Unchained - Bits + Bips: Will Crypto Rise on Liquidity or Will 2026 See Another Washout? - Ep. 988

Episode Date: December 23, 2025

Thank you to our sponsor, Mantle. Sign up for their hackathon here!After a “weird” year in the markets, hosts Ram Ahluwalia and Christopher Perkins are joined by Ava Labs’ President John Wu for a candid debate about where crypto really is in the cycle—and what needs to happen next. The panel wrestles with a question many investors are quietly asking: has the market washed out enough to set up the next move, or is something still missing? They explore why momentum has faded, what signs would suggest it’s coming back, and why 2026 keeps coming up in long-term conversations—even as near-term enthusiasm remains divided. Plus, why TGEs are “dying” and, with the rise of super apps, does Coinbase has an edge on Web2 players like Robinhood?  Hosts: Ram Ahluwalia, CFA, CEO and Founder of Lumida Christopher Perkins, Managing Partner and President of CoinFund Guest: John Wu, President of Ava Labs Links: Unchained:  Circle Acquires Interop Labs Team, Excludes Axelar Foundation and Token  Aave’s Rushed Governance Vote Draws Backlash UNI Token Rallies as Voting Begins on UNIfication Proposal Bitcoin’s Demand Boom is Fading: CryptoQuant Alex Thorn predicts BTC will reach $250K by end of 2027  Memento’s research on TGEs  Jeff Dorman on X: “I don’t know a single liquid fund that has bought a new token on TGE in over 2 years.” CoinDesk: Coinbase rolls out stock trading, prediction markets and more in bid to become the 'Everything Exchange' The Block:  Coinbase to acquire prediction markets startup The Clearing Company AAVE token holder proposes 'poison pill' for DAO to absorb Aave Labs amid contentious revenue debate Timestamps: 🎬 0:00 Intro 📉 1:55 What made this a truly “weird year” for markets 🗓️ 7:09 Why 2026 may be a breakout year and why not all tokens may survive 🌊 8:41 Whether a big washout is ahead and what actually brings momentum back 🔁 13:40 How the four-year cycle, midterms, and new cohorts keep reshaping crypto demand 🏦 20:30 The fight over institutional settlement layers and Canton’s rise 🧩 24:34 Why tokens exist at all and where real value capture is getting lost ⚖️ 30:19 How investors should think about the constant tug-of-war between equity and tokens 📊 41:07 Why Chris feels constructive on markets while Ram sees something missing 💵 43:52 Why stablecoins are quietly becoming the “new net interest income” 📱 44:51 How super apps are changing the game and why Coinbase may have an edge over Robinhood 🧟 53:16 Why token generation events are fading Learn more about your ad choices. Visit megaphone.fm/adchoices

A good piece of technical evidence would be a period of consolidation in basing. People have checked out. They've moved down to other pastures. They're no longer talking about digital assets. You see these negative front page headlines again. And then there's a quiet rally that's taking place in the background that no one's paying attention to except us on the show. I would look at this asset class as a long-term thing. And if you want to get involved, I think I'm actually more positive on Twitter.

2026, then probably ROM is, but you seem very bullish on 2026, just because, again, like, the market forces are filtering out the nonsense supply. Consolidation will Manasov's itself in M&A. Hey, everyone. Welcome to Bits and Bips, where we explore how crypto and macro collide one basis point at a time. Today, I'm your host. We left the mad professor today, and I'll be your host. I'm Chris Perkins, the Golden Hanna Coin Fund. I'm here with Rom, Al-Alawalia. My of wealth and leader of Lumina. How's it going? How are you doing?

And today I'm very, very excited to be joined by my friend, the one and only John Wu, Lord President of the Avalanche Realm. Welcome, sir. Welcome both of you. Great to be here. Amazing. We're here to discuss the latest stories in the worlds of crypto and macro. And just remember nothing we say here is investment advice.

And please check out Unchained Crypto.com slash bits and bits for more to disclosures. And with that, we will go to our commercial break. Mantel is launching the Global Hackathon 2025 to accelerate the future of real-world assets. With a $150,000 prize pool, backing from a $4 billion treasury, and direct access to buy-bits 7 million plus users, this is the ultimate ecosystem for builders. All right, guys, we're coming to the end of the year. It's been a real weird year. I'm not going to lie. Here we are today.

Hop all of monies move to precious metals. Golds hit all time highs. Silver's hit all time highs. Digital gold has not. And in fact, digital gold, our friend, Bitcoin, we're looking at it's potentially a down year, which would be its fourth in its history. It's kind of mind-blowing considering the amazing things that are happening.

And we can talk a little bit about it. But let's start with Rom. What the hell is going on in these markets, man? Sure. So I was at a holiday party about a month ago. It was hosted by a crypto native who shall remain nameless. And he opened up by saying, what a year. Bitcoin's at $100,000.

