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Is a lot of people forgot how much A, custody isn't figured out, but B, your assets sitting in these different custodians and insurances. It's very similar if you go read and you just put it in Claude or Perplexity or whatever your favorite AI app is like, what are the terms of service around your bank and the dollars? And they're effectively not yours. You're giving them up and you have no real rights to them. And it's very similar here when you're giving up your underlying asset and you're leaving on a third party custodian you or beholden to not only what happens to them today, but in the future if, God forbid, there's a lawsuit against them and now the courts are looking to call back assets. It all comes down to computers communicating the information superhighway can be a confusing mix of on ramps and off ramps. Bitcoin is worthless artificial gold. Is it still rat poison? Probably rat poison. Squared. We need to get into the world of OK, this is actually foundational technology. What the Internet of money? Does is it creates a single network which can do a microtransaction to a giga transaction. The Internet is going to be one of the major forces for reducing the role of gun. The one thing that's missing that that will soon be developed is a reliable E cash. All righty gentlemen, welcome back to another episode of Final Settlement brought to you by Onramp and Early Riders. Today is Monday, May 18th, 10:41 AM Eastern Standard Time. We got a big show, gentlemen. Lot has happened over the past week. I think we'll get into some Clarity Act stuff, some deals of the week, potential lawsuits, bankruptcies, SpaceX IPO and pre IPO shares trading on hyper liquid. Coinbase made a deal with hyper liquid. We talked last week about how Coinbase was getting disrupted by hyper liquid. I think they took the old, you can't beat them, join them, tacked and made a deal with them around their stable coin. And then we've got to talk. I think where we're going to start today is something we mentioned on the show probably about a month ago. There was initial reports around, obviously the Strait of Hormuz being closed and you know how. Can I interrupt? You, yeah. I think, I think, I think we we messed up because we were talking about before the show about where we should start and then there was an obvious place and it's not actually the Spurs. That thing's going to stay. That thing's going to stay up Brian, until it'll be a sad day if they lose or they win the championship. But the other thing, so tonight, even if you're not like a Spurs fan, I think from a basketball. Perspective Are you flying to Oklahoma City for game one? I'm supposed to be in Dallas Wednesday and I was looking at what the drive was from Dallas to Oklahoma City. It's three hours, but then I have to make it all the way back. I'll just be there Friday. I got I'll be there Friday in San Antonio. But independent of that, like from a basketball perspective, it's pretty enticing set up. But what I what I did want to call out was there was a big announcement and it's kind of actually the way I'll position it and tie it into the, the Hormuz stuff you wanted to share was around on ramp closing or Series A Yeah, because we didn't start there. We had released that after. I'll let the guys share more. The one thing I I wanted to call out was really, and this was cool that Fidelity syndicated news picked it up the next day. I think this really is at an interesting time, especially in the market where you see we're kind of like in this retrace. We've always felt like we're really fortunate and lucky because for all intents and purposes, I feel like we've been in a bear market. I think empirically you can look at it from all the different activity without highlighting them, you know, whether it's transaction volume, net new users, hardware devices, but we had this time to not only build multi institution, but this really financial service business is around around it. And we got this retracing while a lot of people are bleeding out and, and all these other things, the lack of focus and interest in the space, we're just like getting stronger and stronger. And I always get excited about that because we know this price is going to come back. We know demand for this market is going to come back. So it was really fortunate to be able to raise this round. And we have a lot of plans for growing the team partnerships, talking with a lot of banks around a bunch of different things that we can do for them, they can do for us. But the main thing I wanted to highlight here and then this kind of doesn't steal the Thunder, but it it talks about the Strait of Hormuz deal and the safe and they're announcing Bitcoin settlement is I know there's a lot of people listening that are under 20%, under 10% of the portfolios in Bitcoin is perfect with line. And I know there's a lot of people that have exposure to paper Bitcoin products. And that's fine that everyone can do what they want. But there is this real acknowledgement that has to happen that there is a non zero chance that we end up in a world when it comes to stable coins for AI and barger, because that's effectively what it is. And you look at net settling for anything in the real world you need, you end up needing the best form of money because that's what the other side will demand and require, IE oil for a sovereign, for energy. And if that's where we're going, you are going to need robust native financial services for that all the way from reducing counterparty risk from a custodian all the way to how do you accept it? How do you manage assets next to it and how do you live from a company, a sovereign or individual. And I feel fairly confident a very close, I would call out if anybody was doing it at a scale or from a sophistication as what we're doing there. There's nobody. And so in the examples like, well, what do you mean by no, but it's like, OK, we'll let's play this out in bitcoins $250,000 a year and you're across the world and you need to settle a billion dollar oil tanker in bitcoins. So well, what's the process? And it's like, well, somebody has to send it, so I'm going to send the funds. Like there's this whole thing. Will you have this infrastructure right at play where you can set up escrow type services where one entity can hold a key or work with a sovereign institution that would represent them to hold the underlying? The other entity that's sending the funds can sit on the other side of that and you can have an intermediate brokerage, whether it's somebody in Switzerland, whoever you might deem and you can tranche out. You don't have to move total amount of assets. You could put, you know, 25% in this multi institution. The point being is that nobody's thinking at this level, let alone, well what happens when Bitcoin is $250,000 and that means the price is 2.5 X and Coinbase is sitting at over a trillion dollars in assets and everyone's freaking out. Well, where are the assets going to go? We're just going to split them across 3 counterparties. That's another example of the thing we call out with Sailor is us just saying that they're unsophisticated because what they they're telling you if they need 3 custodians, they don't actually custody hasn't been solved. It's telling me the opposite because if they felt good about it, they leave it at 1. And so anyway that that's where I get excited about this because it's less is double down on everything we're doing. And we've been an insanely lean team for the amount of capital we've raised, the amount of people have worked with us. And to be able to go and double, triple down on this while we're getting stronger in the market and Clarity's coming back is going to allow us just do so much more than we've already done. Yeah, 100% the the other way I would frame like sort of the, you know how you were linking what we're doing to the stuff in the Strait of Hormuz and and Iran using Bitcoin. Like it really boils down to like the difference between exposure and ownership in my mind and this world we're moving into. Like you're going to want true ownership and there's still a there's still a path to do that where you're using counterparties, but you are doing it in a trust minimized