Efficiency Is Alpha: AI Disruption & the Return to Sound-Money Investing

[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 gigat 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. Alrighty. Welcome back to another episode of Final Settlement. Today is July 1st, 2025. It's a Tuesday, beginning of Q3. Lots going on in the world in markets. Uh I am joined as always by Liam Nelson and Michael Tanguma. And today, big show. We got a big show today. A lot of topics to get through. And uh we have a special guest as well. Uh Klay Norris. Clay is a venture capitalist by day, a Bitcoiner by night perhaps. Um, I'll I'll let him sort of introduce his his background and and uh how we got to know each other, but uh excited to have him on the show. Clay, how's it going, man? Yeah, I appreciate you guys having me. Um, excited to do this. So, I can give my quick elevator pitch here. I've uh so I've worked in venture now for the last seven years. Worked my way up from analyst associate to principal. was most recently at a family office up in New York. Um, and now I'm spinning up my own fund called Outlaw, the GP of that. I've also been moonlighting a media business on the side for really the last six years called Confluence VC that's given me a lot of access to interesting people in the venture world. Um, got connected to Liam while we were still in college. So, it's funny how things come full circle. Um, and also say I'm a Bitcoin maxi. I think all of my uh all of my disposable income now goes back into Bitcoin. Everything that isn't required as the GP commit is uh going back into Bitcoin. So excited to be here. Awesome. Yeah. And this uh this kind of speaks to, you know, kind of where where we want to take the show from here. So, you know, historically we've talked a lot about Bitcoin, people building on Bitcoin, um, news around Bitcoin, topics around Bitcoin, and we're going to sort of expand the the breadth of the show a little bit and get more into broader capital markets, broader venture, and so bringing on folks like Clay on a more uh recurring basis. Um, you also folks like Cam Duty, which we've had on the show many times, uh, who sit in the traditional space, but also have a Bitcoin lens. Um, and it's kind of indicative of just how we see the world moving in the sense of ventures changing and you need to have a sound money lens on capital allocation in general. Um, and so this will be the first uh sort of instantiation of that. And so we have a number of topics to get through that are, you know, not necessarily Bitcoin specific, but we're going to be wide ranging here. So excited to kick this off. Uh, Michael, I don't know if you had anything else to add to that. I think it was super well said. I think the thought for the past 15 years is Bitcoin will get closer to traditional markets, whether it's capital markets, tech, culture. Um, ideally we're not early. This feels like a very opportune time to really capitalize on that from the venture side, but also from the kind of just like content. Um, yesterday was interesting with the Robin Hood as an example because Robin Hood is not only one of the largest technology companies, they're one of the largest fintexs, potentially one of the largest, you know, financial companies as well as getting into the digital asset space. And so I think it's just the um there's a no pun intended confluence of um events happening that kind of like lead to really bringing that together. And then the point you said Brian about um sound capital or sound money. I think it ultimately will revert back to that being the alpha like that you actually have to think uh with constraints and you have to think with returning capital and just being efficient. And so naturally, if that's true, then that's going to bleed into all areas of the market that aren't really historically talking about that. It's usually been abundance. Um so excited with the new format, new topics we'll be covering and and guests that will be going down the rabbit hole that we'll get to have join us um every other week. Yeah, very well said. And uh maybe we start there. Maybe we start with the the slew of news around Robin Hood. Um Michael, you'd shared this in the chat. We'll start here. uh just the aesthetic overall of the uh of all the announcements that they made at the event yesterday. It was very um casino royale bond villainesque. Um they're going to be talking about crypto and they did it was a full onslaught of cryptoreated announcements. Um I'll pull up this tweet here. Um so they're going to be you know they're going full into tokenization and we've kind of seen this coming for a while. We've talked about it on the show in the past of this feels like the next crypto trend outside of stable coins, which I mean is a form of tokenization, right? But um you know tokenizing other real world assets. And so um they had a number of announcements around not only tokenizing existing public equities um and you know caveat this is specifically for investors in the EU not not in the United States but um also preIPO private companies so that you know they announced OpenAI and and SpaceX as two companies that people would be able to trade onchain. Um they also announced their own chain um that is from my from what I can gather uh built on or bu based on uh arbitrum which is an Ethereum layer 2. Um and so yeah lot lots of announcements. I think you could also have, you know, seen this coming in some sense of, you know, over the past 12 months, Vlad has been talking more about crypto as everyone has. And I know that, you know, anecdotally, they had been hiring uh in the sort of crypto sphere uh for a number of months as well. So, I think it was just a matter of time before they they made this larger push. Um, so any any initial thoughts on on any of these topics? There's a few things I want to get into, but we'll take the broader thoughts first. one just uh always excited when it gets into the crypto stuff for Brian to be joining us because he can he can go deep on the multi-chain world. Uh but maybe Clay, you know, guest uh you being polite where what are your thoughts? How do how do you think about this? I mean, yeah. I think just at a really high level, I think there's just more and more demand into these private assets. And I think the way that the venture world has been going over really the last call like 10 to 20 years is this idea that companies are staying private longer just means there's lower upside ability once they do become public. So I think from a retail investor's perspective, like they're getting robbed of a lot of potential gains that otherwise they would be given access to. I mean like when Google, Apple, and some of these other notable tech companies today when they went public, they were only a few billion dollars in market cap. Now they're multi- trillion dollars. Like everybody in the retail world was able to ride that wave. Um so I think there's there's just demand for these companies, but they're locked up in the private markets. And I think this idea of tokenizing some of those assets and making them available to retail investors is it's interesting. I mean, I don't have really strong opinions about what happens from here because I think a lot of it is untested and unproven, but I'm interested to see um what happens with the uh with the the Robin Hood test here. Yeah, I think that's very well said. I think that there's also a significant demand for um exit from some of these privately held companies too. Even like the SpaceX's that have done extremely well. Um there's just like different time frames that many of the LPs were not expecting when they got into many of these super large funds that haven't really returned capital quite as quickly as they were anticipating. And so um there's just different time frames where you know employees are looking to monetize their shares as well as um some existing LPs of have different time frames need to rotate into different assets. We know that there are a bunch of different endowments who need to return capital back to their investors or just to the school because they have different uh obligations now. And so, um, I also think this is interesting as well because we've seen much of crypto, um, not really having any value acrruel narrative and, uh, other than, you know, um, Bitcoin being a stable store of value and then, uh, stable coins being, um, tied to the US dollar. And so, I think, uh, I'm I'm unsure what's going to happen with their own chain. Um, we'll we'll see. Maybe that's like a BNB type uh token, but on uh on the underlying asset, I think that there's massive questions about the compliance and um you know, legal aspects, but it's an interesting um trend that I think we're only going to see more of moving forward. Yeah, I think there's two different topics. I know Brian probably wants to get into the token or cruel side, but like more structurally or No, no, I mean seriously, like there's there's validity to discussing how it kind of Well, I won't steal Stender because I think I know where he's going to go with it and we can talk about that. But I think before getting to that, I think just like from a very like first principal