And last year, Bitcoin's at $100,000. And that was a month ago. Now Bitcoin's, I don't know, what, 88. So that just puts it in context. I know this individual expected Bitcoin to be at $750,000 in a few years. That's why he was, was. still excited about it. So what's going on is this, a few things. One is hype got ahead of reality. So and two, the mission was accomplished. What was the mission? Stable coin regulation, genius act,

get a hospitable regulatory framework, get the SEC focus on solving the kind of issues we have here. And part of that sell the news. Another driver is, hey, four years. cycle. But another and maybe even bigger driver of this is just the proliferation of other competing momentum narratives. And that includes like space stocks. Look at what's happening with like Rocket Lab. It includes robotic stocks. It includes AI. They're all competing for attention. So the crowd that digital assets attract, so different kinds of crowds are like the gold bugs, there's the a tepren optimist crowd. But one big crowd is the momentum crowd. And that momentum crowd will go to wherever the hottest hand is. And you mentioned Chris earlier, it's like precious

metals. That's where momentum is. Momentum creates its own demand. It creates its own momentum. And we're not seeing that in the asset. And so you get a self-fulfilling prophecy. So I think Rahm is right on many levels there. Ramm has actually talked about another factor that we haven't talked about, which is the fundamentals, in other words, and value. So like we've been trying to figure out what are these tokens fundamentally what they should be doing, and then value. How do you value crypto tokens? It's very hard.

But before we go there, I know we're probably going to be talking a lot about that in the rest of this podcast. I'll add one more thing to what Rahma said, which is basically there's actually been an amazing number of new distribution channels for access for retail into this space. And whether it's the DATs or companies like Circle IPOing, and at the same time, the demand has not increased, it's the same group of people, and some of them are going to other, call it, high beta asset classes.

But on top of that, the supply size has increased tremendously. There's like tokens left and right now. We're not just talking about the three to four or five thousand tokens on the exchange of central. exchanges of Coinbase or Binance. We're talking about on-chain tokens left and right in the millions. And that's kind of confusing for a lot of people. And you had an unfortunate situation on October 10th.

So what people don't talk about is, yes, there's a lot of these debts, but a lot of the dots were in-kind contributors from the same people or funds that would have been buying these things on chain. So if suddenly they're locked up because a lot of these dads haven't cleared a SEC yet, for a SPAC or the reverse merger, their money is held and holding on and down. So you're losing that incremental demand there as well. So there's all of these factors leading to this, as you call it, a weird year, Chris. Yeah, you know, until now we've talked about the conditions, Rob, like week after week, great setup.

You know, now we got Mike Seleig who is just an, you couldn't shut your eyes and envision a better setup from a regulatory perspective. We've got two amazing leaders now of the agencies who matter. They're going to be setting precedent. That foundation is baked. You got institutions, so we're now saying, well, maybe clarity got pushed. I personally don't think that matters because the regulators are going to be playing ball. The biggest change since December, though, is that we've gone, the liquidity environment has improved. And we've seen correlations with liquidity. And so now you're seeing, you know, the the Treasury General account, the TGA is coming down. We've gone from QT to, you know, the error of QT is over.

And so like now we even have liquidity on top of that, but we still, Bitcoin is struggling to hold 90. I guess the question for both of you, esteemed gentleman then is, all right, what brings momentum back to crypto, right? I think we all believe that it's coming long term. But like, like, what's the impetus? What's going to bring that incremental buyer back? What's next?

How do we do it? Well, I actually think 2026 will be a good year, but not for all tokens. I think underneath the hood, we're going to have more differentiation. What's happening right now is a filtering out of bad tokens or projects. Okay. So right now they were treated as one gigantic asset class and too much supply of new tokens. But as those new tokens, all these things are just going to be worthless, but they may not be worthless overnight, but they're starting to.

to hit that. The incremental demand, which I do see, you see J.P. Morgan now supporting institutions, so they made that announcement a week or so ago for investing in this asset class. You've got the RIA channel just opening up, introducing this to their $40 trillion of potential users. And so if the demand pipes open up for more people to access the space, but the filtering lens is going to take the supply down as to like viable tokens, viable projects, viable things. So in some sense, I think the supply is going to shrink in terms of reality versus optically on a notional basis. So that's going to allow this to be a much stronger asset class next year. So consolidation is what you're saying. But we already had the meme coin washout, right? Like, what do you think

that's going to manifest? Layer one's, layer two's, like apps, all the above, any particular vertical is going to get washed out? Well, I think it's not like necessarily a vertical, but it's more about which verticals have more use and utility. So, you know, you could be, I mean, listen, meme coins are a thing and they'll come in and out just like collectibles are in the traditional world. They'll come in and they'll go out. So maybe there's another version of a meme coin that comes in and it's a fat, but it's not necessarily like everything's going to get wiped out based on a specific vertical. It's going to be what use case?

There is a growing use case of on-chain stuff. You can call it gambling. You can call a speculation. You can call it digital collectibles and meme coins, but somewhat similar. But that is a real use case. If we're going to allow prediction markets in the traditional environment, which is based on similar human characteristics, they're going to still exist maybe just in a different form on chain.

I think a good framework for this is the trough of disillusionment. I think folks in digital asset cycle may be familiar with this. There's actually a better version of this chart. If you can see my screen, I see Chris is not in his head. This is the perfect way to understand where we are. So at the genius cycle, now it's past, that was the peak of inflated expectations. Valhalla is coming. Look at all the amazing things.

and you get there after you've climbed the wall of worry. The wall of worry was the Gensler era. You see the promise and opportunity. So it turns out actually after the election last year, the market's discounted the next two years in this one to two-month period where Bitcoin went from 65,000 to 107. It was compressed. And it's part of that hop-all liquidity that Chris mentioned.

The velocity of how information moves and the velocity of how people adjust to positions in trade, it's compressed that. We saw that same compression with the fact that Bitcoin hit new all-time highs before the halving cycle, which had never done before. This is a different market condition, different market characteristic. So what we also saw in, you know, over the summers, this proliferation of debts and IPOs,

those people are going through the trough of disillusionment. Now, they're saying, what the hell did I buy? I wish I never bought this. Someone getting me out of this. Now, what's going to happen is there's going to come a point in time where the people that own those, what's the psychology of that group? They want to own things going up. They thought this was a lottery ticket.

