Tether co-founder William Quigley on why the real bull market is still coming

Transcript

GM. Good morning. Welcome to the Milkroach Show, the daily crypto show that's seen more ups and downs than a Six Flags roller coaster. I'm your host, Jay Hamilton. It's Monday, June the 23rd, and today once again, we are joined by one of our favorite guests, William Quigley, seasoned investor, co-founder of Tether, the most used stable coin in the world. Also co-founder of WAX Blockchain, a leading blockchain and bridge technology. Today we're going to talk a bit about the news of the day, the Iran war and the impact on crypto and broader markets as well.

We're going to look at Bitcoin and the lack of sustained momentum that Bitcoin has that just seems to be holding it down so it can't quite break out. Talk a little bit about alts. What's going on with alts? Is there going to ever be an alt season? Uh William and I were chatting before recording here and it's it feels like it's never going to happen, but don't give up hope everybody. things are still positive in the long term. Also, we got to talk about stable coins. Circle IPO. Circle just continues to catch a bid. Wall Street obviously very excited about more exposure to crypto. And we're going to talk about the Genius Act, what's going on in legislation, some positive momentum there that not a lot of people are talking about, but honestly, the the

news for crypto continues to be good. It's the macro side that keeps on hitting us in the face. Before we jump in, got to let you guys know quickly Milk Road is hiring right now. We are hiring a podcast host for our macro podcast ahead of people and an operator to help operate a bunch of the things that we do here. So, if you're interested, hit milkroad.com/careers or the link in the show notes. Would love to meet you and have you join our team. Today's episode is brought to you by Letin. Get cash without selling your Bitcoin. It's also brought to you by Nexo, the platform that grows your crypto without locking it away. Without further ado, William, welcome back to the Milk Road Show.

Glad to be back. Always a pleasure to have you, William. It's always good to get somebody with your level of expertise and experience in investing to give us a bit of a bit of a deep breath in these moments when we tend to freak out when uh markets just go wobbly like they are right now. Just red and then green. Uh let's let's just start by uh I I know you're not a macro trader. I mean, let me actually just ask you this question. Um when events macro events like the Iran war erupt like they do right now, uh do you do you trade around those events? How do you I don't I don't No. What I hope is that my portfolio is positioned to do what I want it to do

when these events happen. But um uh as I've said many many times for many years um the greatest gift that can happen to all of us as investors is having some quantity of available money. Uh I mean not invested directly in the market or you know held in like maybe uh government bonds something. And I recommend this to everybody to do that so that when there is a super disruptive event and there's a sudden drop in the price of whatever assets you're looking to buy, whether it's um you know the S&P

500 or some global index, you can get in and uh uh being able to acquire positions when there's massive fear in the market is probably the it's almost like the one area where you can beat the big institutional investors because a lot of them they can't take the same sorts of risks that individuals can take and um my view which is probably a lot like Warren Buffett's is um uh there's always safety in buying assets that have um uh much lower prices than they did

the day or the year before. Now, obviously, there's some things that are just going to go away. You know, if you buy stock in Blockbuster, while the the trend is that that's going to disappear, that's a different story. But when a an attractive company or asset is just hit in a major selloff uh that's more about people just all wanting to put their money in gold or some other protected area, it's a great opportunity to pick those assets up at a discount. Um now in in the case of uh the recent US bombing of u of Iran's nuclear sites so far anyway this morning

the S&P 500 has not really taken a big hit. It's uh I know last I looked it was basically flat. Um uh so that opportunity doesn't exist, you know, from the events in the last couple of days, but it's just a good thing to keep in mind. Big global disruptions, you know, macro stuff that's not company specific uh or industry specific uh but still leads to a selloff in the in the in the things you want to buy, they're great opportunities to come in. Um so that's uh you know something to be looking out for right now. Uh because any war if one um gets really u bigger than just Iran

and and uh and Israel and I don't know if you want to say the US is at war. I guess we are in a way. We bombed some count's facilities, but it's not a substantial commitment yet by anybody but those uh primary belligerents, Iran and and Israel. Um there's a chance that we'll see a big selloff as people just pull their money out into things like gold or whatever. So, we should be we should be looking for those opportunities. Obviously um hospitality and travel related companies I think really worth a look at because you will see a dip anytime things like u you know

important regions flare up with conflict but those come and go. How how do you feel about the way crypto has responded? I mean obviously one of the challenges uh with the beauty of crypto is 24/7 7 days a week trading. Uh negative of that is when a macroe event like this happens and the catches the weekend crypto can get slammed. Yeah. Can and almost always does. Right. Um I think uh the in in the short term specifically to your question I I'm not surprised we saw a push back or pullback

in all the crypto assets BTC you know taking the lead and then everything else follows BTC. Um because Wall Street has just put Bitcoin in the sort of risk asset bucket, the same bucket they'll put any uh like recent IPO stock. It's um it's something they want to u increase their position in when the markets are feeling bullish and it's among the first assets they sell when the markets are scared.

