Trump Nationalizes Intel, Fed Turns Dovish & Warms the Money Printer

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. Hey guys, thanks for tuning in to another episode of Final Settlement. It was a fun podcast covering uh all things that have happened the past, you know, week and a half in the digital asset space. Positives around Bitcoin adoption along with Altcoin Mania coming back. Um quick word and exciting announcement. You'll be one of the first to hear it. We just launched on Guardian. really excited to get this out because we've heard from the market all over the board as it comes to security with um clients of on-ramp and then prospective clients that are looking to leverage our solution but have certain aspects of giving up what they deem as control as a negative. It's something that I talk to clients a lot about. um have clients have come on from, you know, 50 to $250 million and really explaining this notion of a it's not all or nothing, but also where we're heading to. You're going to be praying for giving up that control um as the market starts to realize you don't want hundreds of millions of dollars or even tens of millions of dollars in your possession. And so what honor and guardian does is effectively uh brings out withdrawal delays, deep fake protection against AI, instant freeze functionality, and then obviously our Lloyds of London insurance. And then for private clients, it goes even deeper. really thinking through um different withdrawal freezes which has come up a lot you know up to 365 days custom velocity controls around the amount of capital that can move and then a real proprietary uh 3FA protocol where you have to leverage the blockchain specifically the Bitcoin blockchain to move UTXOs around to prove that it's verifiably you in an objective manner really excited about this if you want to learn more and if you're already a client you could just um you know activate it via the web platform and then if you're looking to To learn more, please feel free to book a consultation or shoot me a note. Always happy to hear from folks. michael@ honorbitcoin.com. Now, on to the rest of the show. >> All righty. Welcome back to another episode of Final Settlement. Today is Monday, August 25th, 10:13 a.m. Eastern time. I'm back in New York, boys. No more pretty uh beach skate behind me. How's your weekend? How we doing? Big list. Big list today. >> Big list. I feel I'm not 100% but like 95% which last week I was at 60 so I feel like you know a million bucks. I'm excited to chat. I'm in Nashville right now. Woke up it was 59 degrees which from like a native Texan in you know August to wake up 59 degrees is pretty wild. So um feeling good and just ready for the spicy takes. Just too much [ __ ] too much things getting thrown around that the market believes to be true that just aren't. So um I'm going to try to bring the heat this one. >> Yeah. Lots of lots of different topics to get into. We'll talk a little private equity. We'll talk a little custody landscape, some new research that early writers put out last week. Um maybe though where we're going to start is some news uh from the Trump administration. Um I'll pull up first here a uh a truth social tweet, truth social post, I don't know what they're called, from the dawn. Uh it is my great honor to report that the United States of America now fully owns and controls 10% of Intel, a great American company that has an even more incredible future. Um and so this uh made some waves uh over the past several days um in what is a uh pretty pretty strong departure from sort of the typical uh level of government involvement in the private sector and a public company like Intel. um the government just coming out and saying, you know, now we own 10% of that. So, uh there's a few other links that I'll find for this, but uh what are the immediate reactions and thoughts around this, guys? Keep this one up for right now. This is there's so much in here that we could talk about this for a week straight, but one of them is in the post he said, "The United States paid nothing for these shares. The shares are now valued at approximately 11 billion." That's not true. Uh they the money comes from somewhere. It doesn't come from no nowhere. Uh so they gave significant amount of tax breaks. Um as well as just you know they you could also say the the United States paid nothing for these uh this amount of money that we printed during COVID and it's now worth like $5 billion or whatever amount they did. Um and it we all pay for it in inflation as well as taxes. Um, in addition to see there's uh it's it's difficult to see some winners and losers being picked when a lot of these large organizations continue to be able to have the ability to find out how to monetize all the tax breaks as well as they can. The smaller companies just don't have the ability to. Um Jackson talked last week about a family Italian restaurant in his neighborhood closing after 40 years because of the impacts of inflation um the while Intel which is losing money um gets additional stake in and investment from the government but it's when uh when looking at this it's interesting to see it's uh it's a departure from recent activity here in the US of the government not taking any stakes in companies but it's actually very common when looking at the broader landscape of uh you know how companies benefit from uh or the US government or governments in general benefit from taking stakes in companies. So in the past uh during world wars and financial crisis respectively the US government took stakes in railways as well as uh you know banks and AIG etc. um during the financial crisis. I guess uh you know maybe we'll look back on this and say that we're currently in the midst of a debt crisis which is going on and um that's probably why they're doing this. But when looking at other countries and and what as or what stakes in government or stakes in companies that they have, it's pretty similar to what you would expect. It's there are four kind of key areas. one uh financial services like banks and and potentially stable coin issuers moving forward defense companies and critical parts and then um the flow of key material. So um you know I'm just looking at a list of other c uh other countries and what they've taken stole uh stakes of the United Kingdom coal rail steel industries um during World War II as well as 2008 the banking sector bailouts um France during World War II was automotive and now telecommunications and defense um Germany a lot of aviation Italy banking Um and then kind of just going through the list, it's a lot of energy production, oil, banking. Um so just key critical parts that go into economies um especially during times of turmoil. Um so and it's really interesting that the uh they said this morning that they're going to be taking share of additional companies moving forward, those that continue to get tax credits um from the government. So, I I think it's just very uh it's something to watch. Um and I I would expect those key industries to to get some more attention moving forward. >> This makes no [ __ ] sense. >> Yep. >> You didn't have a take. You just shared us a history on like what what like what's going on, but this makes so like we it has it makes zero sense. Like this is so insane. I don't even know what to make of it because everything feels like when it comes out it's just like oh we throw these things out of um god I don't even know what's the most recent new insane thing like what was it the Trump files where they're like going to release him and they're not and we just like all like laugh it off like these things get thrown out that the US government's taking 10% stake in a private business and we just like this was done before and this is why it's like this is the most bearish take on like humanity and like the United States specifically and the The reason for it is it's very similar like we've got super co-opted and in our brains have gotten co-opted from first principles thinking around the notion of u the very often it's thought out like who will build the roads right like we need the government to build the roads it's like no no that's not how it works like humans um they deliver value they create value they have moral integrity and ultimately if the road around their community needs to be uh built they will figure out how to build the roads this is how all of humanity is exist this is how we like deliver value. He goes across. It reminds me very similarly of like uh the TLT pods when we talk about Jackson. He would bring up UBI on Bitcoin. It's just like a there's all these like levels that we forgot to build in. And so going back to what this is saying is that we do not feel that the private market understands how to develop and create efficient technology. So the government is going to take a stake and help and influence that outcome which we understand. the more the further we send our money away, the more inefficient the um allocation of the capital. But then and then as that that capital gets more inefficiently allocated, the more inefficient the outcome of the production and you referenced it in and when you kicked off what you were sharing about um nobody will pay for it. It goes back to like another first principle thing that I think we like all missed is there's uh I think Brad Gersonner and who was it? Fred Gersonner and uh uh Bill uh Bill >> Bill Gurley were talking about whatever the new like save a child like all these things always sound good like where you're going to give a kid like $1,500 when they're first born. You're going to lock it up and it's going to get put into public markets is going to compound. It's like well that's somebody's money. Like it's not free money and is there better use for that money? It's like yes by the family that like made it and then they would save their own kids money or you know child like if this is it's a free market endeavor. Um it's just ludicrous but it makes sense because we're just in a weird ludicrous world where the government's going to tower um that from national uh security to domestic production which brings up the other two parts of like isn't this basically what like