Animal Spirits, A Very Stable GENIUS, & Mispriced Execution Risk: Why Bitcoin Wins

[Music] It all comes down to computers communicating. >> The information superighway can be a confusing mix of on-ramps and off-ramps. >> Bitcoin is worthless artificial gold. >> Is it still rat poison? >> Probably rat poison squared. >> We need to get into the world of okay, this is actually foundational technology. What the internet of money does is it creates a single network which can do a microtransaction to a giga transaction. The internet is going to be one of the major forces for reducing the roll of gun. The one thing that's missing but that will soon be developed is a reliable ecash. >> All right, welcome back. Welcome back to another episode of Final Settlement. Today is Monday, July 21st, 2025. As always, joined by my co-host Liam Nelson, Michael Tangu Tanguma. How we doing, boys? A lot happened last week. >> Doing good. We won't we won't say who, but maybe some people are getting married, engaged, things are happening behind the scenes. And uh it reminded me of like podcasts where like before you you do it, you rip it. It's like there's a little anxiety or you're like, man, I got to do this. And then when it when it once it starts, you're like, oh I'm glad I'm glad we're here. Like it's going to be a fun, you know, 60. So that's what uh that just reminded me. I'm ready to lock in. There's a lot of stuff to chat about. So uh excited. >> Big show, lots going on. We're going to start uh nice and simple. This is just, you know, setting the stage for a lot of things we'll talk about, but just uh the president of the United States tweeting out over the weekend, the greatest Bitcoin explanation of all time. If you've been following Bitcoin for a while, been in the space, you'll recognize the guy on the screen right now, uh works at Coin Center, Peter Van Vulcanberg. And this clip, I think, you know, is originally from like 2017, 2018 where he's doing some uh testimony in Congress and he's just very uh cleanly, concisely explaining Bitcoin's value prop and why it matters for the world. Um, and the president of the United States is is tweeting this out. I would I would, you know, position this as sort of a more buttoned up approach to as if Trump had tweeted out like Sailor saying there's no second best, like just a very uh long-standing mimetic uh clip that describes Bitcoin that's sort of been circulated for many years that uh the president of the United States is sharing. Um so thought we'd start there and that kind of dovetales to everything that happened in uh Washington last week. Yeah, go ahead. Jump in. So, so a few things. We don't have to play, but I encourage you because I think there's a lot of new people that haven't. I I I could be wrong, but I think this is from the 201819 Libra hearings. Um, and this is part of >> this is part of it. Um, but if anybody hasn't, it really is an incredibly concise uh incredible concise clip of Bitcoin's value prop and where it plays into, you know, global money movement. Um it it does remind me of the Baron um memes that were coming out when um Trump was you know in the process of running for president where this is like you know Baron whispers is like father they need to know you you understand >> ship the vonber ship the von clip you need to speak to the people that you actually understand what the orange coin is like you know we know Trump doesn't really get it but somebody gave him this clip and was like ship it now >> especially because Trump media apparently just b2 $2 billion worth of Bitcoin and related Bitcoin securities this morning. And so that going out Sunday night right before is related. >> I think we got to be careful because we're gonna get more and more listeners of the show. I think what it said and I maybe I'm wrong so I have to be careful as well, but I think it was saying that their their mark tomarket holdings are currently over $2 billion. They didn't buy they didn't open like market by $2 billion worth of securities in Bitcoin. >> You're a journalist now, Liam. you're going to have to fact check yourself before uh you know coming because people are going to hold us to a higher standard. Um no, but I am just joking. But I I think that's what what's going on. >> But um you know you you mentioned bags pumping. Lots of people's bags are pumping over the weekend. Uh it may in fact be alt alt season as as Michael has been uh alluding to for several months now. We might be there and it might be related to to again you know what what we alluded to around what happened in DC last week. So, the stable coin bill, the Genius Act, uh signed into law and uh the two other bills that are sort of still in process, uh passed the the House and will now go to the Senate and that would be the Clarity Act, just sort of the market structure bill, um delineating, you know, what's a what's a commodity, what's a security, what's a token, etc. Um and then also the anti-CBDC surveillance uh state act. Um, and so on the back of this, you saw Ethereum, I think, is up like 50% in the past 2 weeks or something crazy. Uh, Salana is also, uh, up pretty large. Um, and so now you're starting to see perhaps some of this followthrough from just, you know, positive sentiment, regulatory clarity, etc. Um, what do we make of this, boys? I think maybe um splitting them and maybe starting with the bills and then uh we could talk a little bit of crypto because I think I think there's a lot more meat on what's happening here. I think one of the big ones is for the first time and you know it's kind of an insane proposition when you think about Bitcoin is a $2 trillion asset or crypto digital assets 4 trillion and have never had regulatory clarity or formal policy uh is pretty pretty interesting. I mean, I think just based on that anecdote alone, you could imagine how this thing eats everything. If you get to $4 trillion, like four trillion is an insane number. I think the way maybe Bellagi recently talked about a a trillion is if 1 billion uh Chinese bought a $1,000 iPhone, which is a thou, you know, thousand iPhone is is an expensive um thing for an individual purchase. You have a billion of them, you know, one seventh of the world or one anyway. So 4 trillion is an insane number and we have had no regulatory clarity. So, I think that's a big component of it. I think breaking them down, the stable coin bill, a few notable things. So, one of them was the protection of state uh oversight because I think that was a that's always a ongoing battle between federal and state um regulation and policy. And so, I don't know how much that actually was a win because if you go deeper into it, you can see that um so it allows for stable coins to be created for banks, non-banks, and credit unions. Um but then the devil's in the details around there's guardrails for banks and non-banks. There have to set up separate entities, separate capital ratios and then the second you go over you get to any substantial um like flow or any substantial amount which is $10 billion you have to get regulated by a federally chartered um regulatory body which is the OC. So I thought that was that was interesting. Um I think the other one that nobody really it hasn't been talked about enough was uh this is the first time that the US has had a global framework for anything which is a big deal in the sense of whether it's in custody or specifically stable coins when you go to run businesses uh internationally whether I think they reference like Libro was set up in Switzerland because they already had um some regulatory body when it came to digital assets and financial services. you see this Mika, Singapore, UAE, there is no system or setup for the US formally and so it ends up really hard for people in and out of the states uh to offer services and then what is recognized and so I think that is a a big deal and then um the only other thing that I think kind of plays into all this which the stable coin bill it looks like clarity has a more likelihood p um given the previous passing this past week of getting approved um provides the right framework from a yield uh perspective because I think one of the big things that makes sense is like with Luna and a lot of the uh blowups that happened in 22 there was a lot of stable coins issued out there that didn't have any kind of framework when it came to onetoone backing and where they were um uh governed. And so once you have the stable coin legislation, well the next one is kind of market structure. So you can start to understand, you know, what is a security versus what is a commodity. I'm not saying it's right because there's a lot of things that we probably would agree are commodities that are going to be recognized as securities. But the point being is more from I think their vantage point. If they have stable coin legislation and then they have market structure, understanding what is a security and what is a commodity, when you start playing with those interoperability, now you can start to break down how do you actually build robust solutions that produce some kind of like yield that you at least can point back to where the smoking gun is versus like these crazy things that were built. Um, so I think that's how we in inevitably get into yield. I know that was a lot, but that was kind of my like looking looking into this trying to understand and then see how it's going to play out for the Bitcoin space. Um, but yeah, Leo, I'm sure you have some thoughts there. >> Yeah, I I think that the most interesting by far is uh I I try not to spend