Bitcoin at a decision point, an Ethereum thesis and tokenization

Transcript

But there's actually real value being created in in in crypto right now in onchain finance and that is bringing assets in the real world that people like and used and putting them on chain and making them more usable. What's up everybody? LG Ducet here. Welcome to the Milk Road Show. LG is not with us today so I am going to be hosting this episode. This is a Milk Road Pro research meeting and we are going to be discussing a lot of the most important things going on in crypto today. Uh if that all sounds good to you, make sure you like and subscribe. Share this episode with somebody who needs to hear it. Today's episode is brought to you by Feros the layer 1 built for reali consensus Miami where the next cycle starts and Nexo earn interest borrow and trade crypto. We've already got an echo

going I think so things are going to be really fun. Kyle Martin welcome to the milk road macro or the milk road pro research meeting rather >> macro. Are we talking I'm so used to saying that. I I'm so used to saying that. It's just an instinct at this point. Um but there's a lot going on in crypto. A lot of new products being launched. a lot of uh drama in the space right now. Uh where do you guys want to start today, Kyle? What's on top of mind for you? >> There's a lot. Maybe we just start with a little bit of markets and give the listeners our kind of like thinking on where the markets are right now. I don't know, Martin, John, who wants to start us off there. Who's got some strong opinions on where we're at in the markets? Bitcoin, by the way, is sitting

at about 78,000, a little underneath that as we record this episode. Uh we had a run up over the last few weeks, I guess, technically. And uh the question is, do we go higher or are we cooked? What do you think, John? >> Yeah, I Well, that is the big question right now. I I'm glad to see us trading near the top of this range. I'm glad to see that we haven't gotten like immediately rejected off of it. Um but I do think that we're coming towards a major decision point for Bitcoin and the overall market here. Uh I think there's there's two ways to look at this. A lot of people are saying or expecting rather that Bitcoin is going to drop from here, go lower, maybe even then, you know, break down to the downside out of this range. Um, but because of that, we're

seeing a lot of negative funding rates. So, there's a lot of people who are going short. And that to me is setting up this opportunity for a bit of a short squeeze. We've got a lot more spot accumulation from people like Sailor and institutions now for the first time offering access to to spot Bitcoin and Ethereum to their clients. Charles Schwab is one example of them. Um, so it's an interesting setup here because what always happens at at the top of a bull run is the bulls are expecting price to go so much higher that a lot of them get leveraged long and get liquidated and that, you know, flips us into a bearish direction. Uh, similar thing happens at the end of bare markets is the bears are so confident that we're going to go lower. They get, you know, short with leverage and then the bulls

liquidate them and we flip higher. So that that could be a setup that happens here. But ultimately, I'm just I'm just watching very closely to see which way the price does break because I think we are near the end of this like 70day or longer trading range. Um, and I think Bitcoin's going to pick a direction here soon. So, I'm just locked in to see what happens. >> Just trying to pull up my screen to uh to show the range you're talking about. I assume it's this range, John. That is the very one. >> Does this look correct to you? I just drew a couple lines on a chart for those that are um those that are listening on the podcast. But yeah, we we've hit the top of the range uh which we've done I guess three times now so far since uh since March. The question is do we come

back down? The bottom of the range would be 67. Um or do we finally break through? Martin, you got any opinions? >> Not really. Like you keep making fun of me that I was too bearish a couple months ago. I'm still leading and my portfolio is performing the best and you are still you know somewhere down below. But anyways my point is that and I want to hear your thoughts like where do you think that we are heading from here? I I had no idea like for me I tend to be more bullish because I think like all the risks are now you know muted and yeah I I am now more bullish like obviously than I was a

couple months ago but now I lean towards bullish from here and um yeah I think we are going to break this ranch and and go up. What do you think >> from a technical side? But if you look at this chart, it it doesn't look great, right? It looks like, oh [ __ ] okay, we hit the top, which is exactly what we did here back in January and then collapsed and fell through it. Now, this is when a war started. I'm assuming we don't have a war starting here today. We may or may not have a war ending. Um, so obviously anything. >> Yeah.

>> Do you think Sailor is looking at this ranch and saying like, "Okay, this is not goodbye right now." >> If you're not seeing this, you're trading blind right now. There are real moves happening behind the scenes that most people don't see until it's way too late. Inside Milkro Pro, you can track exactly what our analysts are buying, selling, and what's on their watch lists before it moves. Martin recently unloaded 40% of his cash off of one signal. And Melvin is up multiple calls by like 50%. And we're already up 30% this month on some alts. This is all happening every week. You can try it out for just a dollar for 7 days. The link is in the description.

>> No. No. >> Yeah, he's dumping every clip he can get into the market without price. >> Sailor's buying without a doubt. Um and then but it really just depends. Is the market ready to go full risk on again or not? Um and I mean in the stock market it has. We're back at alltime highs everywhere. Crypto hasn't been able to work its way out. I think part of this maybe just has to do with the overhang of what's going on with the Clarity Act and so people are kind of just sort of sitting on the sidelines waiting to see what happens there. But I don't know. For me, it feels like Bitcoin's been so oversold for for the last while. Um, and there's a lot of things coming together that are bringing demand back into this like Sailor ETFs have have flipped positive. Um, you know, you talked about

a bunch of the products that are coming, John. We talked about this last week a lot, too. Um, there's just a a pretty strong bid, I think, for Bitcoin here. And so my assumption is we do break through unless something bad happens with Iran, which I don't know really what could like happen that would make everyone get super scared now. I think a lot has happened. Um, so my assumption is we're going to go up from here and we should have a good few I mean obviously we'll go up and down, but we should have a good few months here and a good year in 2026 I think. >> Yeah. Okay. Well, >> you know how people keep saying >> the the best narrative is price.

