Is 2025 Crypto's Dot-com Moment? | Weekly Roundup

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I could not be more excited about the future of the industry and yet here we are just everybody looking at prices and feeling terrible. You know, in many ways like the sentiment is a lagging indicator of price. We'll have to see what what what happens into into next year. >> It is very possible that we have 2 years of choppiness and underperformance of crypto relative to everything else while we have a lot of adoption. Now I'm spending a lot of time like going back and seeing okay in the time of the internet like did you see a lot of adoption like coming out of 2001 and how did like the market react to that. We might be in a scenario where like we we sit in this chair for 2 years having more and more announcements of corporates and the price just doesn't behave the way that you do and that's

entirely possible because a lot of these networks are just kind of widely overvalued. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Block Works. Our hosts, guests, and the Blockworks team may hold positions in the company's funds or [music] projects discussed. The Rob since he joined, he's always like the the [music] 5-second clip, like the I think he always drops like rage bait. And so we always use him as like coming up in Empire and it's always Rob saying something. I now have anxiety to

like I feel a competitiveness of >> Wait, you want to hear something crazy? Okay, so by the way, welcome to Empire, folks. Welcome to Weed. We got the fam together today. We're very excited about this. Sorry, my mic is kind of crappy today >> in the office, which means you would think that my mic would be better, but alas, it is not. Um, so what what the you know how Santi you know how basically we've talked about this on the show before podcasts are basically becoming like super long form or just short clips on Twitter. What a lot of the big podcasts are doing like bar stool bar stool is now experimenting with this. Other people are doing this they just record short clips. They won't even do the podcast. So imagine we sit down and we just record like 20 short clips and then pump them out through

social. That's the model. That's the model. >> You know that I do think about what the banger post. Uh anyways, I I'll try to drop some some rage bait in this podcast. The good thing is we have a lot of the crypto timeline to give us a lot of really good content because everyone's so spicy and sour. Rob, you're now mild in comparison to the rest of the timeline in crypto. You know what's going on? >> I gota I got to step it up. Do you think we should go towards like twohour live casts, you know, just like every day TVPN style? Well, there's actually an idea that I think the >> Oh, I don't think you'd want that as a as my lead investor.

>> I have no idea what what I would be doing. It's >> an interesting idea for you guys to think about as investors because the role of like, you know, okay, so as a CEO of a company and a founder, you've always had to be a good storyteller, but historically corporate like executive comms was like, can you do the 30 secondond clip on CNBC? like can you get on and actually now I think it's kind of changing where you have to be able to go on like Rogan Lex Freriedman and do these like threehour podcasts and actually sound interesting. It's a very different skill set than like going on and you know saying some pathy things. So the best there Mark Ben off who's the best public uh public CEO is it like Alex Karp from

Palunteer. Um Mark Beni off uh Satia Nadella pick pick your horse like who's the best one to do it. >> The best story I don't think Ben off and Satia are amazing story amazing storytellers. I think they're really good operators but yeah it's like yeah it's like the Alex Karps of the world. It's like I think if you want to think about the measure of storytelling, it's like how much what is the market cap of the company relative to like the value of the company and uh I don't know Palanteer seems it's like why is Palanteer so hot? Cuz it was the moment Alex Karp went on CNBC, popped a Zin in his mouth and started spinning his computer on one finger. I was like this stock's going to rip. [laughter] So that's I don't know. Yeah, Alex Karp

is good at it. I don't know. Um, let's talk about the timeline. Timeline is salty. Timeline is uh, it's interesting. It's like it feels like the industry has basically just started to like grapple with this idea that like, oh my god, I didn't sell the top again and we're in a bare market. Crap. Um, yeah. Would love to just hear Let's Let's riff on that for a little bit. >> It's bad, man. I tell you what, like Twitter is uh maybe as toxic as I've ever seen it.

I was having this discussion with with somebody else recently, but it felt like even during 22 uh when Luna went under and then, you know, call it, you know, post FTX where I think a lot of people were wondering whether or not crypto would survive, whether or not crypto would continue to be here in the future. It was a still a collective, you know, I would say we were standing by each other. There was collectively hopeful, collectively an understanding that we were like building towards, you know, new financial infrastructure and a new future. And it wasn't really PvP in the same way that it feels like it is now.

Now, every single topic, every single thing that's happening, there's just tons and tons of people like swiping at each other. And frankly, the discourse is low. Like the level of discourse is like very, very low. I see, you know, these, you know, uh, replies to, you know, whoever posts something that are always negative that are getting elevated and most of the time they're just actually not even particularly factual or like useful or, you know, well documented or or well argued. Um, and so it almost seems like there's just a a broad group of people who are starting to feel like, you know, they

don't know what they're doing. They don't know why they're here. And I think we've talked about this a hundred times and I know Santi has a perspective on this, but the I think it's part of the reason it is so bad this time around is because the adoption curve and the price curve are so decoupled today. Like the the things that we're seeing out of corporates in terms of like tokenization, in terms of um you know, stable coin usage is actually extremely promising, right? Right? Like I just had a board meeting for one of my stable coin companies this morning. Uh we were talking about one of another one, you know, before we got on this pod about some stuff that's going on that's on public and the I could not be more excited about the future of the industry

and yet here we are just everybody looking at prices and feeling terrible. So um I I don't know. I I think you know in many ways like the sentiment is a lagging indicator of price. Um but you know we'll have to see what what what happens into into next year. That's going to be the banger clip of the pod, right? Isn't god damn it Rob beat to it. I will I will overlay something which is like is it priced in you know like are we gonna it is very possible that we have two years of choppiness and like underperformance of crypto relative to everything else while we have a lot of adoption.

I I I sort of that's like my house view and we'll talk about it next week in predictions. Um now I'm spending a lot of time like going back and seeing okay in the time of the internet like did you see a lot of adoption like coming out of 2001 and how did like the market react to that and and I think like so people have lost money this year. I think unrealized losses are the second highest they've ever been in crypto second to the collapse of FDX. So, you're going to continue to have funds and other folks capitulate.