perspective, um I think all of this stuff and I know it sounds cynical, but I believe it to be true just takes uh advantage of the financial illiterate. Um and mainly because so there's a notion of we're exporting the US dollar like that's understood to the rest of the world they're going to offset our debt. It's the same thing with we're exporting the capital markets the rest of the world and then you're effectively allowing to your point there's a lot of investors that have been illquid. Um the other component of just structurally where from investment banking and all the process to IPO and all the amount of capital in private markets there's been the ability to just keep people locked up for various reasons because also if you're unprofitable it's probably really nice to not have your people going through your books on a quarterly basis. Um but then the other aspect the one that like most people just miss is this notion of private markets like venture capital as an example exists because of all the money that that's created when you hear of like alts and the term alt has grown over the past call it five years and private credit most people don't have the acumen to go into serum especially retail investors uh already in the you know the C and B I can't get there Clay will know for when it comes to like investment when you come into a fund the exact 506 B and C when it comes to being able to solicit and market those securities. There's a reason for that. And so now like bringing this all out, uh it reminds me a lot of kind of crypto in the sense that remember when like A6Z would get into these tokens, get in early, and then kind of dump on retail and it was a lot more liquid and easier to get out. And so I think this is the world we're heading to. Um it's not good or I mean I guess it's kind of bad, but it's just the reality of it. And there's a better way to like store capital. And I think the market's just going to slowly uh come around to that. So I think that's the interesting thing for me is that everything's going to get digitized, everything's going to get securitized, and people are going to love the high volatility and leverage. Uh they announced perpetuals. I don't know if you covered that as well. Um but it's really just going to I don't think people end up storing wealth or value in there. Uh is basically the genesis or the the summary. Yeah, I think that's all fair. Um it's it's part part of a broader trend of access democratization of of access to various things and whether or not the investors on the other end are discerning enough to know what they're investing in is a is a totally another discussion but I think it's clear that the trajectory is more access versus less. Um you were right Michael and that where I wanted to take this was uh the value approval component. Yeah. Quick just before going I guess I left out one of the missing pieces is that a lot of these or the majority of the companies lack fundamentals like they traded insane racial like so that's the core point like if if the market wasn't what it is and everyone had access to companies and were producing dividends and returning the capital and had like sound that's like I think the the missing part is most people don't understand that these companies are traded on vibes is the is the big I mean they they announced space action open AI who are you know like Uh yeah, exactly. Um so I think that's a massive part of it as well as just like it unlocks a massive liquidity premium for these companies that they wouldn't have access to otherwise which is you know the massive uh big benefit to these privately held companies and uh they don't have to go through the M&A proc IPO process as well. It it reminds me like a great example of this is uh we works IPO. So when we work uh long story short, you know, at Weiwork, they were supposed to, you know, IPO at 48 billion. They were doing uh tender offers like six to 12 months before to buy back shares from client or employees. I was like, "This thing's a Ponzi. Get I'm getting out of here." Sold sold the shares. But in that world, if they didn't have to go through the scrutiny of the S1 and everything related, they'd be trading an insane amount because it was all vibes in the in the like the market side, uh the marketing side. And so it's a very similar example here is like everyone in the inside of these companies knows they're not worth what the market's saying. I mean anybody that has like a head on their shoulders because a lot of people just smell their own farts and think that they like everything's great there. Um but there's people that get it anyway. It's Yeah. Yep. Um so so back to value of cruel. I think um this this is what's most interesting about all of this to me is there's sort of a a parallel to you know what we saw yesterday with Robin Hood building on arbitrum and also the stablecoin side of you know USDC is multi-chain but like the economic value where is it acrewing where is it flowing at least in the near term the value seems to be acrewing to the issuers or the corporate entities that are behind and building on these chains and the chains themselves seem to be more commodity like infrastructure. And so the you know example from yesterday is is Robin Hood is you know making new all-time highs. Uh the stock is ripping. They announced they're building on Arbitum and Arbitum is basically flat. Like it had a little little pop um but you know it's still 90 80 to 90% down from its all-time highs like two years ago. Um, and similar similarly on the stable coin side, it's like genius bill passes. We're going to proliferate stable coins. Um, and Ethereum hasn't really reacted to that in a material way. And so I think this is this is kind of something I've thought for a long time in terms of um people building on these other blockchains outside of Bitcoin. The question always was, you know, does the value acrew to the native token? if people are building on these things, using stable coins, trading US stocks on arbitum, like does the value actually flow to the native token? And and and to be fair, like I could be totally wrong about this and in 6 months, you know, these assets could be much higher and that could be a reflection of people, you know, placing their bets and seeing the activity on these chains, but right now it's flowing to Circle and Robin Hood. Um, and so this speaks to, you know, if you're familiar with the show, Michael and I have had uh arguments or disagreements around Bitcoin dominance with whether it continues to grind up from here or go down. I think in order for it to go down, you would need to see value acral to the native tokens because of this usage uh whether it's stable coins or stocks being traded on on chain. Um, and so I think that's the big question as we move forward. That's what will have that that's what would necessarily have to happen in order for Bitcoin dominance to come down in my mind. Um thoughts? I mean I don't think ever it was about the usage for like the asset like if Salana and whatever is happening there on chain to trade stocks like the usage of it isn't the reason the price goes up. It's the speculative like acknowledgement that this might be you know stored. is where is the speculative acknowledgement going? Is it going to the corporate entities issuing the things or is it going to the native token? I think that's the question. Well, so I think I think it goes both because one like this just came out I think this week Salana is having their ETF approved. So people are naturally going to buy Salana and they're going to do whatever they they do. Um and so I do think tokens are going to naturally get locked up for various reasons. But then to your point, I think long-term and today it really comes down to the company which is the issuer. Because again going back to first principles, if we realize we don't need tokens for all this, well then it probably ends up being like the independent company that's creating the value and orchestrating between the different market participants and then they're just going to be making money and then that will be the equity that's valuable in that business. So, I think it makes complete sense that Circle is generating the revenue if they're playing in the middle and they're issuing and they manage both sides of the demand and and the the the liquidity side. And then um because the the the one that came to mind is like Poly Market. Um I was thinking I don't know if you had if we were going to go there, but I know like Poly Market and Kelshy and and those deals have been like top um big top of top of mind. And I know a lot of people probably reflect that eventually you'll need to be in like sensorless borderless form of money because you know you can there's a lot of things you can do when you can start to like uh if these things got if the prediction markets got big enough and there was enough like reason to want to shut them down you probably can on most chains and so that naturally makes sense that you want to go to a permissionless permissionless form of money. But then also um if we agree that direction well then it's ultimately going to and they're going to settle in BTC. where