>> So like once Bitcoin is just, you know, showing uh strong gains, then everyone will just turn bullish and I think then Bitcoin can really explode. >> And maybe that's true for all crypto because right now, >> you know, crypto is not obviously the very hot topic and like I don't think people are talking about crypto these days. institutions are though but they are talking about how they could adopt this technology not necessarily should I buy a or should I buy you know sky well it there are certainly discussions happening too but it's not at the scale we want it to be so I think at some point all the capital that is now chasing AI and like what's the best you

know trade in AI right now it might not be entropic or open AI it might be just some infrastructure or energy providers whatever. But at some point when Bitcoin starts to lead and outperform everything else, not correlate anymore with software stocks, Bitcoin will bring more attention to crypto again. And then people will start okay but Bitcoin is not the only thing in that space. What what else is there? And then at that point, I think your goal as an investor is what people are going to buy at that point. And you think you need to think critically and not just like okay this is a good story or I don't know it's still below 80% alltime highs. Nobody cares about these stuff. You need to be

like very critically thinking guy and just like should I buy this token and if so why? try to sort of um share your bull pieces for any token that you have in your portfolio and imagine that you are presenting your your bullcase to a a bunch of investors. Would they be interested or is it just based on story and like you know that the story is compelling and attractive and ambitious enough so you might sound like a smart guy selling a big story but the numbers doesn't back it up.

>> I I think the thing that is exciting about you know, if you're if you're in the crypto space and you're going, okay, what is there even that's exciting? What is there to buy? What is growing? It is it is real world assets coming on chain, right? Um, and I mean, we've been talking about this a ton. But the obviously we have our problems in DeFi, right? We've had these hacks. It's non-stop. We've had a bunch of tokens that just don't do anything. Uh, people just loop them and try to make money off them. But there's actually real value being created in in in crypto right now in onchain finance. And that is bringing assets in the real world that people like and used and putting them on chain and making them more usable. Right? So if we look right now, US treasuries are about to pass 15 billion. They are going

through the like through the roof right now, right? Like these were just a couple weeks ago, this was under 13 billion. So we're literally adding billions uh a week at the moment. Stable coins doing the same. They're at alltime highs every day right now. I think it's like 321 billion or 322 billion, whatever that is. Um and so the numbers are starting to ramp up here. And I think what people need to remember about crypto or about blockchain is like this is infrastructure, right? We didn't really other than Bitcoin, the purpose of of of blockchain is not necessarily to create net new assets, although that's what we focused on so much. But as I've said for I don't know well over a year now, and John, you've always hated this, is most of crypto is uninvestable. It's because we make [ __ ] assets that represent nothing.

But what we have built that is really good is infrastructure, right? And so one example of a company that I think has done a really really good job and their token is is is showing at least so far it's very very new is showing promise as a result of that is um USDA or or chip is the new token that came out and what USDA is for those that that don't know is essentially they are a a lending uh company for or a financing company for GPUs. So there's a lot of companies in the world that want GPUs uh and they need to borrow capital to do it. So basically they're taking out a mortgage to to buy GPUs, right? It's probably the the most in- demand product in the entire world right now. So, you can go to a bank and do that or you can

go to what's called USDA and what they do is they're using stable coins and onchain capital markets to um basically get capital and then lend that out and be a bar uh and and be a lender for for companies. And so, you can deposit in USDA. That's basically giving them capital. They're going to go and lend that out to companies to buy GPUs. And then the interest on that is what they get. That's their revenue. and then they pay that out to USDA holders. So you can get about 7.5% APY currently uh all backed by by GPUs. So what's interesting here is they just basically looked at what is the best product in the world. Well, that's GPUs.

Okay, let's just take the financing for that, put it on chain, and we'll create an incredible business. And boom, that's exactly what they've done. Because it's all on chain, they can offer better rates. Uh they can scale this faster than you can on traditional financial res. So they haven't really done anything net new. They didn't create this new digital asset like Bitcoin or like Ethereum or like Tao, right? Like all they did is go, hey, people want GPUs. Okay, let me use the infrastructure that already exists, which is Ethereum, and let me create a better financial uh service for them.

And boom, they've done an incredible job. Now they have incredible yields, and they're going to uh use that that revenue to buy back this token chip. Um, and you know, to me, this is an incredible business and they just launched their token. It's done well. I'm not saying you should go buy this token. Obviously, it's been live for like 24 hours or whatever. So, the price action isn't really meaningful. What is meaningful though is they're doing exactly what DeFi was meant to do, right? Like this looping of assets and like rehypothecation of of a bunch of assets that don't do anything. That is not really the promise of DeFi. That's what we've done because we just haven't had anything else to do DeFi with. But finally, we are seeing a world where real assets are coming on chain. Real

businesses are coming on chain. Real credit is coming on chain. And that is what blockchain was built for. So as much as people are like, "Shit, DeFi is cooked because of what happened with A recently." I'm like, "No, no, no. Defi is actually here. It's back." And that is because of things like USD, USD AI, what Sky is doing, etc. So, I don't know. I'm pretty bullish and excited for DeFi today. Um, I'm just not excited for most of the assets that exist in crypto. And so when I think if Bitcoin goes breaks through this um range, I still don't think the rest of crypto goes with it. I think certain pieces of crypto go with it, but not everything.