Um, putting aside if OpenAI is able to raise around or not, which we're all begging that they can, I do think that we might be in a scenario where like we we sit in this chair for two years having more and more announcements of corporates and the price just doesn't behave the way that you do. And that's entirely possible because a lot of these networks are just kind of widely overvalued. And I mean I don't know if you guys would agree or disagree with that. I I think that's entirely possible. >> I I think that's a good point Santi. I mean if you look at like the internet okay so end of 2000 right the internet stocks had wiped out like 75% of the value from their peak and it really took a couple years to recover but if you

look at the users of the internet I think in 2000 it was roughly like 300 million. Fast forward three years I think you were roughly at like almost a billion users. So you went from like 300 350 million internet users to like you know I got I got to actually look at the numbers but somewhere between I'd say 700 800 900 million users. So we grew the internet users two to 3x but prices went down 75%. I really I think I think that's a yeah I I I would agree with that take there. I think that's a good one.

>> The irony of all this is that the single best performing IPO this year was Circle. Single best performing IPO. not just like, you know, where it IPOed to peak, but where it IPOed to today at, you know, 75 bucks or 80 bucks, uh, is still by far and away the single best performing IP. >> That actually brings up like even actually just to further Santi's point even more. It's like, okay, after 2003, then you kind of go into this like I don't know what you call that period of the internet, but like the web 2.0, the social media era, like Facebook gets started in 2004. It's like yeah global internet adoption happens time spent online starts compounding but actually a lot of the value acrruel was private. It wasn't in the broad public markets, right? Obviously, you had a couple big network effect winners. You had like

Google post IPO, but like really you just started to you started to see like uh you know, face uh Facebook was still preo like a lot of the value was in these private things. And it wasn't until like 2009, 2010, 2011, 2012 that you started to see the social network start to yeah IPO and SAS really started to come to the forefront as well. So I um I use this analogy a lot during that period but that's actually when AWS was started was 2002 right uh and AWS really went broad around you know call it into the global financial crisis >> and my perspective and obviously it depends on who you talk to but the going from onrem to cloud compute was actually essentially the similar to like what

we're seeing as the infrastructure layer maturing in crypto which how we're now able to launch applications easily with the right wallet infrastructure with the right you know call it on-ramp offramps with the right abstraction of crypto to build the net new novel applications and products that will then be used uh and say on top of the technology and I think AWS was in many ways the change in what happened in the internet that allowed for that you know cause scalability uh in your application so I I use that analogy actually a lot when we talk to LPs and and others >> I I was terri terribly wrong this year because I would have told you that having the IPO circle and figure

would have done that would have invited more traditional allocators to say holy it's not just ETFs we can here's a company called circle that to your point best performing IPO of the year and figure doing quite well I think >> I think it's also top five yeah in terms of performance of an IPO and and still crypto asset prices are down only. Is that is that uh is that perhaps the opportunity that that I mean we've talked about it length like maybe it's equities that are going to outperform and and now you're seeing companies acquire crypto companies and the token gets rugged like what what is it or or is it just institute like or

>> I want I want to make a a point on that too which is that >> um when you think about the traditional allocators they are actually back in a real way in the private markets. So um we're seeing it across our portfolio. But the amount of companies on the stable coin side, tokenization side, the exchange side, the prediction market side, you know, a lot of the, you know, call it core use cases, the the wallets, um that are getting inbounds from the best funds in the world, generalist funds in the world, the best fintech funds, growth equity funds. Um it's it's happening and it's happening in a real way, but to your point, it's not happening in the token market, in the public token market, right? And so I I think the the right question is the

question that you're asking which is you know we we talked about this with Tensor uh and the Vector.f fund acquisition a couple weeks ago and now there's the Axel acquisition uh by Circle earlier this week is just what do the tokens serve as a representative of exposure to economics and you know how does the market view those token prices relative to you know where we're seeing a lot of traditional allocators you know want to put money into private equity right now >> is that a bit of scar tissue from allocators that have said most of the value creation in in just in general has been created in the private markets like now you have for the first time in history trillion

dollar companies that are private SpaceX stripe ramp some of these companies historically would have gone public now they're not going there's still liquidity in the secondary markets is that just allocators would be like hey listen we feel comfortable investing in the private market >> scar tissue I don't think it's scar tissue about that I think it's there's a fundamental misunderstanding of what a token is there's even Even the industry, even us as crypto people, it's like you've got half the industry saying token should represent equity. You've got half the industry saying it shouldn't represent e equity. I mean, like I think we should talk about this Axelar acquisition because like so circle bought the team and the IP behind Axel, but they wanted nothing to do with the underlying token. This happened with

Coinbase and Vector. It happened with Kraken and Vertex. It's like why would you want to own a token in this case? Actually it's it Yeah. >> Yeah. My point with that is yeah, that's a huge issue. I think that's just uh residual of a challenging regulatory environment and and so the question is are people just going to be incrementally more skeptical of buying tokens because why should you if you basically have no rights and there's a disconnect between the equity.

Maybe that's what's happening in real time, right? Maybe that's why I mean the biggest divide here is you have circle outperforming and then you have tokens drastically underperforming. How does this change? >> Yeah. I mean I I think I think two things, right? So circle outperforming has something to be said around stable coins and the appetite and desire and excitement around them. You know, today we got the SoFi USD announcement. And we talked about the CLUD announcement a bunch of times. Um the amount of announcements that are going to come out that look exactly like that are like probably you know in the hundreds or hundred you know over the next uh nine months. Uh and so there is just a general belief and excitement

around this part of the market. I think there you know when I talked earlier about a lot of the traditional investors it's not just stable coins uh but that is probably the area where we're seeing the most call it traditional growth equity activity right now. they are in prediction markets. Um, but even in prediction markets, there's just there's only two players. There's in stable coins, there's a lot of different parts of the stack and different companies that are doing well. And so, I think some of it is call that vertical or that niche. But, uh, the broader point I think is multifaceted, which is okay, well, we have this regulatory overhang.