as much time as possible on on the Clarity Act and and it's it's great to see uh one other thing that you didn't point out which is uh very helpful is the protection for the free and open source developers related to um they are not money transmitters. I believe it is um based on this uh this clarity act and they would not be pursued as money transmitters. I know that the tornado cash uh case is still ongoing and so I may not have everything exactly correct there but it's uh it's definitely great to see for those cordavs and others working on on the space. Um, other than that, um, I think that the the most important aspect of all this is the the stable coin side of things. And, um, there's going to be money that flows into Bitcoin regardless, uh, just because regardless of the amount of times that the other side of the trade is actually can net settle. Um, we've talked about this before, whether it's, you know, banks that close on Friday at 4 p.m. and have to settle up Monday morning or stable coins that can trade throughout the weekend. uh 247 365 and never close for bank holidays. Um but I mean maybe I'm getting a little bit ahead of myself. We're going to see a really interesting divergence uh on how the different players look at the space um that are trying to get into the stable coin aspect where you know Tether has been in the space for a super long time. They want to just be accessible to everybody and um you know not have to deal with as much friction as possible. And we're already seeing others that are not quite as familiar with um or not not trying to get quite as much um market share in terms of number of different participants like uh JP Morgan already rolled out their their played um fees for different crypto companies that want to get access to their customers data. And I think that we're going to see a number of different strategies. I think most are going to just try to get as much market share as uh possible go and have run negative gross margins at the beginning and just because it's kind of like a an Amazon warehousing play where um you know you you get as much of the customer as possible and then you figure out profitability a little bit later on rather than uh JP Morgan trying to just extract fees uh at the beginning because they probably don't understand how transformative this is related to um the flow of capital and how people don't necessarily need bank accounts if if they trust uh Tether versus JP Morgan, which you know, the counterparty risk is is a little bit different, but not too different overall. Um, and I think that there's just enough uh there are a lot of different players with different views on how this is going to play out, but ultimately it's just all going to um it's going to be very interesting to watch and and there's going to be a lot of different regulatory uh plays in order to get as much moat and uh figure out how they can be governed, especially once they get to 10 billion dollars like you said in in total flows. Um so just kind of watching right now how how this is all going to play out. >> Yeah. And you what uh you alluded to here in here was um a an article that Michael you shared from from Fortune talking about JP Morgan's plans. Um what what are the implications of this? Yeah. Go ahead. >> So well I didn't know if you had any thoughts Brian on the stable coin stuff before going into I think before jumping to this I think we should talk about What I wanted to jump into is a whole second part which is the disintermediation of banks. But before that, any thoughts on or stable coins? I know we talked about them a lot so we don't have to go deeper. >> Nothing really on the stables. It's something you know we've reiterated over time. It's it's medium to long-term I think very net positive for Bitcoin. Um there's obviously these other crypto protocols that are seeing some value acral based on the you know the trajectory of stable coin growth that is expected going forward. Um, and then just on the clarity act, like I do think I do think there's some stuff in there that like, you know, you sort of alluded to this, Michael, like um the classifications of what might be a commodity. I think there's some language in there that is uh questionable to say the least around like what does, you know, trying to quantify like what does decentralized actually mean? Um, and I don't I don't think that what the language currently in there is like super applicable to like just saying something is decentralized enough or like having certain thresholds. Um, so I think there's there's work to be done there uh in terms of, you know, understanding what all of the uh the language inside those bills mean, but um yeah, go ahead on this one. >> Yeah, I mean there's a there's um a clip that was uh surfaced last night. I don't know how they got their hands on it. I think there's like open laws or whatever that Bitcoin open laws that I don't know if it's formal or if they're making up the charts, but it's one of those sites that show the different um states and what they're doing. And I guess they've kind of like commercialized it and they showed >> it was like a clip from the Clarity Act and it showed the two different parts. Um I couldn't find the hard copy because if I pull it up now, it's really blurry. But point being is it's like we would all agree in with any shadow of a doubt that the commodities that they're going to deem a commodity are securities, but this is what we talked about a few weeks ago. It's just who's governing the grift and who gets paid because that's what that's what's going to be blessed. Like commodities are are have certain properties to them. Uh you don't create them in a in a program and then let them out and then be able to change the code. We know all these things including Ethereum have been rolled back. Um but before we go to the the banking this specific thing I think that there's like an overarching theme um that the this act is kind of like the backdoor CBDC and the reason why is because ultimately the banks have been concerned and this is why it's going to be interesting to see how they play with Bitcoin is the commercial banks are going to be disintermediated by stable coins and the reason why is because the stable coins are um effectively you're just going directly to um either assets sitting on the Fed balance sheet or um treasuries. So you don't need the commercial banks to issue them. And furthermore, like to what you were sharing, Liam, I think that the stable coin stuff is bigger than Tether or will ultimately where we'll start to look at like, and this isn't a perfect analogy, but I think about it like the internet and how encryption um was outlawed for a very long time and then it finally opened up because you naturally needed to send information over uh and secure information. And I think about this for like think about some of the largest retailers, Amazon's a great example. You want to get closest to the client's like wallet and affect like the real wallet like we say it in metaphor terms like their their bank account or their their wallet and then you can naturally, you know, get them to spend more, do more. So imagine that they're able to link up whether it's their account, however it's managed, they convert and now you have it sitting there and then you can interact within their version of the universe versus like um Google and then you know Walmart, whoever else people have their relationship with. And that's what this is going to allow these these entities to do. And that opens up um just a lot of different ways that capital will flow who will look like a bank. But then also for the fintexs um and I think we've already seen this before like so it's tokenizing deposits are fundamentally different than stable coins right because if you tokenize a deposit you also have the counterparty risk of the bank that could fail like the other one is backed by the sovereign you know government and the treasuries versus uh the standard token. So, I think that's where you're going to see a lot of disintermediation, a lot of different like um uh um business models around how you can actually build and we'll talk about some of those later today. And then I was looking into it and I think that this is actually a growing trend that we've seen for 30 years with um market makers, mortgage firms, the fintexs have been doing this. Uh leverage buyout firms, Jane Street, Apollo, like there's all these different firms that have like taken out and just kind of it's almost like the Craigslist thing where Craigslist was the bank and then individuals start and build their own businesses. Airbnb as an example or ride share. Um, but it seems pretty dark for where banks are going and rightfully so because they've really haven't innovated. And so I wanted to share that. Let's get some thoughts and then that ties into like what JPM uh and Jamie Diamond issued out and he hasn't issued it yet. He hasn't even said the numbers. >> Yeah. Well, I mean, one thing you said earlier that I wanted to touch on too because you you brought out a lot there. one these are back door CBDC's which is I agree and they are essentially CB they're all CBDC's it's just are they issued by like sovereigns or not like so they're not central bank CBDC's but they're centralized they're just you know they're essentially a bank in terms of it's how you store your money and uh the issuer on the other side whether it's going to be circle tether whoever it is they can just freeze your account and you're going to have to rely on them in order for you to um