SpaceX’s $1.75T IPO, Strategy Sells Bitcoin & Crypto’s Hard Reset

Transcript

Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Block Works. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed. All right, everyone. Welcome back to Empire. Very excited about this one. We got uh I've got home homec court advantage on this one. It's East Coast time. 5:20 p.m. We're good. I got three guys who are between 11 and and midnight here. So, I I think I got the home field

advantage. Rob Santi, welcome. And we've got a special guest, fan of the pod, Ryan Zur. So, Ryan, welcome to the show, too. >> Thanks for having me, guys. >> Santi, Rob, how's how's Europe? Wherever you what whatever you guys are doing. Well, well, I'm in Amsterdam for uh for money 2020, which for people who don't know is like pretty much the biggest like fintech payments conference uh in the world. They do one in Vegas in October uh and one in uh in in Amsterdam in June. And the one here during June is like it's basically like a trade show.

like every big payments company and like fintech company in the world comes and same as last year literally the only thing people want to talk about are stable coins and like AI essentially aentic commerce and at the same time having these conversations and everyone's you know the biggest tech companies in the world are like talking about implementing stable coins Bitcoin is just nuking uh and somebody maybe Michael Sailor is just like like selling and selling and selling and so it is funny to this dichotomy because like you don't like nobody nobody I'm talking to has any idea what's going on and I'm I'm sitting over here like the world is melting. So >> yeah. Yeah. Yeah.

>> Guys, how stupid is it that we're evaluating the technology based on the price? >> Like like this is how this is how bizarre crypto as an industry is. Like companies don't make decision whether to buy anthropic or SpaceX or Tesla because the stock is up or down. Like you assess this is like to me that's why crypto is so early. Like you can't go in a conversation and talking to like you know people to deploy like Moon or Deal and they're like you know what guys we're not going to do this because Bitcoin is back to 67K and Michael Sailor the Ponzi that is Micro Strategy is pump dumping coins. It's like who gives a [ __ ] you know it's like we keep talking about price you know where I

stand on that. I'm sort of tired of it because I was beating the drum that I was deeply bearish since November of last year but I don't care anymore. You know, I'm talking about AI and other stuff. Ryan, I know you're a big investor in SpaceX, so I want to hear all about that stuff. >> Yeah, I think we should um we there there's two events we need to recap. So, Rob gave us the money 2020. Ryan and I were just hanging out at this uh All-In Summit, which is either, you know, cool or cringe depending on on on who's listening. Um cringe >> and uh Yeah. Yeah. You know, it's all right. I think it was I thought it was great. >> Yeah. Rob's on Rob was on the waiting list, so you know, maybe it gets in next year.

>> I just didn't get in. I just >> No, it was it was very well curated. Um, you know, everyone you talked to was was really really thoughtful, you know, CEOs or GPS of of really significant funds. Um, the like the onstage content wasn't overdone. a lot of the best lessons came out of the the random conversations that you were having and you kind of like felt a need or or desire to have lots of random conversations because there was so many smart people in the room. So, um I thought it was great. I don't know, Jason, what did you think?

>> Yeah, I thought it was one of the better curated events I've actually ever been to. I mean, it's um very few speaker sessions, but the speaker sessions were incredible. Right. It's like Bill, Bill Aman, Brad Gersonner, um, uh, you know, Gavin Baker, um, you know, presentation, >> Thomas Leont, you know, co-to founder, uh, I thought Sarah's presentation was probably or conversation was probably the best, the CFO of OpenAI. I I think she'll be the next CEO of OpenAI. She was fantastic. Um, so yeah, a lot lot of learnings. So Ryan, I want to bring you on because uh you know we are this is a crypto podcast, but we do need to talk SpaceX because uh my biggest takeaway from the all-in conference was uh crypto is like a dot on an elephant's ass right

now for the real capital allocators. It is. I know Rob's at money 2020 and it's very hot there, but like from a capital allocation perspective there there were every single panel at money 2020 except maybe Nikesh from PaloAlto um turned into a conversation about either open AI anthropic or SpaceX and every dinner conversation was SpaceX and every drinks conversation was SpaceX and you are you know for people who don't know you very early crypto person and you know did did very well and you know one of the I think first employee at Polychain and now run a fund called Dialectic and have done very well in crypto, but I think your maybe biggest position is not crypto anymore and you know, you've been accumulating a lot of SpaceX. So, I'd

love for you to maybe talk through just how you view what's going on right now and how honestly how historic this is, I'd say. >> Yeah, you you know, so for context, I've been accumulating positions in SpaceX since 2018. um very grateful to to to be um good friends with Steve Jervson which has been a lot of that position but it's been wherever I could could get it for for some time. So I have been parlaying the crypto wins into SpaceX for you know for now eight years. Um and I was really surprised like in our office it's just such an echo chamber of like Elon Bulls and you know and and people were super excited about SpaceX. I thought I was

going to go to this all-in event because all the besties are exposed to SpaceX and it was just going to be like a preIPO party and everyone's going to be talking, you know, um how great this is going to do. I was really surprised at the other side of the table, there's a lot of bearishness in in the market around this IPO. Um because when I like when I look at my model and the way that I value SpaceX is uh what I'm calling a probabilistic sum of the parts. So you need to you know you need to look at all the different business lines of SpaceX.

There's 12 different business lines between between launch and Starlink. Starlink direct customer Xplatform uh Grock XAI but then you've got Colossus um you know you'll have orbitable data centers and then you've got you know you you've got to at least have some kind of thought around the the sort of deep space opportunities offplanet resource extraction you know Mars colonization before that before that lunar col colonization and think and you can put a really low probability on these things discounting them really strongly, but you do have to like think about this stuff. And that's really the interesting thing for SpaceX for me is that um you

know there are just so many possibilities and if any one of these things go goes right, it's a multi- trillion dollar company. And that's why you know I've been saying to people in crypto whether they want to hear it or not for a number of years, it's more important to own SpaceX than it is to own Bitcoin. Um, you know, this is a like a more fundamentally necessary asset to to have in your portfolio. Um, because, you know, the upside is all of the infinite possibilities of space, right? And very clearly this will be part of the inspiring future that that we will live in.

>> I mean, there's a lot to unpack there, Ryan, but I I love the thinking. I do think it's like the one of companies plus Elon has I heard it somewhere. Elon has never lost money for investors and that is something that you know just a lot it resonates really well but let's let's talk about the bearish case I mean what were some of the conversations in the onsummit what is the key like as you you know probabilistically what you're the outcome here like what is the most extreme bear what is you know >> yeah so so the the bearish case that you're hearing both from say the armchair analysts and and they're at the event is the fact that the company is unprofitable or that it's trading at, you know, 100 times 20 2025

um revenues. And uh you know that that doesn't go deep enough because guess what? They just doubled the revenues with one deal on Anthropic. Plus, they're adding, you know, just this last week, they added another $4 billion contract with um with the US Department of War. So, you know, revenue expansion is is is really significant. In fact, one of the things that's been so frustrating trying to get into SpaceX over the years is that it's been so profitable. They haven't done a round since the J round in 2019, right? It's only been tender bids. And so yes, when they when when they sort of merged in XAI um and and X.com that you know that

dipped it it into sort of a cash flow negative position on a temporary basis in kind of a sum of the parts at that moment. But you know all of the things that are that are executing right now um not even including any revenue from uh uh you know from direct to sell Starlink um you know we still are looking at close to 50 billion in in revenue this year. It will be profitable again this year. It's been profitable since 2018.

