GMGN, thank you for joining us here today. We're going to start the show here in just a few minutes. We'll give it a few for folks to filter in, get our speakers up on stage while we wait. Here are some tunes.
Good morning and welcome to the
Lucky lead today is Tuesday March 14th. It's Tuesday this week is already off to an insanely fast start. We have a ton to talk about today. I see some friendly faces out there listening, but I also see a few new ones as a reminder for any new listeners.
We run this show every weekday Monday to Friday at 10 a.m. Eastern. It's a 30 minute show covering all the major news and crypto, web three and NFTs. This show it's meant for those interested in discovering the space, those actively buying and selling in the crypto and NFT markets. And those here just doing
research. I'm your host Tyler D. I'm doing my amazing co-host ghost content star over a lucky trader deep in the So Rare Streets. Quietly a whale in a tea trader. We've also got Emily loves crypto a web 3 security expert and co-founder of the foolproof app Emily good morning. How are you doing today?
Good morning, I am back home after South West. Glad to hear it and happy you got to experience that maybe we'll catch up on how that went in any takeaways. Today we've also got a few special guests with
us. We've got founder of several companies, including Lucky Trader Peter Jennings on the show with us. We've also got the director of Bives from the entire NFT space and D's with us here this morning. D's good morning. How are you?
GM GM still waking up, but feeling good. Glad to be here. Hope you're having a good day. We are and Peter definitely excited to hear your macro takes with us here on macro Tuesday. Thanks for joining us as well.
Yeah, Jim spoke to you guys. Deeds get to see you. A lot of crazy stuff. This is a wild time in the markets. Indeed, excited to get into all of it. So that's where we're going to start on the docket for today. It's macro Tuesday. So we're going to hit crypto and the financial crisis in bank
right now. We're going to hit on today's CPI print, talk a little bit about rates and expectations there. We're going to talk briefly on what's happening with signature bank and Binance and BUSD. Then we're going to talk, maybe a roundtable on some NFT topics with you get 12 fold and some controversy there.
So we want to know from you, were you surprised to see Instagram shut down its NFT program and does it concern you for broader adoption? And a bit of housekeeping as a reminder, if you enjoyed these shows, Tyler does a similar recap of the NFT market every morning in his morning, minute newsletter. So I'm going to pin that since Hop is well, please give that a subscribe if you haven't already.
All right, let's get right into our top story just the crypto markets on fire and what's happening in the general macro right now. So the coins are absolutely melting up this morning. If you haven't checked in on the tickers, it's green all over the board.
the CPI news here this morning about an hour ago now that came in at 6% as expected. Right on that news, we saw a surge. So Bitcoin touched 26,000. ETH at 1746 here live. A lot of the other coins up quite a bit as well.
I'm seeing a dollar 23 up 10% Solana at oh wow already back to 22 up 13% on the day and then blur on an absolute rocket ship up 35% at 71 cents I think this is all happening while a lot of the bank stocks have been kind of falling off
Cliffs in the last few days here is crazy to see where we're at on Tuesday morning based on the situation just five days ago this past Friday when it was massive fallout in the crypto space and just massive red on the board so maybe we start
there. Let's back up to this past weekend and all the volatility. I'm curious if either of you, Peter or D's were making any major moves when USDC was depaging on Friday night or maybe your general reactions to what was happening there. Peter, maybe I'll start with you.
Yeah, it was definitely something I was paying close attention to. I know it wasn't like a lunar situation, which I was following super closely. So to me, I wish I'd put it slightly different, but I thought there'd be value in being in the ETSDC pool.
swap. And it definitely was the right play just in terms of the volume that we saw there. Being an LP provider definitely made sense. That being said, you know, at one point, I switched all back to ETH and then I kind of went back into the pool and I wish I just would have stayed in
but that's been results oriented. I think it was a pretty good play. Yeah, crypto, you know, I think the killer use case for crypto has always been be your own bank and what transpired over the last week and into the weekend is really compelling for crypto. That being said,
said there's some real challenges now. Three big banks that are all a huge part of the crypto ecosystem. All are being shuttered. That's definitely going to be challenging because we're going to have cover times with on and off ramps with the turning fiat into crypto.