have the right flow of capital. Um and so sometimes it's the enemy, you know, which is, you know, the Fed or or who uh whoever's your local central bank has, you know, at least some reliance on, you know, doing public good otherwise they'll be shut down by the public versus, you know, the outlaw um stable coins to come. So, so that's one aspect. Um >> the other the other component there too is just like even if it's a you know stable coin that's issued by someone other than a sovereign the ultimate >> underlying counterparty risk like those you know those freezes will occur at the direction of the sovereign right so it's like it's just an indirect form of um CBDC exactly >> I think yeah so where this ties into um and I I think this is fascinating went completely under the radar So, this came out July 16th. It's a pretty meaty article and the title is JP Morgan. Um, I don't know what the title is. JP Morgan plans to charge for data could crypto and fintech startups. I'd encourage anybody that's interested to listen. It's by Fortune or read it. Um but the gist of it was that ultimately Plaid and a few other aggregators have really created very large business models to um effectively integrate from the large banks into so think Wells Fargo, JP Morgan into crypto fintech um by making like pull requests effectively from the exchange to the bank and they take in the middle like middleware to get that client's information and data to be able to process it and move it over. I don't know what the exact fee structure is, but I can guarantee you it's nominal compared to what they're proposing here. The example they use is if um Coinbase wanted to move capital from JP Morgan, um if Coinbase wanted to pull capital for JP Morgan and let's say they do a $100, you know, movement of dollars to USDC or Bitcoin, it'd be roughly $10 just to do that pool. it would make a lot of crypto and and also fintech business models um either obsolete or very hard to run. Uh Jamie, if you stay right there, Jamie Diamond has a great uh quote. It says, "I expect to win so help me God." Diamond said during a call all the time, Diamond singled out Plaid, a wy service that helps consumers quickly connect apps like Vmo to their bank account saying there are people who probably use the data and that's been given that's been given them like Plaid. Um it's a super fascinating article. These guys are are very smart. Um, I would imagine this is for um, not like they call it a choke point. They talked to a lot of execs in the space from Kraken among others. I think this is more of like Trump and Tariffs. It's a it's a bargaining tactic um, to to better the economics and then figure out like I'm sure JP Morgan's going to come out with a stable coin that's not a deposit coin and a bunch of other things. Um, but the thing that I find the most fascinating is like the internet, you can't ultimately control it on a long enough time horizon. And the way, and they don't get it yet, there's a few that might, banks are going to compete in this world, is nothing to do with stable coins. It's all going to have to do with Bitcoin because anybody listening to this, and I know we all agree, all this stuff is going to net settle to Bitcoin. And the real moes are going to be around how much of the BTC wallet share of your clients and of the market you can maintain and then what are the structured products or whether it's lending stables you know yield generation we'll talk a little about some products that were funded this week but that's the real game not how you can move dollars around in the beginning it'll look like dollars but at the end of the day like all those dollars like Liam shared can be seized censored um but the thing that cannot be and can be managed properly is Bitcoin you and then that can have a further differentiated product in this banking world that's ultimately going to get uh commoditized out and uh there there's very few that see it and I think it's just amazing because you don't actually have to build a quasi bank anymore. You can build a bank by helping people hold their Bitcoin which is not is a commodity and so it's like an it's an arbitrage right in front of everyone and everyone's focused on crypto DeFi uh or telling everyone to stack sats and go into self- custody when nobody really wants to do that. Um, >> so it's it's time for us. >> What do you think the timeline is on that recognition, though? That it's not just about dollar movement. It's not about savings. >> They've already known it. I think I think that they already know it. And I think that the bargaining chip that you repres uh that you talked about, Michael, is getting all of the flows of the prime brokerage to uh from all the large hedge funds, etc. uh um who have a significant amount of capital that want to go back and forth from stable coins into Bitcoin and and uh vice versa. And I think that that's what they're looking forward to uh getting with the relationships with these banks. They say, "Okay, we're going to it's it's like Trump like saying, "Okay, China's going to uh pay 150% tariffs or whatever, and then so 30% seems reasonable." It's like, "All right, well, here's this massive fee. Well, you know what? will give bring it down significantly if you give us a lot of your flows and volume and send a lot of your clients our way. >> Yeah, I think what that makes sense. I think um what Brian was referencing is like when do banks realize that and maybe I'm wrong, but tell me like that banks realize >> that Bitcoin from a leaning into it is the mode versus playing this other game. And I think um I think it's going to be the sophisticated ones because we're talking with some of them. But really, it makes sense from an order of operations that the interest is with stable coins because that's the thing that we talked about with VJ before is I think that's how we get to a million dollar Bitcoin before we all really truly expect it is because the amount of flows that will end up in Bitcoin via stable coins are we cannot comprehend. And so you needed stable coins to be there not only just for that just to interact in a digital world. Um there was something that came out around a fantasy football crypto company like being served and it's like it's genius like it should be built on Bitcoin or with stable coins because everyone knows how hard it is to move money around and like all the things issued with it. But like that's just it's just so small and innocent but like once people have access to stable coins and movement of that capital it's just going to create much more GDP on the internet by itself but without restricting those flows. But that's the first order because that's easy for people to comprehend. Nobody comprehends Bitcoin as this thing that's outside. Most people don't comprehend Bitcoin as a thing that is more than a speculative asset. Very few people, if you're listening to this, you're one of the rare people that think of it as a true store of value with a large percentage of your wealth. It's taken me like two years running this business to really realize that because when I was in the old world and it's with all the hardcore people and like you're thinking about self- custody is the only way I'm going to shoot somebody if they take my Bitcoin. You're kind of like everyone's smelling each other's farts and like this is the only way. But once you like step into the real world where trillions of dollars moving around and there's the largest companies in the world like nobody thinks like this. Nobody wants to die for a trade and nobody's going to put all their money in magic internet beans that can just potentially go uh away. It's also why it's asymmetric. But you have to get into the mind of how these people think if you're going to really be opportunistic and make money. And this is just how they go. It's the first order is dollars. And then the smart people will start to realize, well, nobody's paying attention to this Bitcoin thing. It keeps growing. And maybe I want to help in custody because I can generate revenue on trade and custody. And it'll just take time. But that's the beauty of this whole setup. It's like it's the same thing as everyone gets Bitcoin at the price they deserve. It's like every financial institution is going to adopt Bitcoin at the price that they deserve. Hey everyone, welcome back to another episode of Final Settlement brought to you by On-Ramp and Early Riders. It was a really fun and fascinating conversation this week. Um, no shortage of things happen in the digital asset and Bitcoin space. We touched on a number of deals that were announced last week including Mara investment in uh two prime. some of the interesting things happening around the pubos including Caner launching with Adam back their new spec and then everything happening in the digital asset uh stable coin space you know all the way to JP Morgan and Jamie Diamond coming out and referencing choking off some of the uh integrations with their banks as it relates to crypto access and being able to trade. Um a quick word from On-Ramp as you all may know on provides best-in-class multi-institution custody. The thing that most folks might not know is we offer other products and services as well. Um whether it's multi-institution custody underpinning with multiple institutions um managing and working on behalf of the individual client or institution to move those assets all segregated onchain backed by Lloyds of London with a hund00 million insurance policy to the ability just to uh buy Bitcoin at the lowest cost rate in the