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China tariffs bumped to 104%
Recorded: April 9, 2025 Duration: 0:57:16Space Recording
Short Summary
In a significant move, Ripple has acquired prime broker Hidden Road for $1.25 billion, signaling a strategic push to enhance its services for institutional clients amidst a turbulent crypto market. As Bitcoin and Ethereum experience notable declines, the ongoing trend of mergers and acquisitions in the crypto space highlights a complex landscape of growth and challenges.
Full Transcription
Good morning, everyone. Welcome to the modern market where every day we discuss everything
to the modern market. That is sometimes the crypto market, sometimes the NFT market, but mostly
the tariff market and increasingly the US treasuries market. We will talk about whatever
we need to to get on top of whatever we need to for crypto. That is what we're going to be getting
into today. China has been hit with 104 tariffs it seems
now the yuan is sliding treasuries are rising uh bitcoin is holding 78k when i checked last might
be a touch lower just now we'll get into everything that's going on in a bit more detail later in the
show we've also got on the headline side ripple announcing an acquisition of prime broker hidden
road for 1.25 billion dollars pretty
big acquisition there also got the latest on price action on crypto and nfc's as usual um as we get
into the show so stay tuned for that i have bread guy legendary and product lead and co-founder of
pirate nation and proof of play adam with us today cannot wait to get into a bigger discussion in
just a moment but just a reminder friends nothing that we say here is financial advice this market is very very risky
and uh despite being called uh bond yield experts in the youtube comments we are not those
necessarily so um bear with us do your own research and good luck because it's uh it's
challenging out there at the moment and with that out of the way legendary it's wednesday it's the 9th of april how are you doing i'm doing
awesome i'm not gonna foreshadow anything off the show instead i'm gonna focus on my little juice
cleanse that i started okay so this is how you're coping just focusing on your juice i posted it
yesterday i'm doing this four-day juice cleanse again. Show us again.
Talk us through the color, the flavor.
What have we got here?
What are we looking at?
We got six juices a day.
Two of them are mainly water-based,
like the one that I drink in the morning
and one that I drink in the evening.
And one is more...
Two are very heavy on vegetables
and the other are more heavy on fruits.
So they do get like a total of
1.3 k calories in per day because i need the energy for the show and for my workouts and i do this uh
once a year i mean the last time i did this kelan was commenting on my post uh eath was at 3.5 k
now it's at 1.4 k and the question is what will happen after this cleanse with the ETH press?
Will I be the only one to be cleansed or is the market in a cleansing as well?
Okay, we're going to stretch the metaphor out then, I guess.
Trying to think fast with it, but I haven't got anything yet.
So, Adam, how are you doing your side?
What do you think about this this cleansing is this
like a do you have any things that you do when the market changes or adjusts on a personal level to
kind of recalibrate maybe i could pick up some some voodoo habits i don't know if anything can
make the markets heal right now i think somebody just needs to take away Trump's Twitter accounts.
That would be probably a really helpful cleansing.
Okay.
So that's the kind of cleanse, the social media cleanse.
That's a different kind of cleanse.
So we've got the juice cleanse.
We've got the social media cleanse.
Staying off of social media is probably the best possible
thing you can do um i think you know before the show i was like i forgot to download x again
because i i don't keep the app on my phone uh i join i i download if there's the spaces and then
like immediately after i just like delete it i use it from my browser on the phone if i want to tweet
something and if you've ever tried to use x on the browser on the phone if I want to tweet something and if you've ever tried to use
x on the browser on the phone it's like terrible like there's no support for it as a product
and so it's it's like painful to keep me away from using it unnecessarily okay so we're getting some
alpha here guys uh yes we are going to get into the main headlines we're going to get into the
tariff stuff if you're just joining yes we're going to get into 104 tariffs uh against china
we're going to get into the ripple acquisition but first legendary's got the juice cleanse going
to deal with what's going on we've got the social media cleanse bread you know what's coming
what uh how are you cleansing to deal with i'm a little i'm a little jelly jelly of uh
old fern here being able to do that i got frankly
i got too much of my life tied to this this phone i'm on i'm not even on my phone right now but to
this app i should say um so she's on there she's still hitting notifications daily i don't do the
cleanse and actually i kind of find it fun like i'm watching like i'm able to disassociate myself
so well from what's going on that it's kind of entertaining
to just walk.
Like one, I find CT to be hilarious whenever numbers are going down, just generally.
Like that's when the memes are the best.
That's when the vibes are like, I don't even know.
Like it just takes a turn.
I don't know if you guys can sense that too.
But like seeing people who
legitimately know what this stuff is who focus on macro like uh uh fajow fajow i think is how you
say a guy from blockworks who like he primarily focuses on on macro trends he has a podcast
around and stuff like that he understands stuff i don't so like i just whenever i see him crashing
out with all this stuff going on i i just it's just hilarious to
me to see these people going through this stuff uh i mean i understand it's major
yeah maybe that's what it is um yeah but like i just it's so uh i don't know it's it's it's
entertaining for me so like it's it's help maybe it helps me cope maybe that's what this all is have you seen the um the i can't find the meme now but it's the the alteration of the
the strong the hard times create strong men uh i can't find the the meme now but this person
wrote it out it's hard times create great memes. Strong memes create good times.
Good times create weak memes.
And weak memes, okay, this was a joke.
And weak memes lead to Libra coin.
So I think, I wonder which, where are we here then?
Okay, so we've had Libra coin.
So we're back in the hard times.
We're looking for some great memes
to set off the cycle again, I think.
Yep.