you're going to derive the value around the infrastructure because my understanding Cali is a little bit more like infrastructure as a service versus like poly market is more of both sides of the marketplace either way like you're going to go to the the highest liquid market which would be bitcoin um and so where's the token there's no token there is all derives from the actual company building the business and that's the underlying equity so I think that's a line I'm agreeing that like I think the business will it makes sense the business should generate the revenue I think that these just probably aren't the winners over a long enough time horizon Yeah. No, I I agree with that and I think it's interesting like if you just think about Poly Market like that is to my understanding that's built on Polygon which is like a chain no one cares about and so I think that just again speaks to like the actual users don't care what the underlying chain is and you also see you know signs of this on the stablecoin side which is I would say more mature in the sense that USDC runs on a bunch of different blockchains. So them as the issuer and the user like don't really care about where it's running. Um as long as they can get get access to whatever is being issued. Um Leah, did you have thoughts on the uh we can we can sort of pivot to the the prediction market stuff because I know you had some thoughts around all that. Yeah. Um maybe I'll kick it to Clay first. I guess like what what is more interesting to you? Um being for uh focused on the user experience and actually um getting the users to use your site or being primarily infrastructure as a service that's going out to you know the Robin Hoods of the world etc. Um or do you want one or the other? Do you want to do both? Um what's what's kind of the most interesting aspect here? Yeah, I mean I would say in an ideal world you get both and I feel like you ask different venture investors and they'll probably tell you different things. I mean, where my head is going is I would probably care more about like I'm agreeing with Brian where like you can't really disagree with user patterns. Um, and if they just if their usage patterns tell you they don't really care what the underlying infrastructure is, I feel like that's your answer. Um, but I don't know. I would I would be curious how different venture investors would uh would think about it, too. Yeah, I'm kind of thinking about it like almost like a parallel to to the Coinbase versus Binance deal, which is, you know, Binance went overseas like Poly Market has done. Um, they've done a lot of their unregulated aspect as well. Um, but they have a decent amount of liquidity because they haven't had to be slowed down by being CFTC approved approved like Koshi has. Um but you know Koshi will have the benefits of you know having being integrated with Robin Hoods of the world and more and so you know the argument that that I could see there is uh they end up getting more liquidity um and uh and so you know be uh being the most liquid I think is the most valuable with all of this because it can be the biggest sign of where uh what the market is perceiving to be true. um you know it's it's not necessarily going to be just um is this going to happen but it's a lot of sentiment as well um and where where people are thinking but I think that there's a little bit more value in um being the infrastructure provider that can have the most liquidity versus going straight to the the user long term um which is what I was most interested in here. Yeah, I think it's all relative onto the investor, what the entrepreneur is trying to do, the the market. I think history shows the biggest companies start with the user because you can't really build infrastructure until you have like uh intimate and asymmetric information like Amazon is a great example and Coinbase because um Coinbase like the the the angle I'm thinking about is BO. Bitco is a wonderful business. They're a very large business. They're going to IPO, but most people don't know who they are and they'll market cap will ultimately always be uh I I shouldn't say always, but will be a fraction of Coinbase's. They've always been infrastructure. Um I think Coinbase is going to wrap back into infrastructure. Like so they started with a user, they went institutions, they're going to start working with banks and others. Um so I think that's the idea is agreed. It's almost very hard to like just come out the gate and provide infrastructure because you can provide it for what you think the market or what they're telling you, but you won't have like intimate knowledge of that growing market and then be able to build um what they need. And I think like Amazon and books is a great example. Yeah, you get to iterate real time and realize what what works well, what people like, what they don't like, and be able to uh then go out and provide that for a service like um like others are are going to do. And the venture component I think ties into the the entrepreneur because if you had somebody that wasn't Jeff Bezos trying to do what he did wouldn't make sense in the same way if you had somebody trying to build infrastructure that was a consumer person or the way they started it would they would both like probably fail or not be as successful as you would imagine them sitting in the right shoes. So I think it's just relative to the opportunity. I don't think there's like a a wrong or right. Yeah. No, that's all well said. Um Liam, I'm going to pull up a link that you you had shared um around uh AI disruption causing winners and losers. I think this is a a broader trend we've you know talked about a bunch in the show, but uh pulling up this link now from Bruce Richards. Um if you want to give us sort of the TLDDR on on what he's talking about here. Yeah, I thought this was super interesting. It was um Marathon Asset Management is a a large private credit organization. they do $40 billion in loans and he's saying that they have been and will continue to avoid lending to software companies and that the um reason behind it is essentially they are unsure which ones will and will not be um disrupted by um you know AI companies coming in that are just being force-fed capital in order to um go and disrupt their businesses. And I thought this was super interesting as it's kind of what we've been talking about before of um these there's a big disruption of capital going to the biggest winners in the venture space and of those large private companies I think that there uh that are like software which has been a big trend in in venture for you know the past decade plus and they haven't gone public. I think this is going to be a a big issue if um other private lenders are thinking the same way that there are issues related to the viability of software companies um ability to continue to grow and um not have their pricing go to to um be deflationary as there are disruptors in the space. Um, so I just thought this was super interesting and um not not entirely sure how I I really want to think about it in a big way other than the fact that um just like there are LPs in these legacy uh funds that are you know trying to get out on um on a in a big way and um I think that they're they're kind of all pivoting towards AI and so it's just really interesting that the legacy um venture thesis has has really shifted in a massive way and there's kind of dried up in terms of the IPO potential for these software companies. I love that you brought this up. It like encapsulates a lot of the things I think we want to talk about today but in the future. Um, from a micro example, I just think of this as an individual that had a certain amount of cash flow and if he had a micro like a if we went back to community banking and he went to the person and he saw people getting laid off all across the street and that person hadn't gotten laid off yet, but it's in his best interest to slow down the credit limit or slow down whatever extensive loan because that person gets laid off and he extended that loan like it was, you know, when everything was gravy, they're going to be in a hole and he does that enough times and he's out of business. And that's effectively what this is at a larger scale. Um because what we know about, you know, we kind of see it every day. I always joke with the podcast. It's kind of embarrassing how much we actually spend for how many podcasts we do, but without sharing the number when we first got quoted two years ago, it was like $1,000 an episode for some human to like edit each pod. And I can promise you we do, you know, 12 to 20 a month, if not more. and it cost us, you know, 1 1,000th of what the total of that if not less. And so point being is um all these companies, the writing's on the wall. And it also I don't know how much we're going to end up taking it back to Bitcoin in this pod but it's just true like if anybody had the the prudence or for forethought to raise some capital back in 181 17 20 21 and park 5 10% into BTC they would have ultimately been able to help offset this and then would have just naturally potentially I wouldn't say naturally but the idea is once you see something