way. And that is effectively what multi institution represents is better ownership guarantees while still, you know, effectively utilizing some amount of trust and custodians in what you're doing and basically organizing or architecting the governance layer of the protocol itself, using multisig to do that in a way that is just superior from a design surface perspective. And so I think you're right to make that connection between everything we're doing and, and what's happening globally because we're building for that world. We always have been because we, you know, that's our long term fundamental thesis on this asset is that it becomes global money. And and if that is the case, like having paper exposure where you just have price exposure or proxy exposure, like it's not going to have the same utility as having the underlying. And so we've been building for that world and I think we're seeing why why that's important and why it makes sense in real time with with what's happening around the world. And and maybe that's a nice transition to to what I was referencing before Michael, you interrupted me, but that was a good interruption. I appreciate the interruption. I ran links reports as Hormuz safe Bitcoin settled insurance platform aims to generate 10 billion. So again, this relates to what was sort of leaked or announced about a month ago around the idea that Iran was accepting Bitcoin for payment for passage through the Strait. There was some initial inkling that, you know, hey, maybe they're using stable coins or other crypto or even gold, But then obviously there was a bunch of Tether, Iranian Tether that was seized in the interim of of that initial announcement. And so now it seems like they're coming out and saying a little bit more bluntly, a little bit more plainly like, no, we want Bitcoin. We're basically setting up this insurance, digital insurance platform that will have to be paid in Bitcoin. And so I mean, there's a few different directions we could take this. I think the one thing that is important for me in the sense that like, it's funny, the discourse around something like this, because I think the natural inclination for, you know, if you're a, a long time Bitcoin critic and you think Bitcoin's a scam and a, and a Ponzi scheme and, and used by criminals like this is in some ways like a layup for you, or at least in your brain. It's a layup because it's like, oh, Iran is using Bitcoin. Like, see, I was right about Bitcoin being used by criminals, when in reality, like all this means is like, you know, Bitcoin is a tool and it is being used in this instance because it's the only thing that works for them. And who they are, what they're doing is actually irrelevant to the story at hand and why this is important for Bitcoin. It's adoption, people learning about what it is and how it actually works because, you know, you wouldn't lambast or blame the Iranian government for using the Internet. Like the Internet's just a tool. You wouldn't be bearish on the Internet because Iran was using it or any form of like telecommunications. You wouldn't be like saying that's a bad tool because Iran uses it. Like, no, like that's how technology works. That's how open source tools works. And and generally, like, even if you look at the Internet, it was initially used, you know, more so by criminals, whether it was the pornography industry or, you know, trading drugs like Silk Road, like all of these things have a trajectory to them and the people that need to use them most will use them first. So yeah, we're whichever way you guys want to take this. But that was kind of something that I saw over the weekend was like people thinking that this is a layup or a dunk on on Bitcoin, when in reality, like it's actually a positive proof statement for why this technology exists and why it works. On Ramp finances live and the Genesis program just launched. Over half the spots are already gone and once they are claimed they are gone for good. The 1st 210 signups get one year free of multi institution custody. Highest on ramp rewards to your earn up to 5 percent 1 1/2% cash back on every swipe. A signed copy of Gradually then Suddenly by Parker Lewis 21,000 cents deposited into your account upon activation. Sign up in 5 minutes on rampbitcoin.com. Use the code TLT and do not wait once the sponsor claimed the Genesis program closes for good. Go ahead, Liam. There are a bunch of different ways you can take this. Yeah, I think that the timing's a little bit odd with the Clarity Act, but as, as we mentioned, this is kind of going to be the end state for how things work in the world. I think that's a neutral money that can be settled pretty much immediately with no counterparty risk is just makes too much sense. And these Iran is just a test case of why you really need censorship resistant money is they've been cut off from SWIFT. They then go to stable Hawaiians, they get that seized and then, you know, they need to have another option here. I they've announced other things like this where they say that they're announcing or going to accept today's payment and the streets still closed. So who knows if this will actually get traction in the near term. But it is it is the only way that there can be two parties who are not necessarily friendly that need mutually beneficial things and can work together. So this is just inevitably how the world is going to work. We'll see if this ends up getting a lot of traction in the near term because the streets still closed and so cautiously optimistic a good path to be going down, but not not sure that we'll see any immediate benefit here. Yeah, I'm working backwards on some of the the comments. I think without going further down that rabbit hole, it is interesting the timing would between clarity and just and all of these things we talked. It was actually really good. Low key, I think people found signal in the Josh Fer episode. He's one of the few people I think is, you know, spoken up about like Trump the the the straight's closed because Trump wants it closed. And that seemed obvious to me from the beginning because like people would say, well, they couldn't see it. Comments like, how did your Intel not see them closing that down as an option? But either way, like walking away from that, I think that there's the meta, which is the most important part. And you were touching on it, Liam. And we touched on a little bit in the beginning, which is the economic forces and the rational actors will participate in holding Bitcoin and transacting it because it's just a superior technology. This kind of reminds me a little bit of a lot of the backlash that the miners got who now are crushing it in the transition to AI. They were not afraid. They, they went and they embraced and they wouldn't found the cheapest sources of energy vertically integrated because at the end of the day, the economic forces need that energy. And so yes, certain jurisdictions, you can like ban yourself from Bitcoin, but you can't ban Bitcoin from from the entities. And so I think that's the thing that goes back to when you look at oil and you're a sovereign. Because I think a lot of times we forget when you're leading the country, you have your constituents, your citizens to, to plan for. And if you go too far against what they need, they'll revolt. And so this is where the inflation stuff comes in. This is the balance. This is where energy and food and if you need energy because you're a net importer and the only way to get it is to pay in Bitcoin, well, you're going to pay a Bitcoin or you're going to, you know, have a big issue in your country. So the point in bringing that up is that the second order, which will be interesting, I hope it doesn't play out, but like what Brian brought up is second order effects of well, this becomes this is our cross. It came up on Bluebird. It's going to be probably across all mainstream news and do you get the discussion of this is a link to nefarious activities which Brian pointed out. It's like you let go back to the Internet and how it proliferated. It was gambling, pornography. It's irrespective of like the use. It's what people will use it for early that need it because everything else you can get in a different way. But do you see what I would