So, um I don't think that is the the the right sort of bull or or bear case. The right bare case that that I think you can reasonably draw to is do you get a blue sweep in November and then you get antitrust um concerns and you just get like regulators kind of, you know, chipping away at them, death by a thousand paper cuts because you've got, you know, Democrats controlling these um these various entities. I think that's a fairly reasonable one. Um, you know, competition out of China is is increasing really quickly. They've got great manufacturing capabilities.

Ultimately, this is a manufacturing game as much as it as anything else. Those are I think those are coherent um uh you know, arguments for for the bare side that it's not going to continue to be a monopoly, you know, so on and so forth. Um, but the that's not the arguments that that we're hearing today. The arguments that we're hearing today are on a backward-looking profitability question, which that's not how you value businesses. You value it based on the the forward expectation of profits brought to present value. Right, >> Ryan? There was a um I don't know if you saw it, but there was a Goldman report that came out today that said um

essentially that they expect SpaceX to get to $320 billion of revenue in three years from now. Uh which obviously aligns a little bit with what you're talking about primarily >> 1.8 in a decade. >> Yeah. 1.8 in a decade. Yeah. and and aligns I think the two big pieces are one Starlink is going to continue to grow dramatically and then it's basically the data center business and like the deal that they did with um with Enthropic being kind of the harbinger of things to come. I think Brad Gersonner's actually talked a lot about this too as part of the IPO about how the anthropic deal signals you know how basically like there's nobody better in the world at building you know hardware or building you know physical assets than Elon and so we have this energy problem we have

this data center problem and Elon is probably the right person to fix it and so that's really what they're going to lean into a lot during the uh during the road show and so I don't know like how much how deep you you've really gotten but how can you talk about that a little and kind of what you expect the business to look like. Is it Mars colonization or is it really like this is just going to be the single best data uh like data center business in the world? >> Yeah. No, I mean it really I I like in order to try to like keep ourselves grounded on on this valuation, we you know that probabilistic sum of the parts, what we do is look at a 5year timeline, a 10-year timeline, and then a 20-year timeline with a 20-year really like heavily discounted um like an

underweight on that. And in the sort of in the five and 10 year timeline, it's launch services. Um it's Starlink connectivity, it's direct to sell, and then frankly there's the the big growing uh revenue stream right now is Starshield, Golden Dome, and Defense. Like it, you know, people forget that SpaceX is also a neoprime, right? A defense neoprime. It's really standing to to to capture a lot of the increased spend not only from from America but from other countries as defense spending explodes around the world. You know, Colossus is is going to be if he just

continues to build out Colossus. So, you know, Colossus 2 up to now uh a million GPU equivalents. Colossus Colossus three macro hard continuing to to build out at the aggressive rate that to your point only Elon can build. Uh that's a really great cash cash flow business. So um I have it actually at lower than Goldman predicted. So I have 20 20 35 revenues at 1.2 two trillion um with all those things baked in and you know and that's only with uh 23 billion from Terraab you know people forget that like Terraab is going to to be a whole other Nvidia

right uh that again you know Elon and his and his team are uniquely positioned to to execute on that's that that's going to be really really exciting so the way that I've taken it to try to be conservative as possible is take a conservative approach to each one of the 12 business lines and then um uh but then the sum of those still makes this valuation of uh of $1.75 or $135 really cheap. I think I think like my current is is $185 and I think we're probably in that this summer or I thought that going into this past week until I heard all these all these bears

and I was like wait like um so there there is a lot of bear bearishness in in uh um in the market. I don't know how much of that is just people who are buttth hurt because they missed it. Uh, and how much people are actually like thoughtfully dissecting where we're overestimating, but you know, it's a pretty conservative approach to the revenues. You and you do have to consolidate all 12 businesses at some point. >> Hey, hey, Ryan. I I've been noticing in the timeline, I mean, obviously memory has ran up quite a bit. There's u this guy in the UK basically runs a research subscription says he's really questioning the ROI of AI spend. He's like and like whether you want to

believe his arguments or not. I mean I I think it it does pose the question of I do think we're going to continue to see this more and more. It's like okay like Uber just really set a cap on token spend. You had I think Meta cut back. So we're going from spend all the tokens you want to wait a minute not so fast. and what's the ROI on that? So, look, I mean, I think and also there's a lot of negativity in AI like like just from a lot of to your point around what's really the bearish case for SpaceX and candidly just max 7 the broader markets is just a lot of hostility towards AI and the destruction that it's having soio economic impact for the vast

majority of people. Have you guys done a lot of thinking around like quantifying this ROI of AI spend? Because you know we talk a lot about like Shimat said in the pot like follow the dollars you'll do well if you invest there like you know energy you know chips uh and everything that goes into the chip. Uh not so much like the the Mac 7 that is now spending a ton of capex that may or may not there's sort of a disconnect like where you spend and when you you know realize that return. What's your view on that? Well, I I mean for me I I I'd love each of each of you's view viewpoint on this, but it it is absolutely shocking the uh the like veer towards profitability that

Anthropic in particular has taken like it you know I don't think we've seen these types of of revenue growth numbers in from any large scale company in the history of mankind. Um so when you know when an AI product hits product market fit um clearly like you know clearly there's demand clearly there's people willing to pay and that may normalize but then we have these whole host of other things on the horizon you know at the all-in liquidity summit uh there was a lot of talk around the the sort of Johnny IV puck or this this you know AI native device that will just drive a lot

more inference. In any case, we're going to see a ton more um like node edge inference driving AI and that could actually be more profitable for for model um you know for for for the the foundation models that you know that could be really exciting there. Um, so I certainly, you know, I wouldn't want to be in Michael Bur shoes and shorting this stuff right now. Like that seems like, you know, a recipe for disaster. Um, obviously there there has to be some margin compression across the stack. You know, whether it's memory or whether it's um, you know, foundation models building for for coding, these margins

will compress. But at the same time, what we see is something that I wish we would have seen earlier or more often with with crypto is real product market fit. People loving the product, right? Just like leaning into the use of it. And it's something that we've kind of waited for for however many years in crypto saying it ah it's it's just around the corner and and lo and behold, you know, we've never been able to get users for any kind of product this way. Robots and machines will outnumber humans onchain and peak is how they get there. Peak OS enables any machine to do business on any chain. It turns machines into autonomous actors and liquid assets with ease, giving robots access to

capital and the ability to compound their value. That means funds, allocators, and institutions can underwrite, finance, trade, and route capital to machines the same way they handle any other asset. millions of new potential consumers for any web 3 service from compute to storage to anything a machine may need without a human in the loop. Head to peak.xyz or click the link in the show notes to find out more. I mean, Yan, you you and I were talking offline, but to me, this feels like the worst bare market because there's not a single like specific event like Terra or FTX, but you're, you know, putting Micro

