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The Bull Market Is Back! But Bitcoin Isn’t Leading It? — Transcript

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0:04Bankless Nation, it is the fourth week
0:06of September and we've got a bull market
0:08on our hands. It's a bull market, but
0:11whose bull market is it? That is the
0:14question. The majors are up a little bit
0:16this week, while the middle of the
0:18market is up 30%, 40%, 50% in just 7
0:23days. So, what's going on? Even crypto
0:25guru Ben Cowan has said that the bull
0:28market is on. We're going to talk about,
0:30we're going to dissect the current state
0:32of the bull market.
0:33>> Yeah, I think once Ben says it's on,
0:35he's been bearish lately. Once he says
0:37it's on, that's confirmation enough uh
0:40for me. We also got to discuss Zcash at
0:44a near 10-year high. I think that's a
0:47fundamental change in the market and I
0:49want to get your take on it. Also,
0:51David, tell me about Kshi. They got
0:52cooked this week. There was a bunch of
0:54wash trading, a million identical $5,500
0:58trades. The Wall Street Journal is
1:00talking about this. Some guy on Twitter
1:03is talking about this. And also, I saw
1:06Vitalic has blessed a prediction market
1:09called Truo. That token was up a lot. He
1:12said this is the prediction market
1:14without any of the corpo slop. So, we'll
1:17discuss what that means. Meanwhile, as
1:20we discussed, the 30-year Treasury, the
1:2210-year Treasury are all printing their
1:24highest yields since like 2004.
1:28Not only is it a crypto bull market, but
1:29it is also a bond yield bull market,
1:33which is bad. Usually, that's bad. Do we
1:36care? Does Bitcoin even care about high
1:40yields? I think that's another question
1:42that I want to ask. Let's just look at
1:43the charts. However, Bitcoin made its
1:45first leg up from like $63,000 up to
1:48$78,000.
1:50And people weren't totally sure if that
1:53was, you know, a head fake or not. But
1:55we have since made a second leg up from
1:57about $77,000 up to $85,000.
2:01And now people think it's on. I also
2:03think it's on. The second leg up off the
2:05200E moving average, I think, is is a
2:07pretty big deal. That marks a eightmonth
2:09high on Bitcoin, the highest prices
2:12since January of this year. And so the
2:15people who have previously been been
2:16saying there is going to be a fourth
2:19quarter dump, you know, we're not done
2:21through the bare market. We're going to
2:22once again touch the 200 week moving
2:24average once again in fourth quarter,
2:26maybe even go below it. Those people are
2:28starting to change their tune.
2:30>> Yeah, I think there's starting to be
2:31growing consensus even among the psych
2:34the crypto cycle investor experts.
2:37people like Michael Nato Cyclers.
2:40>> The four-year cyclers. Uh Michael Nato
2:43from TDR I would say is one of them. Uh
2:45Ben Cohen also from Into the Cryptoverse
2:48is another one of them. And both of them
2:50are aligning and saying that the weight
2:53of probability is exactly where they
2:57they'd want to see it for calling an
2:59early bull market. In fact, we'll get to
3:01Ben in a second because he's kind of
3:02flipped on this. He was holding out. He
3:04thought we were still in the bare market
3:06that there would be another leg down
3:08that we wouldn't see a light at the end
3:10of the tunnel until sometime in October.
3:12And he's on this week. He's apparently
3:14changed his mind on this. But Michael
3:16Nato, I talked to him on Wednesday for
3:19the TDR podcast and he said, "I'm ready
3:21to say it now." He was previous weeks he
3:24was cautious that this was an early bull
3:26market. And he's saying he wasn't sure
3:28yet, but now he's at 85% probability. I
3:31think there was a number of metrics that
3:33really nailed that uh to him. One is the
3:36golden cross was confirmed. Okay, so for
3:39people who don't know what a golden
3:41cross is, that's when the 200 day uh
3:44moving average um the the 50-day moving
3:47average crosses the 200 day moving
3:49average and that finally happened in
3:50previous cycles that has indicated that
3:53we have broken the back of the bare
3:55market and we've entered the early bull
3:58phase. He has some other reasons that he
4:00thinks we're in the early bull market.
4:02So there's a a reset in the holder
4:05structure. You know, he follows these
4:06onchain metrics of the cohorts, the cost
4:09base of the cohorts and and which cost
4:11basises are holding what coins uh where
4:15you you see this process of coin cycling
4:17from weak hands back to strong hands and
4:19the strong hands form the base for the
4:21next market. Anyway, that reset has
4:23completed. Now we've got a bunch of
4:25strong hand and in the 56k to 92k range
4:29of Bitcoin. 37% of all supply now sits
4:33there. So we've gone through that cycle.
4:35We have a reset in leverage. You know,
4:38Michael Sailor Strategies STRC that's
4:40back trading at almost 100 and that that
4:43is a belt uh weather for leverage. A lot
4:46of the leverage got flushed out during
4:48this bare cycle. We have a bunch of the
4:50KPIs that were hit. So, uh, you know,
4:53realized losses as a percentage of
4:55change in realized cap, those types of
4:57things, supply and profit, all of the
4:59KPIs you'd say would would be bare
5:02market bottom indicators. The majority
5:05of those were hit. We just hit the
5:06golden cross. And then this, we
5:08reclaimed the 50week moving average. We
5:11did that two to three months from the
5:13cycle low. That's exactly what we we you
5:15would expect to see. And the 50we moving
5:18average right now is 78.8K.
5:22So, we've locked in at least one of
5:24those, a monthly close above 78.8K.
5:28We lock in another and another after
5:30that, then we're kind of like that
5:32solidifies it. It's that that would be
5:35according to all previous times we've
5:37seen it the end of the bare market and
5:40definitely final confirmation that we
5:42are in the early bull phase of the
5:45market. And I haven't kept up with Ben's
5:48work, Ben Cohen's work. I know you are
5:50having him on the Bankless podcast
5:52tomorrow, but I think he's been a 4-year
5:55cycle believer who sort of held out and
5:57has said, "No, we're still in the bare
5:59market, right? The bull market is
6:00coming. It's coming sometime this year,
6:03but not until a little bit later." And
6:06he changed his mind on that this week.
6:09Yeah. Both Mike and Ben I categorize as
6:11these guys who move slowly, require a
6:15lot of evidence, but when they change
6:16their mind, it's firm, as in they're not
6:19going to change their mind again in one
6:22or two or 3 weeks. And so it's it's kind
6:24of a big deal because it takes a lot of
6:25evidence for them to change their mind.
6:27The last time I was talking to Mike on
6:28the TDR, we really talked about
6:31comparing the last bare market to this
6:33one. And the last bare market was, you
6:36know, we had the Teral Luna collapse
6:40followed by the three capital contagion
6:42followed by FTX, like one, two, three
6:45sucker punches that created just so much
6:48pain and pressure, downwards pressure on
6:50the market, followed by the Gary Gendler
6:53era of operation choke point 2.0. Pretty
6:57bad time. Yeah. Uh and during that time
7:00you had Bitcoin not at the 200E moving
7:04average but below the 200E moving
7:06average for almost 2/3 of a year and
7:09then again for another third of a year
7:11later and so a meaningful amount of time
7:14below the 200week moving average which
7:16was unique idiosyncratic in Bitcoin's
7:18trading history. And then so when I was
7:20on the TDR with Mike last we talked
7:22about how we are at the Bitcoin is at
7:24the 200WE moving average but also we had
7:28no three hours capital we had no uh SBF.