We haven't had a clarity act or some sort of reconciliation yet. And whether or not what exactly that looks like is still really up in the air. we've had a um you know I I think the pricing of tokens like the FDV is still not really apples to apples across different tokens and across different networks like you know the amount and what that market cap looks like and who actually holds the tokens and how you actually think about like what the value is of this thing is I think still pretty hard to understand not just from a oh valuation perspective to the points you've been making the past few weeks a but also the value of like what is the actual public float right now is like there's a lot of games that get played there in some of these uh different tokens, right? And then I

think there's an access issue and there's a infrastructure issue as well. So, you know, obviously you can believe in the future of high throughput blockchains and you might believe that monad is going to do extraordinarily well, but the vast majority of people don't know how to buy monad and hold monad and how to get exposure to monad. So there's that and I I think all of that together combined with the volatility of you know part of the feature of private markets is that you don't have to have realized volatility right and the token prices are just so volatile it makes it really hard for the incentives for the LPS so I think it's multifaceted um and but if we get to a world where there's like regulatory

clarity and the tokens represent equity that becomes a lot easier of a conversation for some subset of of investors, but it does probably put a drag on some of the reflexivity as well. So, it just changes the whole market structure. >> You also saw like, you know, we were talking about 25 years ago after the.com bust, you saw this like ex very stark bifurcation once the dust settled. You had like a lot of the pureplay.coms basically just went to zero and they never reclaimed their highs. But there was this small subset of like either profitable or structurally advantaged internet and tech platforms that so massively outperformed over the following decade and I think it will look very similar like yeah thousands of internet and telecom companies vanished

got delisted got acquired at fraction of the prices but there's a small cohort of like I don't know who was it Amazon Microsoft Apple they they compounded returns so drastically that they offset the entire graveyard of losers and that will happen in crypto like Santi before you jumped on before we hit record Rob was talking about uh a crypto company right now they've like adxed their ARR it's there are there are winners like there are people doing and I know what's happening with inversion right now and like things are go there's there are some companies that are where things are going extremely well it and I think those those those winners will compound even stronger coming out of this would be my take >> I can tell you I've been I've been very surprised is by the interest of people

that two years ago would have told me like no interest in crypto, like no interest in stable coins. I mean, honestly, not surprising, but even in places like Mexico, man, we're like they're just so riskaverse. They're last movers. We got boards of some of Fortune 5000 companies say, "Hey, come in here because we want to learn about this stuff." And and it's it's just like that disconnect that Rob's talking about. Um, and so again, I I think this this idea of like it's going to be quite interesting where value crews where the compounders are.

That doesn't mean that like there's not going to be a whole graveyard of companies, but you know, all the timeline right now is just entirely focused on like, hey, we've totally reset. We're down on the year quite a bit. And you're seeing some of the smarter traders say, you know what, whatever, man. I'm throwing the towel. I'm going to go back to traditional market. that I'm going to go, you know, punt AI. Um, I don't know, guys. I mean, like, should we talk a little bit about prices to some extent? >> Do you think that >> Rob's like, "Oh, man. Save me that the headache." [laughter] >> Yeah, let's actually take us into prices without directly being like, "What what's going to happen?" Um, who is the marginal buyer of crypto tokens right now? That's my question for both of you.

>> There is none. Well, there's definitely a marginal buyer. It can't be as bearish as as Santi. Um, >> dude, I I wish I was bearish, man. I'm I'm I'm feeling the Asib said, I'm down as much as everyone in this industry, man. I'm not I'm taking a lot of chips off the table and I think people shouldn't be surprised by that. And, you know, I'm I'm writing about it, but you know, it's still down. You know, there's no hiding here. Listen, I I think a little bit of it depends on what part of the market you're in, right? Like the marginal buyer for Bitcoin is, you know, still a US institution, right? And we saw I think we saw net inflows yesterday on on

uh Bitcoin uh ETFs obviously after, you know, a lot of outflows previously, right? Like there's a lot of people still trading around this asset. I I think I actually told I don't know if I said this on the podcast, but I told somebody a month ago that I thought we were just going to be rangebound from 85 to 100 for a while and it kind of looks like that's where we're at right now. Obviously, there's a lot of conversation around tax loss harvesting for the uh for the year. Um >> so we'll see, you know, kind of what happens there. But this is not surprising to me this current price action. The the question becomes, well, who's the marginal buyer for name, you know, your your token, right?

like like a monad which I'm extraordinarily bullish on but who's the marginal buyer of that right now or you know what are the other big launches this year things like um like plasma which has been you know kind of I think I think suffering uh quite a bit or um you know what are the other big launches this year double zero which is one of ours right and and these are all companies that are like trying to build really interesting like net new products and you know trying to to build for you know the future of of finance and and scalable blockchains Um, but it's unclear obviously who that buyer is until that story gets outside of crypto or more liquidity comes into crypto, right? And for that liquidity to come in, yes, we need a better

macroeconomic environment. Yes, we need looser monetary policy. Yes, we need more um just think clarity around what's happening with like tariffs, right? There the there just like too much uncertainty in a lot of part of the markets. the markets are obviously very shaky right now. You see it in the the equity markets got crushed yesterday and they're up today uh on the PC reading. So like there's a lot of a lot of this happening where there's just a lot of nervousness. Um and but I do think like clearly like liquidity that in 2021 came into crypto is now going into AI, right? Like you know Open AI is raising at 750 billion now, right? you know, everybody is just, especially at the institutional level, putting as much money in possible

