Can Crypto Survive a Recession? | Roundup

Transcript

the prediction that I've had is like ETF and Bitcoin flows are going to be basically the same and if you look at just like the Black Rock flows which are driving most of both Bitcoin and and eth like yesterday I think was like 170 for Bitcoin and then it was like 90 I think seven for eth so like we're at 50% today and that is you know twice as high as basically everybody else has said and I think it'll continue to go higher but it's been a smashing success for the E ETF and it's good to see grayscale speedr running the outflows as well because that just hangs over the market and it feels like the mini trust are also absorbing and helping at least some of that flow to get out so it's it's very very positive and black rock

and the other ETF providers have an obligation to make sure this stuff goes well like if these are duds it's like not a good look hey everyone this episode is brought to you by say after several months of effort says V2 launches live whoop let's go and introduce the first high performance parallelized VM to the world stay up to date by following say it's say that's SEI Network or you can experience the speed firsthand at say. today thank you very much for being a partner to belr say hey everyone this episode is brought to you by real a new permissionless L2 built on the arbitrum orbit stack by Define natives for Define natives for tokenized real world assets it's very cool chain highly recommend that you go check it out and they just started their Rewards program so you can type in re.

al/ rewards you can use the code in the show notes below all right thanks everyone home with the show all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to Another Round Up of bker we got Michaels one and two Vance and T we got miles joining us as well fellas how we all doing we're back good good good to

be back seems like the stock market's melting but we're back actually bitcoin's held up very well actually we had a we had a huge Miss on jobs this morning and NASDAQ sold off like two and a half perc Bitcoin is I think moderately up on the news which is eth is rallying bitcoin's rallying it's like you know you have these moments where it can actually be an alternative and when Intel is down 211% in 15 minutes of trading like I think there is a good argument of like do you want to own Tech or do you want to own crypto why is Intel down 21% Jesus they purp of an earnings call they laid

off 15% of their Workforce they fired or they they cut their dividend they no they they halted it which is like the worst thing you can do basically after Q4 they're like I don't know if we're going to have a dividend anymore because we're not it's pretty bad yeah this is the dividend the dividend suspend is not something that investors like um yeah never popular ethereum's dividend never stops it may slow but there's a lower bound yeah um well it's good to be back uh State Side I just got back from I know it's early morning for you guys I'm also jet lagged from uh just flew back from from Ireland I was hanging with a

mutual buddy of me and Miles I actually I wore this uh this sweatshirt that I'm wearing uh I don't do you guys know the brand black dog at all like is that a familiar so it's like a brand from that's native to Martha's Vineyard and only at the end of the trip was everyone like why are you wearing this like Grandma dog sweatshirt no one recognized the uh you guys don't know this yeah yeah no um but west of Ireland very good um yeah so maybe maybe we can chat a little bit about uh I know this happened a little while ago but I wanted to get your guys read on the the Trump Bitcoin Bitcoin conference appearance so he gave uh very long speech uh um you know very very

hyped up people were really excited to hear what he had to say um and he covered covered a number of different things and some of them was more maybe like pandering to a Bitcoin audience there was like someone must be coaching him to to say a lot of this stuff but you know he had like you know I'm gonna free Ross Albright um or uh you know on on on day one type thing uh he said he's gonna fire Gary gendler on day one which was greeted with like rapt I don't think he has the power to do that but do thing I don't either but uh it was like he was actually shocked if you see the clip uh by the Applause that he got like it was like two full minutes of applause um and then the you know the thing that ended up getting a bunch of the

headlines was this strategic Bitcoin Reserve um and that was actually Cynthia lumus actually proposed something much more comprehensive and RFK said that he would like to see the Bitcoin or to see the US buy $618 billion doar worth of bitcoin which is the amount that the US holds in Gold Reserve that'd be a pretty big multi-year teawap uh but what Trump ended up actually saying was just I'm I'm going to commit to not selling any more of the Bitcoin that we already have and so yeah which is definitely good and it actually looks like they're the the US is selling uh Bitcoin again so just in general like what was your guys take on the speech um and this kind of I don't know on forever ongoing politics debate that's happening in

crypto these days I mean my my visual reaction was um it's very obvious that he is going to be the pro crypto candidate it when it comes down to it I I think even if there was a catchup um by Kamala or um you know any other candidate at this point uh it would just feel disingenuous because this has been consistent and it's been you know there there isn't another candidate who has an nft collection um and going just going to this event in the first place is a huge signal um so that was kind of like the initial backdrop I think you know there's also this like I don't know if you guys remember like in