We'll see what transpires. I really am happy that the Fed stepped in. I think what they did was for smart using the insurance fund to cover SVB deposits makes a ton of sense. I have a ton of opinions on that. There's been a lot of different points made and people are calling it a bailout.
to me, it's, you know, it's bailing out the depositors, which I think makes a ton of sense given what I think would have happened to that, but you know, they want to done that. I think we would have seen a ton of panic and things would be in a really bad place right now. Yeah, I do want to dig into that a little bit more here. Emma, you guys
your hand of thoughts on what Peter had said. Yeah, I mean, I 100% agree with Peter. Making depositors whole is absolutely what FDIC insurance is for and the correct move and that's not a bailout. That's what FDIC insurance is for.
I myself or us over at foolproof labs had just gotten our first angel investment and it came entirely in ETH and it came the day before the circle announcement or the news about circle had broken up and like I couldn't get one of my team members to
make an exchange with me because if you're making an exchange on a noses, there's a time limit to get that approval through or your swap expires and I couldn't get anyone on there. And then the next morning, my original distribution plan for our youth was something like
70% new SDC and 30% new SDT and then my other team members have went on and made that swap and I was like no no no no no no no no like you see I've or you see DCs about to yeah I'm sorry it's early um is about to DPEG like let's not be in there when a DPEG's let's
all USDT and like I don't know they thought I was nuts but when that's your runway and you need to you know report back how your runway burn is looking then it's a serious problem so it is a serious problem and maybe we just dive right in there so you know what are our crypto companies you know NFT companies
with Treasury supposed to do now, with stable coins looking less stable. So I mean, in my maybe reactions to you, so are you still in in ETH or are you exploring new options? I mean, as a business, yeah, we're always going to have some in ETH, but it
It's just kind of hard for us to report accurately with the volatility of ease. So we don't even count that in our burn or we attribute it differently for like our team members that are paid in ETH. So that's yeah like that burn is very predictable but the people that are paid in ETH, we're very
clear like one each is one each right and you know they said yes so hopefully it doesn't make it to five thousand dollars or something because then we're deeply screwed but yeah you know for now with that agreement yes that's how that's how it looks so you know it's
It's different as a business, right? It's very, very different as a business than it is an individual. I'm curious for your take on that as a founder in the NFT and crypto space. Have your views on keeping funds and stable coins, either at a company level or personal level changed over the past few days?
Yeah, I mean, I've never been a huge fan of stables. Just broadly, I think USDC's done the best job, but obviously they were vulnerable, having so much of their liquidity and banks.
problem is, you know, this is not just a SVB problem. This is a problem, you know, we saw yesterday there's about 20 banks, there's just gotten absolutely hammered. They're trading up a bit today, but broadly, all these banks kind of have a similar problem, which has a lot to do with what trends
inspired in the last couple years from a macro perspective. A lot of these banks have long duration low yielding bonds and in a situation where they need liquidity to pay depositors back, they're forced to sell these long duration bonds at a big loss. And that's because the price of those
bonds has gone down tremendously because all bonds end up, you know, when they're forced to be sold, they end up converging at whatever the yield is. So the only way for a low yielding launderation bond to, you know, have the same yield as the bonds that are currently out there that are around 5% is for the price of those bonds.
So a lot of banks have this problem. That's the overarching kind of theme that I think is really important to the macro economy and certainly important to founders in any industry. So I've seen a lot of people and a lot of companies move money to the big banks. That's the other unfortunate thing is that basically
With what we've seen a lot of people are just flocking towards the big four banks because they're too big to fail So if you more in reported they've had like the biggest implicit deposits they've ever seen and there's all sorts of weird things going on So yeah as a founder, you know specifically to lucky trader. I mean I feel really good. We actually
We had our money at SBB, we got it out Thursday ahead of all of this. So that was kind of fortunate timing. It was still very stressful. A lot of companies I'm invested in and know had money there that was locked up, obviously the USDC thing. I'm really happy that the FDICs came in and I do think
that now it's just trying to figure out where to bank your money. I never thought it was a great idea to keep a huge amount of money in stables as a founder, but I understand that that's sometimes the only option that you have. I'm curious that you mentioned essentially the timing mismatch on the bonds.
and how it's an issue facing several banks. What's the answer? Is the new program from the Fed to backstop some deposits? Is that just a short term band aid? Where do you think we go from here related to that very specific issue?