in these private, you know, foundational model deals um as quickly as possible. SpaceX raising another private round before they want to go public at one and a half trillion, right? Can like can you imagine a IPO at one and a half trillion? Like mind-blowing. Um and so I I it's clearly to me I I saw XAI is also raising at 240 billion, right? And like I remember, you know, a couple years ago looking at an SPV at, you know, 18, right? Like these things are compounding at such a a rate that people almost see it as having the same reflexivity as they did when they invested in tokens 21. And so, um, I think that's honestly the biggest issue is just the in terms of high-risk assets, they're just there is more exposure and interest in these like AI private rounds that are raising,

you know, massive massive amounts of capital. We're not an AI or macro podcast, but does it feel I was I was thinking about this earlier and I was read I was listening to podcast by the chairman of like General Atlantic and he talks about like why they've been a bit cautious to just invest in AI and they're like look we'd rather see it how it our portfolio companies start using AI before we make investments and then I saw someone like out there just so it was like one of those small insert meme of like small domino question and then like a huge cascade of how it collapses and it was like hey haven't really met a lawyer that uses Harvey AI they have crazy ARR numbers of like 100 million but like most of my

lawyer friends are not using it like people are not renewing these things I am curious like yeah like I hear you Rob a lot of the flow a lot of the interest maybe especially on retail the marginal side is like going to AI but I mean think think in a world where like AI uh just softens a bit on the capex side on the hype. Feel like in crypto you kind of learn this cuz if after a couple of cycles you start noticing like patterns of like okay this feels toppy. It feels really hypy. Like I'm curious like your internal view, not dragonflies view, but like right now I I'm particularly worried of like just what's happening in AI because if that it's so priced to perfection

that if there's any material deviation from the expectation into what companies can actually realize next year, man, things just going to be really ugly. And it's not to say that like, oh, people are going to say AI was hype. Let's go transition out to crypto cuz that's where most of like this is where the real potential is. It's like, no, there's going to be so much capital disruption that forget about getting a marginal bid on Bitcoin and everything else. >> Yeah. If we start to see like a real collapse of these AI companies, the foundational model companies in terms of just, you know, missing expectations, a lot of the, you know, the hyperscalers as well, like you can see it at earnings every quarter, like the equity markets

are going to trade off 20%. Right? like it's going to be a really big really big correction. Uh I I do wonder and this is now going into macroeconomic territory but like what happens Sam Alman came out and he kind of made this statement that you know he said was misinterpreted but around how there might be like backing of capex by the US government for him and the whole everybody was like very interested in what that actually meant and then the US government's come out we're not actually doing any sort of guarantee and I think it becomes very clear that like the US government and I mean and this administration specifically they see equity market performance as a scorecard and so like

if like what would happen to monetary policy if you know call it AI really soften and then equity markets came down a bunch it's unclear to me it might actually be good for crypto prices if people came a little bit more disillusioned with AI and started to not you know just call it you know force capital or or concrete capital there in the same way. But um it would be bad in the near term. It would be hurtful like no no doubt about it. >> Yeah, I would highly recommend listening to an episode of I don't know if you guys listen to invest like the best with Patrick Oanosy, but he had this guy Gavin Baker on and um uh who knows, you know, 100 times more than I do about what's happening in the AI world right now, but his core view is that basically

everything relies on these Nvidia Blackwells that are coming out. It's kind of this inflection point where the economics of the AI companies and the competitive competitive positioning of these companies is gonna really start to shift. And uh he basically describes like the the the jump from Hopper to Blackwell as the most complex product transition we've ever gone through in technology, right? Higher power drop, liquid cooling, heavier racks, heat management issues, all that kind of good stuff. And basically, if the industry can show receipts, so we're going to start transitioning to Blackwell in early 2026. I think XAI is the first one who can who's going to be able to pull it off. He says if the applications built on top of Blackwell can demonstrate clear economic returns, then

this like enormous capback cycle gets validated and the spend cycle continues. But if the ROI disappoints from Blackwell, it all crumbles. And so that's like, you know, just as someone who's like not as deep in into the AI world, I don't know, I found it found it very interesting to think about this one idea of like the transition and shift to Blackwell is the thing that a lot of this depends on. This episode of Empire is brought to you by VanX onchain economy ETF, Node. If you feel like you are constantly missing alpha, never have time to scroll through crypto Twitter, Node is for you. Node is actively managed by an experienced team with years in both trady and crypto. That team at Node looks to capture the most powerful trends across all of crypto

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>> All right, let's let's enough of this doomsday scenario situation. There's a lot of really good stuff to report on. Visa uh demonstrating developments. Coinbase, I think, had interesting developments. Should we just kind of run through Yeah, let's talk about >> Leo. >> Yeah, I would love to. Um, okay. So, Coinbase had this big announcement uh big roll out maybe. Um, >> uh, they rolled out prediction markets, they rolled out stocks, they rolled out DEX trading. Um, they rolled out uh what else did they roll out? >> Equity, PES, and futures, not and also uh stock spot futures, Coinbase tokenize, which is an end toend platform for institutions to bring assets on chain. Uh the base app is now live for I think everyone everywhere, every

country. Uh they rolled out custom stable coins. Uh so you can basically create a branded stable coin for your business. It's backed one to one by collateral custody obviously at Coinbase. Um token sale. >> I have a question on that. >> Yeah. What is is there to me it was like are we going to see like it if if you're an end consumer are you going to see like dollar or are you going to see like say that you have like 10 different relationships with banks or whatever and they all have their own stable coin. Is the regulation going to allow you to kind of collapse it into like dollars or is it going to have like 10 different versions of a dollar? And if it's the latter, it's going to be like um is I don't think it works for the consumer to

be hon. It looks like a loyalty like Starbucks points. >> So that but but that is what it's what they're mostly being used for right now, right? So I mean they announced their first customers as Soulflare and um like one or two which is a wallet and like one or two other >> Go ahead. Sorry. >> No, no, go for it. No, but I mean they they're first customers which is like you know kind of like similar to phantom cash right which is like it's mostly used for okay well how do we do like you know cash back loyalty for our customers right our loyalty I mean we we talked about this a little bit with cara uh on car USD right it's really about how we serve cross border how we serve our customers right like there's not an