They thought this was a rocket ship. They were sold a bill of goods that it's going to take this thing to the moon. They're going to say, I can't handle it anymore. Navilla keeps going up. META keeps going up. Space stocks keep going up. Gold keeps going up, and then they're going to say sell. And when that happens, that'll be the best time to buy digital assets.

It's not, I don't know, it feels pretty good right now. You get that improving liquidity situation. We're in the trough of disillusionment. And the fundamentals seem, and again, to John's point, not every token, this does not apply to every token. Fundamentals matter. But it does feel like a very nice entry point for various tokens. with strong fundamentals.

So I'm seeing value emerge, by the, which is interesting. Yeah. Now, you don't want to buy when you first see value immersion because this thing is going to oversell. It's going to overcorrect. And it's going to have to attract people that are like, gee, how do I not buy that? So what I would want to see is blowups. I would like to see funds blow up and headlines around this.

I would like to see a desert of capital. These are like my ideal. If you're asking for my perfect setup, this is what you want to look for. Like at the end of the debacle around FTX and the DCG Genesis, you know, you had Michael Saylor on the front page in New York Times Magazine and mainstream media were shaming him. And they say, oh, so we know better. Don't look at this guy. I can't believe what he did.

So it's got to be an uncomfortable buy psychologically. people have to hate the asset class. You know, you probably see developers start leaving the ecosystem for AI. It's got to feel that bad. That's when I would be really interested, actually. So, like, are there tactical opportunities along the way? Sure. You know, I would find a very interesting, if I had that kind of frigidness in the ecosystem.

I don't think we have that. I don't think we have that now. Yeah, so the Bitcoin Viking himself, Alex Thorne, I don't know if you know him, over a galaxy. He said 2026 is way too hard to call. I was speaking to Steve McClurg, CEO of Canary. He's like, look, we're going to retrench with Bitcoin back to 60 sometime in the middle of next year and then we'll march back up. How do you guys think this is going to play out into 26? The asset class or Bitcoin?

Both. I think it starts with that. start with Bitcoin. You got to start with Bitcoin, because Bitcoin leaves everything, right? I agree. It starts a Bitcoin. I do think it's going to be better than 2025. And I am a believer that the four-year cycle is no longer because there's, you know, that was a finite, not finite, but a small group of investors in the space or traders in the space. And now we've expanded that. So expanding it means it's the cycle is part going to be slightly different. I mean, elements of it still exist. You can't get around that supply, you know, side of the equation.

But the demand size changed so much. Yeah, you're right. Eidosyncratically, we've seen a lot of the old holders, the whales. They've cashed out the cycle. So you don't get older, having kids, need to buy a house, I'm out. And so maybe that psychology is changing. That's a consensus view, by the way, that the four-year cycle is dead. Do you agree with that, Rob?

It's proving it out again, though, right? The four-year cycle. Right. has expressed itself and it's worked again. A lot of Bitcoin, as with other assets and holders of other kinds of stocks like Tesla, there's a tribal, like religious component to it. You enter like this, the cathedral of Satoshi Nakamoto. And you learn these things like the four-year cycle and the halving cycle.

And so you can get these self-fulfilling prophecies. I do think that there are a lot of other factors that stacked up at the, same time. I do think Bitcoin at 60,000 starts to share some value, but we have just to address it when it comes. For example, if we get a first half midterm elections pullback in equity markets, which I believe has happened every single midterm year, maybe that sets us up a new for an opportunity. That could be one. The second thing is, you know, there is value emerging. Like, if you look at like circles IPO. That's a high beta name.

It's past its lockup. Starting to rally. That's a good sign. They're embers in the fire. You want to see that. I think we have more time to go. It's important not to rush into these things. A good piece of technical evidence would be a period of consolidation and

basing. People have checked out. They've moved down to other pastures. They're no longer talking about digital assets. You see these negative front. page headlines again. And then there's a quiet rally that's taking place in the background that no one's paying attention to except us on the show. And then you're going to see that price moving average is trying to slope up. And there is an opportunity that would emerge around

that time period. So it could happen sooner. I think because of the pace of information velocity we talked about, how assets repriced so quickly, I think, it actually could happen sooner than people think next year. It might not be 2027. I think, for build on that, there is a, you talked about the OG selling out, Chris. Yeah. There is definitely a rotation of people or things that are interested in this space. And naturally, I mean, the space has been around for 15, 17 years already now. And naturally, just like investors and just like builders, there's a certain class of people that are just attracted

to early, early stage stuff where things are just like breaking convention and creating new things like zero to one style. But as we now, as I think Ram said earlier, you know, almost like seldom news as adoption is happening, the one to ten is a much larger group of people, but it's going to take time to get them over and believe in this space. So there's a rotation of interested at people in the space bowl on the investor, trader, and the builder. No, just briefly, I agree. Look, there's fragmentation of attention and focus. You need to see fewer projects.

You need to see winners. You need to see losers shake out and disappear, too. So you can concentrate around the winner. So we're not seeing that. Like you said earlier, there's so many names. Markets can't fix onto a narrative. There's competition in the L1 space. There's competition L2 is built on L1s.