>> So I don't think we have this crazy altcoin season. >> Martin, you've been very bullish on Sky as well. Have you looked into this uh new product from Chip or do you have any thoughts to add to that of what Kyle just shared there? >> Let me ask one question. Are you bullish on the product or also on their token? >> I'm bullish on the pro. Well, so I'm bullish on the product. Actually, Martin wrote a really good pro report about this like a month ago. So, if you guys are pro members, you would have known about this a long time ago. Um, now I'm really really bullish on the product and what they've created, right? Like I think this is what DeFi was made for.

And so this is what you're going to see this across every single um financing product in the world. Um the the token is now over a billion FDV, which is crazy. So again, I'm not saying to buy the token long-term. Sure, I think the business model makes sense. They're going to use the profits to buy back Chip. Like it all makes sense. So at some point, it's on my watch list now. I plan to buy Chip at some point, but at a billion dollar valuation seems crazy considering it just launched 24 hours ago. Um and their TVL is I can't even remember, but it's in the hundreds of millions, so it's it's probably overvalued at this point, I would say.

Yeah, it's 342 mil. Um, I I guess I had main two issues here. One is at the point when I was writing my pro report, they only had deployed 17 million into GPUs. The rest was backed by PayPal USD. So I wasn't sure if they are able to like again the story to lend money uh against GPUs is compelling but you need to see it like in in real not just like in theory right now it's at 65 mil which is you know 3x from a month ago which is good and if that ratio is going up then I like that I think that's the the thing that

potential investors should look And the other thing is we don't even know how this is going to work when there is insolvency or bankruptcy of of that lender that they are lending the the money to. So you know we now saw there there was hack with allet did something different but what's going to happen if someone was using GPUs and now they are out of money and they don't have money to pay you back then their GPUs like how this whole process like are some people from USDA coming to the data center and just taking all these GPUs and then going to sell it somewhere on Facebook market or like you know >> so um Yeah, I think th

this is bullish for crypto because it just showcase what crypto is able to do and like this is probably something that you wouldn't be able to do uh outside of crypto. So this is really good thing because you can um sort of create that capital uh or capital formation how we call it here. Um that's pretty appealing but I want to see it like once when there is a crisis how they will behave and also there's just 20% token in circulation which means potential WC's and team unlocks are just going to create a lot of sell pressure on the token itself. So yeah bullish product but let's see about the token not not bullish there.

>> Yeah you can see 47.6% 6% of their of their TVL or like of the yield that you're getting is coming from PYUSD. So they've allocated 281 million into PYUSD and then the the rest is all well I guess I don't know what the rest is. Yeah, the rest is all in GPUs. So they're at a 50/50 ratio at the moment. And look look at the API on on GPU lending. 15% 10% 12% 11.5% 12%. It's pretty incredible, right? I think this is obviously a very in demand in demand product. So it's um you can see as they as they start to and you got to understand it takes a little while for them to um actually get these loans serviced and so they probably have a

huge and they might even have this deal pipeline somewhere but the uh you know as more and more of these come through less and less is then put in PYUSD and then their their APY will be much much much higher. So they're I think they're tracking for over like a 10% in the coming months. So um and all backed by GPUs which is you know pretty massive. So uh >> and also they say that they have on the backlog they have billions in demand. So like the companies are you know uh reaching them and like hey we want to use your product and yeah if they really have billions and they are able to deliver it then yeah it's very very attractive >> and and the thing is what's interesting about this for those that are listening to understand is you can go and apply

this to anything. So let's say we want to start I don't know lending capital for I don't know energy right uh a deployment of solar panels or the deployment of I don't know n gas or whatever is in demand in that moment. What's interesting about about onchain finance is you can just launch a stable coin like this get deposits immediately at the speed of light. Anyone who has USDC, USDT, ETH, whatever they can swap into this immediately and that is giving them capital to then go and lend out, right? So it can happen so fast. Um, and the trify world does not work like that. And it's global, so they have access to way more capital too, right? Um, so it's just it's, you know, this is possible in traditional financial rails, but it would take a year, right, or something to to to get this capital and deploy

this capital, but on onchain finance, uh, it sort of compresses that time frame into maybe weeks or months rather than years. And so um it's it allows capital to move move much much much faster which is um which is really the big unlock of DeFi. That's the whole point in what we've built here. >> Remind you guys deepin if you remember deep in like >> this is exactly what I was going to ask about deep >> I would love to ask about this because there's a project specifically called render that allows people who have GPUs that are idle or not being used to put them into a marketplace and allow the market to pay for the cycles of those GPUs. Uh, Brener also has around a billion dollar. I think it's around $900 million market cap. Um, and their token