go up you start to realize or ask why and then it starts to impact and affect your business because you're like, well, why are we just wasting all this money when we could just be buying the BTC? Um, so yeah, I think I think it's going to be huge and I think it's going to be interesting to see how it plays out uh and where that money comes from and what looks like what a distressed companies look like. Do they end up getting merged? Like um because if the price of software is collapsing like these companies have a big problem. Yeah. Clay, Clay, I curious if you have any thoughts on on this one. I have a few thoughts. I mean, like my entire thesis with Outlaw is really predicated on this. I think the the new vanity metric for ventureback companies is this idea of growing revenue per employee. I feel like you talk to enough people, I mean, we just discussed this a second ago, like efficiency is rewarded more than the old vanity metrics of growth at all cost, headcount growth, you name it. I think there's a lot that goes into building efficient businesses. The way that I'm thinking about it is that I think a lot of these back office functions and departments within an organization, I think they get consolidated to the point where there's one or two people that can handle the majority of the output for that department. Um, I think where I have the most questions for all of these AI businesses that just like quickly ramp up revenue, I think retention on that revenue has really become the main focus. Um, I think there's plenty of examples now of companies that scale up to 20 30 million in recurring revenue and then like you see they stall at that because they just have a really bad churn problem. Um, and I think you talk to some sales reps and you can start to understand a little bit as to why like one thing that I don't think a lot of these AI focused businesses have solved on the sales side is how to incentivize their reps. And so traditional SAS is easy. If you think about like if you're an AE for a SAS company, you're comped based on whatever the ACV is for the contract. So say it's like a $100,000 ACV contract, you get 20% of that upfront. So, like you're incentivized to sell as much as possible. And I've talked to a lot of friends that work for these AI businesses and they get comp based on usage. And so, and like it their quota isn't necessarily clean. Um, they don't and they that also makes their sales process a lot longer. Um, and so they say they like close a customer, they then have to activate that customer, get them comfortable with the product, and they get paid in perpetuity, like a percentage of whatever that customer is spending within the business. I think it's harder to, at least from the people I've talked to, it's like it's easier to attract talent to those businesses. I think it's harder to retain them on the sales side because they just have like a lot less of an understanding of how much they're going to get paid. I don't know if that helps answer the question, but that's just some things that I'm I'm hearing about like why um might be tough to sustain growth for some of these AI businesses. Yeah, that that's super interesting. I'm curious like on the churn side it may is that more just indicative of sort of the low barriers to entry like what like what is what is causing that higher churn rate inherently in your mind? I think there's this idea of vibe revenue where everybody's just like in an exploratory phase and you want to test out different tooling especially if you can figure out companies that don't lock you into annual contracts. if you can just test things out and see if how it goes. And like maybe there's this promise that it can remove some of your entry- level work and you have 60 to 90 days to figure out if that's true and maybe after those 60 to 90 days you realize it's just another tool that isn't going to be part of your core workflow and you abandon it. But technically like you're it's booked revenue. Um and so the the company is able to market that as booked revenue back to their investor base. everybody else show that like the growth curve continues to go up. Uh but I feel like especially for series A investors, I I feel like for a lot of these seed companies, it's probably not put into focus yet, but I think once you start getting to growth rounds, so series A, B, and beyond, I feel like a lot of the emphasis and diligence moves to retention graphs more so than just um growth charts. Yeah, I don't I haven't thought deeply about this, but I would not want to be anywhere near venture capital and and AI. Um, there's a a book, The Technological Revolutions. I forget the name. It gets quoted a lot by Carlo Perez, and it just effectively breaks down like disruptive cycles and the installation phase and the amount of capital that's destroyed. And that's basically what this sounds like is that there's a lot of capital, a lot of people. To your point, it makes complete sense that there's a bunch of churn because to your point, everyone is looking to try the next thing. The attention and the people that are generally trying to trying to do the next thing already have like a something in their DNA that's always looking for the next thing. So, they don't even spend enough time to figure it out. Um, and then if you're spinning these things up and there's no actually real meaning, everyone everyone knows this. Like, it doesn't actually matter how much money you pay somebody. it matters how much like clarity of meaning in their work that they do. um if you actually have an ambitious goal and have a good leader like it's not necessarily like obviously compensation matters but if somebody doesn't have anything outside of like I'm just building an AI company because it's an AI company or make people more efficient or there's no real like it's just the next thing people resonate with that and they just like are mercenaries and so um the thing I would be investing in as far as like AI is just anything that and Palanteer was like there's probably more companies but I always think about Palunteer in the notion of um what they keyed in on is the fact that you want humans and then you want technology, right? And like that dance is what really is like the alpha or the emote. And so Palenter has all these like models and all this crazy [ __ ] but then they have humans that can actually go and discern and really go through it. And when I think about like um back office like to your point, it's less about the software. there's software that's needed to do like five things, but it's like who's the human or the shop that can plug in somebody to handle all of that because now they can use AI and how can it like generate revenue from that? Or the other one that um the guy from former uh morning brew Alex Lieberman's trying to spin up is like the McKenzie for AI or whatever where it's like I'm going to go and like audit your processes and then I'm going to come because that's like valuable in my mind versus like them trying to figure out because they don't know [ __ ] That's why like they're Mckenzie is like they've been telling people some other stuff that's probably like 30 years already antiquated. So, um yeah, I think the AI spot is just going to destroy so much money and that's just natural to like innovation cycles. Uh I personally would be far away from from it unless you got like the right founder and you could get in early enough where you can trade on vibes and momentum and let somebody else, you know, buy your your shares or get it marked up enough to potentially get out. Yeah, I would agree. I I think that the main beneficiaries of of these uh you know companies are are kind of just being the uh large mag seven as well as just large companies that have way too many uh people in their organizations and can continue to uh find better processes in order to um you know continue to find efficiencies in their businesses. Ever since the AI kind of trend took off, um there's been sub like substantial growth across all of these companies, but um there there hasn't necessarily been a a big increase in cost and and headcount has significantly gone down across most of them. But it's really only been rewarded to the top companies that are not, you know, only AI focused of uh we've now seen a significant jump in IPO activity as well as M&A activity over a billion dollars. um the but despite that we're we're only seeing of the trend do more with less not really being picked up outside of the really largest firms in the space um of the Microsofts the Googles that can use uh can improve their processes. I think that there's also a lot to be said about founders who can use the tools in order to bring more efficient products to market that haven't been there previously or just do it at a significantly lower cost and with a better form of money. And so to date over uh 50% of all venture has been you know AI and uh related but uh and it's sign it's down significantly from the 2021 levels despite all of this hype. And so there's uh a major amount of or or a major lack of funding still for nonAI companies in the venture space, which I think is um is a sign that things continue to be a little