a mix between you know private and public market like fasc fascism is? Where's the line when you start to create is it uh you mentioned some vehicles but what about tech companies like Facebook and then we saw what happened with COVID and how insane the government uh allocates any amount of resources. So the whole thing's preposterous basically. >> Yeah, I I would agree with all that. I I am definitely in the camp of this is pretty insane. Um just in terms of few things you referenced in there like the blurring of the boundaries between public and private. I think this while Liam laid out some historical precedent for these types of things, um this explicit uh of a of a blurring, you know, hasn't happened in a really long time, at least in um sort of public markets like this. And so the other big thing that sticks out here is like this is very clearly you know if you've been listening to this administration over the past 8 months or so that they've been in power like they have somewhat forecasted or signaled this in the sense that like they view specific industries um as national security assets and so like it's you know while it is a jarring move in terms of you know blurring those lines uh in a pretty explicit way they have sort of been forecasting that like they view a lot of these things as almost existential to national security. Um but to your point Michael like it does like this is sort of um you know what you would expect the China of the world to do is just you know take over certain areas of uh public markets like it it is pretty wild in that respect in terms of what this does like the implications of it are um you know prices markets get distorted as a as a result of these um sort of capital allocation decisions at the government level where again like yeah somebody's paying for it And so that that sort of inserts some amount of moral hazard into markets uh into these industries generally speaking if there is a you know free money printer allocator stepping into the market and taking control of of you know at least parts of certain industries. >> My my two favorite parts are um the notion of um purchasing the stake in the company. uh you're pretty much it's it's like the they're like they're just really very gaslighting mechanisms in the sense of if you wanted the free market to to out compete Intel, you basically assured with a move like this that they won't because imagine being an entrepreneur in any form and the US government and your competitor takes a stake like you're just you know what are you supposed to do there? It's unlimited amount of capital uh and involvement whether it's government contracts. But the other one that's fun to bring up is um so the government's going to start buying stakes for national security perspectives of uh you know companies. Well, you know there's a nice business over there that's sitting on I don't know the next world reserve currency. What is it 550,000 BTC more than that? >> Yeah, almost 700. >> Real uh convenient to be able to normalize the notion of taking uh positions in businesses. So yeah, good luck with that. Yeah, it makes no sense at all. But I'm and I'm not condoning or or supporting this, but I'm just saying it's it's the very early days and and it's going to happen even more and more. And it it it's very difficult to see for a company like Intel because what do you do if you're you're the competitor? It's kind of just like what Bill Gurley talks about just like all this amount of crazy funding that goes into you know the Ubers versus lifts and if you don't take the money then you're at a disadvantage to others and same with all these latestage companies who are just being asked and and flooded with money to go develop the new AI. You you it's not a great situation if you're the competitor and dealing with okay well the government has a stake in my competitor what do I do now? Yeah, >> wild times, but like Michael said, this will be forgotten about in a week. We just gloss over it and move on to the next thing, which is kind of insane. Um, and yeah, I'm glad you brought up the um the MSTR point, which is obviously where, you know, a lot of Bitcoiners took this on Twitter of like, you know, maybe maybe you you'll think a little bit more critically about um proxy exposure to Bitcoin and not not actually owning the underlying and and trusting a corporate entity to hold it. and also you know trusting layers of counterparty risk beneath that as well um puts it into context um that these things are possible and if it's occurring with Intel why couldn't it happen with MSTR I think is a is a re a reasonable question to be asking um moving on from there u there was a few um private equity related tweets I saw that I wanted to share um this first one is basically Basically, a lot of PE firms, large PE firms, KKRs of the world, bank capital, Goldman have started using commitments to continuation funds as collateral. So, this is basically um you know, indicative of a few things uh to pull out of this, but basically there's a liquidity crunch in private equity generally speaking. Um some numbers that are quoted in this uh Bloomberg report are our distributions to investors have collapsed over the past several years. So what was uh around 29% of NAV being distributed about a decade ago is now 11%. Um so these firms are are struggling to return cash and so this is a clear sign of sort of a liquidity squeeze across the industry. And so they're resorting to new forms of financial engineering and sort of shifting risk around. So um to avoid sort of force sales at discounts, firms are now using what are called continuation funds um to basically use those new commitments as collateral for new borrowing. So this is it very some some Ponzi elements to to everything that's happening here and being described. Um basically you know financial engineering masking the underlying ill liquidity and these delays and inevitable markdowns that are occurring in in the PE space more broadly. And so all of this is, you know, adding sess systemic risk and vulnerabilities in the PE space broadly. Um, and you know, marks a a shift that we've seen over the past few years with um, you know, exits being harder um, basically masking over what what are probably a lot of markdowns in these portfolios. And so just shifting the risk uh, shifting these investments into continuation funds and then actually barring against those commitments as well. Um any thoughts on this guys? >> I think the biggest thing is I mean this is um the trend we'll watch for the next 10 plus years is counterparty risk and the insolvencies of various funds and sovereigns when it comes to all this misallocated capital. We the numbers get so big that we uh gloss over like when you hear billion dollar fund goes out a business or markdown. We talked about it a week ago or two weeks ago. The open door markdown from a billion dollar valuation to like $50 million. It's like that capital's destroyed and somebody is capital has been destroyed. An individual an investor in the fund. Um, and this is that that reversion back to what we've been talking about in sound money and gold and bitcoin that the market's going to wake up and realize like the risk-free rate is whatever gold's purchasing power looks like on an annualized basis or BTC. Um, and you don't have to go make these risky bets anymore. But the reality is we're going to play this out for so long because if you think about London School of Economics, Chicago um School of Business, like these academics and people cannot fathom that it's as simple as just buying one or two assets and then just going back to their life and trying to produce value and their whole livelihoods are built around trying to either outsmart or extract value from the markets. Um so I see this persisting much longer, but we're speaking to the individuals that kind of get it. Um, and that's basically underpins a lot of our investment thesis as well is like who's delivering value to the world as the north star because if you're delivering value to the world then individuals with value will pay will pay for that and whether it's in dollars and get swept into Bitcoin or whether it's in Bitcoin. Uh, on a great example PS people play us in Bitcoin because one funny enough one of the only things that are more valuable than Bitcoin is how you custody it because if you don't custody it the right way you might might not hold it very long. Um, so yeah, I mean a lot of this makes sense. It's just unfortunate because it's going to take a while to play out. >> Yeah, using leverage has been the prudent thing to do for these PE funds from, you know, 2009, 200 to right up till co and they're just going to and they've gotten a lot of value that way and so they think that it's just going to go on forever. But um unfortunately that's that's not quite as valuable as just like actually investing in in real companies that are delivering value. Um but yeah, it's going to take a long time. Yeah. And then the other the other link I wanted to share related to this is um sort of on a a similar but different track and and what this chart is showing is revenue growth as increasingly the key value creation lever for PE. uh generally speaking. So it's saying effectively like what was always sort of a game of of leverage and cutting costs isn't really working. And so a lot of the exits that we've seen over the past two years are shifting a little bit more towards just topline revenue growth and margin expansion as opposed to um levering up a business, cutting costs. And I think this is an indicative of a few things, but you know, effectively what what has worked is starting to not work. And so this is a sign of of people in PE land having to to shift their strategy a little bit um and focus a little bit more on actually you know getting a company to produce value. I think the other takeaway from this could be just the onset of of AI like maybe you need less uh leverage and and the cost cutting is is also still a component there but you're just leveraging deflationary tools in a little bit more of an efficient way and just driving uh revenues a little bit faster than you otherwise would have. But any any