No Big Sell Orders in Sight. Is Bitcoin's Run to $100K Clear?

Transcript

Hi everyone. Welcome to another episode of Bits and Bips the interview, the show where we explore how crypto and macro collide one basis point at your at a time. Uh My name is Steve Ehrlich. I'm the head of research at Sharplink and also your host and we've got a terrific show again for you today. But before we get started just a little bit of housekeeping. One, nothing that you hear on the show is financial or investment advice. For full disclosures, please see unchainedcrypto.com backslash bits and bips. And then finally before we get started, let's take a very brief moment to hear from some of the sponsors who make the show possible.

Etherfi is giving unchained listeners 15% cash back on food and ride apps. And that's on top of the 3% you get on everything else. Your bank is charging you to use your own money. I switched. Go to ether.fi/unchained to claim your discount. Bitcoin changed how money works. Cetrea changes how Bitcoin scales. With a trust minimized BTC and a native stablecoin CTUSD, Cetrea enables Bitcoin capital markets with lending, privacy, Bitcoin yield, and more. Get started at cetrea.xyz/unchained. All right, welcome back. So as I mentioned before the break, uh we have a lot to talk about uh today. A very tenuous ceasefire was agreed to a couple

days ago with regard to Iran and it's had ramifications all across crypto and uh the broader um sort of macro economy. I've got a terrific guest to discuss all of this today, uh Kavita Gupta. She is the founder and general partner at Delta Blockchain Fund. Welcome, Kavita. Hi, Steve. Yeah, yeah, great to have you back again. Always enjoy our conversations. So let's just kind of dive right in. I I want to know what it's like for someone like you that you have VC fund, you also have a liquid token fund. What has it been like trading the last 48 to the 72 hours with uh so much whipsawing back and forth rhetoric and will they won't they agree to a ceasefire?

You know, I I was just talking to my team today morning, and I was like, instead of trading, we should be on prediction markets and just like basically doing predictions on these, we would have made more money, to be honest. [laughter] Um it's been like it's Okay, so first of all, the idea that everybody is now back to predicting Bitcoin is going to cross 80, and Bitcoin is going to cross 100, that's exciting because we have been sort of in a winter for too long. Um ETH uh picking ETH actually has outperformed in last 48 hours with around 6.7 to 7% than Bitcoin jump, which is great because as you know, I won't call myself ETH maxi, but I'm a

big ETH believer. Um said that, I feel like this particular cycle has been very different than in the past cycles of every time we have a world political situation or the economy situation moving in, we have seen crypto going down. But right now we are in a sort of a ceasefire, which based on President's Truth Social account can disappear anytime. Like it's not a permanent resolution. It doesn't feel we are out, right? And but still, the first impact is on crypto market as soon as the oil prices went down or expected to go down. So that's very good. Um but I don't know

how much of this is institutional waiting that they're putting money aside, and let's bring in so much on ETF, which we saw like a huge amount of money coming into ETFs. I just really don't know how much was it wait and watch versus uh oh, this is this is an asset we have to go in, sort of a thing. Yeah, it it it's it's really been a kind of an insane week. Uh I wish I had a better uh more eloquent words to describe it. But, I mean, on one hand, uh, President Trump was threatening the destruction of a, uh, centuries-old Mideast like, uh, uh, civilization.

Uh, but at the same point in time, uh, I mean, I think many people, many industry watchers, and if you look at what happened on Polymarket and prediction markets, I mean, they anticipated some type of ceasefire deal. And And I I wouldn't necessarily call what Trump was doing a bluff, but uh, it certainly seemed to He certainly seemed to use rhetoric as a way to exact maximum leverage to try to agree to some to some sort of of deal. Because I guess theoretically, if he took that step to uh, attack all the civilian infrastructure, that's not really something that could be, quote unquote, taken back. And And And And I'm sure we've both seen some of the reports of people making gargantuan profits on like shorting oil right before the ceasefire was announced. It's actually I was kind

of curious, and I was talking to some of my own colleagues and and contacts, like, was that a case of insider trading, or was that just people sort of betting on the taco? And, uh, it's hard to It's hard to really know. I think it's hard to know for sure. And perhaps the answer is is a little bit of both. Um, but we we have to think Can you Can you pause there, sir? Uh, yeah. Yeah. I think How do you define an insider's trading on prediction markets, which you don't even have a regulations? I'm connecting it to, you know, we saw that famous early days of NFTs, what happened with OpenSea, when like just for $6,000 somebody was like taken through the mud.

