean and Elliot Stein, Nathan's down in D.C., and they are doing a lot of work. He covers a lot of the policy agendas. He's where I get all my D.C. inside info, because he's like, he knows everything that's going on down there. He knows a lot of guys. He used to work at CFTC. He knows all this stuff. And they currently have an official 70% odds of these passing within the next one to two years.

So we're talking timelines, debating whether or not it can happen in the second half and next year it happens in 2026. but it's almost certainly going to happen within the next one to two years. That end, a crypto market structure bill, they have at 70% within the next one to two years. So that's pretty high for them, I would say. I mean, I've seen them go higher, but as we get closer, maybe that number will go up. But, yeah, they're pretty confident that there's going to be some sort of bills that get passed through Congress in the next one to two years.

And while Trump has, you know, the Senate, the House and obviously the White House. Amazing. Anything else on that topic? Let's get in something more fun. We were talking about this before. Thanksgiving, I mean, I remember in 2017, right after Thanksgiving, things went crazy in the crypto world. Do you guys have any fun Thanksgiving-type interactions?

I mean, I know I know you're in Europe, so maybe it's a little bit different for you over there. But I know Ron, I want to hear your stories. I want to hear all of your stories. Ron, why don't you go first? Well, my grandmother asked about Bitcoin. How old is your grandmother? Well, she's my stepmom's mom. So she's in her mid-70s.

And she's asked about Bitcoin. And she told me about her friend, a physicist who, who sounds incredible, like incredible individual. I just want to get to know him. He's into Bitcoin. So Bitcoin came up like through two different individuals across a family Thanksgiving of maybe like eight to ten people. That's what they include. It's a high hit rate. It was a high hit rate and it was unprompted. It was unprompted, right? Meaning they just brought it out and they say, hey, what do you think about Bitcoin?

And I got text messages from people. I'm sure, Alex, you've seen that too. And Noel and James, I'd love to hear what you're seeing there. But I would say the level of inbound I'm getting around digital assets has never been higher. And it's from a new layer of parties that have previously not engaged with me. personally on that topic. We're friends. We talked about 10 other things, not Bitcoin. And now I'm hearing about, hey, should I get into Bitcoin now? I don't know. I haven't heard like nearly as much as I thought I would. But I definitely did get, well, you know, it's like I was at a birthday

party for a family friend who turned 70. It was a big party. He's a great guy, great man. And it was filled. And it's one of my wife's best friends' dads, right? And so I know this group of people for 10, 15 years in general. So there's a bunch of people. And they're coming over and like slapping me on the back congratulating me. You guys, Bitcoin. I saw Bitcoin. I was like, you know, I didn't like sell my Bitcoin and buy a house or anything, you know, like I'm just sort of watching the number, right, talking about the number. But there's only like one or two people in that group that actually really know anything about this market. And, and, you know, shocker, it's the CFA and the RAA that I'm friends with that we're there. And they get it. But I still, and I am getting inbound.

and people asking questions. I mean, I did get a couple, even at our family Thanksgiving, which was about 12 people of like, can you actually just explain Bitcoin again to us? Like, now we care. We didn't care last year when we had Thanksgiving together, but now we care again. So like there is some of that.

But I was also just struck by very few people out in the world really know anything about this market still. Like people just, I think honestly it's going to, Bitcoin will have to be trading at a million dollars of corn before it's like part of the, day-to-day discussion, you know, like, I don't know, it's just, it's crazy because obviously us four on this, you know, podcast are like, you know, the, you know, you're about when BlackRock got involved or the ETFs launched or the or Trump talked in Nashville, like, no, almost nobody

did. Apparently it's, you know, I guess it's, maybe it's one or 200 or 300 million people in the world, but that's still only, you know, a couple percent of the total world that I think is into this. And I haven't, I have started to see some, you know, the high school friends, was texting me. They're like, what do you saw you in Bloomberg or something? It is starting, but it's not at the level that it was, for me, at least, in 2021 when, like, Jimmy Fallon is on his show holding up his board ape. But I did also see, by the way, as an aside, like, NFT volumes are starting to pick up.