thoughts on this one? Well, this ties into a little bit of the the first conversation around um we never tie back directly when we see housing, but specifically medical care and u education because a lot of these things are government subsidized and you see them hit the highest amount of inflation, the administration costs and the bureaucracy that sits in these organizations and um it ties back to like private equity and I don't know the trade, you know, maybe Liam could probably uh articulate it better. But you hear them talking about where private equity will buy u um like the medical facilities or or hospitals and then they'll strip them of like IP or any of the goods like sell them off and then they'll sell the shell to whatever you know other subsidiary that's part of the government or government subsidized. Point being is you've seen this like extraction um via the system and people taking advantage of it. It's not good or bad. It's just it is the incentive model of the system and that's where you get these like insane you know health care costs and all that. But point being is like what happens when more of the government goes in and and you know is has these misaligned incentives because the money can't doesn't have the discernment of allocation that a general private market investor would have. You're just going to end up with more distort distorted outcomes. Um going back to the first point is what we're seeing here. >> Yeah. Liam, any thoughts on this one? >> I think it's it's difficult to tell just from this chart, but um yeah, I think it's a little bit of a shift in terms of the types of businesses that they're really focused on as well as um just the the proliferation of additional um these strategies are very well known and uh of just like you know you need to cut your cost as much as possible. All of these companies are looking to do that prior to um prior to being sold to private equity companies and and so they can get the best valuation possible. And many of these people um don't haven't actually run a business in the past. And so they can go in and say you can cut costs, but um they they don't actually know how to do that in a in a very reasonable way in order to drive um drive potential returns and margin expansion for these businesses. Yeah, well said. >> Hi guys, thanks for listening. I hope you're enjoying the pod. Uh just wanted to give a quick word uh from On-Ramp and Early Riders. You're probably familiar with um our venture fund. we operate and we will be having um some very exciting um meeting of the minds over the next few months in Nashville around a few events happening um at the Bitcoin Park as well as in Dallas around the North American Blockchain Summit. We'll be having one-on-one meetings, private roundtable um sessions discussing the status of the market, some of the exciting investments that we haven't publicly announced, as well as other ways for individuals to get more involved with everything we're building across the ecosystem. If you're interested in learning more, you can reach out to us directly. Um you can book time or you can just subscribe to our research. We're going to be uh publishing a lot of these dates as well as ways to get in touch via um the early writers newsletter. You can be at early riders.com. We're always excited to hear from individuals. Um, we have some of the most sophisticated listeners and clients and investors in early writers. And I really mean that. We're working on kind of the bleeding edges of this space. And so it usually takes individuals that have had to think deeply and follow the space for a while to kind of pick up what we're putting down. But we love hearing from you folks. Um, and also hearing about ideas or ways to get involved. There's no shortage of really amazing talent out there trying to kind of uh either take a one step out of the traditional space and figure out what their next move is. And we love hearing from individuals like that because we're working on a lot of things and it's really our job between the guild network onamp and early riders and some of our other portfolio companies to figure out how to help there. So I'd encourage you to reach out. If it's not this week, please keep it in mind as you navigate the space. We'd love to speak with you. All right, have a great rest of your week and we'll be back with uh the last trade with a very big guest uh that we're super excited about. I don't know if Jackson will like that I share it here. So, if you want to know, tag him on Twitter and maybe he'll share it on Twitter. I don't want to steal his thunder. All right, have a great week. >> Um maybe switching gears a little bit. There were a few um sort of just deals or announcements and we can take this in anyway. I did want to share this one. I thought it was relatively interesting. SoFi becomes the first US bank to use Bitcoin Lightning for remittances. So this is through a partnership with Lightspark, which is uh David Marcus' uh Lightning service provider company. um pretty notable just in the sense of a you know a tradition more traditional fintech um seeing the vision of of building on Bitcoin as opposed to all these other various blockchains and and interesting in the sense that that is where the large sort of largest focus is in the stable coin sphere and you would expect SoFi to be thinking through uh use cases like that but they've decided to partner with lights on this one. So any thoughts on this? I think we talked about it before. I just don't see how this is going to at least today matter. I think like I think Lights work has the A16Z ties. They're super not only well capitalized, well connected. And so I think via uh relationship similar to David Marcus being a PayPal like you can go to a SoFi, you can sell them a story. Lightning's been sold forever as a story whether it's for payments and Blackhawk and all these things that never transpired with different firms and very similar here and to your point like the outcome we talked about before is things the same here it's like you just put it on the easiest database which is a stablecoin database and then you transfer it over like that like think about the level of education and permissions that you have to move over I just don't see it happening today now obviously 5 10 years from now and for whatever reasons from interoperability to you know governance and and uh potential, you know, better from a censorship perspective and privacy. People would do the stuff on Lightning, but I don't see why they would. And then the amount of liquidity to make it material would happen there versus just on a public blockchain that is running some of these stable coins. >> Yeah, it's another announcement of something that's coming in the future from a very large company. And sometimes these do or don't actually end up happening on the timelines that they expected. They if you scroll up there's something about implementing university money addresses too. Um which I don't know what that means. Um and seems like it's overly complicated versus just using uh using the typical address schema. Um so we'll see if this ends up happening. But if you're not already if neither side really wants Bitcoin, it's a little bit of over complicating things in my view. >> Yeah. The fascinating thing with all of this and this is happening across the world and we get a glimpse of it in meetings we're in is um everyone is focused on these things that are sexy by whatever standards um and you know the blockchain was this like in 2017 and 18 and STOs and now it's real world assets and then there's like payments and remittances and it's not to say there's not innovation there but it's just a hard thing for people to wrap their head around and then sell that you want to be able to like house and custody this asset store it and then when your client bases um I think we should transition because I think Brian's been a little bit like you know worried. I'm not going to go hard on him. I just want to like he's like all this like stuff is not news. The news is like it's altcoin season. Altcoin season if you can pull up that >> I love Brian. Brian's been a key pillar of so I'm not I don't want to you know sour relationships. Am I going to go so hard on his calls around that we're never going to see um you know alts and Bitcoin dominance go below whatever? That's not where I'm going to go with this. Just wanted him to know that. Um where I do want to go with it is ultimately this is going to get crazy. We've been saying I've personally been saying it. This title says Bitcoin whale wakes up after seven years rotates $270 million worth of E. I don't know if this is true or not. Um, I don't I have no reason to believe it's not true because in the same way people and large holders of public equities and other assets can manipulate markets, it's the same way where large holders I think this is tied into some of the selloff from the past 24 hours that the person, you know, potentially was manipulating the market to be able to buy back lower in the same format that um there's large holders that play both sides of the market and that as the Bitcoin you can go back and forth between altcoins and Bitcoin. Uh but the other we don't have to pull them up but I just had them in this channel. If you give me one second I want to like rattle off um just how wild what's h what's about to happen and what's coming is uh so just you know read them off real quick. So the past let's call it 48 business uh 48 hours past two business days uh Gayscale and Bitwise filed their amendments for the XRP ETF. Um, there's a former Bitmain exact launching a BMBB treasury uh targeting a billion dollar raise. Gayscale also uh files an S1 with the SEC to convert its Avalanche Trust to an AVAC ETF. Galaxy Jump in Multicoin seek a billion dollars to create a Salana Treasury. Um, Van proposes Jit Saul ETF. Um, hold that one in your thoughts because I'll I'll come back to that. Um, or maybe we'll we'll go back. So like so that Jitsaw one uh very similar to I think it's uh like hyperlquid. So So I can't help but bring up a little bit of this is where the fundamental discrepancy between Brian and I were is that like a only 