I'm not saying that, you know, having a knowledge, oh, this NFTs is going to get listed, or this token is going to get listed, let's make money. That's a human behavior, but if there are rules, you know, you have to change that behavior, and that is the moral code. I am like, this is not the first time I feel like Polymarket has been Polymarket has been highlighting that there are multiple times when it comes to Trump administration. Uh from his VP pick to then going into this genius act to like multiple things like exactly before doing the first missile into Iran, etc.

etc. We have been seeing this so-called insider trading. Um and now Binance has prediction markets on for the rest of the world. So, I mean, do you think like can we qualify them as uh offencible, something which is crime, insider trading, or right now it's a wild wild west there? So, good question. I mean, obviously good questions. I think actually one of our sister podcast Dacks in the City, um which the three hosts are all lawyers, I think put a really good episode out on this.

Um one of my writers at Unchained did a really good story on this. I'd I'd say a few months ago, Jason Brett, um because it really kind of comes down to how you're defining insider trading. And and like I'm not a lawyer, but but US securities I mean, there's a very there's a very like concrete um definitions of what constitutes insider trading because in securities markets the whole idea is to sort of eliminate information asymmetry so everyone's trading on a level playing field. And in prediction markets, which are uh regulated by the CFTC, uh it doesn't have the same types of requirements and like sort of fiduciary duties, so on and so forth. And you can almost make an argument that people should trade on quote-unquote inside information for prediction markets. Um that's sort of

the whole point. Yeah. Um it really kind of comes down to then like what happens if someone at the White House or or not even just like a geopolitical one, but what happens if someone comes across information that maybe they shouldn't have, are they allowed to trade on it? Well, sometimes it comes down to like what's their role in the the entity? Like like if I quote-unquote hear something and I trade on a prediction market that has nothing to do with my job and I just come across it, did I commit a crime? Probably not according to what securities laws are. Um but it's it's really sort of a fascinating thing. So, I was actually going to get into into prediction markets later on because I didn't want to talk about more about Bitcoin, ETH, and other assets, but uh, I mean, have you're fun. I mean, are you

looking to trade on prediction markets? They're getting wider, they're getting, um, more liquid, but, uh, sometimes they can also be very adversarial. I'm sure you've seen the same reports I have to suggest that, um, it might seem easy to make money on those, but oftentimes, uh, the, um, the the bets, I guess the the odds are not necessarily in people's favor and in a world where there are so many insiders, uh, perhaps it is a lot more challenging than than than people think. I think it really depends what sort of bidding. So, I started personally, first of all, from the fund we don't do it, but I started personally also as a way of learning and seeing what exactly is happening in the space on hyperliquid.

And I think hyperliquid really started with this really deep pop markets. And then from those pop markets, I basically started taking positions more comfortable on Coinbase, different stock pops, and all. And then from there we had Polymarket. And I think Polymarket went crazy about, "Hey, how many people are going to wear white tomorrow?" You know? So, it is like anything and everything. How many people are going to have Indian versus Chinese food tonight? Like, you know? And it started from there. And I feel like, um, you know, sometimes these prediction markets with like, if you list if you look at the top 20 trending topics or the top 30 trending topics, I think

you cannot have like, yes, you can have an insider. Like, for an example, there was a big pool of like, "What is Bad Bunny going to sing at halftime?" Right? Of course, Bad Bunny can go or his manager can go who has a whole list of what they're going to sing and [laughter] like, participate in it, right? Um, so, I think when you are doing predictions like this, there's always going to be somebody who's going to have more qualified information than you have. And specially even if you can do KYC, right? How do you justify that an insider trading on a Bad Bunny thing?