thought of when the guys were talking was like you get more of a push to ETFs and paper Bitcoin pieces like, oh, you want price exposure, but you don't want to deal with this illicit like it'll I mean that's probably far fetched, but it's not out of the realm of possibilities that would pick up steam. But either way, I like, it's not a popular thing to say, but I think this is easily probably the most bullish thing that's happened outside of like even, you know, maybe the ETFs are probably more bullish. But I just think of it as this notion of when the market understands that there's this unit that can't be stopped and that people need again, the meta is that the countries and others will adopt it. They will use it because it's just superior than anything else that exists, which everyone's already known. It's just that hasn't really been needed at scale. So. Yeah, I mean the other angle I would look at this from from like a the impact it has from like a perception and education standpoint is like if you were a person who thought like Bitcoin is a Ponzi and a scam and worthless. Particularly that last point, like if you thought Bitcoin had no value. Like this flies directly in the face of that. If you, if you have any sort of like critical thinking and can think through like what this actually means in terms of why they would need to use Bitcoin in this instance. If you start to go down that path, you like realize a lot of the underlying fundamental sort of mechanics of how and why Bitcoin works and why it actually does have a ton of value in this world. And so that's I guess my optimistic spend. Like, I do think there will be a lot of people who are not critical thinkers who look at this and say, look, I was right, Bitcoin is used by criminals and I ran bad, so Bitcoin bad. But I think there's a trajectory here where it actually does open people's minds to like, oh shit, OK, this is those Bitcoiners were were perhaps on to something in terms of like how this thing actually works. And now I start to see why this, you know, digital settlement network that's decentralized and censorship resistant, like actually has a place in the world. And, and then you can start to map it to what to basically like, well, if Iran needs it, maybe there are individuals around the world who need it as well. And there's a lot of value in this thing, not only the network, but the asset. And then you, you know, you go down the rabbit hole of store value and money and, and all of these things. So I guess that's my hopeful stance on where this goes, but. Well, it, it will go there now the, the, I have no doubt just because it's again, it's like technology, it's just going to go it's like water. The the, the question is, how long does it take? But I think the other point, and you may was good about like, yes, this thing has value is in this world, the notion of like I just love is what's obvious is obviously wrong. And that's just standard. And it makes sense because you can't live your life always looking. It's not necessarily be contrarian, but just always looking for gaps because then you won't just be your the mental capacity to do that. But the point being is that in a lot of these people that like the a lot of different products and crypto forget if it's crypto or if it's Bitcoin adjacent that are paper Bitcoin derivatives. They fundamentally don't have the vision to understand how this asset will proliferate digitally and physically for oil or AI and everything in between. And I think this just gives you a little glimpse, if you have a tiny bit of vision to see why you may want to hold the underline. Because I just truly believe that there's a lot of people that like this asset class that can't fundamentally wrap their heads around why this would be used day-to-day. I won't name who, but I was having a conversation on Friday with a Bitcoiner that's known and we're just talking about like stablecoin stuff. And he was referencing that, you know, he brought up a good point that yes, stablecoins are going to proliferate on AI. But when you look at like the amount that are created. And this is going to tie in a little bit of the hyper liquid USCC stuff and Coinbase, but like it's this notion of you're going back to barter. And so you just end up with this insane complexity versus 1 ubiquitous uniform currency that everyone recognizes. It just starts to make a lot more sense on how we get there. And again, this one is just like at this highest point when you think about net settling oil that you're just going to want to hold this underline because it comes up all the time. Well, you know, what about how does your business do in a world where ETFs exist? And it's like, well, it does great because the price will grow and then people will, the economic forces will say, well, why am I holding this in a paper construct? And maybe I need this and other products will, you know, exist. It's just the lack of vision because again, makes sense. It's like insanely hard to believe there could be a new form of money. It's to most people, this is just an asset, an alternative asset, but it's the thing that makes it alternative asset. We'll make it the new form of money because it's people deem it as valuable. Then people will continue to deem as valuable and then eventually people will demand it for payment. And that's how you end up with a good form of money. Yeah, yeah, 100%. And I think that the other point that we've been really driving home to that makes it just becomes even more valuable with this is just the notion that stable funds are going to be the onboarding to Bitcoin for most folks. Like Iran didn't touch Bitcoin at all because until they actually could want, they wanted dollars, their dollars got seized. They're tokenized dollars that were Tether. And at this moment, everybody is looking to get more exposure to U.S. dollars that are cut off from the financial system, whether it's the Venezuelans of the world or Argentina, where they make it incredibly difficult to get dollars. And I think that's just going to need to happen again and again. And these different products out there that may be obviously not as good as Bitcoin itself, but will offer stable points. And Bitcoin, like everything that Light Spark is doing and the different products that are actually coming to market are really just going to accelerate this faster than most people can really imagine. Yeah. That's well said. And a piece of all that acceleration is what we referenced a little bit earlier around some progress and development on the Clarity Act front. So we don't have to spend a ton of time on this, but just to put a finer point on on what we referenced. So last week, the Clarity Act got out of the Senate Banking Committee markup session that occurred on Thursday. I believe the vote was 15 to 9 in favor of moving it forward. And so now the bill will go to the Senate where I believe it needs 60 votes in order to get to the president's desk for signing. So the timeline of having it signed before July 4th is still on the table. And yeah, I'll kick it to you guys for any thoughts on this. I mean, we've talked about Clarity Act a bunch historically, and this is just sort of the next step in the process. I was going to pull up Polymarket to see what the odds are but. Yeah. I mean, we talked about the bullishness and the need for clarity. I still think this go, this actually is like the conspiratorial whatever side we're talking about the Bitcoin news being accepted for oil that I think it gets done because it needs to get done for the administration. But if I wasn't coming through that lens, I would say this is actually less likely because of the issue that wasn't completed. And I forget the term, but it's effectively like the ethics deal, which is they never had agreement and alignment on Trump and the administration associated with him absolving themselves from this, whether it's unwinding or whatever I think the Democrats would ask for that hadn't been figured out. And so I don't necessarily know what that plan is. And if I was looking at just through that lens, I would say this wouldn't get done because it's not enough time. But I, I think this is like, kind of like a bipartisan thing. I think that, you know, when we look at this