7:31Uh we have not Gary Gendler but the two
7:35most positive crypto regulators at the
7:38SEC and CFTC. This this bare market is
7:40different. Granted we were saying that
7:43when Bitcoin was at the 200WE moving
7:44average. Bitcoin could have potentially
7:46broken down below the 200 week moving
7:49average. But I think now if you are
7:51accepting that we are indeed in a in a
7:53bull market, we're not going back down
7:54to the 200E moving average for a while.
7:57You can take this bare market which was
8:00two pretty short time, a pretty short
8:02time at the 200WE moving average, never
8:04got below it. Compare that to the actual
8:07fundamentals of we don't we don't have
8:10to pay for our sins cuz we didn't have
8:12very many sins. Michael Sailor paid for
8:14his sins by selling Bitcoin under his
8:17purchase price. Uh, and we didn't spend
8:19too much time there. And so to me, those
8:21two things are congruent. Like very big,
8:23painful bare market for very valid
8:25reasons in the past. This bare market
8:27much shorter because we have a lot less
8:29debt and we get to move on quicker. I
8:32think those two things check out. Yeah,
8:34the 200E moving average is 65.5K
8:38right now. And you're right, we we did
8:39spend some time below that, but not very
8:41much time this bare cycle below the
8:43200E.
8:44>> The furthest we ever got below was about
8:465 to 8%. Uh last bare market, we got 35%
8:50below the 200E moving average and stayed
8:52there for a while.
8:54>> Yeah. If we if we do now, here's a
8:56here's a if type of scenario. If we do
9:00hit that 65k or go below that for some
9:04period of time, say we get a few monthly
9:07closes below that 65k amount, you're
9:09saying you don't think we will. Michael
9:11Nato agrees. So does Ben Cowan now. They
9:14all agree. But if we did, I think that
9:17would break the back of this early bull
9:20thesis. So that's a number to to watch
9:22out for.
9:22>> Oh, certainly.
9:23>> But like that's it's not evidence of we
9:26went down there. It's already broken.
9:28See, this is like all of the people
9:30saying it's not going to happen and this
9:31consensus that we are in early bull does
9:35raise an eyebrow for me a little bit
9:37because if everyone's saying it then
9:39it's like well maybe but
9:41>> well previously everyone was saying that
9:42we were going to break down in October
9:44in Q4 and so that also raises an
9:47eyebrow. You should as of being in the
9:49market you should always have an eyebrow
9:50raised.
9:50>> Yeah, that's right. Okay. But I I do
9:53agree that uh it looks like we are in
9:56the early bull phase. So I you know I
9:58think that's probably true. Ben Cowan
10:01talked about he actually released a
10:02video why I was wrong. Maybe you're
10:04going to have to ask him why
10:05>> not why you Ryan was wrong. Why I was
10:08wrong.
10:08>> Exactly. Why Ben was wrong. He he's he's
10:10bullish now of course. What he got wrong
10:12in his words. He he said I assume the
10:14interest rate hike he's talking about
10:16the Fed hike that just happened with
10:17with WH last week would immediately
10:20bring Bitcoin down and it didn't. So
10:22where he got it wrong is he said my
10:24thesis was that rising energy prices
10:26would cause the long end to go up then
10:28they would raise rates in September then
10:30the dollar would go up and Bitcoin would
10:32repric because of the rate hike. That's
10:35why essentially he he thought there
10:37would be one more leg down. Also
10:40previous bare cycles have lasted 9 to 12
10:43months. It was getting towards about 9
10:45months but you could see it last 12. So
10:47that's why he was calling for kind of a
10:48bottom October toward the end of this
10:51year. But what he got right or wrong I
10:54would say if you could sum it up is
10:56probably macro is just overindexing on
10:59macro and Bitcoin crypto just plowed
11:02through all of those macro concerns and
11:06that I think is a lesson for all of us.
11:08It's just like I enjoy some good
11:10old-fashioned macro com commentary. I
11:13really do. But I have to treat that and
11:16I think any savvy investor who's been
11:18here for a while, including Ben. Ben
11:19knows this. You have to treat that macro
11:22analysis with a grain of salt because
11:24it's a very complex engine. There's so
11:26many other factors. The thing that won
11:28out here, I think, was coin holder
11:30rotation and seller exhaustion and it
11:33was just time to go up after 9 months of
11:37crypto winter. And so you don't want to
11:39be out of the market when the market
11:42decides it's just time to go up.
11:45>> Yeah. Yeah. I do I do take that
11:47perspective. I was trying to not be a
11:49four cyclinger on the way down, but for
11:51some reason I see myself being a four
11:55cyclinger on the way up. CoinDesk had a
11:58pretty interesting article. Uh I I
12:00thought it was pretty interesting. It
12:01says uh the data proves that Bitcoin
12:03doesn't care about rising bond yields
12:04over the long term. and they had a bunch
12:06of analysis and they say basically say
12:08that uh the correlation between the
12:1110-year yields and Bitcoin is at 0.18
12:15inverse and so you know if if yields go
12:17up bitcoin goes down with a8 correlation
12:20which is very low that's just not that's
12:23insignificant and I one of the reasons
12:25why I think it's insignificant is
12:27because so much of crypto cycles are
12:30herd mentality and when it's time to go
12:33up it's time to go up people like the
12:36last bears sell then they're not in
12:39control of the market and the only
12:41people left are those left to bid and
12:43people who have cash see the the herd
12:46get the contagion of like well
12:48somebody's making money over there let
12:50me allocate let me allocate and all of a
12:51sudden everyone's allocating and we get
12:53momentum on our side so like my
12:55rationale for why Bitcoin is up at the
12:57200WE moving average and why it's up
12:58season right now when things have been
13:00going up for like five weeks straight is
13:02because it's time People are bullish,
13:05people are allocating, and that's that
13:08is spreading in a like a contagion
13:10across the investor field.
13:12>> Well, in the words of Michael Sailor for
13:15to to all of the the former bears, he
13:17says this to Ben Cowan, welcome back.
13:20So, welcome back early market.
13:23>> Feels good.
13:24>> Now, that doesn't necessarily answer the
13:27question as to whose bull market this
13:31will be. So say we are in the early
13:34phases of a crypto bull cycle. The
13:37question now any investor in this space
13:39has to ask is okay what assets do I want
13:42to hold for this next fifth crypto bull
13:45cycle. And the answer previous to that
13:48was certainly Bitcoin. You want to have
13:50a good portion of Bitcoin outperformed
13:53last cycle by a lot.
13:55>> Um will that continue this cycle? It's
13:58been interesting to see a bunch of other
14:00tokens, some altcoins, let's say,
14:03outperforming. Ether up a little bit on
14:06the week, about 9%, but you'd even
14:08consider ETH a blue chip. And maybe
14:10we'll talk about that uh in a little
14:12bit. Let's let's first maybe talk about
14:15some of the coins that you've seen
14:17outperforming and whether we can uh
14:20extract any pattern from this early bull
14:23phase into what we might see into the
14:24into the future. what what's been doing
14:26really well.
14:27>> Yeah, you said ETH was up a little bit.
14:29It's up 9% which is a good amount, but
14:31it's a little bit in comparison to
14:34Athena which is up 40%, Uniswap up 30%,
14:37Onondo up 30%, Jupiter up 30%, Arbitum
14:41up 30%. And so the the the like
14:45benchmark, the hurdle to be above the
14:48market was something like you needed to
14:50be up 15 or 20% this week to be beating
14:54like an index of all like legitimate
14:57crypto assets.
14:58>> What do those things have in common?
14:59What's what's the thing that ties them?
