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WALL ST CRYPTO TAKEOVER | Gensler & Yellen IN TROUBLE #CryptoTownHall
Recorded: June 20, 2023 Duration: 1:06:09Space Recording
Short Summary
Recent developments in the crypto space include the potential approval of a Bitcoin ETF by BlackRock, the launch of EDX Markets by major financial institutions, and Deutsche Bank's application for a digital assets license. These moves signal increased institutional interest and potential growth in the market. However, concerns about regulatory scrutiny and the classification of certain tokens as securities highlight ongoing challenges. Political candidates' support for Bitcoin also reflects a growing trend in political narratives.
Full Transcription
What's up, man?
Nice new picture that Bear Market is over now officially, right?
When you change your Cryptopunk?
Almost, it's over.
I know it's become a meme now in the space, but it's over once I sell it.
So it's going to be a while.
Oh, come on.
That's not what I read.
Has Brad Mills celebrated yet?
I haven't seen it.
I don't know if you've seen it yet.
I don't know.
I've tweeted at him a lot about it, so we'll see.
Yeah, that was me.
Yeah.
Someone called you, yeah?
Yeah, even though I have the full airplane mode on and Wi-Fi calling,
sometimes they slip through, I don't know.
How was the space yesterday?
It was pretty good. I thought, you know, sometimes there's slow news days, but I thought that it was still really, really interesting, and we got some great perspective on the institutional side, which I think we're going to discuss quite a bit more today.
I mean, I just think that it's just absolutely insane, the velocity of news that's coming in and how quickly we're seeing this very obvious strategy of, you know, handing over the keys, so to speak, to Wall Street on this industry in the United States.
Right.
Yeah, man, I was looking at the headlines today in our agenda, and like, generally speaking, those other headlines you'd see, you'd be celebrating.
But it seems the sentiment is different this time, Ryan.
I know we've spoken about this.
Ryan, I've just sent you through a co-host invite as well.
You could accept that.
And I know that today we're going to finally, so I know that we're getting a lot of people that want to sponsor the show.
And we were meant to talk about one of the sponsors today, but because it came in last minute and I'm unprepared, we're going to do it.
Is my mic bad or is it good?
Yeah.
You sound pretty good. There's a tiny bit of feedback, but otherwise pretty good.
All right, cool, man. If the feedback gets bad, let me know. I've just put the mic closer.
Just keep me posted. Ryan, you've got to accept that course. Okay, Rand dropped.
There's no space. I know when Rand drops, everything's fine. The day that Rand does not drop, something's off.
So let me get another invite out there.
Yeah, if he stops doing his dishes, we know the space is.
Yeah, exactly, exactly. Ran, how are you?
I'm trying to get it as a co-host and every time I accept the coast in by the bank, oh, there we're back to the coast.
I'm good, Mario.
We missed you yesterday, bro.
Yeah, I didn't miss you guys too.
I'm joking.
How was it day, man?
It was a, would you call it a good day or a bad day yesterday?
I mean, I think good for Bitcoin.
I think in terms of the new cycle, pretty slow, but I think really good for Bitcoin.
Yeah.
But yeah, I think from a, as I said, from a new cycle, pretty slow couple of days in the news.
The only headlines are pretty much this Bitcoin BlackRock ETF and the possibilities of it getting approved and what it actually means if it is going to be, if it is going to get approved.
Now, I'm putting on my skeptical, my skeptical shades here.
And the reason why I'm putting on my skeptical shades is it's very simple for crypto to create a narrative.
because that's what they want the narrative to mean and i'm really trying to become very skeptical
and to question the narrative here as to whether we are making of this narrative what we want
or whether this is indeed what is actually happening and i think we should spend some time
talking about that here today yeah i think we can kick that off in a bit scott maybe we can
start with the um quick market update before we dig into the news sure we can do that i think
it's actually interesting rand to your point uh
Bitcoin looking decent, but Mike Alfred was on my show this morning and here yesterday, GBTC looking much better as the discount closes. I think it's gone from mid-40% to 34% on the GBTC discounts since the BlackRock News. So that could actually be the trade here.
What was the discount? Sorry, just so you compare, what was the discount back during the FDX days?
It's varied. It's been literally all over the place depending on the week that you look at it, but it topped just about 50%, I believe, and obviously, you know, in years past was trading at a 20, 30% premium.
So you're talking about massive, massive swings in that.
But the BlackRock ETF news, a lot of people interpreting is good for Grayscale and the GBT gap is closing.
So if you're, you know, looking at a way to trade Bitcoin, a lot of people are viewing GBT as the better trade.
Even if you just look at the...
The GBTC chart, obviously, you know, the lows were about $7.50.
It's trading over $16 today, meaning that it's more than two X off the lows.
Bitcoin obviously hasn't done that, right?
Bitcoin bottomed just sub-16,000 is trading right around, you know, 26 or below.
So I mean, 27, 26, 733 as we speak, so up about 1% on the day, but still chopping sideways.
So GBTC has been the much better trade really this year and certainly off those FTX lows.
So I've been, actually, I've been calling it on my show for a long time saying if you're going to hold Bitcoin for 10 years or five years, probably one of the best things to do is to actually buy GBTC.
And the reason for that is because at some point that that discount has to close.
And when it does close, not only do you get the upside of Bitcoin, but you get, you get the discounts as well.
So I think it's, I think it's been a good trade.
But I think, again, it's very, very important that we're going to.
type questions and say are we creating a narrative here or is this black crock thing seriously a done deal
you know on the one hand you got blackrock which have got a 575 to one uh win to loss ratio when it comes to
ets the only etf that they haven't got approved is one that didn't have any reporting to of its positions to the
cc and 10 years ago
Yeah, and then on the other hand, you've got a SEC, which has declined 60 Bitcoin ETF applications.
So it's like two big guerrillas, you know, each one in the corner saying, well, who's going to win this now?
Ran.
Sorry, go ahead.
I was going to say we do have Matt Hogan here from Bitwise, and he's arguably one of the best people to speak to this next when you conclude your point.
Yeah, so, I mean, I think the question here is,
There's a lot of confidence around Bitcoin.
People are fleeing the old coins getting to Bitcoin because, and I think now the new thing pumping Bitcoin is this, this, you know, particular of an ETF getting approved.
Matt, maybe it's a good time to bring you up and say, look, you know, are we being crypto bros and trying to justify and create a narrative?
Or is there a real narrative here that is finally going to get a Bitcoin ETF?
actually approved.
It's great.
Thanks for having me on.
That is the million dollar question.
You know, I don't think it's right to assume that there's some internal wink and nod
that Black Rock has 100% confidence that it's going to get its ETF approved.
But I do think it's reasonable to assume that they're a very well-organized, well-thought-through,
careful company.
And,
and that they see a path to potential approval.
Otherwise, they wouldn't have filed.
So I think it's right for the industry to be optimistic about this development.
I actually think it's a major narrative turning for the crypto market.
I think it's sort of can be seen as the...
the dawn of the mainstream era for crypto.
But I wouldn't assign, you know, 100% probabilities by any means that this is the one
that gets through.
