🚨LIVE: ETH & SOL Ripping! HYPE ATH! Ethena Fee Switch! Lockout Rally CONTINUES! Silagadze & Belshe

Transcript

[music] [music] [music] [music] Thank Lord.

[music] [music] We'll see you around the timeline. Feels good to be back. [music] >> I think The Rollup is one of the most premier media brands in crypto and Andy and Robbie are great [music] experts at everything they talk about and it's my favorite podcast. adding it to my library every day. [music] >> Potentially multi-chain deployments. >> We are at the connect day one here. I'll be testing from space. [music] [music]

[music] Heat. [music] [music] Heat. [music] >> [music] >> JP Morgan, Black Rockck, DTCC, Fidelity,

the entire thing was just institutions. It's just it's next level. This industry is going to the next level. And guys, I I don't know what else to say. I'm bullish. He said it. He finally said it. So bullish. And he's bullish. I'm bullish. We're bullish. [music] Heat. [music] [music]

Heat. [music] >> [music] >> Heat. Heat. >> [music] >> Corola is headed to [music] the top. If

we're not already at the top, we're going to the top. >> Roll up is my favorite. >> People from all walks of life, all over the world, all over this industry come together for the roll up. [music] [music] [music] >> [music] [music] >> Zoom out. The institutions aren't

coming. They're simply here. Taste the golden age of crypto, guys. Get right. Let's go. [music] Welcome to the nest. See you on the shows. We're live. We are live. Keep those sound effects coming. Uh August 27th day lost count of the bull market, but we are certainly here. Uh we're in between Nvidia beating earnings and Kevin Worsh going up and announcing quantitative easing in Jackson Hole. Uh guys, it's August 27th. You're watching the roll up. My name is Robbie and uh I don't know what else to tell you except I hope you packed your bags. I hope you

pack your bags because we're going for a ride, boys and girls. Uh August 27th on the rollup. Big shout out to our friends at Plume. They help to run the tokenization tower that is quote unquote the rollup headquarters north. I am in the roll-up headquarters south just outside Miami here in sunny South Florida. Got a little rain earlier today and no one is raining on our parade because the bull market is here and we're back. We are so back and I hope you guys are ready and are ready to have some fun because we've got a tremendous show for you guys here today. Uh the mics, we've got Mike and Mike, not Mike and Ike. Uh Mike Belshi and Mike Selig going to join the show. Sensational

indeed. Today's topics as you can see markets and weather ether CEO and Bitcoer and CEO joined the show. Mike Belshi was just at the Washington DC President Trump shaking hands with the best in the business and then later at the CFDC advisory committee. Uh Mike from Bitco was up there uh with the industry leader. So, we are very proud of him for representing the industry well, and we're going to hear from him about how that went and how his 100 Bitcoin bet against Anthropic is working out.

Uh, guys, I mean, I don't know what what else to tell you. I mean, we're above 80K. Zcash is above 800. Pump Fun is almost above that 5,000 mark. uh half a cent on pump fund. I mean, we're green across the board. Athena fee switch is live. I'm still accumulating fake world assets. It's holding nicely below that 2 and a half cent level that I'm looking at. VVV is the one where I uh I feel like I'm a bit underexposed, but man, DeFi is coming back in a big way. Perpetuals are here. Hyperlid all-time highs. hyperlquid all-time

highs and PUR is flying. >> W's in the shot >> on the heels of the earnings call. This thing is ready for takeoff. Uh, and we're going to get into it. We've got a fantastic show for you guys. I just want to kick back and just hang out with you guys and just have some fun. That's kind of the nature of the show today. We're going to keep it casual. Uh, it's Thursday. We're uh we're living it up. We are absolutely living it up. I came on uh it's not really work in the bull market. It's pretty much just hanging out with you guys. Bit 5050, hey yo to you as well. Freedom guy as always.

You're the man. Appreciate you rocking with us. I believe New Type Little Miss Gun. All the regulars are out there somewhere. Big shout out to you guys. You've been here rocking with us day in and day out. And so you knew what was coming. You guys have been paying attention. You've been aware and allocated this entire time. And it's finally paid off. You guys are now getting revered as early and correct. That's exactly what you want to be here at the rollup. That's what we pride ourselves on. Before we get into today's show, Dinari is our tokenized equities partner. These guys are helping to bring [cheering] hundred trillion dollar asset class on chain. Uh not only do they bring it on chain, but they help to do more with it.

I'm extremely excited for all of the non skeworphic, yes, non-skeumorphic use cases of tokenized equities. Obviously, we know that DeFi is about to get rerated and hundred trillion dollars is going to flood into DeFi. What I'm most excited about are the unique things, creative things that we don't even know or understand yet until they're created. That is what I think we should be positioned for and that's what I'm excited about. Weather 87 degrees, had a little bit of rain, participation is not anymore. Feels like 98. Uh, heard New York is getting some flooding, so we are very happy to be in South Florida. Give me some W's in the chat and hope you guys

are vibing out there. Hope it's good weather where you guys are, too. All right. Um, Dylan Jenkins, that's a new name. Got into Soul like a week ago. Not a bad time to get into Soul, if you know what I mean. I mean, that thing couldn't really have had much better timing on that. Congratulations, Dylan Jenkins V4T. We're going to keep moving along here. The next partner that I want to tell you about is FRA. FRA is our stable coin partner and these guys are absolutely crushing because they have entered the revenue meta. You guys know the portfolio construction thesis. Well, on one hand, we've got scarce assets, hard money. Put on other words, it is owning things that they

can't print. That's hard money. On the other hand, we've got revenue producing onchain businesses acrewing value to their tokens. Frack belongs in that category and should be valued as such. Let's go ahead flip over to the markets because boy oh boy do we have some green to show you guys. Near pushing $2 level again. Chain link pushing $12. Salana above 100. ETH above 2500. Bitcoin above 80K. Salon is the big winner here. 13 1.5% increase. Uh I believe uh Salana's kind of playing the catch-up trade to the application of pump fund.

New type trader. Salana outperforming ETH baby. Sell all your ETH for Salana. Yeah, I mean ETH had a big runup. Salana is crushing. Uh maybe we'll do a little screen share later and we'll go over what the ETH to Solana ratio looks like. I think playing that one is going to be uh a good move. Dylan Jenkins has no idea what he's doing. That's okay. Pay attention. Stay tuned to the rollup. We're going to help you figure out what you should do with your own research. Figure out where you can outperform the market. That's why you guys watch this day in and day out so that you can stay aware of everything that is going on, everything that you need to pay attention to. Royal, I appreciate the wholesome vibes. Guys, let's continue.

Uh markets as always powered by Zama. Uh couldn't do it without Zama. Equities are mostly flat. Uh there's a couple ratios that I think uh are now finally starting to turn in our favor. Uh so the market update here is that equities are flat, gold is flat to up. But if you look at the ratios between Bitcoin to equities and Bitcoin to gold, these things are starting to bottom and they're starting to explode off the lows. And so obviously we know the monetary regime is now liquidity accommodative, right? And this is benefiting scarce assets, hard money. Bitcoin and gold uh both benefit from this kind of monetary regime, but Bitcoin is actually beginning to outperform gold and I think this is a ratio [cheering] that is important to

watch. Yes, big round of applause for the Bitcoin to gold ratio. As always, markets powered by Zama. Nvidia beat earnings yesterday. That really helped just kind of solidify everything happening in the AI trade. Uh we need or want this thing to continue. uh there might be a rotation from equities into Bitcoin or scarce assets, but I think if we do get the kind of monetary regime that they're going for, this bull steepening of the yield curve, I actually think equities are also going to go up, they're just going to be outperformed by hard money scarce assets like Bitcoin and gold and Bitcoin uh most so and I think that is what we're watching uh in in the markets. Okay. [snorts] And

then obviously uh we've got Jackson Hole announcement tomorrow. My co-host Andy is going to be at the conference, the Wyoming Fed Symposium. He's going to be calling in from the ground floor of the most important financial conference in the world happening tomorrow. Kevin Walsh is going to give his first Jackson Hole speech as Fed chairman. So, you're not going to want to miss today's show or tomorrow's show. We're going to keep you guys absolutely cranking. Dylan Jenkins, just just sit back, relax, and enjoy the show. Uh we're going to tell you everything that you need to know, what you should be paying attention to, as well as our AI partner, uh Near. Near is crushing. Okay, they do not don't only just have uh the [cheering]

AI side, the ironclaw side, but they also have Near Intense. Uh Near is also making its way in the revenue meta. And this is part of the thesis of revenue producing value acrewing tokens that are making up the other side of our barbell thesis. Right? So on one hand we've got hard money scarce assets benefiting from uh the monetary regime, the the accommodative liquidity situation. And then on the other side we've got onchain businesses benefiting from the legitimization of the industry producing revenue driving value directly to their tokens. This is this is the thesis. This is what we believe in and this is where we've staked our claim and uh are allocating uh for the upcoming cycle.