ecosystem. And also if you want to lend um against your assets uh towards the end of the show I'll uh have another update as it relates to other financial services will be launching uh later this week but you have to tune in to to find that out. All right onto the show. I I completely agree with you but you know honestly there are very few the the use case for stable coins especially for banks is just trading counterparties and uh there isn't much demand because bank especially large banks can settle with each other at the end of every day and um you know their existing system works fine. It's only really just the fact that Bitcoin trades 24/7 365 which is is why they need stable coins and so stable coins uh you know Bitcoin's main trading pair is stable coins but other than stable coins too the main trading pair is Bitcoin uh because that's the only thing that really needs to uh settle 365 or 247 365 and so if they want all the trading volume around it they're going to naturally understand that Bitcoin's on the other side and um need to have at least some experts about how the market moves and and really what's the value proposition etc and everything like that and I think that they've had to be doing that uh in order to deeply understand why they want stable coins at this time. >> Yeah, I think we're both saying similar things but for different areas of the market. So what you're saying makes sense in that like they understand Bitcoin from flow of funds and movement of capital. what I'm when I think me and Brian are talking about are more from like a client perspective and how do you win market share as a bank and client deposits of the BTC versus like from a trading um perspective and that >> and that ties into also how the products will be built because what you're referencing is right but those people would never develop anything close to what we talk about with on-ramp or other products that are like segregated accounts onchain verifiable because if when they build it it's going to be very similar to the prime model you're discussing which is an omnibus account and they're going to say trust me bro I got your 3,000 Bitcoin, it's all insured. Um, >> I agree. But yeah, it's at least like a good top of funnel and they're going to just, you know, do the same exact They'll probably look at Coinbase and try to understand what they've done uh both what the banks have done in the past, what Coinbase has done and, you know, where uh the the good parts of both of those and they won't try to think about it in any different way like you know what people in self- custody have thought about Bitcoin or or anything like that. They'll probably just try to merge the two. Can we talk about one thing really quick? Curious to get your guys thoughts on because it ties into this is um how big a role in Tradfi like insurance really plays it. It um I personally I've always had this fundamental understanding that like the best um and the only real insurance for your Bitcoin is the way cryptographic materials hold whether it's in self custody. It's like how you manage that. And then if you have a third party um counterparty whether it's BitGo, Coinbase or if you're using something like multi institution is how are those keys secure? because if it's just one entity, like you're kind of, you know, not in a good spot. >> Um, and maybe it's because we've been in this like uh immature like not not fully developed um asset class that I just assumed it would always be like this, but now everything's changing so fast. And so we all know that like Coinbase, Bitco, they have these omnibus wallets. Lloyds will only insure them up to like call it 250, 500 million. Um, and I think that's market standard. It's not to pick on them too. to everyone and everyone knows that's educated that like if there is a large loss you'll never be Maple and then most people are hacked all day long from their phones and they're never made and where I'm getting at is I didn't realize this was a big thing in the gold industry so like a lot of the gold industry ends up with either fragmentation or segmentation because the um bullion depositories or where they're safeous um Lloyd's only insure a certain amount and then you have to kind of like move around and we had uh Josh Far from the Wyoming Reserve on last week. It's going to come out this week and he was referencing there's just like the size of the concrete and all these things that you naturally need and then you kind of like have to move to a different location geographical um diversification. Why I'm bringing all of that up is because your point Liam like this asset class is going to grow and there's no credible way to like ensure it and there's just there's none that's like economically feasible and so we're so busy but like this is going to be a very interesting model for early riders to look in you know to go further and so we've done a little bit but it's going to naturally grow where I don't see the two things that I think are objectively true for multi institution because every person can have subjective risk profiles but the two objective ones are enterprise pubco co anybody managing um other people's capital because you're a fiduciary effectively and you have to distribute that risk and then also from an insurance perspective because the asset being held whether it's an ETF Pubco with 100,000 whoever it is there's no insurance on the planet earth that can cover them so you have to diversify that risk and it's not to say put it at five custodians it's to say there's five custodians holding the keys they're all insured at a certain amount and the market hasn't really keyed in on this and that's going to be an interesting way I think to see how mic proliferates um in the banking sector. >> Well, yeah, you you kind of alluded to the I think what hasn't been fully grasped by the market is that the the the key here is is fault tolerance and redundancy. Um it's it's mitigating that tail risk of total permanent loss. And so, you know, whether it's the omnibus structures out of Coinbase um that have a, you know, a dimminimous amount that's actually insured, you know, it's even um it's even worse than that because as the asset appreciates, like these aren't these policies aren't denominated in BTC either. So, like the the dollar amount doesn't scale with the appreciation of the asset. So, there's sort of multiple layers of of issues with ensuring crypto assets. And so to your point like you actually have to go to the protocol level to mitigate the risk before you know before the loss happens effectively like that's how you actually um mitigate tail risk is by just going to the protocol level and and implementing some form of of fault tolerance where you don't get knocked out of the game and you're not having to insure against this massive amount that you you know you don't have the coverage for. Um, so I think that's that's the biggest gap to me is like people just not recognizing that there are protocol level solutions to to this issue that aren't just, you know, get more dollars to ensure the omnibus accounts. >> Yeah. And it's it's so beautifully elegant like multi-IG and the notion that it's all interoperable because there's this stuff's been tried like you can try in a proprietary implementation like Fireblocks to create a private key and shard it but you still have to trust their implementation of multi-party computation or even if it's like something like miniscript like somebody's independently creating some implementation that you can't audit you have to trust and the other part is even if that's better tech which it generally isn't or it isn't like multisig is the standard for a reason. The market coaleses around standards not around better tech. This has happened for for forever that um there's a notion of like liquidity that gets more liquidity and as more market participants leverage multic. It's a click of a button to export an xpub and participate in that quorum and actually scale appropriately versus get plug you know uh have to reconstitute recreate. So that's going to be a very fascinating thing to see as a market grows. Um because most people that know what they're doing are using multi-IG. And so for them to export one of their private keys or the public key to private key and then participate in a multi-institution quorum is um it's work, but it's it's um it's incremental work. It's not like you have to build a whole new tech stack. I think we lost Brian. Well, >> should we >> should we pivot? What What do you got? I got a list, but um anything top of mind? >> Why don't we uh why don't we go to the crypto aspect side of things? Uh I think that there was another name of a U Bitco said that they're going public today. Um, and it essentially is just like I I I think that the Clarity Act is like the this second uh coming out party of all of these crypto firms of uh you know this is their opportunity to go public. they now finally have the validation of the public markets that they've been waiting for for you know the past decade plus for some of them and they are seeing all of these um instances of whether it's strategy or the dogecoin treasuries or whatever it's going to be I think that they're seeing that there is never been more public markets interest in the space and um just wanted to get your thoughts on on the news of Bitco going public that that went out on Twitter this morning. >> Yeah. So, I personally love it um because Bitco has been one of our earliest partners. Um Mike Belshi and the team there one of the first to believe in multi-institution