But I do think you can take confidence that they thought about it carefully.
Do you think that BlackRock care about the reputational risk or the stats as we read
them out?
Do you think that they really care, it's 575 to 1 or 575 to 2?
Um, no, but there's there's there's there's there's there's there's there's there's
there's there's there's there's there's there's there's
market in general. I do think it's an important signal that that that, uh, that
reputational challenge is low enough that Black Rock is willing to step into it.
You know, that wasn't the case.
three or four years ago, it wasn't the case two years ago, it wasn't even the case one year ago,
but now we have the world's largest asset managers saying that investors should have access
to this space in a widely available vehicle.
I do think that's an important statement.
I don't think they care if they're 575 to 2, but I do think that's important.
And, Rand, the other interesting point that I think it was met a lawman brought up last week
and has been tweeting about is that BlackRock obviously has led the ESG charge work.
worldwide, right? And so some people view this as either a hedgecrasser or sort of a death to the
Bitcoin is bad for the environment argument that BlackRock will be pushing in. I don't necessarily
ascribe to that. I'm just telling you that's a narrative that is circulating because if they're
the champions of ESG and are willing to go all heavily into Bitcoin, it really does say something.
Well, let's actually go one step further.
So one of the other narratives that the crypto bros have created is that if, you know, look at GLD and when GLD launched and what the price of gold was when GLD launched.
And the narrative that we've created is, well, if that's what GLD did for gold, can you imagine the Bitcoin ETF will do for Bitcoin?
Now, I mean, there is an argument.
for it in that, you know, a lot of investment advisors are not going to be able to sell Bitcoin and add Bitcoin to their portfolios.
And, you know, BlackRock do have a very big distribution network.
But, Matt, like, if we do get a Bitcoin ETF approved, and it is the BlackRock ETF, which I believe is then available in all the terminals in their distribution network.
Does this really mean what we have created it to mean?
And that it is going to drive distribution.
It is going to be the best thing to be Bitcoin,
that the pension funds can now allocate between 1% of their portfolios,
that the advisors will push this narrative
because they want the commission on selling the new ETF.
Because that's what's going around on Twitter.
I think we need to get a...
to really understand this on the soberhead.
Yeah, I think it's a great question.
I'll see Dave Nadegaon here, who's an expert.
But I think a lot can be learned from the GLD example, actually.
And I think what the GLD example tells us is that we probably
overestimate the short-term impact and underestimate the long-term impact.
A lot of people look back at GLD and say it's the most successful ETF launch of all time.
And it did.
It pulled in a billion dollars in a couple of days.
But after a year or two, it was only a handful of billions of dollars where GLD really made an impact was over a five-year period when it got up to, I think it was $80 billion.
And I think that's what I would expect.
for a Bitcoin ETF as well.
It's not the case that day one, the Bitcoin ETF launches and CalPERS puts, you know,
$10 billion into it.
That's not how it works.
Day one, an ETF launches.
There's a large amount of excitement.
And then there's a huge amount of work on the other side, getting it approved on all
the various platforms, getting people comfortable with it, seeing a track record build up.
So I would say that we, we as the crypto community probably overestimate the short-term impact and underestimate the long-term impact. I think the long-term impact is absolutely massive. I do think it moves crypto to be a mainstream institutional asset, but I think it takes a little bit longer than
than most people expect because there are, there is a lot of work after approval before you see,
see the wall of assets coming in.
Yeah, I don't know.
I hope Roger is better now, change your headset.
But Matt, what is the impact of the narrative that instead of wanting to kill crypto,
we're seeing the Wall Street try to take a piece of the industry.
And that should be a, you know,
a really positive signal for the industry that we've been talking about the hurt coming for so long and I've said this before and now it's coming in
So sort of the narrative earlier was like hey they're trying to kill crypto now they're regulating crypto and they're killing the incumbents and trying to take a piece of crypto
For the incumbents for the people that were there in the early days coin based finance and others that's not a good thing
But for the industry as a whole we should see more liquidity over the long run. Is that is that a fair statement? I
I think that's right, except for I'm not sure it's a bad thing for the incumbents as well.
So I do think that's what you're seeing.
You see the industry now embrace this, move it into a regulatory market and get their piece of the pie.
But I think the pie will grow.
And actually, if you look at the history of asset management, even when the big players come in, the specialized players tend to be the largest providers in the space.
That's true in the MLP space.
It's true in the real estate space.
It's true in commodity space.
It's true in most markets.
So I think they're going to come in and get their piece of the pie.
But the pie grows so much faster and so much bigger that I think the crypto native firms are going to do just fine.
I think, you know, people underestimate the size of that pie and the value of specialist players.
So I think, honestly, everyone wins in this case.
I think it's strictly good for crypto.
Matt, do you say everybody wins, but as Rand pointed out before,
we've seen roughly 60 rejections of Bitcoin ETFs.
Bitwise, obviously, you guys have been doing this for how many years?
Since I was three, Scott, since I was three.
Yeah, so since 1944, you guys have been pushing Bitcoin ETF.
But it's good for you, but is there any,
and I've spoken to quite a few people in the industry
who have applied for Bitcoin ETFs, obviously.
Okay.
I've gotten sort of mixed feelings about it.
Some people think it's a head scratcher, death to everybody else who has applied for ETFs
because there's this default idea that BlackRock will just get it.
But some saying, hey, BlackRock gets approved, then we all get approved, bigger pie,
sort of the idea that you just said.
But from Bitwise perspective, let me even ask it a better question.
What would it mean to you if you saw BlackRock get approved in the next six to eight months?
And Bitwise had not been yet when you have...
continued to apply for this exact same effectively product.
Yeah.
So obviously Bitwise has a filing in, and I can't speak to any specific filing.
But, you know, walking through that scenario in my mind, it would be very frustrating is the answer to that question.
Now, I do think our broader business would do well.
Bitwise is more than just a Bitcoin shop.
but in that scenario it would be yeah it would be exquisitely frustrating uh to be to be in that
in that shoes because we have done a huge amount of work that's not my base case that's not what
i think will happen and you know i would be happy to compete on a level playing field uh with black
rock uh and see where the chips fall but but in that scenario yeah of course we would be we would be
extremely frustrated
Yeah, Steve McClurg, who's in the audience, was on yesterday, obviously Valkyrie in a similar situation and pointed to a past where he was at Guggenheim and had a similar situation where Black Rock effectively preempted them, jumped in, but then Guggenheim ended up with the better product.
So it's not unheard of that BlackRock could actually be first but not be best.
That's right.
Yeah, absolutely.
And the history of ETFs shows that all scenarios are possible.
It's possible that the SEC would let one firm go and others follow.
It's possible that second-to-market...
could possibly catch up to first to market.
It's also possible that the SEC would line up multiple players and launch them all at once.
We've seen all three scenarios in the past.
And we'll see what happens here if indeed any get approved, which of course, as a reminder, is not a guarantee at this point.
So, if they don't get approved, what does that mean for crypto?
Well, I think it's, you know, at this point, the market is probably going to start pricing
in at least some probability that one of them gets approved.