is much more like open in the circulating supply in terms of like like how much is actually out there. It's not like a whole bunch is still being held back by VCs. Um, talk to me about the differences you see here. Why is this project different? Why do you think Render has struggled? I mean, they're roughly around the same size in market cap at the moment. Uh, just thoughts on this versus a deepen project that's doing something similar. >> Yeah. So I mean I don't know a ton about the details of render so maybe I'll go over to you Martin but one thing I would say is render is a marketplace whereas this is a fi this is just financing right so this is like acting more like a bank whereas render is is a marketplace we're like hey if I need compute or whatever it is that they're they're

selling I go there uh kind of like Facebook marketplace type thing or Amazon and I find what I need uh and and then I rent that essentially right um so like there's a lot of problem problems of like is there enough scale there can you get what you need there like I don't really But this is different. This is, hey, I need GPUs. I'm going to actually buy those GPUs and put them in my, you know, massive data center that I've just built in Texas. And so I need some GPUs, but hey, I don't want to put $200 million into GPUs today. I want to do some financing. So I can either go to the bank or I can go to USDA, right? So it's it's a completely different model. So yeah, I don't know. Martin, what do you do you have anything you want to add to

that on render? Yeah, I think it's different use case and also um like for render do we really need decentralized AI compute or or is it just you know something we came up with like look at all the big players today they are looking for data centers that are able to provide them all as much GPUs collocated as possible because it improves their product and latency and everything so like I'm not sure well maybe there are some smaller labs or like you know niche niche use cases that might be fine to have you know different hardwares across the world and that might work but >> I don't know I'm not I'm not not sure

that that's the case and we haven't seen that so far so >> I mean we're at a place in the world where you can no longer get GPUs you have to buy years out at this point right like Nvidia's completely sold out um now the biggest companies in the world are starting to build their own things like Google is uh etc So, and then now there's like the the cloud providers that are doing this, right? So, you can get some of this from uh compute from like I don't know, Amazon, Microsoft, you know, you name it. But that's probably going to get used up pretty soon here. And so, like maybe there is a world where these marketplaces do make sense, but there sort of edge cases where okay, I can't get it from many like if I can choose from getting it from Microsoft or from

something called render, I'm going to Microsoft all day every day. But in a world where there's none of that left, maybe then people start to go to these edge cases where it's like, okay, well, I've got extra compute on my Mac Mini and I'm not using it right now. Let me put that in this marketplace and someone can tap into it, right? Um I I could see that happening. Uh I don't know that the world is there just yet and I don't know that they've done a great job of sort of marketing themselves to the world. So I don't even think most people know that that exists. Um, but I I could see if if things get used up too much, then that could be a place that you go next, right? Um, but they're not the only one doing that as well. This is a lot of

like what Tao is doing, Bit Tensor. Um, is they have a bunch of subnets kind of doing this as well, but not just on compute, but of of many different parts of the the AIM structure side. So, um, yeah, I don't know. I don't know if that's going to work out. We'll have to see. >> Trillions of dollars in real world assets are stuck offchain. real estate, commodities, private credit, all locked behind outdated systems that weren't built for a global 24/7 economy. The fix: bring those assets onchain. Problem is, most blockchains weren't designed for that either. Feros is. It's a layer 1 purpose-built for real, a real world financial infrastructure that lets assets be tokenized, verified, and traded at institutional scale. We're talking parallel execution for serious throughput, compliance baked in from day one, and infrastructure that actually

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cashback on trades. Benefits usually reserved for loyalty program members. Get started at milkroad.com/nexo. Yeah, I think my take on this is that this is just another example of the beauty of the digital asset of the web 3 space, which is that there are so many different ways that you can configure your product, your service, different kinds of users and and segments of the market you can target to serve and offer products and things too. And then, you know, we're all trying to see what finds product market fit um and and what grows faster and uh you know, etc. But uh I think that's the the beauty of being in a space like this that's emerging is that you can see rapid iteration of different kinds and styles of products and services that all in some way use digital assets and then see what the

market adopts and you know maybe it's something where it's like you know right now there's not a huge demand for some of these things but laying this infrastructure out is is the first step because then once you know the agentic economy comes into the play and once other different kinds of things start to happen as you know like Kyle you said at the beginning as assets assets, you know, we call them real world assets. Now they'll just be assets like digital assets, assets, they'll all be on chain, right? That changes the the nature of the landscape and and what products and and services will find product market fit. So, I think it's just a really interesting example of how there's a lot of different ways to configure things around crypto um that leverage crypto and digital assets and and find product market fit. Um yeah, so it's it's an

interesting difference there >> and I do think deepen there's a place for it and it's going to succeed. right now it's struggling because it just has token dilution. That's how these all work. Um but if you can find revenue from it and use that to to um to incentivize people to, you know, lend out whatever, then I think that can work, but it takes a while to build that out and actually get that started, right? But uh especially in a world where, you know, a lot of people are probably going to lose jobs because of AI and Uber's going to get disrupted and all this kind of stuff. uh starting to rent out the access resources you have in your home, whether that be electricity or that be um you know, your compute or whatever, it's probably going to be a thing people are going to want

to do if you can't, you know, go and and drive your Uber around anymore to make your extra side cash. So, I think there's definitely going to be a place for it in this world. Um and and I think you make a good point you know as the agentic world comes out even us in our company have thought about this of like okay you know where are we going to get the the bandwidth to have everyone running their own agents uh and we know we want that but it's like okay are we going to use like some sort of cloud thing are we all going to you know buy everyone Mac minis which you can't really do uh right now it's months to get that so like something like a render um could make sense for us at some point right um so yeah I don't know I I think