All right, let's get into it. Our headlines for today. Ethereum daily uh talks about a critical ETH security update. Something to watch here. Uh vulnerability has been discovered in the Ethereum app on Ledger hardware wallets. Guys, Ledger can't get out of their own way. Uh you guys probably know that. Uh, Treasure was a partner of the show for a while. Still friends with the Treasure team. I have both. I have a Ledger and a Treasure. I mean, this is something to watch because, you know, Ledger has been the uh victim of, look, multiple security vulnerabilities, data leaks, and now they have a problem with their Ethereum app on the Ledger wallet.

Ledger CTO says it's internal security team discovered the vulnerability using AI assisted tools and pass patched it. Uh, and so in theory, maybe this is getting patched and everything is okay. Uh, but, um, I mean, this is just simply not what you want to see from the hardware wallet ecosystem, especially after the exploit of cold card, right? And there's an argument to be made now that centralized exchanges, ETFs, these represent the more secure path [snorts] for gaining exposure to this asset class. So, I mean, you don't want to put all your eggs in one basket, but it's becoming dangerous to have your money in hardware wallets. And that's very unfortunate because self-custody is one of the ethos

that this industry is built on. We believe in the principles of self-custody. But we also realize that we are in an entirely new paradigm and AI assisted coding tools are both protecting and exploiting these protocols in record time. And so, it's very dangerous. Um, if you can find an insured protocol to keep your money, that's even better because you get that protection. Uh, hardware wallets just don't seem safe these days. Uh, but I think ultimately centralized exchanges, unless they offer you that protection or some sort of, you know, reasonable assurance that they're going to bail you out if they do get uh, exploited. Um, it probably makes sense to divide up these assets, put some in the hardware

wallets, put something in centralized exchanges. Um, I mean, even hot wallets, guys, like you know, those are at risk, too. No one's really safe from these AI tools. Um, and so that's just kind of the reality these days, uh, of what we've got to do. Um, and so, yeah, I mean, you want to protect your assets, especially as these things go up. Um, they become a massive honeypot. Uh, and you just want to make sure that you're protecting yourself. Obviously, part of this is uh you know, making sure that you're allocated uh to the correct assets, but also your venue of custody is extremely important uh when you're thinking about allocations and risk as well. So, just stay safe out

there, guys. You know, we're going to continue to tell you guys what uh we think and I'll tell you. Um I've got a treasure, I've got a ledger, uh but I also have a mix of centralized exchanges, one being my hub and then a couple more out from there. And then obviously you know kind of spread out cash and equities and assets and all these sorts of things. Uh so just protect yourself uh but uh really at all times you want to make sure that you are uh yeah properly allocated avoiding as much risk uh on the custody side as possible. New type I think you got it right. Hot wallets and institutional custody if you have a hardware wallet can provide an additional layer. Dylan Jenkins, hey man, real question for you.

How much would you charge me to run crypto? I have no clue on what I'm doing. Can you contact me? So, that's not really the business that we're in, Dylan Jenkins. All of the education that we do here is free. So, we don't charge you a dime. All you have to do is tune in every day around this time. We're going to go live on YouTube, Twitter, and all of the other platforms so that you can take place and understand uh what we're seeing and what we're doing with our own portfolio. You can follow along at will as your little heart desires. >> Sensational.

>> Totally free of charge. Guys, let's continue. Uh we have plenty to go over. And here, Stanley Drunken Miller. Remember, this is both the boss of the US Treasury and the Federal Reserve. Uh in one man, Stanley Drunken Miller. Little piece of wisdom from him. You don't get rich by diversifying into 50 mediocre assets. you get rich by finding two or three asymmetric home runs. I think this is completely correct. I think you can essentially pick two assets that are going to outperform the market baseline. There's really not a large reason or important significant reason to be super diversified at this point. I mean, we kind of know the

direction that the that the market is heading. Um, you know, concentrating wealth into a couple of assets is going to create more volatility. uh when the market is moving in a upwards direction, volatility is not a bad thing, right? Uh but when it is a little bit choppy, a little bit down, that's when volatility is wrong. You want to try to avoid that. But we obviously know the market conditions and the monetary regime that we're in right now. So what is the portfolio construction thesis? You've heard it from us multiple times. Here it is in a nutshell. It's two groups. On one hand, it is hard money, scarce assets that they cannot print. We know that the monetary regime right now,

Catrini just put out a article that talks about the Treasury Federal Reserve Accord 2.0. This was an actual piece of regulation and legislation a few years ago. Now the narrative is that this is 2.0. The Treasury and the Fed are on the same page and they are creating an accommodative monetary regime. What that means is basically there's no guardrails, there's no blockers to investing in risk, right? Investing in growth, investing in risk. The way they do this is they run the economy hot. They put inflation at five plus percent. They steepen the bond curve. They bring short-term rates down. They put long-term rates up. And they run the economy hot. That benefits every single kind of asset, equities, hard money. But hard money, we believe, is going to

outperform as a result of this high inflation. it will appreciate as people look for an inflation hedge. Gold, Bitcoin, Zcash, and a couple other choice assets as well. And if you look at the Bitcoin gold ratio, Bitcoin is beginning to outperform. And so this makes up one bucket of our barbell portfolio construction thesis. That is the hard money scarce asset thesis. The other side of this, you've heard us talk about it numerous times very frequently. We coined the term the revenue meta. Andy did this. It was a year and a half ago. It was extremely early, but the the market has not looked back. The industry has not looked back. And we've continued to only deepen into this direction. And it is onchain businesses generating

revenue and acrewing that value back to their tokens. This is primarily benefiting yes from you know the monetary regime creating accommodative liquidity policies and bitcoin and gold going up. But remember these tokens, these onchain businesses, some of them have inflation schedules. They're not necessarily scarce assets. They can be printed at will. What these assets benefit from is the legitimization of the industry. It is the industry leaders that are shaking hands with President Trump and sitting right there with the financial regulators in the CFTC in the innovation advisory committee and directly benefiting from the legitimization of crypto and the integration of digital assets with the

traditional financial world. It is happening right before our eyes. We've asked for this. We've looked forward to this and it is finally happening. The time is now. And that is why you're seeing the second group, the other side of the barbell is onchain assets producing revenue with product market fit and acrewing value to their tokens. This is what we're watching. This is making up the other side of our portfolio thesis. And I mean I can give a shout out. Obviously, you heard about, you know, some of the names that make up this category. Uh Athena turned on their fee switch today. Frack is also part of that stable coin segment. But of course, Pump Fund is one of the leaders when it comes to a price to earnings market cap to earnings or buybacks ratio. Pump Fund

is one of the uh lowest multiples with the most capacity for growth. So they are firmly in this revenue meta category of this portfolio. Uh also hyperlquid and lighter on the perpetual side. So you've got multiple angles. You got the consumer applications that have product market fit. You have the stable coin companies that have product market fit. and you have the perpetuals that have product market fit. You can also, you know, look at a couple other areas that have found some product market fit and are starting to generate revenue. Chain link and defy I think is a very very clear way to express this thesis. You can also look at a and morpho as another mechanism of DeFi that has found product market fit is generating revenue and is

acrewing value to their token. Obviously, these all sort of fluctuate in how much revenue they're generating and how much of that revenue is flowing into their token via buybacks or some other value acrruel mechanism, but ultimately there's only a few sectors, right, of the onchain businesses that exist that have found product market fit and PMF is a prerequisite for revenue. And so think categorically within onchain businesses. We're looking at stable coin companies. We're looking at perpetuals companies. We're looking at vaults slashdei, right? And there's a couple infrastructure uh pieces that make that make up that category. Um and and that's kind of it. I mean, you could put Sky into that. There's a couple AI

companies. You could put near into that category as well. But ultimately within onchain businesses, there's only a few categories that make sense because they have product market fit. And so this is a portfolio. It is hard money scarce assets on one side benefiting from the liquidity regime in place. And on the other side, it is onchain businesses benefiting from the legitimization of the industry actually driving revenue as a result of finding product market fit with a consumer base and acrewing that value to their tokens. Guys, tell me who you think is going to perform the best in the comments. I want to hear from you because I've had my AI agents run the most exhaustive analysis on which companies are the best fit in this