So a failure for them to be approved would be a setback.
Again, I don't think it kills crypto.
Obviously, crypto's done quite well.
You know, what the first ETF application was filed when Bitcoin was trading for $100.
So crypto would be just fine.
But it would be a setback at this point.
I think it would be a negative for the industry.
Dave, Nadig, you're here as well, and obviously you're an ETF expert.
What do you make of this entire process?
By the way, anyone who's wondering, these are like, you know, we're seeing my ETF guys.
These are everybody I call.
I see the letters ETF, and these are the people I have to go to.
So go ahead, Dave.
Yeah, I mean, I think Matt's got the general tone of it right. I think, you know, a couple nuances I might put in there. You know, the approval of a Bitcoin ETF, it's not so much that it would open up at just this floodgate of institutional money. I mean, some of that is true. But actually, it's this middle ground. It's folks who would use Bitcoin as a portfolio asset, whether that's,
a non-enthusiest retail investor, a more conservative institution, or frankly, most of the
financial advisor market, which actually drives an enormous amount of liquidity in this world,
a lot of those folks have been scared off of Bitcoin, even if they've been interested, because
there hasn't been an easy way to make it a
portfolio asset. It's always required some level of jumping through hoops. So having Bitcoin
ETFs would open up that market. And to Matt's point, I think you'd see a short-term pop, of course,
but then I think a longer tail three, four, five years as you start seeing portfolio allocations
come in, that does two things. Not only does it put more money into the Bitcoin pool and
therefore you would expect number to go up.
But what it also do is that stability, right?
You actually want a large base of non-trading assets because that's part of what helps price stability exist.
So those, I think, would be the main impacts.
In terms of handicapping where we're at now, I do agree with Matt.
I think it's a little bit much to get all twisting the mustache and, you know, thinking that there's some backroom deal here.
and that like Tuesday next week, there's going to be a flash approval and EDX starts trading.
I think that's a bit much. I think it's more likely that they are trying to get in line on the
GBT lawsuit, as Matt was saying. And this is just sort of their way of putting the marker in.
I would be very surprised if the end state of this was BlackRock gets,
some runway of X weeks and or months where there's no competitor and they get the nod.
As Matt said, they have done things like the SEC has done things like that before and generally
they've been pretty ham handed about it. I think it's much more likely that we either get
the classic, we're going to reset the rules and make everybody refit.
file so everybody gets the same date. I think that's a pretty obvious one. They've actually
made maneuvers like that and then around the futures based products we have before. So that feels
more normal or, you know, potentially putting a start date on the clock and saying, you know,
filings that meet the standard will be allowed to trade on X date. I'm actually quite skeptical.
We see any of this this year.
I think this is the beginning of a new process, not the end.
And I think it's probably well after a GVTC announcement that we get some sort of formal approval,
or request to refile, which I think is the most likely.
Interesting.
I think what a lot of people are pointing at right now is not only that we're seeing this BlackRock news obviously come through,
and then we've seen the conjecture surrounding fidelity, which I think we can agree so far is unsubstantiated.
But on the outside of the ETF side, we're also seeing a bigger move by these larger institutions into the space, all seemingly at the same time, right?
As far as breaking news for today, EBX markets, which was not discussed as widely as you would have thought last year when it was announced, which is a cryptocurrency exchange run by Citadel, Fidelity, and Charles Schwab collectively.
I mean, you effectively can't find three bigger names that you can maybe add in a J.P. Morgan or a BlackRock.
These are the largest institutions in the United States.
Launching an exchange that will focus on Bitcoin, Ethereum, reportedly, Bitcoin Cash, and
like coin, which always slide in because they're the ones that are effectively commodities.
I just laugh when Bitcoin Cash is always seemingly included.
But that's basically launching today.
And then of course, CZ had just tweeted, now it's on Bloomberg.
Deutsche Bank applies for digital assets license amid growth push.
Looks like that's primarily a custody license.
But there's no question. Listen, you can make the jump to the conspiracy theories, which we probably shouldn't do, that, you know, there's a crackdown, and I do it. But there's a crackdown on the industry, the people who built it, the actual companies, and that they're sort of trying to push for the adults in the room or push into Wall Street's arms. But there's a lot of this happening right now at the same time.
Don't forget to mention at Crypto.com, the time it cannot be any better.
Crypto.com or C service for institutional clients starting June, whenever, in a few days.
Or tomorrow.
And there was a story in the Financial Times yesterday, Mario, that Crypto.com has a proprietary trading desk and an internal market maker that's counter trading their clients.
Okay, that's a pretty big story.
That one, I didn't see that one.
Yeah, very similar to, you know, what happened.
But then when you see, Scott, Scott, when you see news like this, like I don't understand,
exchange after exchange player, after we saw what happened with Abra a few days ago, now we're
seeing Crypto.com.
Again, these are all allegations.
But.
But I'm not surprised that regulators are cracking down.
I'm not surprised that the, like, it just starts to feel like we kind of need,
and again, I'll get hate for saying this,
but it starts to feel like self-regulation backfired badly
or ambiguous regulation or lack of regulation, and we need Wall Street.
Either we need clarity of clarity in terms of regulation,
but then again, what crypto.com knows what they did is wrong.
So what clarity do they need?
Abrightly, the allegations are true.
Sorry, I don't know if the answer is that we need Wall Street, as you said.
I think it is more the other side, which is that we need clarity and...
But what clarity? Scott, what clarity?
What clarity?
Crypto.com needed clarity.
Abriand FTCS needed clarity?
Yeah.
No, but the point is, like, when a lot of these exchanges launched or when a lot of these platforms launched, they basically, if they wanted to be in business, they had to be the clearinghouse, the custodian, the exchange, literally everything. And that's been the biggest problem is there's no walls like in other markets. But the question is, if...
If Coinbase is going to be your exchange, who was going to be their custodian if there's no trusted entity that is allowed in this regulatory environment to even custody these assets.
So if these companies wanted to even launch, they effectively had to take on all of those roles and now retroactively are being punished for it.
I think moving forward, they do need to look more like these other exchanges or companies where we have those walls between them and the custodian is not.
the exchange, but to their, you know, to be fair, they didn't have that option.
Okay, and that kind of this, what we're seeing now fits the narrative that Ryan was saying earlier, that we, the next bull market will not be like the last two.
And that's because regulation is here.
That's because the institutions are here, the infrastructure is there, we're maturing as an industry.
And the, and that's not a bad thing.
Like not seeing 100x pumps over a week is not necessarily a bad thing.
So hopefully out of all this mess, we will see, you know, there is light at the end of the tunnel.
Ryan, what's your thoughts on this?
Let's get round, because I'm around probably covered it earlier today.
Yeah, I mean, as I say, I think, look, I think the black ETF net net is really bullish for crypto.
I've got to be honest.
I think that it's probably bullish for Ethereum as well, actually.
And maybe Heath is not getting all the credit that Heath deserves.
Why do I think that?
Because I think that if you look at Bitcoin and Eats, they are very, very, very similar.
The only difference is that EVE now moved to proof of stake.