1% of the market roughly knows about any of this stuff. So it was kind of like insane to me to believe that 99% of the people were going to just bypass the noise was one. Two is the institutions love this stuff in the same way the individuals were then like testfed for just all again the mental gymnastics around yield generation and all these crazy things. So they're going to parlay that into these frameworks of ETFs and public treasury companies that will generate passive yield by these other insane uh strategies that blew the market up in 2022. And um then the last part is crypto including bitcoin has been insanely historic uh historically been insanely hard to get spot possession of right like this is just pure why the ETF has had such large demand and even like micro strategy because if you really think about it for anybody listening here might be pretty simple to go log into an exchange and buy some bitcoin maybe figure out how you're going to custody it for the majority of people that's very hard proposition like it's the way to either use the mental model if you were to go set up a gambling account. You're going to go set up some like third party weird place that you're going to end up at. You have to move your dollar from your bank account. Hopefully, they land over there. You have to buy the underlying that is a magic internet bean and then you have to move it off into some other third party if you're going to like actually secure it the right way. That is not like easy. So, these ETFs provided that point of walking through that is when you think about hyperlquid, I don't even know what hyperlquid is, but I know Brian does and he shared it multiple times. It's my understanding that this hyperlquid token is a very hard to find on any exchange. So, if somebody's going to give you a what they're called, DATs now, I guess, digital asset treasury company to give you hyperlquid exposure and they're going to generate yield. Think about the amount of people in your old networks that are going to love that thing. Um, so anyway, altcoin season is here. It's going to run rampant. And I'm sorry, Brian. >> No need to apologize. I'm uh I'm willing to admit I may have been overly optimistic about the the understanding of Bitcoin being different than crypto. And it's not even that. It's not even really the distinction. It's just the greed and animal spirits that still exist and people see a way to make money, pump these things. Um and you might be right. We might just be at the at the sort of beginning gates of that. And if I'm being honest about it, I think 50% dominance is now in question. And you >> I think uh I will pull up BTCD just for No, I just want just for reference of where it was was around 65. It's now at 58. >> My call has always been 50%. There's a lot of resistance there. We'll see what happens. I will also point out though that the ETH BTC ratio chart, while that's been spiking over the past month or two, it's still off its highs of 21. So like in Bitcoin terms, Ethereum hasn't made a new all-time high. I would say alt alt season's really here if and when that does happen like if if we see this ratio continue to go up above its its previous all-time highs then I would then I would say 50% is is in jeopardy. >> Yeah. I don't >> Yeah. I I mean this is the hard part about where we've gone back and forth in this is like the thing we want versus the thing that's going to happen are fundamentally just different. Um >> but the it reminded me of and this is just timely. you out of all people should have been on to this trade and how it was going to play out because a year ago today we were in the salt conference in Wyoming and um really great from a just like u >> boondoggle perspective >> but boondoggle from an environment right like Jackson Hole in late August is just amazing but remember just the amount of I mean you sat there you wrote uh a whole piece um on the noise that was there and that was the canary in the coal mine and you can imagine so So it happened again this past year. Heard great things from again the environment but very similar when it comes to u the environment from you know the signal to noise ratio around digital assets and all the things associated. Uh so yeah this is just a sadly sad state we're at. It's also the alpha in the market on just holding spot and and you know businesses that will acrew it. But um yeah. >> Yeah. The I mean the other thing I would say is like probably should have known better once uh Trump coin happened and it became very apparent that the administration was not just leaning into Bitcoin, they were leaning into everything and that gave the air cover for everything. Um so I do think that that that's been a factor as well probably would have happened regardless. Um but all of these debts and broader institutional interest in all these other assets I think is also a reflection of just the administration's uh stance. It's that plus it's also just the the players in the industry who for better or worse are looked at as like the largest in in the suits uh like like the bitwisees etc that are going into and leading this Galaxy Tom Lee uh you know I think Brian Armstrong uh tweeted Bellagiocoin over the weekend which had like $3,000 in market cap or something to that degree. uh all these people are not just interested in Bitcoin and the market perceives them as to be the best educated. Um so until that changes, we're we're probably going to to see alt season continue. >> Yeah, maybe you can click into the other link because that ties directly into uh the rent extraction. >> Which one? >> Uh there's a rent extraction link. I think it's title. It was right below the the last. >> Got it. Um yeah, the so this reminds me of this conversation that Liam just kicked off around uh the suits and and whether it's Brian uh Brian Armstrong or Tom Lee very similar to the gaslighting and the government buying a company that looked at anything any way positive in the same way that most individuals that were coming from Trad and even probably some listening would think we're either lit or there's some innovation happening here but we've had 15 years to show empirically that there is no there's no objective value being delivered by any of these blockchains. Even the stable coin aspect if they really wanted to from a consortium level can adopt this. The banks compete with each other. Um but we all believe it's going to end up back there at some consortium level because even at the stablecoin level you can seize and censor all the transactions. Now they do obviously offer innovation from like rails but the European Union has known to have like great kind of like connectivity when it comes to banking like it's not as innovative to be able to send you know dollars from a bank domain and so um we've seen this play out and so these tokens that are filling the DATs and the ETFs have no underlying value. Nobody's deliver delivered them and at least from the architecture we could talk about multiple layers on Bitcoin and where you would you know have some of the stuff derived from but point being is so it's been rumored the past couple days that um I think it was the block and then block works that 21 shares uh so it looks like 21 shares ETF would invest in crypto ETPS features and equities active management lets us move beyond simple exposure and deliver strategies that adapt in real time to a rapidly evolving market uh head of US business X Blackrock and If you scroll down, uh, it says, "The firms looking to launch these two will be there will be a lot of crypto exposure for investors to choose from in the coming months between funds and equities. Tons of experimenting from ETF issuers to see where demand is. I doubt it will last." Um, so it shows a 2x long Doge ETF, a 2x long Suie ETF. There's discussions around Bitcoin's volatility or concentration might be a problem for 401ks. So now you're going to have mutual funds that have a basket of cryptocurrencies. We've seen um Bitwise in particular for years have basket in the top 10. The fun part about talking about this is like there's actually receipts out there where Bitwise have launched multiple things like there was the metaverse ETF with multicoin that they scrubbed. You can still Google and find it online but they scrubbed it from like their website and any like you know lasting because these things they're just kind of it's rent extraction. It's the ability to take individuals come into the space they're looking for quoteunquote alpha and then you sell on products. you take your crazy management fee, including in these DAT structures, and ultimately people get left hold in a bag of effectively zero um or close to zero, and yeah, we're just going to see this at a much greater scale now that the plumbing is all uh opened up into these DATs. >> Yeah, this is insane. This is crazy. This is a bull market for noise. Like, this is going to hurt a lot of people. 