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Is ETH is entering its MicroStrategy era?🎙️
Recorded: July 2, 2025 Duration: 1:32:49Space Recording
Short Summary
Ethereum is poised for a potential resurgence as discussions around institutional adoption and the Genius Act signal a new era of growth. With significant fundraising efforts and the promise of yield opportunities, ETH may soon see increased traction in the crypto market.
Full Transcription
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. all right we can get started i don't know if music was playing or not. I typically switch
when I open the space. There we go. We got a thumbs up. So it was playing. Big news with
Ethereum. I think a lot of people have been, unless you're not holding a significant amount
of ETH, quite upset with ETH's price action over the last couple of years. In fact, if you look at ETH
against Bitcoin, you could have bought ETH in 2016, points in 2016, and you would have been
at the same Satoshi value today as you would have been in 2016. So it's pretty crazy to see how poorly ETH has performed down,
I believe, 75%. At one point, it was 80%, 85% since the merge against Bitcoin. And people have
been wondering, I mean, we've done spaces on this, you know, whether or not ETH is going to or is meant to have its micro strategy era. We did a space a while back, does ETH need
a Michael Saylor? Does Ethereum need a Michael Saylor? The consensus was back then that yes,
it does in order to even, excuse me, forget about keeping up with Bitcoin, but it's like
even revisit all time highs. And when I say all-time highs i don't care about the dollar value i if you've been listening to my spaces for a while you know that i
i value things in crypto in satoshis i don't care about how it performs dollar wise and the main
reason for that is because i look at things from a risk reward perspective like most people do and
um for me the the least riskiest asset in crypto is Bitcoin. And so why would I take on more risk if I'm going to underperform the least riskiest asset?
It doesn't make any sense to me.
So, yeah, I don't really care if Ethereum goes to 5K.
I don't really care if it goes to 7,500, right?
I want it to outperform Bitcoin.
Otherwise, I'm just going to convert everything to Bitcoin and sleep better at night.
So, all right.
Tom Lee.
I've never heard of this guy before. I know he's a somebody just like Michael Saylor. I'd never heard of Michael Saylor
before 2020. I didn't, I don't, I knew what micro strategy was, but I didn't know who Michael
Saylor was. And he's made quite a name for himself just by, by putting his money where his mouth is,
buying and holding Bitcoin with conviction and using his company's
treasury and putting Bitcoin on their balance sheet. So he got on, I believe, CNBC, the company
that he is now spearheading is Bitmine Immersion Technologies, a company that I've never heard of
before. And he is the appointed chairman.
Right. He's a co-founder and head of research at he was a he was the co-founder and head of research at Fundstrat.
And I had not heard of that before either. So a lot of new names being thrown at me. But the gist of it is that they are they are spearheading a strategy very much in the mold of micro strategy, but for Ethereum.
And they have initiated a 250 million private placement specifically to build a massive ETH treasury.
And that, I think it's interesting because the market reacted, but not in a way that we would think. The announcement
caused the stock to surge up roughly 27% pre-market and then nearly 700% intraday. And then
Ethereum didn't really do anything. Now, I will say that we've seen similar scenarios with Bitcoin
where you hear big money buying in and you don't really see price movement and then all at once it goes up.
Fundamentals are different.
Different assets, obviously, right?
We can go into that.
There are a lot of people who think that the L2 model is not good for ETH and it's not going to allow ETH to grow the way that some of the guys like Ryan Adams from Bankless hope it will.
I've seen him make some insane predictions comparing it to oil.
But anyway, welcome to some of the panel members.
Ron, what's going on?
I think we have – the spaces are being funky today.
The co-hosts are dropping.
So got Adam, got Ron.
Some other folks are going to be joining as well.
But welcome, guys.
Thanks for having me. It's good to be back here.
Quite some time since joining you guys, so excited to dive into everything that's been going on,
especially from the more policy DC angle, since there's a lot of developments recently
and will be in the next couple months to come.
Yeah, tell me about that, Ron.
Yeah, definitely. I mean, I guess I'll try to stick on topic here a little bit since we're talking about more micro strategy era of the Treasuries, which has been getting some attention on Capitol Hill, more in the negative front, as expected, with largely Democrat skeptics starting to more get word of what these treasury plans are.
And even before making too many assumptions here, a lot of them have been saying this
could create market risk.
And a lot of them, including Elizabeth Warren, are saying that this could be more existential
for the banking system as a whole if more public companies start having these treasuries.
Again, nothing really too unexpected from the typical crypto haters that we've seen
in Congress.
However, it's been more exciting to see just the engagement, especially on the Ethereum side, with Tom Lee's announcements, kind of really starting to pick up the scene here in D.C.
And that's all, of course, with the backdrop of the Senate just passing their big stablecoin bill, the Genius Act.
just passing their big stablecoin bill, Genius Act. And potentially next week, we could see
maybe the House move on that bill, as well as the market structure bill known as the Clarity Act,
which is a huge piece of legislation for a lot of the industry. So we could also be seeing some
announcements from the Trump administration on executive orders related to the Bitcoin Reserve
or the crypto reserve, whatever they're going to be calling it in the near future,
as well as potentially another couple of reports from the White House
of kind of more how they plan to fund the reserve itself
or the mechanism they're going to use to make the United States
the crypto capital of the world.
So there's a lot happening.
A lot will be happening in the next couple of months.
They'll be telling just how far the legislation will go
before it goes more to the regulators.
But overall, very positive.
But we have already started seeing, especially on the Treasury front, the skeptics starting
to cling on to this being a potential systemic issue.
And therefore, we should not be supporting cryptocurrency industry at all.
Again, it's mostly Elizabeth Warren.
It's mostly not going anywhere.
But D.C. has started taking attention.
Yeah, Ron, right.
The usual suspects, they can resist all they want, but it seems to me that it's inevitable.
And I think we all agree, people that have been around technology know that this is inevitable
and you might as well start getting on board, which is what this administration is doing
and a lot of other countries are doing as well.
Not just countries, but sovereign pension plans also allocating to Bitcoin, adding it, you know, 50 to 100 cost basis.
Sorry, one second. 50 to 100 cost basis points to their sovereign and pension plans.
Sorry, my computer's freezing. Give me one sec.
Sorry, my computer's freezing. Give me one sec.
Okay, so we have a number of companies.
And again, I don't know who these companies are.
Sharp Link Gaming, never heard of them before.
I've never heard of BTCS Inc.
BTCS Inc.
Republic Technologies, BitDigital, BlackRock, we know them.
These are all companies that are that have already been buying Bitcoin.
Right. So Sharplink has announced a four hundred and twenty five million dollar plan.
And BTC Inc. is acquiring, I think, 3450,450 each, or at least has already acquired that much, and they're going to—
Well, no, sorry.
They recently acquired $3,400.
They're bringing their total to $12,500, and the rest are following suit.
So, Dave, I want to know what you think, right?
Do you think that with a guy like Tom Lee—and people were like, well, who's Tom Lee?
And I would say in 2020, a lot of people were saying, who's Michael Saylor?
Do you think with a guy like Tom Lee and all these companies allocating now ETH to their treasuries, that ETH can enter its Bitcoin era?
And hold on. Let me just say this. Now. We're going to have the Genius Act hopefully pass. Stablecoins passes, it's off to the races.
This economy is going to live mostly on the EVM.
Now we can make arguments for whether it's going to be on L2s or the actual L1
and how much value is going to be accrued from Ethereum itself
versus the, as some call them, parasitic L2s.
But we can dive into that later in the conversation as well.