bit mispriced. Yeah. I mean, I think um just real quick, I think we also benefit, right? Like it reminds me very much of like Uber Door Dash Wars of like we probably these things are being subsidized um so we benefit. Anyway, sorry Clay. Yeah, I was just pulling up I was I was pulling up a link that Clay shared. So this is along similar lines if you wanted to speak to what's being shown here. Yeah, I mean I think um this just shows kind of the trend line of how many um YC companies are labeled as AI agents for specific functions within a department. I think last batch had let's see 67 out of the 144. The batch before that it was 58. And I think you talk to some some venture folks that go to demo day and they're saying some of these companies are raising a $70 million post for like a tech like a seed deal. That seems ridiculously overpriced to me. Um but I think earlier we were talking about the Robin Hood stuff. We're talking about taking advantage of the financial illiterate. I do think there's a lot of financially illiterate people that work in venture now. And so I think when they hear these revenue numbers, they don't go a level deeper and they ask where the money is coming from. And they also don't clarify what these founders mean when they say ARR because I think everybody in the founder world, they like are starting to dilute the definition of what ARR is. And I think a lot of these YC companies, they they just sell their booked contracts to each other. And so they like are able to prop up their revenue. So it makes a it tells a better story at demo day that they're able to say we have two million in run rate where it's all just these other YC companies who aren't going to actually adopt the software but it's technically booked and they're just able to market that off to other venture investors so they can get more capital in in the door. I mean I think that's a dangerous game. Um like a main reason why I don't like pursuing YC companies. Um, yeah, I think like a question I have is where all of the revenue is coming from. I think if I hear a seed company say they got to like zero to 2 million in revenue, like I think the next question I have is how they're defining revenue. If it's like book versus contracted versus actual, um, I'd want to see the the breakdown of the customer profile. Ideally, it's multiple and you don't have so much concentration risk into one customer where if they pull the plug and decide to go with somebody else, it completely destroys the business. Um, I just think having that level of granularity in your diligence process becomes more and more important because I think on Twitter you see like all these companies just posting their growth charts and that just tells you like that's the tip of the iceberg. That just doesn't tell you the whole the whole story. It's a great it's a great point because I don't know. I'm assuming this is real because it makes sense. There was something going viral on I think it was on Twitter and it was like a guy that created a LinkedIn profile was like Stanford uh I'm sure you saw this like it was like Stanford and then you know wherever NBA worked at like some I don't even know it wasn't Google it's one like like maybe it was Uber whatever and I forget he just like cold emailed um do you know what I'm talking about Liam? Yeah, it was like Palunteer and like something like that and like yeah emailed somebody without a deck or something like an idea and they're like okay like where well it was a little more than like I think he referenced he sent it to a couple I don't know either hundred or thousand but he referenced he already had like a term sheet and he want and he said he got like seven term sheets um because to Clay's point like it's just like you kind of get taught one thing and you're just going and it's just a a vibes thing again. And I can't. And yeah. Yeah, I think I mean that guy is probably going to get charged for something financial crime there, I'm sure. Um, but no, I saw that and I mean that's like type behavior that unfortunately happens a lot in venture. I mean like it's it's I get it from a preede and seed investors perspective like you're incentivized to see as much as possible. Um, so you'll take meetings wherever you can get them. I think the more established you become as a firm, the harder it is to meet with everybody. So you have to like put in some type of filters for yourself. And I think an easy filter is just like previous employers, where you went to school, like however you're able to tell your story like in a condensed manner. But ideally, like, yeah, in order to meet with those types of people, you got to make sure that everything they're telling you in that is is true and they're not just lying uh on their resume. So, yeah, I'm kind of hoping that that kid ends up getting in some sort of trouble. It it's why I kind of like um it's very subtle and and simple but elegant in Camdy's Brickyard model because once you build a brand like that you have to go to the middle of nowhere Tennessee and spend 6 to 12 months like you kind of self- select already on who you're going to see. Um, and I I think that's like an interesting I don't think we're there yet, but there's a notion of like counter, you know, the whole like counter culture narrative like probably YC people still go that are like world class um similarly from like the Stanfords and Harvards, but there's going to be a time where it's actually the opposite. It's going to be a complete negative. We might already be there. It just depends on what the the right job is. Um, but point being is like there's just going to be a natural like switch and and I think that's an example of it where it's like okay you want capital well you have to come sit I don't know if you're familiar with Cam duty and Brickyard but you have to sit on site I believe it's 12 months out of the year and just move there. Um it's like well [ __ ] and like that kind of tells you a lot about the individual. Uh, it's not to say that all founders have to do that. But it's like if somebody's willing to go do that, they're at least willing to grind for 12 months and like push everything out of the way, which you can't say that for most founders, especially in Silicon Valley, because there's a whole other angle of being a founder that people are excited about. They're not actually building a business. Um so yeah I think heruristics like that are going to be growing and I think that will naturally start to help with the differentiation from both sides from u founders finding the right venture capitalist and venture capitalist finding the right founders. Yeah I love the um sound money aspect that we have too. I mean, if if somebody's willing to uh denominate their returns in Bitcoin, it it's a telling sign that they are really just looking to get more capital rather than, you know, uh really live the founder lifestyle, go to whatever sort of parties there are in the AI space and uh you know, kind of just do it for clout, which many of these people are. Hey guys, thanks again for tuning in to another episode of Final Settlement. We had an awesome rip this week with Klay Norris. Clay Norris is a general VC in the traditional uh technology space. Um we're going to start, you know, on a every other weekly basis having guests that come from the traditional finance, tech, business building um space that are starting to integrate or think about how Bitcoin plays into their portfolio. Part of one of the goals of final settlement is really to help and articulate and drive how Bitcoin is going to get infused across all capital markets. Um now, a quick word from On-Ramp. As you may know, On-Ramp uh leads the space in multi-institution custody. We work with businesses, institutions, endowments, and individuals. We've increasingly seen an uptick on the public uh treasury companies coming to on-ramp for best-in-class custody. Um but at the core of our service, a private banking experience for individuals. As the Bitcoin price appreciates, it naturally uh that notion of the the plastic device or that hardware wallet gets heavier and heavier and it gets scarier and scarier. when you think about inheritance planning, the risks associated with all your capital being stored on a bearer asset that something bad could happen to. Um the other side of it is obviously custody with a third party custodian. Um which as most people educated know that you don't also want to leave all your assets there. And so multi-institution custody is really that middle ground having three independent institutions work on your behalf. We mix technical governance with legal governance. So the assets are segregated onchain but then also you have direct title and then each of the key holders work on your direct um on your direction. I was uh recently moving some you know decent amount of capital in a single hardware wallet with a passphrase this past weekend and uh it forgot how daunting the experience is when you're moving significant amount of money or at least significant for the individual. And so I'd encourage you guys to book a consultation if you want to learn more and just understand how we can potentially help you, your