Like, of course, when are the bomb going to drop are a much more serious international topic, right? But I also heard by the way that there are military defense all over the world who have now started looking at these prediction markets in this administration to see having defense analysis of expecting bombs. And like lot of people in Israel I'm hearing are basically either banned or being asked to do a lot of random betting to confuse lot of analysis. Have you heard any of these things? I I have heard that the Israel sort of disinformation betting on Polymarket that was is pretty fascinating. That

that's probably worth someone doing a story on. Um, but one thing actually one account I do try to follow sometimes kind of just in a jocular way is um, there's this Twitter account um, it's called like the Pentagon Pizza account or something like that where yeah, like it'll it'll detect like a huge uptakes in activity um, for this like pizza place right by the Pentagon. I I actually I used to work in the Pentagon but I didn't I never went there but it it sometimes people use it as a signal of of incoming activity. So it is it is pretty fascinating. All right, let's let's turn back let's turn back to the markets cuz as you mentioned there there's a lot of kind of unusual behavior. Um, maybe even go back to to April 6th, Monday.

Um, there were huge inflows in Bitcoin ETH ETFs um, etc. etc. after obviously like months and months of of withdrawals. I mean billions of dollars in withdrawals. Um, I'd like to know kind of what you thought about what was happening there. I mean obviously the deadline was Tuesday. So this was at least 24 hours before Um some of those inflows that seem to have continued. Bitcoin is up to I think 72,000 as you mentioned. ETH has been outperforming uh Bitcoin, which I guess suggests there's a bit more of a risk-on uh behavior. But, like kind of just uh to the extent you can, walk me through your week. Like, what were you seeing? What were you thinking?

And like, were you positioning yourself um long, short, little bit of both? So, our fund is a long-term, right? So, our trading fund is also not day-to-day active trading. It is more about let's get into the market at the right position, and then let's hold. And then even if it takes 6 months or an year to get out on a certain positions, let's do. Some of our tokens are also which we have directly gone They're public tokens that already listed, but we have gone with the foundations because another aspect of blockchain or companies which does their token is once you have done your token, people think that you are suddenly sitting on lot of cash for next 20 years to run your companies, which is not true anymore or for 99% of

the companies. So, a lot of these founders, if they have done decent in the market after launching their token after a year or two, they still need to either sell their tokens in the market to raise money for the foundation to grow, etc. etc. So, we have also bought lot of those foundation tokens from different companies. And what we do is we don't want to put them a lot in the market in the same go, especially if the market is not stable because it can really take the prices down. And from from our position, we do believe that the market is going to go much more long than this.

>> [snorts] >> And so, going and selling is not even an option right now. Because I don't think that we would have successfully uh like made an exit. The thing the way we have looked at the market is two things. First, that means crypto is not completely dead, which a lot of news media hosts started saying, "Everything is done in crypto. AI it is." So, that has not happened, thank God. The prices are moving. We are alive. We can survive.

The second thing which we have started paying attention to is that as soon as the oil prices went up, crypto is one of the first asset which has moved without any other impact whether like on employment numbers, labor numbers, or any of the like the White House announcements, right? And the the and the second thing is if the institutional money coming back, which is a big volume as we as we talked about the ETF, um then that institutional money is definitely going to take the blue-chip tokens up.

Now, the two things which we are on the watch for which hasn't happened. One is digital asset treasuries. They are all still super negative. None of them have really really moved. So, I'm hoping the public equity is also going to slowly move up. And the second thing is the old cycle movement hasn't happened. So, if I go from like Bitcoin, BNC, BNB, ETH, Solana. Solana has moved a little bit like come down to the next level, Aptos say Sui Monad, bunch of them.

That hasn't really happened yet. So, what I'm So, what we are watching now is how the other tech tokens which are associated with different L1s or the alternate L1s going to go, and how the institutional ETF flow going to affect that. Okay. Let's unpack that a little bit more. That a lot there. I mean, for one, again, as we're recording this on on Thursday afternoon, the ceasefire, I guess, appears to be holding. There there have been reports of of further strikes from Israel and Iran into the Gulf region, etc.