that is um how Bitcoin's treated these days by by um by Wall Street. And since all of the altcoins are basically move in kind with Bitcoin, but they just are more amplified. Um, we saw, you know, this weekend another big sell-off in the alts and, uh, it's becoming harder and harder to to see if 2025 will have any sustained rally like we were hoping in the year post to happening. Um and um I would say more broadly it is curious I think to all of us who are involved in

in Bitcoin and and the other tokens how uh what was supposed to be the asset you went to when the world was um you know doing doing bad things. Uh it was supposed to behave a lot like gold. it um Bitcoin really behaves just like any other traditional globally traded Wall Street asset. It it uh it's not doing what we kind of hoped it would do. Um and uh and so when we make these u linkages to Bitcoin being digital gold, I think that's a harder thing to harder

argument to make in recent times because uh gold is where people move to and Wall Street investors move to in times of um of uncertainty and it's not Bitcoin. It it certainly feels like we are headed in that direction, right? You are seeing more and more a tie between Bitcoin and gold, but we're we've we've still got a ways to go. I mean, certainly if you look at the, you know, central banks are buying Bitcoin or at least continuing to hold it and in on their balance sheet if

they got it through seizures, right? You've got you've got, you know, Abu Dhabi who bought a bunch of Bitcoin at the beginning of this year. I think it was like 500 million. But we just don't have we don't have the sustained momentum that we need. We just keep getting smacked by macro factors like but but the it's it's very it just feels like we're we're we're balloon held underwater a little bit right now. Like and I don't know when the pop happens. I don't know. Do you think that we still like I know you were very bullish coming into 2025. So was I, right? Like very bullish, you know, and so but I don't feel I don't feel less bullish than I did before. I actually feel more bullish

because, you know, of all like all that Trump has done, the stable coin act, all the legislation that's coming, the the shift in crypto sentiment from institutional buyers, the ETF continuing to do so well, you know, and I'm talking mainly about Bitcoin right now, not really the alts yet, but it just I don't know. But you has your stance changed? Are you still just as bullish? Um I not as bullish as I was um at the beginning of the year because at the beginning of the year everything was moving in accordance with what had been similar to the prior uh three havingss.

we were getting um uh we had the the kind of the post having April 2024 kind of low then some substantial selloffs in August September which I like to see so we're still on trend and then we finished the year and immediately preh happening we were in 65,000 or so BTC price at the end of the year we were 100,000 you know close and that was all very consistent with what I expected to see in a posth having year.

So going into 2025 where um Bitcoin would rally in multiples. I was hoping to see a 5x multiple between the having and maybe when it would top out at the end of 2025. Well, 5x of 65,000 you're, you know, you're over $300,000. So, um, and then beginning of January, it was like, yeah, all right. And then Trump coming in saying great things, but, um, it so far it hasn't turned out that way. you know, uh if I look at gold, uh since the beginning of the year, gold, gold's like 28%

above, uh the price at the beginning of the year. Bitcoin's 8%. Right. So, um and the S&P obviously it was up like 20 and then dropped 20 and now it's I think up two, right? Yeah. It's about even basically. Yeah. Yeah. Call it break even. So, but you know, S&Ps kind of break even, but for a posth having year, halfway through the year, which now we're halfway through the year, uh to be up like 8% year to date, that's uh substantially less than what I was hoping. Yeah. Now would that like what that says to me is that we have had more

external volatility from political events and the headline risk that Trump creates for all the good that he does for for crypto and crypto adoption and crypto legislation. He certainly is a uh he's not great for for volatility in markets. So, what that says to me is that says to me that I it just feels to me like nothing has changed. The timeline has just been pul pushed back that your bullish sentiment could still your 300K could still come true. 300K is obviously a high target. I still feel good about 200K by the end of the year so long as