custody and participate um you know I believe they manage over hundred billion dollars in assets. they've been around um for a very long time probably second after Coinbase and to your point um the clarity has been there now to really access the capital markets but then also um you know from a personal selfish level I'm excited because while BCO is world class the market like our clientele in high net wars and family offices don't really know of them and it's really kind of an interesting paradox because the way we reference is the best key holders um today won't necessarily be the best ones in the future, but the worst ones today um like it's basically this notion that nobody really knows who most of the crypto firms are from the trady high net worth play uh perspective, but they know who Bank of America is or JP Morgan, but the thing they don't understand is you don't want any of them holding and participating in anything technical at this point because they don't know anything. Uh and so it's just an interesting dichotomy where people have to reconcile that these these firms and that's that's also the scary part about the disintermediation because I think bit goes and the firms like that there's only so many custodians to buy and some of these large banks are going to buy these firms and so you end up with more consolidation. Um but overall I think it's super positive for the industry and seeing like these the demand we saw for circle is probably going to you know go to the uh custody place because again there you know it's not as rare as um circle but there's only so many reputable custodians that exist in the market. Do you think that some big bank makes a big splash and tries to like go acquire them from like a public perspective just because they have so much data from like the I know Bitco is essentially the custodian for a lot of other custodians in the space and like uh they have a a big B2B TOC model. What do you think about um potential interest from banks? >> Yeah, I think BNY has always been the rumored one. Um >> Bitco it's it's it's there's data but there's just assets, right? like it's the same concept around buying those treasury companies that start to dislocate from the NAV >> is if you can buy a lot of that infrastructure >> and assets and client relationships. Um, you know, it's interesting because Robin Hood bought Bitstamp and Bitstaff was built on Bitco I definitely think that happens. Um, I have other thoughts, but I'm curious, Brian, because I'm sure he has some on Bitco going public. Yeah, the biggest thing to me is is kind of what you stated, which is like, you know, we have um you know, sort of an intimate knowledge of of telling people about Bitcoin and and it is kind of shocking that most people have have never even heard of the firm um in sort of Trafi Normmy. Um, and so I think that's that's sort of the one of the more positive signals to me is like as these companies go public, like they just become um more normalized, more ingrained in the public consciousness. And um to your point, it'll be interesting to see as like more and more of these do come public. Like it was it was fascinating to watch Circles IPO and then basically like 10x in a few weeks. I I think that'll be you know not all of them are going to to have that level of performance because I think circle and and USDC was a sort of a very particular thesis that want people wanted to express that view um broader sort of like crypto custody is is a little bit more of a a broader thesis and there are there are more many more players so it'll be interesting to see how that plays out. Um, one other Go ahead. >> Well, so just to, um, because this rounds out back to some of the crypto stuff you referenced, um, and it ties into one other thing, we'll just like lump it and then and then transition is, um, Charles Schwab, you know, announcing they've been talking about crypto and, you know, selling and buy sell. um there's been a friendly like you know competition or discussion around uh Bitcoin dominance and I think this ties into what we're talking about here because ultimately like Bitcoin and all the things we're talking about has been such a small sample size and it's kind of why you see Grift year over year or cycle after cycle just kind of grow and still stick around is because think about the people that got burned probably 20 pre207 and the 2017 bubble in 21 like There is some like notion of it that sticks in some people's minds, but the majority of people have no idea about like the Ponziomics and all the craziness we've all seen. So, it was always kind of crazy to me to believe that like we were and I it would be I wish it was the case, but that we were just going to go and Bitcoin is going to run and everyone's not going to pay attention to crypto. Why I'm bringing that up is mainly because um it's going to be interesting and this is really what ties into what we do at Early Riders and how we believe like if you look at Bitcoin as a north star and there's a lot of reasons to look at it because I talk with a lot of these infrastructure providers and it's an insane amount of workload to manage digital assets and all the craziness when they update protocols and accounting and everything that you need as a bank. It's just an insane like endeavor. And so I think Bitcoin will be successful. I think Robin Hood or Coinbase and whatever they do in this cycle will be successful. But if we all believe that over time, the market's going to grow. The market's going to understand that all this stuff is a grift and there's no value. It's going to be very interesting to see who actually ends up as winners and losers. And one of the big winners I would look at is ultimately like how much Bitcoin are you able to aggregate and then what kind of financial services you are you going to be able to deliver there. Because if you're focused on 101 cryptocurrencies and not focused on best-in-class custody and you're building um other yieldbearing products and all these things without first principal understanding of what you're doing, it's going to be a short-term game, but long term you're going and we've seen this, this isn't like theoretical. We've seen this cycle after cycle people get blown up and and you know uh there's no shortage of examples so we won't go into them but I think that's a that's a foundational fascinating question whether you're a long-term equity holder in the public markets on who's doing things like blocks a great example that to express your view in Bitcoin probably done right on a long enough time horizon but then what we do in the private sector is the same thing is look at the market from what we're doing what we're building and then look and how do you get into it companies um that are building the right way because on a long enough time horizon they're on the other side and then they're the ones that are going to reap a lot of the rewards. Funny enough, Bitco actually did this. They were one of the last people standing in the crypto industry back in 21 and 22 and they were able to do a lot of aggregation. Um, so yeah. >> Yeah, I I agree with all that. I think, you know, a lot of this deal making and and people putting their chips on the table will look uh smart or savvy in the short term and then over the medium to long term it'll be um there will be a reorientation around Bitcoin as as the thing that you need to focus on. Was it worth playing this uh Charles Schwab CEO clip or did you want to >> No, you don't need to do it. But essentially uh just real quick it's essentially the CEO said that he wants to compete with the uh cryptonative firms like Coinbase and they are just launch looking to launch uh spot Bitcoin and ETH trading um over the medium term um or or short to medium term and you know it makes sense that they want to compete with the existing firms because this is one of the few times when you know Coinbase and the people who aren't on the inside are actually, you know, the most sophisticated players because they, you know, regardless if they have done things right or wrong, like they just haven't blown up yet. And so they have all of the the trading volume thus far and and everybody needs to compete with them. Um, so it's just every everybody wants to get into this space. And to Michael's point earlier, like we were talking about like custody being done, right? And I think um, honestly, it's just more so than that, the trading volume is going to be more important just because they can figure out things later on with respect to custody. As long as they don't have all their customers uh, lose all their funds in in terms of their Bitcoin. Um, but I mean they they may or may not be able to get that right, but um they they're going to be able to iterate over time as long as they kind of get the flow of capital from Bitcoin to stable coins and vice versa. >> Yeah, I think they have dist they have distribution. And I think the thing that custody will matter sooner than later because >> it's like that whole notion of um it's such a crude or morbid example but like at Uber or Walmart at any night somebody's killed somebody that's an Uber driver Walmart employee because of sheer numbers by the pro proximity of having larger surface area of people servicing people in this industry more people are going to get hacked and lose their assets >> and then everyone's going to wake up to oh this whole thing of like well now I understand why people took their keys offline. fine, but then also that doesn't work long term or this and that's where like it'll