revenue category of the onchain businesses. But I want to hear from you because I'm sure that we might be missing some. Uh we'll probably put out some lists very soon. Obviously you guys know Aerodrome and Sky and Hyperlquid and Lighter and Chainlink and all these guys but ultimately we want to hear from you guys about who we might have missed so that we can include them in this portfolio thesis. Let's continue. You guys know the portfolio thesis well at this point. Obviously here is a deeper analysis on one of the leaders of the revenue category. Pump fund buybacks today are trending towards the highest daily number since April estimating $1.2 million. The average daily buyback of the last seven days is 117% higher than

the average of the last 90 days. When we were doing our analysis yesterday on the show, we saw that the market cap to earnings/bybacks ratio of pump fund is between 6 and 7x which is an extremely small multiple uh for a company that is growing at this pace. Actually, Austin in his tweet here does explain that the PE ratio that he comes up with is 5.3x and he agrees with our AI agents that say buybacks are essentially token earnings, right? That is how they're acrewing that value to the token. He puts it at 5.3. I had my AI agents came up with a number in the six to seven range. Um ultimately this is extremely low multiple for a company that is growing at this rate and uh we

are going to continue to watch how this plays out in the market but we believe that uh that that pump fund is just just pure fundamental play here. You don't really need to believe in the memecoin thesis. We actually had the head of consumer at the Salana Foundation come on yesterday and tell us why he believes that pump fund earnings are not cyclical. Right? There was this theory that uh meme coins really only do well in the bull market. Uh we're going to get kind of like uh the downgrade of the casino vibes, right? Pump Funds earnings. If memecoin trading volume was down, there wasn't really a lot of revenue potential or durable revenue

that we could project for Pump Fund into the future. I mean, especially now as we get into a bull market, I anticipate that the revenue profile for Pump Fund is as strong as ever. I am bagged up and if you guys have any other questions, please feel free to hit me in the chats because we are uh believers in the onchain business revenue meta. W's in the chat. >> Certainly W's in the chat. Uh guys, I also want to tell you about our partner who is doing uh doing wonderful things to support the onchain economy. Let me tell you about 1 in. These guys are crushing when it comes to the shared liquidity [cheering] protocol. Uh they

have uh their new protocol Aqua which is supporting uh liquidity providers by allowing people to not ever withdraw money from their accounts. they can actually deposit their liquidity directly from their wallets. So, we believe this is a new primitive. It's very, very cool to see. It's applicable across several chains as well as several asset classes. So, we're going to continue to watch 1 in uh from that perspective and we think that they're doing a great job as an infrastructure company helping to bring DeFi to the masses. Let's continue. Let's continue because we've got our first guest joining us in just a moment. Uh Mike Sliggaz is going to join us. that is a roll-up portfolio company and uh yeah, we're going to uh we're going to keep

this thing rocking and rolling. Nobody's talking about the fakest the fakest uh of world assets. Uh fake protocol and Ethereum. What is fake world assets? Uh you guys have probably seen that I've been talking about this. Um I said that I wanted a million FWA uh because I think this thing could go to a dollar. That's not a price prediction. And I'm just speculating. Uh but uh obviously do your own research. Um why do I like fake world assets? Well, it's an NFT launchpad.

Um and this is totally contrarian. I mean, at this point, it's like NFTs are dead, but we're seeing kind of this this like reboot of NFTTS, which is kind of funny to watch. And at the same time, I've actually got a couple of friends that are on the peripheral of crypto. They have a couple of holdings, but they don't really dive deep into this industry and they love the collectibles. Like I have a friend that's sports trading cards, Pokemon cards, absolutely printing with his business and absolutely crushing it. And it feels like this is a primitive on fake world assets that is born out of the collectible industry.

It's born out of the collectible industry. And um that's why I think if we can take some of these primitives and it's basically like this gota machine but it also applies to the revenue meta right so fake world assets if you guys are unfamiliar they launched this NFT gotcha protocol where you can kind of play this machine it's either going to give you an NFT or and then you can either keep the NFT or you can sell it back to the protocol. people who are providing their NFTs are just raking in fees and then there's a protocol fee that fake world assets collects as well.

Uh and those protocol fees are actually generating buybacks for the FWA token. And so that's what we're seeing. Uh and that's why I'm bullish because if this thing gets traction, remember the value acrruel thesis or that mechanism is just one piece of the pie. in order for you to acrue that value back to the token. You can, you know, go out and say that you're going to do 100% buybacks, but if you're doing 100% buybacks with zero, it's not going to help you. You need to find revenue and you need in order to get revenue, you need product market fit. There needs to be a customer segment out there, market segment that wants your product. It's in high demand and they're willing to pay for it. And then what you do with that money, whether it's go to buybacks or it

goes to dividends or whatever it is, that is a whole another story. But first and foremost um it needs product market fit and I think FWA has actually solved the tokconomics question first before going out and getting FW uh before getting product market fit and the the thesis here now it's not like is there regulatory clearance you know for uh protocols to go out and you know kind of shift around their equity structure so that they can acrew value to the token.

there's a lot of like regulatory debt that these guys need to go clear out for for fake world assets. It's a much more it's a much cleaner thesis. All you got to do is just go out get product market fit. Obviously, that's much easier than than said than done. But if you do believe that there is, you know, a use case here, uh, and the product is in demand, well, then, you know, you can essentially just bet on this product doing well in the market. You don't really have to speculate as far far as whether this tokconomics design makes sense. We already know it makes sense. Uh so we will see. We'll see. Uh token value capture 100% of the protocol fees now fund buybacks on FWA.

Roughly 250 ETH already deployed plus a 327 ETH retroactive buyback program. So there's a lot of fuel uh already going into this thing and it's just a matter of time uh or just a matter of whether or not they get PMF. That's that's really all that we're looking for now. Okay, let's go ahead. Uh I think we're going to bring up our first guest, uh Mike Siligase. Uh he is a uh founder of Etherfi, the non-custodial liquid staking protocol, uh transformed into Neo Bank. All right.

And uh these guys are a portfolio company of the rollup. And so we are uh we are very happy to support these guys. They're one of the few winners that we've been able to uh to put together in our thesis here. Uh but they also are part of this cohort. Uh EtherFi is part of this cohort of onchain businesses. Okay, EtherFi is part of this cohort of onchain businesses that has product market fit. Um, and they are, you know, what make up that side of the barbell thesis as it pertains to this portfolio construction. Uh, and so we're going to bring up Mike. He's been on the show multiple times. Uh, he's been a very loud opponent of EIP 8363. I think that

proposal has pretty much been dead in the water. Uh, and so, uh, we've got plenty to talk about here because, uh, this is a great example of a company, um, who has figured it out, right? They figured it out on the token side and they figured it out on the business side as well and ultimately shown how it's possible to connect these two. Uh, and so we're gonna bring up Mike in just a moment and, uh, and we're going to chat because, uh, like I said, EtherFi is one of those onchain businesses that has actually gone out, find product market fit, uh, actually gone out, generated some revenue, and figured out the value acrruel thesis as well. Now, you know, a

lot of teams are rethinking their value acrruel thesis, but it starts with PMF. You can't distribute buybacks and revenue in terms of value acrruel mechanism if you don't have revenue and you don't have revenue if you don't have PMF and willing customers to pay for your product. And so we're going to hear from Mike. I think he's ready there in the back. So let's go ahead and bring him up and talk about how onchain businesses are finally starting to find PMF and acrue value uh to their business actually just starting from fundamentals. Mike, you're up on stage now. Welcome to the show, man.

>> Hey, thanks for having me. Good good to see you again. >> Absolutely. It's uh it's always a pleasure to have you on. I think you know you were able to figure out uh some things in the industry that have taken others uh a little little bit of a while to uh to figure out. So um I mean we we do this every every couple of months, but Mike, man, maybe you could just catch us up because it feels like tides have turned on uh on multiple fronts. How have the last couple months been for you? Yeah, I mean listen, um we're always kind of heads down just building getting users like every day. If if you actually look at our growth graph in terms of active users and uh kind of revenue, uh it's like a really nice kind of steady progression uh basically every single

day, every single week. Um, so, uh, the the hype cycles where like all of a sudden, you know, X gets super excited about what we're doing, uh, uh, or, you know, we get, you know, a big push somewhere else. Um, uh, you know, it's fun to see, but, honestly, like dayto-day, not much changes. We're we're still just kind of heads down building and, uh, and focusing on acquiring customers. >> Very cool. Very cool. Um and so I mean obviously you know Etherfi has uh really taken this you know Neo bank concept and ran with it. you guys have the Ether card which I think is one of the most used cards in crypto and it's just treating this thing like a fundamental business going out acquiring customers

um and continuing to grow and so I remember the last time we spoke you know it was a really really strong focus on you know the cryptonative community who already is familiar with this technology familiar with the asset class and then broadening out from there u because there's also you know a high LTV uh for this customer segment have you kind reached market saturation in the cryptonative segment, now you're looking elsewhere. Or maybe you can just talk through the customer segments where you found product market fit and where you plan on going from here.