Well, it's not about how we got here first, because I think that's really important. And, you know, I think the Fed and central banks around the world wrote a really interesting position when COVID first happened. And they knew that the economy would essentially shut down. People were going to have to stay at home and that would have a huge impact.
But there's opportunity and that they can trust everything that's going on. Obviously, COVID was a really unique circumstance. But flooding all of these economies of the tunnel of quiddity, stayed off a huge depression. But then we have this liquidity challenge. And I think really where I think the fact
and where we made the mistake is that we continued to just have these low interest rates and we continued to pump the economy full of liquidity when it was very clear that we already seen it starting to see a lot of inflation. And they said it was transitory and that wasn't going to be a big problem. And of course we had this really high inflation problem and that's a massive
massive problem for society. If you start having sustained inflation, that's really going to hurt a ton of people, especially the middle class and the people that are on the lower end of the income spectrum. They're going to be hurt the most by inflation and it really just helps wealthier people. So that's a huge problem to them.
options really are to put it into treasuries and from 2019 to 2021 a lot of these deposits that you're getting the short duration bonds they're actually yielding negative or really close to zero so that wasn't like a very compelling option as a bank so I don't necessarily blame the banks I think there's definitely ways that
like SVB in particular should have hedged their bets better, but it's a really tough environment for banks because they don't really have an option outside of these law and duration bonds. So that's what transpired. The Fed finally broke something with raising rates so fast and now I think it's inevitable that we'll see the rates slow down and the real question is what happens to inflation.
So this is the problem with monetary policy and Fiat currencies. There's, you know, when you don't let free markets kind of impact things and there's a central organization, you know, kind of moving things around, you'll run into problems and we definitely broke something. And if there wasn't confidence in regional banks, we'd have a lot of issues and
society. So we'll see what happens. But yeah, my view is that rates will slow down and if not go go lower relatively quickly. And then the real question is what happens with inflation? Yeah, well, thank you first for that eloquent breakdown of the situation. That was great. So I think we're starting to see it.
And how the market's pricing in these rate, rate tags. So I think we're seeing 25 BPS now is the odds on favorite for this next move. And then to your point Peter, I think we're expecting likely a pivot or a reversal here soon. But then that opens up its own
And you had your hand up. Did you have something to chime in on this? Peter covered it. It was it was born in regards to how banks deposits can be affected by their long term financial strategy and how that
probably has a lot more to do with the run on SVB than anything else, right, as the reports come in and people look at it and they say, oh, you're in treasuries. Oh, these treasuries are not or bonds. These are not performing the way that you expected them to perform. You don't have the same amount of reserves that we expected you to
in relation to deposits, right? And that's kind of what triggers these types of events. So yeah, Peter covered that one. Awesome. Well, I want to continue the discussion and maybe talk about what's going on at Signature Bank. Before we do that, let's read the news.
Today's top headlines powered by Lucky Trader.
on the day following the news. Yuga's 12fold sparked some controversy as the full collection was revealed over on Ordinal Hub showing a lack of variety in the outputs and a mistake duplication of 12fold number 205. Artifacts shared a teaser of their next forging event taking place on April 24th along with a preview of an upcoming
coming Murakami and a message taking place in Japan on April 30th. In crypto news, we already covered the coins are up majorly on the day, Bitcoin over 26,000, 8 to 1740, 8 coming at $4.60 up big for a mince local lows ahead of the token unlock coming later this week. Coinbase
It's also opened up at $66 today in pre-training up 30% from its local bottom. In Web 3 News, Instagram has shuttered its NFT program after just a few months of existence in order to focus on other monetization products and opportunities for creators on their platform. Sesame Street is coming to the blockchain as a
Pokemon collection gets set to launch on Veeve coming on March 19th and then the Pokemon company is currently hiring for Web 3 rules leading to speculation of their potential entry into the NFT space. All right, quite a bit to unpack there. I want to keep this crypto macro conversation going. Go.