Strategy aside, which we can get to it later. Like, we just don't have enough users. Like, we're sitting at like probably less than 100,000 active users on chain. Why even bother being in crypto in the first place? like like and it just it's challenging when you have OpenAI hit like a billion users you know just just to say something so we were talking offline I that is not why I I also think this is a tough bare market but that's not why I think this is a tough bare market I think this is a tough bare market because in 2023 or 2022 all that stuff blew up but everything else was going down it's like we had t you you know SAS had topped

like the market had really pico topped and like it all topped in 2021 right like SAS and you know like you know crypto >> yeah rates go up >> and then and then rates went up and then boom everything came crashing so we were all crashing together and I think the reason this feels tough is because you know like again Ryan and I are at this event like there are other things that are going up an extraordinary amount and you know people are getting hilariously rich like I thought you know I felt FOMO in 2021 when you know we have friends who made ungodly amounts of money um and I know you guys did quite well yourselves and um you're looking around and it's and it's almost laughable and then this all-in event like I was sitting next to a guy at dinner uh he

got a bunch of retail investors together for the last several years he's returning 7 billion to them when SpaceX IPOs so it's um the the amount of wealth being generated here is historic and unprecedented and crypto people if they haven't participated in that are are kind of feeling like they've you know been left out of this was the dream right is that crypto would and it what crypto hasn't been the thing so I think that's why there's actually a psychological element I think that has made this cycle this bare market maybe tougher um but hold on Ryan >> wait can I can I can I add one point to to that though because um you know there's that New York Times article that everyone looks at which everybody's getting rich but you right uh and like I

do think a little bit that what's happening here I I think that the one thing that's different about crypto as well, which I think it makes it very psychologically tough on people, is that there are a lot of people who have gotten hilariously rich and all of those people are people who have left the space basically for the most part, right? Or they've they evangelists and they kind of turn into, you know, Koss or whatever and, you know, they kind they kind of do these things that, you know, maybe you you like or you don't. There's, you know, obviously Arthur Hayes telling you that hype is going to go to 150 one day and then tell you the next day he sold all of it uh when when nothing's changed. But um a lot of it in in crypto feels very uh zero sum and

people feel very much like they for them to win they something else has to go badly or they have to to be against the the rest of the market and everything that's happening in SpaceX and then with anthropic and with open AI feels very positive some to a lot of people and everyone's getting rich because things are working and they're being used and so I think that mindset is a big part of it because it's it feels very much like people just aren't uh able to do this in a collaborative way. it is a PVP culture versus a let's build something together culture. >> That's that's really interesting. I also share your sentiment but from a different perspective that this has been the most challenging bare market you know and I went through 14 and 18 and 22 and this one personally feels

the the the hardest um for for some reason even though like you know financially it's been by far the e easiest and it's because um so many people who were such purists are leaving the space, you know, like our our fund psychographically 93% of our fund has been um crypton natives, you know, high net worth that that want to yield on the on their crypto. And we've had, you know, real like people who I never thought would sell a single Ether Bitcoin like picking up their stick and going home saying I'm out.

>> Ryan, why are they why are they doing that? Why are they selling? So there the like the purist feels like we have lost our way in that the institutions did come and that's what we always were wanting. The institutions are coming the institutions are coming. Oh, the institutions arrive and they'll they'll like you know the cryptonative ethos of you know privacy and self- sovereignty and you know and these crypto assets being the medium in which we we we transact that has not played out right that that it's mostly this time around instead of value acrewing to the crypto assets value is acrewing to companies operating in crypto right uh which is

obviously ly uh higher genie coefficient, less broad-based uh wealth distribution, you know, less permissionless wealth distribution and and people feel left out in the cold in in in that regard. And that's, you know, that that's been been really disheartening to see is is these people who adored crypto and were in it for the right reasons um pick up their stick and and and and go home. Um so yeah, >> but but what are the right reasons, Ryan? Because I mean like crypto's sort of been a religion, but it's it's hard to for me at least like you know last coming into last year I'm like okay super I wrote an article about it I don't need to rehash it but it does feel

it does feel like we've done a lot of things right like look Rob your pound on the table on stable coins and money 2020 I don't think you get a single skeptic almost at this point like >> very few largely very few right I mean >> at least every company feels like they need to have a strategy. It's not as if now you know there's a couple people at the place at any place that are working on it and I I don't want to derail this but I had a conversation with somebody recently where it's like literally he's like saying my board wants me to u replace like or just basically start putting everything on chain right and so you're seeing this at the board level uh and yet you know this is happening as Ryan's talking about and in fact I was having this discussion with somebody

else earlier today who was saying you know the to to Ryan's point the institutionalization happened. The boomers came, the ETFs worked, everybody was buying and it's all the OGs who feel who are are leaving and that's been this transition has been really tough for people. >> Yeah. I mean the the other thing is like look, let's not forget, you know, we've talked I think all of us would have agreed that like we're sort of like the 1990s era. There's just how many companies in the 1990s continue to exist today. Like whether you think Ethereum is like Cisco, TBD, but you know there might be just companies like Cardano of the world you know founder just stepped out you know today like

those companies eventually. >> Was that really just today? Do you think it was really just today that he stepped away? He he he tweeted about it today. Rob is all but you know I mean like there's a natural um natural selection evolution process in capital markets and technology that like I think it would be unreasonable us for us to sit here and say yeah like probably 99% of the projects that have existed from the 2017 2020 era are not going to be the ones that really like take us in the Amazon's the you know uh uh Googles of the world you know and and and that might not be Ethereum that might not be uh Um, you know, I think Bitcoin still has a place in this world, but it might not be Ethereum. It might not be Salana, maybe

it's Hyperlquid. Um, but there's still a lot of innovation happening, right? I mean, I think we should definitely talk about the stable coin uh consortium here of Circle. I think it was Mastercard, someone else. Uh, but that that's maybe that's why it hurts, right? Right. Because like, you know, you see someone like David Hoffman, right, who's been a huge evangelist of Ethereum say, "Hey, look guys, I'm packing up my stuff. like ETH the the current like the the asset itself is you know not moving but the network itself is probably going to continue. >> So a lot there but I yeah >> yeah a point of frustration that I would draw to is for example stable coins are uh you know are capturing zeitgeist and and gaining popularity both within the