And because EVE moved to proof of stake,
the SEC is now coming for EVE and saying, you know,
you actually could be a security.
You're going to security when you're a proof of work,
but now you've changed it into proof of stake and you actually may be a security.
So I actually think this is bullish for Bitcoin.
I think in the longer term, it's also bullish for Ethereum.
I think in short term, it's very bad for altcoins because all the liquidity is flowing from
from the old coins into Bitcoin.
We've seen this before.
I think it's the end of a cycle.
And I think, you know, what happens at the end of a cycle is the old coins bleed out completely
and almost prepare themselves for a new cycle.
And I think that that's exactly what's starting to happen here.
Yeah.
I think that TradFi is moving in.
I think TradFi is moving into Bitcoin.
They've seen a very resilient asset,
and they've seen an opportunity to swoop in on this asset
and this industry really, really cheap.
And I think we're taking it.
Now, yeah, as I say, I'm trying to be very, very, very,
what's the word I'm looking for?
Skeptical.
I'm trying to be very, very far away from, you know,
drinking this crypto-cool-culead.
But I actually do think that there is substance here.
Yeah, I agree. And Steve, you came up, obviously, and we talked yesterday. But just your final thoughts here, sort of on the ETF. And then we're going to move to JW over here and discuss Gensler.
Yeah, I actually still believe that the BlackRock ETF is going to get approved. I don't know when, but I'm pretty positive at will.
And then...
It is also very, very bullish for Bitcoin.
I don't know if it's as positive in the U.S. anyway, for other coins.
I'm also of the opinion that there are a lot of tokens are securities, according to U.S. law.
And there's a lot that we don't deal with because of that.
There's a lot that are on the fence.
There are a few that most definitely aren't.
Like something like one of the biggest ones that was mentioned in the last couple of weeks, Cardano, for instance.
I truly believe that that's a security.
The way that it was created, the way that the founders and the team made a lot of money off of the new issuance, so to speak, and the way that it's treated.
Yeah.
There's a lot of other tokens that fall into that category.
So Steve, just to confirm, you think it is a security or was a security?
Cardano, I think it is a security, still is.
And what happens?
So when a token like Cardano is considered a security in the US,
what happens to Cardano?
What happens to projects built on Cardano?
I know we touched on it already,
but I think it's a really important point,
at least for VCs and projects building in the ecosystem.
I think projects building on a technology is not a problem, right?
I mean,
Think about it like this.
If Microsoft violates securities law,
or any other type of law or Apple, you know, all the developers that are building apps on iOS aren't, you know, aren't or shouldn't be affected.
Now, it is possible that they would be affected, but, you know, when it comes to something like Cardano, but yeah, just because you're building an application built on a technology doesn't mean that you're necessarily in trouble or the technology's in trouble.
It more refers to the team.
and anybody distributing those types of securities.
I think those are the people that are going to be loved up.
All right, so Scott, I know you want to move to Gensler, your best friend.
There is movement against that's pointing out that Gensler and the SEC were overreaching.
I haven't read the full story. I just saw the headline earlier.
But it looks like, again, some good news today.
I guess it depends on who you are if you determine it as good news or not.
But the headlines from the block, former SEC advisor, legal doctrine could end Gensler's crypto crackdown.
We have that former SEC advisor here.
J.W., how are you, man?
Good to be here. Good to be here with all of you.
You're getting a lot of press these days.
Yeah, well, I like to speak my piece here, and I did that when I was on the SEC's investor advisory committee.
To be clear, I was there, I was put on there to replace Hester Perce and take a role of a libertarian voice.
Technically, I was an advisor to Gensler.
I like to repeat that because I know that it annoys him.
He said it annoys him, but it didn't work for him.
I was always poking him to do the right thing.
So let's dig into the doctrine and question here, the major questions doctrine, which you say
could end this sort of ongoing crackdown led by Gensler. Assuming that means you that there's
some overreach here and that it could be time for legislation or for Congress to step in, but you're
the best to speak on this. So go ahead.
Coinbase, finance, ripple, any one of them could take the cases against them to the Supreme
Court and have a very good chance.
Thank you.
and using the major questions doctrine this is a doctrine that the conservative majority on
the court are using to roll back the extensive discretion to independent agencies that courts
have given them over the last 30 or 40 years so that gives me hope in the long term that
coinbase ripple might win that tokens might be protected that's a long time though that's
probably a five-year fight so that's not going to help me as a as a coin base investor
as an owner of a lot of tokens, that's not going to help me in the next five years.
And that's a long time in crypto.
That's a millennium in crypto.
But long term, that does help us.
That's a backdrop against which the SEC operates.
They know this risk.
It's part of the reason why they settled the Wahee case because the Wahee defendants raised the major questions doctrine in their case.
It's a risk.
The more the SEC alleges tokens of securities, the more risk they face.
There's a possibility that the district courts could do a how we analysis on a token of two and say it's not a token.
That hurts the SEC's precedent.
But long term, I think the real risk is the major questions doctrine coming down.
I don't think it's going to stop them all together, but it probably gives them some incentive to settle at some point, maybe.
Okay.
I don't have a lot of hope for legislative reform in the near term.
It's just because Congress is gridlocked.
I think the real change will come if the Senate does flip in the next cycle.
If it does flip in the next cycle, then if Biden wins re-election.
I think he probably still goes with a different SEC chairman, one a little bit more moderate,
maybe one who's willing to go with.
ETF Bitcoin approvals, even though they're not willing to go with creating a reasonable path to crypto registration for individual tokens.
We'll see.
Or, of course, if it flips and we could have a Republican chairman, probably the odds are going to be better.
Although Trump is not very much of a crypto guy.
He's hard to read.
I don't know.
He's got his NFT, but he was negative about Bitcoin for a long time.
DeSantis has staked out a rule.
as very much a pro-crypto guy early in this campaign and his Twitter announcement.
So the politics are going to drive back.
And same with RFK, Vivek, and obviously Francis Suarez.
So I think we have a generally, I think what we have here is the younger generation of candidates generally understanding that they either need to say they're pro-Bitcoin or actually be pro-Bitcoin and the boomers.
The opposite.
I just want to throw something out there.
I don't think it's the younger generation.
So if you look at all the people that have ran into the election race, so far.
So let's just quickly go through who all the people are.
So you've got RFK, we've got Randa Santos.
You've got Mayor Suarez.
Those are the people that are Vivek.
And who else has put, who else?
No, Vivek, Vivek is too small, though.
Like, you know, Vivek, Marriand.
I think RFK and DeSantis are the main two.
It doesn't matter. I'm just saying if you look at every single one of them, every single one of them have come in on the Bitcoin with the crypto narrative, which means that they are fighting for the crypto community in the elections.
Every single one of them has come out with some kind of stance on Bitcoin.
And so you think that they genuinely believe in the technology?
Or is it more of part of the narrative supporting freedom or is it just them trying to get votes?
Well, regardless of what it is, regardless of what it is, they've all come out positive.
They've all come up positive for Bitcoin, whether it's just to swing votes, whether they actually believe it.
They're all positive against Bitcoin in a time where the current administration is negative against Bitcoin.