2x long Doge, 2x long sooie. to your point, there's no underlying value in any of these things. And you're layering on not only leverage, but counterparty risk, execution risk, all these things to something that doesn't even have fundamental value to begin with. Um, so this is not great to see. Um, little disappointing, but to your point, this was kind of inevitable and, um, this is this is this is the world we live in now. So, expect more of this. >> Feel like we feel like we broke Brian. >> We're dead. Well, uh it it may take a long time, but eventually this market structure will break. Um people don't really look for a basket of diversified precious metals. People know that gold is the best. Um and just like that, they will know that Bitcoin is the best and only um digital asset. There may or may not be a place for other of these that are significantly smaller um than Bitcoin, but it's going to take a a very very long time to get there. >> Yeah. Yeah. Um we mentioned Wyoming. Um, I know Michael doesn't like when I read tea leaves, but there were some uh heavily discussed um words from Jerome Pal last week uh in Wyoming effectively um what some people are looking at uh him abandoning the 2% inflation target. Now, I think that that was a little overblown, but again, all of these are just words. They don't really matter in the in the grand scheme of things. But if we are to look at what he said, um it is a bit of a departure in the sense that they're not really focused on inflation anymore. Um and there's various reasons for that, but they basically know they can't get it to their target of 2%. So they're sort of tacitly abandoning that target and instead focusing on a weakening labor market as a rationale to cut rates. Now, the reality baked into all of this is that they have to cut rates regardless of their excuse for it. um because the interest expense on the debt is over a trillion dollars right now with rates where they are. So they have to bring down rates, they have to print money and this is all just words. Um but as uh Microscope points out here, lots of debate around the meeting last week. Um he's saying they didn't technically abandon it, but they are signaling basically their intent to abandon it at some point um because they can't get it 2%. Um and then also just shifting the focus from inflation to the labor market. Um, another tweet to share here from uh, Kobe. Um, this is sort of what I was alluding to. They were going to blame the weak labor market. So, they're just going to forget about CPI uh, which has been above 2% for 53 straight months. Um, and so naturally, this is uh, prorisk assets, pro bitcoin, pro gold, all of that. Um, and it it should be seen as as a bit of a pivot. they're shifting, you know, pal also said shifting the balance of risks um may warrant adjusting our policy stance. So basically that is foretelling a a likely September rate cut again blaming the labor market as opposed to inflation which they can't get back down to their target. Um maybe one other notable thing from this was just the market reaction to it. So right after these comments were released, you see gold spike and the dollar collapse. Um, thoughts on this, Michael? I know you hate the Fed and tea leaves, but >> thought it was important. >> Yeah, I mean, I don't necessarily hate the Fed. I think uh I think it's just all gaslighting. Um, we talked about it a week or two weeks ago about the Warren Buffett like the short-term noise is noise. Um, I think the key thing I took from there is I thought for for weeks, if not months, they were consistently saying that the job market was great, right? We know the job market and inflation aren't great. It just it doesn't take a rocket scientist to go and see what it costs for anything or to see friends and family either not having jobs or being stuck. There's all these terms about like job hugging where people are just fearful of leaving. There's crazy numbers on like the amount of u movement of jobs and like it's like a 50-year low because of there's just another there's no other opportunities um or people understand that there's very little limited opportunities. So, uh, yeah, I think this all like aligns, right? It's just like what's the the flavor of the the next Fed meeting on, you know, how do you spin the the narrative? I think the reality is we're just going to be in a much higher inflation, the 2%. So, now you have to start to figure out like what is that mix and goes into it? um to kind of get people familiar with how we're going to be at persistently higher inflation. At least in those terms, whatever number they give us, you're going to be able to probably add 10% confidently to know that that's what real inflation is. >> Hey guys, I hope you're enjoying the podcast and uh it wasn't too doom and gloom. Uh really just try to share what's currently happening in the markets, how we see it. The altcoin craze is something that sadly will persist. Um but I believe if you're listening to this podcast, you probably understand that. and um think deeply about Bitcoin custody. And just a quick word from On-Ramp, um I'm sure a lot of listeners know of the different offerings that we have, whether it's, you know, multi-institution custody, the ability for our our trade desk, lending, inheritance, um and then the dynasty trust, which we are really excited about. We have no shortage of exciting things coming out this fall. Really, uh I think industry shaking things across the the landscape. We have a lot that we've been working on. The one that I just want to go a little deeper on is uh Guardian that we announced today and specifically the proprietary uh and I don't even want to call it proprietary but the 3FA um 3FA we're really excited about that because ultimately it's something that separates the internet connection uh from the movement of your Bitcoin. So whether it is you know video verification, multiple institutions verifying that 2FA logic uh time withdrawals those are all put in place to protect client assets but at the end of the day they leverage uh the internet connection specifically from a subjective view. How do you interact with humans in the logic? 3FA takes that a step further and really uh relies on public public private key cryptography specifically around Bitcoin wallets and the movement of certain UTXOs for a certain client specific PIN. This is something I've been thinking about deeply. Um it might be overkill for somebody with call it 1 to10 million even though it's still open for them. But for clients that we work with that have tens if not hundreds of millions of dollars, this is something that I think they're going to be really excited about because ultimately it takes it a step further and leverages either a hardware device that we would ship them or another way that they generated a private and public key. Um, so if you want to learn more about that, you can look at the blog post or you can feel free to book a consultation if you want to talk with me directly. Again, michael@honorbitcoin.com and uh hope you enjoy the rest of the show. Yeah, I I actually read it a little bit differently. I thought that they were moving away from the 2% inflation over time that they authored back in the pandemic and moving back towards a target of just 2% inflation, meaning that they might be a little bit more restrictive than than we had thought. I think that Powell probably wants to protect his legacy of, you know, running too hot on inflation. And then if he's not able to really tame it, um then he likely will want to uh he wants to fix it. Like he doesn't want to be the guy who uh had super hot inflation over his term and uh but he also doesn't really want to crash the labor market. Um the labor market to your point like the the job switching is at a record low. New hires is uh like very very low both below prepandemic trends. Um, so they're stuck between a rock and a hard place. >> Yeah. No, that's all well said. Um, maybe one other just headline, Liam, I think you shared this one, uh, but the Philippines thinking about a strategic Bitcoin reserve. I don't know the likelihood of this. Yeah, I think but >> it's extremely low, but if you pull up the link there, it's interesting to see all of the different data data points that they um mentioned like uh in Central America, El Salvador already adopted Bitcoin as legal tender and began to purchase and hold in reserve. Brazil introduced uh sovereign strategic Bitcoin reserve. Uh in the European Union, Switzerland is now considering it alongside gold and Germany. the former finance m ministers um suggested that they reduce reliance on USD and consider Bitcoin as a way forward. Poland considering Bitcoin reserve uh Hong Kong has advocated for it too. Um the Malaysian government has started to consider the use of this. Um the in Russia they've begun to use Bitcoin and other western digital currencies for international transactions as part of the strategy to bypass western sanctions and reduce reliance on USD. And so this in itself is I doubt that the um this Philippine one gets passed or um or that this is really meaningful in itself. But just taking a look at this kind of laid out and how much the Overton window has shifted from the past 2 years, I think is just interesting to see. And regardless if if they do it or not, I think that there are going to be a couple countries that do it over the next 5 years or so, which will just continue to move that window over even more. Um, so just like we've seen Harvard allocate to uh the Bitcoin ETFs, we're we're just going to see it go incrementally this way. And it's interesting to see how they laid it all out like this and how far we've come. >> Yeah, I agree. in a in a sea of noise as well as pessimism around the status of u you know just kind of like misallocation of capital. The notion of a congressman in the Philippines drafting this bill and then all the other anecdotes Liam shared um is very positive for that like kind of domino just next domino to fall whether it's Philippines or somewhere else. And then it really ties back to the notion of um where we've shared if like the next call it 18 months you see the sovereign adoption and accumulation step in um things get really interesting and accelerated versus like the traditional markets um or traditional Bitcoin markets when it comes to havingss and and just cycles. I don't think they go away, but I think they take a completely different form if you have sovereigns globally that have access to what's effectively unlimited dollars and also energy to be mining uh step into the market. So, I do think it's a positive direction independent of like the likelihood of, you know, the Philippines accumulating Bitcoin. >> Yeah. No, it's well said. Some signal in a in a sea of noise whether or not this gets passed. It's the it's the over overton window continuing to shift with respect to to Bitcoin as a reserve asset that you would want on your balance sheet as a sovereign. Um Michael, there was one other um stable coin related link that you had shared uh from layer zero labs. Um is this the Wyoming stable coin? >> What was the take away from this? >> Yeah. Um, so I think it's I love Wyoming and the people behind this and know them, consider them friends. I think it's it's cool to see Wyoming lead in digital assets. Um, my understanding that this is the first stable coin that's been launched on so many blockchains, uh, Ethereum, Salana, Avalanche. Um, it's