family or network as you think about navigating the space and preserving your wealth in Bitcoin, but at the same time not having to have the friction of all the different tradeoffs with self-custody or third party custody. At the end of the day, On-Ramp um provides our clients with peace of mind, and we'd love to talk with you. Again, you can book a consultation at onampbitcoin.com. Now, on to the rest of the show. Yeah, 100%. Um, Mike, you shared a Bill Bill Gurly clip on this uh similar track of of the sort of venture scape venture landscape shifting. You want me to play the full clip? Yeah, it's actually really like it it really exemplifies almost everything we're talking about from somebody at the highest level. So, we can listen to it and then we can they are forced to play a game on the field. And this is I think the worst part of this whole world. There's a word that I I found um called a a gavage tube. Do you know what a gavage tube is? I do not. So a gavage tube is what the French use to force feed the geese so that they can create for and what ends up happening in this world because it's the same thing that happened in 2021 is the minute there's a company that has any amount of excitement about it. whatsoever. Someone's knocking on the door trying to give them 100, 200, $300 million. And I think for for founders that have struggled their whole life to raise money, this must sound like the most, you know, ridiculous comment ever, but it's a reality. And I think you know it, right? Like you know this is a reality. And what that does is it forces everyone to go all or nothing. swing for the fences and I lived it in the Uber lift situation, but we're going to have that type of capital battle in every category under the sun. And you, you know, you mentioned the notion of like traditional company building. Traditional company building isn't spend 100 or 150 million a year in cash burn, but all the big AI companies are doing that, maybe more. I think OpenAI said they're going to be seven billion in a year. Um, and that's not, you know, your grandfather's startup business or your grandfather's venture capital. That's a radically different world. And if you're a founder, you'd like to think the advice is, well, ignore all that and build your company the way you want to build it. But if your competitor raises $300 million and it's going to 10x the size of their sales force or 50x it, you will be dead before you know it. Like, you won't be around. So you are forced to play the game on the field. I guess the good news is the because these investors are so eager to throw money at you, you can probably take founder liquidity. I think that's bad for the company's potential long-term success. But because it fits we can probably I mean the end was basically like not a good outcome. He's like the founder should take some liquidity because he's building like an unsustainable business. Um we're gonna have Bill on. We're gonna have Mike Maples on. We're going to have all of these guys that are world class because eventually I thought that clip was really uh preient and and interesting because this is somebody at the the top of the game when it comes to business building seen everything was on Wall Street to start his career and he knows there's something wrong but he can't put his finger on it. And I know there'll probably like push back here because I even push back on myself what I'm about to say but I'm fairly confident what he described is completely wrong. Um, and if you can't win the game, you shouldn't play the game. Like, it's fundamentally unsustainable to do that. And there's a lot of angles. I don't think there's a perfect one-sizefits-all. If you have the money cannon at you, um, we did this thought exercise with we work on if they would have held Bitcoin, but I think about like Uber Lift. I think every company has their own path that they can go down when they face that dilemma. and whether it's playing a different game, being more of a spo uh specialized counterpositioning to the incumbent, um raising capital and saving it and watching the mistakes because ultimately somebody's destroying capital, they're making a lot of mistakes. I anchor back to um the the Sony founder in Japanese culture and it's really kind of like this goes across all cultures, but Japanese uh and spec specifically because they're on an island and so they really like had this high level in their culture around waste. It was like a sin. It was the worst thing you could ever do is just like waste money, waste food, whatever it is, because you had to import it. And that's how they effectively built Sony. And there was a lot of just kind of like doing more with less and the constraints made these world-class products. And when you think about that as a small example, just now extrapolate that to just the money cannon and blowing all this capital. You're you're just it's fundamentally in congruent with the world. Uh, and so rather than play that game and be forced to it, founders should take a step back and say, "Well, what are the ways I can play?" And if I can't, then maybe you just start a different business or you closed up. But you shouldn't like be 10 years down the track and where Bill Gurly tells you, well, you can just take some uh secondary so at least you got to eat because you're just bu you're just wasting money. You're wasting, you know, world's resources. Um, and I think this is all going to come to a head eventually because it's just the natural laws of the universe. You can't just keep wasting and everyone expect it. ever. Anyway, so that's kind of like the thought that I think encapsulates a lot of the stuff we'll be talking about here, where we think our like edges in the, you know, business building space is building with sound money principles and and um sound capital. Yeah, I think that's exactly it. That's that's the notion of playing a different game because if you can't compete with the people throwing 300, you know, 300 million to a billion at the problem, then you have to fundamentally play a different game and use sound money to your advantage. Um, to bolster your balance sheet, be more disciplined, um, think about opportunity costs more than those people that are, you know, spraying the money bazooka. Um, I think that's necessarily sort of the counter because if you're anywhere in the middle, you're kind of screwed. Um, so yeah, you kind of have to pick a side if you're going to try to play that game or play a fundamentally different game with sound money. I feel like he talks about that and I listen to that episode too. I think he talks about the removal of small, medium, and even relatively large outcomes in the asset class and how I mean it really is just pushing more companies to play that game. I mean, everybody talks about parallel outcomes, but I think if you break down portfolios for different venture funds, like if everybody plays that same game of just prioritizing parallel outcomes and just avoiding companies that can still be good businesses but not have these crazy return profiles. I mean, it ends up with, especially when they're downturns, it just ends up with a lot of lost money. I think it now gets us to the position that we're in now where LPs that are into those funds, they become really turned off by the entire asset class. They have no interest in re-upping in that fund and they definitely don't have any interest in joining any new fund for the partnership. And so, yeah, you just like dry up all potential capital. I feel like there's a time limit on this type of game because like even in the Middle East, like I think Saudis, um I think a lot of people have been told like if you run out of options in the States or in the West, you go to the Middle East because there's always money there. And it sounds like even a lot of the uh Middle East investors, they're getting concerned about private equity valuation practices, which is a totally separate conversation. But I just feel like all of this is leading to like there's it there seems to be a timeline of how much longer this can go on before there's just something has to change or the asset class just never recovers. I don't know if that's too doom and gloom, but just doesn't seem great out there right now. I think it definitely I mean will it'll transition because capital formation and business building, you know, has always existed, right? Um somebody has to have an idea and somebody has money and they want to invest. Um, I think the uh I forgot where I was going to take. What did you say before that part about um the Saudi stuff? Before the Saudi stuff. Yeah, there was um on the Saudi on the Saudi and just interesting like the crypto a lot of crypto people went there because the regulations like a lot less lax and similar with a venture. They're just like it sucks because they have the money but they're always like one step behind the like uh parade and what's happening in the state. So they just kind of get dumped on. But there was something else I was going to reference about um oh the game. So we was thinking about like when we explain when when we look at businesses um that it's kind of like nonsensical or insane to be