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The CEO of the American Bankers Association sent a frantic alert to every bank CEO in the country demanding immediate engagement to lobby senators and kill stable coins that would finally let everyday Americans earn real yields on their money. This line and letter sticks out. We committee members may not be fully aware of the risks to the economy by the stable coin loophole. Both intellectually dishonest and simultaneously demeaning. This entire issue was litigated during the genius activate statement is insulted his and his work. So you can see here, this is what was sent by this guy Rod Nichols last night to folks. So, you know, it was kind of dressed up last week as we've reached a negotiation, there's compromise banks and can save face, but seemingly the banking lobby's still not super excited about this. 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. Today is Monday, 12:13 PM Eastern Standard Time, a little later in the day for us gentlemen. How are we doing? How was the weekend? How was Mother's Day? We're doing good. We were just catching up on some Mother's Day, you know, mishaps with the children. But it was, it was good. Nice recharge. And I know Liam has some stuff to do. So yeah, a little later in the day, but hopefully we'll carry the same signal then Monday morning first thing, right? Yeah, lot going on. We've got a lot of things to get to. We'll try to keep it tight. I guess the first, first thing we wanted to get into was so Coinbase reported earnings last week and I think there's some, you know, multiple different angles we could take this. They, they not only reported earnings, you know, we talked about last week that they laid off 14% of their staff just prior to to reporting earnings. And then they had an outage for I believe the at the longest period, it was like 5 hours where coins were just down, couldn't use it. And so number of different ways we can take this. Like I said, Williams are way down, particularly X Bitcoin Williams for all their other tokens that they, they list on the platform. Where do you guys want to take this? Any, any notable things? I guess from the the earnings themselves maybe Liam, I'll hand it to you first and then we can kind of take it in different directions from. There, I mean, there's so much going on here, especially right like pitching this entirely as AI related layoffs the week before. It just seems a little bit like a misnomer and then missing that big, I mean one, they just try so many different projects that some of them are naturally gonna fail. And a lot of them you could realize from the jump, just because they don't actually understand the real money and economics behind it. But #2 even though they grew their overall crypto trading market share, it just feels like a tougher game to be in long term. And obviously they don't want to have that be their real core revenue driver. Seeing all the hyper liquids and competitors pop up on more of like the crypto native, like high frequency trading side of things. And then we'll we'll get into others aspects later too. But then seeing E*Trade and kind of coming in with 50 bips trading fees on the actual Bitcoin and Ethereum side. So it kind of seems like they're going to compress from both angles. And I mean, the outage for five hours seems just like a a massive hit to their credibility. Nobody really wants to be able to see this, especially as they have real money on the line and they just need to be thinking a little bit more adversarially. I think if they're actually custodying this amount of crypto assets on behalf of the industry, it's I would like to see them be a little bit more thoughtful about, you know, redundant systems, etcetera. And and know that's a lot of what we think about here at early riders non ramp. Those were my initial takeaways, but curious what you guys thought and was the biggest top of your mind, Michael? Yeah. I mean, randomly when you're bringing up the volume, we'll probably have a chart on this, but I was looking at in the content channel, they're not even top three right now. Top three in volume for crypto trading, Binance buy bit and then OK X. So you know, even in that realm, they're right outside of the top three. They don't lead there. I don't know, I deleted my Twitter for 48 hours. So like feeling a little cerebral in the sense that I want to like bring up something more objective or hopefully being objective and less around anything we're building, but just more of like from a market structure perspective. Coinbase in the markets in a really interesting spot because we talked to them about this the past few weeks. There's a very like high level of incompetence being shown from I think the layoffs have persisted for the past like four or five years wherever I think that they've naturally overextended themselves to Liam's point, they've naturally been scattered in their focus. But also the outages should concern IT individuals, but also they happen all the time. Like this outage was, I think related to trading and some other things. And this was like 6-7 hours. But every time, historically for the past, call it decade, at least 5 to 10 years, when the Bickman price has any kind of volatility up or down, they generally just have to like freeze. It's almost like the circuit Breakers. And I think it just ties back into this notion objectively that we really genuinely forget. I think a lot of individuals come into this space maybe post FTX or maybe building a position that's material post FTX that like custody is just fundamentally figured out. I know we say that all the time and it sounds like talking our book, but this is just a large problem if you have Coinbase, who has this whole slew of issues. And I really think it comes down to leadership because at the end of the day, I genuinely want like, I think we all want Coinbase to succeed and not have any issues because like that could set the industry back very far. And so I think like there's just a lot of fascinating things that play out here, which is 1. How do they like evolve and navigate this space with now institutional capital coming in the Morgan Stanley's of the world, not only undercutting them in fees, but understanding they're going to have to live and die by their own sword and figure out their own custody. But then also this notion that they don't really have a North Star trajectory. I think of like Gemini's, the poor man's version of Coinbase and that their founders were building something for acts. They've always looked at Bitcoin as crypto and not really as a money. And the people that use Coinbase look at it as crypto and it's speculative. It's not people really parking and storing their wealth long term. And you can actually go back and maybe this is a report one of us will do on the how we got here, because I think a lot of people forgot that Coinbase was blessed by Silicon Valley and really A16Z to get that Silicon Valley Bank charter till they allow them to trade. Because if you go back to 2012 and 2013, this was right after the first operation choke point around the illicit quote, UN quote illicit goods and services sold. I think it was, I don't know if it was prostitution, but it was definitely gambling online and maybe it was guns, guns and gambling. But the point being is that nobody could get a bank account and they had their A16Z relationship. They had their bank and it'll get let them kind of like run for years as his dominant player. They didn't just get here out of their own like position or being these