all this stuff will will will have its time, but it's just it's not a today thing, that's for sure. >> Martin, I want to ask you a question. You have been one of the most bullish people I know on the DeFi space, and you know, as Kyle and we've just been discussing, there's a huge push for tokenization, trillions of dollars of capital coming on chain. However, I think you've also been a little scary, Barry, after the the A hack and this whole situation. What in your mind changes in terms of what you're expecting the DeFi landscape to look like? Does this make institutions more hesitant to come in? Does it mean that we're going to have to bring in more robust security measures that actually, you know, makes DeFi more attractive to institutional capital? Like what is your headsp space at right now around DeFi

and and the consequences of this hack? >> I think how people usually analyze something is that if they find lending borrowing markets interesting on the blockchain rails, they probably start looking at the leader and that's a has 60% plus market share. And then if the leader has some problem, it probably shows like that the whole market or that specific market might not be like ready or like you know not institutional ready um as some people might expect it. Now I think like what happened with ABA was unfortunate obviously but the smart

contracts are still like untouched so there's no problem there. The problem is that they probably didn't do proper risk assessment when they were, you know, allowing um restate Ethereum to be used as collateral on their platform. That being said, I think the risks are still quite high, but this is for for AVA specifically, this is not a, you know, uh, existential threat like it it will just make them stronger. But in the short term, midterm, I think that there was a lot of governance drama. Who is going to capture revenue? you know all the key contributors leaving including

the their main risk manager which was K labs. So like if you just combine all these things together and you are a fund managing uh like tens of millions of dollars and thinking about deploying it into a and you see all that I think the risks are pretty high and you would probably wait a couple more months before you deploy into a so like in the long term I remain super bullish on AVA. it's still the the leader and I think everything they are doing just makes sense and now they are expanding into other uh products. So that that's pretty positive. But I >> yeah, current view is bearish.

>> Like look, this isn't the first time that a lender has lent money or a let's call it like a bank has um interacted with an asset that was not a great asset, right? This is this has happened many many many many times in the history of of of finance, right? This is a a normal thing. So I don't know that this is necessary I mean it's not a problem of a they didn't necessarily do anything wrong, but they did not manage risk well. they they probably shouldn't have allowed this asset on their platform. Okay, this story has is existed in every single bank that exists that we know of today. So it's I don't think that any institution looking at a like okay this thing is untouchable. I think it's like hey they are right now there's a bunch of uninvestable assets that exist on

blockchain and that's the dominant products that are being used inside of a that's a problem but it will look at a and go wow this is a way better lending borrowing marketplace than what exists in traditional finance rails it is way more efficient way more cost-effective right than anything else we've ever seen so this is interesting I wonder what happens when this thing starts to have good assets inside of it like GPUs or you tokenized US treasuries or you know blah blah blah blah blah blah blah right like if you apply a and they just give it good assets instead of [ __ ] rehypothecated assets a is an incredible product and so I think if you just do a little bit of due diligence which I think institutions are doing today they're going to see through this and go

oh yeah okay you know there's just not a lot of good assets right now in this space but as we bring more and more of our assets the big boy assets that's where a is going to flourish so now I would say this has obviously been a opportunistic moment for competitors to a spark has done extremely well over the last few days in terms of their inflows and so they they sort of crushed it. Um I don't know about morpho but maybe they have as well and so you know there's an opportunity here for others but a is definitely so far and so big that um I think it does bounce back but this just goes back to everything I kept saying is we just need better assets on chain and then all of our defi will work so much better. It's hard to do that when you're

playing with garbage. It might take some before we on board like more real world assets that you know will scale into billions. But I also want to say the problem was that there was some restrict ETH on the blockchain and what the hacker needed to do was because if you want to sell asset worth hundreds of millions there is not enough liquidity. So what what that guy I don't know or a group of people what the hacker did was they lend it on a and borrow wrapped ETH against it and because there is a lot of liquidity for wrapped ETH so I I sort of feel like those are the cost that if you are leader into something and you have

enough liquidity so it's it's like double A4 you attract a lot of people and everyone's using you but at the same time when there is hack people couldn't like get all these money so they are using you because you are the best. You have the most liquidity. So, you know, so this is like you need to also have this in mind. >> Yeah. Yeah. >> Yeah. I would I Kyle, I think your point, sorry, I was just going to say I think your point about other competitors getting an opportunity because of, you know, the the bad press and attention that a has gotten has been really interesting. But I would also point out because, you know, I think people who are in crypto are very acutely aware of, you know, how much bad press there's been on this. A has crashed to prices not seen since two weeks ago. and is is

seemingly holding pretty stable there. So I think that to me is is a sign of very bullish bullish confidence from the broader market in a right like the the the token is not dumping. There was a a bull run or a bank uh what do they call it? A bank run, not a bull run, a bank run on a uh so to speak. I wish there was a bull run. >> Yeah. >> Um but but those outflows seem to have stabilized now too. So, I it looks to me like a lot of the market is just waiting to see what the final resolution of this is going to be and they're still trying to to kind of track down some of these funds. Arbitum is is going to uh recover I think $70 million worth of the Ethereum. Um and so like the the ecosystem is is actively working on on