15:01>> I'm so glad you asked, Ryan. They make
15:03money. They all print revenue. Athena
15:06prints revenue. UniS swap the fee burn
15:09on Robin Hood chain is printing uni fee
15:12burn you know revenue Jupiter all of
15:15these things have revenue arbitum the
15:17only significant layer 2 token to
15:20receive the pump is getting revenue 10%
15:23of Robin Hood chain fees which is why
15:25arbitum and not any other layer 2 tokens
15:28are up this week it's revenue yeah so
15:30arbitum is up which is like in a world
15:32where layer twos are just they've been
15:34just bleeding uh for the last few yours.
15:37It's not like there's a secular
15:39narrative. Oh, let's pump L2 tokens this
15:41time around. Only ARB is pumping and
15:44it's pumping because of its ties to
15:46revenue from the Robin Hood chain that
15:49you can clearly see. It's a different
15:51reason for
15:52>> uh you know it being up than we've seen
15:54in previous cycles.
15:56>> Just like we talked about keeping one
15:58eyebrow raised during the bull market.
16:00Um Bitcoin Cash moved 50%.
16:05Don't tell me that.
16:06>> So, like,
16:07>> what do you tell me? Let me look at X
16:08XRP. How did that do on the week?
16:11>> Yeah. How did XRP do?
16:12>> XRP
16:16um on the the
16:17>> 17% 17%
16:19>> 17%. So,
16:22okay. Well, I don't I don't know that
16:24that disproves it, David, because it is
16:27true that everything is getting a bit of
16:29a a raise from this, but also it is true
16:32that um the cash flow generating tokens,
16:35the tokens with buybacks and real
16:37revenue story are outperforming
16:39disproportionately.
16:40>> Yeah, there are it's been that true for
16:43a while. Delphi Digital put out a tweet
16:45about like how revenue generating
16:47assets, a basket of revenue generating
16:49assets were up like 17% while the blue
16:52chips, ETH, uh, Bitcoin, Salana were
16:54down 30%. And they put that tweet out in
16:56June and that's been only even more true
16:59ever since. Well, some people have been
17:01going f far f farther. So, I actually
17:02saw um publisher David Feld uh from
17:05Banklist published this in Bank list in
17:08the newsletter. This is not Bitcoin's
17:09cycle. And he made the case that, okay,
17:12look at all of these assets that are
17:13pumping. They're they're they're
17:14pumping. They're growing fast because of
17:16cash flows. Guess which doesn't have
17:18cash cash flow. That is Bitcoin. And by
17:20the way, who is the next marginal buyer
17:23of Bitcoin? Sailor has all he wants.
17:25Last cycle, we had ETFs. And you could
17:28quite clearly see institutions being the
17:30next marginal buyer. Does Bitcoin have
17:32that this cycle? Will it continue to
17:35outperform? And another way to take a
17:37look at that is like market cap Bitcoin
17:40dominance. Right now it's at about 59%.
17:43The usual model for what happens during
17:46the early bull cycle is we get early
17:49Bitcoin dominance. So Bitcoin dominance
17:52increases early in the cycle and uh then
17:55alts follow later. So it's always
17:57Bitcoin leads then alts follow. Is this
18:00going to be a little bit different this
18:02time? Like maybe what David Feld is
18:04saying is maybe this will not be
18:06Bitcoin's cycle, at least not to the
18:08extent it was in previous cycles and and
18:10certainly in last cycle. Do you buy that
18:13argument? Do you think that other crypto
18:15assets are going to get their time in
18:17the sun and Bitcoin just doesn't have as
18:20much potential this cycle? Also,
18:23obviously
18:24>> much larger market cap. You have to take
18:26that into account, right? can't we're
18:28not comparing apples to apples when we
18:30we compare like a multi- trillion dollar
18:32asset to something that's you know in
18:34the you know tens of billions.
18:36>> But that aside, do you think Bitcoin
18:38will do as well this cycle as as last
18:41cycle or do you think other crypto
18:42assets will take take center stage here?
18:45I I do go back to the era of like DeFi
18:48summer where Bitcoin and Ether were
18:51unresponsive
18:53while there was like money flying hands,
18:56euphoria, insane amount of wealth
18:58generated in like the lower market cap
19:00assets or the brand new assets. And then
19:03what happened, you know, Bitcoin went
19:04from $6,000 to to $660,000,
19:08you know, Ether went from $300 to $4,000
19:12plus. Uh and so like maybe like the
19:15attention always starts inside of the
19:17cryptosphere and then it bre you know
19:20then it overflows and attracts attention
19:22and that's what moves the blue chips. Uh
19:25and so that pattern could still play
19:27out. But nonetheless, I am also
19:29concerned like the average typical
19:31commentator on crypto Twitter I would
19:33say is just like our blue chips are
19:35really big and they're hard to move and
19:37who is the marginal buyer of Bitcoin
19:40when gold is still doing its job as gold
19:43and who's the marginal buyer of Ether
19:45after like Tom Lee? I don't know who's
19:47buying the blue chips cuz it's not me.
19:49I'm done. I'm done.
19:51>> They're too big,
19:52>> right? It's not going to come from
19:53cryptonatives. It has to come from some
19:55new set of buyers and the market's maybe
19:57still establishing that. I I still think
19:59there are net new buyers, right? Even
20:02Michael How is certainly not a
20:03cryptonative, someone I do follow, I
20:05enjoy his macro takes. I enjoy his
20:07global liquidity takes. He still talks
20:09about Bitcoin as a 5x kind of levered
20:13gold type position in that if you
20:15believe in debasement you could buy gold
20:18or you can buy Bitcoin and it has a 5x
20:21multiple to gold when global liquidity
20:23goes back up. Right? So there is a set
20:26of institutional believers out there who
20:29aren't sort of the crypton natives that
20:30you interact with that I do think will
20:33continue to be the marginal buyers of of
20:35Bitcoin
20:36>> and they are going to believe even more
20:39this cycle as Bitcoin recovers as new
20:42time uh all-time highs are are breached.
20:45Yeah, I do think on the longest of time
20:47frames like if you believe that thesis
20:49and therefore you are looking to have
20:52exposure to debasement and you weigh
20:54Bitcoin or gold and you have a 10 plus
20:56year time horizon then I bet you that
20:58that plays out. I think the very large
21:02wide random walk that Bitcoin walks to
21:06like around the debasement exposure line
21:09is very frustrating for investors
21:12because like you can be correct about
21:15debasement on a 5 to 8year time frame,
21:18but Bitcoin just randomly walked down at
21:21negative 30% while gold was more steady
21:24around the debasement line. But then
21:26Bitcoin does the thing where in two
21:27years it makes it all back and then
21:28some. So, it's a very frustrating random
21:30walk. Let's talk about an asset that's
21:33at all-time highs and that is a bit of
21:35an outlier from what we just said, which
21:37is we said assets that we're pumping are
21:39assets that have some sort of cash flow
21:41or revenue attached to them. And yet
21:43here we have Zcash, which just made a
21:4610-year all-time high on the price. Now,
21:49I'm not sure if that's market cap
21:50all-time high. It's probably still
21:52price. market cap alltime high is by far
21:55uh up massively because Zcash inflation
21:58of course. Okay. Yeah, it's the opposite
22:00of what I was thinking. Of course,
22:01>> this is why the Zcash chart is kind of
22:03especially in the first like
22:05third of its life, but also most
22:08importantly in the first like one month
22:11of its life because people like somebody
22:12I tweeted out Zcash alltime high and
22:15then I think Austin came into my replies
22:17and was like technically it's a recent
22:19era all-time high and if you go and you
22:21look at the Zcash alltime high chart, it
22:24starts at like $10,000. But that talking
22:27about in price or in market cap?
22:28>> In price? In price. in price like the
22:30the the first Zcash tokens were trading
22:33at $10,000 for like
22:35>> a day.