ultimate strategist on the Bitcoin side. So anyway, I have more like questions and answers and like, where do we go from here and how do they like weather the storm because the competition is going to only increase. And it's going to be interesting to see how they navigate it because again, they don't really have the best lens. So are they going to monetize that underlying Bitcoin that they sit there? And then crypto trading is starting to get more spread out. It's going to be a fascinating place to see. And I really like my instincts tell me that they probably have to have a leadership shake up if they're going to be able to like get out of this. The only caveat to all that is the public markets are so insane that like it's all narrative based. So if they can continue the narrative, they can probably be OK because they are this quote UN quote dominant player. When people think of Bitcoin or crypto, they think of Coinbase. Yeah. I mean, in my mind, they've kind of, they kind of fell forward for a long time. And despite not having a, a real material Moat in any, in any business sense because they were early, because they at least for a time had a had a brand name that because they were VC backs. There were various people involved that, you know, they became the sort of version of, you know, how the Tradfi sort of adoption story was going to go, at least initially in the year, in the interim stage where Tradfi wasn't going to build everything themselves. They were going to partner with Coinbase. They were going to use Coinbase's sub custodium because they had effectively been green light, green light and they've been around the longest. And so there's a lot of like sort of momentum ingrained in where Coinbase sits today. But I think what we're seeing now is effectively their quote UN quote note being eroded or tested in real time. And that's coming from multiple angles. As we mentioned, it's coming from the stratified folks who are not only going to attempt to rebuild what Coinbase has built from a custody perspective, but they're also just going to undercut them on trading fees like we see with Morgan Stanley and E*Trade. And then, you know, say what you will about sort of the failures of crypto and the D5 space, I think one thing you could point to that has been somewhat successful is hyper liquid and a lot of trade volume moving over there. So this was an interesting comparison chart that I saw that I'm pulling up now, which is says Coinbase Q1 earnings are in Coinbase have reported a $400 million loss. Hyper Liquid meanwhile has generated 200 million in profit, pretty much the same business allowing people to trade, use leverage, etcetera. And you know Hyper Liquid is 11 people versus Coinbase is still over 4000. And so they're getting intense competition from both angles. And the other thing which I thought was worth bringing up and maybe we'll we'll speak a little bit. I think this was later on the list, but I think it's worth bringing up now in terms of what Circle has been announcing because, and I'll bring up this headline from just this morning, Circles raising 222 million from Black Rock, Apollo and others and an ARC token presale valued at 3 billion. And so this is interesting from the perspective of Circle and Coinbase have had an interesting sort of symbiotic relationship with, you know, centered around USCC and, and Circle being the issuer and Coinbase sort of being the, the ingrained distributor. And, you know, Coinbase launched base, I forget how long ago, at least probably two years ago now, which is their own sort of proprietary blockchain that they want to move a lot of stable coins and tokenized assets upon. And now Circle is just going to have their own token and, and so and blockchain. And so it's, it's, it's an interesting step in my mind for Circle of Tape. Because it seems like to me the early stages of trying to potentially separate themselves somewhat from Coinbase and start to kind of do more of their own thing and not be as reliant on Coinbase as a distributor. And maybe they just see the writing on the wall for everything we just described around Coinbase and, you know, their struggles moving forward and sort of the erosion of their Moat. Thoughts on any of that stuff? Yeah. I mean, I'd be curious some of the mechanics. I mean, I would imagine the token obviously isn't here token but and that was probably what you know was sold to the investors that got involved. But before going there, I think there's also this like core thing that's going on, which is there's a lot of path dependency into like Hyper Liquid. How they got there and what early riders in the whole thesis of the firm is based on was this notion. And, and we had luck or timing that you got to see, you know, coming out of the desert world where there was a higher cost of capital. All of that started to put focus on profitability and earnings per employee that Coinbase was part of that, you know, Silicon Valley, late 2000s, early 2010. And again, we talked about last week, Airbnb was a big component of this and they talked about it. Brian Chesky, the CEO said he woke up one day and he went from like, you know, a start up to managing like 10,000 people and didn't know what the hell happened. And and Brian Armstrong was at Airbnb. And so they built this business of like growth at all cost. And that's fundamentally like juxtapose into this new world we're at again, in case in point with hyper liquid and their leanness in their revenue per employee. And so it's just going to be a fascinating, I don't think they can make that transition. So it's like, what does it look like? Because they have such an insane headcount. I think even with those riffs, they're still at like 4000 employees and they have this whole design service that's not generating revenue or financial services. And then when you really think about, OK, well, the majority of trading volume custody across anywhere, this is like The Dirty secret is that it's all Bitcoin, right? You just couldn't capitalize. Nobody would invest in a Bitcoin only firm. And so they have all these people, all these customers, but they can't actually take care of the people that have have the real Bitcoin wealth because that's what they need to succeed in the future stages like have a focus there, have the right client services. So real people with real money go there. They get known for that. But you can't do that if you have, you know, hundreds of thousands, not millions of people with $10 wallets. So it's again, just they're just in a very like interesting predicament. And how do they go from here? And then where you start to see Triadfi start to eat their lunch and then also like Morgan Stanley as an example. And then also on the other side of that, just the incumbent or the net new players like an on ramp or others because we naturally, that's where a lot of flows come from. People that wake up, they want to increase their position. They know they can't leave it on Coinbase. They go by the hardware device and like, screw this. I'm not putting it on 12 words and then they end up here. And that's only a growing trend. It's not going to go away as the price appreciates. So yeah, it's it's going to be interesting. And I don't know, Liam, if you want to have me share any thoughts. I'm just curious about the token in general around the ARC stuff. Yeah. Just real quick on the Coinbase stuff, just last comment there is there's going to be other activist investors who come in and are going to try to have the company break up and sell off some of the different