Yeah, but I think the only two people that matter, Ryan, are Biden and Trump based on the recent polls.
So, and Trump, we don't know how pro-Bitcoin he is.
Well, no, I don't know.
Wasn't RFK, wasn't RFK in the current?
True, true.
I think RFK is...
No, he is not.
That is nonsense.
It's a favorability poll that was run separately.
It has nothing to do with who's likely to be the next candidate or popular.
Yeah, that's a mis-spoken.
RFK is sitting at below 20% last I checked.
I can't remember.
I was like 14.
Yeah, RFK's chances are, like, you know, and listen, this is not a statement against him,
but, you know, he's running it like, you know...
like you said, 20%-ish and Biden was in the 40%.
It was a favorability poll that people, as usual,
are taking out of context and saying that he has a better chance of being the candidate.
Neither here nor there, but that's just the facts.
Just to go back to JW, I just want to go back to you with the question is,
you know, everything you're talking about is just going to lead to
You know, a lot of ambiguity for the ecosystem over the next few months and years.
Like, I just don't see anything changing in the short term.
I'm right in saying that.
And then what does that mean for the ecosystem?
Does that mean we're going to be sitting in limbo waiting to see what's going to happen with the SEC's lawsuits?
Well, the good thing is the worst case scenario is firms like Coinbase Finance get taken down.
And then they go after Defy Next.
And then it's going to be hard to find places to trade tokens.
You'll be stuck with, I know how to trade peer to peer, but our average new person coming into crypto doesn't know how to do that.
And so that means a huge hit to liquidity.
But the good news is even if they're successful in taking down these big crypto institutions, it's going to take a long time for them to win.
It'll take years for them to win that case.
That buys us a lot of time.
hopefully for a change in politics.
Look, if you're imagine,
think about the politics of how Gensel got where he is.
Liz Warren plays all of her chits with the Biden administration
in her endorsing Biden and jumping out of the race.
She plays all of those chits for financial regulatory appointments.
That's what she cashed those chits in for, those political chits.
Right.
that dynamic is not likely to repeat.
And so I think it's reasonable to assume the next chairman,
the average tenure of an SEC chairman is about three years.
The next chairman, even if it's a Democrat,
probably going to be more moderate.
Do some kind of milk toast thing,
kind of like Europe's approach with Micah,
probably do some Bitcoin ETF approvals,
I think I'm fair saying there,
we'd definitely get a better deal out of the next Democrat
than the current Democrat chairman.
So that's at least something.
I agree because clearly, as you're saying, Gensler is effectively an Elizabeth Warren plant, right?
I think everyone knows that.
She's the most powerful Democrat on the Finance Committee and certainly behind this entire narrative.
So even another Democrat, people are losing the fact that there are plenty of pro-crypto Democrats.
Right.
Everyone's made it a partisan thing because they're so loud on both sides.
But there's a lot of Democrats that we speak to and know about that are very pro-crypto
and are just afraid of Elizabeth Warren or afraid of, you know,
coming out against the narrative of the party at this exact moment.
But JW, what I want to know, and we can dig into that further.
But I want to know, you said that maybe this doctrine, the major questions doctrine doesn't
really come out until five or six years down the road.
But the doctrine itself, doesn't it allow for legislators to...
to step up and basically outside of the court system say that this is an overreach and to legislate.
So like we see the Warren Davidson's obviously and the McKenrys and all these people that are very clearly pro-crypto and anti-SEC.
Isn't there room for her to, for them right now to take advantage of the major changes doctrine and step in and already say that Gensler's overreaching without it having to go to the Supreme Court?
It's a way courts have of interpreting law.
So what they've used it so far is to strike down agency efforts to abuse discretion in law.
CDC does a rent moratorium.
CDC doesn't have any authority in the statute to do that, but they just try to fudge it,
try to fit it into what's in the statute.
Supreme Court says no, major questions doctrine is.
Congress wanted to give you authority to regulate that major question, national rent law.
They would have given it.
to you in the statute they didn't.
FDA tries to regulate cigarettes, nicotine as a drug,
using their authority to regulate drug safety.
And Supreme Court says, no, that was not the point of the power giving you to regulate
drug safety.
Nicotine is different and cigarettes are different from the pharmaceuticals that you regulate.
So here, the argument is that
SEC is trying to regulate digital assets that exist entirely on a decentralized ledger.
Nothing like any of the dynamics of sales of securities previously contemplated.
So SEC is abusing its authority to go after this.
So I think it's a good argument.
I think it's more likely than not to win.
Between now and then, Congress could legislate, which could take that argument out of play.
I don't see it in this Congress, maybe next Congress.
David, go ahead.
I see you have your hand.
So I just want to jump in on what J.W is saying to simplify it for people who don't want to talk about legal doctrines per se.
I don't see the major doctrine being particularly useful in this situation because God only knows what the crypto landscape is going to look like in five years.
Think of what we look like in 2018.
Think of what we look like in 2013.
Five years is a lifetime.
I think what we're going to see is that practically...
If crypto increases as an asset class, and I think with what we're seeing going on with all the big players coming in this week, I mean, I think we have to talk about just the incredibly weird legal timing of...
Citadel, Black Rock, Fidelity, coming in 10 days after, you know, the SEC.
I just said that.
It's all, yeah, I mean, it's literally all within a week and Deutsche Bank today.
So, yeah, we don't have to put on a tin hat, but clearly there's a timing issue here.
Yeah, something is going on behind closed doors.
The conspiracy theorists will say, you know, people were, you know, the conspiracy theorists
will say Wall Street was, you know, pushing down the prices so they can come in and steal
market share.
I don't believe in any of that.
But ultimately, when we're...
talking legally about what's going to happen.
I do think if crypto keeps growing in the manner in which it has and these large players,
they're going to start.
Black Rock is going to start throwing around.
Fidelity is going to start throwing around their weight in D.C.,
to lobby for their benefit.
And that will kind of push the major question doctrine aside.
JD's 100% right in what he's saying.
But because it takes so long,
these rich people,
these rich companies are going to want to establish barriers
and moats that are good for them.
And I think that's what we're going to see the evolution be
in the next year to two years,
is how these players are,
Unlike Coinbase, Cracken, Gemini, the original exchanges with Coin Center and the Blockchain Association, how they were lobbying for perspectives they want.
We're now going to see, and I think Scaramucci on one of these town halls said it very succinctly a week or two last week was...
you're now going to see billions of dollars inflow with lobbying efforts from BlackRock, from Fidelity and from the other players who want to do this to make Congress do what they want.
And I think that's what we're going to see.
Just as a point, whether it's Republicans or Democrats, right?
I do think a Republican administration, even if it's Trump, we're going to go back to the days where they just leave businesses alone.
They're just going to say, kind of do what you want to do.
And until there's a real problem, we're not going to get involved.
It's going to be the same thing that we're going to see.
But if the Republicans retake either more seats in the House...
more seats in the Senate or the or the White House.
What we're going to see is the congressional push to regulate this
based on the players who are coming into the space this week.
Yeah, David, I...