Yep. And I think that's true if you see the you see the the uh and with ai now the production quality is just it's just right like you like had seeing all the the videos of like
americans in factories making like making cell phones and shit and everyone's just like strong
yeah it's so hilarious um yeah we're gonna
be up tiny screwdrivers get your tiny screwdrivers everyone yeah and then like seeing that adapted
to like people i guess all was it the chopping block guys did it where they did that same meme
but they were able to put in like uh uh the founders of curve and and hasib and and all
them were in like the same meme but it was them
and like hey i'm so good you can just talk and do that shit it's it's so great and that maybe that's
to put a button on it that's what i'm doing i'm cleansing myself of my own uh actual work and i'm
diving into the ai stuff really heavily um i'm have a vibe coded app coming out here soon so i'm
trying to catch up to fern this one with a smart contract. I'm going to come to you on that in a second, because there's some, you know, yes,
we're going to get into the main headlines, but there's this cool conversation that came out from
CEO of Shopify the other day where his internal memo was leaked and it's just like aggressively
pro AI and emphasizing the importance. So I'm going to come to you in that because I think
that'd just be helpful for people to know about and for a short discussion on that too. But before we get
there, let's get into the main price action headlines to get you up to speed with everything
that is going on in the market. Today, we have Bitcoin, all things considered, not doing too
bad. It's down 3%. Yes, but it is at 77K. ETH is down 7%. So so doing slightly worse i would say at 1.4k um xrp is down 5 to 1.8 bnb
is flat actually at 558 solana is down 4 to 106 dollars um getting into the meme coin side of
things we've got doge down 4 uh trump is down 4 god eth is down more than all of these things um pretty outrageous to be honest bonk is down three percent fart coin is down ten percent uh
farquin is up five percent on the week though stills one of the only assets that's green on
the seven day chart whiff is uh flat at the moment spx marad's coin is down ten percent two
pengu uh still a little bit red um at all-time low now i think as well um mog is down 10 basically
right across the board on the memes very little standing out there we might draw attention to a
couple of others um in a moment getting into the headlines themselves we have obviously china
hitting getting hit with 104 tariffs as the yuan slides and treasuries rise to 4.3%. We're going to be
talking through the different elements of what's going on, a little bit to do with the tariffs,
a little bit to do with China and its currency, and tying that in with the treasuries conversation
as well. Legendary is going to be taking us through that in just a little bit. Super important
conversation. Stay tuned for that. We've also got Ripple
announcing the acquisition of Prime Broker Hidden Road for $1.25 billion. We've spoken a lot about
how, look, all this stuff is going on and it might be negative for the moment, but there is
increasingly a lot of crypto M&A happening at pretty healthy valuations too. So something to
keep an eye on. Some notable other price action, hypes up 6% in the last 24 hours to $12.70 against the general market turmoil. Story protocol was
also up 7% to $4.20. So that's interesting to note, given that everything else is getting
a bit hit at the moment. Part of that, I saw someone from Asari was tweeting fees generated in the last 24 hours.
And the original post was like, oh, you know, hype's coming in around.
And it was like third or fourth behind a couple of their large platforms, but still pretty dominant.
And then people are like, yeah, this isn't accurate.
And then three hours later, he's like, oh, yeah, we reached out to Artemis, which was where they got the data from and reconciled it.
And they shot to number one.
Like in the last 24 hours, it was like $3.5 million they'd earned in fees because like perps going up usage wise, volume wise, while the market is going down and sideways.
I mean, it's interesting. The hype token is a really key outlier in terms of its token has a
I mean, it's interesting.
really good set of tokenomics set up. And it's set up in both ways where if the markets are going
well, people are trading more, they're for more fees. If markets are not doing well, there's
another class of traders who like to deal in the bloody streets and they can also do well.
And all that pressure goes back to
the token itself. I mean, they have, I think probably the best tokenomics in the market
and they have the added benefit of a product that generates real money. Like three and a half
million dollars in fees in a day is significant. Like that's a real company's revenue, but not
like, you know, small protocol doing like a hundred K or 50 K yeah i mean pmf is uh such a rare thing these
days and whenever you can generate fees it's usually a pretty good indication that there's a
little bit of pmf there so yeah i think just it just double clicks that right like and that was
like my thesis from the other day i talked about it on monday that i was looking at at hype and i
was like you know even with all the like downtrending stuff like that's probably one of the tokens i'm
looking to maybe to start dAing into over the next
few weeks, months.
I'm not going to try to time any bottoms, but it's
one I'm interested in for the reasons you pointed out.
Excellent points. The other point as part
of that conversation is that it is
continuously eating into
the centralized exchange
market share.
There was a tweet shared that is just... Yeah that is just volume is starting to get eaten into.
Yeah.
Yeah.
Doing definitely increasing their market share.
So something to keep an eye on, as you say,
getting into the NFT side of things,
is there anything that we should know about?
So a lot of CryptoPunk sales, a bunch of XCopy ones too.
Yeah, absolutely. As you said, CryptoPunk sales, a bunch of XCopy ones too. Yeah, absolutely.
As you said, CryptoPunks are still very healthy
and still moving given the fact
that they look very attractive,
very cheap from a US dollar perspective.
In terms of the other NFTs,
honestly, there's been a broader correction.
Most of them are down.
The only thing I really want to point out
is the Kytogenesis NFTs are up.
We'll quickly touch on that as part of the Web3 Roundup.
There's been a massive announcement coming out on them.
And what I find interesting is that on the one hand,
the NFTs are up 7% over the last 24 hours, sitting at a 1.9 ETH floor.
However, that price action is not reflecting in the KITO token in itself,
which is down 9% over the last 24 hours.
Interesting.
Good call-outs.
Just a couple of specific ones on the Punks.