It also appears that the straight remains largely closed. So, just a trickle of ships are going through. So, and a lot's at stake, I think, with at at some high-level diplomacy, I believe, it's going to be in Pakistan this weekend. So, all that notwithstanding, I'm I'm curious like your sense. Like, do you expect another V-shaped recovery assuming that the ceasefire is able to hold and perhaps be extended like we saw after the tariffs? What type of duration would it take to kind of get there? How long would it last? And then, I mean, I think that leads directly into your your thought about like this this new alt cycle and and pulling up things like like that and and and other tokens.

Like, how long might it take to to really kind of see that filter through because I've talked about on the show and I know you've seen in the past before like there there are some narratives out there that alt cycles maybe aren't necessarily a thing of the past, but there are new ways for people to try to get like like like high beta exposure to to risk assets, be it like AI plays or or even now prediction markets. 24/7 perps on oil futures and other things. Like, there are other ways to to occupy your time rather than investing in alts.

Um so, I think the two questions or three questions and let me unpack it one by one, right? So, the first question is how do I see the market? Do I see the V-shape recovery? I think we are in up and down. We going to be in waves because Lebanon Beirut just got bombed even during the ceasefire. So, it's not like the conflict there was a bombing which I've heard in Qatar and Kuwait. So, as a retaliation of the Lebanon bombing. So, I don't think the conflict has really disappeared from the ground, right? And I think it's a matter of fact that the gas prices have gone so crazy in US that the US is taking a little bit of like

thinking through phase of saying let get the oil go let the business go, but do I trust um Do I trust that US is out of the war or do I believe that? I don't think so. And so, I feel like if we get stuck in this situation which is a very high possibility that we may um then then I don't think we have like a proper like an upside recovery. I think we are in swings. That's one. Secondly, I think uh with respect to whether all coins are dead or like what are the different ways of making money I feel like uh there's always going to

be options. Have you forgotten the whole meme coin phenomena which nobody is talking about >> anymore and like the >> one of my last big stories at Forbes was on pump.fun a big profile for the magazine show. I I've been very much on the record. Um I think meme coins are are mostly useless, but I I know there are smart people who disagree with me and uh I I I I'm with you on this. I may be not that smart person who got it or made any money out of it, but just generally like you know, so I feel like there's always going to be things which people are going to make alternatives or have fun basically any sort of gamifying system.

Said that even in the past when everybody thought in 2018 and 19 crypto was dead again and came 20 and then DeFi took the market and then NFTs came back. So, you never know. I still feel like like one of your sponsors just to point it out because I'm huge fan of that company Etherfi. Um I mean, they are still generating yields. They are generating yields more than my bank accounts or my saving accounts or my S&P accounts and and one of the reason the genius act is getting stopped by the banking lobby. So So those are the connections and relations makes me feel like the institutional and conservative investor who may not go to a prediction

market like you know, as a fund I'm not going to go to a prediction market and put my institutional capital there. So I'm still going to go and play in these spaces where there is more the the base has a it has a strong base, you know, I know the yields are coming. I know the business on chain. Uh said that if you look at I was just reading chainalysis recent report that how not only Iran but a lot of Middle East countries are doing trading in crypto now like the shipping trading, the movement of money because the banks are not working anymore. Like so we are going back to the core of why crypto was created.

You know, and so it's sad that it has come to that but it also gives me a little bit pat on the thing that okay, this is the reason we all got into this space 10 years back. Mhm. Yeah, really fascinating. Just a last couple questions on the current environment and then I want to after the break we're going to expand out a little bit. One, I'd love to just kind of nail down your thoughts on on Bitcoin and and in particular the way that they relate to each other. The Bitcoin ETH ratio had I guess that Bitcoin's performance visa vie ETH had been even though they're both going down had been Bitcoin had been doing better than than ETH for for most of the year and and you know, go back into the last