expectation I think for most of these people that we're going to go and you know proliferate colon USD or soul Flare USD or C cash by Phantom in a bunch of other applications. There's just an expectation that this is a better for treasury management, money movement, loyalty, you know, cash back, etc. within like my application, right? >> And so, >> go ahead. >> I was going to say, do you think that's going to be a little bit like tokenized stocks that we talked about last week where there's like not not that much demand? Because the other model is like what Visa is doing which is like totally totally like abstracted like the consumer doesn't really see that

um I'm just a bit >> I I think over time right the problem with so the interesting thing about Coinbase's product is that they said it will all be backed by USDC right so there's a two interesting points there to think about which is that you know Coinbase has this agreement with circle right now that for all of the USDC that originates and sits on Coinbase, Coinbase gets 100% of the revenue. So for every single USDC that is issued and originated on Coinbase, Circle gets no uh no economics whatsoever. No, no revenue. And so all of a sudden, Coinbase launches this new product, a white label stable coin issuer, which is

we're seeing more and more of this happening, like you know, CLA, etc. and they get they don't have to manage the collateral whatsoever themselves. Uh they just have to manage the USDC which they are then getting 100% of the economics from Circle and Circle was bearing all of those costs with the money markets and the the infrastructure etc. And so um so there's something to be said about just also like Coinbase masterclass here uh relative to their agreement with with Circle. But then I I think that the next thing here is that because it's all backed by USDC, they're probably building out or they're on top of their already their existing infrastructure that allows them to more easily use liquidity from a bunch of different stable coins, a bunch of different sources um within the state

within the Circle ecosystem using CCTP using you know the all the the crosschain work they've already done using the APIs the MIT redeem functionality that already exists with circle right and so um It's I think it's actually quite interesting to say okay well like anybody can go and they can get you know some share of the economics and they can have you know some sort of marketing and loyalty through a stable coin and then uh Coinbase just has to handle you know USDC mint redeem relative to that stable coin that they're doing which should be you know pretty easy for them. The problem becomes uh when you have a bunch of different white label stable coins that don't share similar liquidity because then you just have like a lot of breakage when you have to go from one to

the other. You have to get usability, right? But if it's it's USDC like there's obviously a lot less breakage, a lot less fees that will go into that. One thing that caught my attention, by the way, I'm looking here at um some of Guy Sheffield's post. So, Visa stable coin settlement pilot just hit three and a half billion annualized run rate. I assume that's like notional transactional volume. Like that's not a test anymore. That's a market signal. Um a lot of what they're doing it now. So they launched like their new global stablecoin advisory practice. It's pretty interesting. I think they're just going to, you know, really be advocating

for that. And for context, I mean, Visa for as long as I can remember, they've been a part of the space for many, many years. People might not appreciate that. Um, a big part of what I kind of in the timeline was able to appreciate is the the key unlock here is like commerce like runs seven days a week. moving money is nine to fi like Monday to Friday and that's where that's where Visa is really kind of pushing for merchants and stuff. It's like, hey, um, you know, I think it's only US issuer and acquirer partners can now settle Visa in circles USDC seven days a week.

As simple as it sounds, it's like just two more days and that's super super valuable. >> Yeah. >> Uh, Cross River is involved. Lead bank is involved and I think they they sort of said more banks are going to be announced next year. So, it's pretty interesting stuff. >> Yeah, that is >> that that um that that was an interesting announcement. So, not to shill another podcast while we're on this podcast, but um I I did um I I chatted with Kai from Visa uh and Simon Taylor about this uh earlier this week and I think it's going to be launched and then we talked about >> you're showing you're showing another crypto podcast.

>> You can sh go see Rob on tokenized podcast and report back in the >> nerve Rob's shilling. Not even a Block Works Brandon podcast. Unbelievable. >> No, but I I it was specifically it's a a stablecoin podcast about this specific point. And so I um so we talked really deeply about this. So there's there's more than I'm going to say here, but the this like stable coin settlement with Visa has existed internationally for a little bit. Um this portfolio company of ours, Rain, which is the largest that's doing it.

They uh replace the issuer bank. they, you know, have all their own wallet infrastructure and they settle 365 days, 7 days, uh, a week. Um, with Visa, right? Um, they, Visa actually still has, uh, constraints that they can actually still only take they actually can't take stable coins like, you know, atomically. They they still have to batch. But you can see how as Visa fixes this problem that like you can start to do like atomic settlement. significantly better from a capital efficiencies perspective, significantly better from um a fraud and risk management perspective. And so they announced it domestically in the US, first time that that's going to be domestically. But what I actually found was funny about it

is they announced it with Lead Bank and Cross River Bank, who are two banks have no card program. They actually do no volume with cards whatsoever. And so it it's um it's a little bit interesting because lead is lead is obviously trying to be the backer of of Bridg's card which doesn't really exist yet today but they announced they're going to have some new first customers and starting to to to roll that out. Um and but there's still a bank involved. What I find really interesting here is as there these card issuers that are out that are principal members that are not bank depository institutions. So like a rain which is a principal member but not a lead which is a bank depository inst uh institution. Um they start settling

without the bank involved in the fund flow. Right? That is what I think actually think the real unlock is because now you've gotten rid of um a kind of an intermediary that takes takes a lot of the fees. So, I thought the announcement was really really interesting from uh from from Kai. I think it tells you where this market is going. I I said this um I think a few weeks back, but there's that, you know, direct settlement with Visa has gone from $250 million annualized in May to $3.5 billion of annualized today. It is the fastest growing uh part obviously of a very small denominator of Visa right now. And I think that that becomes um a huge huge piece of their business. the same way Visa Direct has which is their like you know um outside of their

network push payments business which is grow I think it's the fastest growing transaction business they have right now as well. So >> who do you who do you think wins the stable coin issuer like on a because I saw you tweet about SoFi SoFi did their they launched SoFi launched um SoFi yeah to yeah offer settlement infra to banks and fintex and stuff like that. Coinbase just launched custom stable coins. So now we've got Paxos, Bridge, Agora, Bastion, Anchorage, Athena's doing this, too. Uh I think Bitcoin base, uh M0 obviously does this as well.