So there's two pieces. There's value and there's supply-demand-driven price. So let's talk
supply-demand-driven price first, value second. Supply-demand-driven price, more companies,
more investors say, eat this cheap. It's going to have its dogs of the Dow moment. For those who don't know what that means, it's an old, old, the old timey idea that
whatever is underperformed the most is more likely to do the best on the next upswing.
ETH on that scenario can certainly do well.
Frankly, you get more people buying, you get more, you know, it shifts the demand curve up and the price goes higher.
That's, you know, fundamental economics, no question about it.
Tom Lee's commentary was literally the dumbest thing I've ever heard come out of his mouth.
And I am a huge fan of Tom Lee.
You know, this notion that stable coins is going to drive ETH's value completely misses economics.
You know what I mean by that?
I mean that whether or not the value of ETH is determined by how much gas fees are earned by the network and how much people need to own ETH in order to use the application.
the application. We know that the majority of the fees will probably end up in layer twos
because everybody that's talking about doing stable coins and ETH is talking about layer
twos. So I don't know how much is going to be needed by ETH. And it's not at all clear
what the demand side of the equation will be in terms of using it. Plus, if you look
at what happened with Tether, Tether started on ETH, and now more of the transactions in Tether are on Tron.
There is no product loyalty here.
I mean, I'm happy for people at Arbitrum.
They're all happy about Robinhood building on that.
But they missed the footnote in the, not footnote, the part of the announcement.
Robin said, well, we're building our own layer too.
our own layer two right the thing is economics means that the actual tokens the actual projects
that are going to fuel stable coins are going to move based on economic principles meaning that
you know trying to assume that you're going to get a multi-trillion dollar asset because and having
to pay for a multi-trillion dollar asset to run stable coins on top of when you can do it on top of much, much cheaper tech is just wrong.
I mean, it just it's absolutely wrong.
And so I don't understand Tom's justification other than he's wearing the jersey.
Now, if you said to me, but Ether is going to be used for a lot of things and the ecosystem is going to be big and it's going to be relevant.
And so we're going to end up convincing a lot of people to follow us and acquire more of it. Sure, the price is going to be big and it's going to be relevant. And so we're going to end up convincing
a lot of people to follow us and acquire more of it. Sure, the price is going to go up.
But there's a reason why the Bitcoin Ether ratio, you know, I got all sorts of shit from people
several months ago when I when it was at between point zero point zero point zero two. It was
approaching four or five, you know, getting towards5. And I said, this is the likely top
in the short term. And we're now at 0.02. For people wondering what that means,
1 ETH equals 2.24 million Satoshis. Right. But it's a little bit less than that,
2.337 or whatever it is. And we're still bumping up against that and they're moving together. Now,
can ETH outperform because of that Dog to the Dow theory at varying times? Sure it can. I mean,
when Bitcoin reaches its next plateau, whenever that is, and we're still in a trading range until
even though we're butting up against the top of the trading range right now, but we're still in
a trading range until proven. In other words, when Bitcoin goes on its next run and then finishes
and moves back
into a new range sure during that new range i would expect ether to catch up and potentially
to outperform significantly but that's a trading scenario the thing about treasury companies is
you know what are you doing with it right is this a short-term investment in order to make money
because we want to you know do that or is this
something that we're saying this is the basis of our company and microstrategy that's the basis of
their company the basis of their company is bitcoin will become a monetary standard a monetary asset
full stop i don't know anybody who believes ether is going to be a monetary asset that i take
seriously i mean there have been people over the past. In fact, the last group of people who screamed about it was when Ether was at 5,000, that Ether will be
a monetary asset. But something that is controlled in a proof of stake network, which by the way,
the last upgrade means that the stakes are actually larger. So the network is much more
dominated by larger holders, doesn't feel to anybody is right for a monetary asset. It doesn't mean it's not a
utility asset, and utility assets are awesome. But essentially, what you're talking about is
treasury companies that say, you know what, I'm going to base this, I'm going to base my company's
treasury on a foreign stock, you know, whatever. It's just a financial asset with utility.
And, you know, the fact is that it's not a crazy idea in this case because it's effectively
an open source movement, et cetera. It's more broad based. It is not illogical. I'm not saying
Tom's going to fail. In fact, I think he'll probably succeed. But the comparison to Saylor
is at best a loose one. Does that all make sense? I totally agree with you, Dave. My one question is, and I think this is the main issue with Ethereum, L2s, attract as much attention and just get
people working and living on the chain, basically, even though it's nearly free. And no, even though
all kind of value accrual is to the L2s, just get everybody to build on us and we'll figure out the
money-making part later or the tokenomics part later? I mean, that's what I get now. And
I know that's not great for Wall Street or necessarily maybe great for an investment,
but do you think there's something there that makes sense?
It could be, Adam. I mean, look, there are lots of examples. I mean, if you ask yourself the
question that if you could have built an ecosystem where there were parts where you could have an ownership But the trick is, if it could run without anybody
owning a piece of it, what's the value of owning a piece of it? You see what I'm saying? And that's
kind of the issue with Ethereum. It's like, will the network run without it? And the answer may
very well be no. There are lots of people who have done a lot of really good work on network effects and talk about the idea of tying things to something. And then the question is, is there
value to owning a piece of that something? That's always the question. And there are pathways where
that can happen and governance methods where it can happen. So I'm not, as I said, I'm not against
Ethereum. I own some Ethereum. I was reacting to the Michael Saylor, you know, comparison with Tom Lee. Tom Lee's had some of
the best market calls literally anywhere on the planet. He was the only one beating the drum
on stock markets in 2009 when everybody was like thinking that it's going to go to zero,
you know, and he was right. And he's been right in a lot of things.
So I'm not against him, but I just said that his justification
for Ether being a monetary asset seems wrong.
But could it become a valuable utility asset
if they somehow figure out a way to monetize
what will be the global computer mindshare
that they might be able to get?
Well, it certainly could be.
I just haven't really thought it through.
Yeah, so good points, Dave.
I want to spar a little bit.
And Tron is one example.
I think that the majority of these stablecoins that end up coming out of the woodwork in
the next year are probably going to end up on the EVM.
And like you said, it's unlikely that they're all going to be on layer one.
A lot of them are going to be on layer twos.
Just some counterpoints, right?
So settlement and finality.
These layer twos still need to post state routes and proofs to Ethereum.
I think you already know this, that this does
require ETH-denominated gas payments. And so as there is more usage, right, if we are to assume
and expect the world to come on chain slowly, gradually, then the L2s are more in L2s. You can
have as many L2s as you want. They're going to anchor to the L1. And especially during high periods of activity, roll-ups have driven spikes in Ethereum burn.
So I think that's one point.
And I think I can see why people make the comparison of ETH to a universal collateral.
Because even if transactions are happening off-chain, they're always going to have to settle on ETH. You can use ETH as a staking collateral,
you can use it for sequencer bonds, you can use it for slashing guarantees. And again,
I think the large stablecoin issuers like Circle, JP Morgan, I guess is going to get in the game,
are going to rely on ETH liquidity and collateral to manage bridging and settlement.
We all know about EIP-1559, of course, and the burn mechanism that comes with that.
And then restaking.
I think the restaking component of it is valuable.
So ETH can do things as an asset that Bitcoin simply cannot, and the network offers value in a way that bitcoin does not
and so i'm curious to know dave before i go to gary what are your what are your thoughts on that
i'm looking something up uh i'm trying to find out because no no here's i'm going to tell you
what i'm looking up so i'm trying to find out what's the value of Depository Trust Corporation.
Now, why am I doing that?