Middle School when you'd have you know School Board elections and like the the promise of all the candidates were like no more homework or like we're gonna have double lunches and and kind of feels like we're we're if it was gonna be something where he he proposed something similar to you know what's cus or or RFK proposed it would feel a little bit too close to that realm it feels like not selling the existing uh Bitcoin that's on the balance sheet of the of the government and you know it is spread throughout a number of different agen and Regulatory bodies like the doj has some I'm sure like secret service has some you know they have a mass of pretty serious amount of Bitcoin but it's not all contained in one wallet and

it's not all contained by one entity um but not selling it feels like a a reasonable way to approach starting to hold uh some on behalf of the treasury um which is what would control the Strategic whatever Reserve digital asset or Bitcoin or you know whatever it is uh so it feels reasonable um and I I think you know the we're going to buy 550 a day for four years uh approach is probably not reasonable um but I definitely gets people excited um I I I definitely think um you know to what Vance said I don't think firing Gary danler on day one is even feasible um but it does signal to the market um you

know the the trajectory of Enemy Number One for crypto um is out and nobody else from a candidate perspective has said that yeah that's um that's sort of my perspective as well I I don't really know how feasible it is or or how smart it is to Telegraph like a multi-year you know multi-billion dollar teawap from the government I know everyone wants to see that but I think the much more impactful thing would just be if uh like if people could just operate in the United States again without fear of getting indicted or unfairly prosecuted and he actually did refer to this as well with kind of the Nick Carter phrase choke point you know 2.0 type thing that they would end that and that's not going to grab as many headlines that's not hey

the government is going to buy a bunch of Bitcoin and they're debating whether or not that makes sense and what does a strategic reserve of Bitcoin even mean but you know just as someone who's you know T to think about operating a you know a us-based crypto business I think just clearer rules of the road and less concerned about unfair prosecution is the much more impactful thing from my perspective so yeah I agree if it translates into like policies that actually move the ne that'd be great um you know we we'll see when we get there this feels like a super easy win just to not sell and then move some coins into you know uh one place but yeah I guess to Michael's Point like sets up the

structure for you know the potential of that um of of actually buying crypto in the future does the government hold any e or like Soul at the moment no just unclear unclear okay no e e get that mamass spun up I mean but when uh yeah exactly when when the government you know when you get taken down as a perpetrator uh they they take all your things including all the you know gold bars the cash the guns and probably the crypto so ostensively the government has all kinds of crypto uh it just doesn't know what to do with it or it isn't big

enough for it for it to be reported on um I do think it is interesting though like I and I know there's sort of been an effort this week and over the last 10 days give or take to to kind of um look at both uh what looks to be both candidates at this point and say okay this is our chance to to spread the love and have it be something that's bipartisan um I'm I'm curious your guys's thoughts on um it seems like this is coming from one side of the political Spectrum um what do you think about um how it could or if it could uh be something that comes from both sides um well it's important to remember as you see Camala Harris's odds rallying

that eth is the coin of the Liberals as uh so many people on acts have hosted and accused us of so um I think eth will be fine uh the rest of the market pretty unclear I do think there is probably a bipartisan approach to crypto where maybe it's not Donald Trump trying to stack BTC in the Strategic Reserve but it's probably legislation Market structure stable coins and and kind of that's what um we go off of but I was thinking about like you know if it's not Trump if it's Cala I still think it's going to be Trump um like what is the actual difference in crypto policy

it really I don't know like it probably wouldn't be that different is kind of my actual gut sense if there is a legislative framework if there's not I still think it's at the discretion of the SEC but it certainly feels like crypto is going to get a vote on one or both of those bills so it's not like having like a president who's like more or less enthusiastic after those passes makes makes a real difference gas yeah yeah I was just going to say I feel like it's a bit of a coin flip um where you know I think they've realized that taking this anti- crypto stance is not winning them votes it's been net negative um you know that really only comes up in election years though like

for the most part um or like becomes most poignant and you know I could also see them just kind of forgetting about it and putting you know gendler 2.0 in place um as soon as the elections done if they do win but hope for the uh hope for the best yeah I think uh I think there were kind of two debates that are getting tangled up into one here at least from my perspective which is is crypto a bipartisan issue and then let's say that it is a partisan issue you know what's the face that you project to the rest of the world and it might it might very well be the case that crypto just ends up being partisan like I'm pretty sympathetic to the view that yeah like I think I I think there's some truth to

the idea that okay the Biden Administration is going to be we don't even know what the you know if there was a Harris Administration what that would even look like now um how different would it be but I do think there's some amount of Truth to the fact to the this idea that's been presented that uh the Democratic party as it stands today is like a little bit less um accepting of the like ideals and Ethos of crypto but I still think that's like up in the air in general but um but then there's this like okay let's say you were to even accept that it's a partisan issue how do you interface with like the Dems and the the the point that I feel relatively strongly about is like it doesn't make much sense to like spit in the face of you know one of the major

political parties in the United States and you know I've seen these lists on Twitter of you know demands like this is what we would demand from the Democrats it's like you'd free Ross immediately and fire Gary gendler it's like guys I mean that's that's never going to happen and you know if you talk to the people who actually tried make change in DC like our advocacy groups um you know they're like guys this this just isn't how you actually get stuff done uh so I think there's a way that you can engage um and put a good public face on without just being openly hostile which I think would be counter to all of our objectives even if we decided even if it does end up being a partisan issue um and I think those two debates are

getting kind of wrapped up into one thing at the moment but yeah that's I feel about it personally um but uh yeah I guess what do you guys like last last uh maybe point on this whole political thing is obviously Kamala is doing there's like a big she's brat energy and she's crushing it on Tik Tok and uh like maybe having a little bit of a honeymoon period like she hasn't really I don't really know what her stance is on anything like I haven't seen any substantive like policy or what her cabinet would look like or anything like that but she's climbing in the prediction markets um I saw Nick Carter tweeted something um in hindsight turning Trump into a or Bitcoin into a trump win Market might have been a