your hand up? Something away in? Yeah, first of all, I love cookie monster. I'm a cookie monster Maxi, so I'm excited about that one, even though it's on beef. So not that exciting. But I also want to do a lot of us were wondering what to do this weekend. And I just wanted to call out Diz's advice that he posted, which was to get very high and forget about until Monday, which I really resonated#
good advice out of these for managing the situation this week. Yeah, let's let's tag you in here. Did you heed your own advice? Did you stay on the sidelines and just ride out all the volatility this weekend? Yeah, I was in Charleston and I only had access to five percent of life on
I'm able to buy USDC was like putting liquidies into to AVE and then taking out like a USDT loan and bought in USDC and I just decided that was going to be too much effort. So I just didn't do anything just sat there and held everything and told the people around me that
I would not panic sell their dollars for 10% off their dollars while banks are closed in reductions aren't live. Um, yeah, I think that that's strong advice. I'm curious though, kind of having watched the weekend play out, have your views on stable coins changed much? Or do you feel the same? And do you have a decent chunk in stables?
Yeah, I mean I think my views have changed a little bit. I think I probably thought USDC was a little more put on quote safe than it is. That being said, I am kind of like Peter where I don't like to have just dollars sitting around the dollars we have or more.
for this house we're buying and getting furniture and stuff set up in there, but it doesn't feel plus EV to just hold dollars, right? You can go buy fucking treasuries, get your 4 or 5% whatever it is right now, you can dump it into some riskier stuff. But yeah.
in 2008 after Dodd-Frank, you know, in the meltdown, they forced banks. They said, you know, you're going to kick on deposits and you can only do less risky investments. So it kind of forced banks to invest in these treasuries. So this bank, Silicon Valley and these other ones that Peter are mentioning, are actually regulatory fund and they are following the guidelines
And what banks do is when they take it, they put it into two buckets. They put it into the sale bucket and the whole to maturity bucket. And the reason why people put hold in maturity is because then you'll have to market to the market. And so that basically makes it strength. So unfortunately what Peter just said was rates went up and the whole
macro climate changed and they were forced to sell those that were basically in the bucket of whole to maturity. And that's what caused the whole meltdown. And by the way, every bank would have done that because no bank is basically built to have a run of 25% on their deposits.
So that's kind of what happened and everything would have worked out fine if there wasn't a run on the back. They're just happened to be one and that's what happened. So, you know, I think it's more of a structural thing and I just want to reiterate like regulatory they did everything right. They followed the book, they followed the guidelines, but unfortunately what Peter said was with the big
of 2019 with all the influx venture capital got a lot of money and they had to put it somewhere and the bank standards say you have to have a lot of money to cover that and yeah that's what happened. Well thanks for weighing in there I think we also saw this new risk of the social media risk and the speed
at which these transactions and these bank runs can now happen in this digital area. So I think that is another takeaway. And a say from one of your points there, faded, you mentioned the Dodd Frank Act. So Barney Frank squarely in the mix with this signature bank situation. I want to quickly cover this here.
So, you know, in the feds update on Sunday evening, kind of sandwiched in the middle was that they were shutting down signature bank. Just days after we saw the second largest bank failure in SBB, we got the third largest in signature bank after a $10 billion run on their deposits took place. I think what's interesting is more
details are starting to trickle out about why this may have happened and what a difference in their situation at signature versus a few other banks. So Barney Frank from he co-authored the Dodd Frank at he is on the board of signature. He came out some pretty strong statements saying, and I quote, I think part of what happened was that
So here's how it went down a little bit. So first Republic was facing a fairly similar crisis over the weekend as signature bank was seeing their own run on deposits. Yet they were able to make a fairly
Mark Key announcement on Sunday that signature was unable to make and that's that they had lined up $70 billion in liquidity from the Fed and from JP Morgan and this was apparently enough to keep them afloat through Monday even though their stock price certainly took a hit on its own That line of liquidity was not offered to signature signature execs had apparently
gathered on Sunday to explore their options to short deposits. They thought they had stabilized their situation and just hours later came to learn that the execs had been removed from the bank and it was being shuttered. So very much a tale of two banks here, one famously crypto friendly and signature and seemingly paying the price for it.