parts because there's fundamentally no reason that a lot of coin bases, I guess we, we do need to put out a report on this. They bought Zappos custody. They bought the prime brokerage from, I forget who else. And then they've kind of acted more like a venture firm of just kind of having these moon shot bats and trying to go out. And it doesn't necessarily make sense to have the same firm that's custodying all the Bitcoin for the ETF to also be really going in deep into a prediction market, sports gambling, everything else that they're doing and just kind of taking away some of the focus. I think that and they're going to continue to try to go into agents and everything else. And not necessarily that those are are bad ideas or some of them are, but others maybe just the execution isn't completely right and could be better suited with better owners. But a lot of like, to Michael's point, it's not just them, like Gemini went with the director of going to try to get an ETF and then had to figure out custody and trading everything else. And so a lot of these companies just came from eras when you had to try a bunch of different things and they ended up with this behemoth of a company of joining together these different parts that don't necessarily fit. It's going to be a reckoning real soon where they just need to either sell off some of these businesses for parts or somebody's going to come in and ask them to if they don't with some real force. So, so that's, I mean, really why we're bullish on just the idea that more folks can come in and, and I'll compete them because they have so many different directions and the built in essentially status quo of going and focusing on all these different things because they've been doing it for so long is really, no, it's tough to go in and really ask the tough questions of we, why are we doing it this way? And many folks haven't actually done that at these large, big bureaucratic organizations. Yeah. The only other thing to add like contextualize, because maybe we're bringing up a lot of problems and not solutions or what could have been different or how is I think like the ultimately treated Bitcoin as a speculative asset. And for their not in maybe their security posture, but in how they think about the relationship with the client and where they're going. And so if I was in those shoes like the even today, a knowing where stablecoins like why don't they own that full stack to be able to issue their stablecoin, manage that float, get that brand awareness. So they could issue others because they could take a percentage of the others float that were issued. But then ultimately, like they do have a brand. Why didn't they be just become a full stack like quasi bank or neo bank to let people park their dollars, manage them and then let them move more into that savings into BTC. Because you even see that's where they're going further away from that, where about a week ago I think they launched perps on gold and silver. So it's like they're just letting you speculate on these underlying there. It's like the perfect, you know, exemplification of like this is how far they're away from actually how people want to manage real long term value. 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 earned 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 onrampbitcoin.com and use the code TLT to lock in one year free of multi institution custody and our highest earn rate. Yeah, I think they've they've repeatedly and consistently optimized for sort of, you know, velocity and moving people out the risk curve. And so even if even if individuals at Coinbase understood that sort of Bitcoin was different, I think I point to them as one of the main reasons that the broader market conflates Bitcoin with crypto because they lumped it all together and there was no delineation between OK, Bitcoin is long term savings. It was no let's. OK. Bitcoin's a thing like it's, it's kind of old technology. There's all this new stuff that you need to effectively gamble on and we're going to push you at the risk curve so that you trade more often. And that's going to be a core way that we generate revenue is getting people to trade with high velocity. And so they, while some people may have understood what you described, like they've never optimized for that in terms of like the direction of the business. And so I don't know if they can sort of pivot to something that looks like that at this point or if they're if it's too far gone and the the competitors are now sort of out the door for the first time where like I said, like for a while they had this mode that was just a function of them being early and one of the only players in town. All right, So we touched on the Morgan Stanley deal, which was a big headline from last week, but I don't know if we need to rehash that. Maybe the next biggest story from late last week was related to what we just described around some of the stablecoin stuff. That Clarity Act looks like perhaps it's actually going to pass. So the target is apparently July 4th. There will be a preliminary vote, I guess, this week, this Thursday. And so, yeah, I mean, most people are now thinking this is going to happen. I believe the Poly market odds of it getting signed are up above 70% for 2026. Now, that's not to say that the banking lobby is giving up just yet. So there was this drop this morning from Bernie Moreno, Congressman saying the banking cartel is in full panic mode. While Americans were celebrating Mother's Day with their families, the CEO of the American Bankers Association sent a frantic alert to every bank CEO in the country demanding immediate engagement to lobby senators and kill stable coins that would finally let everyday Americans earn real yields on their money. This line and letter sticks out. We believe committee members may not be fully aware of the risks to the economy by the stable coin loophole. Both intellectually dishonest and simultaneously demeaning. First, there's no loophole. This entire issue was litigated during the genius activate. Phil Haggerty worked tirelessly on this issue and the statement is insult to his and his work. So you can see here, this is what was sent by this guy Rob Nichols last night to folks. So you know, it was kind of dressed up last week as we've reached a negotiation. There's compromise banks and can save face. But seemingly the banking lobby is still not super excited about this because while effectively what has been negotiated and the compromise is, is that, you know, idle stable coins doing nothing can't earn yield or interest. But if there's any sort of activity associated with said stable coins, they can earn rewards, which looks and feels a lot like interest, if we're being honest about it. But I think how we've talked about this over the past year or so is this kind of how we expect things to shake out in terms of what this compromise would ultimately look like. And it seems like we're getting to a place where I guess there's going to be more discussion this week. Preliminary vote Thursday and then hopefully this gets to the president's desk by early July. Yeah, I don't know if it's being a little if the terms like disenchanted or just, you know, realizing that there is a true, there's a machine in the background and what it wants it gets and that this is all like posturing or maybe he believes he can have a fighting chance. But ultimately the administration, all the things we we've talked about so we don't have to rehash need stable coins to proliferate. And it never made sense A so that