world and it's Democrats and, and Republicans specifically not liking this, I don't look at it through that lens. I look at a lot of the things that Trump was able have been able to do with the regulatory side happened because there was an antagonistic previous administration that that had these certain things that happened. And then the next second third of our effects came into place. And if that lens is right, then this gets done. If that lens is wrong, then maybe you do see that actually get thrown in the like a monkey wrench and then you ultimately end up not this year. But yeah, that's that's kind of my take. I would agree with that. I think it more than likely gets done and but 64 ish chance probably is about right, maybe even a little bit higher. But one other aspect too is many folks out there are thinking that if it doesn't get done by 4th of July before they go out recess and it's just not going to get done at all during President Trump's term. And I don't know if I necessarily fairly agree with that. There's it's fascinating to see a 16Z is the new largest political donor at the moment. And I just think that given all of their focus on crypto and raising a new fund, I would imagine they could only, you know, donate to pro technology, pro crypto politicians. And across the aisle, this becomes more of a the talking point though, that they just want to get things done. So I think that even if the low chance that they don't get it done this year happens, that it will get done within the president's time frame over the next two years or so. Yeah, I think that's a fairpoint because I think what people miss around because I think that the the angle or the argument is like, well, you know, if the midterms that the the Republicans lose the House or the Senate or both, it may be more difficult for them to pass it. But it's like at the end of the day, like this needs to be by bipartisan to some extent to pass anyway. So I would agree like I I still think it gets done within this presidential term because Trump wants it to get done. But Michael, you can bring up a good point around the, the conflict of interest stuff, because that's I guess that's kind of the one thing that like, I would even say there's like some legitimacy too, in terms of like the, you know, the inner dealings of the Trump family And, and obviously the should coin pump and dumps that they did world liberty 5. There's a there's a number of things you can point to that don't look good from a perception angle. And so that that could be the thing that that does Hang it up. I think you're right. The other thing related to this that I do want to touch on before we move on was this tweet from Paolo to you of tether. He's doing the eyeballs emoji quote tweet on this tweet from Gold Telegraph. For the life of me, I will never understand why mainstream media refuses to read the Clarity Act. It literally names gold as the commodity backing stable coins. And so this is the excerpt here that I'll pull up from this. Michael, what do you got on this? Well. So I think he kind of picked his words conveniently. It says the this that is, there's multiple commodity backed stable coins and one of them says or multiple lines that one of them says that is denominated highly liquid publicly traded physical commodities such as gold. I don't necessarily think it's directly tied to that like it's an option. I think that there's various options for stable coins. I could be wrong in reading this and this is what it's referred to. Either way, I it's actually interesting now I think about it, if this is because it may be if you guys know or we can do a search. What I'm looking at this is it says SEC .21 commodity back payment stable coins. What I was looking is interpreting this as like one section of the type of stable coin that can exist, not I think that's probably right. Yeah, that, that that's what I thought as. Well, yeah, so, but where I think it's super fascinating and this ties into what we've been talking about. We talked about with Josh Fairs where this all goes and Tethers understood this is that the recognition, the liability of U.S. Treasury backing stablecoins won't exist forever. Because again, if we go to just free market, we've been talking about this notion like free banking that the stablecoins credibility will be based on the assets back in it. And then also there'll be differentiated mechanisms on how you incentivize that liquidity and the the mechanisms that incentivize the user to hold it. And so whether you're giving some kind of yield or other stable coins are losing because of inflation or whatever it is that you will have this mix between treasuries, gold and BTC that will back the stablecoin. And you know, obviously try Tether. That's their, their treasury. It's stable coins. Tether are BTC and gold. And so I think there's that component that's where we're headed. It'll probably take longer because the market will have to kind of get rugged in traditional stable coins or feel inflation before they do it. I think the other side to that is just the notion that gold and the tokenization of it in stable coins are going to proliferate much more than anybody's expecting. And we again talked about it last part. I'd encourage listening to because we've been talking about it. We have an investment in Argo, Argos super close, you know Sprott family firm, very close to a lot of the different kind of innovations happening there in gold. And we have to remember like Bitcoin is still a $1.5 trillion asset, gold is 35 trillion. So there are powers that be working on different ways to pool the asset, commoditize it, securitize it, delivers net settle. And so there's just a lot happening below the scenes that people aren't recognizing. And this is part of why we brought our going into the platform broader and finance. And I just expect institutions that are going to persist in the future are going to naturally need to put dollars, gold and Bitcoin next to people's financial future. Yeah. And one thing, just one angle on what you described around sort of a potential evolution path for what the backing of, you know, dollar paid stable coins look like. Like I agree with you, it probably takes longer than we expected, but I think the thing that could potentially accelerate it is like, you know, if you start offering stable coins that are, you know, have a higher percentage of their backing in gold or BTC or a combination of the two, Then you could start to see a world where like you can offer, you know, higher yields or rewards, whatever you want to call them, you know, that are higher than if it was just backed by U.S. Treasuries. So I think that's ultimately like how people wake up to that evolution is like certain issuers that say, well, we're we'll pass along some higher yields because it's backed by these appreciating assets that we can, you know, pass some of that on. Yeah, I mean, yes and no. Like I think there's a component this will tie into the hyper liquid stuff. And Liam's been calling us out around liquidity because liquidity is the thing that Trump's all, especially when you think about treasury liquidity and why people hold them. And you effectively need the, if you're going to really manage in size, you need these things to be liquid. And if you're backing them with E liquid assets that are also somewhat volatile, then you end up with this issue of how do you get the liquidity profile of that? And then on the other side of it, this is nothing I was talking about because a lot of people miss this. And this is giving like the credit where credit's due is there's a lot of fintech, Silicon Valley types that understand payments and money movement better than anybody in the Bitcoin space. Like you've seen this bridge as an example and bridge had Stripe had done this acquisition of Privy. Privy allows for really this proliferation of like native wallets within your phone. So you can kind of like hold that underline in a secure way. They like sharded. One of them lives in this secure enclave. I think the other two live in different places. But point being is the CEO of Privy was on a on some pod or interview a couple weeks ago and he's referencing that like there's going to be two different new types of stable coins