So maybe we are getting close. Definitely, you know, big uptick over the last two years, though. Yeah, I'm not seeing very much in my circles, which are European, and we haven't had the same sort of regulatory hostility. that you have in the U.S. But for me, it does not feel frothy yet. I'll be brief. Look, it's the same story. People focus and pay attention when you're at all-time highs. No one cared about Bitcoin a year and a half ago, two years ago. Now people are focusing on it. Now what it means for Bitcoin here, I think is a good question. And Alex had a really thoughtful write-up on Twitter

that I enjoy those, those, now peeled all the dimensions on Bitcoin here. But XRP is in focus now, which tells you the kind of buyer that's in the market now. And what was the comment made earlier, most hated rally because no one's in it? I will say, my interactions for the most part, I think I did get people like, oh, I know you cover crypto now. Like this is crazy, right? I'm like, I guess. But ironically, I have a bunch of people asking me about XRP. I would say that's probably this aside from Bitcoin and maybe some.

No, actually, I would say Ripple passes Solana. But, like, people constantly ask me on XRP, and it kind of makes sense. It's not a quality. You know that aren't like, they don't really know what's going on with Bitcoin or blockchain or what all this is. Most of those people are huge fans of XRP specifically. Yeah. So, Alex, what do you make of that?

I mean, you wrote a thoughtful defense of Bitcoin and OlerS, but don't you see that as, like, these two anecdotes are sharing. or train with you. Aren't those top of the market kind of signals? One is, you know, Normie's dollying up and say, hey, can I get in? And then second, you've got a low quality junk rally, which is a part of the cycle, as you know, and it's also the last part of the cycle. I'm not saying it's the end of the cycle, but, you know, cycles have mini cycles within them. Isn't that a negative indicator? Yeah, it does feel like the hotball of money period actually did start happening the last couple days, right? Like you had the, I mean, the coins that

were up 20% or more was like light coin xrp hbar stellar right which is actually just like it was been surprising and um in some ways heartening it felt like old times you know like i think um yeah i i agree is like a top signal there's a question there i think it's more like finally uh bitcoin went sideways you know took a breather after like three weeks and there was some room for something else to do something um most of the deeufs coins that have rallied did so right after the election right so like there was already uplifts the sort of catch up i think just on xrp in particular because the chart is like truly insane to look at if you like take a zoom out and look at a like a daily or a weekly chart it's literally just

like peaks in 17 goes all the way down peaks in 21 again a little lower than before goes all the way down and then it's literally just like four days like triples right like it's a straight line up right now as we talk, it's like a 260 or something, 275, right? And this, I think this is maybe the most hated rally in crypto that I've ever seen. I don't know anyone in the institutional world or crypto funds that own this. All the OG crypto traders, Bitcoiners, they all hate ripple in XRP. So I think this might be maybe the most painful rally for the crypto-native investment the class that I've seen in a long time. I don't know anyone that was long XRP at 60 cents thinking it was going to triple, right? Like basically nobody that I know. And so I, you know,

kind of is what it is. Maybe that's why, I mean, it's up 91% over the week over week right now. I'm looking at it here. And so I don't know if that's at a top. I mean, it, it definitely has vibes. You know, the funny thing is that ether didn't really run, right? Typically, this would come it would go Bitcoin, Ethereum, sort of alt season. And in 17 and 21, like these coins were, you know, leaders in the alt season cyclicality. But we've had this different like Bitcoin and meme coins kind of and Solana market for most of the year. So things feel a little out of whack. I think you hints of that.

But there are, think about it. I mean, like from a policy, I think the policy catalysts are just impossible to ignore. Like there's this is not going to look like a normal cycle, I don't think. Even if it is cyclical, it's you've got too much on the horizon like regulatory relief for the altcoin and defy complexes, the possibility of a strategic Bitcoin reserve. You know, this cryptos are. I mean, for all I know, Brad could be in the mix for that, right? Like there's a whole bunch. He, I think part of this too, he tweeted that he'll, he did an interview with 60 minutes that is yet to air. So, like, there's noise around XRP, like, in general. But I think people have been shocked.

And it does make you wonder when coins that nobody's really talked about for, you know, one to two years at least are rallying. I'm sure you guys heard about that, right? Like Cardano's like in the policy, like, what hell's going on? I saw Charles say that they were. I don't know if I believe it. Yeah, exactly. That's setting up a policy department, therefore, for sure you're going to be invited to form,

you know, part of the inner circle, right? Yeah. You're right. So, Alex, I get your point on the opportunities ahead, but we need specific dates and events, right? We had SEC, Scher, Gensler, Nassu's resignation. That was the peak sentiment moment. People looking forward to that. That's an event you can look at and say relief is that, even though everyone knew that was going to happen.