mistake um and people are maybe equating the you know performance of Bitcoin in the last week to kamala's odds climbing I'd be curious just in general do do you think that's what uh Bitcoin is actually trading on or just like we talked about a couple of weeks ago it was less about the news headlines and it was more just about government selling that type of thing um but yeah what do you guys think about this idea of coins trading on election odds I mean the nice part about markets is they don't all move because of the exact same reason there's some proportion of them that move for one reason there's some proportion that move for another reason I don't know what exactly that proportion is I would say my guess is that broadly you've got 70% of coins are moving because of flows

government selling uh you know the EF relative um like there are definite you know I would say structural things that are happening and and probably around the edges say the 30% is you know people who are like ah maybe I'm not going to buy the marginal Bitcoin this week and and give it a little bit more time um I think broadly um the way I think about the election right now or at least the odds is like the there was a there's a massive comeback at the last you know in in the fourth quarter and the Dame's tied going into regulation at the last second and like overtime just started it's like a new game you know fresh legs like everybody's got five minutes left on the

clock uh and like a new period just started and what we don't know is we don't know the platform of the democratic party um nobody has any idea what they stand for is it gonna be Joe Biden 2.0 is it is it gonna be like 180 degrees different from Joe Biden is is it gonna be Pro crypto same anti- crypto Pro business anti- bus like there there are a lot of major question marks and I think what we'll see as that starts come about uh you know and they'll have to they'll have to report on who's the VP pick who's you know what's the platform that they're going to be building on where they're going to be spending time um which will give you a signal as to how they're positioning themselves all of that will tell you and then the

relative reaction to the stock market but also the rest of the crypto Market um as that information comes out we'll tell you kind of how people are actually positioning um I I think frankly it's it's most of the flows so far has been not related to elction I'm sure there's some that's been marginal yeah yeah the Dems are like a you know pre-revenue startup right now where you you can just kind of like imagine what they'll be you know they're they're not the alternative right they're positioning to be better than the alternative but as long as you don't have to you know put anything on paper then you don't you know you can kind of like Get Away with not being attacked as

much um ex she's doing well right now tot she's doing well right now because she is not Joe Biden and she is not Donald Trump exactly yeah she's just not these other people but I don't know what she actually stands for I exactly I I went back and actually looked uh at some of her policy positions when she was running for president um in that brief stint do you guys she proposed she was running on a 10 trillion doll climate change package like I just want to remind people about some of the concrete things that were said and was like a you know a Hallmark of her campaign back then which is like I mean I don't think she would

do that now but uh yeah I I think I think it it does bear repeating that we vacillated so do you guys remember we're doing podcast you know right after Trump got assassinated and it was like you know that his election odds went up to 75% now there's been a little bit of a swing I feel like everyone should just take like a really deep breath and wait until we get more solid information coming from that campaign because right now I just don't think we know anything still um it's waiting game pre-revenue startup miles is probably a good analogy that's uh they can dangle the N they're they're dangling their air drop right now um and yeah H so maybe they got a little bit of

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a user you can go over there and provide concentrated liquidity trade borrow and leverage tokenized rwas including T bills real estate and tokenized basis trades so again head over to re. al/ rewards and you can use the code found in the show notes here tell them that I sent you thanks real for making this possible all right wanted to get your guys thoughts maybe zooming into crypto a little bit more there was a uh this also happened at the beginning of this week but I think it brings up some pretty interesting questions um there was a there was I think you could barely characterize this just as an attack on compound a governance style attack um and it was perpetrated by a guy who's been around the block a couple of times his name is humpy um one of these fun sort of crypto fun crypto stories that

just wouldn't get anywhere else but um he's actually a he's a he's been active in crypto for a number of years um has tried things in in uh similar type attacks protocols in the past he actually did uh um a relatively sophisticated exploit of balancer back in the day so balancer has this ve sort of gauge type system very similar to what was pioneered over at Curve where the longer it's kind of like a bribe system where the longer you lock up your tokens you know you're able to direct emissions to certain pools and he exploited that mechanism he was like a whale in um balance or governance and he directed a bunch of emissions to pools that he controlled and he ended up getting in this almost like back and forth fight with the protocol and kind

of got a lot of his funds trapped but something happened in compound where so he's he's got this alternative project called The Golden Boys um and he it was a very similar thing he basically voted to give himself um some $25 million worth of uh worth of comp and this had actually been tried a couple of times so uh back in April of this year um and I think Gauntlet did a pretty good job of uh sort of rallying the troops back then and trying to inform people about what was actually going on and the true intent of the proposal and it didn't end up passing but then they then they ended up asking for five times the amount of tokens this time and I don't I still don't really know what happened if it was just general apathy um you know without throwing any stones at compound I think

there's a lot less activity in it's a much less active governance Place uh than it used to be um and so this vote ended up passing um and and now I think they've they've reached some sort of compromise where um uh where humpy has agreed to you know give back a bunch of the funds in general but it it sort of ignited this this debate around governance and I would be curious you know what your guys thoughts are one on first of all I'm not sure this is even strictly a legal action from the perspective of humpy here uh but two you know there have been a bunch of a bunch of just discussions about governance in general and how things work and wanted to get any high level takes that that

you guys had yeah I can go um I think like uh spent a lot of time working with in in protocol Dows and and working on governance and you know I think there was like a a period towards the end of the last cycle where there was a ton of excitement around Dows um it had Dow tooling startups popping up left and right um and and projects that we're actually trying to uh innovate on governance Frameworks if you guys remember I mean obviously like optimism uh element Finance had a really exciting one or at the time it was really exciting um and I think you know in general the these like um I would say