year. That's reversed over the last couple of days or I'd say like a week or so. I'd love to get a sense from you like if there's any undercurrent thoughts as to why and and and Bitcoin really played a unique role here because while tech stocks went down during the conflict etc. Bitcoin and went up and I've had debates on the show the last couple weeks. Is this a sign that it's a safe haven or or or not? I mean was it just a factor of gold sort of having such a high run up that people were going to sell out and they had to move money into into somewhere else. And what does it mean now that like oils tanking, Bitcoin's going up? Like in the past it's sometimes been a hybrid

safe haven slash risk asset and maybe it has that Jekyll and Hyde quality again, but I'd love to just get your thoughts on how those two tokens in particular performed and how they relate to each other. So, it's a very good question. Historically Bitcoin has always been the first one to move and then ETH is the second one who is trailing behind. And then we see altcoins slowly picking up and if everything is going great and it's just like a uh yield up market, then we would see like Bitcoin going up and we would take three days to a four days delay of ETH going up. The percentage difference would be like 150 uh like half half of it or 70%

of it and then we would see altcoins going up but much faster with respect to the growth rate, right? So um I think if I just stick to Bitcoin and connecting it back to what I was just talking about, we are seeing lot of transactions on Bitcoin happening at the very big institutional level in supply and chain in the Middle East. So, it is becoming or it is being used as some sort of a currency transactions by the big corporations slash governments. I don't have that much clarity, but it's huge numbers, right? And so, suddenly we are seeing uh Bitcoin being stable or moving up,

like the demand increasing. Of course, the gas prices are coming down and the gold, you're absolutely right. There was a time gold was high. People are getting liquidity. When they're getting liquidity, gold also traditionally has been thought of like if you get into trouble, you save gold. You sell gold and then you do the transaction. So, I wouldn't be surprised if there's a percentage of those gold deposits are getting converted into Bitcoin to trade use Bitcoin as a currency. And those are the places which I'm seeing with respect to global market. With respect to the US market and the institutional spaces, I feel like there is a very strong feeling that the Bitcoin is about to cross 100k again. People are already predicting 80k in next week or so. And so, that has

made institutional flow and a lot of hedge funds flow. Like if you look at the order books in the market, whether on Binance or Coinbase, I haven't seen Kraken yet, but like you suddenly see the price movements or people putting put calls, big volumes, right? So, and I haven't seen a big sell order. So, in the past with ETH specifically, what we saw that every time ETH would move up, specially after 4k, there would be a big sell order already in the queue which we would see. So, which would give us an idea it may go and then it's going to come back because there's a big sell there.

We are not seeing a big queue of sell so far in any of the perps markets, in any of the centralized exchanges. And there are bunch of buy orders at different different different levels for people who are probably like moving things together. So, I think that is how I see Bitcoin. I do see Bitcoin uh like not going significantly down to like let's say under 65k or something. It has really held itself strong. But I do see Bitcoin going above 80K over next sometime. Now, with respect to ETH, I am actually very happy that during this whole year of like going up to 4.9K to coming down, ETH has actually not gone down to like last year's low of

like six like $800 or $1,200, right? ETH has really held itself, and you see a big movement in ETH because of institutional money. Um and specially when there was this big Google report which came out about the quantum computation can probably can create security issues with the Ethereum ecosystem. I think ETH did not completely crash out even with that news. There was some movement, but it was not like, "Oh, there's a 20% down." Like, you know. Um so, I feel like ETH as a technology token with respect to institution and ETF is probably going to have a good growth this time.

Okay. All right. Well, that's a good place to to take a quick break. So, let's um just take a moment and hear some hear from some more sponsors who make this show possible. Etherfi is giving Unchained listeners 15% cash back on ride shares, groceries, and restaurants right now, which honestly is kind of wild for a card like this. On top of that, I'm getting 3% cash back on every single transaction using my actual crypto. No conversion fees, no nonsense. My bank never once did that. And it goes beyond just spending. You can borrow against your holdings at 4% or less, which is super useful if you don't want to sell your assets. You can also earn on all major assets up to 8% APY just by holding. And moving money is