we don't have any of these more of these macro events. Now, very difficult to predict whether we'll have more of these macroe events. I don't know. Nobody knows, right? But, you know, I just I look at the the Iran war uh is feels to me like something that give it a few weeks and and we'll get through this. I don't know what will happen with the war, but from a market perspective, I think the markets will adjust. We'll price it in and we'll get through this. The bigger thing was tariffs and even that was a huge people don't realize how much of an impact that had on markets and yes the volatility and the uncertainty that created far greater than than this Iran war is and we got through that right so we're on a 90-day

pause right true there is a danger of what happens in July in July Trump is going to uh drop the hammer again I assume now maybe something will change if um the US is increasingly committed in um in neutralizing Iran. You know, maybe he'll say, "Hey, economy can't take the the tariff thing while we're trying to deal with Iran." So, that could put a pause. But I I think it's quite disruptive and difficult uh and really even unfair to have this looming tariff

bomb over us. And the president says, "Well, we'll wait 90 days." But there's a lot of companies that u smaller companies in particular that are wondering about, do we acquire goods? you know, if if it's going to take a month or five weeks to ship goods to the US, you know, pretty soon we're going to be in that window where you don't want to be buying those goods and have them hit the dock right as a 125% Chinese tariff hits us. So, um I think it's very negative and must be suppressing the market in some ways, which means it's suppressing crypto. Um, but I also I

mean I agree wholeheartedly the tariffs were way more substantial to the markets than uh this you know since I've been a child all I ever hear is conflict in the Middle East right it's been going on for a long time so markets can deal with that one so for for it it feels like we go back to your first point that right now the best thing you can do as an investor is to position yourself so you have some cash on the sidelines so you're you're able to take advantage of the Trump headline risk of what he's going to do suddenly and be prepared for some volatility down

but still we're in a position I I believe we're we're still in a bull market we're still in a buying period and we whether the timing is just the difficult thing but I think it's within the next 12 months Right. Like I I don't know your take. You still do you still think I know you don't think maybe you don't think 300k Bitcoin by the end of the year. Do you still think we could hit 300k Bitcoin in 2026 in this bull bull cycle? So I wouldn't be holding it unless I thought we could do much better than 300K. Uh uh now uh what kind of timeline, right? So that's very hard. I mean, it's like the

S&P. I like the S&P. I know the S&P is going up, but don't ask me like, you know, in 6 months, 12 months, 15 months, 18 months, whatever, will it be up or down? I don't know. But in the longer term, and for me, longer term is like five years. So, I am incredibly confident that over the course of the next 5 years, Bitcoin will be substantially above its current price and I'm also confident it will be below its current price at some point in the next 5 years. Uh, so I don't worry as much about Bitcoin, you know, because my time horizon's pretty long. But like

anyone else, I'd like to see it um go up and uh uh I don't think it's going to hit 300 in, you know, 3x in the next 6 months. It could, but I don't think so. Um uh but it'll it'll really be based on whether the I think retail uh buyers come in. Uh it's mostly been uh an institutional phenomenon this year, right? I think retail buyers just didn't do what they did. Maybe they got distracted with with u meme coins. I don't know. But um I think you can like

look a lot at the increase in Bitcoin and correlate it with Michael Sailor issuing bonds to buy Bitcoin. you know, big and not just not just Michael Sailor, right? Huge trend of and don't get me wrong, like Michael Sailor is a mountain compared to some some hills here, but the the rest of the Bitcoin treasury companies that are coming out also at least a couple of dozen around the world. Um, you know, the biggest one aside from Micro Strategy would be MetaPlanet in in Japan. Um, but uh those like sharp acquisitions of Bitcoin

um definitely uh by these companies have definitely helped it. If you took out uh corporate buying including Micro Strategy, I definitely don't think we would have been over a hundred. I think it would be below that. Um, it's a um it's a it's a phenomenon of Bitcoin that it's it's incredibly influenced by by um spot market buying. Um and it takes a little bit of fiat buying for uh it to go up a lot. And u so these companies acquiring positions have helped. Now, you know, they they could also sell

uh you know, you I really like the ETFs because um and I think Bitcoin ETFs currently have I don't know the US ones collectively maybe have 130 billion or so of Bitcoin. And um what's super nice about uh ETFs is a lot of those are owned by um in um retirement plans like 401ks and IAS in the US and those tend to be just you know set it and forget it type of buyers. So um I really like um uh the ETF phenomenon. Uh uh but there's