coming in the innovation there. One was going to be inflation adjusted stable coins. And then he was also referencing there's other innovations that are tying like stable coins to like some physical like energy backing. And I just like had responded Bitcoin, you're describing Bitcoin and you know, credit to any like the tweet. But point being is that I think like you'll see these different products exist. You already see this with the stretch stuff trying to tokenize it for stable coins and yield. But you still end up with the person having to assess the underlying risk associated with the additional yield, which will naturally just keep people away because how do you underwrite everyone? And then the other side of that is you still have to manage the liquidity. And if you have people coming in and out to arbitrage that and all the things, you just end up in a different issue that I think you ultimately end up with the Peretto distribution of that barbell of either people adopting Bitcoin because you need to manage inflation adjusted or you end up with just the treasury aspect because of it's the most liquid exposure with the nominal risk adjusted yield. Yeah. That's fair. OK. Shall we move on to? Should we do? The hyper liquid thing real quick, just because yeah, I think this ties directly into it. My read on this because I mean, I think this is tied. I didn't fully see this. I know this came out yesterday, but my understanding, limited understanding was Hyper Liquid initially moved over to like USDH and cementing their own stable coin. And in the call it quarter, two quarters of this was live. The total value locked in there like directionally their fees were like 20 million versus like 120 million they get, meaning that in Hyper Liquid it's still the dominant currency is USDC used. So rather than try to adopt their own native one and lock in those assets and take some that yield, they just were like, screw it, we'll go to Coinbase and go plant the conspiratorial side of me. That's right is like that's probably there. You know, there's a lot of noise coming out, which we talked about like 6 months to 12 months ago about like hyper liquid will only get certain scale and then they're eventually going to have to like meet the state where they're at because it's starting to come about around like these 24/7 markets trading these physical and real assets that probably working with Coinbase is that notion of like we're integrating slower, slow slowly into the traditional system. And then there's also the the the monetization factor that it's a four to five acts on what they can get in revenue by just part partner partnering with most liquid stablecoin. Yeah, I think, I think there's truth to everything you said. I think from from hyperlink goods perspective, you're right. Like it's a legitimization of the platforms to some extent. Now their own stablecoin that you reference, USDH that they created, they were always sort of, you know, as far back as like a year ago, starting to basically shop that around is like, OK, who's going to be the treasury issuer behind this? And so I think this is sort of the end state of that initial conversation where they are just going to allow Coinbase and Circle to come in and be that main trading pair on the platform. And basically some, they're effectively sunsetting USDH or whatever it's called. And now USDC will be that sort of default stablecoin pair on the platform. Now from Coinbase's perspective, I think it's that's the more interesting side in the sense that literally just a week ago we were talking about how, you know, Hyper Liquid was a super profitable platform with, you know, 10 or 11 employees and Coinbase is losing money with 4000 employees. And so they saw the disruptive force of Hyper Liquid just from a trading volume perspective in terms of the exchange business. And so this gives them basically a way to participate in in their own disruption to an extent and have some economic tie to hyper liquids growth. And so I, I believe the sort of structure of this is effectively like both Circle and Coinbase will stake some amount of hype. And then also basically Coinbase will be sharing the vast majority of the yield from USDC back to the Hyper Liquid protocol. So estimates are basically, you know, at Treasury yields of around 45%, it's a potentially 150 to $200 million of revenue to Hyper liquid per year. So it's a boon for the Hyper Liquid Protocol, the probability of it, but it basically allows Coinbase to say, well, hey, now we're sort of participating in the upside there. And so it's an interesting deal from that perspective. It seems like kind of a win win. Liam, you got any thoughts on this? Yeah, for sure. One, I'm surprised that they weren't able to get enough liquidity on USDH just given the amount of swaps that folks can do now between USDC or I don't even know if they have USDT there. But it really just kind of take me a step back and putting my Bitcoin hat on. It's like this is just going to show how much they're going to pump Bitcoin in order to drive Bitcoin or stable coin adoption across the world. Because as of right now, if you take the same analogy of like USDH not being able to get liquid enough in order to like actually get in and out of positions they're going to necessarily and just needing to adopt the trading pair that actually has more adoption. Right now, the main use of stable coins is just both either just trading Bitcoin essentially. And so without getting more liquidity and adoption by having the bitcoins trading volume start to increase even more, it's not going to be able to necessarily get enough adoption worldwide to be used by all the largest corporate treasuries, sovereign pension funds or just investment funds across the world. And I think that the United States will know that and they're going to necessarily try to find ways in order to incentivize adoption globally. So when when you kind of take your step back to, it's just really a bullish for everything that we're seeing on the Bitcoin side to and and why stable coins are are important to the story. So I have a question like while I want that to be true, I feel like with the clarity in the integration of crypto or stable coins, I don't, I think it's a component, but I feel like because it's getting entrenched in a lot of the financial infrastructure. Like specifically, you look at like Slash and these companies that are external fintechs and their adoption and their growth is proliferated because they're arbitrage on like basically banking the unbanked for USD. Like that would be the, I don't say counter, but the other side of that right where you don't need bitcoins growth to generate the liquidity for the demand or are you saying something else? No, I I think that that's mainly true, but like slash is mostly just from my understanding or startup founders that aren't doing like a ton of volume and and not that large of companies. And if you want to while like SpaceX and those types of folks have like dip their toes in it a little bit, it's not necessarily that large at this stage. And yeah, the, the products and services are getting better globally too, but it's still not large enough for really significant institutions to do, you know, cross-border trade in it, etcetera, in my view. Yeah, I don't, I don't have enough of the data. My instincts tell me that it's a not a either or but it, but I wouldn't just hold it all to Bitcoin. I think like when you look at Square, you know, specifically Stripe in the like infidelity. But one thing just to take a step back, that's actually interesting that as we were talking about this is I could see 2 worlds happening where you end up with like Pereira distributed Bitcoin. I'm sorry, stablecoins where it's really like USDC and let's say Tether because of this liquidity issue, even though we have all these stablecoins proliferating or the alternative, which could this is where it ends up going back to Bitcoin is you end up in this world that looks similar to how we broke down light Spark and what they're doing where it's not just light Spark like I think Lightning, what the use cases found is it's basically like the connectivity nodes between all these other disparate pools like Arc and E cash mints and even