22:36>> You're talking about this stupid that
22:38thing does not count.
22:40>> Yeah, of course. Count that's stupid.
22:42>> The thing that the the line the vertical
22:44line that is like reminiscent of Hunter
22:46Biden's laptop token does not count.
22:49>> Yeah, it doesn't. I mean, market cap I
22:51think is the true expression of like how
22:52is this doing as a store of value asset?
22:55So Zcash quite clearly is in the store
22:57of value asset category. It's a crypto
23:00monetary asset. It's like early bankless
23:02thesis stuff where we were like, okay,
23:04there are crypto assets that are
23:07emerging that will have monetary
23:08properties. It's sort of the Bitcoin
23:10play but private. And now we are at a
23:14market cap of we exceeded$ 26 billion
23:19last week. And this has been an insane
23:22overperformer even during
23:25>> the bare market and certainly in the
23:26early bull market like what are we up
23:28here Zcash we went from about eight 8
23:31billion now we went from just even
23:33during the bare market up to now it's
23:35like 7 billion right now to
23:38>> 7 billion was after it pumped for the
23:40first time and it's I I think that was
23:44even not even a year ago like when bit
23:46Zcash went from a $300 million market
23:48cap up to like two billion What? When
23:50was that? That first vertical lineup.
23:53>> What? What's that? The first vertical
23:54right here.
23:55>> Yeah, that one.
23:56>> 10 billion.
23:57>> 10 billion at the top. What was it? What
23:58What date was it?
23:59>> Talking about 2025. November 2025.
24:02>> Yeah. So, it's September 2026. This
24:04whole Zcash thing is less than a year
24:06old. It's It's put on $26 billion in
24:08less than a year
24:09>> in the bare market. And into the early
24:12bull market, put that much on. And when
24:14you start getting to $26 billion and you
24:18don't have cash flows, you are a store
24:20of value crypto asset. You know, part of
24:23your explainer for this was just like
24:25this is Bitcoiners rotating in. It's
24:27like it's catching the Bitcoin trophy.
24:29>> Who is it's not ETH money. It's not
24:32Salana money cuz those assets aren't big
24:34enough. It's Bitcoiners shaving off like
24:361% of their market cap. Yeah. And when
24:39that goes into a $200 million market
24:41cap, it goes to $26 billion. It's
24:43Winklevoss twins. It's Barry Silird.
24:45It's Grayscale. You know, there's an ETF
24:48here. You can kind of naval. You you
24:50could see that rotation into this. But,
24:52uh, the reason it's meaningful, I think,
24:55is because this is a true
24:58competitor maybe to Bitcoin. I mean, $26
25:01billion is still slight in terms of
25:03Bitcoin's total market cap, but the
25:05category it's pursuing is store value.
25:08And the only other asset to even try to
25:10claim at this type of market cap level
25:13that it was pursuing a store of value
25:16type type strategy has been Ether. Ether
25:19the asset and not even the full Ethereum
25:21community has has kind of claimed that
25:24you know and Vitalic has you know been a
25:26little wishy-washy even about that. And
25:29so we have another crypto money that
25:32seems to be emerging in the game. And
25:36you wonder if that's going to persist
25:37for this entire market cycle. And if it
25:39does, what are we going to get to?
25:41Hundreds of billions of dollars for
25:43Zcash.
25:44>> Yeah, it's hard to say that Zcash is a
25:46Bitcoin competitor when you have a $1.7
25:48trillion asset shoulderto-shoulder with
25:51a 26 billion asset. Like that's a 65x
25:54difference. But I think the point we
25:56want to make is that it is a competitor
25:57for the marginal flow of dollars in 2026
26:02buying assets. And so are they going to
26:04buy Bitcoin or are they going to buy
26:05Zcash? And if that flow split is 5050
26:09from the marginal buyer of Zcash like
26:11that that does make it a competitor
26:13>> the other Go for it.
26:14>> Yeah. Well, don't you think it's the
26:16first viable competitor that we've sort
26:18of seen? It's like
26:20>> after after Ether had its like very
26:22valid attempt. Well, who's pursuing the
26:23store value race right now still still
26:25left in crypto,
26:27>> right?
26:27>> I mean, do you think Ether is in the
26:28race?
26:29>> I do. Absolutely. I think Ether is in
26:31the race. I think it's Bitcoin. I think
26:33it's ETH. And I think now when you get
26:35over $25 billion, Zcash is in the race,
26:38too. And I don't
26:39>> see anything else.
26:41>> Yeah, there's there's one more to keep
26:44an eye on that I know that the the the
26:48team is like interested has their eye on
26:50the ball here, which is like the near
26:51team. And I do think that there is an
26:53interesting pairing between Zcash and
26:56near and Bitcoin and Ether. So, so Ether
27:00won the blessing of like the Bitcoin
27:03bid, like the trophy of Bitcoiners are
27:06going to buy this thing because there's
27:07going to be like a an agreement that
27:09like, okay, maybe maybe hedging my
27:12Bitcoin exposure of my multi-t trillion
27:14dollar asset with a little bit of ETH is
27:15a good idea. And so that's why ETH just
27:18did so well in 2021. And that's and I
27:21think that same thing is happening to
27:22Zcash today. Then there's like why also
27:26because of the privacy the technical
27:27superiority the more the more modern uh
27:31asset the one with less tech debt. I
27:33think near is also kind of fulfilling
27:34that same thing. It's also on the
27:36privacy meta. So you have Zcash the
27:38private money and then what is Near
27:41doing? It's doing private intents and so
27:44crosschain like it just privatizes your
27:46asset transfers across chain and the the
27:49volume around near intense is up like
27:5185% on the two week that near is the
27:54biggest mover of the week this week is
27:56up 54% uh in 7 days and I think if like
28:00there's in addition to the Bitcoin bid
28:02there's always been this like second
28:04place trophy which is like the smart
28:05contract bid that Ether Ethereum has won
28:08Solana then won it later like if Salana
28:11won the dominant smart contract bid
28:13flows beyond 2021 and I think one of the
28:16reason why near is up so much in the
28:19last seven days is because it's winning
28:20the smart contract bid and that is the
28:23marginal flows and so kind of going back
28:25to this problem statement that a I put
28:27in my article but we were talking about
28:28earlier is like the assets that are more
28:31attractive than our blue chips are these
28:34much smaller cap assets the 26 billion
28:37market cap asset instead of the $ 1.7
28:39trillion one or in Near's case it's like
28:42the what is it $8 billion asset instead
28:44of the $500 billion one. So the blue
28:46chips are not getting the bids and it's
28:48going down to these more modern more
28:52more new assets that are capturing the
28:55the the marginal flow.
28:57>> I think that could be the case. It could
28:58also be the case that just near is the
29:00recipient of kind of this revenue meta
29:03pump as well. I mean intense are
29:05generating cash flow on near as well and
29:08you can kind of see that you could see
29:10it has product market fit in a set of
29:12applications right it's like the intense
29:14application around privacy
29:16>> also doing things in AI so maybe it's
29:19coming for some of the smart contract
29:21bid but I'm not sure it certainly
29:23doesn't seem like it's coming for the
29:25store value bid though which is like
29:28what ETH bulls in sort of the you know
29:30the the glory years would would uh would
29:33claim and It it does seem to be trying
29:35to actually create a business that is
29:38generating cash flow with apps and
29:40revenue and sort of more more central
29:43kind of control over the product
29:44roadmap.