>> Yeah, that's that's a great question. Um, I would say so broadly speaking, the audience, the customer base that we're going after are stable coin users. Uh so we we've definitely expanded past just like the hardcore DeFi users that uh are you know power users and are comfortable with uh you know wiring up their own financial derivatives uh through various DeFi protocols. Um and the majority of users that we get today are just people that use stable coins uh dayto-day. Uh you know we get some users that are kind of I guess let's say normies and they're able to top up their account with fiat rails but uh that's still the exception.

the majority are uh stable coin users, which is a pretty large um uh target audience. You know, there's hundreds of millions of people, probably half a billion people that use stable coins pretty regularly, especially in LATAM, in Southeast Asia, uh but all around the world. And I think honestly, Ether is the best product for that. If someone is looking to have a um bank replacement uh an alternative that gives them self-custody, that gives them great rewards, that gives them kind of pretty extreme flexibility um uh to save, invest, deploy, spend their crypto, um their stable coins. Uh honestly, Ether is the best product on the market for that. And that's that's ultimately the reason that we've been

seeing growth. basically all of our adoption is coming from uh uh word of mouth referrals. Um uh and so that's you know that's very positive kind of reinforcement that what we're doing uh uh is a good fit for people. >> Absolutely. Um I and also I mean I I want to chat about the uh the value acrruel thesis the revenue meta uh because I feel like you guys were pretty ahead of the curve on this. uh a lot of teams are now uh you know figuring out that this is the right way to do it. You know I said if you're not acrewing value with tokens it's probably too early to have a token. How did you guys see this?

Why did you decide to do this early on? And what is your thesis been as you've grown the business? How do you oscillate between you know acrewing value to token holders whether that be through buybacks or another mechanism or reinvesting revenue in growth? you you know you've adapted and evolved the model through time and through you know the as the business evolves. What have you found is the best balance to to to making sure that the business and the value acrruel mechanism to stakeholders is aligned.

Uh yeah, I mean the challenge that we've had in in DeFi and crypto in general is that uh aside from sort of speculative premium, most crypto assets are just not uh investable. Uh in other words, if you're more fundamentals or long-term oriented investor, um you're sort of orphaned. Like it's very hard to to make the case for, you know, one asset or or another. Uh I mean you could look at something like Bitcoin or ETH um or you know much more speculative assets like Zcash and really like your trading narratives. Uh I mean dayto-day uh no one's using Bitcoin as any kind of uh you know currency. Um no one's well no sensible person I think thinks it's

actually an inflation hedge because I mean objectively it hasn't been. Um I mean it's just a speculative asset that has its uh uh its you know its moments. Uh in other words like when the interest suddenly surges then it you know it goes up. Uh when the interest interests it it goes down. It's you know these are speculative assets. And so, um, one of the most, uh, fundamental ways to, uh, uh, make crypto assets more investable, um, is to, uh, to integrate them so that their, uh, fate, I guess, is tied to the success of the protocol to to make them, uh, intertwined with the the success of

the the networks. And I think the best way to do that one way, you know, or another is to um uh to integrate it into the revenue stream. So if a protocol, if a network has a a revenue stream that it's uh kind of intermediating, then redirecting that back to the token is is the best way to create some sort of fundamental value uh thesis around it. Um I mean that just seems honestly pretty obvious. Um uh and as the money has kind of exited crypto and entered more into other speculative domains like AI and just gambling in prediction markets and otherwise um you know the fundamentals start to become more important and so

that's I think what's what's been driving the the revenue and buybacks meta uh lately. >> Yeah. Yeah. It certainly it certainly seems that way and you know this has been kind of like one half of the thesis from our perspective. It's been, you know, hard money scarce assets on one side with like you're saying that is, you know, kind of driven by narratives as as those oscillate. But then on the other side, it is you know these onchain businesses that are benefiting from the legitimization of the industry. Like we had industry leaders up there, you know, shaking the hand of the president and on CFTC, you know, innovation committees.

And it feels like the time is now to really integrate into some of the existing financial plumbing and rails that we've always kind of had around us, but you know now feels like the Overton window is open enough for us to start to penetrate that market and really start to gain a foothold. And so have have you know in your experience have you found that you know now you know with the regulatory regime as it is with the you know acceptance that you know this thing is here to stay and the the growth of stable coins all of these things have you found that it's easier to penetrate you know markets that previously were sort of were sort of off limits now you're able to get into those and and you know gain some market share.

>> Yeah 100%. I mean it's certainly become easier to to operate um and seeing the uh progress I guess on the regulatory side in the US really um has been has derisked a lot of things that you know businesses that operate in crypto are doing. But I think the important thing is to move away from just the pure kind of casino business model. the more we can move away from that within the the crypto space, the more legitimate the business uh becomes uh or the the industry becomes. Um and I think we're seeing a lot of that. We're seeing that with tokenization of uh uh real world assets. uh we're seeing you know whether it's stocks or bonds or uh various you

know uh instruments um uh gold you know commodities um uh I think as that starts to dwarf the casino uh business model um I think that naturally will uh legitimize and bring crypto into the uh the mainstream. You know, for us, we we are one of the few businesses in in crypto that does not sort of thrive and try to feed off of the uh you know, the the speculative premium or gambling uh nature of of crypto, right? If you look at the vast majority of DeFi protocols and whether it's centralized exchanges or um other crypto entities, I mean, it's just like one version of casino

after another, right? like it's just casinos with the with extra steps. And you're now starting to see the emergence like Etherine and a handful of others where that's not the case. I mean, crypto prices can spike or drop or whatever. Our metrics just keep keep on uh going uh regardless because what we do is we provide actual utility for people day-to-day for people to actually be able to use uh uh get the benefits of self-custody and be able to use crypto, spend it, and uh use it in their in their real lives. And that market is 10 times a 100 times a thousand times larger than any of the sort of casino uh uh you know variations that that are out there right just neo bankanking in

itself is over a $300 billion revenue market just just neo banks not we're not talking just banking or uh or or you know other uh aspects of the financial sector but just neo bankanks like new bank like chime like revolute uh is $300 billion in revenue. So that alone is probably about 150 times larger than all of uh crypto right now. So um to me that's the that's the prize that we uh uh keep our eye on um is trying to capture a share of that market rather than uh you know focusing on this overcrowded casino market. Yeah, I I mean I think that's that's a super

pertinent point because, you know, for for how, you know, prevalent uh crypto is in kind of like the zeitgeist and in the perception in people's minds. It feels like maybe we're just starting, but it's still extremely early for for you know people at large to sort of wrap their head around like tokenization, stable coins, blockchains is fundamentally different than memecoins, trenchers, casino, you know, vibes. Like these two are so fundamentally different yet, you know, they all kind of run on similar technology, but the technology is so generalizable that it can support both of these use cases. and and you know, people cling on to the most

entertaining outcome and you know, the funniest thing to think about and so they kind of tend to obsess around, you know, whether it be cryptos for crime or meme coins or whatnot. But I think and I'm I'm curious because you know you're you're kind of facing this every day as well like the public perception does seem like it's starting to evolve and it's starting to mature a little bit maybe with the rise of you know some some more of these institutional products you know in the investment side but also institutional consumer products such as Ether's card like you know they're they're starting to accept and realize that these two things are not the same. There is a little bit more nuance here. Have you seen this as well where you know people that have

previously kind of wrapped up crypto quote unquote into like one big umbrella bubble are now starting to kind of untangle it and realize that there are some different pieces here or you think you know the public perception is the same as it it's always been and it's still you know a massive challenge to try to overcome it. >> Yeah, I think it's like honestly I think the public perception is very negative. Uh for good reason. I mean, if you just think about most of the things that uh uh you know, quote unquote crypto has enabled, um um you know, a lot of it has been, you know, extreme like hyper gambling is kind of the term that I use for it. Um and it's, you know, largely has been pretty negative. So, uh the public perception is negative. And I

think when that will change is when crypto fades into the background. when you don't think of it as crypto anymore, when you just look at whether it's a product like EtherFi or others, um when you just look at it as, hey, I use this product and it's really great because it lets me save money, it gives me more flexibility, it uh uh gives me more control of my finances, um um most of our users, five years down the road, maybe even three years down the road, I think the majority of our users won't even think about the fact that Ether is, you know, built on crypto rails. it just won't be relevant. In the same way that when you use, you know, Uber or Door Dash or whatever, you're not thinking of that as an internet application, right?

You're just thinking of it as I'm just getting a ride. I'm just ordering some food. Um the the the thing that matters is utility. Um uh so so that's my my my view is that like crypto perceptions will start to change when crypto really fades into the background. And since you mentioned because we we hear this analogy a lot like you know this is ultimately what the technological adoption cycle was for the internet you know eventually became ubiquitous. Every company has a website like these things all sort of fade into the background.