also a lot of borrowing, right? I'm constantly getting asked by different uh intermediaries, hey, you want to lend your your Bitcoin? Some hedge fund, you know, wants to sell short. Uh there's a lot of that, a lot of institutional shorting. And um I think that is uh it it kind of uh uh fulfills something that I thought was like one possible uh avenue we may go with Wall Street which I I've always thought was kind of negative to be honest. Wall Street uh being involved with Bitcoin and that is um institutional investors are okay

earning uh 5 10%. Because if they do that with any leverage, 2x 3x leverage, you know, they triple that return, that's a home run to these guys. Uh you know, we've been spoiled in in crypto and Bitcoin. We want multiples of what we, you know, we bought in at. And um uh there's a an argument I guess I make uh about Bitcoin going up and eventually being over 200 300 maybe that takes multiple years. But here's my argument. This is an incredibly volatile asset. Uh and and if

you go, you know, after Bitcoin, Ethereum, and all the other tokens, they're all very volatile. Um, no serious buyer wants to own that and accept that kind of volatility and and I'm really meaning on the downside unless there's a flip side to that. Unless it has the potential to 5x. If it doesn't have the potential to 5x, you wouldn't accept how risky this thing is. And so, uh, to me that ultimately argues that, yeah, if people are still holding it, then it's going to continue to go up and and it will be at multiples from here because

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Mhm. Yeah. Yeah. Yeah. I mean, it's a great point. the the uh the amount of confidence that institutions are showing in Bitcoin is a a big a big check mark that I think uh is easy to look past because you're right, retail is not here right now and has not been here basically this entire year. This has been all institutional money flowing in. Retail, as you said, retail got wrecked by memecoins last year. And and and and got wrecked by altcoins. Didn't get wrecked, but didn't get what they wanted from altcoins because we have not had an alt season. And uh and the expectations

that people have shoot them in the foot because they expect these mega multiples constantly monthly, you know, like it's a ridiculous expectation. And don't It is it is. Yeah. And and so if you take retails like uh substantial collectively, you know, substantial buying uh support uh out of the equation, then you're getting more bumpy u moves as different larger institutional players come in and acquire a position. Um, I would like to see companies that are taking substantial positions and I'll and I'll

exclude uh Micro Strategy because Michael Sailor's been very clear what he wants, but these other companies uh I would like to see them uh articulate what their plan is. And um whenever you get a u if you're a public company, you you you actually shouldn't be playing around a lot with the cash you're holding. You know, you you should uh try to, you know, do better than inflation, but as a as a former CFO, I I would tell you I would be wary of going into assets where I could lose half my principle.

Having said that, when companies get substantial cash positions, and many of them do, you know, tens of billions, um, uh, many of these companies, uh, historically have been willing to put some of their money into longer duration assets. Uh, from my background as a venture capitalist, we would always see uh, big companies. Uh it was usually kind of trendy too which I didn't like but a big company would say we should get into venture capital right now with venture capital your money is illquid for 10 years could be even more and there have only been a few uh uh public

companies that did this well I thought uh some of those are still around uh Google ventures did this well uh the granddaddy of this is u um uh Intel I think they started in the 80s uh and uh they had a very experienced group of investors right I co-invested with them many times um but so many other uh companies they would see this fad they would see how the markets were like everybody should be in venture capital and then they would dedicate some quantity of venture capital and then markets would turn around, venture capital would be in a

you know slow time and then they would sell off the portfolio and kind of damaged the valuations of those companies that they were in. So um a lot of us older VCs got burned enough to where we were like we don't want corporate money unless you've had a long uh experience in managing your venture investments. I'm going to put the same kind of perspective on companies that are taking positions with Bitcoin. Um, you know, the uh what I'd like to see is them say, "Look, this is like u just a small percent of our cash holdings. We intend to hold it like we would in a venture capital environment, maybe five years, 10 years, whatever. When we

decide to exit, we'll exit responsibly. You know, we won't sell it all at once." That's kind of what I would like to see. Uh but uh that's not really uh uh what I see with all of them. Some of them uh most notably Micro Strategy are like this is what we're going to be. But uh some of them are I think are just like hey we can get our stock to go up and therefore my stock options will be worth more and I can sell my stock options while Bitcoin rallies you know. completely completely. That doesn't help us as much. Yeah. Yeah. There there's certainly there is a a bit of a fad moment happening with these Bitcoin