would have clarity passing, but also never made sense that they would fully cut out any of the rewards. Because ultimately then it doesn't facilitate the goal, which was to get these, you know, stable coins globally out there being distributed for people to soak up dollar demand in further dollar dominance, but also Treasury demand. And I just think it's interesting because the banks sit on different sides based on what their needs are, right? Because you can imagine not all the banks, but a lot of banks would have wanted Bitcoin in the integration there. And they haven't been able to get it. Now they have the new administration ready to do that, but now they have the dollar issue. And I don't think they just have a choice either way that they think they may and it may feel good. It's, you know, we won't go into voting, but you see, we're going with this. It's like that they're putting this stuff out there. And also I think like there was an understanding that from a consumer sentiment, they don't really have a lot of legs to stand on. It reminds me of the a little bit of the Uber stuff that happened back in the day because Travis was they were really sharp in, you know, doing the ask for forgiveness versus permission. But then also the beauty of like what they did was they would pull out of these markets and you would have all these statistics around drunk drivers that were reduced in killings, all these things that were in the consumers favor. And so they just had no chance long term to be able to politic and get themselves out. And so if there was ever a chance here, it'd be maybe on the consumer side, but it's like, how do you go to the consumer say, oh, we keep all your dollars? Like we have a horrible a product in business line and so we need your money. We need to not pass any through, but we need everyone else not to be able to do that. It's just like like, how do you square that? But also it should show just everyone's colors that like this is just how the world operates. But I do, I do think like it's not all over with for the banks like the banks are going to have because we've been in the weeds here and the banks. Do you have interesting like quote, UN quote technology versus the stable coins when it comes to the banks are going to be doing and they're already piloting tokenized deposits. Tokenized deposits are a little bit different than stable coins in that it's, it's more of a deposit basis versus like what a stable coin be sitting in treasuries. But why there's benefits there is the banks can still pass on some of those rewards, but also they have better plumbing than the stablecoin technology and infrastructure. And it has to do with the way that the like Fed wire and like all the systems are set up that it's still early days. So the banks that actually evolve and then embrace this technology and there are some that have been working on this, we're talking to them. There's going to be actually benefits on why you would rather work with the bank if you're like a fintech and you want to use banking as a service. But I do think what's going to happen is you will see a lot of concentration and consolidation because it is true, and it's sad, but this is just how the world works. Is a lot of capital's going to flee these community banks and regional banks because if they do not innovate fast enough, why would you leave your capital there? And the world's only going to increase in innovation because once you have these dollars tokenized and stable coins moving, you're going to be able to offer better financial products, better just consumer experiences. And all of these banks are going to be ready for it. Well said. Many of the neo banks will capture a ton of those deposits too. And it's going to be interesting too because they're well, I don't necessarily play in that space quite as much. There's going to be a lot of winners around The Who can be the best at, you know, really over collateralizing stable coin loans. It's going to be a massive category and appreciate you, Brian, for tracking all this so closely just because it is a lot of posturing back and forth. I think it's, you know, we don't usually talk about price too much on this show too, but it is just looking like one of the more exciting times that I've seen in the past, you know, at least since the ETFs were launched of just the number of different banks who are getting in right now. Morgan Stan or E*Trade, Charles Schwab turning on Bitcoin recently, Morgan Stanley's new ETF, this new shifting regulation. It just seems like a one of the more exciting times and even the ETFs have been like almost not sold any Bitcoin. I mean, it's just going to bring so much more capital into the space, which is just always going to flow into Bitcoin over the a long enough time horizon. And and all the rails are getting absolutely time to, you know, bring the flow back and forth from everything light sparks doing to all the other banks out there. Yeah, we've been talking about this like the Clarity Act. I felt like was that time of the bow for this whole thing for us to really go. It's another discussion, but that the USI think has a lot of tools or arrows in a tool kit for effectively being able to wait or keep sovereigns and other places to adopt this asset class because of the dollar dominance until they're ready. And so you saw, we know Clarity was going to be, we've talked about it. But then this past week, JP Morgan Morgan Stanley, Black Rock City, B of A and Fidelity and Jeffries all had a bunch of crazy, you know, 3 to $700,000 rolls out there for digital assets experts. And I think a part of that, yeah, I think it's a little different, but this is also related that like this Clarity Act feels like a done deal. And to be honest, I think it it was done post administration when Trump won because without, you know, diverging any names, we were talking a lot of large institutions and a lot of things slowed down in those discussions. Because once they got word that this like favorability into the asset class was going to come, there was a lot of base level infrastructure they needed to get in place, namely stable coins, right? Because if every bank has to rely on deposits and the deposits will leave, unless you have effectively the the 2.0 infrastructure, you had to work on that before anything related to Bitcoin custody. Because you're sitting on, you know, potentially trillions of dollars versus what will Bitcoin consume. Even with the greatest launch ever, you're still only at like 50 to $80 billion total across all ETFs. So I think to Liam's point, we are set up, you know, famous last words, we get bullish and then the market tanks. But even if that was the case, in the next three to six months, I think for the next few years it's going to just be insanely exciting time. Yeah. It feels like, at least to me, the only thing that could derail sort of this slow grind up that we've been experiencing over the past month or something or so is something that is completely external to crypto and and is something that brings down all markets. And in that scenario, we've seen that before where yes, Bitcoin and crypto may correlate to one with other assets, but it is the fastest to come out of whatever that event is. And so from, yeah, from like a crypto specific internal perspective, like things have never looked better or more bullish from the ETF stuff that you mentioned, Liam, to the banks turning all this stuff on to all these incumbents competing to head to head with the coin bases of the world. Like all of that is positive