29:45>> Yeah, it is uh it's doing kind of like
29:48the ultra sound money thing where it's
29:50using the revenues from confidential
29:52intents to like buy and burn near and
29:54they they have like they're averaging I
29:56think like 60% of near issuance is
29:59getting bought and burnt and they're
30:01doing the ultrasound money thing. I
30:03still think the ultrasound money
30:04narrative for Ethereum was the best
30:06narrative that we had and then and then
30:08ETH price went from down from like 4,000
30:10down to like eight and 800 and we all
30:13threw out ultrasound money to the
30:15garbage. I still think it's the best
30:16narrative. It's still worth that being
30:18the narrative and I think like that's
30:20kind of why nearer is stealing the week
30:23won the week this week is because is
30:25because of something like downstream to
30:27that. What remains to be seen whether
30:29this momentum can hold and what's going
30:31to do well during the early bull, but uh
30:34we're going to be talking about it on a
30:35week- toeek basis. Coming up next, there
30:37was a Howard Marks memo. I was waiting
30:40for this to drop uh talking about yields
30:44and why Treasury market, bond market is
30:46going crazy, what assets to buy in order
30:49to hedge against them. I want to talk
30:50about that. Also, does he mention
30:53cryptocurrencies in the memo? We'll
30:56discuss all that and more, but before we
30:57do, we want to thank the sponsors that
30:59made this possible. I've been trading
31:01crypto for almost a decade, and I've
31:03used so many different wallets,
31:04exchanges, aggregators, or frontends,
31:06and I'm basically always looking for the
31:07same thing, just one interface with a
31:09deep liquidity across a bunch of chains
31:11and assets where I can access markets
31:13like pers, earn yield, trade
31:15confidentially, and still control all of
31:17my funds. And I've never really found
31:18it, and I'm just always switching
31:20wallets, juggling gas fees, or getting
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31:54the bankless link in the show notes. Not
31:56investment advice. Bankless Nation,
31:58we've built something for you.
31:59Introducing the Bankless MCP. Chat GBT
32:02and Claude are great at a lot of things,
32:03but ask them anything beyond the basics
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32:13Banklist, on the other hand, has spent
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32:56it out. There is a link in the show
32:57notes. And once you become a bankless
32:58premium member, you can hop into the
33:00Banklist Discord and let me know how you
33:01like it. Cheers. Ryan, we got some more
33:04all-time highs to discuss. The US 10year
33:06is at an all-time high of 5.15%
33:10yields. The 30-year is at 5.44%.
33:15These are highs not seen for over 20
33:18years.
33:18>> Yeah. Almost all time highs in during
33:21the decade, you know, period. Not all
33:23time alltime highs.
33:24>> Alltime highs during the conscious years
33:27of us and our audience.
33:28>> Yes. Alltime highs for the show. Alltime
33:31highs for the crypto industry. Uh and
33:33and honestly show no signs of stopping.
33:36I mean they just keep going up.
33:38>> Uh growing at quite a pace. So uh David,
33:41did you read the Howard Barks memo? No,
33:44because I knew you would tell me all
33:45about it.
33:46>> You know who Howard Marks is though,
33:48right? It's just like
33:49>> I totally but for the benefit of our
33:52listeners, why don't you go ahead and
33:53tell us?
33:54>> I don't know. For me, he's kind of in
33:55the Hall of Fame and he's a bond
33:57investor, but he has just like these
33:58memos that he writes almost like Warren
34:00Buffett like that kind of make sense of
34:02the current environment of the market.
34:04He's, you know, very very seasoned, very
34:07reasonable, very rational, and often
34:11often right. And so I read every one of
34:13his memos that come out. It's just like
34:16every couple months or so he'll publish
34:19something on on what's going on. This
34:21memo was about yields and he knows a ton
34:24about them because he is of course a
34:25bond investor. So it's called shall we
34:28repeal the law of economics and he gives
34:32reasons three reasons for why yields are
34:36rising and it's reasons that our
34:38audience is probably familiar with.
34:39We've talked about this and so Howard
34:42Marx is really reinforcing some of these
34:44ideas. So number one, yields are rising
34:46because inflation is high, stubbornly
34:49high, he calls it. So we have inflation
34:52PCE at about 3.7%.
34:55And recall the target, there is a target
34:57out there and the Fed has still said the
34:59target is 2%. Well, we've been above 2%
35:03for a long time
35:04>> since co really popped our ability to
35:08hold 2%.
35:08>> Yeah. and 2% is just like we've never
35:10gotten back there. In fact, we're in 3%
35:13range and the high 3% and rising. So, we
35:16have the war in Iran, we have oil
35:18prices, lenders are demanding some
35:20protection from uh inflation. So, they
35:23demand that in the form of higher
35:24yields. That's the first reason. The
35:26second reason which has been a bankless
35:28theme of course and a theme of all of
35:30crypto is there is zero fiscal
35:33discipline in the US and not just the US
35:37all countries around the world you know
35:39fiscal situation blowing out of control
35:41uh sovereign debt is uh you know
35:43exploding there's no signs of reigning
35:45it in he said that the US has a golden
35:48credit card there's no credit limit the
35:51bill never comes and this is of course
35:53the US flexing its ability as the
35:55sovereign
35:56uh reserve asset and the global reserve
35:59currency. It's it's kind of flexing that
36:01golden uh credit card capability, 40
36:03trillion in debt, 1 trillion uh a year
36:07in interest payments now exceeding the
36:11amount that we spend on our military in
36:14the US. We're just spending that amount
36:16in interest. So, we know about that zero
36:18fiscal discipline. The third is a
36:20capital demand squeeze. So he talks
36:22about you've got $5 trillion in AI
36:26buildout that need to be funded by debt
36:28instruments. So this is AI data center
36:31buildout needing funds needing capital
36:34in the form of debt and they're willing
36:35to pay for that capital in the form of
36:38yields. At the same time you have
36:40Treasury and it's trying to issue its
36:42debt too. So you got 2 trillion in
36:44Treasury that needs to be issued. This
36:46is US bonds. Whereas you have five
36:48trillion in AI debt and you know the AI
36:51people are good for it because they have
36:53the cash flows to support it.
36:55>> Do we know that?
36:56>> I mean they have the profit right now
36:59and so and also if you know Nvidia chips
37:02if that's kind of a the new oil if that
37:05is a
37:06>> a commodity as Jensen people like Jensen
37:08are saying then it's also collateral
37:10backed as well. So it's it's a
37:12competitive debt instrument and that's
37:13just raising the cost of capital up. So
37:17he says about Bessant um you know
37:20Bessant has been going around saying I
37:22don't think yields reflect the
37:24underlying fundamentals of this strong
37:26US economy and he says on the contrary I
37:28think US long-term bond yields are
37:30reflecting the actual fundamentals that
37:32we have if you just look at those three
37:34things inflation no fiscal discipline
37:37and the AI capital squeeze that's
37:39sucking all the capital so he reiterates
37:42those points that's the reason according
37:44to Howard Mark Mark's uh yield s are
37:47rising. The question uh is how do you
37:51protect yourself as an investor from
37:53what he's essentially calling kind of
37:56the debasement type trade? Uh and he
37:58said you can do a few things. One, you
38:00can have assets denominated in
38:02currencies other than the dollar, but
38:04the problem with that is the other
38:05currencies have a similar type of
38:08effect. They are debasing as well. Uh,
38:10two, you could go to non-financial
38:12assets like gold or non- US real estate.
38:16You could try that. Or three, you could
38:19do non US companies. The problem is
38:21there's not a lot of great companies out
38:23there and the US companies are
38:25overperforming. Or he says
38:28cryptocurrencies. He actually mentioned
38:31cryptocurrencies in the memo. So that's
38:33something. Um, a friend asked him,
38:36"Okay, Howard, should I sell my stocks?"