like stable coins where it's just sitting there to offer the like the atomic swap or the movement. And I could see a world where Bitcoin actually sits in between that from a liquidity perspective and how light Spark was doing it. So you have all these different nodes that are running their own, like closed in tempo has their stablecoin, but then you need the intermediary to net settle and then even move over into the other stablecoin or dollars. And that it's interesting is it'll be interesting to see how that plays out where Bitcoin sits as its underlying tech to, to help in the migration from different stable coin stacks. Exactly. Well said. Whether you've been in Bitcoin for 10 months or 10 years, managing your Bitcoin wealth has been a fragmented experience. One place to buy, another to custody. A patchwork of providers for your IRA, your loans, your estate plan and everything in between. Every additional platform is another point of failure and that is why we built on Ramp Finance. A unified platform for your entire Bitcoin life. Enhanced brokerage, cash bearing accounts with earn rates up to 5%. A card that earns cash back that you can use to stack more Bitcoin. Multi institution custody, Iras and built in inheritance planning all under one roof. The Genesis program is live and spots are filling up fast. You can sign up in 5 minutes at on rampbitcoin.com and use the code TLT to lock in one year free of multi institution custody and our highest earn rate. OK, I want to jump to standard. Charter I think already owned a percentage of Zodiac custody, but they are looking to acquire the remainder of Zodiac custody. Banks offered to acquire a slice of Zodiac custody it doesn't already own has been accepted by the firm, shareholders and other note holders. Mike, what do you got on this? Yeah, I didn't read into fully if they are buying out the existing investors because I know there was some external participants. We talked about this a few months ago when it was rumored. I mean, I think this is super savvy that you had a regulated banking, global banking entity that set up a Skunk Works Labs outside of it. They invested the other team there and then they're able once they saw this asset class growing adoption, basically absorb it back. And yeah, because it's like Northern Trust, the bank is majority shareholder of Zodia with minority shareholders. But ultimately bringing Zodia activities back into standard charters digital asset custody business, I think it really is going to put them in an interesting spot global because they have those Fiat on ramps. I think that was the one part we missed with the USDH aspect is you still need USC has set up this inertia where they have Fiat on and off ramps globally. And that's what allows that liquidity, especially if you're a trader or anybody who wants to hold the underlying is because depending where you are in the world in size, you need to move it, but you also need to be able to access the local Fiat. And so standard charter. The thing that doesn't get talked about enough is they effectively have those. I like to think it was just like the the desks, the the teller windows. They can give you a duffel bag full, you know, dollars that that is valuable. And that's what tethers really been able to do on the ground for like retail. And so I think this is super cool and it's just a sign of like where things are going. The interesting part is there's a lot of banks that don't have this level of sophistication of what their foresight is. So a lot of them are going to have to buy other firms. Exactly. Go ahead, Brian. I was just going to say it's kind of what we talked about before and like there aren't a lot of assets like this to go out and buy. So now I think this is an important step for them, but it's really an important step for the broader market in the sense of, you know, kind of the race is on and you better start thinking about this unless you're going to build it yourself. There aren't too many like pristine assets from a custody or infrastructure perspective that you would actually want to buy. So I think this will be a wake up call to a lot of Triadfi institutions, banks that you know, haven't put their their foot forward in terms of building anything themselves. And now I think are going to probably realize like they're a little bit behind the 8 ball on actually going out to acquire this if that's the route they want to take. Yeah, the closest one here in the US and it's not necessarily exactly the same because it didn't incubate it, but was Morgan Stanley investing in 0 hash. And despite that's mostly just an orchestration layer, at least they're integrating it into E*Trade and getting some inside seat as how the industry works and strategic knowledge as they, you know, obviously just launched their own saving point and then building custody in house. So I'm surprised that we're still not seeing more of this. I think that maybe they're just waiting on the green light from the Clarity Act, but it's probably better to do it from an outside seat until you for right now until you can actually like get the assurances that that you really need from a clarity perspective. Yeah. And I know this might be not be in the direct order, but because of time, there's a South Korean deal that happened as well, which I thought was interesting, the Hannah Bank to buy or put a $670 million stake in the exchange. Dunamu. I think this is just ties into what we're going to see more and more of. There's not enough assets. And ultimately, if this is where the market's going, there's not even like there's the crypto component of like how do you just turn on the ability for your holders or your clients to buy the under like asset and get the fees? But then it really comes back to that whole notion of why destroyed by bridge. It's like you needed the natives to have some of the infrastructure, but then also the lens of where this is going. I think it's a big part and most of these firms are missing. Everybody's turning on stablecoins, but it's like, how are you going to get your clients to effectively use them and build the products that are fundamentally juxtaposed to the traditional architecture of money movement, which is very closed end and permission? Yeah, good call. And while we're still on this topic, I would bring up this one as well, which we had on the list Japan's SBI and rackets in developing crypto investment trust in house. So this is kind of the other path, right? Like if you're not just going to go buy this infrastructure of these assets, you've got to try to build an in house. And so this also comes on sort of these firms following the lead of Nomura, who I think has been pretty early in, in terms of at least being involved in, in crypto and digital assets with their, I believe subsidiary Laser Digital. But so these are Japan's two largest online brokerages are developing crypto investment trusts in house and plan to sell them directly to retail investors. And so, yeah, these, this is sort of just another, another sort of line in that story of, of a lot of these traditional incumbent firms either building or buying like those are the those are the routes. Yeah. The two things to add here is makes a lot of sense because I believe, I don't think it's gone into effect yet, but Japan changing their tax deal. So this is probably visibility into that being connected that if that changes, I think I don't know if that's referencing that in 28, but either way, there's that. But then the thing we miss in a lot of natives missing like I don't know anybody listening to that if they know the original origins of this business was around the on rent Bitcoin trust. This is pre ETFs and it was building a product that you know rivaled like a GB TC from the unit exposure to in kind redemptions and subscriptions and then better custody that we forget that there is a whole slew of investors from retail all the way to institutions that either can't or do not want spot BTC. And the main reason for anybody listening is like one of the biggest is who manages it, who manages the underline, who has the title and then who has the money that the controls. And I think everyone here on this call would say that it's a superior version of it because you own