But it happened. People got excited. That event fell off the calendar. What are markets going to look forward to? Like, Bitcoin Reserve fantastic. Cricas are great. But until we have dates and impact, I think that's the market. I think that there could be a lull between now and inauguration day where there's just no events for markets to focus on.

Yeah. And meanwhile, you've got rebalancing a portfolio. Right. Yeah, I mean, this feels like a bit of rebalancing, right? Again, Bitcoin kind of just sideways. I mean, down a bit at first, but then pretty much recovered right into the middle of the 90s, right? Just sort of sit in here, 94 and 98 over and over again. Plenty of room for capital rotation, and that's kind of what you're seeing.

a couple that come to mind, Ron, like you've got the Bitcoin Mina conference at the end of next week in Abu Dhabi. I'll be surprised if there's not some kind of big announcements at that that are interesting, like, along the lines of sovereign wealth funds or nation states. Yeah. Yeah. So you have that. You have the actual naming of someone like an SEC chairman or chairperson that I think is likely going to be positive for crypto. Yeah, but you're right. I think markets, markets are pricing that it's going to be favorable.

So it's, I think the remaining, the remaining names for these role, plus they're diminishing in importance, right? I mean, the Treasury Secretary is sort of the top for importance in financial markets, but the market regulators will be important. I think who you see at the sub, like the OCC and stuff, that'll be important. But, yeah, I think you're, you're kind of in a lull. At some point, the stuff actually has to start happening. right. I mean, like, and that could take a while, right? Like, after, even after inauguration, right? Gary

Gensler wasn't confirmed by the Senate until April of 2021, actually four days after Coinbase won public. So, like, it could, you know, you could end up with waiting for legislation to be introduced or waiting for someone to actually take, you know, their seat. I think maybe if it's Hester Purst or, sorry, what were you going to say, Rom? No, I was just saying there's risk of frustration disappointment in markets. Because all the things you pointed out, right? Yeah, there is. That's it. We had a great event at CCTraganser resides.

Now we go through the value of execution. That takes a lot of time. I don't know what is the nature of that when, the who is, the where isn't. But in that time, we could also be seeing some rotation, as Alex, I was saying, not just skipping all the way through to the meme coins and XRP, but we saw on Friday, if net inflows, its highest ever, even higher than the net inflows for the Bitcoin spot ETFs. That was very unusual. And this is before we're even hearing rumors that staking rewards will be allowed to be distributed in the ETFs or any catalyst like that.

It felt like a rebalancing sort of rotation, which, you know, as you've been saying, we could be seeing more of here into the end of the year. Fair enough. look, if the administration comes out with a framework that makes Ethereum defy legal for institutions, that's bullish. I don't think that's price thing. People aren't talking about defy, which is one of the kind of essential points of getting a counterparty risk here. That's exciting.

Yeah, Ethereum's rally. Ethereum has been unburdened by what has been. It's great to see Ethereum finally get its mojo. We'll see how far it continues. Yeah, it's got a lot of catching up to do, though. There's some catch up. Yeah, it does feel like that mean. Or it's like it's down all the way.

And then there's that little bar that goes up. And everyone's like, yeah, like celebrating. It did have a moment last week, Noel, though. You're right. Where Bitcoin was also trading lower while ETH was trading higher, right? Like there. And you can imagine that Ethereum and Solana platforms that have defy and stuff are, they stand to be bigger net gainers from a shift in regulatory policy, I think,

over the long term than Bitcoin, right? So there should be some rotation. Maybe this just gives a little bit of breathing room while we wait for a national strategic Bitcoin reserve or something. A question for James, what odds do you give the approval of an XRP ETF within the next two years? Yeah, so this is a list of all the current filings.

Ironically enough, today we get Wisdomtree file for an XRP ETF. All the ripple ones, as you can see on here, I'm hoping, if you're watching, there's four of them that have been filed in the last few weeks and months, but none of them has gone through that final step of filing in 19B4, which is like the filing you do in partnership with the exchange that starts the clock. But we have a light coin filing, we have an HBR filing, we have a bunch of XRP filings. We have some basket ETFs that are trying to convert. We have other ETFs that are going to hold Bitcoin and Ethereum that have already filed. most recently the Salani ETS filed. So when will an XRP come?