Well, Depository Trust Corporation is the backbone, the finality, and it does a hell
of a lot more than, you know, it does a hell of a lot more than that, but it's the finality
and these settlement institutions for the entire U.S. equity market.
and the settlement institution for the entire U.S. equity market, okay?
Okay.
So I'm having a hard time understanding how ETH in the next five years,
10 years, will approach the backbone value of what DTCC is.
Right.
So that's sort of my, that's a mental model.
It's just a thought of a mental model.
We'll see.
So let's see.
Estimates from Grok.
So Grok estimates DTC's value between 10 and 20 billion dollars.
That's one tenth of what ETH is today.
So for me, everything you just said is fascinating.
Let's say it happens.
Let's say that it captures as much market share as the entire US equity market, which we all know how large that is. It would need to be 10 times
that size to grow into its current market cap if its value is based on settlement finality
and being the backbone. That's my point. Dave, as an an ease holder you're making me crazy over here dave get you got
to give me some bullish news man this is killing me bro i'm sorry you know it's like i'm not i am
not a bitcoin bro it's the world computer dave come on man give me some bullish news well yeah
the other thing i was gonna but guys i mean i'm just i like to ground things in reality i, a lot of people think I've been called a permable a lot over the last few months,
and I find that hysterically funny.
Now everyone listening to this call are like, maybe he isn't a permable.
No, I'm not.
I mean, at the same sort of analysis with Bitcoin vis-a-vis gold and beyond tells me Bitcoin is 90% undervalued.
So, you know, you have to understand,
I'm not saying that ETH can't grow into something much bigger,
but you're effectively assuming if you're at a $200 billion market cap,
you're with a commodity style, you know, economics, right?
You know, with the layer two scenario,
which is very comparable to DCCC because it's operated as a public utility, who knows what they could extract, if it were a
separate company, but in fact, it's operated as a utility by everybody else. So, you know, it's
really hard, but you need mental models before you start thinking about this stuff. It's not,
it's going to run the world, because, you know, whether it's Solana, or Sui, or Aptos, or whatever,
there are a lot of people who are saying, oh, we can run the world on our stuff, too. Right? because, you know, whether it's Solana or Sui or Aptos or whatever,
there are a lot of people who are saying,
oh, we can run the world on our stuff too, right?
And so the world is a big place. And maybe Ether will grow into some monster
that is effectively running all of the world.
Okay, maybe.
I mean, I don't know.
Is it going to be as big as Linux?
Could be, right?
And then what would Linux be worth?
So the mental models are important. So
it's not about bullish or bearish or whatever. You know, as I said, I still own some ETH because
who knows what will happen in the short run? Lots of these things are matter. But it's important
to understand ETH is a $200 billion asset right now. It is not trivial. This is not a startup.
And so it's, that's how I come to it. Anyway, sorry for the rant, but you asked me the question, Noah.
No, no, no. Adam, the reason I bring on Dave, I invite people that I know are going to be critical because that's the type of conversation and discourse that I like.
Otherwise, we're in an echo chamber shilling our own bags, and I've been in plenty of those circa 2021.
We saw how a lot of those tokens ended up.
So I hear you, Dave and i think the the comparison
with linux is interesting i think that if linux was a decentralized world computer and it relied
on ethereum it relied on an underlying gas token to keep it secure and keep it decentralized and
keep it running then we might be having a different conversation about linux uh but but i want to hear
from or go ahead if you want to respond then i want to no no no i was gonna say exactly that's
all i agree yeah let me just i'll i'll do my because i didn't get to get my my point in my
point is that um i mean we've already seen like what happens when you know blob prices spike a
little bit and we've only really had a couple of instances of this where people were basically minting like NFTs and blobs and stuff. But blob prices went through the roof.
What is basically a free service to these L2s can be modified very, very quickly.
And I actually, you know, my personal belief in this might be, look, it might be a decade. So ETH could be a terribly performing asset.
I'm not saying by ETH, but I am saying that ETH is in a really unique position from a
network, um, effects perspective where basically all these L2, everybody who's thinking about
building an L2 is thinking about building it on ETH.
And I, my personal feeling is that it does get this massive network effect of builders on top of it.
And then, you know, maybe five years, maybe a decade down the road, they can kind of begin turning on this fee generating mechanism slowly that actually becomes very, very valuable.
So it may be overvalued right now.
I kind of totally agree with Dave's point,
but that's my kind of vision of ETH. And just to be clear, that's exactly the way that I look at
it, but there's a lot of ifs in that. And so that's why I don't think it's as undervalued
as people say it is. Yeah, look, I get it. The transaction fee shift activity moving to
optimism, or I don't even know who's on optimism, but arbitrum and base, most users are not,
you know, they're paying very, very small amounts of mainnet gas. So that's not it.
That's not it.
The whole point of an L2 is that you're paying pennies for gas. Now,
The whole point of an L2 is that you're paying pennies for gas.
Now, once the world moves on chain, hopefully, that's what we're predicting, then how many users do we need to make the value accrual back to ETH substantial enough to increase the price and get it back to pre-merge valuations?
That's the thing.
I'm not even talking about ETH outperforming Bitcoin in the long term,
more so than I'm even scratching my head at whether it's going to break that previous all-time high back in September of 2022.
The sequencer profits are something everyone knows about.
People don't like to use this word,
people in the ETH community,
but they are parasitic to some degree, right?
They collect fees in ETH or stable coins
and the profits are often captured
by the L2 protocol itself.
And not even the L2 token.
I mean, Arbitrum, for as much bullish news
is coming out about Arbitrum and what they're doing
and as much they tweet about how Arbitrum is the answer and the truth, that's not doing
much for the token, right?
But I'm still not really understanding what the point of the ARB token is apart from extracting
value over the course of their airdrop and all that.
But that's another conversation from their time.
I mean, I think we have a couple of things happening here, which I think is actually really interesting.
I mean, I tend to agree with Dave, which is not uncommon.
But the interesting thing here is first, philosophically, what we're trying to do is centralize uh you know the concept of of
blockchain like can we get everyone onto one chain uh and centralize all of the interest on one chain
so that we can pump up the value and and focus all of the attention so that we know where all of the
developers should be and everything and and it's kind of antithetical to the concept of what blockchain was originally,
which is really, you know, look, if the smart contract works,
you know, the vending machine concept works,
then you really just need to find the chain that enacts the solution that works for you. There were supposed
to be different chains that solve the trilemma in a different fashion. But what ended up happening
is a bunch of chains that don't necessarily solve problems in different fashions. They're really
chains that are spun up in order to create a token in order to monetize something. And that is really where we're falling short here,
is that the purpose of multiple chains is to create multiple solutions in terms of what is
more important in terms of, you know, are we focusing on security? What are we focusing on
here? Are we focusing on speed? Are we focusing on centralization? Are we focusing, what is the,
what is the thing that this chain does, this platform, this protocol, what does it do
that is the priority that other chains don't do, as opposed to let's create a protocol so that we
can have a token? Because once again, you know, all the tokens rushing to market i've talked about
this many times it really just bleeds value and i don't really um you know that's a separate topic
and that's that's something that we all need to come to terms with is understanding that
blockchain is about a technology not about uh rushing to create false value in penny stocks.
That's really what we're creating is a sea of penny stocks.
And that's really not the purpose of the technology.
In terms of Ethereum, it had this massive opportunity before it went to proof of stake,
before it went to proof of stake, but it had to create this sort of devil's bargain, right,
in turning the miners into validators and all the L2s that built up the system.