38:39And his answer was this. The problem we
38:41face isn't a problem with the US stock
38:43market or with US companies. The problem
38:45is with the US fiscal management and
38:47ultimately it's a problem with the US
38:49dollar. He basically saying American
38:52companies are good. In fact, maybe
38:55they're great. It's the American
38:57government that's bad. And so don't sell
39:00your stocks. That's actually a way to
39:03protect from some of this debasement as
39:05well. So, I I thought it was a
39:07well-reasoned, well-reded
39:10uh insightful memo and um kind of gave
39:14me some put put a connected a lot of
39:16dots on what's going on in in the
39:18current environment for me at least.
39:21>> This connects to a a bit of discourse
39:25that I've been seeing around the
39:26timeline that I'm I'm picking up on. And
39:28I'll pause and give a disclaimer that
39:31this is bull fuel what I'm about to say.
39:34Uh, and I'm trying to not be too drunk
39:36in this bull market. I'm taking I'm
39:38taking evidence. I'm taking insight from
39:41my guru Ranch Adams of during a bull
39:43market, you want to be a little tipsy.
39:45You don't want to be sober. You want to
39:47be a little tipsy, but you
39:48>> It's pretty early. It's pretty early in
39:49the night to be drunk, David. So,
39:51>> I'm decently tipsy.
39:52>> Okay.
39:52>> And so, I'm into bull stuff. But a bull
39:55the bull stuff that I've been seeing on
39:56the timeline that I agree with. One came
39:59from a while ago which um came from Anom
40:02actually when I was listening to his
40:03market bubble podcast and he talks about
40:05like the way that zoomers and
40:08millennials escape inflation is through
40:10investing. And so investing is a
40:12or inflation is a It's punishing
40:14everyone. You get out of that by
40:16investing and that's the only good way
40:17to escape. You have some type of assets.
40:19>> That's step one.
40:20>> The other the other bull take so that
40:21was a while ago that was months ago. The
40:23other bull takes I've been seeing on the
40:24timeline is like what if the bond market
40:26is you know printing in five six 7%
40:29because the economy is cooking
40:32and that this is something I've been
40:34seeing from Felix from uh forward
40:36guidance about the economy is ripping
40:38the economy there's money flying around
40:40in the economy the economy is looking
40:42good so the b the bond market is
40:44printing in higher yields because it
40:47wants to allocate to the stock market
40:49and the stock market is the place to put
40:51your capital and the bond market is the
40:53yields on the bond market are just
40:55reflecting the cost of capital because
40:56everyone wants to invest. So what if the
40:58actual fundamentals are great of the
41:01stock market of equities now is the time
41:03to invest and the bond market yields
41:05like sorry US Treasury, you're out
41:08of luck. Everyone wants to take their
41:10money and invest in growth assets
41:12because that's the only way to escape
41:13inflation.
41:15It's which is also somewhat ironic
41:17because a lot of these growth assets in
41:19the US capital markets are US-based
41:21companies, right? And so that is still
41:24fundamentals of the United States of
41:25America at some level and future
41:27potential tax revenue,
41:29>> right? So so maybe
41:31>> but the tax revenue is just not going to
41:33be able to pay the debt. Like it's going
41:35to you have to debase.
41:37>> You have to debate. The tax revenue is
41:39the most helpful thing. There was one
41:40time I I typed into Claude or something.
41:43I was like, "What if we just did away
41:46with taxes? What would be the
41:48repercussions? Like do we need taxes?
41:50tax.
41:51>> Can't we just print the money to pay?
41:54And and it was like, no, dude. Like tax
41:56revenue is the majority of the reason as
41:59to why there's not hyperinflation. And
42:01so if you did away with the tax revenue,
42:03like you it would be massively
42:04catastrophic to inflation. But
42:06nonetheless, tax revenue does not cover
42:10debt. And so therefore, the debt
42:12compounds.
42:12>> That's right. I think that's what's
42:14going to happen. And uh it's pretty
42:15sensible to hold assets. And I guess
42:18just almost any asset you can hold is is
42:21certainly better than the dollar and
42:22certainly better than bonds. Uh David,
42:23there was a story breaking from Kulshi
42:25this week. Did they get caught
42:27red-handed doing stuff?
42:29>> I don't know if they have officially got
42:30caught red-handed. This was one of the
42:32Twitter stories for the decades. Uh
42:35there is a Twitter persona. His name is
42:38ICO Beast. I've interacted with him a
42:39few times on Twitter before, but he got
42:41hired by Khi as like a crypto lead. And
42:44basically on Twitter he has just been
42:47promoting Kelchi like our metrics are
42:48look look great like Kelshi is the best
42:51look how big our pers volume is. This
42:53most recent tweet was a picture of the
42:55Kali's like market share of like
42:57regulated onore volume and the he asked
43:00chat is 96.7% a lot because that's how
43:03much the volume dominance Kali has over
43:06polymarket pers. Then an account named
43:09Benny on Twitter responded, "It's easy
43:12to have 966% like market volume
43:15dominance when 3/4 of your volume is
43:17wash traded." And then ICO Beast replied
43:20like, "No, you're you're wrong and
43:23dumb." And
43:24>> I love this cope, see rage.
43:28Now these words these words are just
43:31imprinted upon the future of the crypto
43:35Twitter and all the Twitter surrounding
43:36these poly markets. ICOB follows up with
43:39why the would anyone try to watch
43:40trade when you have trading fees
43:41incredible intellect on display. Uh
43:44Benny then a few tweets later self uh
43:48inform so called themselves like I'm an
43:51autist on Twitter. Don't don't haunt me
43:54cuz me off to prove this.
43:56>> ICOB says better to remain silent and uh
43:59then and thoughts of fool than open your
44:01mouth and remove all doubt. I'll give
44:03you a few minutes to think through this
44:04and delete this. Uh, Benny responds
44:07saying like, "No, no, no. Like, reverse
44:09Uno card. You uh, and then nothing
44:13happens for a few hours." And then Benny
44:15releases a monster thread with a bunch
44:18of evidence like hardcore evidence for
44:20wash trading on Kelshi. So, I'll
44:22summarize his points. Point number one,
44:23there's a massive dislocation between
44:25ETH volume and open interest on the ETH
44:28market. So on the ETH volume, there's
44:30half a billion dollar traded hands on
44:32the volume on the ETH perpetual. The
44:36open interest is 3.1 million. And so
44:38that is a daily turnover of 174 times
44:42the amount of actual open interest there
44:44is. That's just like absurd. The massive
44:46dislocation, too much volume for open
44:49interest. That's the first bit of
44:50evidence. The second bit of evidence is
44:52that the position leaderboard is tiny.
44:54The number one position on the ETH
44:55market was up a whopping $17,000.
44:59When $500 million is changing hands
45:02daily, you'd expect people to be up or
45:04down more than $17,000, but all the
45:06winners or losers were in the 10 digit r
45:09the uh six-digit range. So tiny. Third,
45:13there was the same trade size about
45:15$5,500 accounts for over 50% 50% of all
45:19trading volume.