treasury companies. And don't get me wrong, I agree with you. I think done right, it is a it is a great play and a great strategy. But I think that when you have a moment like this, as you said, where you see dollar signs and you see immediate return, you can have people go after it for the wrong reasons, without understanding it, without understanding the risk, the volatility, and then they might sell at the wrong time or they might get blown up. So thankfully, nobody is is is huge yet other than Micro Strategy. Like nobody is so big that they if if they did blow up, they wouldn't market that much. But when you have probably by the end of this year, I would guess we're gonna have hundreds, maybe even a thousand of these. I wouldn't be surprised. I don't think we'll have a

thousand, but no, I could see I could see a hundred. Um, the thing you've got to appreciate is how um difficult it is to do this as a public company because you know you're you train your investors over years, decades. This is how you should value this business. These are the metrics we care about. even introducing one new metric, it takes time, you know, whatever that metric might be. And so, um, now you're a CFO, you have a amazing quarter, your core business really

performed, but you have a loss and you have to say, "Wait a minute, wait a minute. that loss is due to this unrealized uh decline unrealized gain in a or loss in a in a Bitcoin holding and but ignore that you know but okay so now I can't just look at how you performed I have to see that oh operationally you did well but this holding you had did poorly but now I'm wondering why do you hold that and so I actually believe CFOs probably don't like this you they uh it cuz their attitude is probably uh go take the dividends we give you Mr.

investor and go invest those dividends in Bitcoin or take some other portion of your portfolio at at some point. By the way, even if you look at Micro Strategy, now it's been a few weeks since I looked at the u uh the company's uh financials. Uh but so this is rough but uh you know they've got what is it $60 billion of Bitcoin something like that hundred billion dollar market cap now in the S&P 500 and their uh their business the Micro Strategy business does $450 to $500 million annually topline you know 125 million a quarter um like$und00

million of operating income, whatever. And it's been doing that for what? Formed in 1989. It's probably been doing that for 15 years or something, right? It's flat. It's a software tools business that nobody cared about. Like nobody. Um, and so, uh, to me, and yet all of the employees work there. So you got 1,500 employees, 1,450 work over here. All of the SEC reporting is like this little business, but Wall Street values it as this Bitcoin holding company. It seems practical to me that

the CFO would lobby to just spin off that irrelevant business. Like no one is valuing Micro Strategy based on a you know we did 10% better in our software business this quarter. Nobody cares. Um uh one could even see I would certainly say this if I was a Micro Strategy customer. I'd be like how much attention does anybody in your company care about?

The only thing you guys are looking at is the price of Bitcoin because that's going to your RSUs or stock options. That's what's going to affect that. The software business is irrelevant. Uh so they should spin that thing off. I'm sure they've obviously this is not an original idea. I'm sure they've been thinking about it for a while. There may be some technical reason why they don't. Maybe maybe the SEC issues would be different, but um as a CFO I would be like lobbying for that.

Are are you invested in in Micro Strategy or Metaplanet or any of these? No. No. Be because it's a it's simply a proxy for something that I have more of than I probably should. You know, I'm uh I'm uh I'm quite exposed to crypto. That's why we got to get you on the show, you know. That's why we got to get you on the show. I want I want to go back quickly to something you mentioned uh earlier and then I want to talk about uh stable coins and Genius Act and Circle IPO because there's so much to talk about there. Um, but you brought up earlier uh 401ks and something happened about a month ago that I feel like nobody really noticed which was the previously the Biden administration gave

guidance that you should not hold crypto in your 401k. It was not like a it was only guidance. It wasn't a flatout rule like you can't do it, but it basically led nobody to hold crypto on their phone. And was this guidance uh through the SEC or do you know this was I I don't actually know where it was. I think it was through the it was Department of Labor. It was through the Department of Labor. I see. Okay. So, the Department of Labor Labor had given guidance saying do not hold Bitcoin crypto in your borrow. By the way, terrible advice and I terrible advice.

tell you why, but it's terrible advice. Not even being a bullish guy, I would say it's terrible advice. But yeah, but please continue. So, so now that has been removed and now the Department of Labor, I don't know if they have given guidance or if they have just removed this this basically anti- crypto stance, but there's 8 trillion in assets in 401ks in in the US. So you have a massive asset class that if they start to invest in crypto and Bitcoin, which I think they will slowly, it won't be fast. They're not going to be the, you know, the fastest buyers, but as you said, when they do buy, they hold.