They were essentially going to get screwed by moving to proof of stake. So they created this
bargain by saying, well, if you do this, right, you're going to be faster and cheaper. And then what
did we build? Why did we do this for these years? Why did we build a marketplace for you if
essentially what you're going to do is make the base chain do all of the things we as L2s all
did for you were meaningless, right? We don't provide the value that we were supposed to provide. So essentially what they
did is ratchet down a lot of the speed and increase the cost to provide increased value
for the now validators and provide purpose for those L2s. It's something that they were forced to do in order to maintain the system that they'd created.
So Ethereum is sort of a compromise.
And there's a reason why you look at things like Solana and other systems that exist,
and they exist because they formed without that compromise.
without that compromise. They've formed later, right? And we have new systems that exist
They formed later, right?
that have different and you could say better technology since Ethereum existed. What Ethereum
has is a bunch of people. But as Dave had said, there's no real market loyalty. It's really about
who is creating the product that people want and who's solving the problem that is most useful. Fundamentally, this is moving to a back-end technology. So really, you know, it doesn't matter if everybody's on Ethereum or not. What matters is, are the problems that are being solved, being solved using the technology
that is enabled by Ethereum or enabled by someone else? Like, do they all talk to each other? I mean,
the interactive protocol is probably going to be more fundamentally valuable than in any
individual protocol. Yeah, well, so interesting points, Alex. Thanks. And
I think that right now we're looking at stablecoins, again, the only product in crypto that has
found legitimate product market fit. And we're thinking to ourselves, well,
most of the stablecoin activity is going to likely be happening on the EVM, ETH L2s, and maybe some on the Ethereum L1.
Over 20% of all USDC is issued natively on Ethereum. So will these transactions,
will this on-chain activity, will ETH as the dominant collateral asset for DeFi protocols,
ETH as the dominant collateral asset for DeFi protocols, like Aave, like Maker, like Curve, will that be enough to not just have ETH appreciate in value, but also will that ETH be valuable enough for more guys like Tom Lee and more companies to continue accruing it because
they want a piece of this potential world computer. Or I guess it is a world computer,
but this piece of potentially decentralized world computer that is comparable to Linux. I mean,
Dave didn't do that specifically, but what if? I think the Genius Act is probably the only reason why I have
become, I've kind of switched back to being bullish on ETH. I have been bearish on it for
not a year now, even though I'm still holding on my ETH. And so I think that the stablecoin economy
is going to be what potentially saves it in the short to medium term.
But I want to hear from Gary.
Go ahead, Alex.
I just want to mention really quickly, I did a full breakdown of the Genius Act.
The Genius Act really is bank protection.
And the stablecoin economy, you know it precludes stablecoins from creating yield.
you know it precludes stablecoins from creating yield.
So the stablecoin economy that is supposed to be created by the Genius Act
is basically going to be cut off at the knees.
It's basically only – it allows them to be created
but really not employed in any real capacity.
Where does it say that, that they can't be employed?
Oh, it's in the – I mean, do do want me to grab it and show you that.
If you could expand upon it.
I will. I will. I'll I'll go get the genius. I'll I'll get it.
And I'll and I'll explain that to you if you want me to go to go grab the the the act itself.
But it says that, yes, you can't have yield-bearing activities.
Well, not yield-bearing activities, but have these stablecoins exist on chain.
You can have stablecoins exist on chain, but you can't have yield-bearing activities. What does that mean? That means that banks are the only ones that are essentially creating interest,
they're creating financial tools. That means that they're protecting banks in creating financial tools in yield-bearing environments.
But the transactions are still happening on-chain.
It doesn't matter if the transactions are happening on-chain.
It does matter.
No, not really. What it means is that all the financial growth, like the things that create generational wealth,
all require essentially interest-bearing activities.
And all of that stuff with stable coins
being comparable to fiat, right?
If you wanna create a financial system
that parallels or competes with banks,
then what you need to do
is create some sort of true interest-bearing activity
with something that's stable and is not like the garbage that we have mostly in DeFi.
It's called Aave.
It's called Curve.
It's called Compound.
A lot of that stuff is just garbage.
What are they generating interest in?
What actual activity is generating interest?
Most of it is garbage.
It's not actually generating.
They're not selling mortgages and stuff like that.
Aave, Curve? Can you explain?
I'm trying.
Okay, why are Aave and Curve, why are those garbage platforms?
I'm not saying they're garbage platforms. I'm saying a lot of DeFi activity. And I wrote a book on it.
I'm talking about legitimate DeFi activity, though.
Not a lot of DeFi.
I'm talking about legitimate DeFi protocols like Aave.
There's very little legitimate DeFi activity.
Most of it is under collateralized.
A lot of people think it's over collateralized, but truly it's under collateralized.
But most of the volume is on the legitimate stuff.
Most of it is not, actually.
Most of the volume is not on the legitimate stuff.
We can go to DeFi Llama.
I mean, Aave is number one.
And I'll tell you, most of the stuff, how many of these are actually going to fund, for example, like businesses, mortgages, real things that are generating revenue?
I purchased a home.
I purchased not a home, but a rental property using- Are you repaying a loan using one of these platforms? Of course. I'm collateralizing
my Bitcoin and Ethereum and Aave, and I'm borrowing against it, so I'm living lost debt. Most of it is
not. I'm not taking capital gains. I don't want to pay capital gains, so that I'm using these
protocols to borrow stable coins and live off the stable
coins but also i can take a stable coin and i can i can dump it into ave and i can get yield from
that i can get interest this is the thing though with genius you can't get yield from stable coins
no but you you you can. Aave, it is a different protocol, of course, and has borrowers of what is being put into the, and it has different safety modules and things like that as well.
So you're kind of like talking across from each other.
It's not exactly the same vocabulary.
I understand what you're saying.
I mean, these are different platforms.
There are a lot of different protocols.
Some of the protocols are legitimate. Most of them are not. Most of them are black box protocols where essentially they're like, give me your money and either the next investor will pay, which is relatively Ponzi schemes, or give me your money and I'll hold it in a box and magic money sex will happen and I'll be able to pay you out of that magic money sex.
Some of the protocols are legitimate.
Most of them are not.
We're talking about something entirely different there here.
I understand what you're saying. Collateralized lines do happen, but a lot of this...
These are arguable points, but you think that you know what JP Morgan is doing, but you do not.
We simply read reports that are sent out as public, whereas we can read blockchain transactions.
So it's not... I understand your authority and your reference as far as understanding DeFi,
but some of the commentary that you're making is we're in blockchain in general,
not just because it's a different ticker,
but we're here because these things
can be actually researched.
I understand what you're saying.
And I understand that we don't know what JP,
well, we do actually know some of what JP Morgan is doing,
but not all of it because Onyx is private.
But, and I lost my train of thought.
But some of this stuff is, I will go look, I encourage everyone, please just go look at the Genius Act and make sure that it is something that you want to pass, right, beforehand.
Because most of these are bank protectionists.
They're not actually things that are promoting
a healthy financial system in crypto.
There was a tax position that was,
well, we wanted to add to the budget bill,
or it's not really a budget bill,
it's a tax and spend bill,
but it didn't get added, unfortunately.
There's quite a lot that isn't actually being added right now that needs to be added in order to have a healthy alternative financial system.
Yeah.
So, I mean, I can't speak to specifics on whether or not the Genius Act is going to be good for decentralized financial
markets. I think I've heard different takes from opposite sides of the spectrum. I think that none
of us can really control at this point whether or not it is passed. And people are speculating that
it will pass. And the conversation is, okay, well, once it passes and once you have different entities churning up their own stable coins, will or will that not be a pseudo or a direct onboarding ramp to the EVM, to Ethereum?