like the progress in dowo Frameworks was really around putting in controls and like empowering you know contributors to like take have more Authority uh move faster and also have like you know I think on the control side some veto councils um just operating system improvements org structure improvements that was not like necessarily rocket science um and then I think especially during the bare Market uh like it all basically stopped um you know most of the Dow tooling businesses uh wound down I think people generally either thought like d were kind of a failed experiment at worst um or just like not interesting

anymore um and yeah I think in in general even this cycle you have not really heard about any sort of Forward Thinking governance you know Innovations right um and so every once in a while like you know somebody who's kind of still paying attention right can come along and and try to do something like this I guess I I was just trying to go look at the vote I'm kind of I'm surprised that he was able to get it across without like I would I would imagine he had a lot of a lot of help um and you know I think there were some like big voters that came in and um tried to shut it down like the university clubs who were you know on

summer break but still paying attention fortunately um so yeah that's my general take is like there was a lot of progress with Dows I think none of them really panned out and you know it's just kind of like uh uh where we've we've hit like a wall basically yeah I think um well so I I agree I I think that uh a lot of the early it there was an enormous amount of excitement back in the beginning of dows and in the same way that you innovate on the tech you if crypto people are thinking about innovating innovating on or structure that type of thing I think some a lot of that has been met with failure um but I I think there's still reason to be optimistic there are some

really active engaged dows like um that are somewhat functional like I think arbitrum is a is a good example of that and this type of thing would never have at least passed arbitrum because there's so much um engagement and activity there but I I think that this is a good reminder that um yeah there there are these like like you mentioned miles like not really rocket science uh things to do and there was a there was a good thread um that got posted here by the uh the CEO at Aragon um and I think you know there's a there's a long list here basically of of different uh kind of more modular and multi-body governance um so examples like dual governance that Lio has I think is a really good example of that uh the two sides of the house

that optimism has I think would be another good example there I think M you do some work with like Orca back in the day as well like they have a pretty good in you don't really you I mean it's not that Innovative I'll be honest with you it was just pragmatic and like it it it works um and I think a few other project I think Jos taking the same sort of approach and that's why it's just a little bit quieter you know in salana dowland yeah um what do you guys here's something that uh this was this is an an old idea that's also getting talked about again which is VE engages so this is what we talked about before but this is the curve Finance thing where you can lock up a c certain amount of your token um and opt into these new conditions and

that that gives you you know the idea of like locking up your tokens for a longer period of time means you have skin in the game um and then specifically in the case of curb that allows you to direct emission to different stable coin pools um and so the IDE it's I mean it is kind of interesting right it's kind of like the idea of staking it's like you're putting skin in the game and because you're a more committed long-term holder then theoretically you're making decisions for the Dow which are on a longer term time frame um the the other side of this coin and where it's gone a lot of pushback is from I don't know if ARCA ever specifically commented on this but more of these like groups that saws as activist hedge funds right where they could buy up a stake in the protocol and

then make decisions and so I guess what what people always uh deep value people like a hundred out of a hundred times like no more DCFS all the uh all the wannabe car iin who are who are saying well these tokens are just as governable as all of the the corporate equity and Delaware legislation that these fight guys come on just for curiosity though why where does that fall apart from your guys standpoint because people have talked about this for not to pick on ARCA here at all but like people have talked about this for a long time right and it's never really panned out

start um I think second of all they don't have any of the legal protections that he has and then I think the like you can probably get away with both of those things if the project is good enough but like doing DCFS on Sushi swap at the top of their tvl and volume like you're just extrapolating a trend that is the opposite of what is happening in reality it's like when people were saying that openc is going to be you know like a hundred billion dollar business when they did the round it like 13 or 14 billion I I also think like Dows haven't failed a lot of the projects around Dows have failed but like maker in like extremely high functioning Dow Lio high functioning Dow I would

even say uniswap it's like a high functioning Dow yeah like I don't think the message is that Dows have failed I think the message is that like we're seeing a very typical rate of startup attrition like it's like saying corporate Equity doesn't work after 99% of the YC class gets you know killed every single year it's just you know you got to look for the positive you know examples not the negative ones um but I do think there will be activists in the future and and even in the present with like Humpty doing The Compound thing I I just think the question is like is compound a successful protocol or or can you can you make it into one and I think you probably can relative to where it is today uh and

maybe that's a big win but I think maybe that's the better way to think of all of this is like you know people doing DCFS to justify 100x from Sushi swap is very different than like people getting in somewhere and turning around a project that's like kind of bottoming out you can probably squeeze you know a three or 4X you know blood from a stone type idea but you're not going to have like this thing that can go off and challenge like JP Morgan with with like compound it just like keeping expectations realistic is probably the most important thing yeah I I think there's two things there's sort of like the the turnaround value mindset where you're like oh we can and this is I think what Humpty did is ultimately what has been proposed as

a response is let's turn on the fee the the P switch and maybe the turnaround oh this isn't working let's step in and force a decision to be made is positive the other one and more of what I think everybody's mindset is when they think of activist activity in crypto is let's extract the residual value the treasury is worth more than the market cap of the token therefore let's bow the tokens and you know flip the treasury over to token holders like that that stuff never works because what we're talking about there's no governance there's no legal framework there's no like there's no uniformity of of this asset class it's all like software and every one of them is generally different other than the erc20