They're not buying to sell. They're not quick traders. They're buying to hold. And so that is a I think the inflows that will come from that are nobody's really noticing that or seeing that. And I think that could be a large inflow throughout the future in the coming years. To me, what it'll come down to because remember 401ks have gatekeepers. First, the corporation that sponsors the 401k and then the institutional platforms that offer the 401k menus, right? And um it's um there's so many ways to like like examine your comment there because uh for many years, we're talking many many decades since I was a public

accountant in the 1980s and these these uh uh 401k vehicles were invented. Um, one of the things that struck me always was the lack of guidance to people who are investing and investing for like the ultimate long haul like 30 40 years, right? if you're in your 20s. And um uh I saw all kinds of awful things when when I was at the Walt Disney Company.

Um I'm sure it's not like this now, but when I was there, you know, 80s, early 90s, um the um it was very common for the CEOs of companies to um like really shill um the employees to buy more of the stock of the company they worked for. Now, we can all figure out really quickly what a freaking terrible idea that is, right? Like the one thing you shouldn't own in your 401k is the stock of the company you work for because Jesus, right? If that company does poorly for whatever reason and you're fired, you lose your job and the

investment you had, it was linked to that job and now you're you're you lose in both places. And so it it really bugged me even back then. I remember the first time I looked at the Disney 401k. Now, this might be 1990 or 91. When I looked at it, it was nearly 90% invested in Disney stock. What a terrible idea, right? Like this should be a diversified thing. So, um, it's been a, uh, it's been such a challenge for corporations, uh, to figure out how do they encourage people to use the 401k option because you also get matching, but to also, um, it's like Goldilocks. There are people

who will only invest in like treasury bills in their 401k, which is also terrible, right? And then there's people who will try to do really risky things and and too much of it. Uh what I would uh I mean the best advice I could give anybody would to be just put it in the in an S&P 500 index because where goes US stocks probably is where the global economy goes. Uh, but I see nothing wrong with having 1% or 2% of your 401k assets in Bitcoin. Like it could, you know, if it does really well, you could get an extra couple of percent

annualized return. That sounds great. But I would be the first to say don't put 10% even. Uh, certainly not more than that. It's this, you know, this little thing that can enhance the yield. Um, and if collectively eight trillion dollars, you know, uh, uh, does 1% what is that 80 uh 80 80 billion billion 80 billion dollars of buying. That's, you know, uh, done over a period of time. That could be kind of nice. Um, so, uh, uh, yeah, the one of the things as I've gotten older, one of the things that I, it really strikes me is when we went

from um, what we called defined benefit pension plans. This is where the company uh, told you how much money you're going to get when you retire. And then in the 80s we were or the 70s but it really impacted the 80s we went to defined contribution plans and that's where you can invest a certain amount and how much is left when you're retire is up to the markets right when we did that we said now you're responsible from deploying your investment capital what we didn't do is educate people and while there's there are lots of online resources I get it I always thought corporations could have done a better job. And having been

in the financial roles in these companies, I understood there was this there was this worry that if the company tries to give you advice and it doesn't work like you want, you could be sued. I felt like Congress should try to give some indemnifications to companies offering legitimate advice, you know, like uh so many people I've known have, you know, they they they've made almost nothing over 25 years on their retirement account because it was in bonds, government bonds.

So to me that was a much bigger risk that the government the Biden administration probably should have been educating us about versus putting a little bit if you don't like it just just put a cap only 1% of your 401k can be in stuff like Bitcoin and you know calling and and and and it comes back to you know Operation Choke Chokepoint 2.0 know and you know Elizabeth Warren and and the the crusade that the Biden administration and the Dems had against crypto. It's you know our memory is so short we forget how bad it was and that's again why I come back to why I

still am so bullish despite all this macro stuff. You know, you and I were talking before we recorded. If we were sitting here right now, you know, a year ago and talking about all of the the shift in the political side and I wanted to actually chat about the uh the stable coin, the genius act quickly as well. Like we would be thinking, wow, I can't believe how bullish that would be and I can't believe how good the setup would be, you know. But we've had we've we've been greatly impacted by macros so far this year. And also people forget we had a really good run to end 2024 and that is often forgotten. I think the real story in 2025 has been the um at the highest level