Hoodie Punk sold for 140 ETH.
A bunch of other sales taking place in the 40 to 50 ETH region.
The floor now is in the region of i think it's 65k um which
is you know getting towards the bottom i think they usually bottom out around 50 or that's where
they did do last time so keeping an eye there i think some people are seeing that as value for
punks however interesting point there's an official uh tax uh document i think it was on the irs site one of the biggest holders of crypto punks
called wilcox uh was charged criminally i think is a criminal charge on avoiding taxes and he's
got like i think it's eight i can't remember the numbers i'm just going to make up the numbers but
basically the point still stands it's like he i don't actually don't actually want to make up the
numbers basically millions of dollars he has not accounted for with the taxes i think it's like he i don't actually don't actually want to make up the numbers basically
millions of dollars he has not accounted for with the taxes i think it's something to do with the
punk sales although it's not specifically said so but that is one of the main holders and i remember
because you can actually find him is wilcox.eth and he's got an amazing set of punks and he started
selling them i can't remember exactly when it would have been maybe the back end
of last year um and started like late said it's selling quite a quite a range of decent ones
towards the floor because he's got such a humongous collection um so yeah something to keep an eye on
and i think people are suggesting that could create a little bit of sell pressure as well
on punks if you're looking for one could be a reasonable time brad you want to say something did you guys see the tweet from uh coinbase about taking out a loan against your btc yes
so ridiculous like like it's just like okay for anyone who didn't see it like coinbase the actual
account just at coinbase tweeted like you know you might have some unexpected bills coming up
now is a great time that to get into your BTC.
Yeah.
Now is a great time to lend your BTC to get take out alone,
to then pay off like taxes or whatever else is coming,
or maybe just like down bad positions in this market.
But yeah, it was like a headline tweet.
And I was like, how tone deaf do you have to be to do that right now?
But yeah, that was yesterday.
I fire that intern immediately. You came with a custom graphic because AI is so be to do that right now? But yeah, that was yesterday. I fire that intern immediately.
You came with a custom graphic
because AI is so easy to do.
The intern is all-encompassing now, right?
He doesn't need a marketing department.
He can go prompt it, spin it up,
and then throw it out on a tweet.
It's great, high quality.
Indeed.
I'm sure there are reasonable occasions
where borrowing against Bitcoin might be a more
reasonable thing to do but take care of your taxes without that ideally a few other bits
of news from around the space before we get into the main headlines today I think you might find
interesting the Department of Justice narrowed its scope for crypto enforcement the unit that
was supposed to be dedicated to crypto related investigations is like become far more narrow than what it was before.
The Argentine House of Representatives passed a resolution to establish a special committee to investigate the Libra meme coin scandal.
Obviously, this was the one involving Malay and Kelsier Ventures, specifically the leader there whose name was Hayden.
I can't remember his surname.
Yeah, I definitely think we have not heard the end
of that so it'll be kind of interesting to see where that story goes uh blackrock announced
anchorage digital as a custodian for its bitcoin etf to go alongside coinbase i've heard a couple
of people would be curious to hear people's thoughts saying okay well this coinbase definitely
don't have a monopoly on this business anymore i saw some people suggesting they were going to start selling off some coin because you know maybe you don't have
monopoly on that business necessarily other people might be invited in uh mastercard partnered with
kraken to allow european users to spend bitcoin at 150 million merchants worldwide that's
interesting to know big coin launched on abstract as an alternative to bitcoin ran to 3.5 million i'm not sure where it is now um i guess people having some fun and games on
abstract and finally as legendary just alluded to kaito released its info 5 vision article and how
they seek to unlock unlock monetization for the masses i think kaito has been in a lot of
conversation recently because
a it is a great product you can get awesome data teams can get awesome data on the mindshare that
they're creating um generating on the timeline but i guess the criticism has been it's kind of
it's getting gamed quite a lot people are farming it quite a lot is the content organic and useful
as it was um so those are the questions.
Legendary, I know you wanted to maybe speak to that a little bit
before I ask the boys what else is catching their attention.
Honestly, I don't want to take it in the Kaito direction
because there's something else that's been going on
that I wanted to touch on, and it is World Liberty Finance.
Just quickly on that, they started selling of their ETH position or one of
the wallets started to do so. And obviously doing that at a loss, sharing this currently on screen
and trying to find the exact data which I had at hand a second ago, they go they sold 5471 ETH
at $1465 each, leaving World Liberty Finance with a total of a $125 million loss
when it comes to their remainder of the ETH holdings.
Damn.
What happened to that tweet from Eric Jones?
This somehow does not make me feel any better.
And isn't that a specificity?
Nope.
In fact, I would say maybe it's making me feel worse.
Adam's, uh, I'm here.
Yeah, you're back.
You're back.
Uh, I would say, I think it's making me feel worse because my one remaining
thesis bullet point for Ethereum was that the Trump family was going to find a way
to pump it because they own a lot of it.
But now that they're out, I think game over for my bags.
I think that was it.
That was my final piece of shit.
You've been slowly checking off the bull theses,
just one by one, taking them out.
I mean, I literally did.
At least we've talked about that here, right?
It was like one of the bull cases with that dumb people, not dumb people, but people just removed from the crypto Twitter Web3 conversation.
We've had to evolve into this position that we have now.
It's kind of a messy narrative.
It's kind of whatever.
There's people, arms reach farther away, remove, would see this and go like, biggest coin, buy it.
ETH is a big brand, buy it.