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Cetreia offers Bitcoin capital markets with lending, privacy, payments, Bitcoin yield, trading, [music] and predictions. Cetreia expands Bitcoin's utility without sacrificing its security. Cetreia mainnet is live. Get started at cetreia.xyz/unchain. All right, welcome back. So, we were talking about kind of the immediate market reaction to the ceasefire and and and the sort of uh I guess highlighting or or forecasting what might happen next. I wanted to just get your thought um Kavita on just some of the big shifts that we've seen in market structure over the last I guess a couple months or or

even years at this point because um a lot of forces are converging at the time of these kind of acute geo- geopolitical hotspots. Uh you talked about Hyperliquid and sort of how uh they've kind of come out of I wouldn't say nowhere, but have really taken the world by storm, especially with the ability to launch markets uh focused on traditional commodities. I know that their oil futures markets were doing more than a billion dollars a day in volume, which is which is massive. I think it became the second biggest market after after Bitcoin. Uh we're increasingly moving into a world of 24/7 stock trading um either by just uh exchanges and regulators changing the laws, but then also through uh tokenized stock offerings from like likes of

Coinbase, Kraken, Robinhood, et cetera. And um we're we're seeing more stablecoins come on chain. Uh we're seeing growth in other tokenized assets, uh treasuries, yield-bearing instruments, et cetera. Uh I'd like you to kind of just put your VC hat on a little bit and or I guess maybe your your VC hat slash your liquid tokens one hat and just kind of talk about how that is changing the way that that you look to to invest and maybe highlight or discuss how some of these forces are going to grow in the in the future.

I think again, Steve, your questions are so loaded across so many space. >> [laughter] >> Um, let's take the institutional adoption one, right? Um, which is great. Uh, institutional adoption has institutional adoption on the liquid side has got huge flows into the space, right? You have uh, the famous CEO of banks saying Bitcoin is to those banks providing ETF services for those uh, assets.

So, that is definitely on the liquid side have done really well. Now, on the I think technology side, we only see stablecoin adoption, which is great for the technology of settlement and like on-ramp and off-ramp and like the companies cross-chain cross-border transfers, etc. So, those particular companies around it have done well. They have good acquisitions, they have like uh, from web two companies, they have like some volumes, etc.

But, the core decentralized technologies, whether those are on Eels or whether those are on uh, you know, uh, different type of products regarding storage, etc. hasn't been picked up. Now, some sort of a computation and storage like there's a core weave meta partnership with Nvidia, which I I is going to be very interesting for decentralized storage spaces. Similarly, a lot of GPU a lot of GPUs and chip mining companies within the space has moved into AI computational like one of our portfolio companies GMI which started as a Bitcoin ether mining company is now a prominent

AI computational company and cloud storage company. So, I think we're going to see a lot of that movement and that's where the money will start going. The money will start going have already started going actually into the infrastructure which has an overlap with the bigger institutional adoption and the AI adoption at the web two level. So, these two we are already seeing a huge change. Now, there have been some surprises. For an example, for the longest time people within crypto have always assumed places like Polymarkets to be very native game.

Which is now becoming with going like I wouldn't be surprised if Robinhood and Coinbase at some point will start having their own prediction markets, right? Um then there are >> they do or they they've they've started partnered with Kalshi and I think Robinhood >> They have started partnering. They do allow the accounts to be associated, but they are not offering on their own platform like the way Binance has started, right? You can put the pools, right? Um uh similarly like I feel like there are going to be other use cases which are going to slowly slowly become mainstream. Now, there are two things and I don't have exactly my finger on what is going to be, but I feel like

either it's going to be two big division where you are like, you know, in a typical Silicon Valley world building products for a big adoption or you are building it for a niche open source society sort of a thing which is like your native crypto society. Or over time this place which is a big institutional, like the banking world, is the only world which is going to survive. Um so, I am still understanding, but bo- but the second part of it completely can depends upon where the crypto prices go. Because if the tokens are not going to do well, uh there's going to be less money in the space and less founders' ability to be able to create and just chill in the space.

Um that's how I see. Said that, I think the next big institutional adoption if we can figure out the banking lobby, is going to be the yield the decentralized yields on at the institutional level. Just imagine, that's going to be like a big win-win for even retail people, like conservative retail people, you know? Um then instead of holding treasuries, you can just get 6% 7% yield on your cash, which is available at any given point of time for you to use.