standard basically every component of it is is different um so I I I definitely think that there is an interesting angle on the activist for growth mentality if something isn't working or something needs to change step in you know cause some situation to happen and then force that change and I think if that's the ultimate Humpty obviously was a large token holder or at least had a lot of tokens that were delegated to this person um and I'm sure a lot of it was owned as well but uh you know one of the things that wasn't flipped on was the fee switch now it seems like that is going to happen it's probably ACC creative to token holders that is an interesting angle if you think that

that's the ultimate uh ultimate cause or the ultimate desire uh that he originally had maybe he never actually wanted to print the $25 million worth the comic just wanted turn with e switch Yeah I think that's another not to actually bring it back to Politics as well but I think that's another thing that people are is a is a potential Catalyst which is being underpriced which if you got a more friend friendly regulatory Administration in maybe you could start to just make some rules that weren't catastrophic to early crypto startups and Dows um and like you're starting to see Unis swap had a couple of fee switch fee switch proposals this year which they've been talking about this forever but it got further and further along than it has in the past um

I don't know if you've seen the a where we talked about it last week actually on the rollup uh the a nomics uh revamp and part of that is like the back end the way that they the protocol deals with um the risk of bad debt but a part of it is kind of something that which I think there's some real desire from some of these more established D5 protocols that do have functioning Dows and real cash flows to signal to token holders that hey you know even if we're not going to give cash today like there's a there's a road you know there's a line of sight to that actually happening and that could be make make make no doubt if if it looks like it is going to be someone who is pro crypto in the White House there will be a lot more of

this there'll be a lot more testing a lot more experimentation a lot more you know throwing stuff against the wall to see what sticks and I can attest that there are a lot of people who are waiting to see that before they and try things right now sitting on the sidelines ready to go um and I think that that's where you know we're talking about the next you know Catalyst with the next kind of like Market Trend I think you know one of the reasons why maybe the not the market pullback in terms of price but the market pullback in terms of activity has slowed because the change in you know the political winds at least in terms of you know what November's elections should be yeah I completely agree with that and can you just imagine for a second uh

what would happen had someone like Hester Pur in charge of the SEC and this like Safe Harbor that she's been proposing forever which is just extremely reasonable right and just very in line with the protections that you know previous administrations have given to new Industries imagine if if they just came out and said hey you can launch a token and it can transition from a security to a commodity which by the way apparently there's actual legal precedent uh to do and for for the first 5 years or seven years you can launch this and basically operate as a security you just need to have a line of sight to decentralizing here are the metrics that we're going to judge you on I mean that just feels so reasonable and like such a layup and you know I

know we've talked about on the show a lot just like the market structure bill and the stable coin bill but it just this also feels like an area where yeah like overnight just by putting basic legal protections and some sort of structure in place you know you could have an entirely new industry crop up it feel one one more thought just on this and not to like completely bring it back to politics but I did hear I think it was Obby who was talking about this on the thousand act podcast um but he had an interesting analogy and I know we talked about commo being or eth being the asset of the Liberals which is hilarious um there's actually a different perspective which which was it

doesn't matter sort of like you're um your political sway whatsoever but uh I if commo becomes president uh it's Pro Bitcoin and the reason why uh and in Pro Bitcoin over everything else and the reason why is because of the 10 trillion dollar Green New Deal the massive ramp in spending the debasing of the dollar because uh of macro macroeconomic re reasons whereas the Trump uh position is Pro ethereum because it's Pro Innovation it's Pro experimentation it's Pro regulatory framework and think about the comparison to the two if the Democrats

want to be Pro crypto they have to catch up to the level of having a safe harbor having a regulatory framework allowing people to try things allowing tests and experimentations from an entrepreneurial perspective onshoring entrepreneurs again that have left in the last five years like it it is a pretty steep hill to climb and I mean we obviously welcome it but there is an interesting angle of the two perspectives are not necessarily not pro crypto it's just they're Pro crypto in very different ways I would say that the the Cala you know potential is I I don't think it's I think it's like Pro the assets that have ETFs today and probably like you're kicking

the can for like the salana ETFs a few years you know probably minimum um and then that's like the ETF landscape then the legislative landscape you know I think stable coin and Market structure give you a path like we said earlier but you're not going to have like the SEC Safe Harbor there's like what do the ETFs do there's like what does the SEC do and then there's like kind of what the general temperature is I think the yeah the Trump perspective is like it just becomes much more bullish for basically every coin the path to ETFs get a lot easier

um but I think a lot of it hinges on just like who the chair of the SEC is yeah that's that's that's a better way of putting it it's not eth versus Bitcoin that was just the analogy that they said on the Pod it's more like does the industry become more wide or does the industry become more narrow and and that's that's kind of the question everything that's in ETF right now and you know blessed from a regulatory perspective will massively expand under under Harris presidency I have like a I have a question that it might sound a bit heretical um so we I'm not like also super familiar with the specifics of the Safe Harbor um uh I guess you know proposed policy apart