handling this. Um, and so I think that there's a lot of things about this to say like, you know, anytime you're operating a business with finance, there's going to be a natural attraction to bad actors to try to exploit it, manipulate it, take advantage of it, abuse it. Um, but the way a has handled this and the way the overall ecosystem has handled this, I think has been admirable. And there's there's lessons learned for everybody who was involved at every stake, every level of this to improve their operational securities and and have more robust um, safeguards so this doesn't happen again. But I do think on the other side of this, we see this like return to to bullishness, capital come back and then, you know, a brighter future and a more secure one um for for DeFi overall. So that thing is really encouraging me just that the

price of a it just kind of it went back down to where it was two weeks ago and then it's just like holding that's a good vote from the market that says we still believe in this. >> Tells you there's no one left to sell, right? Everyone who's Yeah. >> I want to say one more one last thing. There is like four billion worth of rest ETH on a still, >> but I wonder what's what they should do right now about all these other rest ETH that's available there right now because >> it's so frozen.

>> Let's be honest, what's restaking? It's just a rapper. There is smart contract risk. There's there is a bridge risk but like there is no real demand for restaking. So there is no real yield behind it. So it means that people are just taking incentives that all these resting providers give them which is you know not sustainable at all and they are just looping the strategy using a so now what should a do should they sort of you know stop allowing uh all these restate e as collateral because like I feel like that's just a way for hackers to like okay this is your honey spot just come in and try to hack this because I'm pretty sure that this issue might be uh

also with some other restate protocols. >> Yeah, I mean technically the issue was an issue of layer zero, right? Um and and their bridge and and part also helped out and and how >> the security they put around that bridge. So hopefully uh and I mean what we've seen from from a lot of DeFi is they're now double-checking all of their you know um all their bridges and all their their multisigs and their uh and all the different things and making sure that they've you know beef this up. So I don't know hopefully this prevents but I mean we're seeing a ton of hacks I mean both in DeFi and in um outside of that too. So I don't know we'll see where this goes but uh we obviously this industry needs to take security more

seriously. That's that's like the most obvious thing take away from all this. >> John, I'll say one thing that will make you happy once Ethereum really works as a one you know uh composable ecosystem like there there are no bridges. It it will be just one system and all the rollups will communicate together synchronously and asynchronously but no bridges and it will be the final state for Ethereum where you don't know if you are on optimism arbitrum ethereum or some other layer too it will be just one seamless chain no bridges and you'll be just fine >> and is that when ETH will hit 250 was it million what was the Ethereum

>> 252,000 252,000 Right. >> Yes. >> So is that when that happens or what? >> So I think that that that report is is actually one of the best things that's been written about Ethereum uh recently. Um but I don't think it was a price prediction. Basically what they were saying is that assets uh have attached to them. Some assets have attached them a monetary premium which says that because people use certain so there's no money. This is like a really in the weeds like term of monetary theory and economic theory but I think this is worth understanding. um there there is no money. There are assets that we use as money. So the dollar is a representation of debt that's owed by the United States to the Federal Reserve that we use as though it were money, but

it is really debt that we're using as as a currency. It's a it's a different thing. Um so there are a lot of different assets that have some degree of this this monetary premium associated with them. Um because nobody would really care about US debt if it wasn't accepted by everybody as money, right? So there's a monetary premium assigned to dollars. Um, Bitcoin has a monetary premium. Gold has a monetary premium. And so what the report was saying was that, you know, Ethereum is a productive monetary asset. It's a hard asset. It's fungeible and it it actually produces a yield like natively to it. Um, and there are a lot of distinguishing property properties of Ethereum as money that make it very attractive um, and unique in the marketplace. And if it were to demonetize the monetary premium associated with Bitcoin and gold, then

it would be valued at $252,000 underneath. That's not to say that it is going to do that. It's not a price prediction, but it's kind of giving a a sense of what the total addressable market of money is and what the monetary premium of Ethereum might become if it became sort of the the credibly neutral base layer for settlement of value and was used as money globally. Yeah. So, it's just an interesting way of framing the the the the total addressable market and thinking about ETH as an asset, not so much an exact price prediction, man. >> I'm still a believer that ETH is money.

We haven't talked about this since a long time. >> Like I feel like that that whole what do we used to call it? Ultrasound money or whatever like two three years ago. >> Yes. >> Uh it's that's been lost and and I was, you know, a big believer then. I still think it is, but I think it just needs a lot more good assets on it so that it becomes a real financial market, right? Like like Ethereum is becoming the new financial like capital markets of of the world of the internet. And and so like that is worth a lot, right? And the underlying currency of that that powers it is would will be worth a lot like you just said. It's just not that today.