They would just DCA, just like Eric Trump was doing. It's just like, oh, it right eth is a big brand buy it right they just
they would just dca just like eric trump was doing right just like oh good it's a good time to buy
eth several times um they're they're doing this world liberty fire but yeah if if they're getting
hip to the hip to the what the streets are talking about you know it's not great indeed indeed um i want to i actually wanted to i want to do two things here
adam wanted to check in with you uh at proof of play a pirate nation like obviously the market
is going crazy across the board it's very difficult to predict at the moment how are you guys
approaching it from a builder perspective like what what is your outlook how are you guys approaching it from a builder perspective like what what is your outlook
how are you dealing with things internally what's the best way to navigate the situation because
i'm sure a lot of builders are going through the same thing and uh your thoughts might be
might be interesting to them so i think most teams are going into like a cash preservation
node right now so things that they would have spent on,
they maybe are pulling back on.
They're evaluating everything and saying like,
do I really need this right now?
Like they're looking at everything with an eagle eye
to determine if it's going to add back value,
whatever value means to that individual team.
And different teams are optimizing for different things.
Our plan is still exactly the same.
It's build industry-leading infrastructure
to support different kinds of apps,
whether they're games or other,
and build generationally defining games.
So we're still trying to build fun games
and we're still trying to sell
our amazing infrastructure services.
Nothing changes.
It's just a matter of how are we spending money as a company?
How do we make sure we last?
How do we stick around?
We don't want to be one of those companies
that you see running out of money
because of frivolous spending.
Not that we were ever frivolous spenders to begin with.
We're all very mature capital allocators.
However, we don't know how long this is gonna last.
And while we're in this mode,
other teams are in this mode as well.
So they may like
where someone might have bought vip in our game maybe now they won't right and if someone was
going to purchase you know something in our ecosystem maybe they won't now we just launched
pvp which is a like a massive feature in the game that frankly should have launched two years ago
when the community asked for it if you go into the Discord right now, the vibes are immaculate,
despite the fact that the pirate NFTs which are denominated in ETH, unfortunately, are down bad.
The pirate token price also, you know, not in a great place right now.
However, everyone's having so much fun.
I don't even see people talking about the token anymore, which is like shocking.
Because before we launched PVP, that was a primary topic of conversation. fun. I don't even see people talking about that token anymore, which is shocking because before
we launched PVP, that was a primary topic of conversation. It was like, here's what we're
going to do to get these assets to go up. And now people are just playing the game.
That's exactly what we want. That's exactly what our purpose is. It's to entertain people,
distract them, make them want to play and make them want to engage independent
of what the value of any of the things in the ecosystem are so i think mission accomplished
from the pvp side of things and now it's a matter of can we find more players who are interested in
engaging with pvp yeah it's a really good point i think interestingly i think one of the things
that happens in the in the in this kind
of market is it flushes out anyone who might have been around for more speculative purposes
uh it's actually a really good time to for those people naturally maybe get distracted somewhere
else and you get a an opportunity i think the way i look at it is you get this really nice opportunity
to build a really cohesive strong
base amongst the people who are willing to stick around and I think sometimes the most meaningful
relationships are created and formed in these moments you know we were talking briefly about
heading over to Dubai which I think we're doing later this month and a lot of people have been asking asking like oh are you still gonna go like if you know kind
of basing their decision on going on the position in the market I was like I think it's better it's
better if you're the people who are still going when the times are good and when you're still
going even when the times are bad because those people that you can see around um i think something more
more meaningful uh happens there so interesting i think yeah it's a very interesting conversation
to have because i think a lot of people are figuring out ways to cope at the moment uh
talking of ways to cope before we get into the headlines final points i think this is super
interesting as well brad you made a personal decision that in order to cope with life moving forward you must uh improve on the ai but there's specifically an
article shared by the ceo of shopify which was an internal memo it got leaked and he decided to share
it you want to just take us through that and why you thought that that was such an important article
and why you thought it was so such an important skill to double down on
everyone must assimilate is the is the tldr um yeah all right so what he came out with was it was an internal memo that he said it was going to be leaked therefore he's just going to release
it so that people can can see it straight from the source and have it misconstrued and the tldr is
that he's been pretty bricked up on on AI for a while now several months and he's
basically making it mandatory throughout his entire uh company that you have to lean into AI
to enhance your workflow to understand what's going on to basically uh uplift yourself right
or up level yourself I think is the cheesy term I keep hearing so you have to up level yourself
through AI um and he said like it's it's coming down to where everyone will have evaluations,
everyone will have questionnaires that are passed to them to make sure that they're actually doing
this stuff. And anytime someone comes in for a headcount increase, like say, I want to blow out
my team, you have to verify that everyone on your team is actually like utilizing the tools made available to them in order to maximize their own, uh, output through yeah. AI tooling. He's, and he
said it's, it's universal. It goes all the way from the C suites down to the line level people.
Um, and it was just something I actually quote you the same thing. It's like, you have to use
this stuff. Uh, the tools are good enough on basically all fronts these days that you can
increase your workflow in any way you want to, right? Whether it's your creative writing or
your design or your data analytics or just general research stuff, basically anything. So I have also
made a like a little bit of a promise to myself to start leaning into as
many of these tools as I can.
I'm trying to just isolate, uh, which of like, I'm trying to follow some other accounts
that are talking about this stuff, trying to just like bookmark checkout tools, like
make sure I spend time actually dedicated to utilizing these things in the day-to-day
stuff that I do.
Um, whether I want to or not, I'm just like, I'm trying to force myself to use this stuff
because yeah, it's good.
It's going to be an integral part to everyone over the next like it already has been
probably for some but I think it's just it's so painfully obvious right now that you know I need
to start leaning into it heavier um so I am on the on the show when we were talking about that
last Wednesday that we were talking about a company where the company was encouraging people
to use AI more and more and more.