from you know it makes our lives a lot easier and you could graduate essentially and I think for l1s like we can easily draw the analogy to the commodity especially when it have you know this is not a governance token right um but for something like compound right we're also talking about like a protocol feels like an app it we're talking about dividends right with the fee switch um what does it graduate to I guess technically if it's not a security after five years is it some it's not I I just have a hard time being like yeah this is this is graduat to a non-security which is probably the least informative way to describe it but like

even if you think about like what is actually trading on the CME it's not a commodity it's a non-security so true there there isn't how many of those are like also you know uh like holding equity and you know there's nothing on the CME that you have like voting rights on like you know a product and get paid dividends from the revenue of that product it's an uncomfortable question but it's like what is this you know I get to Michael's point about like the narrowness though like they're not GNA like expand that category uh in a CA Administration I mean like we don't think um my also my sense just like orthogonal to this conversation is that

the industry generally has a lot better lines into Kamala than it did to Biden like like Mark andreon and uh Ben Horowitz were like on this about like trying to get a meeting with Biden and they they just like ghosted him um and now you kind of got Novo kind of in the mix you got like all these kind of more liberal leaning you know crypto you know sentim millionaires billionaires whatever um I don't know like it'll be interesting to see what she's like my sense is that it will be better than today probably not quite as good as Trump yeah can't be worse can't be worse Al when when vitalic posted that you

know like don't uh don't vote for a candidate uh you know based on their crypto allegiance that was like right during the RNC I thought celus was just going to cancel him EO you have experience in this now uh and I was like this is like not this is like not great for you but like as per usual the man is prophetic you know he's like I'm playing both sides against the middle to come out on top and we'll we'll see but the Avi Felman podcast I just don't agree with Bitcoin being being the Camala Bitcoin is orange Man coin I agree yeah PG Bitcoin is keep real yeah I didn't I

haven't caught that one yet but I'm in complete agreement with you like I I think he is it's also interesting to see I mean just like going out of our bubble um like into the world the perspective that people have on this it's like it's worth just like engaging with people outside and how they think about this stuff um and I think that I think there's some element where if you want to produce political change like I actually am really sympathetic to this idea of like stop with the both sides ISM right like you just have to look reality in the face and see who is your friend and who's supporting you and like what is the best way to achieve our objectives which is they're actually super reasonable right they're just like I just want fair treatment that any other industry gets and there's also a

high gr tech industry which is going to generate a bunch of Revenue and jobs and progress and isn't that what we are supposed to do in the US like that's kind of our whole business model here so you know we've been made to feel like that's like we're asking for a lot but we're just asking it's it's extremely low bar for what we're asking for and so if you're not being given that you have to push and you have to fight and that makes a ton of sense but I'm also sympathetic to how most of the World Views crypto even though it's a political issue like if you just talk to so many people have this really negative connotation of crypto still um and I think what bolik probably got right in that post is that like there's no reason like fight but don't you don't need to

sort of needlessly encourage this negative stereotype that exists about crypto too there's a way to fight in like a positive way I don't know I I don't I I don't know what why he wrote that maybe he has really strong social views like I don't know but that's that's my view on this it's like you know fight and push and you know advocate for what's yours in whatever way you feel like is best but I don't know yeah I kind of have to be realistic too about how the rest of the World Views crypto and I think we're in we're in the Battle of winning hearts and Minds right and and I think there's a good way to Advocate on on a large stage and like a less good way um but maybe that's a cancelable opinion these days I don't like I don't know we're g

you know we're GNA know more about that in the coming weeks once we see the platform right now we don't have all the information yeah yeah yeah I completely let's let's talk about the stock market for a second because this is shaving up to be a pretty historic day yeah the Russell 2000 which is like uh you know the stock market for real businesses is down 5% yeah this doesn't happen very often like I think there's some people in these pod shops who are having wow the nasdaq's down 3.2% like this is this is the start of we're going into a recession may be a bad one employment is up to 4.3 unemployment is up to 4.3 3% um people are now pricing in about

5050 odds of a 50 basis point cut in September like I remember UNL yesterday said uh when they cut it'll be too late I mean yeah stock market needs a CTO right now someone needs to Dev this because it's not looking good but like this is um I remember in 2022 we talked a lot about like you know one of the big indicators is where's the tenure at and where will it Peak at for the cycle and the tenure is down to 381 that is I mean the peak was almost 5% year yeah maybe a little bit more than

5% like we've clearly put in the high for the 10 year the cost of money is going to go down rates are at 5 and a half per. the next cut will be in September next fed meeting at least but we're we're really starting to move into a different type of economic environment um and there's a chance that the unemployment rate goes to like five here like the unemployment rate is something that if you think about it like a stock like it Trends it's not like it moves like a tenth of a basis point 10th of a basis point then stops like you have to like do something to stop it um but it'll be interesting a lot of the feelings that people have had about the economy being weak are now starting starting to manifest and this will also

be something that is important in the election like if you're trying to own the economy and the economy looks like and the stock market's crashing 5% those are the real businesses too the the the fake Tech businesses are down like almost an equal amount like so a couple other thoughts on so I don't know if you guys have seen that the Nik which is the Japanese stock market index but that's having one of the worst they need a Dev yeah they need a c too um but they're having it's like one of the worst trading days since uh Black Monday or Co for them so it's down six worse than March 2020 yeah it was the worst day since 1987 yeah so pretty incredible what's