Does competition from pseudo chains like Canton Network? So it's very difficult for markets. We live this. We see that, right? But take a step back to like a typical investor. They need a basic idea. Okay, Kappex spend on from hyperscalers on GPs and data center are going to go up. because AI works and I see in my app.

It's a little visceral experience. It's an easy underwrite. They can get their head behind that. You need to see that for digital out. With Bitcoin, it was, hey, look, the Fed is printing money. Look at this QE. Congress can't control its deficit spending. Boom, with Ethereum.

Smart contracts, decentralized, touring complete machines. Salada, here is commercially focused applications. NASDAQ on chain. These are simple, the underwrite stories. Those are all crowded themes. They have intense competition. If you look what's happening to the payment stocks and public markets,

they've also been destroyed. Competition is the enemy of returns. So you need a shakeout. Shake out of the protocols. And we've seen this. What's Pocodot doing? I don't know, right? That'll happen.

I think you also need like a shakeout of investors where convictions tested, they wash out, and then it starts to attract the buyer, the OG sellers, when they start to step back in at some point, that'll be a good sign too. Yeah, I think it's also going to be the season of M&A before us. Beyond that, consolidation will man itself to self in M&A. I'm really watching over this like holiday period because a lot of interesting deals get done crypto or beyond when I know a couple of like big time dealmakers.

They love doing deals on Christmas because their competitors aren't paying attention. So that can be a really interesting space. Ron, the other thing we're talking about is, like, I feel like we kind of go back and forth between, like, retail and institutional and we use it interchangeably. I'd argue the institutions as they're marching forward, you know, they're using the technology more and more. I want to get John's perspective, but I still think their investment opportunities are limited. You know, we're going to talk a little bit about equity versus token. But when it comes to token, I don't know if they have a ton of operative, like, you know, if they're, if they have the remit to invest in a ton of different tokens. You know, we talked in the past about not how.

having the ability to hedge most of these tokens anyway. I just wanted to point that out. But John, Ron brought up Canton. And I think one of the big battles that we're going to see, you know, as we're going through this institutional adoption period, is the battle for institutional settlement layers. And, you know, you clearly are at Avalanche. That's where you guys make your home is saying,

hey, we are going to be that layer for institutions. I just want to get your take on the rise of Canton, the rise of Avalanche, Ethereum. How does this all shake out? out. Well, I mean, first of all, kudos to kantan. They've built a very good consortium of large financial services companies from Goldman to bMI, et cetera, that not only are equity holders, sometimes token holders of the kantan token, but they're also, you know, part of the consortium using kenton, if you will. The kenton, if we go back to the history of kenton, it started out as private

chains. They help individual banks, individual financial services companies. build private chains. And then they had to connect these private chains, allow them to talk. And that's kind of how the whole Canton public narrative started coming out because they're allowing the private chains to somewhat connect and talk to each other. I think Ram even called it a fake blockchain earlier

because there was really more of a DLT, and then they're trying to build gates around each and these private BLTs. But with that said, they've done a very good world getting a lot of volumes in terms of treasuries, repos, working with places like Broadridge and having things run through those private chains. Avalanche and some of the crypto-native stuff started decentralized. These guys started more centralized. So I think they've over-indexed two things, which is large institutions and centralization,

and they're trying to reverse-engineer that. Now, whereas the rest of the universe that we're used to started out more permissible. We've over-indexed or indexed to permissionless, and as well as not necessarily the mega financial institutions, but other financial institutions. I mean, Avalab just announced another partnership with a company called Intane in the asset-backed securities world with FIS. Now, FIS is actually a $40 billion publicly traded company, bank technology, for a lot of banks, not just large, but mid-sized banks.

So what it does exactly is Intane has automated the asset back workflow and made it now basically capital efficient that mid-sized company, non-SMP 500 companies, can access the asset-back security markets. Because in the past, the cost to access that market because the manual workflow was so expensive and the number of parties involved was so, you know, onerous that it was hard for a small company to access that market. But FIS is plugged into small, medium-sized finance services and banks. And Intane has created the workflow to automate that. So now all of a sudden, an avalanche, the same small loans and the stuff you can do on Canton are available for the mid-sized company and mid-sized banks. So again, like maybe the permissionless world overindex for the smaller, you know,

call it individual or smaller institution, and Canton is over indexed to the larger institution, which is literally what the permissionless world was trying to go against. Question for you. I think there's one fundamental question here, and I'm just going to play devil's advocate here to keep it interesting. What's the need for a token whose price is floating if you have a decentralized technology and a permissionless ledger? So that's another completely different thing.

All points of tokens, whether it is private or public, is to figure out utility and use case for it. And for the longest time, Fred Wilson, Munis Square Ventures, thought of the FAPP Protocol, which is like how you get value capture to the people who build the most bottom substrate in a permissionless world. We saw the biggest issue with Linux, and it took so long for Linux to develop into what it was today, and you see it somewhat in AI as well. It's really hard for the people who are going to contribute work and creation in permissionless places to actually ultimately see the value. So how do you incentivize people to do that? And this is a grand experiment with a token for that city state.

It's not a company. It's a city state of people contributing and using. using a community, so to speak. And the thought was that this token was going to help utility and create value and worth for people to want to incentivize them to continue to contribute. I don't think that experiment's over. We can say currently the experiment's gone through many iterations, has not been fully successful.

But I think we're still experimenting and trying to figure out a way to grow permissionless systems faster. Well, I agree. Value capture is another key part of this equation. There's so many issues. here. They just need to be addressed. You're making progress on it. If you have value capture, then it goes back to the Clarity Act and what do we own?