space and beyond. But the original sort of stable coin which you know I'm I'm biased maybe towards that was true to cryptonative values right so so decentralized cash flows acrewing to the token holders maker Dow we're actually today below December 2017 price right so and like and they have over the time you know they've done a lot of things right they've you know, they professionalized the Dow, but they have cash flows on on chain. You know, it like it it did everything that we set out in the original white paper for. And yet, the

thing that has cap captured popularity is taking a, you know, taking people's money and putting in a bank and issuing a like a basically a permissioned um stable coin. that when I talk about like the right reasons or like cryptonative values, that's the thing that feels frustrating is that I would have thought in a world of stable coins, Maker Dow would have more traction um because of these cryptonative values. But, you know, people in the end don't really care about this and that's why that's why I think there's a lot of attrition with with Vitalik's um strategy. Uh myself included. I I you know I'm I'm deeply frustrated that like the things

that he lays out in the crops strategy are just not the things that people want >> and you know and and that's why people are are are exiting is is that that there is a disdain for the business side of running a a layer 1 or or a project that ultimately is is his Achilles heel in spite of of obviously being incredibly brilliant. Ryan, let me let me uh bring Maker Dow back to SpaceX for a second because I want to close the loop on SpaceX. For people who are, you know, wondering why are we talking about SpaceX here for 30 minutes on a crypto podcast that you it's the biggest IPO in history and the the >> it's also the biggest um uh stable coin transactor.

>> Oh, that's interesting. Oh, with bridge, right? Yeah. Um it is uh the largest capital event probably in the history. I mean, OpenAI raised 122 there. So, okay. So, the uh you know, SpaceX IPO is next week. I think it's June 12th. Uh, you know, they're raising at a $1.77 trillion valuation. So, to tie this back to Maker down, the reason I want to even talk to you about SpaceX is, uh, you can have things that will change the world, but you can also have a rational exuberance, right? So, maybe Maker Dow actually will get it right and you just had to have a massive run up and a rational exuberance and then capitulation and then slowly climb back up. And maybe Maker Dow is going to, you

know, be huge one day. Is this the t is this that moment for AI? Right? Because that was the other thing I was feeling it all in is the event felt very similar to Breakpoint in Lisbon, Portugal when everyone is, you know, getting high on their own supply. And uh it felt like yes, this stuff is going to change the world and yes, these valuations. I mean, I was sitting next to a guy who got three texts in a 10-minute bus ride saying, "I got access for you for Anthropic. I got access for you for SpaceX. Three and 30. I'm only charging three and 30. And it was uh it I don't know. It just felt So anyways, to turn this into a question like what do you think happens with the SpaceX IPO? Um from I guess up or down?

>> Yeah, it's a well it's a little bit different than and this is what I have historically loved about kind of the permissionless nature of of of crypto and the fact that there you know there aren't lockups. There's no sort of like perversion around the price discovery. crypto has the purest price discovery whereas SpaceX what a lot of people are not factoring in right now is the significant shareholders right significant shareholders are actually locked up for 366 so until next June 13th that almost certainly and I don't know for sure but when I look at it from the outside I would say that definitely includes founders that definitely includes Valor that definitely includes Fidelity and that almost certainly

includes Giga. That's 30% of float right there. 42% of float is Elon. So you're talking about 72% that isn't going anywhere. And then out of the 28% balance you, you know, everyone's like, "Ah, well employees are going to have to like sell to buy a house and things like that." Well, first of all, most of those employees live in Bokeh Chica. There's no $10 million mansions to buy, right? They're they're pretty dialed in. And secondly, most importantly, all of these employees have had a December liquidity opportunity every year since 2018. That I mean, that's how I've been that's how we've all been participating is the

December is the the December tenders. So, most of the employees are not like, you know, they're not cash strapped. They're not a starving entrepreneur that that like, you know, needs to buy the dream home uh next week. So, you know, and that's that has both a good and a bad part. The bad part is we won't see true price discovery for over a year, right? Because we have, you know, your classical um low float, high FTV, the highest FTV with, you know, really the lowest float um which obviously we saw a lot in 21. And so, we know how that plays out, but that generally buoys for longer. And you can't get a true wash out until you have true price discovery.

We're not gonna have true price discovery at least till 27. >> Well, you if you had the opportunity to sell your shares, would you? >> No. I mean, that that the like So, I'm personally of the mind that the merger is likely to go through >> the Tesla merger. >> Yes. The the Tesla merger because it doesn't trigger um antitrust in this environment with like, you know, Google and Amazon being basically like doing all the same things. So antitrust is not a legitimate argument. I think the merger does go through. That's a creative for SpaceX generally. And then I want to see the the business kind of like settle in to its true Kagger and its true cash flow and its true revenue

structure before you can kind of really rationally apply comps. I've done all the comps analysis from like Palanteer to to Google and and everyone in between and it's just really difficult. you know, you have to you have to structure this Elon premium because the world pays about a you know, about a 2x premium on a comp basis for Elon to everything else. Um, incidentally, today at the at the the valuation, um, it's about the same revenue comp to Palunteer. So, if you don't think Palanteer is overpriced, then it would be difficult to say that SpaceX is overpriced. And it's a more important defense prime to the the US government than Palanteer is. Um and

certainly more defensible. >> Well, it just also makes it hard to comp it, right? I think it has the outlier kind of things. The thing uh Elon obviously was talking about it or he retweeted stuff like when Tesla went public as a $ 1.7 billion valuation which at the time felt pretty rich and now it's like you know trillion plus, right? And so that's like his point was look Tesla was a 0.1% of its current market cap at the time of the IPO. So you gota like to sort of read between lines like look I'm going to be extremely focused on making sure that we deliver on the promise and we continue to to explore the universe you know to the universe and beyond kind of mean like and so I think

um what could uh yeah I don't know if there's anything else on the SpaceX stuff. No, I was more just curious. You're so in I mean you're so deep in SpaceX, Ryan. Are you still what are you still doing in crypto? Like are you still you know so I don't know if you've been I don't know if you've listened to Empire recently. We've been talking about like doing things on chain. Dialectic is very big. I don't know if you guys are like taking long short positions but you guys are a big LP in in DeFi and DeFi has been you know getting hacked out out of the wazoo. So I would be curious to get your take on like what you guys are doing there. >> Yeah so we you know we continue to to yield. Um, we have put a lot of resources and mind space into risk

management over the years. Um, after 1010, I had kind of made the the the quib to my team that it sort of felt like being in the Pacific Palisades fire where we're the only ones who had invested in a sprinkler system. Um, uh, which is risk management. However, it does not feel very good to preside over the ashes of our space. DeFi that is right. So there's only a handful of DeFi shops like ourselves left standing and you know there is sort of this a very short-lived celebratory moment with that and then it's just really really challenging. DeFi yields are down. Um Santi's made the the point very eloquently that um the the risk adjusted

uh you know reward for for DeFi doesn't make that sense right now. And so we're seeing a huge migration into RWA DeFi and we're doing that ourselves. Um so you know you can go and get um you know you can go and take both sides of of a trade say like SpaceX and and lo and behold the the funding rate on the short is um about 45% depending on the platform right now and so you can go and get good yields uh in uh in RWA yielding. However, the big concern that you and I talked about is, you know, given the frequency and the

sophistication of the hacks, it feels like for me that Lazarus probably got a hold of Mythos. In fact, I I'm like convinced that Lazaros got a hold of Mythos and these hacks that are are coming are just like, you know, extremely sophisticated. and the moment feels a little bit like picking up pennies in front of a steamroller. Um, but at the same time, uh, you know, I I think we'll we'll continue to see maturation in in the space. And for those who survive, there will be um there will be another side to this, but we're going through it right now certainly in the space. But I have definitely not I'm not giving up on crypto, not giving up on DeFi whatsoever. We continue to yield. Um,