happening over there and yeah the stock the US Stock Market selling off I will point out Bitcoin is flat to Green um at least as of the time of this recording and I I think that's significant and the actually one of the things that's made it a little bit tough to be in you to have all crypto bags for the last like month is that the stock market has been ripping and Bitcoin hasn't and crypto in general hasn't been doing so hot and this feels significant to me I think that it says that uh crypto's trading on starting to trade on slightly different things than maybe like the S&P or the mag 7 and crypto Bitcoin has historically done a pretty good job of actually sniffing out rate cuts and look what what's happening right now is uh this might be we we had a really bad

jobs print this morning um it way you know way weaker than economists thought employment is up from 4.1% to 4.3% this is what people I think it's what V you just said it's like this feels like something is about to break and we've seen this movie before and this is when you get rate Cuts so maybe this is something that's uh bad for bad news is good news and Bitcoin is just sniffing that out and getting ahead of it basically um I I think like crypto has crypto moves like twice as fast is Trad five yeah where like we crash there's no bailouts there's no you know limit order Downs or timeouts you it's 247 um and then like we kind of sorted

out amongst ourselves and like even the Estates like we cleared that Supply pretty you know early on in terms of like where we are in the market like you know the gbtc now the eth the block fine and Genesis stuff I think it's today like I saw a tweet that we're they're Distributing today trfi moves at half speed and so like all the supply overhang and that needs to get bailed out or fixed like that's still to come and like I saw like these weird articles about like deuts bank and Morgan Stanley trying to do like these like super complicated like we're going to sell credit derivatives to like other people we like we don't want these anymore and like you know they're going to sell it to other people like there's just it

feels like there's a lot of stuff in the financial system that's like trying to work its way through the piping and this is probably when they start to clear the overhang and the overhang of like the AI stocks maybe not being as interesting as possible or as they might have been you know and all the other credit and debt that had kind of been taken on but like all all the commercial real estate stuff too is like it's like it's not fixed yet you know it still needs to go through this process so this is the this is the two-year which has been people have been pointing out it's been selling off there's been actually something that looks like a um a bullish uh steepening um but look at look at what's happened in the last

couple days I mean the like two years just sold off a lot here the two-year and fed funds rate are extremely correlated right and so I think this is actually the market pricing in or or indicating um that there's going to be that there going to be Cuts ahead or that yields are uh you know going to continue to go lower and one other Nuance here as well which is it's it's not typically bullish for stocks when the FED break something and then they have to panic cut that's actually usually not a good thing but the the fiscal dominance of like spending $2 trillion in deficits is still underline here and so I think a lot of people have very rightly questioned okay usually

right about now you'd be really worried about a recession and that the FED has pushed things too far um and that we're going to have to take some pain here but I think the underlying Nuance is that the reason why we haven't gotten absolutely smoked um since this you know 0o to 5% insane hiking cycle that we went through in 2022 is the the underlying uh you know support from government spending is still there so if you're in this scenario where you can't have a horrible recession because of how much the government is spending and it feels like something is broke and now the FED has like unemployment is up uh and inflation is going down and we're you know in for rate Cuts Like That Could you know there's a bull case there

I mean that that could be Goldilocks for something like uh Bitcoin and crypto I mean I mean this is this is what this is it this is what we play for like I mean they can break whatever they want to break I don't know how much correlation has to crypto at this point just given everything crypto going through and the renewed bid from these ETFs but like let's start dropping these raides as fast as possible yeah um uh I guess speaking on like uh more macro highle stuff all right miles I know you got to jump too soon maybe we could just uh wrap a little early here and and just talk about the eth ETF so yeah first week of eth ETF uh trading is now in the

books U Vance I've been seeing you post a little bit about this we we talked about the speedr running of the outflows that we saw in gbtc um but the last uh couple days those have flipped positive and we're seeing inflows and I think it's the um the Black Rock product eth a Etha I don't even know how to pronounce that which is leading the pack um and they had some pretty significant influ over the last uh day or two so and I saw you talking a little bit about a rotation from uh Bitcoin ETFs into eth ETFs so how much do you think that rotation is happening and then um where do you think we are in terms of um you know you know finishing out uh the the outflows from the grayscale product you're pretty close on the outflows like there were less than 100 million yesterday

um I think like the the prediction that I've had is like ETF and Bitcoin flows are going to be basically the same and if you look at just like the Black Rock flows which are driving most of both Bitcoin and and uh and eth like yesterday I think was like 170 for Bitcoin and then it was like 90 I think seven for eth so like we're at 50% today um and I would expect that to be roughly kind of the the base case for what the flow percentage will be and that is you know twice as high as basically everybody else has said and I think it'll continue to go higher but it's been a smashing

success for the eth uh you know bit or the eth ETF and it's good to see grayscale speedr running the outflows as well because that just hangs over the market and um it feels like the mini trusts are also absorbing and helping at least some of that flow to get out so it's it's very very positive and um I do think just like concentrating the bid and the marketing and and the distribution around these two assets is really really great for the whole Space just because like Black Rock and the other ETF providers have an obligation to make sure this stuff goes well like if these are duds it's like not a good look um so yeah just it looks really good honestly I agree you know who we should get on the podcast at some point

is like Matt Hogan um because they they've actually done a really good job with their they've got ew um they've done a really good job actually of attracting flows I think they've got the the third largest um eth ETF and I would love to just get an understanding from him of um like how he's talking about eth or selling eth to a more trafy audience that isn't in the weeds or around the same debates that we are like l2s and block times and stuff like that which I don't think they care very much about but yeah it would be it' be cool to get someone who's like on the ground um as well or someone from Black Rock maybe that would be um willing to talk about this but I think that could be cool um and I guess I guess uh final we we lost for folks who aren't following