really matter up front. But the other thing is just distribution. Like there's two sides of the coin of like you know Coinbase as an example has to be a casino because that's what they made their business in and so they're going to be a good casino better than Schwab, but Schwab's going to go down this route and we already see this and so they're kind of like stuck because they have no view. They're not telling you anything that the market hasn't. So they'll win up front on distribution because they have you know markets um they have clients but at a certain point it's just similar with JPM like the market's going to go to the native firm that's offering better differentiated products and that's just never going to be Schwab. >> Yeah. No, that all makes sense. And the where my mind also goes is like you know there's there's obviously still a massive amount of conflation that exists between crypto and Bitcoin. And I think part of that just is sort of um it stems from or it's a function of the administration stance. So the other probably noteworthy thing to pull up from last week was uh an executive order changing 401k plans. And this was, you know, the way it's phrased and the language inside of it, you know, none of this is Bitcoin specific, right? Like it's opening up these channels, the 900 trillion or or whatever the number is in 401k plans to broader crypto. And so my my point is that like I think there is some sort of flow through from the administrative the administration stance, the bills that they're pushing through to basically give air cover to all these other assets. Um I think flows to the Charles Schwabs of the world that are basically taking their cues from the administration and saying like okay what areas of this can we play in? Um and the the unfortunate outcome of that is that it's still all being conflated as sort of the same thing the same asset class. Yeah, I think I mean we've talked about this before, but unfortunately the investment management world sometimes just the majority of them are not very sophisticated because the majority of them had just underperformed the S&P or their benchmarks for a very long time. And so I think a lot of those people will be interested in the narrative of the day whether it's you know buying ETH or Dogecoin or Hyperlquid or whatever that they can get their yield on and um you know that's why there will may or it may or may not go to the same degree as it has in the past but um not betting that the altcoins are going to zero because of that um that just kind of market structure and how those people operate. But at the and so there will be more people that just continue to um buy these alternative tokens. But at the same time um the amount of smart money which is you know private businesses as well as public businesses that have been run well that are run by founders uh you know very smart founders that continue to attract more capital for their business to have sustainable long-term businesses. They're just going to, in my view, if they've been decent at allocating capital in the past in order to, you know, continue to run a business, those are going to be the ones that continue to just buy Bitcoin. It's just going to be a much broader funnel where a lot of people don't know what they're buying for the first time, just like the first time you download the downloaded a Coinbase app or uh heard about, you know, broader crypto from a friend. >> Yeah. which has been my base case that like ultimately everything gets inflated and so people can't discern what's meeting the real hurdle rate of inflation. Um that's where like Bitcoin is a hurdle rate has a lot of different meanings. um and tokenized. You know, I think it came out today like a few large companies putting Ethereum on their balance sheet in the same way a retail investor looks at unit biases the same way that treasury companies will. Um, and also the the thesis, like it's just a crazy proposition to believe that people just wake up and like, "Oh, Bitcoin's a blue chip." Especially because as you referenced um I think last podcast, Lun bias with IBIT, like you just see that ticker going up and you mark it against, you know, your your portfolio versus you're not looking at $120,000 Bitcoin, which is pretty bullish for Bitcoin, right? Because like Bitcoin could be $450,000 and people aren't going to be shying away from IBIT or the ETF. They're going to be looking at its performance. Um >> or they just start measuring it in sats when it gets above a certain threshold as well. >> Yeah. So we're just going to end up in grift for for for a very long time is the the net. >> I think that's fair. And it's an idea I'm coming around to Michael. The griff will persist longer than than I can imagine. >> I'm not even going to harp on it because I was just ashamed that you you I had to try to convince you of it. But we'll we'll we'll transition from there. >> I was too ro too rosy and optimistic. U do we want to go to some deals? There's a lot of lot of deals to cover. Um Mike, I'll go to your >> Dakota one if you want to talk about that one. >> Well, before the Dakota, I just want to pull up a few things. Um I'll I'll share. Let's see. So, um I think this ties into the grift a little bit is uh Oh, let's see. Here we go. So, um, I thought this was interesting because I think there's a growing theme here. Oh, wrong screen. Um, Michael's having a boomer moment. We'll see if this works. Yeah. So, there was two um notable deals that happened this week where Marl led a $20 million investment into two Prime. um they took a minority stake. The ultimate thing I I don't know much about two primes like full yield generating model. My understanding they've been pretty um I don't want to call them blue chip but they've been around for a while and Mara has leveraged them for their existing balance sheet to create more Bitcoin. Um but it but ultimately the headline is Mara leads to advance uh institutional bitcoin yield strategies. And then there was another one that came out um by function. The firm's function raises 10 million to bring yield to bitcoin gets back in from Alex galaxy digital and to elephant mantle. Um now it's it's less about the core businesses. Um it's more about in general as the market comes back. We still live in a world where people believe you're a sucker for holding the underlying and just um letting that generate the the nominal yield on purchasing power. And so people naturally will start to develop products and services that will look um to generate alpha and yield. And I'm not saying it's impossible and can't be done. Um but that you should always be wary and um you know don't trust and verify in the sense like let them stick around for a while. Let them see what they bring to market especially for the retail side because all these products are fundamentally different from like what they do at institutions and versus the risk curve they put you at as an individual. And so I thought it was just interesting to call out because it was two in the same week and um this is again I'm not saying this is what's going to happen but this is what happened in 21 where a lot of people just got outside their keys on where Bitcoin got caught naked and the market ultimately delevered >> 100%. I think it it can be said by just like Bitcoin is the hurdle rate not Bitcoin plus 2% yield or whatever it is is the hurdle rate. like if you lock up your Bitcoin or give it to uh an alternative party that it can be transparent with uh you know their exact strategy but they're also can be um leveraging it out like I think Marathon is is said on some of their public uh past public filings that they are le uh lending out their bitcoin there is risk in that and even if uh you know you are shown exactly what the counterparties are um you don't know who those counterparties are within this yield generation strategy as well. And so, uh, as Michael said, I think it's just, you know, always prudent to wait, uh, wait everything out and understand that there could be potential pitfalls that like you don't quite understand it because you may not understand even if you understand the counterparty risks, you know, you may not know who their counterparties are or how those businesses are structured. >> Yep. Um, >> yeah. The other just on that the other thing I would say is like >> Bitcoin's a hurdle rate not only because it's you know best performing asset of the past 15 years but it's because when we say that we're viewing it for its inherent riskoff properties and so when you start to layer on other execution risks custodial risks to that it no longer becomes um a you know a quote unquote risk fee rate or the opportunity cost like you're layering on additional risk factors there. And so I think you know we had VJ Boyati on on TLT last week and we we spoke a lot about this in just in terms of like you know market psychology and greed. It's like this is just this is just what's going to happen whether it's Bitcoin yield strategies or all the crypto stuff like it's just people it's just not good enough. You know Bitcoin's kagger is just not good enough when you get in these um euphoric hype cycles that people think that they are late to Bitcoin. they have the unit bias and they need to catch up in some manner. And so, you know, I think we're just scratching the surface of sort of the extent of this type of greed that we're going to see over the next, you know, 12 to 24 months. >> Yeah. And I think it's it's worth calling out. It's not to say you people shouldn't spend their Bitcoin or invest