Is it a security or is it a commodity? The other fun of the act, there are two final bosses from a regulatory perspective. Yes, we've made progress of Genius Act. Obviously clarity is outstanding. But the two final bosses are one is securities laws

and the second is the Fourth Amendment in KYC. Okay. So in securities laws, you have a permission list network. That's not compatible with how you register securities. You register securities to raise capital, V and S1, RageA, or RG-CF you can offer to the public. You meet standards to do that. You have the file with the SEC. You have some compliance obligations. What does that look like for digital assets? There's no good answer for that right now, and that is a major issue. That's a major issue for internet capital markets, a major issue for on-chain crowdfunding. It's a major issue.

The second issue is around the KYC framework. It is not compatible with the ethos of decentralized value exchange. Now, somehow the regulators found away with stable coins, right? Stable coins can be exchanged. There's no KYC requirement to send or receive stable coin. If you want to off-ramp, that's where the point of account and compliance and all the rest steps in. That's not true.

That's not true. There's accountability, right, throughout. And this is like something that is near and near to my heart. And I think, I just got to jump in. There's absolute accountability for AML KYC with any stable coin exchange. But that accountability is on the individual, not on the protocol, right? Yes. Very important distinction, right?

So like, like, this is really something that. Stinction screaming, as we're just speaking to, though, like not interacting with bad actors under OFAC. For sure. Well, no, you're still accountable, right? So if you're an issuer, you have to KYC the entity individual to whom you issue that. From there, the onus of AML KYC, if you will, or sanctions compliance, is on the behavior of that individual or entity.

So, like, if I'm in receipt of a stable coin and I try to send it to my friends in North Korea, I'm going to be held accountable. You know, so, like, I don't think it's fair. to say that there's no compliance obligation for stable hoin holders on AML and AFF. No, you're right. I should, you know, there are compliance. You cannot send assets to sanction entities and individuals. You know, the broader point is like the AML KYC framework and the privacy tension between

that, the Fourth Amendment and AML KYC comes to a hidden digital assets. That's the main point. These two are the final. Well, it comes to a head with digital assets because of the permissionless aspect of it. Because, yes, because in a world where you have an AML KYC framework, in that world, Trotify wins. Ultimately, one way or another, Tratfy wins. FinTech gobbles up crypto.

In a world where those two can be addressed, then decentralized digital assets, that world wins. All right. So there's a lot to talk about. John, first you mentioned FIS, right? And I just want to dig in. For those crypto natives who've never heard about it, it's probably the most important, one of the most important institutions in all of Wall Street.

They power all of Wall Street. If you go back in history, Goldman Sachs tried to compete with them in the future space. And Goldman Sachs lost. They spent hundreds of millions of dollars, and they couldn't replicate what FIS did. It just provided this very, it provides this tech infrastructure layer. And so I do think that those kind of partnerships are going to come very much in the during this period of institutional adoption for sure.

We also talked, I'm about this constant battle between token and equity. And I think maybe we can dive into that next because this has been all over the news, right? You saw Hayden Adams at Uniswap talking about unification. Hey, we're going to collapse labs and entities. We're going to burn tokens because there's been this constant friction throughout crypto between whether value accrues to the token holder or to the equity holder. And we've seen many, many iterations.

it causes a lot of hate and discontent. That hate and discontent today is manifesting itself in Ave, where the Dow and Stani and Labs are at loggerheads. And they're saying, wait a second, value associated with the brand, the IP, that should accrue to the Dow. No, it should accrue to labs. I want to start with John because you deal with this every day. You have a protocol, you have token holders.

You also are the president of the labs energy. what is the how does this get adjudicated how does it get solved i mean it's a constant tension look as investors you know i'll tell you that we oftentimes look at both we're like you know why we don't have to call winners we'll we'll look at exposure to both token and equity not sure how it's going to play out five years from now john how do you deal with this this friction right well for convenience let's just broadly characterize equity versus token because each one of these lapsed companies, whether it's, you know, Stani's lab or Axelar's Interop Lab or Ava Lab, there's different levels of equity and token out there. And then certain tokens have no use case. Others do have

use case for gas, for whatever, et cetera, et cetera. So, but for, for argument's sake, let's just reduce it to the most two basic things, like equity value versus token. That's really like assuming we have identified what that token's use case is. Okay. And then if you want to talk about that, then it goes back down to like, what is the utility that it's providing the system? Okay. And also where does the IP sit? If the IP sits at the labs part, then maybe the equity has some value. But if the IP is not that valuable and it's really all about the tokens itself because you use them for gas, use them for paying for trades or whatever, then maybe the tokens have more.

value. So that's in a weird sense, that's not that different from many systems in the traditional world. Think about like, I don't know if you guys have ever invested in hotels or in other things where there's a hotel owner that owns the real estate, but then Marriott or Starwood, they own the brands and they manage the hotel and they get a licensed percentage of all the stuff that comes through. So you now separated appreciation of land value versus the management of the hotels and the cash flows associated with it. That's actually very similar to a lot of this that we're talking about without as much clarity as it is in the traditional world. In the traditional world, when you invest in host, you know that host is the owner of hotels with various brands.