45:20>> Suspicious. Yeah, this came from Cali's
45:22a API specifically. Later, the Wall
45:25Street Journal reported on this and
45:27found nearly 1 million near identical
45:30trades at $5,500 when with more than $5
45:33billion of volume traded in that size in
45:36that same month. Uh, fourth bit of
45:38evidence. The original claim from ICO
45:40beast was why would there be wash
45:42trading when we have fees? Because if
45:43you're washing back and forth, you're
45:44paying the fees. The obvious answer is
45:47that Khi gives volume rebates to market
45:49makers. So that's mute. But wait,
45:52there's more. Number five, the market
45:54makers allowed to market make on Koshi
45:57are selected by Koshi. Bloomberg
45:59previously reported that Jump Trading
46:01was given an ownership stake in KHI and
46:03allowed to market make on Khi. So not
46:06only is Jump Trading given the fee
46:08rebate, so the fees don't matter, but
46:10they own equity in the platform and
46:11therefore are incentivized to pump
46:13volume through it. But wait, there's one
46:15more. This has spilled over to the
46:17prediction market side of the business
46:19where Benny showed that Koshi has done
46:21some very manipulative metric accounting
46:23for how it accounts volume on its
46:25platform by showing the number of
46:27contracts traded which contract on a
46:31prediction market trades for less than a
46:32dollar. You know you buy 30 cents to win
46:34a dollar. So a contract for here is 30
46:37cents but they just add this dollar sign
46:40add this errant dollar sign to the
46:42contract amount. Don't know why they put
46:44the dollar sign there, but when a
46:46100,000 contracts are traded at 30
46:48cents, it's reported as 100,000
46:52contracts, but with a dollar sign making
46:55it look like $100,000 was traded when
46:58only $30,000 was traded, which more than
47:003xes that reported volume number. And
47:03so, as a result, a lot of eyes are on
47:05Khi. PHI has stated that uh the CFTC is
47:08not investigating Khi for wash trading
47:12or anything like that. Uh I think we're
47:14all kind of like waiting to see how this
47:17um falls out. But the TLDDR moral of the
47:20story is uh don't piss off autistic
47:23people on Twitter.
47:26>> Has Khi responded to this? I I I see a
47:28whole response with
47:30>> Yeah, there's a handful of they they try
47:32they say facts behind the couch
47:34perpetual volume. Um saying the repeated
47:36$5,500 tickets are one paid market maker
47:39quoting fixed sizes hundreds of distinct
47:42takers. So the the maker is producing
47:44$5,500.
47:46>> They're not denying all of it. Maybe
47:48some of it.
47:48>> Yes, it's they are talking about it. It
47:51it's a lot of is unsaid. And so that's
47:54why I kind of think the story is not
47:55over.
47:56>> Okay. I I did see uh headlines about
47:59that. Thank you for explaining it,
48:00David. In contrast to that, I saw a
48:02tweet from Vitalic this week. Uh talking
48:05about a prediction market called Truo
48:09and he said this about it. It's actually
48:11moving from base back to the Ethereum
48:14L1. So a kind of reverse L2 back back to
48:17L1 kind of direction. He said this. Glad
48:20to see that Ethereum L1 will have a new
48:22strong prediction market contender that
48:25is dedicated to decentralization and
48:27being ethical and not corpos and to act
48:31and actually trying to do interesting
48:33and meaningful things with this class of
48:35economic primitive was earlier this year
48:39I think I I saw a uh a comment from
48:42Italic basically a blanket criticism of
48:44some of the prediction markets. He's
48:46long been a champion of prediction
48:48markets in general, right? He's been all
48:50over this since like, you know, 2015,
48:53uh, 2016, the early days of Augur. But
48:56he offered some criticism in February.
48:58He said uh overcon converging that
49:00prediction markets were overconverging
49:02to an unhealthy product market fit,
49:04embracing short-term cryptocurrency
49:06price bets, the sports betting, the
49:09dopamine stuff, not the kind of
49:11long-term fulfillment or societal
49:14information value that he had hoped. So
49:17that was his criticism and he's saying
49:18that that TRUO is maybe doing things
49:20right with decentralization and ethics
49:23and more of the Vitalic style virtue
49:26that that he really appreciates. Um the
49:29true token has it does have a token was
49:31up about 10x after this Vitalic tweet.
49:34So it shows
49:35>> what did it start at? What was the
49:37market cap it started at?
49:38>> It's like 10x but right now it's a $8
49:41million market cap. So it's like
49:43basically after the pump it's at $8
49:45million.
49:46>> Yeah. So this is a micro market cap. So
49:48I guess the the Vitalic uh tweet gives
49:50you something but it doesn't give you a
49:51lot of things. And it's basically I mean
49:54not used the total value locked of True
49:57is $1 to2 million 7.
49:59>> The market cap was $1.3 million before
50:02the Vitalic tweet. It peaked at $17
50:06million. It's currently at 9 $10
50:08million.
50:09>> Yeah. Uh so we have total value locked
50:12in true of about $2 million. 7-day
50:14trading value about 3,000. Um, it's just
50:19it was interesting to me in in contrast,
50:22David, because something I've been
50:24working through and and you know,
50:26struggling with is this idea of just
50:28like what makes Truo better than
50:32something like Poly Market or even Khi?
50:35Like what makes a thing corporate slob
50:37or corpos? Does that matter? And one
50:41thing that I feel a little exhausted
50:43from is picking between virtue and
50:48traction. It's like this forced choice
50:50sometimes in crypto where it's just like
50:52you have the virtue path, but no one's
50:54ever going to use it. You'll have like 1
50:56to 2 million in total value lock, but
50:59it'll be virtuous, right? Versus the
51:02traction path where you have to sell all
51:05your ethics and become corpo slob. And
51:08just this real like growing sense of
51:10virtue without any traction is kind of
51:13meaningless. It's kind of hot air. And
51:16so just an interesting contrast point. I
51:18don't like Vitalicus we've talked about
51:21before. He's very much priest class.
51:23He's very much monk class. He's sort of
51:25the the the the conscience of crypto if
51:28you will. And sometimes that character
51:32class ignores market sensibilities,
51:35ignores product market fit,
51:38>> and
51:40I don't know, it's a whole it's just
51:41like what what um what are we doing here
51:46if we're not trying to get traction for
51:47our protocols? And sometimes that
51:49requires the market telling us what
51:52works and what doesn't. And I'm like
51:55happy to cheer for virtue, but I want to
51:58invest in virtue that the market
52:02actually values because virtue for
52:03virtue sake just gets you unused
52:06protocols and mechanisms that don't work
52:09and incentives in the wrong direction.
52:12Uh anyway, I'm glad to see Vitalic
52:15supporting apps. It's just
52:19it feels like it's from a different era
52:22when we were you know trying to support
52:26stable coins like rye or something like
52:27that and it turned out that tether just
52:31>> dominated everything not based on kind
52:33of a virtue but the the minimum level of
52:35decentralization necessary to grow a
52:37product
52:38>> and I feel like I I just don't want to
52:40go back to that world.
52:42>> Yeah. Yeah. There there was an era in
52:45crypto where the industry was mostly
52:47unbuilt and that was like the 2019 and
52:50earlier era. Um and I think that's when
52:53we were allowed to like be full fully
52:55virtuous, fully imaginative about what's
52:57possible. That was coming up on a decade
53:00ago like seven years ago. um a lot we
53:02have a lot of evidence now and we now
53:04need to like weight both virtue and
53:08usage when we like think about what we
53:10are building here and and I think I
53:14think your your sentiment is felt
53:15amongst many of just like okay like my
53:18like doing the whole virtue thing can
53:20only take me so far and at some point
53:22like I have to rep prioritize other
53:24things because everyone is a market
53:27participant here and so everyone's money
53:28is on the line so it it's it's personal
53:31for everyone one here. All right, coming
53:32up next, we got a bunch of things to
53:33talk about. We got the variational
53:35token, probably one of the biggest
53:36tokens, might maybe the biggest token
53:38launch of this year. We also have Onondo
53:40and Black Rockck collaborating on
53:42Intelligent Portfolios and a few other
53:45things. We're going to talk about all
53:46this and more, but first, we're going to
53:47hear some of these fantastic sponsors
53:48that make the show possible. Some
53:50exciting news. We are launching a new
53:52podcast to help people figure out the
53:54crypto cycle, how to navigate it. The
53:55best cryptocycle investor I know, his
53:57name is Michael Nato. He runs the DeFi
53:59Report. This is the guy that sent me a
54:01sell alert before the 1010 price drop
54:04happened. His cycle analysis has been
54:06absolutely on point. I've been following
54:07him for years. And this year, we started
54:09recording weekly podcast episodes. Each
54:12one we get into his portfolio, what he's
54:14holding, the market structure, entry
54:16targets, fair market value of Bitcoin
54:18and Ether, and where we are in the
54:19cycle. There's new episodes that are
54:21released every Wednesday. They're 30
54:22minutes, they're short, they're punchy.