clarity Act is sort of the final bow on all of it. That's like, all right now it's go time. So, yeah, I think I'm with you that this this could be a place where things start to look better in terms of price. But I want to jump to a few deals of the past week and then some other headlines that are in the. Maybe real, just real quick before because we can gloss over this, but it ties into I think like where we go as you end up with a lot of financial independence and tools, meaning you can move dollars around, you can get some yield, you can get access to Bitcoin, you can get access to gold. The stuff we're working on, others will work on because the market, but you end up in this world similar to like to AI where most people aren't using it, they're not using it right. Then eventually go far enough to arrival hole. It's like you're giving up all your data. And I think we end up in a similar spot when it comes to these assets in the sense of what what Brian had pulled up here and I'm and I'm following, it's not as sexy to us, but we'll figure out how to report on it to make it sexy. Is that 50 firms including BlackRock, JP Morgan, Goldman, Morgan Stanley, NYSE, you can go down the list or building a lot of the tokenized products with DTCC, they're securitized doing stuff with Jump Street. Is the point that while the financial independence and opportunity and products are going to be there and the administration's going to allow for it, you're still going to have all of the narrative obvious gate. Like what's the signal until people are going to get excited by a lot of this? It's the same thing why we talked about the dat stuff is that like the trade isn't really hard, but it goes back to what's obvious is obviously wrong. And it's not obvious that you should just put your Bitcoin or gold and cold storage and just go back to your life. And so while it's bullish, you're going to continue to see these things and they're going to start to cross collateralize and over financialize these products. And a lot of people are going to end up short BTC, whether they think they can get a better trade or they just pick the wrong counterparties. So anyway, I didn't know if we were going to transition here. But that's like the one thing I can see this going is everyone's going to get what we wanted. But the reality is there's so much inertia just built into how we got here that we live in this financialized world and we just accept that we need this financialized world and it's just not the case. We need to coordinate economic activity. We need trusted third parties, but you get to them through slow and steady grind and understanding market structure and fundamentally building out sound products, not by just like shoehorning Bitcoin into the world that's over volatile and over over leveraged. And then assuming that it just helps you get to the other side. That's going to be the narrative and it's just not going to work out for a lot of people. Yeah. No, 100%. That is a nice transition because what I was going to go to was a number of headlines that are on sort of this same track that you were just describing, which is tokenized securities. So what we have up here is Jump Trading partners with securitized to bring regulated tokenized stock trading on chain market maker. Jump Trading is working with tokenized platform securitized to advance on chain training of tokenized equities with existing security regulations. Jump providing liquidity and trading support. A similar deal. Bullish to acquire a Quinity. To be honest, I'd never heard of a Quinity in a $4.2 billion deal expanding into tokenized securities. Any thoughts or knowledge on this one? This this bullish acquisition? And then there's one more related to tokenize, tokenizing the world. I mean, I think it just ties into, I mean, the, the interesting thing with the the bullish deal is I think they're like only value. There's a lot of debt being taken out. I think they're only valued closely, like 3 to $5 billion, but I think there's just an insight. Bullish is super connected. They were part of that big EOS deal, they said on a huge Bitcoin balance sheet, people closest to this industry that have the tack and then also closer to the administration and also the policy, they can see where this is going. So they're able to get these M&A deals, build the market structure and that they can either build businesses around or these other large firms are going to have to acquire because they got to jump on building out the processes and and procedures. And yeah, this goes back to the BlackRock kind of tokenizing the world. And you can see it already. We've been saying this since like BlackRock launched the ETF in 23, I believe was you're going to have a tokenized Bitcoin where you're going to be free trading the ETF shares and you're going to feel like you have your Bitcoin and it's not. This is just going to be part of the transition. And it just goes back to the Weimar stuff in the 1920s when inflation runs, people understand they got to get out of the dollars. They go to high velocity speculative investments. They look like they're getting wealthier in nominal terms, but in real terms they're not. And then it goes back to the math of Bitcoin and gold that independent risk adjusted just nominally in real terms, you end up with a greater upside because of the math and the scarcity, but then also risk adjusted, your downside is minimized if you have it with the right counterparty versus it's complete 0 if you have it with the wrong counterpart. And I just think that it's a it goes back to the Coinbase fascination where nobody talks about custody. It's like everyone forgets that this is, it's not that it is an experiment, right? Like Bitcoin is digital gold that's happening. I don't know if it's fair to call an experiment, but it's at least new. But the notion of taking digital gold and a physical digital bearer asset and then starting to integrate it into other things in high velocity, we've seen how that works. We've seen it in 2017 and 20, 18 in the blow off top. We saw it biggest in 2021, Defy summer, all of those things. When you start to Daisy chain risk, we're just going to get that at orders of magnitude larger scale as you Daisy chain dollars across all financial assets, you tokenize everything and then you're going to collateralize that and put Bitcoin in the middle of it that everyone just assumes like this is going to end up finding it. And I don't understand how it's even possible. It can because all you're doing is digitizing an over leveraged world that's already saddled with too much debt, not enough dollars. And everyone knows those air pockets exist. They don't just leave because you digitize it. They just actually I think become more acute. So again, it's like bullish in the sense of valuations in companies. And it's interesting from a mental perspective to like sophisticated think about, but it's also you can kind of see where this is all going to go. Yeah. And maybe the best example of what you described towards the end is let's tokenize private credit because that's been looking so attractive recently. Let's let's, let's tokenize that as well. This is a, a, an announcement from Falcon X and Signum partnering to launch tokenize credit offering for institutional clients. So I guess this is not fully retail facing more for quote UN quote sophisticated or high net worth folks that are clients of Signum. Any any thoughts on that one? Well, just to one quick thing. Like to be fair, there's going to be firms that try to do things right