But if you own the stock for Marriott, you know you're getting cash flows for running the brands that house themselves at the real estate that's being run by host. So I think we, need transparency and we need to figure out a clear delineation of what the labs are doing, whether they just are purely IP providers, or are they also token holders and they also are figuring out one part of the governance of how these tokens will be used. As an investor, how do you look at this situation? Do you have a general preference? I think that's a key, that's the key question. You know, it's Lucy Goosey. There's tokens that have equity like properties sometimes or community and governance properties, which you've

got equity, which also should have governance. The whole means to get rationalized out. Like, you know, the interesting thing is now you're starting to see projects talk about free cash flow and buyback. People talking about the hyperliquid. It all comes back to value capture. And free cash flow is an important part of this. Now, one might say, well, gee, well, what about Bitcoin?

Now, Bitcoin is interesting. decentralized money, you're going to have some decentralized currency. But here's the interesting about Bitcoin. You could argue that even Bitcoin had a free cash flow story at a free cash flow coming from micro strategy. That was the cash flow. It was just extrinsic instead of intrinsic. It was micro strategy having these complex, esoteric financial products issuing shares

and driving it into Bitcoin. So even Bitcoin. Now, when the free cash flow machine stopped, What's micro strategy doing? It's doing buybacks. Then Bitcoin started to lag. So, yeah, I think token value, all this stuff needs to get clarified, ironed out. These are the right questions to ask.

Yes. Well, I do think the Clarity Act, once it distinguishes different types of protocols and different use cases and decentralization and blah, blah, blah, will help create more clarity, no pun intended, as to what type of token exists. And therefore, you can distinguish equity value from token value. from token value better going forward. Yeah, I don't think you necessarily even need the Clarity Act or it's centered equivalent. What you really need is taxonomy.

Like, you know, what are the rules around what's a commodity and what's the rules around what's a security? And then, you know, you need to underwrite those assets as a commodity or security. And it takes an incredible amount of diligence to understand, you know, free cash flows, value accrual, burnback mechanisms, supply and demand, utility, you know, blah, blah, blah. And, but I do think taxonomy does, you know, absolutely help you. I don't know how you avoid the friction because, like, again, it's been kind of loosey-goosey. Well, I thought this.

Oh, I thought that. I don't know how projects can avoid this because it seems to keep happening over and over again. You know, oh, like all the values accrual to the units. swap front end, not to the protocol holders. Now, it looks like they've come around now through the unification proposal to say, wait a second, we're going to actually go back and burn tokens. Any other thoughts about how this plays out? Well, I think over time, over time, that's the key here.

It's really the people who are participating in the ecosystem are going to help create standards. They just won't participate in things that are vague and unclear. Part of the reason a lot of people went to the spaces for better transparency. You can't have a situation where you thought that there would be a, I guess, a governance call for a change and whatever. And all of a sudden, someone unilaterally just decides we're going to make a change because we can do that. Yeah. Look, the double dipping's got to stop. Investors have to be taken care of, you know, the vesting schedules weren't aligned.

People are going for the quick pops and the quick wins. Now, here's on a more optimistic note. Let's say we look forward. Let's say the dams take back the House, maybe the Senate. that could be a capitulatory event for digital assets. It sets up a wall of worry. And it could be a flushing or rinsing event that makes the asset interesting again. Let us see how it plays out.

I can see that. But the way I will look at that is if you go back to the beginning days of Bitcoin or this asset class in 2008, 2009, we had the great financial crisis in 2008. And that led to, you know, obviously mistrust or, you know, lack of trust for large institutions and central banks and governments in general. That created Bitcoin. And then the byproduct of that was overregulation for like 15, 17 years, consistently new regulation, regulation, regulation.

And then when you have so much regulation, you know, it's really hard to service everyone, allow the small player to get access to things and et cetera, etc. And crypto was basically not only leveraging the trend of distrust for institutions and governments and central banks, but also they were the deregulatory story, if you will. So people said, okay, we're going to create our own rails that people can get access to financial services, can move things around instead of paying 20% through remittances, et cetera, et cetera. And all of a sudden, you know, not even the first Trump term, it's really the second Trump term, and all of a sudden there's a true movement for deregulation.

So that greater meta theme of deregulation has created more of everything else and lost some of that interest from existing crypto builders and developers because suddenly, you know, Stripe is in there doing things for stable coins. And so is, you know, Visa, et cetera, and it allows, you know, new participants to start using these rails or quasi-rails, if you will, if it's probably. Yeah, M&NN would be interesting. And if you saw outside MNA, like a Visa and MasterCard did some kind of acquisition in digital assets. I don't mean like a C-Fi, but there's something more on-chain related. That would shake things up right away.

Well, you saw a circle and axelar, right? That's kind of interesting. Not great for the axelar holders, but kind of good for sure. That's partially going there. I mean, they're buying the IP and people, not necessarily. Yeah, it's in the right direction. It's in the right direction. I think Rahm is saying take the network, not necessarily just the labs part.

Right, cool, right. Cool, guys. Hey, we have to, before we go on, we have to take a quick break. We'll be right back after a word from the sponsors that make this show possible. Mantle has entered a new phase as the distribution layer connecting TradFi and on-chain liquidity. To accelerate this vision, the Mantle Global Hackathon, 2025, is inviting developers to build scalable, RWA and DFI products. Why build on Mantle? It's an ecosystem built for builders. You get direct access to ByBits 7 million plus users for potential listing exposure, support from the $4 billion

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I don't know. I'm a little more constructive around. I see liquidity coming back into the system. I see the Treasury General account coming down. You know, we're moving out of QT. So I think that was... Where are you expressing? How do you express that?