I think that that's a really, really good point, but saying, you know, they're coming when we, once we have a real problem, we had a real problem.
I mean, if we're going to look at ourselves in the face, obviously, the crypto industry had a major problem in 2022, right?
And so I do think that regime change would certainly maybe...
put a bias towards better regulation or towards getting more clarity.
But I don't think that that ends a crackdown after what we saw with the FTX Block 5 Voyager, etc.
So I agree with that, but I remember meeting Rand for the first time in New York.
This has to be like five, six years ago, and he was interviewing me.
And I had a class action against Coinbase.
And this was like 2015, 2016-ish.
And Rand was making fun of me.
And he was asking all these questions, which no, when I had, when I was on stage at the conference, I was talking, I got booed off the stage.
I mean, the fact that the transition to where we are now, having survived the first round of crypto exchanges just disappearing overnight into FDX.
Your Honor, I can't confirm what the defendant is saying here.
I can't confirm that I ridiculed him.
You know, that's the beauty of the video.
The only difference is I was like 100 pounds fatter.
But I mean, at the time, I couldn't even get picked up in the press when I was suing Coinbase.
And Coinbase pretty much capitulated to everything that first lawsuit said about what was going on at Coinbase in 2012, 2013.
Now, the fact that we have FTX Voyager Celsius, which I think is the worst of the worst, you know, is we're cleaning up.
But again, I think what you guys all say, this is the beginning, not the end.
And this was much needed.
But I do think that with the big players coming in, you're going to see a whole new round of lobbying efforts.
to get clearer regulation for Main Street institutions on Wall Street to pump a lot of money into the space.
David, let me, I've got a little bit specific about what we mean about regulation, though.
Yes, go ahead, JW.
Yeah, go ahead, J.W, and I've got a question for David right after. Sorry, J.W, go ahead.
Yeah, just my point is we've got to be specific about what we mean about regulation.
Yes, I do think BlackRock coming in, Fidelity coming in.
They're going to be a very targeted power push on regulation.
ETF approvals on custody issues, but the bigger problem is what do new token listings do?
And I don't think Fidelity or BlackRock care about new token listings, new DFI DAPs, new layer one chains.
They don't give a fig about any of that.
And that, to me, is the most important thing in crypto.
They're just looking at custody, the biggest, most established, you know, things that have been around for 10 years.
They're not interested in new listings, new offerings.
Right.
So that's still a dynamic, I think it will be governed by that of the McKinnery-Thompson bill that I'm still hopeful for.
You know, big institutions coming in might be good, especially on the Bitcoin side.
I worry a little bit about one day the BlackRock ETF becomes Black Rock as validator.
And then they use the validator power to move towards some ESG nonsense.
That's something to keep on.
Yeah, David, let me ask you a question.
It kind of follows what JW was saying.
Just for the audience as well, I've got a question for you.
I want to see how many of you have a tin foil hat on.
Do you think this is all coordinated?
Do you think that Wall Street is working with regulators to crush the incumbents,
crush crypto so they can come in and take a bigger piece?
Yeah.
And exactly what do you believe is happening?
Do you think they suppress prices or just crack down
on Binance and Coinbase and timed their entry into the ecosystem?
So I want to go through the comments to see if we're alone
in mentioning those narratives.
In the meantime, we forgot to pin it.
I'll pin the tweets above.
You're going to see pinned tweets where you can email us
if you want to come on the show.
I think we have sponsors starting tomorrow.
or if you want to work with our incubators.
So my question to David is what happens to the startup ecosystem
that JW is touching on,
because the news we're seeing now is all focused on Bitcoin.
The news we saw a couple of weeks ago with Binance and Coinbase
will harm outcoins, will harm those startups.
So again, before you speak, David, for any startups that want to work with us or on the show,
just DM us and I'll pin the tweets above.
We prefer emails.
Otherwise, David, want to get your thoughts on the startup ecosystem and the statement you make.
This is just the beginning, the beginning of what exactly?
David?
So I think the answer to that is if you kind of look at Warren Buffett, you know,
Warren Buffett never touched technology stocks and now Apple, when he bought into Apple, is like 75% of his portfolio.
I think what we're seeing with BlackRock Fidelity and the others coming in, I think JW is 100% right.
They're only going to touch large institutional...
issues. They're not going to get into the, they're not going to get into the all coins, token issuance.
They don't care about any of that. I don't think that, I think that is still years away.
We in the United States, we do things reactionary. We're not proactive, we're reactionary.
So the reactionary here is Bitcoin's been around for, you know, going on more than a decade now.
Ethereum's getting up there in the year, getting up there a little bit.
Those are the things that the government's going to touch first.
They're not going to touch the smaller issues.
And if you compare it to Wall Street and we talk about frauds, you know, the OTC, the pink sheets, there's just as many frauds on Wall Street in the stock market.
It's the larger funds that you're more comfortable talking about trading in.
It's why hedge funds can't invest in certain things.
But it's the, but who reads anything that's an SEC disclosure anymore, disclaimer, nobody?
So I think what you're going to see is the Congress is going to come in and register stuff that people on this call are going to be like, well, that's so 2015.
They're not going to deal with the issues that are 2023 issues.
We're not going to see that until 2030.
Well, that's not good.
And then for startups as well, David, what should they do with this uncertainty?
Yeah.
I'm going to defer that to the smarter lawyers.
Leave the United States, David, right?
Go ahead and say it.
I mean, I don't.
No one's going to leave the United States every time someone says that.
Everyone left the United States.
That's not true.
They are.
No, they're staying in the United States.
They're just not in the companies outside.
Yes, they're taking their business elsewhere.
Not enough people, not enough people of the United States.
You know, it's like the frog in the boiling water.
The water just keeps boiling and boiling and boiling and getting hotter and hotter.
And to be honest, like a very, very, very, very small portion of people of left United States.
Not enough to count, not enough to make a difference.
Well, Steve McClurg, who was on here earlier, I mean, we had asked him the question point blank.
I can't remember literally at this point if it was on Spaces or YouTube.
And I said, listen, you're, you know, he's at Valkyrie.
You know almost every fund in this, everyone running a crypto fund, VC in this country.
Like, what are people doing?
He said either shutting down or leaving the United States every single one.
I'm not talking about retail. I'm not talking about a whole bunch of people doing the, oh, if this president is elected, I'm moving to Canada bullshit that we hear in the United States all the time. Right. I'm talking about people who are actually building in this industry saying, I cannot do it here. I either need to go get a new job or I need to go, you know, establish in the British Virgin Islands or wherever, you know, or Malta and go run my business elsewhere.
Well, you want to talk about conspiracy theories.
One that I think I'll put a tin foil hat on and support is even more dangerous than the SEC's case against Coinbase is the SEC's proposed custody rule for crypto.
Very expansive.
And if you read the rule, there are subjective determinations the SEC can make to say, okay, you're allowed to custody crypto.
Technically, they say you can take two pounds.
You can either custody at a bank or you can custody at a state trust.
But they have a laundry list of things before they will designate a state trust as acceptable.
They've already said they don't think Coinbase can custody.
Can even custody crypto.
They are, you know, they say, oh, you can just custody a bank.