I'm I'm really excited about about what we're doing, but you have to like you just have to adjust in this in this space. Like, you know, there there are moments where things die and and new things come up. And the open-minded future forward approach is the only one that has ever really um made money consistently over the course of the history of the game. >> You definitely have to survive. Um, and even though you have very small probability of a hack happening, there's a social engineering attacks that are very sophisticated and it's just the impairment risk is much much higher in crypto. Even though you can recover with law enforcement and that has been historically a feature of crypto that's very transparent, but know there's

entities that allow Lazarus to launder and take money out and this makes it hard uh or circle is not awake on the weekend or stuff like that. Um, how do you think about like um on the RWA trades? Sounds like you're just like arbing offchain like Tradfi um and and what's on chain. Is that just mostly hyperlquid stuff or is there anything else that is interesting to you? >> A lot there there is a lot of it that that is hyperlquid. It's the also the first time we have historically been everything only onchain and we had to kill back golden calf and again that's just like emblematic of the moment where these these cryptonative principles you have to reevaluate um but uh you know

hyperlquid actually is is really one of the great venues and I think will stand to win quite a bit in the RWA movement. um they're they're they're doing extremely well. But where the best yields come from right now is the delta neutral between onchain and uh you know some exchangebacked uh like short position and the funding rate there whether it be like Binance or Coinbase you know in fact Coinbase just started offering um uh SpaceX derivatives today uh to institutional clients so that that's something that we're into.

Can we go back to something you said earlier around the 1010 and like what you mean by like we're kind of the only ones who are in real risk management like we've talked to some extent in 1010 I like what's your like what what actually happened because I think there's still doubts around what act like what's your diagnosis of that and what are the ash yeah >> so a big part of it as far as I have heard is very large players um ones that I am very disappointed in because I would have expected that they had better risk management um got caught on some carry trades. So like Hong Kong dollar for Bitcoin carry trade. Um that started the the the Bitcoin liquidation, but then the like the other liquidations sort of

cascaded um from there because and and Jason, you you'd made this point to to somebody this week very very thoughtfully that they're all correlated assets, right? So that that step down in Bitcoin caused the correlated de uh cascade in in every other uh in every other asset. Um, and this is what feels really frustrating. And I had a lot of of of OGs say, tell me this is why they're picking up their ball and going home is because it like in 2025, we can't get risk management right as a space. And we still have large multi-billion dollar shops doing this level of irresponsible

um highly leveraged looped or loople leveraged um uh yielding. It it feels very frustrating. It's, you know, it's one of those things that the rest of the world can't take us seriously until we stop doing this irresponsible stuff. Well, I mean, you have Lehman blow up and a couple other shops blow up, you know, but there's like DoddFrank. Rob, when's the DoddFrank of crypto coming out? But I I are we going into another 1010 here? I mean, obviously like we have >> you're talking you're talking micro strategy.

>> Well, I was gonna I was going to go there, but I do want to make a like just a slight pause here to talk about like I've seen on the timeline like the pump and dumps that are like at a greater scale. like you have like you know I'm not like I haven't looked closely in this but like lab and a couple other projects that like on the timeline there's like I don't know how substantiated that is or not. I don't know if you know for a fact, but it feels like there's a certain market maker entities and exchange coordination around some of these tokens that just cause a lot of damage and wreckage, especially for retail like like like I'm talking about like coins that are like 99% held by like top five entities and then super low float and then you see a

huge wick. Um it feels like a lot of market manipulation. feels a lot like um just insider dealings that like just betrays we talk about like dro you know retail coming into crypto they just are deeply uninterested in this casino because it's not fair it's not transparent and you know even though the house technically always wins in Vegas in prediction markets in you know crypto it it feels like you know crypto's just in a bad spot to inspire the next 100 million users to come and and and and speculate in this stuff.

>> Well, it also, you know, it also burned the last 50 million, right? Like people who came in say late 21 and since whether it was trends with meme coins or late play gaming or otherwise, they feel really burned today. I I actually sat down with a family office in in Hong Kong um in March and the son uh of the family office happened to to sort of be involved with Axi Infinity and he said no one in the Philippines will get into crypto anymore because everyone feels so burned by Axi infiniti and I thought man cuz you know obviously we're investors in and in and AXI and I thought wow that

is really painful to hear that entire country has written off the space because they just feel burned. And like that's not Sky Mavis's fault particularly, but there is this thing like every time we burn a bridge with a retail customer who gets into a you know a coin that goes reverse hockey stick or or so on and so forth. We lose long-term uh like long-term participants and the cost of sort of customer acquisition goes up each time, right? because you can't get them back. You have to get some new incremental um uh entrance back. And we're kind of like running out of time and running out of people to

make that pitch to. >> There's a there's a thing I've been I've been saying to a number of people because because I I get asked this question all the time because I do a lot of these um appearances and and whatnot and people are are asking me like why are there not more retail participants in when Bitcoin is $120,000 and you know, etc. And one of the things that I think is underappreciated last year was that it was by far and a way the most value destructive year that we've ever had in crypto despite the fact that you know Genius Act happened and there's all this like retail excitement and we had on we had Bitcoin alltime highs and you know it's still on all time highs etc.

But when you think about what happened with the Trump memecoin and then the Melania memecoin and then the tariff tantrum and then the 1010 and you think about like who are the people that really get caught off sides on these things, you know, yes, there's institutional, you know, people who get caught off sides on these things. But, uh, it's really the retail investors who get hurt the worst. And when you take that into account and you say, okay, well, there's this thing that's happening where, you know, we talk about it all the time like, oh, there's institutional adoption and that's exciting and we're getting what we wanted, you know, etc. But everybody who made, you know, invested in this space, the hodlers, the people who were excited about, you know, what what was happening and coming, uh, all of them lost money.