But Frank went on to tell CNBC in his interview. He felt there was no real objective reason for signature to be seized. And he said, and I quote, we became the poster boy because there was no insolvency based on the fundamentals. So this is a pretty big story kind of playing out here following that the
shutdown of the three primary crypto friendly banks. I'm curious for any of our speakers reactions to this thoughts on what this might mean for crypto banking, for what crypto companies and FT companies are supposed to do or go from here.
I'll start with you and then we'll go to Emily. Sure, and I do actually probably have a little bit of output to drop for this. So my business partner in crypto and all this, he actually works at a repo desk, you know, a pretty big repo firm, which is a repositioning of financing. And he works with clients that have access to the Fed Fund's secondary window and discount
window. And he sent me a text like and this is a little bit tinfoil but I think it all works out. If you kind of remember before these banks started to fail, there were whispers of crypto banks going and solving. And I got a text on March 2nd from my buddy and he said, you know, listen, you know, I got the okay to start lending to crypto. And I said, you know, what the
I told him, "What are you talking about?" He said, "Yep, my clients got the okay to lend to crypto at a 10 to 12% rate." He said, "Lend what to who?" He said, "To miners and exchanges." From my thing with the whole operation, you know,
What they're trying to do with the on ramps and the off ramps, I think that they're looking to work with more government-friendly banks to keep it afloat, but they probably have back channel talks with that because I got that text on March 2nd. Well, that is very interesting. Emma, you had your hand of thoughts on this situation at signature?
Yeah, sorry. So there's a bunch more crypto-friendly banks. Obviously taking out a major bank causes a scramble. That's problematic. But we're not out of runway with crypto-friendly banks. They still exist.
I think that it would be very difficult to shut down any banks in addition to signature without a lot of evidence behind it because, you know, as Barney Frank said, there was no problem with the deposits at signature bank.
I mean, he kind of presented a suspicion that's being recycled as fact, which is not great journalism citizen or not. But at the same time, I think it's meant to scare banks. I think that's the ultimate
But all it's gonna really do is concentrate the wealth into a couple of individual banks. So maybe they're just trying to give them enough rope to hang themselves. It's hard to say, but the thing about it is it causes a major sentiment shift. And I think it was very
very short-sighted. Yeah, I appreciate your take there and it will certainly be interesting to see how, where we go from here in crypto banking and this kind of larger operation choke point and how the government is handling this. I think just quick
Another storyline that I was following and all this it was somewhat lost is Seasy Binance announced that they're converting the rest of their $1 billion industry recovery initiative funds from their BUSD stablecoin to crypto they moved into a combination of Bitcoin B and B and
ETH. This was about a $980 million move. What was interesting about this is if you look at the tweets, there's some interesting replies. He got some praise that people had been unnerved with the recent stablecoin developments and will now feel more reassured. He responded
that he didn't even think about this way. He was just thinking about how to keep the funds in a safe asset. Well, this statement implied that BUSD was not a safe asset. He was asked that question directly in the replies and then went on to clarify that there will be no more minting for BUSD.
and that the market capital only decreased over time and so well liquidity. So it seems that, you know, BUSD might be effectively winding down or starting to begin that wind down process, which I wasn't aware of and seemingly came at was seemingly buried in some of the other macro
news, yesterday as well Coinbase announced that it would stop, it would disable trading of the USD. So you can no longer trade the USD on Coinbase. So along this stable coin discussion, for real
interesting comment on Rug Radio yesterday. He said when this was all going down, he wasn't sure what to do with stables versus Ethan. He said he thought about moving to crypto punks over stables. And I'm curious, as many of our punk owners on this stage, Peter or D's have changed. Have you
thought about that, have your views on crypto punks as more and more secure NFTs changed at all over this past weekend. Certainly we've seen the price continue to grind up. These maybe I'll call on you any any reactions to this or changes on your view of the punk market.
that's still priced in Eath and Eath is ping ponging between a thousand and two thousand or whatever. So no, it hasn't changed my outlook on it and I would rather just keep playing with it. Sure. So Eath still king.
for D's. All right, well, that's still going to be an interesting story aligned to watch play out with Binance and BUSD. We run out of time, I want to make sure we have time to get to your NFT market headlines. So why don't you go ahead and quickly take us through those.