That's what I was going to ask you, man. I'm the host today. You got to answer. I was trying to hedge you off at the pass. Blomering right back, Chris. I mean, I'm not, look, I'd rather to wait for a better setup than opportunity set. You know, I think the better opportunity is just elsewhere right now. Look, when I see it here, I'll let everyone know.

I laid out how I would think about that. Maybe after midterms, I guess that gives us a year. Funny thing about that, that would set up the next four-year cycle. typical bear market year, year and a half, right? That would be setting up to the next cycle on cue. You know, Rom, you should have said Avalanche, right? Well, I mean, I don't want to count myself or Avalanche, but I would look at this asset class as a long-term thing.

And it's, you know, if you want to get involved, I think I'm actually more positive on 2026 than probably Ramos, but you seem very bullish on 2026. Just because, again, like the market forces are filtering out the nonsense supply. So actually the supply is going to be more limited. And then there's going to be far more distribution to RIAs to also institutions. So I think naturally, call it the quality supply will be limited, but the demand for that

will increase and are more bullish on that. But I think the stuff that Ron mentioned earlier, competition with other asset classes that are early stage, whether it's AI to certain parts of AI to, to, you know, rockets to EVTOLs to other stuff like that, we'll be out there for the user or the investor who's more inclined for the very speculative. And don't forget, prediction markets are there's also a natural competition for a lot of this.

I'm not talking about just crypto. I'm talking about for EVTALs, for space, you know, equity, for very venture-like equity that somehow has become public through the last spec cycle. Yeah, prediction markets you can't deny. I mean, one of the big success stories of 2026. But value doesn't necessarily accrue to crypto in that space. It accrues, I mean, yeah, maybe the underlying layer two or layer one, whatever, may get some utility.

But, you know, that's not really accruing value necessarily to crypto aside from the rails. Did you see the boxing match with AJ and Jake Paul? So they had a polymarket logo on AJ's trousers. So I don't know if polymarkets actually making revenue, those. Are they making revenue now? I know they. I'll be honest with you. Like, to me, I'm in a with the riddus guy, you make revenue three different ways through fees, through net interest income and also through data.

When you hear Shane talk, he talks largely about data, data, data, most exchange models, data is actually the lowest revenue generator. Yeah, yeah. But gosh, they're like one flick of the switch away with the stable coins. Stable coins are the new net interest income. I'm going to say that again. Stable coins are the new net interest income. If you have a deal with the stable coin provider, you're like, hey, dude, I'm flipping the switch. That interest comes to me.

That is your new net interest income revenue stream. And I think that's the way people are going to look at it throughout. When I see 2026, I think there are going to be a couple of battles. One is the battle for stable coins. I'm dumping yours. You're taking mine or you're giving me that yield. The second is the battle for settlement layer. I'm going to capture the sequencer fees because you're settling on my chain.

I'm not going to your chain. I like that, Chris. I mean, I'm sure you saw the Coinbase news about essentially like a stable coin as a service that you can spin up because the world needs more stable coins, I guess. Well, you can brand it, right? You can brand it. We should talk about the Coinbase announcement. I'm glad you brought it up.

There's this vision now. And even like the chairman of the SEC has been talking about it, super apps, the everything app, the everything exchange. Coinbase is announcing, hey, one-stop shop. You know, what's your take, Rob? We need to solve real problems, customer problems, make money movement easier, lower the cost of interchange, make borrow lending easier, reduce counterparty risk, lower the cost of financing, do on-chain tokenization of real assets, cut settlement times and capital time. Those solve real problems. The world doesn't need 97 new stable coins. You have stable coins out

there. You've got a lot. You've got Nick Vanek, who's got a decentralized launch of stable coins as a service program as well too. So this goes back to, again, like hype versus reality. There's so much capital throwing stuff at the wall because it's on theme. And Rahman Hood did the same thing. When they said, we're launching a layer one and we're going to tokenization. You try to scratch a little bit more. Like, what are you really trying to do? What are you trying to accomplish?

What problem are you solving that's going to cut costs, drive value, convenience, revenue? It's just, it's hard to see that. Now, I think the bigger story there is, you're right, the super app story. And like, this will be a big story for 26, which is, it's a, it's, What we've been talking about on the show is the convergence of different assets, convergence at the app layer where it all comes together. The SEC chair, Paul has been talking about this. So crypto is going to start looking more and more like TCPIP on the back end,

like Polymarket, which is built on Ethereum. And it's going to be more around who owns the end user relationship. This is a complex story. Look at Google, right? Google Gemini is now on pace to be the size. fastest growing app of all time to a billion users faster than chat GPT. And they have an installed base with existing distribution. This is back to what we call, what you call the Empire Strikes Back theme.

So the super reps are here. You've got the big brands coming, the others that'll step in. Coinbase and Robin Hood are duking it out. And when you see competition, it just hurts profits. That's the issue. It's great for a consumer. Competition is what makes capital isn't great. But we welcome the competition.

competition. Let's bring on the competition. It feels like we're moving into a bipolar world in a way, John. Robin Hood Super app, Coinbase Super app. You know, what's your take? Well, I mean, don't forget, Schwab just bought Forge for private securities. Interactive brokers also, you know, have made headway in prediction markets and other things in this space as well. So there's still many other apps out there. I think what Coinbase and Robin Hood brought together is basically that yet, you know, that you know, you know, younger demographic where there's growth in terms of the assets per user.