I don't know. I think it's likely to happen. I just don't. We have to wait and see when people are actually going to file. But I would think, I mean, even now, if they filed now, you probably don't see it. You won't see it until the back half of 2025. And the other thing, we were talking about catalysts before. I mean, one catalyst that I think is causing this is the news around the fact that Ripple's going to launch RLUSD

and they think they're going to get NYDFS approval to launch their own stable. coin. So that's one thing that is definitely buoying ripple, aside from the fact that things that go up tend to keep going up until some certain point in the future, especially in this market. But yeah, it's deja vu all over again with this stuff. Because for a while, we were watching all these Bitcoin filings and the Ethereum ETF filings and no one else is trying anything else. And this chart is just the same thing over again, except people are getting a lot more, a lot riskier and going further out in the curve. And I think we're going to see a hell of a lot more of filings like this over the coming years, particularly if we get a market structure

Do you think you're going to see, are you going to see like, because I'm noticing here, James, on this table, no fidelity, no Black Rock, no Invesco, right? We've got mostly crypto-native issuers, Vanek and Wisdom Treat, basically, that are out here with these other. Are the big guys going to get involved, do you think, in this sort of longer tail? I think, so that's a really good question. So there's another thing in here that I don't have on here. All of these filings, the ones that have that, 19B4 is the Solana ETS specifically, for the most part, they were filed with CBOE. So notably, BitWise, their BitWise XRP ETF filing, for all their other filings, they've done with NICC in the past, the other ones they have currently out there for Bitcoin Ethereum, they've done with New York Stock Exchange. But for Solana, they didn't do with NIC or NASDAQ. So I think CBOE is willing to push the envelope a little bit more.

They filed these things back in September, I think, are somewhere around there. and the SEC basically refused to acknowledge them and force them to withdraw the applications for Solana. So I think my view right now is one, the SEC has until within the next week or so, they can acknowledge these applications for Salana specifically, or they might just not and say we're not basically deny them outright before even accepting them and going through the process.

And I think that's what I think has a decent chance of happening solely because the SEC Division of Enforcement has multiple lawsuits out there, namely Coinbase, Finance, Cracken, where if they're not calling Salana a de facto security, they are saying that their offering was security's offering, and they're good, they don't like that. So I think until like we get some change to the SEC, I'd be surprised if you have one division of the SEC, division of trading in markets and the division of corporate finance approving this asset or any of these assets, particularly Ripple, and Solana to go into an ETF as a commodity ETF product,

while the SEC's Division of Enforcement is out there saying, these are securities, this went through securities offering. So I think there likely needs to be some cleanup at the SEC before we can see some of those things. But some of these other ones, like Lightcoin and HBarr specifically, I don't know that the SEC is going to go out there and call them securities. I mean, if you look at some of those lawsuit filings that we've seen out there, I mean, HBAR is a blast from the past. and the SEC doesn't refer to that as potentially being security in those filings.

There's a whole host of other coins. So there's some things out there that maybe they would let slip through the cracks, but I guess time will tell if an exchange is going to join some of these issuers and trying to get these things out. And then I guess we'll see what some of those bigger names do like you were talking about, Alex. But I mean, honestly, I think this is the way it should go, right? Like the way the ETF market usually works, smaller issuers, upstards, tend to really push the envelope and go out in the curve. And if they can get out first, it gives them an ability to

operate a business and make money for taking risks and putting money on the line earlier than most other people. And then usually what ends up happening is the Black Rex of the world end up following suit. They often get bigger. They offer a lower price and what have you. But usually there's a business to be had here, which kind of didn't happen with Bitcoin and Ethereum, because the SEC just didn't let anyone go out until they let everyone go out. So I have a, I mean, I can talk about this for four hours. I'd say I don't like the fact that XRP and HBarn like when you're planning ETS. And if we see those ETS go to market, that's probably the top of the market. And the reason why you see this in public equities all the time.

When the IPO market window opens, that's the last stage of the bull market and a lot of action can happen. They're just like this fact from 2021 IPOs. And quality IPOs go out the door first, like you saw here, Bitcoin, Ethereum, hopefully, Solana. then what happens on the tail end of the IPO, you know, what's expression? When the ducks are cracking, feed the ducks, people just want product. And you see low quality issues go to the market. The market gets saturated, and then things start to dump.

And this seems to be plain out in that way. So I'm actually, I don't like the fact that we see XRP HBarr stuff. I think it's something to watch out for as there's some holes. Also, to be clear here, is like with the earliest, the salons, 101 could launch is sometime in early to mid-August, depending on even if they're acknowledged. They might not even get acknowledged next week. So we're looking like a long way out for the way this process usually works. And the other ones haven't even started that process where we'd get a clock that would start ticking.