But it it it feels like people just viscerally dislike or hate crypto for some reason. Whether they think it's employing scams >> lost money like everybody's lost money. >> Yeah. Yeah. Exactly. and they they have this you know association to money which is fundamental in this industry and so do you do you think that we can get to a place similar to the internet did and maybe a better way to ask this did people as viscerally you know dislike or hate the internet as much as they do >> it wasn't it wasn't just casinos right like or you know other stuff um uh there was uh uh yeah like it had a much more broad spectrum of at least theoretical adoption in the early

And crypto has been around for you know a while. It's been what 16 years 17 years now. Um >> like that's not a short amount of time. I think if you look at the let's say beginning of the internet uh to 16 years after that I don't you know I don't know that the adoption of of cryptos uh has been faster. I think it's been slower in fact. Um and a lot of that obviously has to do with the regulatory uh environment. I mean it's been illegal to build legitimate crypto businesses uh up until you know a couple of years ago, right? Like uh whether it was de facto illegal or just uh uh or or you know actual regulations have been in place that made it uh uh illegal. So all you

could do was you know create these offshore entities that were super sketchy and obviously one blow up after another which kind of exacerbated the the situation. So only now is that actually starting to change. uh to some extent led by incumbents seeing the uh uh the potential of this thing in terms of being able to open up access or generate more uh uh more revenue. So uh so I think it's just a different thing. Yeah, like I said you you look at the average the you know the typical let's say pump fund uh user uh you know 95% of them have lost money. So like how is it really a surprise that uh uh you know the perception is negative uh like that it's not. Um so yeah so again I think it

just needs to fade into the background until people stop talking about crypto. >> Yeah. Well I I I think that's right and uh ultimately people you know whether they they love it or hate it if they don't know they're using it doesn't really matter. So I think that's that that's you know directionally that's that's where we're headed. Um, and you know, stable coins play a very important role in this. There might even be stable coins in people's bank accounts that are, you know, backing the number that they see on the screen when they look into their online banking. You know, how I what I'm curious about here is like a lot of people have have tried in stable coin businesses, they've tried in neo banks, they've tried in the card world as it pertains to, you know, what what you guys are building. And you

know, a big thesis here is just like, you know, onchain businesses that continue to grow uh in customers and product market fit are the ones to bet on and the the the you know fastest horses are the ones that are going to continue to lead. My question is how have you been able to find success in this market when there has been so many new entrance? Why do you think you know you guys have found success whereas others have failed? Yeah, it's a good look um my background and uh the way I kind the lens I kind of bring to to the space is uh coming from you know B2B SAS right uh which is is also very hard uh market very uh competitive very challenging uh

uh and you know puts um uh reality in the in the front seat in the sense that like you got to have positive unit economics right by the time you know I started my previous company um the B2B SAS world was fairly well understood right like you investors knew how to evaluate these types of businesses and and so there were these kinds of these hard constraints around all right do you have good unit economics do you know what you're doing in terms of growth and customer acquisition um and so one of the reasons I would say that we've been successful is we brought that discipline to building Etherfi like we're looking at this as um we're building a product for customers

what do we generate from a revenue standpoint from those customers? Uh um like how much does it cost us to acquire them? What's our retention rate? Like we're we're just bringing a real discipline uh to uh you know to this space. And that just is very unfortunately very rare uh in in the crypto universe because it's you know so much of the the industry has been based off of just feeding off of the speculative premium that building real businesses has always been much harder and as a result fewer people uh ended up doing it. And so the reason we've been successful is again to reiterate building a real company with real product market fit and utility. Um and just being you know quicker to get to certain things like we

were the first uh to uh you know develop these protocol owned vaults uh which at the time were novel. Now basically everybody is is doing it. We were the first to develop this kind of crypto neo bankank thesis and built this integrated package that now is you know been successfully kind of replicated. So just continuing to innovate and then just this you know the last couple weeks where we launched what we called etherfy summer with the integrated uh you know borrow lend market and integrated RWA's um uh support and you know a whole bunch of other stuff uh that I mean that really does bring things forward and I'm sure in in a couple months time we're going to see others uh uh you know

taking some inspiration uh from that uh and that's fine. So just you know being first and having that discipline of building a real business is uh what's allowed us to be successful. >> Yeah. Well there there are some uh timeless principles and ethos and uh perspectives that that you know you guys bring to the table and I think you're right. I think other people are going to follow in those footsteps and then ultimately uh you know this technology that we all feel is inevitable is ultimately going to come uh and be ubiquitous across the entire industry for you know for everyone for those who love it and hate it. >> Yeah. And it's a huge space. Again, look, you know, as I've said already, a $300 billion market growing at like a 30% a year, you know, gagger. So, uh, like that's a lot of room to grow. Uh,

right. I mean, there could be, and there are, uh, you know, hundred different neo banks out there that are viable and generate great revenues and are fantastic businesses. uh there could be at least as many or more in fact more in crypto because the uh barrier to entry is is lower. So um so it's a great space there are going to be versions of this thing that are uh focused on particular communities that are focused on particular uh geographies that just have you know whatever twist specific twist to them. So it's a huge space it's not like you know uh it's not a winner take all uh market. So, I I think there's lots of opportunity for many people to uh learn from each other and build great

businesses as they uh they grow. >> Well said. Well, Mike, thanks so much for being a a steward of the industry. We appreciate you coming on, spending some time with us here and uh would love to see you again soon and uh keep keep crushing it on the business side. >> Yeah, I appreciate it. Thanks for having me. >> Absolutely. We'll see you soon. Thanks, Mike. [cheering] >> All right, guys. That was Mike and we're going to keep the show rolling. Um, as you guys know, uh, Etherfi is a portfolio company of the rollup hour venture company called Good Idea Ventures. Uh, they're one of the fastest horses in the portfolio and so we are proud investors and angels in Ether.

Very, very cool to see their success and their growth so far. Uh, guys, quick commercial break. Very quick. We will be right back. We're going to hit a quick standby. uh refresh some things on our end and uh we'll be right back. So, don't go anywhere. [music] [music] [music] >> [music] >> We get

deep. We get deep. We know we get Get deep know [music] we get deep know we get deep we get we get deep we get deep we get we get deep [music] know we >> [music] >> We get deep. [music]

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We get we get deep. We get >> yo yo yo. What's going on, guys? This is Itan with the rollup. We're going to be patrolling the streets of New York City getting answers to the questions that you guys have most. What are people trading? What are people investing in? How much do people actually budget? We're going to have people from all over, all different investment classes, people who are dead broke, people who are dead whales, people who are just loaded. There won't be a mayor or politician to stop us on the streets.

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>> All right, guys. We are back. We are live. Hope you guys didn't go anywhere. We are here and uh it is as bullish as ever. Um so we're going to bring up our next guest. Pretty cool. This guy was just uh up there shaking the hands with the president of the United States. Uh Mike Belshi was in Washington DC for the White House meeting. Uh and uh it was very very cool because uh he is up there as a leader of our industry and um shaking hands with the president of the United States legitimizing the industry in real time uh and ultimately serving as a steward for uh the industry as a whole. And so this being said, I mean this is, you know, what we're seeing on

multiple fronts. We saw the CFTC innovation advisory committee and then obviously, you know, we saw this uh press conference with the president of the United States speaking with the industry leaders uh such as Mike uh and Bitco representing the industry well. Um and you know, we continue to see how institutional adoption is transpiring. We're seeing the tokenization super cycle play out. you guys know, I mean, we've had, you know, some of the largest and most important guests as it pertains to tokenization. Um, but obviously, whether that be an enterprise or just, you know, any one individual, uh, it's important that custody is solved as we tokenize more of these assets. And so, I

think that's going to frame our conversation today. It's going to be security, but it's also going to be institutional liquidity. And, uh, Mike is a true OG. not sure if he remembers, but he was actually on the show uh early early on in the show's lifetime back in 2021 when the rollup was just getting started. So, let's go ahead and bring up Mike uh and uh we'll we'll get right into it. There he is. Mike, welcome to the show, man. >> Hey, good to be here again. How are you? >> Absolutely. I'm doing doing great. How are you? >> Can't complain. It is a fun time always in our industry. >> Absolutely. You got got that right. I mean, I know it's busy times and uh last time you were on the show was a few years ago. Uh we were just getting started. I mean, the industry was still

new. BCO had been in business for a few years, but you guys have grown >> tremendously over the last few years. >> 2013. [laughter] >> Absolutely. I mean, you guys have been in been in business a long time. Uh we had you on in I think it was 2021. And so I mean h I I mean it would be too broad of a question to ask you how things have changed since 2021, but how how have things been going here in the last few months? What have you been uh what have you been most excited about, focused on? >> Well, look, I I everybody sees it obviously like institutional players are here in a different way than they were.