SoFi, like you can't have 15 different stable coin issuers. Like there's probably going to be, you know, two or three that do really really well here. How do you how do you [laughter] >> say that out loud? >> Say the Yeah, don't say it out loud. uh >> for the sake of more bags and the state of the industry. >> Yeah. How do you differentiate if you're one of these people? I mean like Yeah. How do you how do you win that? >> Well, I mean what we're seeing from all of them, right, is that they're trying to expand beyond like stable coin issuance, right? Like they want to figure out like, you know, okay, what is my wedge? Okay, well maybe that's stable coin issuance. Maybe it's some other part like bridge started with orchestration obviously and now is doing stable coin issuance. And then how do I

offer, you know, if I offer stable coin issuance, how do I offer ramps and orchestration? How do I offer really clean APIs? They can do both B2B and B2B TOC. How can I do virtual accounts? How can I do a um you know, maybe kind of consumer wallets? Like how can I think through a card product, right? And at the end of the day, like I I think about these are really becoming like endto-end solutions. I think, you know, SoFi has um this thing called Galileo uh that they're close to um on their like card product and they're um I think SoFi actually owns Galileo uh and it's kind of like an end toend solution for like everything you want to do and kind of like digital um digital finance. I think that's what all of these stable coin issuers are doing right now as well,

right? And so that's why you're seeing um uh you know I think Paxos announced an acquisition of Fortify, right? We've seen a few other people look at the the wallet space obviously bridge bot but privy um and you know then we're going to see you know kind of a long tale of other types of M&A capabil M&A happening for other types of capabilities because it's now becoming call it like full stack like fintech solution companies of which like stable coin issuance is part of it the people who are I guess above that is you know like tether obviously and circle is is obviously trying to figure out a way to be a payments but they're, you know, they're they're still kind of big enough that it's that it's fine. But then everyone else that you

just talked about is pitching holistic solutions to technology companies and banks. They're not pitching just stable coin issuance. >> I'll give you just to round out the Visa stuff. It's still very early. I was I was uh just querying here the the quant uh if Visa broke out stable coin activity in their financials because you remember when when Coinbase started disclosing that interest income I think in their partnership with Circle. I think it was just interesting for investors to keep track of that and it became like a more important piece of their P&L every quarter Brian like you know started talking about this. It was just a big awakening moment. uh Visa is still not disclosing it and not

surprisingly you know they take this three and a half billion annualized stable coin settlement value figure at face value to put it in perspective I mean that's less than it's 09% of all the volume that they do so it doesn't compute it's a rounding error uh maybe a teaser for next week and I would like to see a prediction market does Visa break out stable coin activity in their P&L in 2026 or 2027 and at what point do they do that? Is it because as a percentage of their total flow, stable coins are like greater than 5%, greater than 1%, greater than 10%. I feel like that is like the talking about that

chart of like price lagging and adoption growing. I think the moment Visa discloses that and starts reporting it, it's when the market really says, "Holy that AWS moment Jana was talking about." >> Yeah. So, so I think uh so for Visa direct what they do today is they announce the number of transactions but not the volume right so what does that imply to you it implies you they're very low value transactions right but I think it's um 12.6 six uh trillion transactions a year that Visa Direct is doing uh right now.

>> Number >> I think that's a number of transactions. Yeah. >> That they're doing. >> Yeah. They're doing 3.9 trillion dollars of of settlement volume. >> Yeah. And but they but the thing they announce every quarter is this like transaction number, right? Um and that's the thing that they bringing out and because they want to make it clear that like hey this is what we're this is really fast growing and it's and it matters a lot but it's it's probably low value to them, right? is not contributing to the top line in the same way. Um they my expectation is that that type of you know disclosure ends up becoming uh pretty common here for Visa with stable coins as well for two reasons.

One is I think that three and a half billion goes to 100 billion next year. Um, and I think it grows tremendously, but >> you're just you're he's gunning for that clip at the start, man. That's fake stuff. >> I No, I I damn Rob, you're getting all fired up. >> Buy by buy >> buy every stable coin company. Um, all the ones I'm invested in for, you know, 100 times AR multiples. No, but also >> hold. Do you buy stable co your new stable coin startup at a 100 200 a billion dollar valuation >> or circle or do you buy Visa?

Well, this this is actually where I was going before you before you talked um jumped in, which is that what we've also seen is I've seen a lot of the sellside analysts talk about is Visa in a bad spot because of stable coins like is there should that be um an issue with their stock going forward? Are they going to lose market share, etc. I've actually had a lot of the sellside analysts call me and say, "Hey, listen. How do you think Visa plays in this market?" And so I think part and and Visa I think when there's a couple of big announcements this year on the stable coin side um and and it actually right around genius Visa traded down quite a bit and I think they'll start talking about it because it'll go to 100 billion but 100 billion is still not

that big relative so really not big at all relative to their overall transaction volume but it'll allow them to continue to tell the market hey we're playing here we don't need to sell us we're not we're not like this and for we are leading around adopting this new technology, we're beating, you know, our competitors, Mastercard, and so they'll they'll they'll be incentivized to do it for that reason as well. >> I have a different topic. I was at a holiday party last night and um vaults vaults there's a bunch of like tradi basically asset managers, trady folks and uh the whole everybody the only thing people wanted to talk about is not stable coins. It was actually vaults.