and succeed. There's going to be firms that try to do things right and then ultimately the incentives will put them, push them so far down the risk curve that they ultimately fail. This is an example. I could go in either direction because what I think is being described here is over collateralized loans. So we talked about the lending rate, the market for Bitcoin back loans still too high. When I look at this, I think that's what they're offering, right? So they're taking dollars private credit, giving them to third parties that are taking on Bitcoin back loan collateral. You can make a nice spread that starts super conservative, but you can see as the market and liquidity comes in, you can get further out on the risk curve all the way to it was insane in 2021. The numbers would probably be like shocking that we got there were how many people have loans outstanding that were under collateralized. And so you can see how this will go further and further. And because a lot of people don't have the principles of policy in place to stay conservative because that's not what the financial system rewards incentivizes. So I think that's part just to contextualize where it's not all like do and gloom. It's just that the market forces push you out to that direction. Yeah, like this makes a ton of sense on the surface and and not that it's either their fault, but there are going to be people out there who try to ARB the different spreads between what they can actually make between Bitcoin backed loans, like what they can get from borrowing with free rate lever up on the difference. And that's it. Like same exact thing is going to happen with, you know, tokenizing stretch and putting that into other corporate balance sheets and doing that carry trade and not say that all of them are necessarily just. Awful ideas, but there's just going to at some points end up in tears as the air pockets get exposed for some people. And not to say that the ideas are are necessarily bad from Falcon extra signum here, but it's just the over collateralization and arbing of the system is just going to end velocity now at which these tokenized deposits or tokenized vehicles move makes the air pockets get so exposed so much quicker. Yeah, that's the thing that just gets discounted because I don't think a lot of people even listening here know that there is an insane like incentive being pushed with stretch to be put a PYXI believe the the dominant one where they're taking it and then they all they hold over $100 million. They're like staking it in Solana to like effectively generate, I think they take half of the stretch and they'll park in the fund to issue the stable coin. Then there's the other half that's parked to generate some kind of yield. And so as you get further and further out on the risk curve, it doesn't even necessarily have to mean that MSTR does anything wrong, but the market structure underneath it, It goes back to the whole notion. I was thinking about it. Everyone generally understands that complexity is the enemy of security. That goes from how yourself custody set up or your custody set up is you want to reduce all the assumptions. That also goes into the financial engineering of any product that people often believe in this world that but if it's over complex and it's very hard to understand, it must be super sophisticated. It's actually the counter to that. And it's again, part of the like water we swim in that we don't even know we're boiling in it. And so I think that's where this ties into it, is that you actually want it simple right now, not overly engineered. 100% really good points. Couple other headlines to get to which I'll just roll through. BNY launches Bitcoin in either custody in Abu Dhabi's ADGM. I think that's a huge one, by the way. Yeah, yeah, go for it. It it mainly because we've been close with BNY. Some of their folks were former advisors helping us out and they got their custody set up. They were one of the first banks and they were one of the largest sitting on what is it 60 trillion and assets under custody. And this was in 22, I believe I met with them 21 or 22. And Gensler and the the crew effectively put up these onerous standings on banks that were going to custody Bitcoin. So they had to have a 1 to 1 collateralization. So it like really kneecapped BNY to ever open up that product. So they may offer for some like highly profile clients custody, but they had it historically. So they've been sitting on this tech for like 4 years and saw it come across the screen last week that ADGM, which is a very regulated entity globally. But then even in the UAE, they are known to be more conservative than Barra. That's it's in Dubai. And for B&Y to sit there and effectively say, OK, well, we're still waiting because the banks and we talked with them. This is something that gets under understood is that even though there's all this bullish intent from different admins or policy makers like the OCC and then you have FDIC, they're still like ambiguity on the collateralization ratios if a bank is going to offer custody. So they're just like waiting and you know, they're kind of just hanging out. And so being wise, the way I took this is a they're, they're, they're going to be ready to roll when the time's right, but they can start to offer their custody for other places. They don't necessarily have those owners restrictions. And so I thought that was pretty slick to go into ADGM because it gets their kind of like mental or their muscle memory going, get their processes in place. And they might be a huge player when you think about capital flight from Coinbase in the US because they have that stature. They have a balance sheet that I think that they're going to be a big player when they'll rival up there with Fidelity, Morgan Stanley. Yeah. No, that's, that's a great point. And I totally agree. I think most people don't recognize that being wise sort of been circling the hoop, if you will, for many years around a lot of this stuff. And so, yeah, this this strikes me as a nice little test case before things fully get green light with clarity act and and what have you. And one no, like think about your previous life at Brown Brothers and other people in that seat like where they would never go into a coin base, but BNY Mellon puts on structured products and changes the whole like lens of how do you evaluate if you're going to get some exposure for you or your clients. A. 100% This was another big deal from last week. Kraken is boosting card capabilities in a $600 million acquisition of a Hong Kong based company called The Reap. This is on the heels of a lot of deals that we've seen over the past months around not only stable coins and payments, but crypto cards. So I actually I don't know who added this one, but thoughts on on this deal guys? Yeah, this one was super fascinating. I honestly wasn't familiar with them, but it's called Reap. They were. It was started by the former guy who led Stripes Asia efforts and he reap is interesting. They're essentially like from my understanding the reign of Asia, essentially offering white label card services, doing cards and FX themselves and cross-border payments. It's there's going to be more than just one winner. I don't necessarily know why exactly they bought the Asia based player just because I mean they can get into it more into the US, but doesn't necessarily seem to have all of the fit for Kraken as being primarily US focused. But at the same time, I think it kind of checks the box that a lot of private or public company investors are