We all know banks are doing choke point two point oh.
They're not, you know, that's not referenced in the SEC's rule, but we all know what's happening.
I think they're trying to shut down VC and hedge fund investment in crypto in the U.S., which would be a disaster.
I've just
before...
Sorry, really quick, Mario.
We've seen...
Yeah, J.W., we've seen conjecture
and this has been sort of my opinion
aligning with what you're saying is that
the SEC has probably bit off all it can chew against major opponents here, right?
Binance, ripple, Coinbase, obviously.
You don't get much bigger than that and they have limited resources so that the next wave
of SEC enforcement actions, a lot believe, will be against those sort of mid-tier and smaller VCs
and hedge funds where they can get easy wins because they can't afford to fight back.
I mean, do you think that that's a reasonable assumption?
I think that's true and I think they're also coming after Defi too.
I think if I can go on LinkedIn, I don't know why more people are not building anonymously.
We need to be like Satoshi building anonymously.
If you're dev and Defi, you should be anonymous.
If I can go on LinkedIn and I can see your name as associated with a Defi project, call the lawyers now.
And call the lawyers and also hit us up.
I've just been there.
I've just been the tweets above.
So I know Rand will kill me if you DM us.
So if you want to work with us, just go the tweets above.
Or tag a project.
Don't hit me up.
I'm in the United States.
Not only this, you've got your DMs blocked.
Hit Mario up.
You've got your DMs blocked.
But Bruce, put your tinfoil hat on.
What do you think is happening?
I want to get your thoughts.
And I know that you'll probably have the best story out of all of us.
Bruce?
Yeah.
The establishment is muted.
No, no, let me, let me do it.
The establishment is muting you, Bruce.
It's Elizabeth Warren.
But it's by the people that just arrested,
are not arrested, they charged Tate.
Bruce can hear us.
He's laughing.
He can hear us.
Oh, yeah, I can hear you.
I had a question to you.
Yeah, putting your tinfoil hat on.
What do you think is going on?
Like, do you really think there's back, you know,
behind the doors,
deals happening and, you know,
What could we see next? Yeah, I don't know about behind the scenes. I mean, there is a lot of
collaboration and, you know, there's powerful people with powerful networks. You know, one thing to
keep in mind about, I mean, there's two things about Black Rock. One is, you know, I joked when I was
running for Senate. They said, what government agency would you shut down? And I said BlackRock.
And that got a laugh. You know, and they do a lot of.
you know, terrible and evil things with ESG and stuff like that. There's a lot of problems.
Wouldn't surprise me if they end up a big hodler and end up pushing for some contentious fork
or something like that. So that's the negative side of it. The positive side of it is
people shouldn't underestimate how massive Black Rock is and what a huge effect that has
on, you know, everything in the world. You know, they, if you took all the Bitcoin on planet Earth,
every single bit, the entire market cap and piled it in a bunch of addresses, it's only 5% of BlackRock's assets under management.
So one single company is 20 times larger than Bitcoin.
So it's a very, very big deal.
And, you know, clearly, you know, all of these companies, it's not a conspiracy theory to say that they have ties with government.
You know, they're very, very tied in.
You know, they're very significant in their lobbying efforts and their legal efforts and everything they do is, you know, kind of another tier up from...
you know, really anybody else in this industry.
I mean, you know, you had kind of the early first professionals and then you had the first
sort of real companies, then you had some public traded companies and so on up the chain.
And you have people like Saylor who've come in more recently who are, you know, a tier above what early
Bitcoiners were.
But.
you know, in terms of wealth and influence.
But Black Rock is a whole, whole, whole another level.
So I'm bullish on it overall.
I mean, I think it's great.
You know, I do predict chaos and problems.
It wouldn't surprise me at all if there's big problems around Black Rock.
If they come in and, you know, three years from now, they have, you know,
$10, $20 billion in Bitcoin and they say, you know, hey, you know, we can make it faster
or, you know, some nonsense like that.
That could happen.
But, you know, it is what it is.
I think, you know, all's fair and love war in Bitcoin, I guess.
By the way, did you, sorry, go ahead, and I've just saw a story that I think we should bring up, but whoever was just something like that. I was just going to say, had anybody seen there was some conspiracy theory that Black Rock would fork Bitcoin or something to do this, but I stopped. I dismissed it outright when I saw some mention of it. Does anybody know about that? If not, we'll just.
Yeah, there was a, there's a thing mentioned in the prospectus that says Black Rock
reserves the right to pick what fork, if there is a fork of Bitcoin.
And that language is clearly put in there because, you know, smart people know the history
of Bitcoin and know that that happened.
So that did happen.
That was a, that was a real thing.
And there was, you know, times around the New York agreement and stuff like that where
there was talk about exchanges, you know, kind of figuring it out.
Because at the end of the day, what is the real Bitcoin?
It's what each person decides to run on their own node.
but it but it you know if if all of the big exchanges say this is the real bitcoin you know that's
you know, that can be significant.
So in the case of something like this,
if you did have a contentious fork,
as we had with the block size war
and the Bitcoin, Bitcoin Cash fork,
you know, one of them has to keep the BTC symbol
and sort of be, you know, the real Bitcoin.
In this last one, it was pretty...
uh overwhelming uh consensus you know in in the direction of what is now called btc but but but
early on it wasn't it wasn't you know a hundred percent you know betting odds you you you know
wouldn't have said 100 percent in the market didn't think that so you
You know, anything can happen.
But either way, you know, so that's where it came from.
But, you know, wouldn't surprise me at all if there's going to be these fights repeated again.
The history repeats itself again and again in this space.
You're going to have an even bigger scam.
The next one will probably be a government, you know, and you're going to have fractional
reserves and you're going to have a fork battle.
There's going to be a contentious Bitcoin war again.
It's just the nature of it.
And that's part of Bitcoin and it's actually a good thing.
It should be resistant to these kind of things.
And at the end of the day, we all get to vote by the node that we choose to run or who we choose to align with.
Scott, did you read the story?
I just wanted to mention something else, Scott.
David, I'll let you jump in because I just saw a story that FTCS has paid $120 million in advisor fees
between February 1st and April 30th.
And I also saw there's updates in Sam Beckmanfried's case, which I think you've touched on already.
But I'm not sure if you saw that story.
This number sounds insane.
It's not insane if you've been a Voyager creditor like myself or anyone who's a Celsius or creditor or any of these.
It's become very clear that Chapter 11 bankruptcy is to the benefit of lawyers and not to the benefit of creditors.
When you see how much of that creditor money is being spent on these processes, especially when...
assets could have theoretically just been liquidated from day one and not protected the executives.
But yeah, I mean, it's a really, really massive number.
Actually, Voyager, they're saying that potentially today could be released.
I mean, I can tell you it in my personal account that they're saying it's a 35.6-ish
percent initial distribution. A lot of that's being held back after because of future lawyers' fees.
They've spent a ton on lawyers in this bankruptcy process, obviously, and then on the case that
Alameda has against Voyager. So, right, we have sort of all these incestuous cases going back and
forth among all of these companies. But what's crazy is that people are realizing it's 35.6 percent
of your balance as of July of last year,
which is significantly, that's Bitcoin was at 20,000,
and Ethereum was like 13 or 1,400.