And I kind of said, I would look at the people who don't use AI,
and these are the people who I would fire first,
because they are basically massively hindering the productivity
if they have a resistance to use those new tools.
And it seems like this is gonna become the reality
for quite a few people.
There's still a stigma associated to it, right?
Like that's the, there's a broad acceptance
or feeling that it devalues you and or your work, right?
If you're not the one creating it entirely
that it's like you're offloading it.
And I do, I even feel that way sometimes,
like, you know, we're working with people on a team we have an intern i say hey write this report for me i
want to see that like you're you're like you write this summary from i can see that it's like the
actual writing itself is ai written right it's got the hyphens that everyone's been pointing out the
last few weeks all that shit and in my mind i go okay like it's i think it's fine that you've
sourced the information for for writing this stuff
but i feel like if you just totally offload it to ai it does lack a voice right it lacks a little
like maybe that's just like a demonstration of his prompting skill but like i i do i do want
i do want it to have a little bit more nuanced character whatever and ais today don't have
the best way to replicate other people's voices.
Until that happens, I still think it is better
and it resonates more with your readers
if you are actually the one writing the thing,
even if a lot of the information sourcing
comes from like AI sources.
Yeah, and there's nothing wrong with doing that that way, right?
Like for the complexity of our segments
has been increasing so much that I'm like using multiple lms to do all the research understand questions where i'm not
certain about that fact check that and then write the segment together in a way how i would like
explain the things or deliver the news and like i don't think there's anything to be embarrassed
about that it's just efficient to do it this way And one of the things that I recently liked very, very much
is Chorus, like C-H-O-R-U-S dot S-H,
which is basically aggregating multiple LLMs,
DeepSeq, Lama, Cloud, ChatGPT,
and you can talk to all of them at the same time,
basically, and kind of have like a panel of experts.
So you ask a question and you tell them,
like, you know, drill holes into this, you this you do this you question this you fact check this and you gpt 4.5
write this as humanly as possible and you look at them going back and forth which is super super
helpful if you have like one ai fact checking the other um and it's really helping to improve the
quality of results and i have have the pro subscription level,
and that's not sponsored.
There's no riffling for that.
I'm just pointing that out
because it's just $100 a month for all of them,
which is just cheaper than having to subscribe
to each individually
because just through chat,
I pay $200 a month.
It's a really good tool.
Interesting.
That is very, very interesting to explore.
It's kind of like having your own swarm of researchers to help you leverage.
We started using it for ads.
So we're starting to experiment with customer acquisition on ads.
And we're testing creative.
So we have about, last I checked, at 100 ads going on right now.
In very, very small dollar spends
just to test out conversion rates.
And all the creative for it was all created with Boro.
Interesting.
Like end-to-end.
We want 100 different ideas, go.
We just copy and pasted them into the tool.
And I'll have the results in a few hours from
now because we're running them overnight very interesting so we'll have to get the get the
results next week um that'll be interesting to learn always always trying to figure out ways to
leverage ourselves given that we're also entrepreneurial on the internet we've just
got to stay on top of it so we'll always keep sharing our learnings with you guys as usual uh but we've got to get into the main meat of today's show um obviously there's been escalation on the tariff
front and further escalation this morning shout out to uh oxy and notorious png shouting it out
in the comments uh legendary i'm gonna pass over to you straight away. What do we need to know? What are the updates and how is it affecting our cryptocurrency coins?
Yeah, absolutely. Tensions between the US and China escalating. President Donald Trump's tariffs are now in effect, including that 104% tariff on China.
As a result, US markets have been selling off significantly, significantly yesterday into the midnight tariff deadline.
And we also have breaking news, which the boys in the YouTube comments have pointed out already,
that China was very quick to retaliate again, imposing an additional 84% in tariffs.
That means that the total rate is now up to 118%. On the currency side, the one is approaching a 17-year low against the US dollar.
And that weakness can also be felt across different Asian currencies, including the Indian rupee.
And if we look at the European stocks, they have been impacted significantly.
They are down 4% on the day.
And also the S&P 500 is down another 1.23% on the pre-markets.
And what's been also happening at the same time is something that's very interesting.
And I've seen some timeline talk about that.
It's both the 10-year and the 30-year yield are up massively.
I think just yesterday, we talked about that UB specifically mentioned it did
slide under 4%, 3.9 something.
Now we are back up to 4%.
And this is very,
very similar picture for the 30 year yield as well,
which is a 56 base points of 0.56% in three trading days.
And the last time we've seen that
was in 82. So that's been quite a while ago, since we've seen such a violent, violent move
in the 10 30 year yields, which typically don't move that aggressively, they don't have that much
volatility. And there's been an awesome article in the Financial Times kind of explaining what's been
what's been going on. Because if you look on the X timeline, there's been like two explainers or two models.
Some people are saying China is selling off US treasuries, which might be true to a certain
extent, but certainly would not be. And that's according to not only Financial Times, but many,
many other experts on this topic who I'm relying on to pass this info. But this effect would not
be strong enough to see the violent, violent move in the 10
and 30 year yield.
And what's actually going on is an unwinding of the base trade.
So the base trade basically is using the discrepancy and the pricing between US treasury bonds
and the future contracts.
That is something that we talked about
the base trade for Bitcoin. It's typically a quote unquote risk free trade, which institutional money
likes to make. And what happened is basically you exploit this small price difference,
you buy the actual treasury bond, you can sell the futures contract, you can aim to profit when those prices are converging.
And what also happens is that it's wildly, wildly popular to massively leverage the trade.
And I'm going to quote a bit from the Financial Times article because that explain, in my opinion, is so, so interesting.