just the fact that alts have really failed to do much right and um alts are always linked to the performance of Bitcoin but but their performance is magnified on the upside and the downside uh and then yeah the fact that Bitcoin hasn't taken off um is um I think almost exclusively exclusively a result of uh uh Wall Street buyers because retail didn't show up uh just putting this asset class if putting this in the asset class of high-risisk stuff you only hold when it's a risk on that's sort of and

and now this ex you we could have you and I could have thought well if we had imagined this scenario we would Okay, but that those facts will be overwhelmed by all the positives, right? Like all the things Trump has been doing. Uh but it turns out no. Um the uh uh Wall Street aversion to risk is much more of a factor than these incremental improvements in the uh policy um perspectives of government officials in the United States.

or the world for that matter. That's well said. That's well said. Okay, let's look at uh Circle quickly. So, Circle opened IPOed beginning of June, I believe June 5th. Uh so, it's it's only been a few weeks. IPOed at was it 80 or $88? Can't remember exactly. And now we're sitting at $250. Uh and it really it it boosted quite quickly. And then it boosted again June June 17th because on June 17th the Senate passed the Genius Act bipartisan vote. Great support behind that. So there's really good momentum for the Genius Act. How are you feeling about Circle? How are you feeling about stable coins?

Well, obviously I love stable coins. As I've said many times, stable coins are the u stable coins are the real story of crypto, right? And I know all the Bitcoin maxis out there will say, "How dare you say that?" I think I think Bitcoin ultimately will be the sideshow. Uh we already have more trading volume in stable coins than we do in Bitcoin. So that's a fact. And it's been that way for years. And stable coins have so much function, right? I won't make this a the a video about stable coins, but there are very few innovations uh in the world where the uh the effects of those are exclusively positive. Like

stable coins don't have a negative and not a meaningful negative. I mean, maybe maybe if you're a a a payment provider that's been gouging consumers or businesses for years and stable coins won't allow you to do that. Okay. So, in you know, certain targeted groups will do poorly. But for global business and global uh consumers, stable coins are are extremely positive. Um the the circle um IPO is in keeping with um something I've witnessed since I've been in the markets so call it you know over 30 years which is when a trend becomes

uh popular and Wall Street says this is an area to focus on one or two companies companies become kind of emblematic of that trend and that would typically be the ones that IPO first you you know where everybody says oh if you want exposure to bitcoin and you don't want to buy it well micro strategy does this thing so they be you know it becomes the proxy uh for bitcoin for people who don't want to own it in its direct form well there is no other public pure play um way to bet on the growth of stable coins for us investors right now than circle and um Just as

uh Wall Street was starting to become aware of the value of stable coins, Circle does its IPO. Obviously, not coincidental. Um the the market cap I think of Circle is what 60 billion or so I think. Yeah. Um and uh you know it does you know one thing. It's stable coin. Uh the market cap of of Coinbase I think is 75 80 billion you know call it 78 or something. Um that's really intriguing though right because uh uh uh Coinbase owns a piece of it or has a is

entitled to a piece of the the revenue that Circle generates. And um uh so uh I sort of feel like if if Coinbase is or if Circle is worth what markets say it's worth, Coinbase should is undervalued substantially, right? And these sort of relative uh valuation games are very valuable to go through because usually they do correct themselves at some point. So um I don't think Circle is undervalued. So I think uh right now Coinbase is is um is u undervalued. Uh and I would Coinbase is at 76 billion and 76 billion was at 61

billion right? Uh uh so that's fascinating and um uh when you consider that even if you go back 24 months uh I think you would have really struggled to find you know you talked to 10 random people on Wall Street if two of them knew what a stable coin was I would have been surprised right and uh uh so it shows that uh Wall Street's starting to understand this and um it's a long way from when we did Tether and uh you know uh even crypto people would say what a waste of time like this why

why are you putting dollars on a blockchain no one cares uh I should say it's interesting that because I could have gone two ways with the Genius Act and the price of his circle um you know the Genius Act invites a lot of other companies in the US to issue their own stable coin. Presumably, a lot more competition would be bad for circle, not good, right? So, um uh I I think sometimes Wall Street people like they get the headline, but they don't think through the details. I would have made