What needs to happen is application. We need to see real applications with product market fit, delivered to end customers, business, merchants and consumers like now. Like people can start doing that now because the regulatory story is, is it going to take a while to develop, to Alex's point. But the product market story, that can still develop. What's challenging there also is you need developers to take risks, betting that they won't be prosecuted to do that.

Because there are applications, actually. Yeah, we get the building going. And further to Alex's point, one of the reasons we don't see the big players up there on the board for these ETS yet is that there isn't mainstream demand. They're just not seeing the demand amongst their clients. We hear the demand because the crypto community wants it. And we spend our, I spend way too much time on crypto Twitter, for instance.

So we see the demand, but the mainstream doesn't. That is also another, note to add to the caution around these products actually making a difference. When they come out, that said, we must remember that the peak of the last cycle was when Coinbase listed. And the peak of the previous cycle was when the CME Bitcoin options listed. So that brings up a good topic. I mean, Alex, I know you had a lot of thoughts on the ETH-BTC ratio on when it would, potentially turn around. We talked about the potential for ETH to get staking in an ETF. I think that's going to happen under this SEC administration. In-kind transactions is not something that retail people

probably care about, but institutionally that will matter. So you can basically exchange the underlying asset for the shares of the ETF. I think that's going to happen. But as we talked about, flows have picked up a little bit to Ethereum. Rom, you kind of hinted like junk comes to market. I mean, if you think about it, Ethereum came to market and it had outflows, like from when it first launched until very recently. So, I mean, theoretically, those things come to market. It doesn't actually mean that any sort of investor interest actually comes along. I have a chart that shows like the cumulative flows over time I'm going to share it right now. Like, for a long time, things were just down, down, down, and slightly ticked up. And the minute Trump got elected,

all of a sudden people started buying Ethereum ETFs. But still, we're looking at 571 million in net inflows to these products. And it's nothing compared to what the Bitcoin ETFs have done, just not borderline, not comparable. But I guess to you, Alex, do you think like we've seen the bottom in the, the ETH-BTC ratio? You kind of hinted at they skipped the Ethereum rally, went right to the all coins. But what do you think is going on right now? Yeah, I had tweeted, I've been, like, publicly negative on ETHBTC for two years, two plus years, and calling it for it to go lower.

And then shortly after the election, I tweeted that that could, it was a little lower than it is now. but it was maybe at like 0.034 or so. And I said, this might be the bottom. And here's the case for it being the bottom. Then like two days later, it went to like 0.0311. And I was like, well, okay, that wasn't the bottom. It's clearly gone lower. But since then, it's been higher.

And I think it makes a lot of sense for it to come higher. This entire year has been driven by Bitcoin on one side and meme coin activity on the other, which is primarily benefited. So it's been sort of Bitcoin and Solana, like with Heath getting squeezed, both from a market standpoint, but also on a narrative standpoint, right? The thing about defy, high dollar defy is huge on Ethereum. It's by far the biggest TVL of any chain. And, but it's, um, defy hasn't penetrated tradfi yet.

So defy is really just servicing crypto wealth, right? And I think that could change. I think that's one of the, the key things that could change under a new SEC regime. in the U.S., that there's actually an opportunity for sandboxing sort of an overlap between defy and tradfi that you could launch something like a uniswap in a sandbox environment and let, like, I don't know, the New York Stock Exchange and a major issuer issue some, you know, equity on tokens. And that could be super interesting. And that would sort of herald the beginning of an actual overlap or integration of defy into Tratfy. The closest we've seen was, you know,

tradfai issuers basically putting yield on chain to sort of treat the onchain wealth as potential customers, but not the reverse. And in the absence of that, like, right, NFT volumes basically fell off a cliff. Like you didn't see any major advancement on Ethereum of crypto and gaming, right? Like these, and DeFi was, you know, useful, but for a sort of a crypto wealth. I mean, companies like Galaxy operate on DeFi, but, you know, not like normal outside of the crypto world really using it. So I feel like, And again, the meme coin activity is most, which there was a lot of and has been a lot of, has been on Solana. So it's been squeezed.