Because we see significant leverage from hedge funds that goes up to 50, up to 100 even and with very very little margins so the explainer says let's say you put down 10 million dollars for treasuries and sell an equal value of futures
you can use these treasuries as i just had explained as a collateral for up to 9.9 million
dollars of short-term loans and you can do that obviously again and again and again. And a 10 million position, 10 million capital spot position
can support as much as $1 billion in treasury purchases.
And what Financial Times tried to do is to aggregate
how big this basically leveraged treasury market is,
which other analysts tried to do as well.
And it's hard to pinpoint it down to an exact number,
but the size is a bit more than $800 billion of leveraged long exposure. And what happens is,
if you see this violent move, some of that leverage starts to unwind. There might be some forced liquidations going on.
And another indicator that is pinpointing to that theory or to that explanation model is also the
fact that we've seen that massive spike overnight, so US nighttime, which would be outside of market
hours, which is typically when some of these forced liquidations would take place. I know a lot of info going on, but just to sum it up once more, the tariffs are live.
China has very quickly retaliated and imposed additional tariffs, raising their level to
118%.
The Chinese currency is struggling massively against the dollar and is also impacting
other Asian currencies. And then we are also seeing the 10 and 30 year yields going up massively because of
a potential unwind in the base trade in the balance sheets of hedge funds who have massive
long leveraged exposure.
Excellent summary of what is going on.
Thank you very much.
A couple of follow on questions that might help to kind of unpick some of the is going on. Thank you very much. A couple of follow on questions,
which might help to kind of unpick some of the key details there. You started speaking about the 10
year, the 10 year rate, which is now up going up to 4.4. Can you try and explain why, why is that
bad? Like, what is it that the U S is trying to achieve? One of the things was trying to get
that rate down, right? They wanted to get the rate down. Why is it bad that that is going up?
And then we're also thinking about, I'll leave the second part till after.
Paul Jay Well, the going theory, the 5D chess theory was,
Trump is putting pressure on the market to refinance U.S. debt at a cheaper rate because whatever he will do will cause the rate to go down.
And that's clearly not happening.
So that's the one part.
And the other thing then is if you have a sell-off in equities, you have a sell-off in stocks, and the question is where is that money going to? And typically, you would say that the 10 to 30-year treasury yields are
a safe haven asset. But because the market is getting flooded with them, whether that's someone
saying that China is selling them off, or we see someone getting liquidated, that means that at the
same time, because these bonds are inverse bonds, right right means that at the same time that yield
is is going up as well and that kind of makes institutional investors nervous
because the question becomes is this really the safe haven asset that we want them to be that we
expect them to be because that's typically an asset class that you don't expect to move that violently. And the last time we've seen not over three days, but we've seen a
pretty, pretty violent move in those yields was 2020 during the COVID crash. That caused a massive,
massive panic on the stock markets as well. That move was way stronger than the one that we're
seeing today, by the way.
But generally,
it causes an additional layer of fear and uncertainty in the market.
And it also kind of shows that
at least looking at the treasury yields
now that Trump's plan
or alleged plan
is not really working out as intended.
Okay.
So I think that's pretty helpful
for additional context.
The other thing we started to focus on yesterday was the idea that, okay, we've got to start focusing on China. Yes,
everyone was disheartened by all of the potential action against the rest of the world, including
allies, and I think some of that criticism definitely stands but it feels like now we're zooming way more into China it's like look you know people are starting to think this
other stuff is probably going to get sorted out maybe there's been irreparable damage
done to some of the relationships but it seems like the main event is China that's where
we're watching more I understand the chinese currency has been
being defended quite a lot and so well i think it's the stock market right we were just speaking
about that yesterday where you know they were they were buying um what's your take there legendary is
um there was also an article which i thought was very interesting. I'm going to try and find it while you speak to China a bit more, suggesting that there's
actually more commentary coming out of the White House itself saying, okay, fine.
The US has been the dollar reserve.
The dollar has been the global reserve for a long period of time.
We're just not really sure about that anymore.
Like we're going to move into a world where that's not going to be the case.
And I'll have all kinds of implications for all assets moving forward.
I'm just going to try and find that specific wording while you speak to China a little bit.
Yeah, absolutely.
On look on China, I think we said yesterday they have quite a few tools in the box to defend
the local currency, which is something they are definitely trying to do.
They can use swaps forward contracts. They can be more restrictive in how they handle their offshore
from a Chinese perspective, yuan holdings.
So they have quite a few things to do.
And they've also been saying they're willing to strike a deal,
but they're also willing to fight this through.
And they've been getting more creative with other things as well.
Yesterday, we just spoke about the export ban for seven rare earth metals, which are
old metals being used in semiconductors.
I think as a kind of a quick move, that was a news that I saw on my timeline yesterday.
Apple charted five cargo planes to fly Apple products, including a shit
ton of iPhones into the States before midnight to have that before the tariffs are in effect.
So you definitely see this already impacting companies and countries massively. I think
Apple also had said that they want to move some of their production from China to India, which is obviously something that China would not like at all. Because they have this, not only do they control like 70% of the rare earth metals, they stock market in very, very aggressive ways. And
just going back to that theory that they're selling off yields, and there's been this analysis
by Jim Bianco who's also been saying that if they really were to sell yields, you would expect
the dollar index to become weak or not stronger, which is something that points to the fact that
this is not what has been going on. And also what's going to be interesting, and it will
probably have to report on in some sort later this week is that the US Treasury has an auction of
$39 billion of 10 year notes Wednesday and another $22 billion of 30 year bonds on Thursday.
The question is going to be if the market's already
flooded with them, who is going to be a buyer
for that?
Jim Bianco is saying it should be interesting to see
who wants these treasuries in the middle of this chaos.