really looking for just because stable coins are the hot thing. This is a great idea, a great company. I think that there are Visa principal member and so it's it's not quite the dot trade, but it's similar of everything in this space right now on the public market side is going off of vibes momentum, what's hot, the cracking or pay where the public, the parent company is about to go public and the genius and clarity act are, you know, the biggest catalyst in the space. And so it just makes a ton of sense to get the deal done now and having kind of the the right team there makes this an interesting deal to follow. Yeah, this is a fascinating multiple fronts. I haven't been able to dig, you know deep into cracking their knee strategy. But we've hinted at this in my understanding for listening to other like in the know people specifically in the crypto space that Arjun Sathi who came in, I always get their names wrong. It's not social capital. I think that's Chamoth, but he came out of social capital to, it's something else capital that he's AGP there and also now CEO that he's super sophisticated when it comes into fintech slash digital assets into Liam's point, there's only actually so many products you can buy out there. I remember we came across the radar when we were evaluating rain. There's rain, there's bridge RE, there's red dot, there's like 6 that are out there at scale and scale generally means licenses and Fiat on ramps and on ramps because I was thinking about Hong Kong base, but the reality is we're going to dollarize world and a lot of those flows had to come back West. So they probably have all the rails from both on ramping and off ramping. And part of that, that quote from the, the CEO on the acquisition was like, this is an infrastructure like to work on. It's going to be deployed day one. I do think that it helps their stock as we talked about with Stripe Aquarium Bridge and their valuation. But I also think that it ties back to the very first part of this conversation with leadership and then where the puck's going and how do you bring in products and services that can like monetize and bring in more value versus like looking like a speck of asset. You start to become real entrenched financial services from AB to C perspective, but then also AB to B to C perspective because part of this deal was Ninja Trader and that's I think super savvy as well. They acquired Ninja Trader for I think over a billion dollars because Ninja Traders effectively integrating equities into there. So now you have equities. Now you have of stable coins for individuals, but then also B to B to C that you can go to Kraken and effectively turn on crypto spot Bitcoin custody. You can integrate tokenized and then securities and then you have banking like infrastructure. They have, I think multiple banks at this point. I think they're either going or got approved for the OCC. They have the speedy license with Wyoming. So cracking you can see is like really starting to put together a real nice like construct and they, I, I believe their team's probably at least half the size from a like capital LA perspective than Coinbase. Yeah, Yeah. They've also pretty, pretty consistently been EBITDA profitable, I think making half a billion dollars a year almost. They publish audited financial statements even as a private company. So would imagine that despite some of the issues that they had about, I don't know if it was them or the Gemini guys, but somebody CFO left and then they had the hack or misappropriation of funds earlier this year, which was obviously a little bit of an issue. But in terms of, you know financial profile run pretty effectively for this industry of being pretty nascent. Yeah, they have a nice balance sheet to play with, I think what are the evaluations like 20 billion right now? Yes, exactly. 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And then right on the backs of a 16 ZS, there was Han Ventures, which I think she was at A16Z for a while. She's famous for putting Ross away. I think she was AG that you know, crypto look is dead. It's just it and it is dead in like crypto currencies. But the notion of all this stuff, I still don't even fully understand Canton network, but I'm pretty sure you go dig into it. It's super kind of like tied into a lot of admin slash tratify because of their inertia or the the momentum they've gotten similar to Han and paradigm and A16Z that they're playing the next wave and they're going to make money because they have the teams. Those guys used to know. He said on Senator Lummus's staff, I forget his name, but he now sits. So he was part of like the the policy makers and he now he sits at the a six and D like head of policy. So they know the groups, they know the plumbing and then now it's just going to look different. And we talk about tokenized assets, all the things we've been talking about, tokenized securities, tokenized gold, which you know, had a like a, I think biggest quarter. I think that was the number. It was like MO more trading volume this past quarter than all of last year that these people are going to be out there placing bets on like real financial infrastructure, not like speculative tokens. They'll still be speculate on tokens, but it makes sense that there there's like a barbell right now in crypto where LP's are looking for institutional allocators that actually understand the space to invest. Yeah. I mean, I'm kind of split on it. Like I hear what you're saying, but like I don't know how great these funds are going to do into the future, like deploying $2 billion into this ecosystem right now. It's like, OK, we've seen several billion dollar stablecoin acquisitions over the past year. Like what else is there that they're going to deploy? Like are they going to try to reinvent Defy in some way? Yeah, they're. Going to be all the tokenized stuff. But I, I feel like that those issuers are already sort of settled as like who's going to be the big players there. So I don't know how you deploy $2 billion in the space right now. Yeah, it's a great question. I mean, in general, this is just an analysis. I'm not even saying I'm fully like there's two different sides there. One is as you start getting, everyone knows this, but generally as you start getting into larger fund sizes, you ultimately get the style drift and you get the the return profile naturally becomes harder and harder to hit. So this is what I'm about to say is independent of how big their fund sizes are, because you can make the case ACC ZS more of an asset manager than a venture fund and they, you know, allocate based on management fees and whatever. I do think that there will be vehicles and a sponge for this that will have returns. And the best analogy I can use is like, imagine the iPhone coming out and you think about like Uber as an example of benefiting from that. But then think about DoorDash and everything else that's around there. Like if you take that analogy, it's not perfect, but then you layer it on to money movement and who can be a bank. And then those floats like rain raised at whatever billion dollar valuation, they're just getting started. So in a, you know, as stable coins go from whatever the number is today, which I think we all expected it to 10/20 X, like what does that look like? And then what are the financial products and services built around that? And then what does it mean to like stand up a bank if the banks consolidate and now you can either build a bank or build a new age bank that I think that there was just going to be