Along on video here we lost uh both Michael and Miles who had to jump but last last question for you on so namada which is um a shout out to enoma it's the sort of privacy focused um L1 which is launching under the enoma framework um they talk they uh and sort of floated the idea this week of unlocking 100% of their supply um at tge and I think the the way to understand this is in the context of everyone is sick of these you know low float High fdv you know type launches where there's a period of time like a year or two where it just feels like everyone's getting dumped on by investors or the team that is waiting to unlock and so there's this idea of ripping the Band-Aid and just getting

that all over with on day one um and then on the other side of this you know NADA hasn't talked about this but you know some people actually advocate for much longer lockups right so worldcoin has these crazy you know eight or 10 year investor lockups and in the past dydx when they've had big unlocks have actually voted to to push that out further and so there's kind of the way that it gets done today which is reminiscent of you know how it works with stocks like anywhere from a one year to four- year type lockup and then you're starting to see people ask for you know advocate for the idea of 100% of unlock on happening on day one or just push it you know continuously further out into the future and wanted to get an understanding of where how you think about that I mean I I think the

worst of all worlds is kind of what we're doing currently um I also think a lot of it is just dependent on like is this a worthwhile project is it interesting enough um especially in a world where relative to a few years ago there's like a hundred times more projects uh you know like I would argue that if something like an eth or something like a salana came out with 100% unlocked or 0% unlocked like the path that they would take would be probably the same just like their successful projects and they will they will go up in value uh and kind of every other discussion about like locks kind of feels like window dressing around like is the project good or not um so you know maybe that's kind

of like a copout but I feel like you know coins should launch no higher than like a few billion and give people a shot to be early and then whatever kind of happens from there you know that that's just kind of up to the project but there was a tweet from Star zooo who's the CEO of okx he was talking about Avo and like how AO has gone down 90% since it listed and he's like like what are we doing here like we kind of need to you know the VCS the exchanges the the other people like we need to kind of think about and protect like the average retail user um and so I think that's kind of part of a broader conversation that's starting to happen around like the slowing of exchange listings and the rethinking of

token economics and just like a higher bar bar for quality for for VCS where you know if if it's just like the average run-of-the-mill like another L2 or like another you know whatever protocol like it won't get listed on on the major exchanges and then all the incentives for that type of low float High FTV go away so I think the market is kind of fixing itself but it's you know everyone kind of needs to think about you know everyone who's in the supply chain of capital like what are the long-term ramifications of of you know funding a 100 projects a year because they're just not going to get the same listing uh if the coins that have been launched kind of keep

performing how how they have been yeah I agree it's almost you know Bill Gurley has talked about this uh he he he went on a little bit of a a campaign a couple of years ago for direct listings and there there is this uh you know this Dynamic of if you if you if you list at a higher price um then that's what the the essential like the sale is the Dynamics in crypto a little but that's when the the the actual money that enters the bank account right and everything after that gains just secondary trading but um you know the the downside of you know listing something as an IPO and then it pumps is you you could look at that and say hey I could have actually listed this for a higher price clearly there was more demand for this and I could have more

dollars in my coffers today but what what investment bankers will always argue is there's something aesthetic it's kind of like a marketing thing if you list something and it immediately goes up people will remember that and we have the opposite problem of that in crypto where we just list at these incredibly high prices and then they just tank like 90% And clearly that's not tenable I mean that that is a that is a part of the problem right now so yeah I I I I sort of have a feeling it's this it's this murky area of how the initial price Discovery ends up happening um I'm not actually sure that it's unlocks or you again this is one of those things that I think actually works pretty well is that you know in the early in the early days of a company this the supply of the equity expands

people will eventually sell out um which is you know that's that's good there's some amount of people that want to take on early stage risk in a product and you know they don't want to hold for 10 years and they'll sell to people who are more comfortable taking less risk and getting less return I don't think that idea is broken I think that actually works pretty well in practice it's just however we're valuing these things when they quote unquote go live and the distribution of gains between retail and uh you know private private investors I mean I think that's the thing that's a little bit challenging at the moment so yeah I mean the things that the market is going to fix is like there will be less incentives to fund the average shitty project just because it won't get listed in this new environment where

exchanges are being more conscientious about what they offer to retail you know that will certainly help I think what we want to avoid in the meantime is like turning people off from from the space just given like I mean if you've seen the turn numbers on things like mem coins some of it is hard to imagine those people coming back yeah I agree yeah um all right dude well um this was a fun one uh congratulations early on 5 years of framework um I know you guys are doing your thing in a couple days yeah man it's a massive accomplishment you guys have absolutely murdered it um so hopefully you guys enjoy your your little hang and I'm sorry I'll be

missing you in in New York but yeah well thank you buddy appreciate it have a good rest of day yeah man you too I'll talk to you peace all right guys one more shout out here to this episode's title sponsor say there are a ton of reasons to build on say if you're itching to get started building or using the ecosystem head over to say. that's se. get started and be sure to let them know that we sent you thank you s