like one out of 10 bets are going to make it. And the example I use is like well when you know I got out of bed to build on him um if there was a one out of 10 chance uh that I would succeed. So if there was 90% chance of failure I just wouldn't get out of bed. Like it just make any sense. And that's what you're effectively like communicating or expecting. Somebody swing for the fences and there's a 10% chance you're going to win the rest. It's like that doesn't make any sense and that's not how businesses should be built. And to your point, I think that notion of like power law, the return profile, and there's a lot of like misaligned incentives became the norm for people versus how do you just actually like return the capital, return some capital plus whatever was invested, and then you have a call option on like I think that's just a natural organic version because you can't I like in building businesses to like um if you have a child and like day one, you can't tell if you can't tell if it's going to be Michael Jordan or not. like you can only do your best and then maybe they turn into Michael Jordan or somebody world class but you have to like get it to a certain point. It can't like you can have ambitions for them to do that but then you know so you may start with the right framework. Um so I think it's just a natural comes down to the private sector in that asset class having so much liquidity and as it happens it turns into like a Frankenstein construct with all these like misaligned incentives. Now to your point, I'd be curious to get guys thoughts. The one ang the way I kind of see how that transition would be seamless is we already see this now where certain venture capitalists are interested in putting a certain component or portion of their um capital raised into BTC to help offset um just doing the modeling out. But I think you know putting 10% held over 10 years probably gets you already to middle like cortile uh return just given like where VC or middle percentile returns given where VC returns historically are. So, it's a downside protector and then also potentially getting venture uh investments to hold a small component of V of Bitcoin because extends runway continuity if your bank gets shut down. And then naturally, the version I like most is um it gives people a frame of reference to like what real money is and then lets them think about capital and and time allocation in a fundamentally different way. I think that will eventually happen because it just makes sense. If Bitcoin adoption grows, well, venture capitalists are going to pull Bitcoin and then they're going to understand its properties and then they would adopt that and then over time LPs are going to start to be like, well, why don't I just own the Bitcoin instead of investing in your fund? Like, and this naturally ends up going in a in a way where everyone just needs to return Bitcoin or you're not getting money or at least pretend like you're going to return Bitcoin or you're not getting money. Like, and that's how I think that is how you get this transition. Sorry, Lou. It really starts with the founder too because if they want to start a business, they want to um return more money than they have originally if they're self-interested, right? And so most of them like even Vlad uh was talking about Bitcoin in a completely different way than the rest of crypto and what he's focused on. He's like Bitcoin is the only thing. And there was you know a lot of speculation of um you know ultimately while they want to pump their own stock and uh you know hype up everything that they're doing, they're going to hold their own Bitcoin as well. And so they're going to be self-interested and, you know, want the best outcomes for whatever they're talking about. And so, um, they're also going to want to integrate it into their business because it just makes more sense. Uh, they they want to get more Bitcoin or otherwise, you know, why would they get out of bed if they think that's the going to be the best form of money? And so, it's going to start with them. um if they if giving them too much money will uh hampen their ability to uh return more Bitcoin for themselves, they're not going to want to do it. LPS aren't going to want to do it, and everybody along that path isn't going to want to do it. And so I think uh I think that's just kind of the very early stages of where everything's moving. It's fantastically put because it's paradoxical, but like bringing on too much Bitcoin because it's not your money can actually a kneecap you from making more Bitcoin in the future. This is how we thought about building the businesses here. It's like you need the constraints. So for for all reasons, we've all had our checking account have a little too much cash and it goes out way too fast than it should. And it's the exact same example from hiring to the culture being like, "Okay, we have too many too much money to pay versus finding the real people that want to come on board." And ultimately, it's to you to Liam's point, it's the person changing chasing more of those monetary units that's going to drive to build a more efficient business and getting everyone on the same boat chasing those units. And um that's been the historical problem or where everything breaks down is around seeking higher valuations. Like the amount of crazy to your point, Clay, on you know, Silicon Valley metrics like it was just insane. I always remember that we were it's like it was desks. It was always like you got to sell desks. you end up giving them away for free because that's what like Ma said and soft bank and I like talking about the weiwork example because like well it's a joke today they had not only world-class talent the best people but it's also uh you saw at the highest level of operational scale but you also saw that like fiat like just in its purest form how the craziness can just like distort all of business building and so I like to think that just as good as like learning you could take learnings and and leverage them I think the mistakes are probably more important than the learnings cuz you you know the mistakes are the things that can kill you. The learnings can only make you a little bit better. Um so there's a lot from the wei work that's we work days that have always stuck with me. Yeah, there's a there's a nice convergence of sort of everything we've talked about for the past hour, like the first half of the conversation around disruption from AI tools, doing more with less. Like saving in Bitcoin is just an extension of that mentality in my mind of if you're going to do more with less with your capital asset, then you want something that's finite, scarce, and actually grows your purchasing power over time that allows you to do do more in the future. And so it's kind of these two ideas are converging. I think that's the transition that we're going to watch play out over the next decade is people recognizing these two forces sort of colliding um in terms of you know depletionary forces from AI and then needing basically a better form of money to um preserve your purchasing power into the future and and actually get the most out of those tools effectively. Um, so not only being efficient from an operational perspective, but also how you're actually storing value. Um, Clay, you had shared another uh link that I'm pulling up right now. This is not your mother's alpha is the name of the uh the report here. What what are we looking at on the screen here? So, I think these guys are some of the better fund of funds investors. Um, it's level. It's Jake Coverman, Albert Aoot, and I mean they've done a lot of thinking of just like what actually creates alpha for early stage fund managers and they just condensed those notes um into this piece and I think the four that stood out it's this idea of structural inefficiencies where smaller funds just have more freedom and I think that gives them a lot more alignment with founders. uh deep information asymmetry where they can just become sector experts in specific verticals and they can leverage that information asymmetry to make better decisions. Non-redundant sourcing networks. I think you're seeing people that uh I think a lot of venture investors they talk about this idea of having proprietary deal flow or like proprietary sourcing abilities. I think that is just not true for 99% of funds. But I do think there are a handful that do have pretty interesting sourcing networks and I think speed and analytical edge. Um I mean I think speed is especially in the early stages like being able to make decisions quickly. Um I think I don't know it seems harder to do that the more downstream you go. And I would argue like the quicker you're making decisions as a series A series B investor. Like I would argue probably not doing your fiduciary duty. like there's just too much to underwrite. Um, but that's what they had kind of recapped as their their main sources of of alpha. I mean, I think all of these are constantly evolving. But going through that entire piece, I think it's uh I mean, I like listening to how LPS are evaluating the asset class as a whole. I think they they do a good job of jotting down some