Now, it's going to be segmentation. And with the Clarity Act, it's not clear that Coinbase can be everything for everyone because they get away with things that are in the gray area that traditional financial services companies cannot do once it's clear what a token is, the taxonomy you called earlier. You know, it's really hard to be the New York Stock Exchange, the Citadel. for market making and the bank for issuing things all in one place. Right now it's possible, but once the rules are clearer, we'll see what happens.

With that said, going back to one theme we talked about earlier, which is KYC, on RAM, and off RAM, there is no doubt Coinbase has a structural advantage for doing things correctly or at best as you can in the last 10, 15 years of existence. So they have a huge edge over Robbenhood. Rob was coming in from the equity side and Coinbase is coming in from the crypto side, but they are going to bump heads. Wow, John's calling Coinbase over Robin Hood. Are you there as well, Rom?

Or are you taking the other side? I think it's, you know, when competitors meet an intersection, no one wins. It's not just that. Look, I would wager that X, formerly known as Twitter, they will have a super app. It'll have trading. It'll have payments. It'll have lending. They're going to get in this game, too.

they're not the only ones. I mean, you're going to see proliferation. The super app thesis is one of these obvious opportunities that's going to attract so much capital and just a number of players trying to get after it. The big tech companies would try to do this if there weren't limitations preventing them from being banks. So they're going to, you know,

they're going to try to do it from owning the AI layer and having a personal assistant that can do your econ transactions. You know, It's an interesting, look, Robin, who's got a pretty expensive valuation now. It's had an incredible run. I don't know, it's like, what, 55 times earnings now, and competition's increasing. So one question is around who's got a better dog in the fight. The other question is around, how do you make money on this as an investor?

I think both are tough questions. Kind of my view and next year is more like, have a bias towards value. I think you'd get a high beta rally now, the Santa Claus, rally. I think that's happening now. Quantum stocks are up like 15 points today, for example, right? It's going to happen. But I think actually value does better next year. Look, overall, we just got a bit ahead of ourselves on a number of different fronts. And now the vibe is like free cash flow and buybacks and earnings yield. Like, that's the vibe now. That's the sentiment. Well, I'd be interested because, you know, no doubt we're more value-oriented right now,

You know, down markets, especially in crypto, always, you know, people start talking about value and revenue capture. The thing is, like, everyone's expecting somehow it's going to be a big IPO year. If you consider competitors to the crypto asset classes, broader than just, you know, crypto itself to all the high beta stuff. How are we going to have a good IPO market if values really back? Because a lot of the IPOs are really, truly high-growth stuff. Yeah, yeah. No, that's a great point. Yeah, a lot of names on IPOs, SpaceX, Anthropic.

That's a lot of float hit the market. Yeah, I want to get to that for the last subject about capital formation. But I want to say my take first on the super app. In the U.S., John, I kind of agree with you, kind of disagree with you. It's been regulation that's really prevented this creation of the super app because you've got different stuff in different pockets. But this administration is anti-regulation. I think you're going to see more and more of it. And what is the end goal here?

It's like two things that we used to say in Tradfai, operational efficiency and capital efficiency. You know, what is that operational efficiency for retail? It's that like beautiful UI, one-stop shop, I can just do whatever. Like, I don't know if you guys noticed, but it's not only Robin Hood and Coinbase that are getting into the game. If you look around the corner, you'll see from a decentralized perspective, MetaMask can do most of those same things right now. Phantom announced prediction markets today. So you got that vector coming in, too, super, super interesting.

But I think Rob's take on Twitter is another one. It's going to be battle for the super app. Last topic, guys. But think about this. Doesn't mean entrepreneurialism would be dead. Because if you look closely at Coinbase's announcement, they're not 100% doing everything all by themselves. They are partnering with certain areas on each one of those things they said they would do.

Well, they are until they're not. Like, you know, look at what they did with Cal She. but then they just bought today. They are until they're not, correct? Yeah, right? They bought the clearing. Do you guys pick it up? Yeah, it's a small,

it's an earlier stage prediction market, but they bought it, yes. Right. I think Robin Hood went live with Arbitrum, but then they're probably going to do their own thing, right? And so I don't know if these are, you know, permanent relationships, but something to watch.

Last question, guys, and I know we're running out of time here, capital formation, you talked about IPOs. When Jeff Dorman came out last week and was talking about just how awful the TGE environment has been, and I think, you know, he said of 118 token launches, tracked this year, 85% are now below their TGE valuation. Hey, everyone. Quick note, Christmas spoke here, and it was Ash of Memento Research who tracked the 118 TGEs this year.

Are TGEs dead? well, in the current manner, they're dying and they're not dead. I mean, it goes back to what's the use case and what's the token economics and why do this TG need to be there. Yeah. And then like, look, going back to the Coinbase News, they have a platform at a launch pad as well. Does that solve it? Curation helps a lot, actually. I do think curation plays an important role.

You know, you have that in other markets. You know, you have a south side investment bank who, puts their reputation on the line, and they go to the bystand and they say, look, we've underend this. We think the numbers are sound. We think it's a good story. We think you should get involved. So I think that curation is an important step forward. There's a lot of other things we need to, setting standards and all the rest. But yeah, I like that. Yeah. I agree. Curation is important. At the same time, you have to figure out what the standards are because what are you curating. Yep. All right, guys. So let's all go forth and curate.

And with that, I just wanted to thank John, a special guest joining us today. Really appreciate it. Thank you, everyone, for joining this episode of Bits and Bips. We'll be back next week to talk about more of the world of how crypto and macro collide. Until then, everyone, thank you.