Yeah, we'll be quick here. So here are some of the top market headlines from Monday powered by Lucky Trader. Memeland Potatoes holders can now quest their NFTs to earn valuables and spoiler alert. We're just going to rip the bandaid right off here. They look like butt plugs. So potatoes were our stable and 2.3 ETH. Actually, down 7% and captains are
The top offer is currently 1.448 and the lowest listing is 258.
touched on on the show yet is Beeple's opening party in Charleston over the weekend. It looked awesome. You know, Deezer, I'm hoping you're still with us. I think you were attending this party. I would love to get any firsthand accounts for how that party went. Is it looked really cool? Yeah, it was awesome.
It was honestly, I didn't have super high expectations. I was just excited to go hang out and see with some friends. And the studio and the whole party was incredible. People, you know, doing live air drops and then seeing people fight over tens of thousands of
like yesterday, but like there were people around us who you know, or people I looked up to and I got to meet a couple of them, a couple of them, I got to be coldy. I actually got like shake his hand and eat food with him, which was cool. I feel like I bumped into him in a couple of events but really haven't gotten us to talk to him.
Yeah, it was a great event people really brought everyone together in Charleston And I'll go back anytime he's having a party. Oh, that's amazing to hear right now. That was going to be my follow-up question is do you know if he's going to continue to have events somewhat regularly I feel like if you build that big of a studio with all of
of the thoughtful shit that went into it, like you're probably going to run it back at some other point and it's not just gonna be a one off thing. That would be my gut interpretation. - Let's hope so. This is also an awesome time of year to go down to Tarleston. So I hope I can make it down there. This sounds amazing. Peter, you had your hand up thoughts?
Yeah, now look to Epic. Really cool. There's a lot of good content posted and I think people's been doing everything the right way. Obviously, it's the right place at the right time after a lot of hard work and a lot of time put in to capitalize and kind of the huge NFC boom and I'm really happy for him and it's cool to see him
to give back to the community. I just want to make sure I got one other comment in because there's kind of just a lot of discussion on what founders and people should be thinking about across the board. And the one thing I have conviction on during this uncertain time where there's a lot of different things and a lot of moving pieces is that diversification is your friend.
for anyone out there that's a founder or just trying to figure out how to allocate their portfolio. This is a time where there's so much uncertainty, I would not make an all in bet. If you have done a conviction that it's obviously your choice but broadly, especially for founders like
you can. If you're going to hold some crypto, hold multiple crypto assets between eats and Bitcoin, maybe some stables, multiple bank accounts, I just try to diversify everything as much as you can because that's how you can sustain and just staying in the game during these hard times is what's going to set you up to
well for the future. So diversification is something I have high conviction and I never want to give financial advice, but I feel confident that diversification will be your friend. Well, that's some really great advice Peter. Thank you for that. And I feel like that's kind of a mic drop comment that we might just go ahead and end the show.
I don't think we've got enough time to do justice to our NFT roundtable topics of blur adding the mobile buying Instagram and T shattering and some of the you know or no reaction so maybe we'll tee those up for tomorrow considering we are already Solid five minutes over but before we do
We've got a slower day. We've got draft Kings, Rainmakers, UFC packs coming at 1 PM Eastern. We've got Paul and coming at 5 PM Eastern and AI Art Collection Mint Pass from Bright Moments coming later today as well.
A slower day, Paul, and it's interesting the artist has tied to artifact and the Air Force 1 space trip shoes, but it's a larger collection at 3333 and a 0.085. He's meant a little on the pricey side. And in the bright moments past likely the mint of the day, but bright moments passes due to
to typically sell out a bit higher on the spectrum. So be careful with that one. All right, that is it. That's our show for today. We'll be back tomorrow at 10 a.m. Eastern. Thanks to Peter and D's for joining us today. Thanks to my co-host. Thanks to all of our listeners for tuning in. Everyone enjoy your Tuesday. Let's make it a great day.