And will that activity result in higher fees, excuse me, in more transactions, which leads to more value accrual.
We're not talking about those stablecoins specifically. Bank of America's stablecoin
is going to be able to get plugged into Aave, and I'm going to be able to earn yield from that.
That's not what we're saying. But Bank of America's stablecoin is going to give someone
from their phone access to the on-chain economy, and maybe we'll have front-end user interfaces that
allow for one-click staking but the person needs to swap that bank of america stablecoin for uscc
in order to do it and then they can plug it into ave and then they can earn yield so there's there's
a lot of kind of different ways that you can speculate on the genius act and the the stable
coins that come out of the genius act a lot of ways you can speculate on how Genius Act and the stablecoins that come out of the Genius Act.
A lot of ways you can speculate on how that is going to broaden the number of users participating
on chain. Now, the question is, how many of them are going to be on the L1 versus the L2? And
how much value accrual will the L1 and specifically the ETH asset get from the L2s?
accrual will the L1 and specifically the ETH asset get from the L2s? And will that be enough
to drive the price higher, drive more adoption? And by adoption, I mean people buying and staking
ETH, wanting to participate in the network, and then more companies like the ones we listed
purchasing ETH. So I think that's kind of the scope of the conversation that we're having.
And I'm going to go to Ron. He set his hand up. I'm going to hear your thoughts on what has been said so far.
Yeah, I'm on the lobbying side so I can provide some context more just on the Genius Act, too.
It's more of the interest-bearing stablecoins.
The ban on interest-bearing stablecoins came from the community bankers and also, I guess, ABA a little bit.
or also, I guess, ABA a little bit,
but more of the community banks were the ones
that were the largest voice saying
that they would oppose the Genius Act
if the yield or interest-bearing stablecoins
were included as A-OK,
because, and again, their purview
or their view to the Hill that they were lobbying on
was that it would dry up deposits,
especially more in community and rural banks,
that the Hill was more sympathetic to those arguments.
But, you know, we did get some clarity from the SEC, was it back in April this year,
saying that yield bearing stable coins were not triggering on federal securities laws.
So, you know, we got some potential action or positivity from the SEC side there.
We might see some more developments as time goes on.
But just more like for the reason why that provision was including the Genius Act,
that's solely the community banks there. And they were ready to raise hell on that issue.
And again, even though we disagree with it in the crypto industry, and many others do here too as well, that's just more for context and awareness behind the scenes.
That's why that's in there.
But again, we've seen some SEC positive actions there, and it looks like we're going to get potentially some more down the road.
But just flagging for everyone's context. I defer to others and when it comes more to these questions
there let me let me let me speak for just a minute about because we've had a lot of topics
just in the past few minutes so just as far as the genus act again i'm not familiar with all
the nuance i'm glad that alex and ron have made some commentary about it if we're going to go off
into that rail then we can but you. But really the topic of the panel is
ETH entering a micro strategy era. So I'll return to that in just a moment. You don't earn anything
for holding your $100 bill under your mattress, but you can take your $100 bill and you can put
it into a bank account. You can put it into a high interest, whatever, trading account,
things like that. So you can earn yield. And that's kind of the same thing that Moby was saying earlier.
We do have these mechanisms inside of DeFi that have been here for five, six, seven years.
I don't know how long Avi has been specifically.
But, you know, you do take a risk just like you do in a Silicon Valley bank that you can it can potentially go under.
Right. Your money can be lost inside of a bank, just like it can be lost inside of a protocol in DeFi. So it doesn't come without risk. And I think that a native stable
coin, you know, that earns yield, I don't think that that'll ever pass. I think there's too many
political levers. There's too many reasons for banks to need to feed up the trough. So I agree
with what Alex is saying in context and what Ron was was saying as far as the lobby i don't think that
will happen but i think that there will always be protocols just like you can put your money into
banks or other speculative instruments with your dollar anything that sequesters the dollar is
probably going to be approvable uh in the grand scheme of politics uh maintaining dollar dominance
around the world it's the largest network uh you know 70 of all trade in the world happens in dollar
so you know whether it's a ledger or
whether it's physical troughs or payoffs of other countries in C-130s, it's still a usable way to
trade, even though its strength has been fading. So some of those things are different issues.
The topic of the panel that I was interested in mostly was ETH entering this micro strategy era.
And it really does go to this, is this the opportunity? Because in 2017, I haven't been
in crypto forever. I was more of a gold and silver bug and real estate guy, still am. But I rotated
millions of dollars into ETH and BTC. I liked that Dave was here earlier, I wish he was still on the
panel. And so I liked the two because they kind of played into this branding of digital gold, digital silver. Back in 2017, the digital silver was
Litecoin. And I think that they fumbled the ball completely. Charlie Lee with his cell,
a lot of the things that hurt their branding, maybe still because they were POW. I don't really
know, but it does seem even with the pivot to proof of stake, maybe that was
for green reasons, you know, not burning as much electricity, maybe it's all the soy of Silicon
Valley, whatever the reason, but it did go to proof of stake, and it does have opportunity,
I think it has great opportunity, and some of this, like you were just saying about the parasitic
nature of L2s or sequencers, you know, there is some risk vector of being on an L2 with a single
sequencer, especially. So again, some of this technical nuance, I'm not deep in the weeds about,
but that's kind of my 10,000 foot view is it's compartmentalization. Back in 2017 and 18,
during that bull cycle, everything was an ETH killer. Everything was being pitched as buy this
token because it's going to outperform ETH. It's going to outperform the thousands of devs or whatever
the history, three, four years of existence. It's going to be better in that last cycle that I came
into in 17. And I think that the pivot into L2 is basically what a lot of technology does do over
time. It becomes the dumb pipe.
If Ethereum is able to become the dumb pipe
and allow things to L2s to specialize,
maybe some of them are dealing only in derivatives.
Maybe some of them are dealing in other products altogether,
and then their branding and their audience
goes to that particular L2,
but it all basically is accounted
at the end of the day on Ethereum.
I think that that's a net good. I think that's better than having, it's kind of the Amazon.
Again, all this comes from experience inside of Silicon Valley. It's kind of the Amazon.
You know, they were selling books, but then they sell everything now. And there's a lot
of different niches that aren't all under the sole control of jeff bezos they have different departments and they actually outsourced a lot of that innovation uh to hundreds of thousands of you
know small businesses and things like that building on amazon same thing with google you know it
started with search but now it's basically in every kind of technology uh that is not crypto specific
so i think that ethereum has a great position again, yes, there's a lot of parasitic
value going into L2s that are some of them are saying that they're going to have a treasury
like Tom Lee, you know, as their L2, because they're basically aligned. If the parent dies,
the L2 dies. If the L1 dies, the L2 dies. So if there's some kind of symbiotic relationship,
then I think that there is a great play in Ethereum as settlement,
especially for high value transactions that do not want to take the risk of a bridge.
They do not want to take the risk of an L2 sequencer.
They do want to settle on main chain.
So that's my pitch about Ethereum as entering a micro strategy kind of treasury mode.
entering a micro strategy kind of treasury mode. So I apologize. I have not had coffee and I have
two kids who want two different things for me right now. So subject verb agreement is super
hard for me. I'm super aggressive right now and I don't mean to be. You guys are awesome.
This is actually a really good discussion and I'm making it way more aggressive than it needs to be.
So I apologize.
What do you guys think about some of the L2s that are actually taking dominance over the
main chain?