It's, I think just from a pure, like, cyclicality, it's definitely due for a rally. And you started to see some of that. But again, I said this before, like the most of the stuff that could happen that's positive for crypto in the new administration from a policy or regulatory perspective, I think benefits Ethereum and X Bitcoin alt coins more than Bitcoin, right? if you get clarity on defy, clarity on exchanges, clarity on token issuance, right? And not just clarity, but a more permissive sort of progressive policy framework, then that should benefit Ethereum and other similar blockchains.

And therefore, the ETH-BTC ratio theoretically should come higher. That's the thesis, I think, you know, I would say the big Bitcoin Reserve. I was going to say the Bitcoin Strategic Reserve is the, yeah, national corporate institution. adoption of Bitcoin would be, I think, the primary, you know, contradictory. What will turn out when the Crypto-Zar? And what tribe does a Crypto-Zar come from? Are they from the Bitcoin tribe or the Ethereum tribe or are they a neutral third-party in my view like a Ryan Selkis? So there's still, you know, positioning will start to matter once we get the Crypto-Zar. Yeah, it's not all priced in.

Everything is priced in. Always, yes. I'm just referencing that famous copy pasta, you know. You were priced in Noel, like thousands of years ago, the woolly mammoths priced me in. There was no second, that's holiday. Perfect information. Yeah, I think, I mean, the markets have shown what you're talking about, Alex. There's a reason that there's so many other all coins that popped way quicker and defy-type tokens that went up way more than, you know, Bitcoin really.

did for the most part on a percentage basis. So it makes sense. I think the market's sniffing out exactly what you're talking about. And it's extremely logical. I guess time will tell whether it goes that way. I only have one more topic on here to bring up. I feel free for anyone else to go after me. But the one thing I wanted to point out is as of November 27th, which was the final trading day of November, that is the reconstitution date for the NASDAQ 100, aka the Q's QQQQQQ, ETF. There's two ETFs that track that NASDAQ 100 index, typically thought of the tech index, there's 350-ish billion in assets in those ETF products, Palantir, which isn't all that relevant to anyone here, and MicroStrategy and two other companies are going to be added.

So there's going to be a lot of buying, ironically enough, in MicroStrategy in the coming month from that. Now, I genuinely do think that's mostly priced in because people have been talking about it, the fact that it's going to be added to the cues. It should happen unless I'm completely reading the index rules wrong. I'd be shocked. It's a top 60 holding in the NASDAQ composite, and anything that's in the top 75 automatically gets added to the NASDAQ 100, the only way it could possibly not get added. Right now, it's ICB classification or its sector classification under ICB standards is it's a technology company. I'm not saying this is going to happen, but I can easily make the argument that micro strategy is more a financial company and financials is the

one the one industry that's automatically excluded from the NASDAQ 100. I think that's something we can look at down the line. But if you're doing software. They're opening a software company under the classification system. Yeah. They sell B2B analytics tools and apparently they're pretty good for this. So this is very ironic because it means that tens of millions of pensions will own Bitcoin through the vehicle of micro strategy. It is so funny how Bitcoin finds a way, like a seed in a concrete forest, it seeks sunlight, and just finds a way to move up. Is this yet not another example? It's beautifully said.

It's very poetic. I like it. Right? I mean, it influences the world. It's birthing itself in a realm. I'm the same like AI has all these engineers around it. They're going to make it conscious and sent it one day, maybe. The same way like Bitcoin just binds away.

It's going to be in everyone's pension account 401k's substantially. A lot of people, anyone owns QQQ, which is the most liquid widely available ETS. Universe has a sense of humor, clearly. I want to see Gensler's reaction, but we should get a reporter, like as soon as this MSTR, I don't want to see the facial expression. What knows Bitcoin? What's he going to stay? Yeah, I should add, it hasn't been officially announced yet, but it should be announced

in the next week or so. And I'd be shocked if they, I mean, they would have to find. a way to, they would have to find a way to like exclude it purposefully, which ironically, the S&P 500 committee, they have a little more discretion if there's a committee that actually decides it and they managed to keep Tesla out. So I think they might be able to keep micro strategy out if they really wanted to. But I think this is, uh, this is likely to happen for micro strategies. So all the MSPR bowls out there, congrats, I guess. I got to make a version of that with like Bitcoin finds away and put sailor's face on it.

That's really one, right? Yeah. That'd be good. Yeah. Thanks for joining us for this episode of bits and bits. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding. Until then, everyone. Thanks, everyone.

Thank you. There's no second best holiday. Happy Thanksgiving.