54:24I think this crypto cycle is harder to
54:26navigate than most. So, let's do it
54:28together. Go subscribe to this podcast.
54:29Search the DeFi report wherever you get
54:31your podcast. YouTube, Apple, Spotify,
54:34or find a link in the show notes.
54:35There's a new episode waiting for you
54:37now. Variational has announced their
54:39TGE, their AirDrop. If you don't know
54:42what variational is, it's kind of like
54:44Hyperlid. It's kind of like lighter.
54:46It's not exactly like that. Uh the the
54:49way that it works is that um the
54:50variational product quotes you a quote
54:54on a particular asset or instrument that
54:56you want to buy whether it's an option
54:59or a perpetual or spot or something.
55:01It's kind of like a per exchange
55:03aggregator or an options aggregator is
55:06like one in one inch for pers.
55:09Yes, but more than per um yeah, more
55:13it's one an aggregator of financial um
55:16instruments of sorts. And the cool thing
55:18is it it um they pour over into tradi
55:22and so they have market maker agreements
55:24both in tradi and on variational and so
55:27they can kind of list assets that aren't
55:29tokenized if that makes sense. It's it's
55:31very similar to hyperlquid and lighter
55:32but also very distinctly different. It's
55:34very very uh hypes. It's potentially
55:36going to be the biggest airdrop of this
55:37year. That's what people are talking
55:38about it. They are aird dropping 32% of
55:41the supply. They're doing the hyperlquid
55:43like lighter thing of 100% of revenue is
55:45directed to the treasury to buy and burn
55:46the VAR token. I'm interviewing the team
55:48on uh Friday. Oh, cool.
55:50>> Bank subscribers will get that early. Uh
55:52and then it will come out sometime the
55:54following week. Uh so that's pretty
55:56cool. David, I saw this and Black Rockck
55:59uh collaboration intelligent
56:02uh portfolios. And these look to me
56:05almost they're not ETFs, but they almost
56:07look like what was Bitwise calling them?
56:09>> Um, vaults. They almost look like
56:12vaults. Sort of a smart contract with a
56:14set of assets that's managed by some
56:16third party who make sure that they're
56:19managing risk. Well,
56:20>> what is this?
56:21>> Yeah, these are these are vaults. These
56:23are single tokens that wrap
56:25professionally designed models, that's
56:27what Black Rockck is doing, into a
56:29single token with Ono tokenized stock.
56:32So it's a single token that you can buy
56:33and then there's onto tokenized stocks
56:35as a part of that token like the the
56:37constituent of that token the makeup and
56:40then the strategy is built and developed
56:42by Black Rockck. So it's like Black
56:44Rockck's models on those assets and
56:47Ono's vaults. And so what do you guys
56:49think? There's three products here.
56:51There's a high income, there's a
56:53diversified growth and then there's a
56:54high growth. And you own these by owning
56:56the assets. What what is actually inside
56:59of them? like high income. Is that like
57:01what what is that? Is that bonds of
57:03various types?
57:05>> What's in them is ono tokenized real
57:07world assets and those are so you're
57:09buying ano
57:12>> vault which is an asset that wraps up
57:14ono tokenized assets into a strategy
57:17>> man and the strategy is managed by black
57:19rockck. So they do the risk management
57:21they put their brand on the strategy.
57:22>> Yes. I don't know if it's like managed,
57:24but the strategy is like a proprietary
57:29knowledge from Black Rockck.
57:31>> Very cool. Okay. Yeah. Uh I also noticed
57:33Black Rockck put out this post and this
57:35is like they're they're all in on crypto
57:37this cycle. Of course, they were last
57:39cycle with uh ETFs, but this is a a post
57:42talking about machine native money and
57:46how AI represents machine native
57:48intelligence, but digital assets
57:51represent machine native money. They're
57:53propagating this story that basically
57:54with the success of AI, what is AI going
57:57to need? It's going to need programmable
57:59money. What is programmable money? That
58:00is all crypto assets. That is all
58:02blockchain stuff. And so if AI
58:04successful then crypto assets are
58:07successful. This is something we've
58:09talked about for a while of course but
58:11the significance is
58:12>> it's a black rockck report going you
58:14know what $10 trillion assets under
58:17management going out to all of their
58:20institutions and clients and so good to
58:24have them in our corner from a narrative
58:26perspective I guess continuing to pump
58:27the crypto bags. Also news on this week,
58:30Binance takes a $100 million stake in
58:33Circle,
58:34which is interesting, I would say. 1.24
58:38million Circle shares at a 5% discount
58:40two-year lockup. Uh, plus a 5-year USDC
58:44deal where Circle pays Binance monthly
58:46incentives on USC balances. So, like
58:49Binance gets the yield, which is
58:51probably now what makes sense because
58:52Binance has a bunch of USC. Binance kind
58:55of being brought into the fold. You
58:56know, it used to be offshore. It's it's
58:58starting to creep getting crept on by
59:01the United States government so that
59:03it's it's kind of closer to the
59:05>> probably also circle worried about all
59:07their exchange eggs being in the
59:09Coinbase basket too
59:11>> and losing some of that negotiating
59:12power.
59:13>> Yeah. Yeah. God, if I if it was my job
59:16to manage the tension between Circle and
59:18Coinbase, I would be so stressed out.
59:20Anyways, speaking of Coinbase, uh
59:22Coinbase has opened up IPO allocations
59:25to US retail investors. So you can buy
59:28into IPOs as a retail investor through
59:30Coinbase starting with Aura, the whole
59:32like Aura ring products. And so this is
59:35Coinbase on its arc to get more into
59:37like feature parody with Robin Hood on
59:40the equity side of things. So Coinbase
59:42is kind of cornered, not cornered, but
59:43like owns a lot dipping a toe in the
59:45water. I feel like from Coinbase, I
59:47still want like the Robin Hood features
59:49of I want to be able to buy my stocks at
59:51Coinbase.
59:52>> You can do that
59:54>> as a US customer right now. I can buy
59:56stocks. You
59:57>> sure? Hasn't Haven't they had stocks um
1:00:00on Coindes? Coinbase for a while.
1:00:02>> This is crazy that I don't know about
1:00:04this.
1:00:05>> Coinbase is doing a lot of good stuff
1:00:07like this. They need to fix their
1:00:09goddamn web app.
1:00:10>> Their web app is so broken. It's been
1:00:12broken for a while. I know that they
1:00:14know it. Why can't they fix it?
1:00:16>> Yeah.
1:00:18>> All right. Send out
1:00:20>> and that's how we will tie that episode
1:00:22off. Risks and disclaimers.
1:00:23Banklistation, you guys know the deal.
1:00:25Crypto is risky but not risky enough.
1:00:27The institutions have landed. So we are
1:00:29going even further west. This is the
1:00:31frontier. It's not for everyone but we
1:00:32are glad you are with us on the bankless
1:00:34journey. Thanks a lot.

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