the passage of the Genius Act to me it would have been neutral on circle. I could give you reasons why it would be good, reasons why it would be bad. Um if it if um all of the banking companies that wind up issuing stable coins and corporations who are going to issue stable coins, if they do them outside of the blockchain because the Genius Act doesn't require a blockchain and it's really more what I've talked about before, it's just like an updated Swift or AC payment network design, then um um uh Circle could do well for a long time because it's offering a different product, right? U a blockchainbased

stable coin, which to me is really the definition of a stable coin, is kind of the it's it's um it's attractive to a lot of people who use them. And um and so uh maybe in the long term, we're going to see these different approaches to stable coins. So circle will maintain its its uh very strong position. It is a pure play. So where goes crypto probably also is where goes uh circle. Um and um I expect the bulk of the stable coin usage among consumers and businesses in the US and around the world will not be

like circle. uh it will more likely be these new stable coins issued by banks, finance institutions, and and big consumer companies that want to avoid a lot of fees. Yeah. Uh if if if you're an investor and you believe in stable coins, how do how do you get exposure? What's your view on the best way to get exposure to stable coins? Are you investing in Circle? Are you investing in the blockchains that under that Circle uses like Ethereum or Salana or another? Are you investing in one of the decentralized stable coins like a a Sky uh or an Athena? Yeah, I mean I'm biased, right? I like

blockchain. I like the DeFi space. So as a overall investor I would not be that attracted to something like Circle even though I think Circle can do well. Um I would be putting it in u innovations in the DeFi space where you know uh stable coins are uh I'd be investing in those tokens uh because uh as more even though I think we've thought about all the great use cases for stable coins the truth is once it gets in the hands of billions of people there will be things we didn't even realize that people want

to do especially when they're blockchain enabled. That'll give opportunities to u entrepreneurs and to and to blockchain based businesses that are fast in their feet. So that to me is way more interesting than the um you know a traditional stable coin that's going to follow the genius act rules. But if you're like an investor, you're a hedge fund or a mutual fund, you know, uh right now the really the pure play, the only pure play you can get is um um circle banks like JP Morgan, uh you know, BFA, City

uh those are coming together in in uh in joint ventures to do stable coins. But, you know, there's going to be a tiny slice of their value of those giant companies value related to stable coins. People like pure plays. Wall Street likes the pure plays. So, to that end, I expect to see more of these things. Uh, you know, I expect more people to take pure play uh stable coins public. Yeah, William, we're gonna have to end it here because you and I could keep talking for another hour and we're already over time. We didn't even get to talk about alts. So, we we'll get you back on the show as we always do and we'll have to talk about Yeah. Hopefully they all have rallied. I was going to

say we'll talk about alts when alts matter again. Uh the only thing I would say on alts, let me just ask you this quickly. Are you giving up on alts? Are you still Oh, of course not. Alts are where all the innovation is. There's no innovation in Bitcoin. Even athereum, you know, it's kind of done what it's done. All the innovation is in alts. If you if you are interested in figuring out what the f it would be like somebody in tech saying I've given up on venture capital investing, right? Like where do you think the innovation is going to come from? Uh so the alts is where it's going to be. All right. Well, we'll get you back on when alt season is happening and we'll get your take on which alts and what the Amen. William, as always, thanks for joining us today. Thank you.

Good to be here. Thanks for listening in everybody. I got to remind you as always that none of today's episode is financial advice. I'm not your financial adviser. William is not your financial adviser. Investing is risky and you should always do your own research and think before you make investments. If you are trying to understand a few things that we talked about in today's episode, such as the macro madness that is happening right now with the Iran war and how that might impact your investments, highly recommend you subscribe to Milk Road Macro. It's our new newsletter that comes out twice a week. It's free and it gives you a five minute or less download on what you need to know in the macro world to understand that part of your investments. Also, if you want to understand stable coins and some of the DeFi and the decentralized

stable coins that you can invest in, you should check out our pro reports on Sky and Athena. We'll link to those in the show notes. Thanks as always for listening in today, folks. Have yourselves a wicked awesome day. We'll see you back again tomorrow. If y'all are making swaps or trades right now, highly recommend you check out Milkroad Swap. This is a deck that we built in partnership with Cow Protocol. Why did we build it? Not to make money, just honestly so we could have a place to do our swaps for the lowest fees that we could find. This is the fees on Ethereum, Arbitum, and Bass are only.15% fees. Uh this is a huge difference from uh other centralized exchanges that charge half a percent or even up to 1.2% fees on their swaps. Also, you can swap

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