Like Polygon is taking a lot of attention from Ethereum. And I think about
Binance that was part of Ethereum at one point and then spun out. Do you think that's actually
like these very strong L2s that could theoretically eventually become their own platforms. Is this better or worse for
the network? I mean, the whole theory of the L2s was that this is the way, this is what's good for
the network. And we're kind of realizing now that may not be true. To Dave's point earlier,
that may not actually accrue value to the base chain. But I think there's no doubt that
people actually don't even care. Polygon is a perfect example. Literally, nobody gives a shit
about Polygon as a chain. But that product, the app, if you will, is the actual important thing.
And you know, so if it's whatever, Fidelity's L2 blockchain on top of ETH, I don't think that should matter.
It certainly doesn't matter for users.
Users just want good tools and good tech and good products, right?
So, yeah, to your point of Polygon is the kind of perfect example with Polymarket.
Like, literally nobody cares that it's on Polygon, right?
So, you know, does that, though, bring value to the base layer Ethereum? Like literally nobody cares that it's on Polygon, right?
So, you know, does that though bring value to the base layer Ethereum?
I honestly, I think it's going to take a decade for us to really know if that works or doesn't work.
Yeah, so.
I think there's some synergy to be, again, if people in leadership positions on these different chains, L2s, L1s, or whatever,
you know, if you're 10 times cheaper and you're 10 times better, you can take market dominance from just about any product or service. But a lot of these are not. They are, you know, again,
what is their marketing capital? What is their, you know, how many years of relationships do they
have with banking and politics that they can lean on, right?
So I do like Ethereum because they have been in the game for a long time.
I think that they're part of the zeitgeist of cryptocurrency.
And again, I don't call these things cryptocurrencies anymore.
I think that that's an old nomenclature.
Bitcoin isn't being used transactionally for payment of coffee, as has always been said for many, many years.
It is basically being treasured,
600,000 BTC going to MicroStrategy or whatever.
These are hoarding devices
and they're going to have their own derivatives
and their own trust vectors,
as you're seeing with stock prices going up
that are basically saying that they're having a treasury
and one of the major
coins out there. So in general, the idea is this still going to be transactional like the dollar?
No, I still believe that there's going to be dollar dominance. And I do believe that the
idea of gold has its few use cases, one of which really being jewelry and the other just being
dug out of the ground in one mountain and then put into a vault underground somewhere else.
So this idea of its value is really what's been latched onto, especially with Bitcoin.
Same thing, I think, with Ethereum at the moment is it does have opportunity. Now it can fade,
it can be lost and all these other things can take their place. But it does have this world
computer, you know, dump hype,
transports of value can be the L2 or the transactions that people would want to do,
whether it's speculation, gambling or leverage, you know, Moby had said something about buying
real estate. I bought a lot of real estate through Avi taking out, you know, risk against my
cryptocurrencies, right? Because I've converted into a stable, I document that well, and then I
can buy property or can have something that has cashflow to repay that debt that's higher than
the interest rate of the debt itself. So I do like a lot of these things that are in DeFi.
And we did get away from this DeFi narrative over this last cycle because it's been
mostly like a meme and hype cycle as far as avatar pictures being valuable um but yeah i i believe in eth because i do think
it has an opportunity to effectively further decentralize and compartmentalize some of these
specialized l2s polygon i remember that i bought you know i met donald trump because i bought nfts
and i had to buy them on uh fucking magic eden moved over to Polygon or something.
But I didn't really do anything with Polygon before that.
So if things want to specialize,
they can be the segment of Ethereum
that effectively is an L2
and can be specialized on some of the products.
And I think that's what's going to happen
with a lot of these banks.
You're not going to see JP Morgan
necessarily cooperating with its competitor bank.
So if it can specialize in its L2,
then that's what you're going to see on some of these stablecoin wars.
So let me just clear some things up,
because BNB chain was never an L2.
It was always an alt-L1.
So it's kind of an EVM clone that's super centralized.
And Polygon is also not an L2.
It's a sidechain.
It has its own validator set, and I guess there is some value accrual to Ethereum, but it's negligible.
It's very small.
So these don't work the same way that the L2s like Arbitrum and Optimism and Base do.
Also, Polygon has been – I mean, I know there are a lot of – not saying you, Alex, but I know there's still a lot of Polygon bulls out there,
and Sandeep's obviously an incredible guy.
Polygon is losing steam.
Like, it's not, Polygon's not what it was last cycle, right?
You don't, the numbers are there to prove it, right?
You have newcomers like Sui and Arbitrum and Base,
and BSC, I think, is always going to be fine because of CZ and Binance.
But I think Polygon is losing steam and maybe their ZKEBM is going to be what brings them back.
And I think that the – but you brought up something interesting.
It was like is the value accrual from – excuse me – from these L2s going to be enough to – is it going to be proportionately beneficial to Ethereum?
And I mean, if I'm being honest with myself, the answer is probably no, just based on what
I understand about the L2s.
But is it going to be significant enough where it doesn't matter anyway, where there's so much activity on these L2s that ETH's
values is increasing as a result past what we have seen prior regardless, in the past regardless.
And I think that is what, excuse me, I think that is what a lot of these guys are gambling on. And I think whether or not ETH has a long-term micro-strategy era,
I flipped on ETH since this news came out. Because I do think that these suits are going to
find a way to make money on this thing. And when you have mouthpieces, I didn't know who Tom Lee
was, but apparently he's well-respected. I mean, Dave spoke highly of him. And when you have these
mouthpieces starting to speak publicly about it, I think you're going to
have retail buying into... So can you accrue this asset fast enough? And can you also convince
retail that this is something worth holding, right? This piece of a pie which represents a world computer
that anyone can come and build on,
that the future of finance is migrating to,
that Robinhood has just decided to partner with,
you know, one of its, one of its,
so it's like ETH is the main highway
and all these L2s or toll roads that connect it.
I think it's going to be an interesting
year for ETH. And it could be some copium mixed with copium because my ETH Bitcoin ratio was
always pretty, like it was 50-50 in in my portfolio i've been saying this for years
um bitcoin's obviously outperformed it by a lot and you wonder hey but should i just put it all
in bitcoin and so there is some hopium there but i also am seeing i think i'm i generally try to be
realistic and what i'm seeing now in the news and kind of what I'm seeing with this new wave of potential stablecoins that are going to be entering the market as a result of new users, it's a bet I'm willing to make.
NFA, obviously. Good guy. What's going on, brother?
Hey, I appreciate the room, appreciate the space.
Just for context, my business partner and I, we've mined almost 900 F back in the early days.
We sold millions of dollars computers every year from 2017 onward.
We now run and maintain full nodes for clients through to Ethereum on Intel NUC.
But I think Ethereum is the other giant in the room that I'm worried about with a lot of different things.
But the idea of Ethereum is it's got the most developers, right?
So the vast majority of products in blockchain are built on Ethereum, Solidity and protocols, or they're forks of that.
or they're forks of that,
And often they're very interoperable.
and often they're very interoperable.
And so as it is the nature of the open source space,
as things are developed on chains that have value,
those can be retained by Ethereum.
They update those back, they bring them over,
and roll-ups and the different types of features we're seeing,
sharding and different things.
It's all very beneficial to it is he just going in and out for me or is he going yeah you're saying like a 82 83 of the developers in the space are working on some kind of Ethereum-based product, be it a layer to or different smart contracts.
You're kind of breaking up, brother.
Good guy.
I think we might have lost.
You're in the woods.
All right.
All right.
Cool.
No, look, I've seen the numbers, right?
I've seen the number of DAVs building.
I know Solidity has the first mover advantage, which is great.
Go ahead.
No, no, no.
Go ahead.
We just couldn't hear you.