Um and then the yield-bearing stablecoins are a complete different story on top of it. I don't know when and how we're going to be okay with it. Um but yeah, that depends upon how the institution work, uh how the government works. And what if if this government changes in 20 I think 28? Yeah. >> election? Yeah. Yeah. >> That's going to be a very big part defined, given a lot of conflict of interest of how the new administration, if different, going to look at this space. Mhm. And And let's kind of stay on that um uh that that last thought that you had. I'd love to get your thoughts on what may or may not happen with the Clarity Act. Uh and I know Treasury Secretary Yellen actually just published an op-ed in The Wall Street

Journal sort of urging passage of this. Um how would you sort of uh what what odds would you place on on passage? And what might be the ramifications if it fails to get across the finish line. You know, if they actually put it sort of like in the sand that you cannot have eels on stable coin, I don't think with respect to technology or the retail customers, which the government should watch out for, is good. Because I actually have talked to a lot of those people who are in the rooms. I've been in those rooms myself.

Just to understand with one simple question. Which is how is it bad? Like how yield-bearing stable coins, which you can control, you have a collateral, it's not failing, it is backed by US Treasuries, auditings are happening. How by providing extra yield to local individual, whose $1 is now worth of 1.06 instead of 1.02 or 1.03, is not good for normal people. And I do not have satisfactory answer to that. Mhm. Yeah, we just play devil's advocate. I'm not saying I have this position, but I mean I mean two things I hear me for one, it'll suck liquidity out of the banking

system, which I know you've heard, and and could disproportionately hurt smaller banks, not necessarily like like the the big G-SIBs. And then two, um stable coins and I mean they're not FDIC-insured. They theoretically shouldn't need to be because that they're not allowed to rehypothecate deposits, but at the same point not every stable coin is treated equally and has the same type of of rigorous standards. And maybe genius act could state it as some of that, but those are just two that I know are in the air supply. Um I would imagine some people listening might be thinking to themselves. So perhaps you could just quickly respond to that. So let just go to let just go to them. The first point which you said, right?

You are saying basically that you didn't set up the small business small banks or the banks in a right great technical manner. So a regular Tim and Joe should not have more money in their bank account. I think that's a answer. I'm sorry. That's not my problem. That's your problem. You figure it out. That is basically saying, "Hey, we're not going to use computers because the small banks would die." You know. Um so, that should not be like the government should be thinking about a normal citizen. They should not be thinking about saving these big managers in the bank. That's one. The second one is a is a good legitimate uh question that every stable coin is not same. So, then please allow the people

like a normal regular person who's putting the money in JP Morgan, Bank of America, Chase, any of these big banks, those banks should have those standards. So, you have a choice to make it that if I'm putting my money in a Bank of America current account, which I am, I'm just generally getting more yields by trusting that bank, and that bank should be taking care of the quality of the collateral and the auditing around it. So, again, that is like cannot be an excuse. That's a very doable problem. Got it. Can you handicap I mean, just to stay on this topic, I mean, um but moving a bit beside or side from the the yield stablecoin question, which is uh sort of hemming everything up, um can you handicap the odds of of clarity

based on um like what you know? And and then two, crypto has a history of buying rumors and selling news, but clarity it's hard for me to get a read on exactly what what's going to happen. So, um if things come together quickly, clarity passes, uh what type of boost could we see in the market? I think honestly, at this point of time, it depends upon what pieces of it passes and what pieces of it doesn't pass. Right? So, markets are like if you take away creating regulations for every new type of technology which is getting built on the space, then you're basically just saying, "Oh, yeah, crypto is fine." Like which anyways is the way

market is moving. If you have cases like ICE, she getting investment from New York stock like ICE and all that stuff, you're already doing that, right? So, you're just basically saying, "Okay, fine. It is happening. Let's accept it." So, I feel like yes, it will help big pension funds to be able to hold probably. You know, so more institutional capital inflow onto this and then SEC and CFTC has to figure out if the government changes to regulate like the if there is a change in the party system, then somebody else cannot come. They have to go through the Congress. So, those two things are big.