And it's probably just another
point where it wouldn't make a lot of sense
for China to sell off all of the US treasuries
or selling them off massively
because
they are also a very good bargaining chip, right?
And if you sold them once, you can't use them any longer.
And as we've just said, it's super important for China to also resolve this problem
because they are fighting on many, many battlefields right now, right?
They're losing production.
They have this tariff, tariffs going on.
They have a weakness in the currency.
They obviously have significant holdings
in US treasuries as well.
So very strategically interesting
to see how they are reacting
and how they are moving.
Interesting.
Okay, I think it's definitely helpful
to kind of double click on China
because that's where the focus
and attention is going.
I found the article, it's not an article,
it's a briefing statement made by the White House two days ago and there's a little bit in there from Steve Moran who is serving as the chairman of the White House Council of Economic Advisers
at the moment and he said this, I'm going to share my screen legendary, there's just a small
part in there where it speaks to the, I'm going to try and zoom
in a bit so you guys can see a bit better.
If you're watching in, you should be able to see this now.
There's this little piece here where he speaks to the dollar.
He says, you know, he's speaking more generally about how the United States has been operating
economically for a while.
He said on the financial side, here we go, highlighting it here.
On the financial side, the reserve function of the dollar has caused persistent currency
distortions and contributed, along with other countries, unfair barriers to trade to unsustainable
trade deficits.
These trade deficits have decimated our manufacturing sector and many working class families and their communities to facilitate non-American trading with each other.
Let me clarify that by reserve currency, I mean all the international functions of the dollar, private savings and trade included.
I've often used the example that when private agents in two separate foreign countries trade with each other, it's typically done nominating dollars because of America's status as the reserve provider that trade entails
saving housed in dollar securities often treasuries as a result of all this Americans have been paying
for peace and prosperity not just for themselves but for non-Americans too so this is a big and very loaded set of paragraphs.
I don't know if we're going to debate that.
In the blockchain world, we call that the monetary premium.
That's the thing everyone wants, right?
We want everything denominated in our asset
because that gives it some nebulous thing
that allows us to just say this thing is worth more,
but we can't really quantify why it's worth more
and what it's about. Maybe the next part of the paragraph bread would be something that ethereum
could say to its l2s said president trump has made it clear that he will no longer stand
for other nations free riding on our blood sweat and tears in national security or trade no more
free riding um i think many lts might be well they're not guilty of
anything they're just playing by the rules that were set for them but and in many ways i think a
lot of these countries are thinking the same thing right well we're just doing what we've always been
able to do so anyway the main point there being this is the argument that is being formulated which
i think is interesting because as brett just said for a long period of time whether that's what you want in blockchain universe or whether you've wanted that in the world like
that was something that was it was a not necessarily an honor there was something that
you probably worked hard to be able to achieve and offered you a bunch of benefits but now
I guess the perception is those benefits are not do not outweigh some of the negatives in their view
the analogies are kind of crazy like even
in this conversation right like oh being the global reserve currency has gutted our industrial
advantages has been offloaded to these other countries and now these other countries are
prospering on us and living on our backs right that's That's Ethereum, right? It's Ethereum no longer is the hub for users.
It has offloaded all of the actual
like smart contract utilization
to base, to arbitrum, to whatever.
And it wants to claw that back
and to claw that back,
it needs to, I don't know,
that needs to displace itself
as the global reserve currency.
I think those are two separate issues,
but there are a lot of analogies here
that I think are kind of funny.
And can ETH start tariffing other chains yeah that's the that was
the joke i've actually it's actually been made on the timeline a lot the last few weeks uh the
short answer is no but um yeah not yet that's the real not yet not yet gotta pay a tax um okay so i just wanted to put that out there um as well because i think
this is happening at the same time or at least that's part of the explanation for the thinking
that is taking place let's do you said i think you had more to give did you want to close this
out like what are the implications for the market as you see it maybe short medium and long it's incredibly loaded
complicated question there'll probably be something that is incredibly important news that comes out
in like 30 minutes time that might change it but just like your general sense at the moment
yeah absolutely just a couple a couple of closing thoughts on that on china specifically just look
at how fast china is reacting to that stuff while the
EU is still thinking how to react and how the countries are negotiating.
China is prepared.
They are ready for that.
They are ready to probably also refocus on the Asian market.
They have expected this probably to a certain extent because they're moving in a very,
very decisive fashion, which is, you know, abstract all the implications away for a quick
moment.
That alone is impressive to see.
To your question how the market is going to react, I have the pre-markets open on my other
screen.
When I did my segment on what's going on with the markets, I said the S&P 500 is down
1.3% on the pre-markets.
It's now down 2.16%.
That's a lot.
I think short term, there's a lot of pain that we can still expect to see.
Yesterday, we had one of the main headlines
which we did not manage
to get to, which was that the
BlackRock CEO Larry Fink is expecting
a potential
additional 20%
drop in stocks. So I do think
we're in for a lot of volatility
short term. And if the market is
recovering for a day, I don't think that's a reason to celebrate. I've seen a lot of volatility short term. And if the market is recovering for a day,
I don't think that's a reason to celebrate. I've seen a lot of people yesterday posting,
oh, look, we are pumping, everything is green, what's you on about? That is not very, very
smart to look at it that way. I would also not trust the BTC recovery that we're seeing.
So definitely in for a lot of short-term volatility and pain and i honestly expect to see a lot of
volatility over trump's entire administration because this is how he has been handling himself
the first not even 100 days and i do expect this to continue but i'm also definitely curious i'm
aware we only have five minutes left in the show to hear from funky on this who has been having his
hand up for quite a while hey gm guys no i just was wondering going back to the whole Hey, GM guys.