it, but you still requires a level of knowledge on how do you manage it, where a lot of individuals rather take that subscription and have a fund manager manage the underlying. And so I think that we're still in the early phases of this, but there will be pooled vehicles that are best in class that give you the assurances of, you know, the custody not having a single point of failure, the units being mapped as close to spot BTC. But then ultimately allowing for that redemption. Because that redemption is the call option on ultimately being able to get out of that construct without, you know, all the different things. Second and third effects that can happen because when when your assets in a pulled vehicle, you lose a lot of the assurances and so it makes sense that the trust and ETF exposures will grow. They're just will evolve to graph to what the market demands and requires. Well said. Switching gears a little bit here, I did want to cover this. Maybe I'll kick this to you. Liam. Gemini reported first quarter results last week and then also announced a $100 million strategic investment. So what's the real story here? What's going on? Yeah. I think just like we talked about before, I think that Gemini likely gets acquired just for their licenses at some point. They they're hemorrhaging cash, I think lost over $100 million last quarter and they have a little bit of Bitcoin and I think some other cryptocurrencies on their balance sheet that they can sell. But one of the things that we've been talking about for a while now is just the fact that exchange fees are going or exchange kind of basis points for trading Bitcoin in in crypto in general are kind of a race to 0. If there's no differentiated product out there, there's enough firms out there that can actually offer the ability to buy and sell Bitcoin now that unless you have, you know, something else, it's just not necessarily enough. So I think that they pivoted a little bit more to, you know, just generally production market stock trading to with tokenized stocks. And it makes sense. We're in a bear market to, but it's also just kind of a general trend of where the industry sits today. I know Ledger shelved their IPO process just because there's not quite as much demand as they would have expected. And so while it's it's, it's I guess a little bit of a dat because they hold Bitcoin, it's not the same thing. But the entire trend of the industry is not in the favor of going actually in just what being hot. And so anybody is going to throw money at it. And so while that's how much of the industry operates, it's much more important to actually make sure that you have the cash flows and profitability in order to survive any bear market. That's why firms like cracking that of you know, printing almost half a billion dollars in EBITDA each year are actually, you know a little bit more sophisticated than this. So I think it's just important to realize where we are in the cycle and and the importance of really being able to position yourself on both the balance sheet and cash flow perspective in order to weather any storm, to not be to essentially needing any. External capital, yeah. I mean, my quick hit is this feels more like a bailout than anything to quell some of the confidence issues because there's no question with between Gemini's exact departures and also just the stuff that's happened over the past three to six months. The interesting part about the year over year growth is reminds me a little bit of like on Twitter when you see somebody post like one of these dats that go up 20% in a day. It's like when you zoom out and you look at it from the downward trend, like when you look at these results, I think they're like net losses, you know, still year over year also increase. So in a vacuum, yes, 42% year over year growth in Q1. But then when you look at the amount of money lost, I think it's probably like equal if not doubled from last year. Yeah, great points. OK, coming up on time, there's a few more things we wanted to get to. I think I'll go here first with and it sort of relates back to the hyper liquid conversation where trading venues are moving in terms of tokenized assets and now the IPO perps. So SpaceX is preparing for its IPO, it's coming up, but now I think this week going live is basically pre IPO shares on hyper liquid. And I mean, this is interesting for a few reasons. I think, you know, to me, it's just these are basically meme coins like at the end of the day, because you don't, you're not actually, you don't have any actual economic ownership of shares of the company. And so we saw something similar with Anthropic shares that have been trading on these on similar sort of pre IPO markets. And then like a week ago, Anthropic came out and basically was like, yeah, you guys don't own any equity, just to be clear. And those, all of those pre IPO shares like dropped 50% in like a matter of minutes or hours. And so, you know, I think these are interesting from a trading perspective, but at the end of the day, they're kind of meme coins in my mind because it's not like you actually own anything substantial or, or not anything that you can like there's no convertibility to to equity at any point. So yeah. Yeah, agreed. I mean, I think it's part of the quote UN quote innovation that's coming into crypto is supposedly giving people in this future state like perpetual future exposure to these like synthetic exposure. So you can bet on the outcomes, which to your point is somewhat interesting. If you want to speculate, quote UN quote, gamble on Anthropic crushing it, But from an assurances and preservation of wealth, are you really putting in size any of these products? I mean, I think people will and they'll probably lose a lot of money, which goes back to what you referenced, not only the Anthropic. There's just no shortage of private SP VS that have been done where people when they unwind that may not have any exposure or less exposure than they thought. And then here obviously seeing it in these markets, yeah, it's going to be interesting to watch play out. We talked about, I do think again from a hedging perspective and like in the 24/7 markets, I think Hyper Liquid found this like product market fit specifically with commodities at nights and weekends. But the point still stands that if anything changes, like we've seen this with the polymarkets of the world when one of the trades, you know, the the TS and CS or they say, oh, it wasn't this or that doesn't pay out. You're always beholden to the centralized entity or what they decide on. And then it also reminds me of like Coinbase. So we talked about their misdirection and they put on, I think 2 weeks ago, ability to speculate on gold and silver's price, which is just like on par for where it is. So I think like the market will be very interested. I think Triify is going to love all this stuff these, it lets them generate more fees. They'll build ETFs around this, like they're working on that ETF around US prediction markets, but this old one is going to get snuffed out by smart investors and then the rest of the market long term. But in between now and then, it's like crypto, people are just going to like love to gamble on it. Yeah, I mean that's. Exactly. Nobody else in them there. OK. Maybe a couple minutes left. Anything else you guys wanted to cover? I mean, we should just do the the prime trust quick hit. I think a lot of people. So this just came across the desk right before we came in and block space. Craig guys said there was an article. I didn't actually get to dig into it, but the key tweet for anybody that's not on screen is prime trust litigation sue Swan. Bitcoin prime trust litigation trust has sued Swan over pre bankruptcy transfers totaling roughly 12,000 BTC plus cash and stable coins. The core notion this is all public information was back in I guess I think it was 22 when a lot of the market delevers naturally you because the price of the underlying asset which is generally where this market's nominated BTC, you start to see either runs or bankruptcies. And we kind of see, we saw this a couple weeks ago, we talked about with the Atana bankruptcy that Prime Trust had a few different issues. One of the main ones is they somehow lost anywhere