Then, you know, who's left, right? there is because cuz at the end of the day, Broadidge doesn't give a [ __ ] about the price of Ether even if they're using a blockchain to like clear some repo transactions, right? And I I think that's one of the the the biggest things. And I had a I had a discussion with an investor recently to to your point, Ryan, about AXI who was saying uh I was talking about a and I won't actually name the the the token because um because I don't want to, but it was talking about oh um you know, have you invested in this token uh for this new project? And it's sort of like one of those things where, you know, a bunch of insiders in Silicon Valley are like, "Oh, this is like interesting and we're

going to pump it and, you know, etc." But, um, uh, everyone I talked to, there's actually no real no one believes it can actually work. Uh, and everyone's like, "Well, I've just seen this movie before. It goes up and then it comes down when everyone realizes it doesn't work." And it gets back to my point I said earlier about how zero sum the space feels that there are so many people taking that perspective around investment decisions which is like oh this thing's not going to work but you know it'll go up and it'll come down and you know at least in traditional venture capital or traditional markets people might make decisions on oh well this is a founder who's good at raising new capital or this is a um you know something that I think can can attract others but nobody says oh well this

thing sucks but maybe I can dump it on somebody else First >> on this point before we go to micro strategy and it's a good a good segment of this is sort of the dats which I think has also been super value destructive. I mean, Bitmine to pretty much every DAT, it was just I mean, it's Spaxs all over again, but just specifically more destructive for the reputation of crypto because it it's sort of the the armchair skeptics about crypto look at now deaths and say, "Yeah, like again, we're right.

Uh you can't put a token on a corporate rapper and expect to perform well." And look, will they recover TBD, right? But certainly like if you look at the performance of particularly someone like Bit Mine, it's just incredibly value destructive and it doesn't help. You talk about Arthur Hayes kind of talking about like a I remember when he shilled his prediction for hype at like 185 like a discount rate. >> He said 150 three days ago >> 150 I think it was a presentation on Tokyo like a year ago and the discount rate was like like the whack on that was like 6% or something. I'm like okay well clearly he worked at an investment bank.

So anyways, >> yeah. Ter terminal growth at eight. >> Yeah. Yeah. Yeah. Exactly. Ludicrous, right? But again, like um what what needs to happen for crypto to grow up? Like it's just like certainly like Rob, I don't know if in money 2020 people talk about DATs and and does that even compute? >> No. No, nobody is talking about debts. Dats >> were they last year because you >> No, they were talking about DATs last year. I I mean last year it was actually the same things. It was Genius and it was in stable coins and and AI. I I think last year there was a little bit more excitement because we were right at the you know Genius had basically gotten past like around the week that this happened and so there was a real just like excitement about okay well now what

does this unlock for stable coins this year there's actually a little bit of oh well you know we haven't seen as much growth as we thought would happen in the last year. It's been a little bit slowgoing. I I kind of discount that a little bit on the stable coin side because like let's just be real. if you're a Fortune 100 company, uh you waited until Genius to get a a stable coin strategy and then you waited two quarters to get a stable coin strategy presented to the board and then you hired people and like now that things happening and so we're we're seeing some of that in my portfolio companies and we're seeing some of that and uh we're just takes it just takes time because these are you're you're moving the Titanic in a lot of these things but I I think um to the point about DATs

DATs were you know I this was not a a thing that that ever made its way really to the you know non-crypto world. But there were all of these people making these presentations last year around, oh well, you can create Bitcoin per share, you can create Ether per share. And you know mathematically they weren't wrong in the right market conditions but the and maybe this is just human nature but we talk about uh market conditions in a in a sense that we're we're we're prone to be positive and so we're prone to like discount to Ryan's point earlier about nobody having good risk management. We're prone to discount to the downside. And so, you know, I I I heard people say to me a month ago that,

well, Michael Sailor is going to take us to 120,000 Bitcoin again because he just keeps buying. And this happened for for a while, right? And now all of a sudden strate he he sells 32 bitcoin and you know the market basically sees it as well he's probably priming us for more sales and uh stretch which is his you know preferred uh note um that he that he's issued trades down under par and it looks like now he's probably selling a bunch of bitcoin to cover those dividends and it looks like a ponzi all of a sudden and it's like maybe you were right that Okay, well in the right market conditions this thing would, you know, create Bitcoin per share. But in the same way, it can go up and come down

and come down really reflexively and really aggressively and violently. And the fact that we continue to put our hope for the industry in financial engineering and not, you know, real world use cases is a big part of the reason that we're in the situation we're in. >> Yeah. the the the question that I always have with respect to micro strategy is what is his number? There is a number uh it's probably somewhere south of 30 you know probably now due to buys last year higher than teens where his uh creditors do liquidate it and like maybe it's not

like a you know a specific liquidation number but there is a number underwater where things start to to to implode there and then obviously that's going to that would be that would be the ultimate sort of liquidation cascade for the space and maybe that is the like like healthy wash out no bailouts you know that that is a manifestation of cryptonative values that that the space needs to to see and also with you know Micro Strategy being the defining DAT but lot lots of these other DATs have have numbers where that like the the debt positions that they've taken on to to make these acquisitions

uh do get liquidated and that's my big big question. He's highly incentivized to never state the number and obfuscate it maximum amount possible. We saw that in the in the FTX collapse where once Caroline tweeted that number of like this is where we'll buy you know you knew that was their number and and it was all over after that. So he's, you know, you're not going to get the number out of him, but um look, where is that number? And you know, and and and what happens should we hit it? you know, there there's um I was talking to somebody who I respect tremendously who's been, you know, one of the most successful traders in the space uh over

the last decade, uh who was telling me today and I think it was being overly bearish because because they like to do this, but was saying, "Oh, you know, I think it's possible Bitcoin hits $40 or $40,000." Um, and you know, it's it's what it's it's 63,000 today. Uh, you know, it it looks like potentially we hit the 50s for sure. Um, and you know the there was another person in this chat who was like, "Well, you know, at 40 $40,000 like I would just put all my cash back into Bitcoin. Like I'd feel really comfortable finally like, you know, taking all my cash and putting it back into Bitcoin." And and one of the things that I said though is like we we've now built this business and this industry around all these central counterparties

to your point Ryan about like that's where all the value is occurring to all these companies that exist around the space and it's not entirely clear to me that we're in a situation where like we were in you know 20 2018 where Bickham can can have this crash and it doesn't just kill the rest of the industry because it's no longer about oh the to your point on all the OGs is leaving around like you know this this hodddler mentality this you know crypto ethos mentality. It is now a industrial marketplace for all of these you know large corporates who are building here and if that happens and those companies blow up and the venture dollars blow up and the you know the the we have the wash out not just on the retail side.