it. Um, I invested my Bitcoin in building on-ramp. We invest all everyone here or Bitcoin in building early riders. The idea is what Brian ke on in anybody ever making investment, you're always trying to um reduce the amount of assumptions that have to be made. So one assumption probably you're you're okay. Two assumptions you start to move a further out. As you start to get further out those assumptions, you're effectively taking too much risk in any endeavor, whether it's with your Bitcoin or your life. And so um the way we mitigate that or we think about it is you ultimately you think about self- custody. that's the hurdle rate um or multi- institution like it's parked in cold storage and then well if an entrepreneur understands that and then understands Bitcoin's proposition well then theoretically if they understand that if they're spending it they need to create more Bitcoin you start to get closer to being able to return that Bitcoin where you see a lot of people get blown up or lose the money is they're ultimately trying to make more dollars and they're also don't fully appreciate Bitcoin for the understanding of its its trajectory as global money and so that dislocation seems so obvious but fundamentally just kills the return profile. And so that's why um we feel confident in what we're building is because if you find the right-minded people, there's a lot of them, you can build really amazing businesses that can return that pro that capital profile. So I think that's something that we'll be discussing more. I know Liam uh working is working on a a paper that will come out um talking about it. Um a few a few quick things. So the other one that was really I thought was interesting um was Bitcoin Standard Treasury Company to go public through business combination with Caner Equity Partners one. So I think if I'm mistake if I'm not mistaken there was Caner Equity 2 which was the Tether uh SPAC. This is a separate one. So it's interesting. It'll be interesting to see what that looks like. Um this one has some really interesting notes in it. Uh, one is it's led it's led by Adam Back. Um, but it was interesting to see how they leaned into it. So, they talk about um the amount of capital that have been raised um the inind. So, here there's a comment about long-term OGs for the first pipe funded entirely through inind contributions from Bitcoin community. Um 25,000 BTC to be contributed by founding shareholders advised by blockchain capital. Um that was interesting. And then the other side uh was so net proceeds will be used to acquire additional bitcoin and build suite of bitcoin native capital market products and services. Um the other side was transaction highlights one of the largest pipes. Um innovative capital structure bitcoin community first funding first bitcoin denominated pipe funded entirely through inkind contributions from bitcoiners. Bitcoin native leadership actionable growth strategy intends to develop Bitcoin denominated capital markets and provide advisory solutions. Um this is something we've talked about a lot we'll be doing more uh publicly about but ultimately it just goes down to yes you can make money on Bitcoin um but you basic you should have you probably needed to prove to the market you could before before launching a uh you know billion dollar plus endeavor to do it. It's very rare if it has ever existed in 15 years where somebody just comes to the market, offers Bitcoin data financial products that require leverage, right? Building, you know, making money on your Bitcoin and hasn't ended up in uh misery in tears. And I think that's something that most people aren't talking about is all these pub codes are referencing. They're going to build Bitcoin native uh accreative strategies and nobody's done that at scale. Uh and so anyway, I'll leave it there. >> Yeah, everyone's everyone's kind of talking about these the same idea. The issue is the the sort of distorted order of operations as you alluded to. like you you kind of need to build a track record of providing trusted financial services and and doing these things. Whereas, you know, this you know, this proposition sounds very similar to the one that Caner is also involved in with 21 Capital where there's basically uh future plans that are unspecified, not many details around like we're going to provide all these services and and Bitcoin capital markets type stuff. um you would naturally hope that like you had built a track record doing those things and then raised on the back of that track record as opposed to doing it the opposite way. >> Yeah. >> I think >> I have a quick question. How do you feel about um the market structure as it relates to Bitcoin price and these treasury companies with um it makes sense a lot of the flows now into these treasury companies. I would say at least 50% is just Bitcoin moving from cold storage into these companies. Well, this one in particular, right? Like it's >> this one, but I think a lot of them I think a lot of their trades like that's the whole, you know, other like I think that's a lot of the trade is people are going and sourcing existing Bitcoin. Um >> yeah. >> Yeah, I would I would 100% agree. I mean um you know there was just that $80,000 or 80,000 Bitcoin movement like last week or two weeks ago. I would assume that's you know going into this product because you know the market hasn't really moved. uh you know most of the people that I talk to especially ones that are um new for this quote unquote cycle have at least you know half of their exposure through um different Bitcoin public market views of uh of of what they express Bitcoin to be so like you know MSTR and similar products but I mean taking a step back like I don't think that the strategy is right that you know it's just like all right let's do the financial engineering and acquire as much Bitcoin as possible. Then we'll, you know, use that Bitcoin in order to develop new products and services in order to get more Bitcoin. It's uh there's, you know, I've I've kind of been harping on this point for a while and I think that I I may be the one taking crazy pills here, but uh nobody else is starting to talk about the fact that, you know, one of the few things that will grow faster than Bitcoin's Kagger over the next, you know, 10 or so years and uh and into the foreseeable future. is just like the number or the growth rate of the products and services around Bitcoin whether it's trade custody lending uh IRA financial services trust company exposure to Bitcoin products uh you know we've seen explosive growth in ETF etc uh different structured products and if you don't start those now it's not going to have any of the liquidity and and lendy around those different financial services and products which will ultimately especially if you understand Bitcoin as the hurdle rate and operating with lean strategies will be able to uh get you more bitcoin in the future. And I mean starting those when uh you know when you are like all right well well the speculative attack is is done a good enough job now we can start to build different uh products and services that help or that are needed in the Bitcoin space like it's it's going to be too late in order for you to have the s uh you know lindy that you need uh for financial services around Bitcoin. Um, so I I I think it's it's not very smart of a lot of these companies to to just say we have plans to do it in the future and not actually try to to do it now. >> Hey everyone, hope you're enjoying the podcast. Uh, there was no shortage of updates happening in this space. Really got deep into a lot of the new bills that are happening uh and regulation and legislation coming down the pipeline. Um, but quick note, exciting news. On-ramp is formally launching its IRA product built on multi-institution custody with one of the largest banks uh in the country. Um this isn't public yet. So if you're listening to the podcast, we appreciate it. And this will be announced later this week. But if you're interested in in rolling over any uh Bitcoin that's with an existing IRA provider or if you're just looking to move over from a traditional legacy equity or bond account and want to move into Bitcoin, uh we will be able to process those rollovers and built on multi-institution custody. Um if you have to wonder why, uh I can assure you that multi-institution custody from a long-term perspective is the best-in-class way to hold Bitcoin. Um, you can make the case subjectively for personal holdings, maybe cold storage, self-custody, uh, thirdparty custody could make sense for you for a number of reasons, but I would make the case objectively for IAS, tax advantage holdings that are going to be held for anywhere between 10 to 30 plus years. Uh, self- custody really gets hard and cumbersome specifically because a device generally isn't going to last for 30 years. So, opens up a bunch of complexity there. And then a third party custodian, we've never seen one last that long. And so multi-institution custody is um perfect for this type of financial product built on Bitcoin. We're really excited about this. We've been rolling people off the wait list and so would love to work with you. Uh if you're an existing client holder, you can set up an account. If you're net new and just want to have an IRA account, um there's actually no cost on the rollover than setting up uh accounts. So that's really awesome. If you want to learn more, you can shoot me a note personally. that happily introduce you to the IRA team or you can reach out michael@honorbitcoin.com or hello@ honorbitcoin.com. Now on to the rest of the show. Hey guys, hope you enjoyed uh the podcast. No shortage of fascinating things we talked about. Um, quick word. If you're ever interested in learning more about our investment thesis, how we're building in the ecosystem, and looking to get more involved, I'd encourage you to check out earlyriters.com and let us know if you're building in the space, want to learn more about our companies, what we're working on. Um, as you listen week after week, you get a better view and lens into how we're thinking about the ecosystem, what we plan to build, where we see the gaps and opportunities. Um there's on our portfolio page a number of companies that haven't been announced. We're really excited to uh share with the market. We'll be sharing with our private network um first, but if you'd like to learn, you can sign up for our research at earlywriters.com or you can just reach out and then um we'll put you in touch. Liamarly writers.com is the best contact for that. Appreciate you guys listening in and um hope you enjoyed the podcast. Yeah. I mean, I think it's smart in the sense of um it's they're going to fake it till they make it, right? So, it's a it's the reason kind of going through that business or that um PR release in particular was it kind of >> exemplifies the whole notion of vibes, right? like it's we're going to pull an OG that, you know, had his name in the white paper and we're going to reference it as the first Bitcoin to nominate and all whatever was in there and it's going to be that differentiated version versus the Tether one and then that'll have its own kind of thesis and people will trade around it and it'll have its own messaging and marketing. Um, and to your point, then they'll try to figure it out. But this and but trying to figure it out is kind of a is a a tough endeavor in Bitcoin because it's usually people's money. Um, I know we're coming up on time, but one thing I did want to call out because I thought it was insanely fascinating because it tied into it randomly tied into the other week was uh the other conversation, this firm Dakota, I'd encourage folks to look into it. I didn't know about it. DDA, uh, the CEO of Tetra had shared with me a few months back. Um, it says they raised $12 million in series A to power the future of global business banking. This just came out this past week, but it's really one of the most interesting business models um I've seen in a while because the ideas so on their websites business banking for the digital age, a modern banking platform powered by stable coins and backed by US treasuries to make global finance uh seamless and secure. This started with like you'll see trusted by and it's really a lot of uh digital asset firms. Um and the core idea is you can have a bank account anywhere. I think you get access to like an iband and everything you would need via like swift but there it's I think they still have a partnership it shows here with lead so I think there's still some component they need to use um through the banking system not clear but the core idea is what we were talking about before with uh the disintermediation of the large banks is you have this like narrow banking version of your depositors are holding uh assets and money market or treasury funds you can move between them you still get the insurance and credibility of of the US. Um, but then you're able to effectively like um not even disinter but like uh the term like dissolve any of the like barriers or lines between where you sit from a a a state regulated, federal regulated, country regulated financial entity and you can just have infrastructure to take those dollars. They don't I don't even know if they do Bitcoin custody yet, but this is kind of how I've been thinking more and more about what the like banks will look like in the future. It'll it'll be all just kind of like dissolving away. anything physical. Um, and you'll have dollars, BTC. This firm probably is going to manage crypto rails. But it's just a fascinating model where they started with businesses in the digital asset space that had trouble getting banks, but I think they're going to back into something much larger where anybody globally or even if you're just here in the States and it's like you think about Mercury and how nice that experience is versus a traditional bank. This looks super slick. Um, and they'll just continue to aggregate more uh services on top, including being able to take a loan out from those dollars, I would imagine. Uh, and they also pass back your 4% because they're using uh money markets versus uh traditional bank deposits. >> Any thoughts? >> Yeah, there was one um related deal that I'll pull up as well um which remind me of of of this one a bit. Uh, I had never heard of this company, but Spyo raised 22 million. Um, and it's similar in the sense that I think there's going to be these like workarounds like you saw in the prior page like the 4% rewards, right? So like based on what's in the Genius Act, you can't necessarily pass on uh the yield from the treasuries backing the stable coins, but there's going to be these other methods and workarounds, whether it's, you know, just calling them rewards or having them structured in funds, which it sounds like this company SpyO is doing where it's they're not actually offering like stable coin yield necessarily, but they're offering exposure to funds, which then they pass along treasury yields to. So, it it reminded me of this one in a sense of like there's just going to be all these different ways that people try to work around these things and and give people access to tokenized yield effectively. The cat's out of the bag. Um, last thing to share is uh this note from this past weekend. I thought it was so funny because we've been talking about this um is a tweet for me. Basically, establishes proof reserve still gets hacked, loses 45 million of client funds. There's an Indian firm called CoinDCX. Um they I think this was the most recent was May pulled up a proof of reserves at a station. It shows their total holdings and then it shows their BTC holdings and the total amount and then it came out over the weekend. Um the CEO blamed a server breach for $44 million exploit. Um and I think this is just the core the core idea. uh you know I appreciate um the building this space and trying to do it the right way but there's just a notion of like multi-institution doesn't get acknowledged or understood or talked about when in reality it's there it's better and will be the standard um in the same way that proof of reserves gets like a nice like pat on the back because historically like you had FTX and all these firms and yes it would have helped from complete like uh you know u corruption but at the end of the day. It's like almost a fallacy in place because you can prove anything one day and the next day if it's all gone, well, how does that make anybody uh whole or help in anything? And this is a clear example and we're going to just see more of them. And so this is just like the market either it's what's the whole term it's like either they're ignorant or they're um uh or stupid. Either way, it's still bad. like you don't want somebody running exchange like not acknowledging like because and it goes to a personal perspective of like I could never sleep at night if on-ramp held everyone's assets like if we as a company had to manage cryptographic material and I can't be managing it so I have a team and god forbid they either are corrupted their families kidnapped it kidnapped they want to steal the money whatever it might be like it's just no way that I'd be able to sleep at night and there's also other reasons um where you don't want to hold all the client assets and so I've ever understood if somebody deeply understood Bitcoin why they would want to be in that position and also look at something like that where if the government ever came I can't move we can't move the client's assets they're not ours and so I think this is just important to call out because this is a small blip it's only 44 million eventually it'll be 440 million it'll be 4.4 pour bill in and over time the market will just naturally wake up to understanding why multi-institution the fault tolerance or redundancy Brian talked about earlier uh will be the standard for a large you know for holding this asset yeah this is the problem with unilateral control effectively um proof of proof of reserves you know is like you said you said it you said it nicely it's a nice little pat on the back like good job but like yeah it could be there you could be gone tomorrow it's the South Park meme and it's gone like you did proof of reserves yesterday and it's gone. Like it it's as long as there's a vector of unilateral control, it doesn't really solve the underlying issue of eliminating a a single entity failure. >> Yep. >> Anything else, boys? Good place to wrap. >> Great rip. Let's get it out. We'll get a nice tagline. Beautiful. Beautiful thumbnail. I think everyone likes the thumbnail. If you want Brian to keep doing the thumbnails and you'll want Liam, too, because you should see some of Liam's, please like and subscribe, uh you appreciate >> or you'll you'll get some of the uh the thumbnails that Liam likes to show out. >> I can't talk because I I don't even know how to use Sora. So, there's a boomer. So, but um that's by design. >> All right. Thanks, boys. See you next week. >> Thanks, guys. >> Thanks for listening to this week's episode of the show. 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