interesting things we don't even necessarily know about. And that's where like a lot of at least that's probably the story that's being told. And it makes sense that there's just a lot of products and technology coming to market that are going to need to be invested. And then the beauty is whether it's data, Amazon or BNY Mellon, they're not going to be building this stuff from the ground up. They're going to have to go buy it. Yeah, I think it's perfect for the A16Z to invest in companies and they're going to have the narrative, the team behind it in order to be able to sell to a BNY Mellon or and it's choose XY and Z bank that doesn't necessarily understand the full story of, you know, why Bitcoins signal what's really going on with digital assets. Just having the name on there. We'll be able to get the bank or fintech shareholders friendly. And then, you know, they're still going to do their token pre sales and all that stuff. And you know, we've been talking about that for a while. How crypto is dad, but you know, they're still going to be able to find a way to make money on new token launches. And yeah, they were just behind the new circle Arc 1. And yeah, I mean, the last one too is as all this new regulation gets passed, it's kind of what the 10 T funds guys did is just the latest stage announcements prior to these companies going public and then being able to exit as this higher industrial liquidity. There's new retail investors that want to come in. So I can see a path for them to do it. Or you know, why you would want to have that much money in this ecosystem as a whole. Not saying that they're going to be able to land it in total, but that's at least what I would do if I was in their shoes. Yeah. And one other thing just to add is like we talked about multi institution is like this new design service for financial products. So we have firms we've invested in layering on there for custody and other financial products. And then you can imagine just a sole business building whatever it's prime brokerage lending, whatever it happens to be around that. Well, we ideally are able to invest, but then as you get to different stages, there are specifics that like an A60Z has connections to be able to help support something we call it exit liquidity, but to be able to like mark that up and get that capital in. And that's one small example is like how big is that opportunity set? And then if every firm's going to ultimately have to do something there, like I think there's just no shortage of different products across Bitcoin, the token of securities or the stable coins that we don't really even know about yet. And so I think that's into it. And then AI is another huge component because like AI coupled with digital value is going to, when those rails really start flowing, I think it's going to be harder for people to just build them. If you're like in a gentic or an AI firm, you're going to have to probably plug into some of that liquidity and like tech stack. And that's another example. 100% seems like they're leaning a lot into the privacy stuff and you know there's a lot of issues with Z cash too, but seems like that's kind of their a little bit of their narrative for this latest fund as well, which is. The Z cash does crazy. I don't randomly was looking at the chart. It was like only a year ago it was like $25 and it's sitting here at like 600 bucks or something. Not it's not. Crazy. You don't need Z cash for anybody listening but. No, no, definitely not. And don't buy ARC, whatever this ARC token is because that that's going to be the, that's going to be the retail dump of all retail dumps if they just raise that much from all these folks. Yeah. I think what's going to be fascinating is how this plays out and how we navigate like the two use cases that you get a lot in crypto. There's there's a lot like the three that come to mind are privacy, right? We know there's different layers for that. And then there's the AI stuff and how that's going to play out. And then in which AI ties into a little bit of let's just leave that one. And then the other one is like the notion of AI compute because that's the thing picking up steam, whether it's like the bit sensor stuff or others, everyone always tries to spin off like, OK, physical asset, you need a token to incentivize behavior. And all these people like can't wrap their heads around like you don't need another token to incentivize behavior. And that's going to be interesting to watch in like what picks up steam and then how they navigate because I don't think Bitcoin's going to be utilizing all this stuff initially and it won't be understood. But I think there's going to be interesting opportunities where people like get the market from a consumer perspective, wrapping around these solutions using like inferior value exchange. But then also they are able to like pivot and then start to move Bitcoin around. I think that like, it will be interesting to watch play out versus somebody just comes in as Bitcoin native and like takes it because it's hard. We don't have the understanding there. What if a firm or they're doing dual, I'm going to call it dual collateralized, but you have dual optionality kind of like what light sparks do. And it's like they're agnostic. If it's stable coins, what it's rails, if it's dollars, if it's BTC, like that's an interesting model, but they understand Bitcoin's the end standpoint. And then you can build into that. That's what it really takes is like if you're going to build any as crap, you have to know the end state before you can start. And then you can actually have a fighting chance to like graft on the the initial legacy mental models of using dollars or crypto and then by move it over there. So that's going to be interesting to like, watch. Agreed. All right. Yeah, Liam, you got anything else? No, I was just going to say whoever really does that and leans into it from the like reef versus rain perspective is going to really be the big winner in the space, at least on that angle. But there are so many other kind of B2B type angles where the infrastructure on the Bitcoin and stable coin side is. It's not quite there yet, but it's getting very, very close and we just need. A little bit more in order to kind of put it all together slash the distribution because I, I, I'm going to take that back. The products are there, but not everybody necessarily knows about them yet and has kind of put them all together in the the perfect way. Yeah, like an example of this was I would much rather even today, like you take a Fiat fintech or or traditional tech founder to build stablecoin rails, invest them 10 out of 10 times. And like the best example is bridge. Because if you go listen to Zach Abrams and that group, they're like world class understanding that they don't know much about Bitcoin, but there's still so much opportunity sitting there. But if you layer on both, that's the opportunity to build the existing market rails with the other side. This was a pretty jam packed episode. Like, there was a lot, a lot of signal, dare I say. But the biggest signal I have to share with Brian is that Wendy's playing tomorrow. So no suspension. No suspension for for taking. Out for your spurs? Take out somebody's neck. All right, boys. Good Rep. Good Rep. By next week. You guys, big announcement this week. Anybody's tuning in? Oh. Yeah, stay tuned. More to come. William's like what's going on all? Right, good stuff. Thanks for listening to this week's episode of the show. 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