We've had it before but everything else that's been built around the space over the last couple of years with Larry Frink and JP Morgan and and all these guys. it it's not quite clear to me that you you can bring the original ethos back and you definitely won't keep the institutional ethos. >> That's an interesting take. Yep. >> I mean the the thing about uh Sailor though is like Luna and like every other financial engineering out there, Lord knows I've been I been here far too long to know how these things unwind. which is what I've always told people, look, you want to be bullish Bitcoin, buy the goddamn thing. It's easy to buy it, you don't

have to go through Stretch and some financial engineering, like eventually arbitrage strategies blow up. They do like it's just it's just a ticking time bomb on a highly volatile asset. And so like I don't know what's going through his mind when he launched Stretch and then he like retired some of the debt. I mean, a lot of these things are from the outside in look extremely fragile and and not sound what I think Micro Strategy relative to other DATs like they were pretty clever because they were first because of their position to like structure things in a way that by the way many other DATs just do not have that same level of structure and downside protection. Um, but again like

a lot of these things are built on like reflexive loops. So as soon as you degrade trust whether you sell 32 bitcoin or or you know 500 or thousand bitcoin it doesn't matter that like you just entered a whole you basically went from being the the bitcoin Jesus which is sort of very counter to the bitcoin ethos of like you know satoshi was never out there you know and you now have a very public figure uh that promised you to never sell and now it's sold like like like Game over. It will end. Like, it's a matter of when. Not. So, to me, I think it goes below way below 40,000. I mean, this could be going down to 10K.

>> I mean, if for sure, >> it's a number for sure. It spirals out. I don't think you hold 40. >> No, I clearly not. No, I mean he had there's so much that if there's a forced unwind where creditors are coming in or you know because he's got all these preferreds they go and you know they go and unseat him and just like unwind the business um so to speak that uh 10k could be high, >> right?

>> Yeah. Why why stop there if that's happening, right? I mean, he he owns what, six, seven% of the supply. Is that high today? >> Does he own six? >> Maybe that's a little high, actually. But >> um let's send it on a high note, guys. I mean, I think uh >> I don't know if there's any. We're like the end of the world. >> The end. There's no fear-monger. Look, we to your point, I think I did feel crypto headaches. Go ahead, Ryan. So the so a high note that that we we draw to in in in the office actually dovetailes with with your with your first point around like products and assets that that people are excited about and

um you know RWAS and and everything kind of moving onchain and having and then us being able to to sprinkle in the advantages of crypto and like using crypto prim primitives but backed by these assets that people have stronger confidence in like a Google and Nvidia, a you know a Tesla, SpaceX. That feels like something that is is really interesting um for me that if you can go and produce a natively denominated yield in Google um that's just a great asset to hold, right? like you know there's a dominant company and then I can get a little bit of a boost and crypto helps

me get that that that boost through you know through cryptonative uh primitives that feels like a use case that that we can stand on it very obviously in this environment the the sort of killer app or the useful use case of crypto is financial related you know this is financial technology at at the end of the day that's why Rob you're you're there in a fintech conference and people are ultimately talking about about these things. Um and and you know and that's because even if the underlying crypto assets are not interesting, the primitives of crypto do remain interesting, right? And

and and that's exciting. >> And so um just uh I just want to correct my my ear there. It's it's 4% that I own. It's not 60%. >> Okay. I was actually I was just typing it in to see to see. >> Yeah. Uh might there be a state of the world? It may not forever. I think eventually valuations do catch up. But you have a great service and technology, but that doesn't mean it's worth 200 billion. Like like Uber for many many years was a great service for the consumer. like consumer surplus was phenomenal but the price just the unit economics were not there. price was not there. And look, now 10 years later, record low

interest rates allowed it to get to the point where it was and then public markets and then but it took a while. Uh it took a while to get there and I think crypto has in my mind always been farther way farther ahead on the valuation against fundamentals because it's so nent. It's exciting. it captured the zeitgeist and uh there there probably is a healthy reset and I think that's what makes it the most uncomfortable here which is um I think to your point Rob like no one is contesting the utility of stable coins um and but it is an uncomfortable kind of truth that we have to face which is okay you know say stable coin volume grows up 10x and a gent takes off and you know that doesn't really acrue value to the

network I think there's a reset that probably needs to happen maybe it's regulatory unlock that allows us to clarity that allows us to really design tokens to capture more value and um or or other players capture that value whether it be Tempo or Mastercard or Visa and and is that like a bad thing? No, I don't think it's a bad thing. I don't also think it's a bad thing that like Robin Hood and some of these other financial institutions are now adopting primitives to your point Ryan prediction markets and per like there's just a lot of financial engineering that has come out of crypto that is in my mind it's a win. Um and I don't think we should like as much as it's painful we should sit here and say hey crypto is like useless like all this stuff like all this venture dollars over 100 billion

invested in all three of us have participated in I don't think it's like not all of it went to waste there's a lot of experiments but but you know I mean like there's like I don't crypto's not going to die the primitives are there more innovation will continue to happen although I am curious from both of your side because you're way more active on the kind of investing side is the talent really there cuz like over the last like 10 years you saw like really great cryptographers and engineers people that wanted to come and build in crypto now I don't know >> well I I will say this I um I'll say two things so first on to both Ryan and and Santi your points about you know what's happening in terms of like bringing

assets on chain uh earlier today I recorded a podcast with uh chair of the CF CFTC uh Mike Celig uh and this will come out on Monday and it'll be the first interview he's done since um he he launched the perpetual guidance uh for U first US regulated perpetuals last Friday. Uh and if you want to, you know, feel bullish about the future of regulated onchain markets in the US, listen to that podcast on Monday because he is so bullish and he talks about the how bullish the administration is and how they really want to push this innovation and they see it as true financial markets innovation for the first time in decades

and have not changed. So that should make you feel bullish and there's no and and I you know it's almost mind-blowing to me if you had not told me in 23 that we'd have the sitting chair of the CFTC talk about bringing markets onchain in the way that he's talking about them today. So that's amazing. And when to Santi to your point around well you know is the talent there I mean we're we're going to announce we were slow to start the year but we're going to announce um probably at least three deals this month maybe maybe four that we've led. uh we we picked up a lot and if I think about the founders of

those companies they are some of the best founders that we've ever backed while we've been here but they're in specific categories where we're attracting those founders so to your point auntie around okay the best cryptographers best deep engineers it's not clear to me that we can compete with AI right now in terms of the the best engineers in the world but if you think a lot about a lot of the best builders in fintech and payments There are actually many many of them here. And you know, I went to this we we co-hosted this dinner with a a portfolio company at the Van Go Museum uh a couple nights ago uh that you know the founder of that business was I believe the youngest SVP in world pay history and uh he brought basically every the who's who

of everybody in European payments to this dinner. I just showed up and put my logo on the on the door. Um and and so that that's nice. But I guess I get a little bit of credit for that. But that the excitement around things like that is is there and so the talent's there. It but it is a fragmenting market very much and I it's it's clearly just breaking apart at the seams where there's there's certain things where there's really excited talent and there's really excited innovation happening and there's you know a lot of the things that we used to think about people just aren't there anymore.