And I completely understand, but it should not come with the constraint of saying outside any of this can is all illegal. I think for me that is the problem that you are going to hinder something which is already working. Uh and the and the and the progress in that innovation by saying you are in a legal box, but the legal box is this small. And everything around this whole universe around the legal box can be now questioned and opened up. That scares That scares me a little bit. Okay. Um just about out of time, but I just want to wrap up by asking you a few uh quick quick fire questions. One, um what are one or two charts or assets that you're really

interested in paying and going to pay attention to over the next few months? Uh like with respect to currencies or technologies? Anything. I mean, digital assets or or or macro. I mean, the show's about how the two collide. Like, what are what are you watching to kind of be a signal for what's to come? I think um ETH has has always been a good uh middle ground for me because if only Bitcoin is moving and ETH is not moving, then I am feeling like the rest of the crypto market is not going to move. So, and if then ETH moves, I started watching altcoins move, right? So, like the next top seven coins for me, say Solana, Aptos, Sui. I start watching that bucket very quickly, and then a DeFi bucket, and then nowadays more of

like RA W ETF buckets. So, if those started showing positive sign, then we are getting ready to basically a good jump up. Uh with respect to technology, I feel like, of course, uh we are waiting on a bunch of IPOs, right? Everybody has been expecting Kraken IPO, FalconX IPO, bunch of more IPOs, and I think that more dependent upon overall the tech IPOs, whether SpaceX or I don't know how Open AI is going to be now, but like SpaceX or Anthropic or something. And I think once that IPO markets open up, that's also going to have a lot of liquidity moving into back into the space. So, those are the two I'm really waiting for. Now, with respect to the

political movement, I honestly do not think that we're going to have a very stable political space for a good decent amount of like short-term 6 months to an year. Now, the only thing which I am trying to micro watch with between that is um are the are the oil prices going to be a problem? Because if the oil oil prices goes up again, then that's not good for crypto. Yeah. And and I mean, just staying on oil, I mean, everything you said I agree with, but just because there's the ceasefire, I mean, as I said before, the strait still remains largely closed and and it's not like you can just flip a switch and all of a sudden oil flows can be back to where they were before the war and and oil's going to be

back into the 60s or $60, $70 uh a barrel. So, we'll have to kind of see what um what that looks like. Um just to wrap up, um anything that we we did not get a chance to discuss you'd like to share or do you have any other big expectations, predictions, things you're looking out for um through the end of the year? I think um the crypto AI game, which is basically having and robotics actually. I think the big space which I am watching is how decentralized identity for different AI agents, the settlements, the AI bots to use for crypto trading and different things. I think this overlap of this world, not the first generation which we saw like a

big boom 2 years back within the crypto world where very random AI crypto companies were raising crazy amount of money and have all disappeared. >> Yeah. And I'm talking about the real use which is revenue driven day zero then to like we see driven. Is is being super super fascinating. And I think specially in the robotic world where uh, big big like you know, uh, infrastructure companies using robots for different services and their identi- identification is on Ethereum as like a public uh, uh, blockchain. I think those use cases are making me much more excited and I think this is how going to be the evolution of blockchain into a blend infrastructural economy, uh, on a much bigger scale than what we

are seeing only in the financial space. I think that's very exciting for me to watch. Great. All right, well, that's a great place to end it. So, Kavita, thank you for for joining. As always, we'll have to have you back. And thank you to everybody for for watching and listening. Um, that's the end of of this episode of Bits N' Bips the interview, but don't go anywhere. In a few minutes, uh, Laura's going to be here with uh, another episode of Unchained. She's going to be talking with James Seifert, senior research analyst at Bloomberg Intelligence and a former host of of Bits N' Bips as well. Um, and they're going to be discussing the big debut of Morgan Stanley's Bitcoin ETF and where the overall crypto crypto ETF space is going. [music] So, stick around and we'll we will be back after this short break.

>> Woo!