You were breaking up.
I can hear you now.
Okay.
So, yeah. So, Ethereum has, you Ethereum has the vast majority of developers in the space.
And that's probably the most interesting part.
Also, when it comes to the smart contracts, they've had the majority of the liquidity throughout the entire cycle of cryptocurrency, right?
The most money locked up on chain by many multiples compared to all other products.
And what we're seeing now is Solana,
which was competing with its centralization,
its less expensive fees, the token creation.
The latest Ethereum update solved a lot
of those gas problems.
We do a lot of forensics and on-chain analysis
and what we're seeing is a lot of the money
moving back to Ethereum from different networks,
like Polygon, like BNB,
like some of the stuff from BASE is moving back, like a lot of the stuff from a variety of them,
Solana. So as that continues, I think the institutional money, which is mostly interested
in Bitcoin in this cycle,'ll start to think about yield.
There's not really a lot of good yielding products properly established for Bitcoin yet but with 32 Ethereum in a full node, you can generate a yield of generally up to 11%
if you're connected to relays. So as long as you're doing the MEV, maximum extracted value,
it can be incredibly profitable. Some months we've made 11% in a single month of interest on that.
That Ethereum wall stays in your cold storage, right?
You assign your node the voting consensus.
So it's a very interesting process.
I think a lot of family desks will look at Ethereum next.
You've earned 11% in one month from your staked ETH.
Did I catch that correctly?
Correct.
Correct, yeah.
And that's using things like the Beaver relays.
Can you explain what those are?
I don't know what Beaver relays are.
Yeah, no, Beaver is just one of the many relays we use.
So we were involved with what's called MEV development back in 2018.
And so Ethermine, we were front-running contracts,
sandwiching contracts, poising contracts, we were attacking bots. The whole way that
the Bitcoin and Ethereum, these technologies work is you have what's
called a mempool. And think of the mempool like a queue waiting for the bus. And you
can see what all those people want to do in the mempool. Now, as a miner, or as a group of miners on a pool, or now with proof of stake as a validator doing relay work,
you can do transactions in the same block that you're submitting to the chain in front of those people online.
And if I was to explain that in layman's terms, you see the mempool,
the bus is really busy, you buy all the seats from your bus and you charge more to the people
waiting. Or you bring more buses over from other businesses and you sell those buses at an increased
rate. And so this looks like causing slippage, sandwiching contracts. We've done as many as
five times, but some people have accomplished seven, eight sandwiches of one transaction.
And what that means for the users, those are those additional fees you pay when you're trying to mint your board ape land or trying to create your NFT collection or when you have failed transactions and smart contracts.
All that reward goes back to those miners or in this case, the proof of stake workers.
So relays are like an off-market database that's looking for opportunities,
seeking out those smart contract opportunities, while at the same time taking open business.
So if you want to protect yourselves
from that, you submit your transactions to a relay when you create tokens or do different things.
You have protections. They guarantee that you won't get sandwiched or things of this nature.
So there's a lot of benefit. The main thing is you can hold it in your cold storage in sovereignty while staking it making a yield
and it's beneficial for everyone involved because there's already licensed and insured
business operators in the space like coinbase which are doing this they have validators they
they'll run for you you simply just they take i, a 4% commission on your Ethereum.
So you'll see these family desks.
What else other than Bitcoin?
Well, we can make a yield on Ethereum.
I would argue that Ethereum is incredibly undervalued right now.
The whole market lagged because the interest was in institutional money this cycle and that was bitcoin but everything's falling back
to ethereum as it does every cycle a lot of developers leave those failed projects and go
back to those main chains um i i think yeah i think there's a really really productive future
for people operating in the space i think i'll close
i don't want to take everyone's time but i'll close with this i think the biggest um overwhelming
force right now is gamefi and how that's going to affect chains like solana and ethereum
and that's directly related to money laundering out of places like china
related to money laundering out of places like China.
Currently, they do a lot of that with casinos, mobile casino games online.
They wash money.
They need American, Canadian, Australian money landed in local banks.
They'll give you tokens you can take out through the network.
So GameFi is going to be a really interesting thing.
And if people pay attention for the first month or two of these products being launched
like Axie Infinity
we're going to see
people getting massive incentive
and marketing budgets
paying them out
I assume people will make
3-4 grand a month playing these things on their phone
when they launch
and that's just passive, all free.
Take the tokens.
Okay.
I'm getting pretty steep here, guys.
Yeah.
You sound like you're, you're getting yourself in a big workout.
Okay.
I just, I FYI though.
If you engage in anything that is money laundering or anything like that. Nobody here is advocating
anything that is money laundering. KYC AML may apply. If there isn't an appropriate KYC AML,
know that there could be fines or other penalties that may apply. So just know that that may attach later on. There are a lot of issues with GameFi because of
this. There are a lot of issues with some other areas specifically because they're being used,
like the art industry actually is another one where a lot of that churn was specifically because
that was money laundering. That was not, I love this art that was, I'm laundering money
this way. So just FYI, that is something that the government knows about as well. And so it's one of
the reasons why they're looking into making sure that KYC, et cetera, attaches, and AML particularly
attaches to all of that stuff. So just be cognizant of all of that. And good to see you, good guy.
I haven't seen you in ages.
We know each other from Clubhouse days.
So good to see you.
Oh, beautiful.
Hey, yeah.
The other thing is a lot of times there's malware, right?
So be careful if you've got cryptocurrency on your phone or personal computers.
Put that stuff in cold storage before you fuck around with the NFTs or the GameFi or
any of that.
Yeah, noted. And good luck on that steep hill you're you're climbing you're hiking up alex so the other
thing that i wanted to mention about um about the difference between bitcoin and um and etho is that
uh bitcoin largely has been functioning as an asset, particularly for all the way down the ranges of financial holdings, right?
So you could be middle or lower income
and you could still use it as essentially a holding asset,
like not just store of value, but also like a growth asset.
But ETH doesn't really function that way because it
actually can be a whole bunch of different things, like seven different categories of things, which
is one of the things that makes it so hard to regulate. So the problem with that is that that
actually functions as a ceiling and a floor in terms of the value. So one of the problems with
ETH, the token itself, is that even though there's a lot of pressure for it to rise as a security, there's also pressure for it to fall because it's used as a transactional token as well.
So there is fundamentally this downward pressure constantly on ETH because people need to use it as gas and also as fees, etc. So that is one of the things
that makes it fundamentally different from Bitcoin. It doesn't have this just constant
upward pressure. It doesn't function just as like, you know, a stock or freeholding asset.
It actually has, because it has utility in it as well, it has downward pressure as well.
So we have this conflict fundamentally.
The other thing about all the people that are builders in ETH is that they're not necessarily
building on ETH, the base chain.
They tend to be building in the constellation is what I've seen.
That may be different from what other people have seen,
but I see people building on like ancillary chains,
not necessarily building on ETH, the base chain as much anymore, right?
They build on other chains.
So like that are all connected through the EVM,
but not necessarily building base ETH stuff.
So again, there's that issue of, well, you know, is it all related to ETH or is it related
to another protocol?
What if that protocol then becomes so big?
And does that always relate to the value of ETH?
does that always relate to the value of ETH?
Like, do you always translate an ancillary chain to the value of ETH?
Does every ancillary chain, like, do we root the value of base to ETH?
Do we root the value, like, do these ancillary things
always root to the value of ETH?
I don't know.
We have to, right? Because the advantage of this space is it's open source. And, you know,
Ethereum main chain has its development forwarded out to 2034 and beyond. And they continue to hit
those milestones that improve things like the fees and the gas issues. Every time there's a bear cycle, we see all of that development,
all of that value start to fall back towards Ethereum.