Um but we don't articulate it very specifically very often. I mean, just 18 months ago, there were zero talks about, you know, how you're going to tokenize equities, and now there's like 12 different models from different providers. Um, literally every major financial service provider before, you know, yes, Black Rockck was doing their ETF, Fidelity deserves more credit. They were in in in 2016, but that was kind of the limit, right? And then now we've got Morgan Stanley, we've got City, we've got Charles Schwab, we've got the DTCC. So we have changed tremendously in the last 18 months and uh you know look if you want to have innovation uh it takes time to get it rolling but it starts with having a climate that at least

allows for it and we have that. >> Yeah. Um and I mean you were up there with the best in the business uh along with the president of the United States. I'm curious why from your perspective this vertical and this industry has become such a strategic priority at the nation level. Um, you know, it's kind of been this uh this regime's uh just table stakes. They're claiming this. We have to make America the crypto capital of the world. And given that you're up there uh and and stewarding the industry forward, I'm curious from your perspective as you've engaged with some of these politicians and some of these leaders of the industry, h what has been the reaction to the industry and how have you been able to help pioneer and

help steward the industry towards a more legitimate future and more legitimate perception in the nation's eyes? Well, it's certainly an honor to have been uh there at the White House uh with the president as he was making this latest set of announcements. uh spent some time with him in the oval office uh which is also an honor and privilege to represent you know Bitco and our industry. Um, if you go back to Bitcoin and discussions that were happening literally 2014, 2015, a long time ago, uh, the idea that we can have a better settlement currency for the globe uh, has been on the radar forever. And will there be discussions, debates, conflicts, fights about, you

know, fiat currencies versus Bitcoin versus, you know, other um of course um money and power kind of go hand in hand. We all know this. Um and uh what's happened for this administration is I think a couple of things. Uh a America is legitimately behind compared to uh other foreign governments that have passed laws about how are they going to deal with digital assets. just a technology at the end of the day, right? So, it's not uh it's not really that earthshattering what we're doing, but of course, we have to have the legislative path forward. You know, Europe is is fully ready to go at this point. Uh America is still trying to figure it out. So, this president wants to make sure America is competitive in the

global landscape. I think the second thing is uh the banks in the US have a little bit um you can say too much power. Maybe it's too much fear of their regulator. I'm not sure. But you know, rightly or wrongly, he had his bank accounts taken away. Um, and you know, is that how we want to uh, you know, enforce whatever the preference dour is? If you happen to be unfavorable in terms of your viewpoints, you know, yes, you've got freedom of speech, but can they just take away your bank accounts because they don't like what you have to say? Uh look, we have the world's reserve currency in the US and in part we have

that because the world feels they can trust it as a steward of value. Um but when you start doing things where you say to somebody, hey, I'm going to take your money away if I don't like you. Then it turns out they start looking for alternative reser reserve currencies. And we're seeing this at the global scale right now. I think some of our leaders have forgotten that the US dollar is strong because we make it something that everybody in the world can trust and use. Even if we politically don't like those people, but when you change that is a problem. This president saw that not just at the global level for America, but he saw that at the personal level as well. And you know, you have the right to a fair trial here. You should not have your money taken away without actually having

gone through due process. So I think I think that's why he's such a big fan. >> Yeah. Well, I I think you know this is one of the principles of the industry that you know we were excited about early on when we were looking at this. Self- custody was such an important concept and it became a tenant of the industry and and in recent times we've sort of it it's almost fallen out of favor from a security standpoint. For so long it was the case that self-custody you know maybe with a hardware wallet was sort of like the epitome of security in the industry. But as of recently, I'm sure you know, you've seen just today there was a a Ledger Ethereum vulnerability that was discovered with AI. Obviously, we saw the cold card exploit that was a, you know, really

unfortunate situation for a lot of Bitcoin holders and it it's increasingly seeming like self- custody is difficult to manage and people are just defaulting to whether it be centralized exchanges or custody providers. How what has your bit reaction been especially in the age of AI and we'll get into maybe the Bitcoin anthropic thing. What what has your reaction been to some of these recent discoveries with regards to hardware wallets? How safe or unsafe are they these days? And and what advice do you have for someone that's looking to bulletproof their custody?

>> Yeah. Uh well, just to go back to like my roots in this and the origins of BGO, we're the only provider in the world that has a full complement of both self-custody and custody solutions. We think self- custody is critical. Um if we lose self self-custody as a possibility, we may as well just kind of go back to the existing system with a few people and gatekeepers, etc. So I think it's really important this is how people retain power over the long term in case industry goes bananas um or regulation goes bananas right it's how you it's how you have your own control uh that said as your assets increasingly move digital you have a fundamental

question you have to answer which is what percent of your net worth are you comfortable to secure on your own and you know why do we have banks at all like banks you know they got a lot of things that they do. Um, but why do you put your money in in a bank instead of having a big pile of cash in your closet? And you know, part of it is security. Um, you know, we feel better. We sleep better at night. We can pass it on to our kids. We don't have to put bars on our windows. We don't have to worry about a fire burning up our cash. All right. Whenever you take on security of large amounts of asset, there's a lot of considerations. And I think humans, and I I don't mean to criticize anyone, I will put myself into this camp as

well. We're generally not good at security. Um, we lose things, we lose our passwords, we forget our passwords, all this type of stuff. So, it's hard. That said, it's really important. I think where you end up in the end is you're using a combination of self- custody and custody. The self- custody capability is like having cash in your wallet. You you might have a little bit more that you're comfortable with securing kind of on your own, but when you think to the future where everything's going to be digital, of course, you're going to be using a bank of some form. So, I think it's been inevitable that we're going to have to figure out how to address this. And everybody's got a different answer.

There's some people that are like, "Nope, I'm willing to take 99% of my own money. I want to be completely sovereign. Forget everybody else. I'm going to do it on my own." That's a totally legitimate decision, and anyone should be able to make that. On the other hand, others are going to be like, I don't really know this stuff yet. I'm not comfortable with it. I'm gonna do 100% in custody. And then others are going to provide decide on some mix. So, uh, what what's happened with the latest cold card hack is kind of the realization that security comes down to a couple of things. You we've been talking about this a lot at Bitcoin years. You know, eliminating single points of failure is fundamentally the the heart of security. Um, anywhere where you have a single key, that single key can be compromised. Anytime you have

a single person, that single person can be compromised. A single location, that single location can be compromised. Uh, in the case of the cold card hack, anytime you have a single random number generator, you're dependent upon that single random number generator, not making a mistake. When using a single wallet, you're also dependent upon how does it construct transactions? Does it do it properly? Does it ever, you know, take it? Does it put it into memory in a way that somebody else can tamper with it before it gets signed. Um, these are all real security considerations. The way you typically address them is eliminate the single points of failure, you know. So, multi-yc that's, you know, we pioneered it. That's the beginning, the genesis of BCO. We've stayed true to that. I think we're the only company that actually does stay true to that.

100% of BCO while it's self-custody custody. We always use this two out of three model. It protects actually against two things. Number one is theft. That's what everybody worries about and they should. The second one is loss. Um, sadly, you know, as humans, we lose our passwords. We forget our passwords. We can't pass them on to our kids because we didn't uh write it down properly in a way that our kids could could understand it. Uh so the two out of three model protects both against theft. There's no single point of failure but it also always has a backup key which by itself is not uh a single point of failure and that's all built into the model. We're the only company that does that. Uh more people should be doing it. Uh if there's any one good thing that comes out of this I hope that it's more awareness of

that's what goes into security. >> Yeah. And you know this is evolving uh security principles like you said there's this triedand- trueue model. you guys use it. It's multi-IG. You pioneered it. Um you're staying true to it because uh of the security tenants that it includes. >> Well, I'll add one more note. Um and I think this is a good note for retail. Um you know, at we like to say this thing, retail deserves what institutions demand. Um when you are managing large amounts of money, maybe you're a fiduciary, you're running a fund, you know, all kinds of things. You always demand no single point of failure and you demand controls and audits and sock audits and all of these things that go with proving that you're handling that asset properly. Retail actually deserves

all the same things. Sometimes we forget that. We take shortcuts. We say it's okay. We don't we don't always apply the same principles. Um at BCO we're trying to make sure everybody has access to this. >> Yeah. Absolutely. and and ultimately that you know self custody here is a fundamental right and broadening access for that is going to uh help a lot of people in this world um you know you mentioned single point of failure um this AI boogeyman it seems like it's just popping up all around us uh you know I think you reacted to this you know pretty passionately uh because there were you know more and more uh theories about what this thing can do and people like to hyperbolize quite a bit um and so you put up 100 Bitcoin

bounty, this honeypot that, you know, you basically said to these uh these frontier model companies like, "All right, if you got, you know, the ability here, there's, you know, a a big, you know, chunk of cash just sitting there in Bitcoin, go and get it." Give us an update. Like, I take it no one has really found this and been able to get it. Is it still sitting there? Is it just in a is it in a Bitco Bitco, you know, fail safes and whatnot? And uh and, you know, what spurred you to do this? and and what has the reaction been since?