between 50 to $100 million roughly in the assets and they in the underlying Bitcoin. I think the way that they described and we actually had an article about this in 23 and it was they chalked it up to mismanagement of the fire blocks wallet. But what happened back in the day was that people caught wind of it because prime trust was one of the main underlying custodians for a lot of firms in the crypto world, but also in the Bitcoin specific world. And there was a run when people because generally like it's very hard to keep once the like cats out of the bag. It's hard to. There's different layers of knowledge. There's like the internal knowledge at Prime Trust and then there's this like second order knowledge. When you have a partnership with Prime Trust, whether it's with the execs there, your account manager that some of these firms started to withdraw the assets before it was public that they had this whole. And so again, without reading into this, there was roughly Prime trust estate demands 970 million in digital assets cash from Swan and bankruptcy court because they're ultimately saying that Swan had inside information about this. They've pulled a lot of assets off. The one thing there's a lot more here. There's a lot more companies that could be exposed to this that we're using. Maybe we'll we'll put a report out on it. But the main thing that I think is valuable here is a lot of people forgot how much a custody is it figured out, but B, your assets sitting in these different custodians and insurances, it's very similar. If you go read and you just put it in Claude or perplexity or whatever your favorite AI app is like, what are the terms of service around your bank and the dollars? And they're effectively not yours. You're giving them up and you have no real rights to them. And it's very similar here. When you're giving up your underlying asset and you're leaving on a third party custodian, you are beholden to not only what happens to them today, but in the future if you know, God forbid, there's a lawsuit against them. And now the courts are looking to call back assets. If they go bankrupt, those assets may be seized. They may either be in bankruptcy or court. They may have to be sold to pay back this debt. And so I think that there's going to be a lot more coming on this. But the main point independent of any independent actor is that you just want to know where your assets are sitting because they may not be yours. And maybe this is my call out to hopefully Brian working on this proof of. Ownership versus proof of reserves that it's something that I think we need to, you know, produce to kind of educate the market on like what they actually own. Coming soon, Liam, what do you got? It's, I mean, technically you're an unsecured creditor of most of these platforms whenever you actually use it. And so having legal assurances, making sure that you can actually withdraw unilaterally and essentially having eyes on the underlying to make sure that the assets are not being re hypothecated. Like proof of reserves are definitely like, yes, a marginal improvement, but it just shows that at one point in time the assets were there and they haven't been actively re hypothecating and or haven't already lost the funds and, and in the whole, but it's not necessarily what you want for the end state. And using that as just an example, like there was a coin DX back in India that had proof of reserves and then lost all the assets the next day. And so, yeah, I would be wary and do your own research about this too, but it seems not great for those companies that were affected as well. Yeah. Before Brian goes like that, that whole notion of they could have had the proof of reserves to show that they had the assets one day and then the next day they were gone. And this exact issue, because that's what happened, is that they mismanaged like 50 to 100 million at the time, whatever the number of BTC. The other thing that's interesting in this deal is it shows Swan withdrawals and it says they withdrew 91,144 XRP. Great, great footnote to this story. Yeah, no, not much to add there, more to come on the proof of ownership side. We'll be putting out reports and commentary around exactly that topic. But that's, that's where this industry needs to move, frankly, is segregated accounts that transparency, visibility to your own assets, knowing that they're not pooled. If you know they're not pooled, you know that they're not being rehypopulated. If you can see them on chain 24/7, if you can recreate the wallet, those are going to become table stakes in in the world as these failures, lawsuits, these, you know, they continue to stack up. And we just see the track record and history of of single counterparties mismanaging the asset. And so that's where we're headed. But good show, boys. And, and just on that too, and just because I feel like we, we, we get stewards of both clients and and non clients yet assets. It's like do your own research and and determine if you should be withdrawing your capital from any of these platforms if you have any there just because there are they are trying to get clawbacks and that could potentially impact people. It just came out this morning. So I don't know anything in particular, but would recommend that everybody do their own research as well. Yeah, it's a good call. I mean now, but in the future, to Brian's point, I just think of this as all the other stuff we talked about. The economic forces will just push people to better products. The problem is between now and then how much damage has to happen because people aren't educated. And if you have another bull run and the price moves up, will people natural inclination is to get price exposure and leave it there. And then life gets in the way. And that's is how you end up in these situations with losses because ultimately people don't necessarily know the history of how we got here. And then most people just for whatever reason, assume that it's been figured out. Like that's the most fascinating part about this whole industry and where people like to pontificate about these financial instruments that can be built on top when they don't fully then understand the underlying and how we got to this point. So they layer on risk when they never understood the base level of risk. And so that's just something that we're going to have to go through. And part of it is education. And that's why I like the research we've done. And and they're not targeted against anybody. It's more meant to articulate just kind of like the history of Bitcoin and they're ultimately the risk that exists on any financial product layering on top of the underlying. 100% Well said. All right, gentlemen, good show for joining me as always. Brian, are you going for the Knicks just because you're up there? Is Arena Is are you? I'm going to wait for the finals, you know, Knicks in four. We're going to be the Cavs in 4. Williams actually a Cavs fan. So we have three out of the four final four teams on this on this pod, which is pretty incredible. But yeah, Knicks in four. I'll I'm going to try to get actual finals tickets. Going to spend like half a Bitcoin on them I think. Really well what how about you do well if Nicks if Nixon Spurs make it the finals well, maybe you can just come down to San Antonio because the cost of a ticket is a lot less and San Antonio there's. The plan. I like that idea. And I got an, I got an in with the Spurs. So we can, we can do a little bit there. They'll be they'll business development tickets. Maybe we'll, we'll, I'm just kidding. Anybody on the finance team, there's no business development tickets unless there are some banks in Texas that we've been talking to that I teased out, you know, some Spurs stuff. So that's real business development. And Brian, our two strategy officer, we need to join. So maybe that's the the finals. I love it. Nick Steel. Perfect all. Right, good stuff guys. Take. Care later. Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that On Ramp Media is for informational and entertainment purposes only, and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com/contact to schedule a consultation with one of our private Client Advisors.
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