It's nowhere even remotely close to that because all we have are a bunch of rehypothecated assets, right? Uh and and most of that is just rehypothecated of ETH. So uh but this is why I get so excited of things like USDA uh and even US treasuries which is super boring and like I don't invest in US treasuries but it is still like that is what most of the world does invest in and so we just the more those things come on Ethereum which you're seeing is accelerating at a very fast rate the more valuable Ethereum and ETH ultimately become. So that is the that is the endgame. But >> if you have any USDC, you are investing in US treasuries. And that is the exciting part of the boringness to me, right? It's like it's like >> I I like that crypto is like >> if you have USDC, you are not investing

in US treasuries. You're getting none of that. And unfortunately, Clarity Act looks like you're going to get even less of that. If you're investing in USDS, you are getting some of that. Uh >> so all right, so let's talk about this. the letter >> there. There's a lot of fear right now that that the Clarity Act is going to be delayed and never passed. For two years, it's been promised and talked about, but now the American Bankers Association, I think, has asked for a 60-day delay to negotiate. There's a senator on the US Banking Committee who's also asking for that. And this morning, a lot of crypto institutions have come out and said, "We need to push for this now and not wait any longer." The the Congress, US Congress goes into recess in August, and it seems like there'll be midterm elections before this ever gets brought

up again. and the Democrats are very hostile, so clarity may never happen. How big of a risk is that in your mind? Or can we just proceed with business as usual based on what we've gotten from the SEC and the CFTC already? >> At this point, no clarity is better than clarity because at least in terms of yield and in terms of stable coins, which is again what I keep saying is the most important part of our [ __ ] industry right now. And if if if clarity passes the way that it is now, like it's not even just that they can't give yield to users, it's they can't even give it from business to business. So the whole b like what a lot of people don't understand is the reason why stable coins exist in the way they do and they're on exchanges. And the reason why

Coinbase and Circle have a partnership is these these um issuers of stable coins, they pay exchanges out of the US treasury yield they're making to list them on exchanges and then Circle pays Coinbase to use USDC. that goes away in the way that it's structured right now. So it's not just a hey Coinbase you can't pay yield to whatever it's circle you can't pay yield to Coinbase anymore and so everything changes if this happens and it's not great. Um now like obviously they'll find ways around it and they'll work through this but it slows down the the like the progress we're making right now. It's like I don't love it. It sucks for consumers.

It sucks for businesses in crypto in general. Um it's just it's a weird situation and so like without clarity they can keep doing what we're doing which honestly is working and it's growing quite fast. Uh so I don't know there's the problem is is there's a lot of things in clarity outside of the stable coin yield that are very important and and are necessary for this industry. So I I don't actually mean it's better to just not have it on the stable coin side though. is um and so it's just frustrating and I I just don't even understand why like why we let banks like who have a monopoly on this why we let them have even a decision here. It makes zero. The whole point of politicians is to separate what's going on over there and like make decisions on behalf of the people. They are so

obviously publicly not doing that. They are literally going let me see what these guys the people who pay me the banks want and let me like do that. It's insane that that's even how this world works. And we're all just watching it and going, "Yeah, okay, whatever. That's just okay. We should be revoling. This is [ __ ] insane to me." H And yet everyone's just like, "Just pass the thing. Whatever. Coinbase, you're like, you care about yourself." And it's just like, does anyone realize what's going on here? Do you realize what we pay politicians for out of our taxes? Cuz that's not happening right now at all. It's absolutely pathetic. And we're just okay with it. It's It's mind-blowing to me. But >> yeah, I think crypto has gotten so used to to begging the government for scraps that they've forgotten to to ask for the

whole meal. Uh Mark, you have any thoughts on this? Or sorry, go ahead. Yeah whoever. >> I think the whole like all financial world just has a lot of you know lobbyists and muscles who are making those decisions because they want to protect their businesses and their interests. So it's a very tough game to play because you are new technology and sort of disrupting all these guys back. So like I can see the push back but I'm quite positive here and I think that Brian and like you know everyone else who is like trying and fighting for crypto they will find their ways and eventually it will pass. And I I'll tell

you the good thing about if clarity passes decentralized stable coins, ones that are don't come from centralized issuers, they can offer yield and they can exist in any way they want and they do not part of this regulation. And so something like Sky is becomes so valuable because if this happens and Coinbase can't get yield from Circle anymore, why would Coinbase not use USDS instead? Because then they can get the yield, right? That's not illegal. um they can't get it from Circle, but they could get it from Sky. So, it it puts decentralized stable coins and yield bearing stable coins into a whole different universe here for anyone who's looking for yield on dollars. So, I don't know. We'll see if that happens.

I'm kind of with Martin. I don't think that it gets past this in the way it is. But if it does, it's a perfect setup for for something like Sky. Wall Street is here. The White House is here. All of crypto is here. We're talking about Consensus, the world's longest running and most influential digital assets conference happening in Miami May 5th through 7th. This is where 20,000 plus decision makers from a 100 plus countries gathered to shape the future of finance. 72% are director level or above representing over 4 trillion in crypto AUM. 3 days, six stages, 500 plus speakers including Michael Sailor, Brad Garlinghouse, Anatolia Yakoenco, and Eric Trump. Tackling the three forces driving trillions on chain. Crypto at scale, institutional integration, and

agentic commerce. Deals get signed here, funds get raised here. The next cycle starts here. Register and save 20% with code milkroad at consensus.coindes.com. >> I think that this is a good reminder that decentralization doesn't matter until it does matter and then it's the only thing that matters. And I think that that would be uh an interesting angle that could lead to a bull thesis on decentralized finance and decentralized products. Um, yeah. Okay. So, I think on this in this point, if this doesn't happen, right, because there's it's it's still kind of a cont coin toss if it does. We've already gotten a lot of guidance from the SEC, from the CFTC, there's been a lot of regulation in Europe around this. I think even Russia is pushing forward a bill to allow digital asset activities