And uh the a lot of the conversation was basically like if you look at the vault space like here I'll just look at data from from block works uh on the vault balances on morpho uh you know gauntlet has a you know the market share right now is roughly like stakehouse 38% market share gauntlet 30% market share um spark then it's like kind of sub 10% is like spark felix year me re7 lab so really it's a game between like stakehouse and gauntlet and yeah The folks in the room last night were like, "Look, we're all we're we're gunning for that business and these are the largest asset managers in the world. These are I mean, one of these one of the the folks last night was seuite at the third largest asset manager in the world. He's

like, "We're we're moving on chain. We're moving into Morpho and we're going to spin up these vaults." I don't know if you guys have thoughts on the vaults market at all. I mean, this has been a a 10-year game basically, these vaults, and now it feels like it's kind of just taken off, but I don't know. Yeah, Sante, I'd love to hear your your take on these. >> I'm old enough to be one of the urine farmers back in the day and doing some honest work. Um, I think a lot of people are just starting to I think it was ribbon or so that got rugged or something and I think it just sparked this debate of what vaults truly are. Omar from Chaos Labs put out a a pretty good article. He's pretty good at doing some postmortems.

Uh I mean vaults are just like a credit fund >> or you know a fund of sorts. you're you're there's not all all vaults are created equal but I am on the margin like I understand why I guess I don't want to give my opinion maybe sounds like you talked this man do they this whole tokenization kind of hype is that like they just want to capture crypto wealth and like just sell their products to these unsuspecting like you know less sophisticated people or I the demand there. I mean because a vault like you don't really need a vault, man. You have a credit funds like >> Apollo KKR they're not brand equity.

They're just credit. >> Yeah. There I think he he said look you guys have done the the silly game of rebranding asset management as vaults. This is just asset management with a different LP base and um yeah we want to take advantage. We want to capture the LP base basically. >> Okay. Well I I would say it's it's what's the biggest vault right now? Morpho has what? Three and a half billion. A has a couple what is it 35 50 billion 30 billion >> something like that. >> That's not necessarily involved. >> I don't think a really counts for what we're talking about. I mean they do obviously and people are using them but I think a lot of these conversation has been more around like um not just like borrow lend money market stuff but also a lot of like is there other things that

I can do other types of products that I can have um other types of strategies right so a lot of this yeah so it's morpho and morpho trying to play in this space but then it's like the the upshifts and the midases and the betas of the world a lot because they they allow the curators to do like different types of things right not just like borrow line and so it feels like a lot of the market's going towards that right what percentage of the market is um automated strategies like indexes versus actively managed passive versus active because I man again I'm old enough to have invested in set protocol which you know was like this idea of like creating like indices like bitwisees of the world and then you have like more active

strategies and then urine was like robo advising uh where where do you rob like where do you see most of the growth in volat if there is one over the next coming years. >> I I mean most of it has definitely been borrow today, right? Like that's the I mean NAV is by far the biggest, right? And and they're they're basically just money market, right? Um Morpho, you know, the biggest, you know, TVL products there are also, you know, money markets, right? Um but what we're starting to see is we're starting to see a lot a lot of growth on what is these like actively managed strategies, right?

Essentially, right? And so there's a you know there there's an an interesting thing happening here because um and by the way Coinbase also launched I think uh a like a Coinbase AI powered Coinbase advisor which is like I I'd have to go back and look exactly what it looks like but you know maybe some sort of like you know wealth better front a betterment or like wealthfront or something um type of robo advisor using like onchain activity and we're see we were seeing a lot of pitches uh here at Dragonfly for like you know automated like yield farming essentially right and so it does look to me like the early days of fintech where it's like okay well we had borrow lend and now

we're trying to figure out okay well how do we you know do other things that are maybe you know deploying to the best DeFi protocols on a specific chain I think um uh like upshift has a an earn a USD uh um it has the biggest vault monad and it's like you know an AUSD and and what they call earn a USD and Basically what they do is they they go and they like form all of the other the curator goes and farms all the other D5 products on on moned. We're seeing like a a growth in that. We're seeing a growth in these like you know call it uh basis trade type type funds etc. And it does seem there's a like there's a there's a really big um just interest in you know doing these things which simplifies basically a single yield type product or

a single structured product essentially right. Um I I think one of the things I've started to hear a lot about too is and we're hearing this around uh I think you know Morpho might be involved some others but is also around um quote unquote like payment financing specifically. So if you have stable coins you need credit to come on chain and then you can use this vault infrastructure to then you know provide you know fill the gap of like where a bank credit line would be um otherwise. And so I say all of that uh to say that like right now it seems like we're in this moment in time where it's about okay well I want to sell some products to you know whatever a new LP base I want to do borrow lend but it's a lot of the excitement at least as we talk about

people is how do we take that next step to use these for like net new structure products that actually might bring in outside capital because they can't do this thing on non-blockchain rails. >> Yeah. Yeah. I want to ask you one question. You know, I'm always going to ask this question of like, what would you rather own? Uh, would you rather own Visa stock or circle stock? And you have to hold it for three years. >> Oh. Uh, what are the trade? >> Your your partner received didn't want to take my money, so may maybe you would grace me with taking it, but you can only invest a month.

>> Yeah. I I think uh my guess is I I have to look where circle multiple is right now. I think it's like 11 times gross revenue which means it's whatever it's you know whatever 35 40 times net revenue probably right and so at that [snorts] price I would almost certainly take Visa Visa's probably trading at singledigit you know like high singledigit uh revenue multiple and I am actually like quite bullish on on Visa's ability to at least out compete their competitors right and so um I don't know I I haven't thought about it for more than you know these 30 seconds but probably probably >> but that said like I I love stable coins

so maybe just take the stable coin play so you know >> I think in a year's time like look circle is a $20 billion business visa is 600 so like from a flow's perspective in the near term yeah you could basically you could see a world where circle kind of like you know really gets behind this mimemetic stablecoin trade but this is why I think the threeear fiveyear time frame is more instructive for this analysis cuz it will be interesting just if again just going back to your observation that you think Visa can go from three and a half billion of volume to 100 billion. It would be it'd be interesting to see what margins for that business do cuz you know circle right now is sharing has a pretty terrible contract with Coinbase.