my understanding it's not necessarily a stable coin. it's a stable token because of it being issued not by bank but by the sovereign state of Wyoming. The thing that what stood out to me and I don't mean to be pessimistic about this but I was thinking about it um last week independent of the Wyoming launch was that the notion of the CBDC's are here. They're just not called CBDC's because where this all goes is we're going to have I think very few people that pay attention to digital assets and Bitcoin would say that we're not going to go to a digital world for for dollars and the movement of dollars. Um and they naturally have to become interoperable because it's just inefficient for them not to. So, however that manifest, again, directionally don't know. It's the same way we talked about the yield being generated on stable coins. We don't know how it's going to happen, but we just know market forces will determine it or require it. Um, and similar to like Coinbase doing whatever they're doing and their arbitrage from like marketing dollars to pay people back for using it. Um, so it's not yield by circle. Point being is everyone's friendly until the draconian measures come in and it goes back to the state private public partnership. We saw this happen uh again during COVID. It's not about being conspiratorial. It's just the reality of when you have government, you know, sanctions and forces and policy for the greater good, whatever the greater good is marketed at the current time, you will naturally be able to now um effectively like just halt any movement of capital. And so you're starting to see this and again it's marketed it's spun as a positive where uh what's the recent knowledge around like HSAs and maja and like okay so you're going to get like your HSA and then maybe that's going to be digitized but you can't like buy you know Coca-Cola or sugary stuff right well like that that's how it starts but ultimately you're basically saying with a click of a button you can programmatically determine what people are going to buy or not buy. Um so again it's going to look like a positive for the industry. It's going to be I think it's positive for Bitcoin because more capital is going to come in because you know now you have a digital dollar and it can just it's more interoperable with BTC, but I can't help but see this is just kind of like um you know not going to play out very well for a lot of people long term. >> Yeah, I would agree. I think that Tether and Circle are pretty much just like half a step removed as well being um overseen by Congress as well. Um it's pretty much just all the same thing and using we we've already started to see this with CHO.1.0 with the restriction on um guns, payday loans, etc. Um and debanking of those types of businesses. Um the the flow of funds and and tracking that and as well as just the then um permitting what you can and can't buy um will will probably continue to heat up. moving forward. >> Yeah, it's a slippery slope for sure. Um, it will be positioned as innovative and necessary. Uh, but there are some seriously negative potential externalities from all this um, continuing to flow this direction. Um, switch gears a little bit here um, to some research that early riders put out last week. Michael, I'm going to pull up your tweet first and maybe you can speak to um sort of high level of what we're trying to accomplish this with this report and then I'll pull up the report. >> Yeah, I think at the core I've been hesitant to say this um but I I feel a lot more confident it'll still be polarizing is we're so early to Bitcoin. We hadn't even figured out custody yet. Um the tweet I know Bill Aman gets a lot of crap on Bitcoin Twitter but um it's a it's a really apt uh quote that he had which says institutions cannot self- custody without severe regulatory issues and that's just one issue not just regulatory most individuals would prefer not to self- custody crypto will remain a sport for hobbyists until this is fixed um and so this is something that we've been talking about thinking about really the notion of how do you get access to Bitcoin without the trade-offs of you know a third party custodian and all the other layers of intermediate iation between an ETF or Bitcoin or a treasury company. But then also again the reality is yes it's very easy for anyone on the planet earth to put 10 bucks or $1,000 into 12 boards or a hardware device but it gets really hard um for somebody to put all of their wealth. And I think that's the big gap that most people have been missing is again if Bitcoin's speculative asset and people want to play around. It's very easy to put a little bit of percentage in any of the existing custody solutions whether it's a hardware device, collaborative custody, um an ETF, Coinbase, etc., etc. But if you're going to think about Bitcoin permeating in everyone's lives in every aspect of society in the same way that the internet did, you have to bring standardization across the board. And so this piece breaks it down and it references different formats like the SSL of Bitcoin tying back to um uh encryption and how if you if anybody old enough remembers you know or your parents trying to buy anything online they would never put their credit card information online and now that's looked at as a standard via encryption that's based online. Linux very example uh very sim similar and an open standard um for building blocks on top of different you know software and hardware. Uh, so this is just a a very nice piece that the early writer scene put out. Um, and I think it's worth a read to kind of see how this goes. The iPhone is something that gets loosely thrown around a lot iPhone moment, but there's good examples of once you have, you know, a product that kind of collapses and disintermediates a lot of either physical or um, uh, software into like one unique kind of construct. You can start to really um, innovate and bring things. And so an iPhone is a great example where GPS being included in your pocket now started to allow for you to hail an Uber, a car that you know historically taxi cabs were like onetenth or 1/100th of the amount of demand for for rides because you didn't have the technology to manage it. And that's just a small example. Um, so I think very very good read and then also gives a good lens of not only how we look at the market but the opportunity that we invest in for if we're so early that custody hadn't been figured out then there's a wide openen opportunity to bring standardization and then bring a lot more uh u a lot more effectively capital and users into Bitcoin and that goes from individuals all the way to whether it's credit unions credit funds that are allocating to the space that need a or redundant, resilient architecture when you're doing Bitcoin back lending to insurance products. Um, so I highly encourage read if anybody's uh interested. >> Yeah, go ahead, Lynn. >> I was just going to say building off that um yeah, I mean like we're we're still in such early days. I I couldn't help thinking of Steve Jobs initially trying to sell computers not not actually built to retailers and allowing them to build it themselves and they and he didn't even understand that that's not necessarily what they wanted. um forcing people or not not quite forcing people but just like telling people to uh if they want Bitcoin exposure to become hobbyists uh and figure out how to figure out how to manage all of their wealth in hardware devices or however they want to custody their funds is just not something that is super interesting to a lot of people and uh there's always specialization because that is just how the world works. It's just allows people to be more efficient with whatever they're doing. And so rather than just trying to convince everybody to be a hobbyist when they're potentially going to lose significant funds if they don't manage it correctly or um you know keep them out of the market is just probably not how the entire world is going to work moving forward. Um so yeah, I would highly encourage people to to read this. It kind of just goes over the historical arcs of um other technology and how this is kind of applying to Bitcoin today. >> Yeah, really great piece. I think um what stood out to me or you know at a very high level does a great job of sort of walking through um you know what has traditionally happened with emerging technologies. They go through these various phases um where you know initially the hobbyist phase there's a ton of friction embedded in using the new technology. So whether that was PCs, some of the earliest um cell phones um or internet protocols, there was a there was a stage there where it was very difficult to use. There was a lot of friction, a lot of learning. And effectively that's where we are with Bitcoin custody because Liam to your point um you know people for the last 15 years have figured out self- custody because they knew the alternative was probably suboptimal, i.e. trusting a single custodian. So they were forced into this niche hobbyist endeavor of figuring out how to secure their their uh you know in a lot of instances the majority of their net worth um via cryptographic material hardware devices. Um and there really hasn't been um a way outside of single custodians to broaden the access reduce the frictions um associated with holding this asset in a risk mitigated way. And so in our view, you know, multi-institution custody pioneered by Onramp really is that break breakthrough for Bitcoin for Bitcoin custody in the sense that it's it distributes the counterparty risk. It's mis risk mitigated um sort of at at the base layer at the protocol layer using Bitcoin native multi-IG but importantly it abstracts away the friction of the end user in terms of securing key material themselves. And so it's this really elegant infrastructure approach um that I think opens opens the door to just a lot more um innovation on top of that standard but also just more adoption of the asset because it's uh simpler reduced friction for someone to on board own the underlying in a risk mitigated way where they don't have to do it themselves and be that niche hobbyist. So this this