in their country. Do we even need the Clarity Act to continue doing business? Kyle, like you said, like things are are growing already. Um, and what we've got is sort of working. There's just not some clarity around this. What do you think about that? I I think we do like like there is a lot of capital that wants to come into the space that is not going to do it until they know they're not going to get sued or go to jail for it. And so there are companies that are getting ahead of it. And so, you know, when Genius first came, you saw stable coins go through the roof uh and really pick up. Um and so, and again, that's not even in law yet, but it's it's they kind of they at least have some clarity around what the rules are going to be

when it does go through. Um, and so like there's some jumping the gun, but ultimately to get the the onslaught of capital that we're going to get into this space, we need this. So it is it is very important. And the US is obviously the big biggest capital markets uh in the entire world. So it's it's very important that we get it in the US. >> I agree. >> Yeah, I tend to agree. I think not everyone has balls like Coinbase because they are still able to offer yield. It's it's labeled like I don't know marketing rewards or something. Um but yeah obviously there are billions uh staying sideways because there is no uh clear regulatory. So yeah it would be certainly positive if it passes and we

need that. >> All right gentlemen I think uh we're coming towards the end of our time here. So I want to end with a conversation about what you're looking at buying. Are you buying? Are you sitting in cash? Are you stacking things? Kyle, you know you mentioned chip AI. Uh are you looking to deploy into that? Are you just sitting and watching right now? Where are you on that? >> Not looking to employ into it now. Uh just because of its valuation. Nothing wrong with the the company or the product. Um so it's on the watch list, but it I would need it to to to pull back massively. I think Bitcoin's still an incredible buy here right now. U I mean I you could also sit and wait out and see what's going to happen. If it's going to come down here or break

through, you could wait for it to break through. Um but I do think Bitcoin's a good buy. I also think ETH, you've got um Tom Lee and Sailor just pumping money into these assets. Uh no other asset has that in the digital asset space. So I I think those are still the two best spots to to put capital into. >> Martin, what's on your what's on your radar right now? >> Agreed. I am becoming more and more Bitcoin maxi or not maxi but like at some point I didn't have any Bitcoin and now like I want Bitcoin to be a big part of my portfolio because it just you know whatever AI is going to do to the market or you know all the valuation or frameworks we use for valuing stocks or crypto I don't know Bitcoin is just a different class it's like a better

version of digital gold and I think it's immune to whatever shock is coming because I think some shock is coming Um, so yeah, I want big portion of my portfolio being in in Bitcoin because I think that's a good hedge against it. >> I am very bullish on Bitcoin as well. It may come as a shock to both of you, but uh I am also bullish on Bitcoin and I've been deployed into Bitcoin. I like to buy when Bitcoin is going down, not when it's going up. Because when we go up, we usually come to these moments where it's like, should I buy now? Should I wait for a better entry? Blah blah blah. So, if you just buy while it's crashing, buying fear at any price, you kind of know that you're maybe not going to like get the exact bottom, but you're not

going to miss a good entry. Um, and then you just be patient with your capital. So, I've already accumulated when the big crashes happened. Um, and if it goes back down, I'll accumulate more. Ethereum, I also have a large position. I'm extremely bullish on that. I think the setup here is ideal for ETH. Um, just because of all the things we talked about. Tokenization drives value to Ethereum. uh the agentic economy and rise of AI is driving a lot of it's already driving users um new users agentic users to Ethereum and then you've got the growth of stable coins the proliferation of real world assets it's just like so many different things are driving capital and value and economic activity which are all different things to Ethereum to ETH and I think they will continue to do that another thing that I'm watching closely

is a because a is uh going through a period right now where there's been a huge sentiment driven amount of selling pressure and capital flight and that to me presents a great opportunity because I believe very much in the value proposition of DeFi and the product and the the robustness and quality of the product that off a has created and offered to the market but because there's this huge negative sentiment rush right now I think it presents a good buying opportunity and at least a local bottom here on that. So, those are some things I'm watching. There's a couple other things on my watch list, too. But to to know if I'm going to deploy into some of those or not, I really got to see Bitcoin make up its mind way one way or another because if I think Bitcoin is going to go back down

to 60K, maybe I'm not going to go waiting into alts. But if Bitcoin goes up and starts threatening 100K again, um just like Martin said, price is one of the best uh best pieces of marketing and public relations you can have and that could be very bullish for the rest of the digital asset ecosystem. So, I think it's a really interesting time to be paying attention here, and that's what I'm doing. I'm just I'm watching closely right now because I think the market is getting close to a decision point. Um, all right, gentlemen. Uh, I think one of the the big rules I was told never to do in podcasting is to just ask the guests if they have any final thoughts, but I'm going to break that rule. It's a research.

>> You got to jump. Okay. Well, >> I got to jump. So, I got no more. >> Okay. Great. Well, we'll end the conversation there. Really great conversation as always, guys. Thank you to the audience for joining us. We hope you're enjoying these research meetings and we will see you all on the next episode of the Milkro Show. Thanks for being here everyone. Bye. Want insights on what's moving crypto markets and how we're trading each event? Subscribe to our channel and join the Milk Road daily and pro newsletters and start investing like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.