No, I just was wondering, going back to the whole stabilization of the dollar in terms
of the global reserve currency, are we approaching the inflection point at whichever Bitcoiner
has been having this fever dream for so long about it's not controlled by any government?
Does it become sort of the go-to
standard for swapping in and out for doing international trade so on so forth so i just
wanted to at least throw that thought out there indeed uh this is where it really needs to prove
itself right like this the the stage has been set for bitcoin i I think. This is what you want and it needs to perform ideally in this moment.
So we will keep a close eye.
And a final thought from you, Adam.
I know you came in a little bit with the comparison with Ethereum, but anything else
here from you?
I'm just going to wait to see how it all plays out.
Last week we said, what is going to happen?
Is it priced in, not priced in?
Not priced in.
We have our answer, right?
Like, are we going to pull back?
Nope.
Doubling down.
And I see no reason to believe that we're going to soften our position at this point.
No goals that I would,
no goals from my perspective seem to have been accomplished.
And what we've seen from this administration,
this series of personalities is that admitting defeat
and is not necessarily one of their core values
and just be like, oops, moving on.
And I saw this Besan interview where he said
like a very small percentage of homes own 80 of the investment wealth in the country and so if you think about and they think that it's not their mega base like so their belief whether it's true or untrue is that they're only hurting like the
elite investor class and they're not actually harming their their voting base and therefore
they believe they can act with impunity again this may or may not be true i don't i don't know
if that like second order step of thinking is correct but if they feel that if they're emboldened on that front
they're going to probably keep going and probably more uncertainty meets more pain
so i i wouldn't give i i refuse to give a a prediction last week i'm giving a semi-prediction
now which is gets worse than um yeah because i don't see us like backing down i mean everyone's just trying to be
the biggest biggest bully right now i think one of the most reasonable parts of that is the idea
that you you can just wait as well like let's wait and see until next week i think people in
this space maybe because it's because we've been just coming out of this hypermania in a bull market, people are really, really triggered to buy every dip or think that everything's going to come back straight away.
And it's okay to wait and to appreciate that we're not in the same financial conditions as we were at the top of January.
of january like we're not there by the dip if you want to but it's just i don't think you need to
in the same aggressive way that you did before because it's going to be up 48 hours later and
far past the point where you had bought um so i think that's a very sensible approach um i did
that in 2022 i was expecting the v-shape recovery dA'd in, and ended up buying like 80% higher because
it takes longer than you guys think, right?
The market can continue to trend down for a little bit in these situations.
Like the advice I saw from one of the founders of Bitwise was just like, wait for a new acronym
to come out.
And like, that'll be your trigger point, right?
Whenever the government comes forward
with some new program,
which is like a liquidity injection,
but they can't use one of the older ones, right?
So they have to come up with a new one
that's like a recovery fund or something.
Whenever you start seeing a new acronym
thrown around by the government,
that's when like, that'll be your first signal
of like, okay, it's time to start looking.
Yeah, interesting.
Interesting point.
Look, we're coming, coming towards the end of the show
kind of already at time but brett i want to give you a moment to speak to the other big news like
this is big news i appreciate the tarot stuff is definitely taking over people's minds and you know
taking over everyone's psychology in a way but the the crypto stage is set in the states for all
kinds of positive stuff and we've been talking about how M&A,
crypto M&A is going to increase.
It's going to be super valuable.
I think that's still important to talk about.
So why don't you close us out, Brad,
with this kind of quick summary
of what's going on with Ripple,
their latest acquisition.
Yeah, sure.
So the headline is,
Ripple announces acquisition of prime broker
Hidden Road for 1.25
billion. So if you don't know what Ripple is, Ripple is a cryptocurrency payments company.
They're actually fourth right now in FDV at 183 billion. Hidden Road is just a prime brokerage.
And if you don't know what a prime brokerage is, it's basically just a bunch of bundled services
that large financial institutions like hedge funds use to operate efficiently efficiently right so like uh you can think of stuff like uh um like custody financing clearing and settlement
stuff like that um prime or hidden road specifically focuses focused on the crypto centric
uh services for a lot of these things and it's basically just that uh that ripple is now
positioning itself to better serve these large institutional players when it
comes to cryptocurrency for those types of services and you know we'll see that now they're
going to start competing with stuff like coinbase prime but short and sweet ripple is just positioning
itself to serve financial institutions when it comes to crypto you know it's hard to understand
what ripple does frankly like you just know that it has strong financial institutions when it comes to crypto. You know, it's hard to understand what Ripple does,
frankly, like you just know that it has strong financial, strong financial,
institutional ties. But it's not exactly tied to XRP, the price, but there is a lot of really
memetic qualities to XRP. So probably bullish price action. But in this market, like, honestly,
like you just got to look at it, write it down and say, you know, in the future, I'll think about this, but it's, it's strengthening,
it's strengthening its narrative with its consumer base.
Good stuff.
Important to keep abreast of what, what's going on on the corporate side.
I think we're going to keep doing that.
I think it's important, but at the same time, we're going to keep focusing on the main,
the main stuff that's going on, the tariffs, the escalation, the re-escalation, hopefully eventually some de-escalation.
Hopefully we'll have some of that too.
That is our show for today.
Just a reminder, we do this every single day, Monday to Friday at 7am Eastern time for one
hour live on X, X video, YouTube, Apple, and Spotify podcast too.
Thanks to my co-host, Brad Guy, Legendary,
and Adam from Proof, Play, and Pirate Nation.
Thanks so much for joining us.
Have a wonderful day.
Take care.
We will see you tomorrow.
Bye-bye.