walks through the various examples um at at length. And the other thing I would point out too to just note here is like the stakes are different when we're talking about Bitcoin custody relative to these other technologies that emerge and went through these phases in the sense that you know if your early edition of some cell phone craps out doesn't work or you know you can't log onto the internet for whatever reason you're not losing your assets you're not losing your net worth. So there's there's obviously um negatives and it was clunky to use these different technologies, but Bitcoin and Bitcoin custody is a different it's a different level of of stakes and and what's at risk for things going wrong. Um and so that's why I would say this sort of infrastructure breakthrough is even more important than some of these ones that we're making parallels or analoges to in the sense that the stakes are just much higher. This is people's money. um in many cases it's you know a large percentage of their net worth and they can't afford to have um those frictions that ultimately could end up in a catastrophic permanent loss. Um and so it is just it different in that sense but go ahead Mike. Yeah, it's well said and I think it ties back to there's a lot of um historical precedences and influences to where we're at and why it hasn't been done is simply because again we're so early but when you look back at um again they're multiple disciplines but when you look back at the the ma mainframe computers and what had to go into um effectively like a mathematician or an account uh somebody that's managing accounting to code up what the logic would be. There's great references on um where you'd have to like not only build the logic, but then you would hand it off to somebody that would go and like punch these cards that almost look like like folders or like an envelope that would be plastic and you'd have to like get the holes in the correct way and if you messed it up and there were stacks of them depending on how uh complicated the uh formula was and then you'd have to put that into the mainframe computer. It's like there's a lot of like precedence to look at well okay that was used by certain individuals but over time you have to democratize that access but then on the complete other side of it when you think about uh goldsmiths and the notion of like gold monetizing in real time the reason where a lot of this stuff is still taboo and why there's a lot of opportunity for us is because in Bitcoin's first 15 years the logical way to custody it wasn't self custody a because this didn't exist but really b the asset was so small so there wasn't really the significant ificate losses that you had at stake now that a bitcoin is 112,000 or whatever it is. Um and then what you need also when you think about like dynasty trust or insurance or these other products and services that are out there. So for 15 years it was the thing to do is self-custody because third party custody um ultimately you couldn't trust and still make the case you you still can't because it's just code. It's just um Bitcoin private keys they're just data and at the end of the day all data will eventually get leaked in some capacity. We've seen this historically. And so when you look at the historical presidents, it's very similar to gold where a bunch of times people would leave their gold buried in their backyard or or in their on their land. They give it up to the church or a third party family member. But all those things don't have, you know, congruence, accountability. They miss a lot of the natural functions for um uh for coordinating economic activity. And that's where the goldsmiths were introduced. And then we obviously went away from the goldsmith as you created notes and you know the different you know claims on it. But very similar here where it's just thought of as a second order like custody has been figured out because we figured out how to hold you know the private keys on a hardware device or trust a third party ETF when for 15 years it's been proven that it hasn't worked because we know that for every one person that gets kidnapped hacked loses their money in a wildfire or all the things associated there's a hundred others that haven't come forward for a number of reasons and then again the last big blowup was only three years ago and that's where the market completely delevered because of the lack of um transparency and all the things associated with centralized custody, let alone hacks. And so it's just something that the the world and the market works in a very 2D fashion. And so it's like what all that we've been given is what we assume will be there. But that's the definition of like what's obvious is obviously wrong. And so I think this piece does a good job of it. But we'll we'll continue to do more because when you look back it, you know, history doesn't it often rhymes. When you look at computers, when you look at banking, like the notion that we're all going to just be our own bank, it's not even technically that it's impossible because it is for every, you know, eight billion humans to hold their own UTXOs. It's actually actually from a socioeconomic perspective, nobody wants to be their own bank. Even the people that scream the loudest about self-custody, I can guarantee you they go to sleep at night not feeling the greatest that all their wealth is held on 12 words, that god forbid they get hit by a bus and they haven't set up the total protocol for their family to get it. And again, it's not an either or thing is the beauty. It's the same thing as money is we don't hold all of our cash in the bank. Like you may take some home, you may have some in a rainy day fund, you may have these different options. It's just explaining the standardized process for the vast majority of wealth will end up going down this trajectory. >> Yep, very well said. So, we'll link to that in the show notes. Um, check out that report. Uh in a related item, just thinking through uh custody risks. Um there was a report from last week of a social engineering attack. We've been seeing these increasingly over the past really almost two years now. I feel like have we've been seeing um increased uh news items either social engineering or physical attacks uh in the crypto space. So this happened to be a social engineering attack. Um a victim losing almost 100 million in Bitcoin. um they were using what it seems like is a some some hardware wallet that then there was an attacker posing as a support agent for said hardware uh wallet getting them to effectively um unveil a certain amount of their uh cryptographic materials or um passwords or loginins to the point where they could then siphon funds. Um and so this is you know a continuation of trend that we've seen. Um you know on one hand multi-institution custody broadly speaking defends against these but um I wanted to pull up a announcement from on-ramp uh just this morning. Um we went live with uh what we call on-ramp guardian which is basically um even further protection. So going beyond um the custody layer and thinking through how do you defend against um basically the unauthorized movement of your Bitcoin. And so sort of the the first defense against that is just superior uh trust minimized custody through multi-institution. Um but basically wrapping around that um various elements of um basically just you know the ability to slow down the process, the ability to put in uh enhanced identity checks, time delays, velocity limits and enhance fraud detection as well. So using AI to combat AI deep fakes potentially um and really just doing everything in our power to add an additional layer of security around what we believe is is sort of best-in-class custody. But, uh, Michael, anything to add on on On-ramp Guardian? >> Yeah, I think the spoofing stuff randomly. I had a dream uh about spoofing. I was thinking about pitching Sailor uh if Yeah, we won't go far into Sailor's actions and intent, but Sailor uh pitching them on MIC and it was this notion of spoofing because what Brian was alluding to, there's a lot of already, you know, value and asurances and security with multi-institution. One specifically is around the notion of even if a key signer was somehow spooed by multiple versions that would take you know different levels of an organization's coordination. The beauty of multisig is that um because it's interoperable and because the signatures happen in a segregated fashion one address or one signing is completely independent from the second one. So you can't manipulate the second signer to sign a a malicious transaction if it wasn't authenticated via the person. Um but then so there's a lot there with video verifications going into multi- institution but to take it a step further given not only the physical um attacks that have been occurring but also the social engineering that has increased there's a number of levels from whether it's a lot of folks concerned with AI and the deep fake protection to leverage AI to combat AI by using um the ability to tell if somebody is actually there or not it's a real human. The withdrawal delays have been something that clients have been asking and using already because depending on markets and also this goes back to just market understanding that if you know that you're an on-ramp client and it's going to take either days if not weeks uh if not longer to move the assets you're automatically because there's certain aspects of this that doesn't matter gets thrown out a lot well if somebody has a gun to somebody's head they are just going to tell them to move the money it's like it doesn't work like that in banking wire in the same way it doesn't work with on like there is a SLA in process independent of what's happening. And that's also why you may want some form of self- custody because you may want to give them something. Um, but then layered on top of that, there's obviously the insurance. There's freezes in case there's the ability for somebody to get access to your account. But then there is a new 3FA protocol which effectively severs the internet connection to objectively prove that it is you with a certain amount of Satoshi's wanting to