>> Yeah. I I would echo this that you know I was just in in San Francisco the last few days and that does feel like it's AI everything everywhere all at once. However, in March, uh I was in Washington, uh and the the chair of the the SEC and CFTC um spoke at at the Milkin Conference there and Washington was a buzz over crypto and particularly stable coins. The conversation was all stable coins, all all crypto. And so I I think you guys are probably seeing the same thing where um founders and and like teams that

we're seeing in the space today are um say more mature in in some ways like are they getting is crypto getting the hot young dropout from uh from Stanford less so than than say the 171 18 era but at the same time there's like really talent executives who are taking a prudent approach to building a business on top of crypto and that's it feels like that's where value is acrewing right now less to the the cryptonative assets and that get ahead of their skis on valuation which ultimately has has really been an Achilles heel for a lot of projects right you go from seed to

public effectively in a few months that thing gets ahead of its skis it causes a bunch of problems in internally with these these young talents And now we're having a a uh a kind of a slower role with more mature uh executive teams in crypto. And that's okay. Like I I you know, I like that. I'm I'm not I'm not completely adverse to that. Is it a little bit less sexy? Yeah. But it's also it's probably more sustainable in the end. A little bit more um more stable in the end as well. Pun intended. >> There's a lot of gray hair on this podcast. So >> yeah, I mean you go to events in suits.

I like like I went to DA a few months ago. I was like what like you I've never seen all the this number of suits in my entire career in the space. >> Well to to your point Ryan I I think this year maybe spilling into next year you will see some of the hottest fintech some of the some of the largest companies use stable coins and I think that inspires the next crop of fintex fintech founders um to build in space. like you know you mentioned earlier you see SpaceX be the largest like you know using stable coins and that becomes talked about and then ramp raising a huge round this week you know they're into it uh and and you know I think >> into stable coins a lot you know and they're I mean they're close partners of

Stripe >> right >> and I actually think it's very interesting they're I think people outside of the space are more bullish on the space than many people inside the space at this point. >> Yeah. Yeah. Again, the techn the the networks and the technology works. >> Lots of new entrance who are really excited about the space that you know is ultimately compensating for the jaded OGs that that are exiting. And that's okay. You know, whether you know you got to have these like refresher moments, whether it's we got to have a wash out of a sailor or we got to have a wash out of of OG's and and the like paradigms of of that era. That's okay. That's part of the evolution and the maturation of of

the technology and we'll get more more legitimate businesses building using crypto primitives as a result. >> Yeah. Yeah. I think event we got a wrap soon guys could say but I think the lines between crypto and non-crypto gets blurred like it's just fintech and fintech encompasses like stable coins and you know tokens and tokenization at large and it just becomes you know irrelevant to make that distinction. Um guys, before we wrap, should we talk about content of the week? >> Of course. Can't we Ryan Ryan reviews?

He doesn't listen enough all the way to the end. He has >> So Ryan, we have a little we have a this show. We know we we have a tradition where we have content of the week, best thing you've read, listened to, um uh uh this week or last couple weeks. Listen, the best thing that happened this week on any content was the New York Knicks coming back from down 14 to win game one of the NBA Finals. So, NBA Finals, that is the content of the week and then then the World Cup starts next week. So, that's the content you I'm thinking about.

>> It is a great it is a great moment in sports over the next couple of couple of weeks here. Um, for me, the content of the week is if you watch any presentation out of the the All-In liquidity summit, watch Thomas Leaf's um uh presentation of CO2. He makes this very compelling argument that um as you go up the scale uh from billion in unicorn land, so from billion dollar companies to $10 billion companies to hundred billion dollar companies, you actually get a higher probability a substantially higher probability of a 10x from there. So companies that achieve 100 billion in in

value have a 31% chance at a 10x whereas companies that are at 10 billion only have an 18% chance. And so that is that one slide explains this whole movement towards the the excitement in the secondary market and all these nested SPVS and everybody piling in to the same 25 names because you the when you take a prob probability based return profile on that it's easier in today's environment to just pile your money into hundred billion dollar unicorn or or a centacorn so to speak than it is to take probabilistic approach at the 13% chance that your your your um unicorn can can

10x from there. And that really flies in the face of a lot of of um you know sort of standard thought in venture and I thought that that was really interesting. >> I love that. I was to dovetail on that. I heard Brad on TVPN talk about this exact same point. He said the best return the best venture returns have been in the public markets. >> Yeah. uh and and I think it yeah it runs counter to the you know venture kind of asymmetric like you know law law of large numbers you can't really compound much at that point but you know he he was making the point like Jensen Huang also with Michael Dell like I think it was like a Bloomberg conference who's like look we're going to see $10 trillion companies like why why couldn't we see that and I think you just have to

like shatter that ceiling you know of course it's going to be irrational >> the best venture returns are are just about to be enthropic and open AI and SpaceX so this is a that is more of a a a a um a result of the fact that like you know people used to go public earlier and now you go public at a trillion dollars and you get great >> well it's fair but the IRR on like you know if you're in Nvidia five years ago or if you're in Sandis Micron you know some of these things have had a phenomenal run so depends on how you look at it like you know cash on cash or IRR but or risk adjusted like it's all these things but yeah I for Oh, yeah. Is Brad um the alttimeter uh uh founder uh was on TBPN

talk about this exact same point. I think it was last week. And uh he also talks about the initiative to give everyone in America, every kid in America like I think uh starting them off with S&P 500 like I think it's$100 or $250, you know, and which I think like obviously he was a huge part in in getting in enacted in legislation the Trump accounts I think is what it's called. >> Yep. >> The invest America act. >> The invest America act and the comp have everyone kind of benefit in the compounding uh factor. Like as I think about raising kids like teaching how to like the value of money and how to invest like something like that is not taught well enough in schools but if you give someone an account they could monitor it. I think it's like amazing initiative that I think every country

should adopt. >> Yeah. When when do you think we see an invest in Spain act? >> No no Ryan come on man probably better earlier in Switzerland or uh Europe's tough man. Europe is tough. X ex Switzerland Europe is tough. >> That could be something that, you know, all three of us are sitting in Europe. That could be something that we could we could chat through next time is is is like also where does Europe go from here in in in this moment. >> I will tell you the that has been a big part of the topic of the conversation here at Money 2022, which is just how overregulated Europe is. uh which which usually Europeans in my experience are very defensive when you say that that

they don't want to agree with you and now it feels like there's some capitulation that even the Europeans are like yeah we need to figure something out. >> The the uh dilemma that I spend the most amount amount of my time thinking about here in Switzerland is you know Switzerland's a very well-run country but can a country stay healthy while everyone around it is sick? you and me, Ryan. >> Uh, topic for another podcast for sure. But look, congrats on Ryan on on SpaceX. I had no idea, but you know, amazing.

>> Thank you. I appreciate it. >> Yeah, that's great stuff. Thanks for coming on and sharing your insights. >> Well, I appreciate you guys and and everything you do in space. So, thank you for having me.