>> Well, that particular message seems to have gone viral kind of by itself. Uh, a little bit unexpected, but um, yes, it's in a it's in a Bitco account. So, not not doing anything special there. Um, as far as I know, it hasn't been touched. I'm pretty sure my uh phone would be beeping like crazy if uh if it had been touched. And uh the reason I did it is because we've been hearing from the frontier uh AI models that like oh this model is so great so dangerous like we can't control it. And I think they're being hyperbolic. Uh I think that America has a real danger if

we decide to regulate AI too quickly. Uh you called it a boogeyman. I completely agree uh that right now we can't articulate exactly what it is we want to protect ourselves from with these AI models and if you if you start creating a gateway where some people have access and some people don't and you know I met with Secretary Bessant and you know BCO's lucky we have access to mythos but like why shouldn't every crypto provider have access to mythos to help put in defenses so there's is a race right now like we have knowledge about how our products are built, how they work, who the people are. The hackers and the AI

bots don't have. We need the best tools possible in order to make sure that all of the defenses that we're putting up is absolutely as strong if not uh the strongest in the world. Um and but better than than the AI attackers, I guess is what I mean to say. Um, and if you put a government that's going to be responsible for deciding who gets it, who doesn't get it, when they get it, we're just gonna be at a disadvantage. And of course, as a global market, the hackers are not going to listen to these laws. They will get access to the best models and they will be coming after everybody. So, uh, look, I don't want to scare anybody. I actually feel like, uh, the the good guys win in the end. Uh, we have got great tools in place now. We're

able to do a ton here. Obviously, I put 100 bitcoins of confidence behind it. I hope that doesn't seem like hubris. Um I really that that comes after a lot of investment, decade plus of investment into security on these things. But um yes, we need to have all American businesses have access to AI and the frontier models. I do believe that they are preserving uh their future business model at the expense of uh what's actually best for American companies. Yeah, I I think that's extremely well said and as you mentioned, you've spent time in DC speaking directly to regulators and uh politicians that are making the decisions on whether or not these things are accessible. And I'm curious, I mean, I think this is a great

idea and I'd love to see more of these companies get access to it to bulletproof their own internal technologies before uh someone goes on the offensive and uses these models for malicious purposes, which ultimately is, you know, what's going to happen. whether it be, you know, the frontier. >> I don't think these frontier models can hack it right now. I I'm not saying that AI isn't going to get better and better. It will. AI is very good and it's able to put together amazing exploits that like, you know, humans couldn't do nearly at the speed. And and we're seeing this like we're seeing software that was written in 1970 and 1980 that's been used on Unix systems for like forever. Humans haven't found the bug for 40 50 years and yet AI comes in and finds it right away. Um, so these are

really, really important tools, but no, they are not going to breach Bitcoin. They're not going to breach the banks the way these AI companies are saying they're going to. The AI companies are mostly interested in just getting regulatory capture to lock out the competitors and win the race. But that puts America at a disadvantage. >> Yeah. Absolutely. And so this is one component of some regulation that we could see going forward. broadening access to these things to harden our security principles. What from your experience in DC talking to regulators, what are some other aspects of regulation that you'd like to see go forward, whether it be with the Clarity Act or some of these other regulations that are being put forth from these conversations? Anything fruitful that

you think would be particularly beneficial for the industry? >> Yeah, look, I mean, uh, first started talking with the president, I guess it was last February, March. Um, what the crypto industry is looking for is first a legislated pathway. And this is the we had the Genius Act. That one's done. Great. Um, is it perfect? No. It bans yield on stable coins. It's crazy, right? Of course, it needs to be modified, but it's great that it's in place because it allows everybody to start working with stable coins and get get things moving. Clarity was the second half of this is market structure.

Market structure is what would have prevented FTX from perpetrating their crimes. Uh absolutely we need it. Every single politician should agree that we need it. Um unfortunately, you know, the political process doesn't always uh go as quickly as we would like it to in America. It's a strength and a weakness. So, I think what this last week was about, this is my summary, is that there's a recognition that there's a there's a chance clarity won't pass. And if clarity doesn't pass, okay, then we'll move into rulemaking. And so when you look at Mike Celig who's the chair of the CFTC, Paul Atkins the chair of the SEC, you know, uh Scott Bessent at the Secretary of Treasury, and then the

president himself. Oh, I left off Jonathan Gold at the OC. Uh all of these parties are working like a team right now to make sure we have sensible regulation, regulatory rulem that gets done now. Um and it's what allows everyone to move forward. Without that, everybody's kind of stuck. And that's what we saw uh 18 months ago. And then just to anybody that's a naysayer on this, like this isn't a cryptospecific initiative. Uh you've got Larry Frink, the CEO of BlackRock. He's been saying this for I don't know two, three years now. Every asset's going to be tokenized. It's a better product. It gives Americans better visibility. It moves the money faster, more efficiently

with less errors. Um these are major mainstream firms. you know DTCT which is the custodian for all stocks in the world in in the US like 90 98% of the traded US stocks I think it's even over 99 I don't have the right number but uh it's all held at this one custodian even they're moving to a digital model because they recognize this so [clears throat] anyway yes we absolutely should have clarity uh that would be the strongest thing for America there is a vote coming up I think it's September 15th decent chance it'll pass but uh this last week was the administration saying even if that doesn't pass, we're going to go ahead and make the rulem which allows American business to move forward.

>> Yeah, absolutely. And you know, this is ultimately legitimizing the industry and it's allowing business leaders uh and entrepreneurs such as yourself to ultimately move their businesses forward in a direction that I think, you know, we we've all been looking forward to for >> we're legitimate already. You know, Bitco we're 270 or so, right? So we're we're not like just some small little company like we we we are actually out there uh in the middle of this and you know we're a public company. Uh we are inspected with every spotlight that the SEC puts on for all traditional firms for how you know that this is a company uh that you can trust in terms of how it's operating. Uh so we are here and ready and able to stand up to whatever uh additional oversight is needed uh by by

legislation or whatnot. um you know the idea that this is a a set of you know rogue crypto you know renegade companies like that's not true like these are legitimate we yeah major firms >> yeah and and I I think what your work in DC and your uh foresight uh with Bitco I think the point is that we're we're legitimizing the industry for the next cohort of business leaders of this industry to ultimately progress right the the next level of infrastructure and build out the rest of this tokenization economy because it feels like we've only got, you know, there's there's sort of uh maybe a dozen or two companies that have been able to break into the

mainstream, go public, have kind of done things in, you know, the right way, quote unquote, like the regulated more legitimate way that businesses should be doing these things. But the Overton window up until this point has been relatively narrow or small and hasn't really let the broad swath and granted the broad swath there, you know, plenty of people who don't belong in that group, but you know, there are more legitimate companies that it feels like now are being let through because of the hard work that you've done in pioneering the industry towards legitimization. >> Certainly, there's a whole bunch of people that deserve a lot of credit. Um I'm happy for the the role that that Bitco has has played with this and um yeah I look I think also the the the giants the shoulders we all always stand

on shoulders of giants you know in Washington last week there was this innovators advisory committee meeting for the CFTC where they're soliciting input on how the CFTC should consider their rulemaking for crypto for prediction markets. they were asking a lot about AI. Um, and that was attended by 50% from the crypto market and 50% from traditional markets. So, we had uh Jeff Spreer from the head of the ICE. Uh, we had Adele from CEO of NASDAQ, we had Frank, CEO of DTCC. Um, you know, a whole bunch of parties are there all all bringing their different perspectives.

So this is this is uh very quickly becoming uh uh very mainstream and uh soon we'll be able to count on digital assets just the same as you can count on traditional rails. >> Well said. Uh ultimately these two worlds are colliding. They're becoming integrated at the highest levels of finance and uh I mean it's it's very very cool to see. I think a lot of this a lot of us have been looking forward to this for quite some time. Uh and like you said, there's several people that deserve credit, but you uh have certainly been leading the way on the custody front. And it feels like uh I mean, you know, there's just this tokenization super cycle. Once all of those token tokenized assets uh become on chain, they end up flowing into all of these rails, one of which uh is

custody such as Bitco >> Well, you guys are more than just custody at this point. [laughter] Institutional liquidity. >> Let's let's talk about that. Like, all right. Right. So when we started building this industry uh you know 2012 2013 um there were no banks there were no traditional firms that could use it like if you wanted to build a crypto exchange or any or a wallet or whatever like lawyers couldn't even tell you what path to take. We've come a long way since then. Uh look we're regulated in the US. We're an OC national bank. We're regulated with seven other custodians around the planet. So we we do a whole lot work a lot of different regulators.