of their thoughts. You know what that reminds me of? Um, yeah, we should share this in the show notes. I'd love to look at it. This just reminds me of a a startup like at the end of the day like a venture firm is a startup especially when it's first starting uh by definition you know uh you can make the case that you know an A6Z or a founders fund or ABC is a larger enterprise but the more successful they run like a startup meaning iterative um quick like a lot of the functions that you share domain expertise actual edge right like a a startup that's very successful has like a learned secret there's something that they know about the market that's allowing them to tap into growth and product market fit. In the same way here, if you actually have proprietary deal flow or access, it's because you have some earned secret in the market that you're leveraging to make investments or connections. And so, yeah, this makes complete sense. And then it also makes complete sense why most venture firms aren't run like this because they're not really run by like builders. They're run by people that have like looked at the mental or the legacy models of like what capital allocation look like and they've just kind of like cloned it over versus thought from first principles like what would make me super dynamic, iterative, give me asymmetric edge knowledge. Um, so yeah, no, this is very cool. It reminds me of a lot of the stuff we're kind of working on at Early Riders. Hey guys, hope you're enjoying the podcast. Uh, it was a great rip. Just wanted to do a quick uh note from early writers. Um we producing an insane amount of content um at the firm from research um to analysis and then uh we have some exciting companies that we'll be announcing um that we backed recently. If you're looking to break into the space and you're either trying to get more insights or looking to build in the ecosystem um you know would love for you to sign up for our research and newsletter or shoot us a note on how you want to get involved. There's some very interesting things we'll be bringing to the market and so I encourage you to to stay close um in case you're looking to get into this ecosystem uh at some point in the future. Hope you enjoy the rest of the show. Yeah, super interesting. Um all right, we're coming up a little over an hour. Um there was a few other links I wanted to cover. Um, one is, um, the these are both sort of, uh, more cryptoreated. Um, Liam, you had shared something on the regulatory front, which I'll pull up right now. Um, and then the other headline from this morning around uh, Deutsch Deutsche Bank getting into um, crypto custody, which is something we've talked a lot about uh, over the past six to 12 months or so. As these banks come in, how are they going to do it? and it looks like they are um effectively outsourcing it to someone yet it still won't be ready until 2026. But uh up on the screen now I have um this market structure uh news if you want to speak to this Liam. Yeah, I mean this uh all of this was pretty much going into where the money and valuations and raising has been over the last few uh months and it's all gone to the largest players in this space. We've seen Circle with a massively uh successful IPO. It was up 10x at one point. Uh it's it's settling in around 7x up now. Uh Binance received $2 billion earlier this year. Uh Gemini is uh assuming to be going public. Um Kraken, rumors of them going public as well. Um Bitco sounds like they're going public too. Um, and so we're we're seeing capital being raised from a large uh amount of legacy player or I guess legacy players in the crypto space because we're seeing a slew or a ton of very positive momentum as it relates to um digital asset clarifications um in the space. So at the same time um so I would say those they have a massive advantage because they have a really established client base solid UX like known name in the space but they generally have uh a lot of you know sunk cost of old technology grafting to you know whatever old Ethereum L2s they have a bunch of different communities and VC arms across all these different firms and and have a different uh a bunch of different cohorts to please on the other side of that You have the banks like DB which is launching crypto crypto custody by next year by partnering with another company. Um, and these banks, you know, I think that they're mostly leaning into stable coins because, you know, they're banks. They want to make more dollars and, uh, stable coins give you the ability to make more dollars. They don't yet realize, um, that the end goal is to get more Bitcoin, not more dollars. And so with that, um, I think that, you know, these banks are going to be slow to move. They're going to partner with others. uh I would imagine that there are acquisitions being looked at from other players in the space but I think that kind of uh and then one other cohort that we mentioned previously was the Robin Hoods of the world and they're going to be integrating a lot of the technology that um you know these crypto players have which you know being stable coins to lower cost tokenizing equities uh kind of drifting off that as well as you they continue to offer Bitcoin, but it's not really a core focus. So, they'll be like somewhat of winners, but uh don't necess and you know the the banks and um native players in the crypto space are are being rewarded with large amounts of capital at the moment. I do think that this is going to be uh kind of a a buy the rumor or sell the news type event um as it relates to regulatory structure across broader digital assets. And um you know I don't see a lot of these circles Coinbases, Gemini, Binances of the world um kind of continuing to uh gain additional market share and val and value acrewing to them just because just like the earliest internet companies many of them uh kind of faded away into a relevance because they were unable to adjust based on uh you know consumer needs over time. they had um some cost fallacies which they had to stick to and I do still um think that there is a massive opportunity as it comes to infrastructure that's well positioned to benefit from increased needs like like multi-institution custody. Um, so that's kind of just like an overview of everything that I see going on in the space right now. Is as I referenced earlier, the amount of IPO and M&A deals over a billion dollars is significantly higher than it has been any time in the past. And so I think um now many of these legacy funds are just like kind of the AI um trend and and um narrative crypto is kind of benefiting from that as well at least as it relates to the public markets. And um but I think that the majority of of that is um is kind of going to be a buy the rumor, sell the news just because they're they're not necessarily the ones who I think will continue to be innovating and um keeping up with where the consumer wants in the future. Are you are you shorting Hood? You think you think Hood's down only from here? New all-time highs building on Arbitrum. Uh, I'm no I'm not I'm not touching anything with you. I think I think what you're describing though is is like more of a medium to long-term outcome. Like I think I think a lot of this stuff could get super frothy in the near term. Um, I think we're just like, as you just listed off like all those companies that are yet to even go public, like I think there's a lot uh a lot of near-term noise, it's going to be uh hard to discern for the average person uh the average investor looking at the space. Um, specifically on the bank stuff like this DB announcement, um, as I mentioned, we've kind of talked about this a lot of like, okay, well, how how are these banks going to actually get into custody? uh are they going to build it themselves? Are they going to outsource it? Um are they going to look at things like multi-institution custody participating but um you know in sort of a more isolated fashion. Um this is kind of like my base case like I think they are largely going to just outsource it um because I think we've already seen signals of that trend with the ETF issuers outsourcing the custody to Coinbase um by and large. And so I think you're going to continue to see similar announcements like this from more of the incumbent traditional banks um that are tapping, partnering with or even acquiring um more cryptonative firms to to help them figure out custody effectively. Um Clay, any any thoughts on this before we wrap or or anything else you wanted to mention? I feel like you guys got such a deeper understanding of all this stuff than me. I'm probably not the most qualified opinion on it. Um, so I played the fifth. Fair enough. Fair enough. Um, well, Clay, thanks for thanks for joining us. Uh, this was a a fun one and uh, as you mentioned, we'll we'll have more guests on the show going forward. So, um, stay tuned everybody. Thanks for joining us. Yeah, feel free to give us feedback as well, what you want to see, what you liked, and what you didn't like. And, uh, we'll continue to iterate from here, too. Sounds good. All right. Thanks, boys. Thanks, K. Thanks guys. 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