I think the advantage is that Ethereum has that network.
And we've often seen when products, the analogy I use for my clients,
Ethereum is kind of like the mall.
It's like the Disney world. And all clients, Ethereum is kind of like the mall.
It's like the Disney world.
And all of these other chains live inside the Ethereum mall.
You got to use the Ethereum bucks to play.
They go and try to get their own, you know, big box stores on the highway.
It usually doesn't go very good.
Often they realize a lot of the foot traffic, a lot of the need of trading, it never leaves those ERC-20 tokens.
They have an incredibly hard time moving all that value over.
And there's a reason for that.
So I would argue that that's a feature of Ethereum by a long shot due to the open source nature.
And we even see that with Bitcoin now.
We see the improvements on Litecoin.
on litecoin they test things before they move them on domain chain it's no different in my mind
They test things before they move them on to main chain.
It's no different in my mind.
yeah i think it's something i wanted to highlight and i ethereum being transacted with transaction
volume on chain does not necessarily i mean it it shouldn't even contribute to downwards pressure
if anything it should contribute to upwards pressure because of
EIP-1559 and the burn. Yeah, the problem though is that as it increases, the transactions go down,
right? That is the correlation that keeps happening, is that you can't actually... Sorry, what do you mean by that? As what increases, sorry?
As, well, the price of,
as the price of ETH increases,
so even though there's a vast reduction now
post-change to,
hold on, I'm actually making coffee right now, but, um,
post the late, the latest update, right. Post, well, post change to, um, to proof of stake,
right. They've reduced, vastly reduced the pricing and they've reduced it even more.
You still see this correlation where it's still increases as the price increases.
So that's the problem is that increases in price still reduce traffic.
So and surges and stuff like that.
Prices do have an impact on traffic.
Traffic is pushing price.
I'm sorry?
Traffic is pushing price.
It's the other way around, isn't it?
Isn't it?
They both do impact one another, but increases in price do decrease traffic.
Any other transaction gas token.
That's not unique to Ethereum.
I didn't say it was unique to Ethereum.
Also, it's those higher-level transactions that use more data.
It just happens with Ethereum.
That's different from Bitcoin.
Right.
That's what actually benefits the network is,
and again, to the point that Mobi made was the burn.
When people are interacting with Ethereum,
especially during the surges, during bull runs,
during product launches,
those fees are captured by the node creators
and half of that is burned.
So all of that Ethereum that's being churned is actually deflationary,
which I think is why a lot of the family funds and things will find Ethereum interesting,
because there's lots of days where it's deflationary, not inflationary.
And I don't know, I just can't wrap my mind around the traffic.
Generally, as the price runs, these networks gain activity.
I mean, Bitcoin would be the example that's the opposite right we have an empty mempool and bitcoin at an all-time high
whereas well these other products are a quarter or half of what they were
um so i just i would argue it's the other way around in general
yeah likewise um all right guys it was yeah it was a good good conversation i think
we generally seem to all agree the time frame varies from person to person but
it does look like eath is about to enter its micro strategy era and um yeah i mean i think
i think it's really cool to see i think eTH was getting a lot of hate for the last year.
And I think towards the end, I was one of those haters.
I mean, I was upset looking at my Bitcoin bag and looking at my ETH bag and thinking to myself, man, I should have just thrown it all into Sol.
No, I'm just kidding.
But I should have just taken on less risk.
Because again, I mentioned at the beginning of the space i i value things uh satoshis i don't i
don't care about it so so if eth was the 2x tomorrow i don't i'm not really going to be
jumping for joy the same way a lot of other people are because i just i i think that's
it's still pitiful compared to what's bitcoin's done and my um my my my the purpose of me purchasing anything other than Bitcoin is to outperform Bitcoin.
Otherwise, I take less risk in my eyes at night and sleep better and just watch my stats rise in dollar value.
And so I think ETH is maybe about to get its revenge rally.
A lot of people have been tweeting about it.
I do think some of the guys like Ryan Adams and the Bankless guy,
they make kind of some egregious claims like ETH hitting 157K comparing it to oil.
I don't see that, but I would like to see ETH one day break its 2022 Satoshi all-time high, and then maybe one day it even breaks its all-time, all-time high, which we saw back in 2017.
I don't know. I'm not really holding my breath for that one.
But I think this is a new paradigm.
And we might – actually, I don't want to speak with conviction. We might be seeing the start of a new paradigm where companies begin allocating ETH to their balance sheets and to their treasuries. And because of
not just the on-chain volume that's about to emerge as a result of things like the Genius Act,
and we can debate about, but also just more legitimate use cases. Someone mentioned GameFi.
I think it was good that mentioned GameFi.
But I have my opinions on GameFi as well as a game ram. But point being is that I think there are a lot of bullish catalysts that could help ETH get back to where we all believe that it should be.
to where we all believe that it should be.
Whether or not I'm going to hold ETH long, long, long term, I don't know.
I might just flip everything into Bitcoin at some point, take the capital gains hit,
because the future for me is still really unclear with new tech and with new layer ones.
I mean Solana has done incredible things over the last year.
I don't think that can be ignored. Forget the meme coin stuff. You have legitimate
applications and infrastructures that have found homes and use cases on Solana. So anyway,
that's the end of my closing argument, closing rant. Crypto Lord, what's going on, man? How are you?
Yeah, I'm good, bro. I love the topic. I've been in ITMASI for long, but I actually gave up because nothing was actually working. The team, the IT Foundation, the attitude towards Ethereum is
actually very bad. I don't see the reason why they would be withdrawing and selling Ethereum
when Ethereum is actually underperforming.
So, well, I saw the news that some people want to start MicroStrategy for Eats.
I hope that it will actually move the price of Eats up
the price of it or because if it doesn't move altcoins won't actually do very well
because if Eats doesn't move, altcoins won't actually do very well.
yeah i've seen tweets of folks uh preparing for an altcoin um an altcoin rally just because
of eth potentially seeing its micro strategy era and coming into the spotlight good guy did you
have something to say and then i'm gonna to close things up? Yeah. Just quickly, the foundation selling.
I mean, if you want to, if the Ethereum foundation selling marks the local top and quarterly top,
like they're perfect at that.
So, I mean, follow that for sure.
But one of the benefits in them selling this time is they put a ton of money aside from marketing.
They've never done actual forward-facing marketing and main television news,
working with politicians, this nature um so they put a whole ton of money aside for development and for marketing
which is for paying people to basically work on ethereum so that's really cool uh but lastly i
just wanted to close with that mev i mentioned maximum extracted value i hope you all learn
about that google mev that the most productive thing you can do on Ethereum is doing MEV.
If you can get 32 Ethereum onto a full node, just run it on your home computer, you really should look at that.
But this is also coming to Bitcoin.
So with these stable coins, with these different layer products on Bitcoin, with people doing advertising, posting pictures on chain,
Lair products on Bitcoin with people doing advertising, posting pictures on chain.
There's different ways that you can now as a miner participate in maximum extracted value on Bitcoin.
And as we see more alternative commerce come to Bitcoin, there will be a lot of value occurred in that sector.
New money made for miners. Huge sums are coming.
So pay attention to MEV and its development on Bitcoin.
And participate on any of the changes if you can.
It's wildly profitable.
All right, Don.
Thank you, everyone, for joining.
Remember that everything you hear on these broadcasts meant for educational purposes only. Nothing is financial advice.
So be safe out there.
And we'll see you all on the next one soon.
Take care.