move from one wallet to another. um that's limited to private clients for now, but we can talk more about it if you ever want to book a consultation. But I'm personally really excited for that because we have clients that hold, you know, quarter billion plus in assets and significant wealth is stored with us. And there's a notion of at the end of the day uh a lot of things end up subjective whether it's passwords or can be manipulated spoof video verification that certain holders will want to sever that internet connection and have a objective um opportunity to show uh via the blockchain and Satoshi's you know UTXO's move that it is them verifiably proving that they are moving these amount of assets and if they don't then then the account naturally will go into a freeze. uh really excited about Guardian and just really adding to the value. Again, this is similar to insurance and the other products we launched. There's no additional cost for this, which is something that uh is important for us that the idea is we're not just a custodian. We're a private bank for Bitcoiners. and you want to be able to deliver as much value as possible, whether it's trust planning, estate planning, inheritance, um, or the just ability for your friends and family and bad actors to know that you can't just take somebody's assets independent if you show up to their house or not. >> Yep. Very well said. Um, we'll link to that in the show notes as well if you want to learn more or reach out to any one of us. Um, one other before we wrap, I know we're we're up on time, but there was one other um, headline related to all of this, related to uh, custody risk, particularly at the corporate Bitcoin treasury level. U, Michael, you had shared this one. Corporate Bitcoin treasuries could raise credit risks. Morning Star says regulatory uncertainty, volatility, and liquidity challenges could all elevate the credit risk profile of firms adopting a crypto treasury strategy. So basically my understanding of this was uh Morning Star and other credit rating agencies are looking at a lot of these uh Bitcoin treasury companies and DATs and saying you know uh effectively calling out custody as a really important risk to consider something that we've talked a lot about on this show um seems to be impacting or at least you know entering the mind of uh credit agencies looking at these these companies. Yeah, I think this ties back to everything we talked about with the standardization. If you're a corporate um rating agency, you're looking at a public equity, whether it it's a let's forget about digital asset treasury company, just a traditional market uh public u listed company that holds a significant amount of BTC in its balance sheet. Figma is a great example. It's in u Coinbase's ETF. But if nothing happens at Coinbase, what part of the credit rating starts to take a hit if Coinbase is holding trillions of dollars and there's no form of insurance that will uh provide, you know, insurance for that? Let alone, well, what's the strategy like? Is it in cold storage? Is it verifiable on chain? Are they lending against it? Doing other things. Now, these might not seem like a big deal today, but as the asset appreciates, because we're again only at 112K, so two and a half trillion dollar market cap, but what happens at 5 trillion, 10 trillion, and these risks come back because they will like it's again, we've never we're in the wild west. We've never had a digital bearer asset worth this amount of capital on the line. There will just be increase in volatility when it comes to counterparty risk. Like, I can hang my head on that. And if that's true, then there will naturally need to be standardization. Not only like the the ratings of who's holding it, but then how are they holding it? How is it verifiable? And insurance is one of my favorite ones to bring up because I don't think I'm very confident insurance in this industry has not been solved yet. Um, and simply because most insurance uh companies are insolvent. We all know this. And so you should never rely on your custody arrangement because it's insured. Sure, we offer insurance and I look it as a cherry on top, but the best form of insurance and I can explain why ours is different, but at the end of the day, the best form of insurance is the way cryptographic material is held. And so, I'm convinced that over time, you'll be able to create um these we've talked to firms about these these mutuals, these insurance products where you can hold them in multi-institution custody. It'll be natural for institutions to participate in this that already have Bitcoin exposure because they've already had to underwrite the, you know, notion of multi-institution for their own holdings. That'll propagate over into them participating into some of these mutuals. And now you can start to really develop robust Bitcoin denominated um uh insurance markets which will naturally also fill into this credit rating. So, I think we're just very early, but it's an important thing that's been brought up that the credit problem is a uh or the credit rating problem will only increase as a as a natural point of friction as the market grows. >> 100%. I think it's a definitely a positive signal that, you know, at least we're talking about this stuff more. I think for a while the sort of uh concentration risk particularly as it relates to Coinbase being the custodian of nine out of the 11 ETFs is something that's just generally not spoken about like everyone recognizes it as a really important risk but it's really not talked about and so the rating agencies talking about this in the context of treasury companies I think just blows through to all elements of custody and and people recognizing ing that um you know these proxy exposures come with real risks and so you have to you have to consider those as you're uh making your allocation to the asset. How do you actually want to hold it? Do you want to do it through a proxy where there's layers of counterparty risk and um potential uh credit related insolvenies at the underlying level or do you want a more direct exposure where you have greater asurances of your ownership? Uh >> yeah, and the crazy part is you can see it playing out this way from a very simplistic view of it's already kind of happening where nobody ever gets fired to go into Coinbase and maybe a little bit of Fidelity. So if you just look at this um you just need one treasury company or one large custodian to mess up and then you're back. So like it can be uh again like the treasury company's an easier example because it can be a small amount of BTC but at a public treasury company that's well known has influencers whatever and then now everyone starts to just think which they already should have of like how are they custodying are they trying to generate yield from it but if you take it a step further that naturally starts to move the market to where it's already going of like okay well it needs to go at Coinbase because of X Y and Z reason but that in itself is it's this natural paradox of the more successful ful Coinbase is, the more likely they are to fail. And a from a just pure first principal perspective, this is how gold failed because ultimately if you end up with a centralized asset, you end with too many claims on it and then you can't actually audit it. You end up in a whole slew of other problems. But the other side of it is just the ROI starts to grow for the honeypot for that asset. And so, um, there's just multiple forces that will like naturally push people in this direction. And it ties back to the Warren Buffettism of the whole notion of uh the definition of like risk management is you know just like it's such a great like it's a crude example but he references if you going to get offer him a billion dollars um but he has to play Russian roulette but here's the kicker it's like a thousand bullets. You can make up whatever number of um or not bullets but a thousand uh spins in the chamber but you have one bullet. Well, you would never take like no rational person would take that chance because if you click the wrong, you know, trigger once, you pull the trigger once wrong, you're out of the game. And it's very similar with custody. It just takes one time and you lose all the money. And so this is just again, we're so early and there's still so small allocations that nobody talks or discusses this, but as the price rises, the allocation becomes greater and then the confidence and conviction of the education becomes greater. that this is just a rational outcome uh for market participants. >> Well said. Um all right, boys. We got through a lot. I think we got through all the links, got through the reports. We'll put those in the in the show notes. Anything else before we wrap? >> No, I think we're going to be out on the road um hosting events. So, if anybody's interested in meeting the guys or the team, us, uh, one-on-one, we're going to be hosting some private dinners and some other, uh, roundtable events. Um, please reach out either, um, you could shoot all of our names at early riders.com or uh, schedule time with the on-ramp team and and let them know that you're interested in joining. Um, there'll be some stuff in Nashville next month and then Dallas in October. Uh, but I think it's going to be a busy 18 months. So, you know, reach out. We always want to connect. And then um I think we'll be taking better logs of kind of who's in certain markets as we're around the the country and actually outside of the country. Uh try to set up more roundts and things where we can all connect with um listeners and clients that are, you know, partnering with us. >> Sounds good. All right, boys. See you next. >> Thanks, guys. >> Thanks for listening to this week's episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will be in the show notes inside your podcast app. Before we finish, a quick reminder that Onra Media is forformational and entertainment purposes only and nothing should be construed as investment or legal advice. Regardless of where you are in your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com/cont to schedule a consultation with one of our private client adviserss.