Um so so things have changed but if you're going to build a uh foundation for the future of finance you have to start at the bottom and at the very bottom is that wallet technology. It's that multi-IG protects against theft and loss. You have to have a solid technology at the bottom. Next thing you need is you need a regulated access to it. That's the custodian. That's where we're most known for. Right? So people know us because we took the time to get all of those licenses in Europe, in the US, in Dubai, in Singapore, in South Korea, all of them. And it takes time to put all that together. And now as we think about tokenization of different types of assets, you've got new considerations. So first we had the crypto and the DeFi access. That's the

market we were first known for. The second one is stable coins. That's hitting the banking industry. Right now, we're thinking about it just from a payments perspective, but that's got its own rules that happen around that. Then the third one that's coming is the capital markets themselves. And of course, the US has had the largest and strongest capital markets in the world, bar none, for a very long time. That's coming on chain. That's also going to have this whole set of regulatory needs to happen. Anyway, that custody layer is really about that regulatory layer. Um, and I think Bitco is one of the few companies that has really paid a lot of attention to the detail, the subtlety of how do you know that you own your asset?

How do you know that should any middleman do something wrong, screw up, that you're still going to get your asset? And this is different in the custody market. It's different in the tokenized equity market and the details matter. You haven't had to think about it because the market structure for our traditional assets has been around literally for a hundred years. Um, so you know, the Securities Act 1933 laid the foundation and it's really amazing that that market structure defined a 100red years ago has held up so incredibly well. Now we're taking that to crypto. A lot of people want to take shortcuts. Um, we're known as a custodian because we didn't take the shortcut, but really what the business is about is we're building all those financial services on top. And that's that's where things get really exciting.

So capital markets and payments are now the next layers of this foundation. Is there additional uh I I take it regulatory is a big part of the buildout here. Tokenization is a big part of the buildout. I is the the technology layer effectively set and most of the energy and focus and resources go to regulation. Now I guess what I'm asking is are there additional bottlenecks here that are preventing capital markets and payments from coming on that live in still that you know techno uh technological developer area or are they primarily off-chain regulatory bureaucratic processes that need to get unwound. We've already done the hard

technical work. Now we need to go and modernize a lot of the infrastructure that has been in place for the last hundred years. I wish I could say anything was all settled. Um, one of the things which makes this industry so exciting is that look, everything is still evolving and still changing. On top of that, because people are recognizing this as the future, there's a whole lot of infighting going on to see who can win. You know, the banks are coming out and saying you shouldn't give yield on stable coins. That's all just trying to claim their turf. Um, so, uh, there's a lot of things that are going on, but really, you know, back to the the late 90s, you know, Mark Andre famously said, "Software eats the world." And what he meant by that was we had entered into an

era where we're making software. We're connected on the internet in a way that literally every single thing that you do can be changed with software. No longer so much just about the hardware, but it's about the software. And this has proven true. It's true with how we communicate. It's true with social media. It's true with how we build supply chains, everything. But one of the last things to change due to software is finance. And the reason it's been late to change is because it's money. And with money, we've always held a high regulatory bar. The fact is is there's people out there that want to steal your money all the time. And they're constantly looking for new ways to do it. Sometimes people think crypto is like somehow for bad guys. No, it's

just something that look bad guys always look for something early that they can try to exploit. But as you bring it under market structure and as you get, you know, good stewards of risk like Bitco we we we take out those bad guys and we can build a good and solid monetary system. So everything's changing because software is finally in the game at the bottom level. We do have a number of blockchains, right? Of course, we got Bitcoin to store value. We got Ethereum did smart contracts. Salana's out there does a bunch of and they're duking it out with Sooie and with Avalanche and all these other chains, but there's elements of those lower chains that haven't been fully solved like privacy.

By the way, the reason we haven't solved privacy is because up until 18 months ago, the regulators would say, "Oh, if you're touching private coins, you must be doing bad activity." Of course, that's not true. Now, then Canton Network came along. uh it's been building from digital a company called digital asset for for some time and they created a a private permission ledger for institutions that has privacy in it and the institutions all said oh we need that um and so they've grown very quickly in the last couple of years anyway privacy at the bottom layer I think is still in flux the regulatory side we still need legislative action for like clarity or whatever the market structure is going to be the rule making hasn't been decided yet exactly how are we going to separate the powers cars,

how are we going to isolate risks in our capital markets is still open. So those things are are are still being worked out. And then of course the last thing is kind of the infighting uh of people trying to use regulatory capture wherever they can get it to somehow artificially win over the long arc of time. Those will not work. Um but they could set America back uh very meaningfully for decades if we don't handle it right. >> Absolutely. I mean we we see that in several industries. uh the AI industry is going through that regulatory capture uh process right now as well. Um Mike, I realize your time is limited. I I just want to ask you one more thing which is uh effectively, you know, where you see Bitco,

you know, you've been in the game a long time. You've seen the industry evolve through the years. We've hit several milestones up until this point. What is the north star? Do you have a a metric quantitative or qualitative that you're looking forward to that says hey once we've hit this that's when we've hit escape velocity that's when this thing has really you know achieved the level that we're looking for. What is the next milestone in Bitco's journey that you're looking to achieve? Well, there's always business milestones around revenue and we're trying to grow and like, you know, where the the company is positioned kind of in in the market. But I I think the most interesting thing for me is that we're taking everything and making it programmable. So, it started out with programmable money in the form of

Bitcoin. Of course, that turned into programmable DeFi and smart contracts, created lending platforms, created trading platforms, created all kinds of interesting things. But now, we're connecting capital markets in a programmable way. We're connecting stable coins in a programmable way. The next element is lending. Uh, you know, the the bank does two parts, right? One part is to collect deposits. The other part is to lend those out. There's tremendous risk in that. And, you know, the run the people that run our banks, you know, they're supposed to be the financial experts, but we've seen over time that they've screwed up kind of over and over again, which leads to more regulation. I think we have the opportunity to change it. So, this programmable ability to manage all types of assets, uh, I think is the thing that we're after inside of Bitco. you're

going to find a whole bunch of very passionate people that are excited about that task. And when you do that, there's a whole bunch of opportunity that comes up on top of it. It enables things for people. The the original thesis of Bitcoin is that it's more self- sovereign. It's something that takes out the middlemen. Uh it's something that banks the unbanked. It reduces the fees. I don't think as an industry we have fully realized that vision yet, and I think we got a lot more work to do. Um, so those are the milestones. We're excited about making making all of those things come true for everybody in in America and the world.

>> Very cool. Mike, thank you so much for joining. Really really appreciate your time. We'd love to uh have you on again sometime soon and, you know, just kind of look back again at at how far the industry has come. Appreciate you uh stewarding the industry forward and uh spending some time with us today. >> Hey, thank you so much for having me. >> See you again soon. Thanks, Mike. >> [cheering and applause] >> All right, that was Mike Belshi of Bitco. Um, and uh, I mean, he he certainly is leading the charge uh, out there in DC, shaking the hands with President Trump as well as speaking to some of the regulators uh, and the politicians that are making the decisions about how the finance industry is evolving. Uh, we've seen the

technological buildout, we've seen the regulatory buildout, and I like the framing that Mike shared, which was effectively building out that custody layer, and a lot of that has regulatory implications. And on top of which, we're building the infrastructure for payments and capital markets. Getting custody, payments, and capital markets all correct is an extremely extremely pro uh important proposition. and ultimately the way in which we're going to modernize the the world of finance. I mean, payments, capital markets, and custody makes up such a large portion of what we know as finance. Uh that is going to get us much further along in our quest to modernize this financial

world. And guys, that is the end of today's show. I hope you enjoyed. Uh we had Mike and Mike on today. Market's flying. Uh, and uh, we're going to wrap and uh, try to try to smooth him some things out on our side. So, uh, we'll be back tomorrow. Uh, Andy's going to call in from Jackson Hole. That should be a lot of fun. Got a full slate lineup. And uh and yeah, guys, I mean, just continue to stay here day in and day out. We're going to make sure that you guys are aware of what everything that you need to know uh so that you can stay apprised of all of the most important and relevant events taking place across the industry. This is the rollup. You guys rock. Couldn't do it without you. And uh

we will see you again tomorrow. Much love. Peace. [music]