So if you actually do the math,
you're getting like 24, 25% back
based on what your current balance would be.
So it's, I mean, it's absolutely insanity,
but these numbers are not surprising at all.
And FDX, by the time they're done and get resolution,
this number is gonna be like a billion bucks.
What do you mean a billion dollars?
How much is Voyager's number?
I don't know, but I'm saying FTX has a much more complex, I think, bankruptcy proceeding going on.
There's $120 million from February to April.
That doesn't even include November.
I don't know.
So, sorry, how much assets do they have?
How much assets do they currently have?
How many billion dollars?
FTX, we haven't really gotten clarity on that.
Guys, someone else might have the interest six or seven billion.
Yeah, let's just go with seven.
Let's go.
So you're saying one seventh of their assets will be spent on this legal case?
Maybe not.
I mean, maybe it'll be five or six, seven hundred million.
Who knows, right?
But it's an astounding percentage of it that ends up going.
It's a narrative.
And this is advisor fees.
This isn't lawyers.
Right?
This is just advisor fees.
This isn't even the lawyers.
If I'm reading this correctly as I'm looking at it.
Well, it does legal consulting and financial services.
So maybe this includes lawyers.
Yeah, David, I'm in the wrong business.
Me too.
The bankruptcy cases are insane, as Scott's saying.
I mean, but the value is, you know, when FTX collapsed in November,
the recovered number was about half of what was expected.
Right.
You know, if you consider it.
Different than Voyager.
Yeah, if you consider that...
Voyager could have liquidated and we would have gotten 75, 80 cents on the dollar.
Now we're talking about 25.
And the bankruptcy laws are the next set of laws that are going to have to change,
but that's a conversation for another day.
You know the story about the lawyer that ends up in heaven?
Dave, I think she told me the story, didn't you?
He was only 26, but he built enough hours to be 90.
Yeah.
Exactly. At the gate, they said, oh, you're much younger than we thought.
He said, because they carried up his billable hours. They thought he was 90.
That's my father's favorite joke. That's why he's retired and I'm still working for it.
Scott, did you say that if they liquidated as soon as the Voyager went bust, you would have had 70 cents on the dollar and now you're going to have 20 something?
68 cents in the dollar they would have.
Yeah, it would have been 68 to 70 on that day.
And actually, kind of people forget, but Sam Bankman-Fried before the actual official buyout they attempted.
Actually, in that last August or September, tried to make a play at Voyager to just liquidate the assets to everyone.
But, yeah, I mean, basically it would have been 68 or 70 cents.
Now it's.
on the initial distribution, it's 35%.
But remember, like I said, that's 35% of your balance at the dead bottom of the market, not at today's prices.
So if you were still holding that Bitcoin and Ethereum that you had on Voyager right now, it's worth 50% more than it was last July.
That's fucking insane.
Yeah, the Chapter 11 laws on the US are crazy if these numbers are accurate.
Yeah, I've personally paid the Voyager lawyers and advisors seven figures.
Look, as we wrap up, I've got a question for Ryan and Scott,
and anyone could jump in on that same question.
First, we're going to wrap up, so make sure if you are a project,
hit us up in the pinned tweets above.
Let me go with Rand first.
Ryan.
Go ahead, maira, just as a matter of interest, who's wrapping up today?
Oh shit, I will never crash the space on you or Scott again.
I would never do it again.
Feels like we should let the lawyer conclude.
No, no, I would not.
I guess the two, you guys get too, you guys are too, no, no, no, man.
The guests are too high profile to play these games.
I would not dare.
And especially if the lawyer ends up representing me or another company one day in the next decade or so.
I've just got a question, Rand, the news that we're seeing over the last few days, would you say it's more good news or more bad news since Coinbase and Binus?
Of course it's good news.
I mean, all this TradFi talk about crypto is, of course it's good news.
And I love the fact that the crypto bros also, oh, we don't we hate the fact that Black Rocks is coming in and Tradfights coming in.
Ultimately, we need someone to buy our bags.
And if I were to sell my bags to anyone, I'd love to sell my bags to TradFi.
I think that would be, that would just be the happiest day of my life.
We want TradFi in here.
You are having a lot of these crypto bros saying,
oh, well, you know, Bitcoin was supposed to be decentralized.
And if BlackRock come in with all their money and start buying up all the Bitcoin
and putting it in their trust and Bitcoin becomes very centralized,
Bullshit. We got into this before the institutions and the tradfire so that they could buy our bags.
That's why we got into it early so that somebody could buy our bags.
And if it's not tradfire buying our bags, then who are we going to sell our bags to?
Okay, so then if this is good news, and I agree with you, what do you think of the market's response to the news?
I think Bitcoin has responded really well.
I think Bitcoin is now at the same price that it was before the SEC attack finance.
The day that the SEC attacked finance, Bitcoin was trading at $27,000 and Bitcoin is back at $27,000, which means that, you know, we are where we started.
The problem is the altcoins. The old coins are really bleeding. I mean, old coins are 20 and 30% down since then.
That's the problem. And that's because you just don't know which is going to be the next old coin that's attacked by the SEC and deemed to be a security.
Scott, same question two years and then we'll wrap up.
And I promise I won't end it.
Now, I'm being it this time.
But same question.
I'm not doing no.
No, no, I promise you, man.
No, this is traumatized you.
I'll give the final word.
I wanted to end it on myself today to kind of make it more fair because I feel so bad.
But yeah, I'll say what Scott says.
The news over the last few days is horrible.
You know, it just shows Wall Street and the SEC doing what I expected, destroying crypto.
And I think the market is relatively flat.
I see it being flat for many years to come and
crypto's not dead, but crypto's in an eye stage.
So these are Scott's words.
You're going to cut me off, so go ahead.
No, no, I promise I won't.
Those would not be my words, actually.
I think that this is all quite bullish, and I think that we're seeing, like, we've got
JW up here right, and we've got others.
I think that we're finally seeing that these regulators have overreached, and there's
going to be a lot of pushback.
So I think that's a very, very positive thing.
And I think that we're moving in the right direction.
I don't believe in this pushback narrative.
I think this whole bullshit about pushing back and all these bullshit hearings in the United States that nothing ever comes out of just the facade.
No one is pushing back Gary Gaines.
He's been appointed by Joe Biden.
He's the puppet of Elizabeth Warren.
And all these shenanigans and all these facades that somebody is actually going to push back against the regulators are a bunch of hogwash.
Well, we'll see. That's the beauty of the market.
All right, guys. We'll appreciate all being here.
We'll see you again tomorrow.
I think it's like 1015. EST. Is that correct?
Is that correct? Is it 1015, Scott?
I'm not speaking.
That is correct.
All right, cool. We'll see you again tomorrow.
Otherwise, any project, make sure you check the pin tweets above.
And for the guests, really appreciate you joining.
Thanks a lot, everyone.
See, I didn't end it, Scott. You're happy?
I'm a nice guy after all.