Uh you got to believe a lot of stuff. >> I mean the fastest growing part of Visa's business today is the the value added services, right? And so it's actually not any of their transaction flows. I mean, we talked about Visa direct earlier, but that's the fastest growing transaction business that they have, but their value added service is what's growing the quickest. Um, they obviously launched the stable coin advisory business. Like it's very clear that all of these, you know, call it, you know, payments businesses are needing to figure out ways at some point in time, you know, uh, to they need to monetize like nonflows, right? And we're seeing this with Circle who's like trying to monetize flows because first they need to monetize flows then they are going to go and try to monetize you know something other

than flows right value add value add value add value add value add value add value services um but I say that to mean that like I do think that companies like Visa become more opinionated they become less call it like open um you know like Switzerland type infrastructure and they spend more time directly with end customers uh and if they're good at that distribution will win distribution will be king and they should have a reaceleration. Um because I I I do think we're in this world going forward and stable coins are part of the story and tokenization is part of the story where intermediaries are just going to get crushed. You have to get closer and closer and closer to your end customer and like this is a problem with the

stable cocoin issuers and it's a problem for the networks and so that's why people you're seeing this type of stuff happen. >> Agreed. Agreed. All right. I [clears throat] think that's a good place to start to wrap. We've got 2026 predictions next week. Stoked content of the week. What do we got? >> Um there's two podcasts that I listen to. This first one I referenced earlier, which is um I think invest like the best. This guy who is the chairman of General Atlantic, very very good pod. He's from He's from I think Bolivia, worked at 3G Capital. Um if which is

also probably a great book. Dethroning the King is a fantastic read which is the story of uh Paulo Leman and these Brazilians that like eventually like bought Anhauser Bush. Really really good story. But that podcast is very good. touches on AI, touches on investing, entrepreneurship, and general Atlantic is a fantastic firm. I think Chuck Freeny and the third book I'll cheat is uh the forgotten billionaire or I think the billionaire that wasn't I think the story of Chuck Freeny building General Atlantic and he basically gave away his entire fortune and uh so yeah, I cheated. There was three contents but the podcast is very good. Go listen to it. I will give a a non-fiction and a

fiction. I've got uh David Senra's other podcast which is uh just called David Senra. Um where he interviews founders. Um I don't know if you guys have listened to it, but he did an episode with uh I forget the guy's first name, D uh Todd Todd Graves, the founder of Raising Canes. And it is >> Oh, that was so good. It is just an amazing I've heard this guy on like you know I think it was like how I built this or I haven't listened to a podcast with him in years but he's great great storyteller the guy you know when he's trying to get money for raising canes like he went to like you know work on a fishing boat in Alaska worked like worked the oil rigs and you know Louisiana like just a just a >> dude in this in the in the salar twang

the accent so good >> so good and he's loaded up that business with debt but that means he owns like he still owns like 92% of it. He's worth like 20 billion dollars. I don't know. Great great episode. I've got a fiction one which is uh I watched a Tom Hanks movie, Green Mile, which uh I had never seen. It's a classic. I was on IMDb top 100 list, realized this is number 25. I'd never even heard of Green Mile. So, >> Death Row. >> Yes, exactly. >> It's a Stephen King book, correct? >> Uh yes, it is a Stephen King book.

>> And that, ladies and gentlemen, is a perfect segway for Rob because he's like wanted, I will give you death row. [laughter] >> Um, so I'm actually gonna give I'm gonna give kind of three, but maybe two. So, since we're talking a lot about cards here, uh, and I've been and and I I something that I've spent a lot of time thinking about, uh, over the last year, um, uh, OddLots, uh, on Bloomberg had two interesting, call it card related pods, uh, in November. One was with a guy called, uh, Edomar Dressler. there's like a Wharton professor um just about like what are the costs that goes into running a card program and issuing a card and like why are you know card interest rates sort of as high as they

are and it kind of breaks down a lot of the business of of cards. I thought it was like super interesting and I think it was like really relevant to what we've been talking about. And then two weeks later um they had Max Levchin on from um from the founder of a firm and obviously was you know call it you know PayPal mafia uh before that and he talks about how he you know came up with BNPL because of um his misunderstanding about how cards worked when he first got came to the US and got a credit card. uh and he like knows more about about um you know payments than than the vast majority of of founders even in that space. And so I thought uh I thought that was great. So that's my my non-fiction answer, but I got to get a fiction answer.

>> So actually no, it's actually it's also non-fiction, but it's entertainment. Um which is uh I've been watching the Puff Daddy uh documentary on Netflix. >> It is wild. >> Absolutely wild. >> Yeah. I've also heard you have to couple that one with the 50 Cent documentary which touches on P. Diddy and gotta I don't know. I'm I've I'm I'm started watching that too. I couldn't get through it. I was just like I don't want to keep watching this. This is depressing. >> By the way, speaking of thrillers, I saw this documentary late last night called Murder in Murder in Monaco. It's about the the murder of uh this banker Saffra.

And there's a whole it's like uh uh pretty awesome. Um it was close to home I guess. So it was good. >> Just feel something. It's like >> is that like the only crime that has ever happened in Monaco? Is that like the one they made a documentary? >> There's a few others but um but that was probably definitely the most recognizable and there's all these they still kind of don't know who it was. But um it's it's a it's a pretty awesome documentary. I'll leave it at that. Um, I would I would, you know, as a teaser to next week, we're going to talk about predictions and how terribly they're going to age. I will just say since October 30th when Rob and I made a bet of what would

outperform, $100 invested in Western Union, which I believe would outperform, would now be worth 102. Ladies and gentlemen, >> meanwhile, a $100 invested in Salana would be roughly $66 today. >> I'm just >> Rob, I will buy I'll I'll buy you dinner in New York. It's >> No, no, we we we we bet. It was a year, right, was our bet. >> Not a year. You're still going. You're two months in. So, all right, folks.

Thanks for listening. Santi, Rob, appreciate you guys. That's the pod. We'll see you guys next week. >> All right. Thanks, guys.