How Bitcoin Entering the Fed Changes Crypto Forever | Roundup

the most interesting outcome here, which oftentimes tends to happen, is Trump hearing this and trying to get more support from the Bitcoin crowd and saying, ah, I like, I like what Lummis said on Friday. And then boom, now you've got the headlines in every mainstream media publication that Trump supports plan to make Bitcoin a global reserve currency asset. And like in that outcome, Yeah, I mean, that's the—

you meme it into existence.

That's the, that's the Bitcoin's at $100K before you know it outcome.

So I thought you were going to say a million, but yeah, I mean, this episode is brought to you by Anoma, the universal intent machine, introducing a new era of applications where you define the outcomes you want. To stay up to date with Anoma, you can follow them at x.com/anoma or or sign up for the newsletter at Anoma.net. Special thanks to Anoma for sponsoring today's episode. Real is a permissionless L2 designed for tokenized real-world assets. They've just launched their rewards program, so get started at real.al/rewards and be sure to use the code in the show notes below. Special thanks to Real for sponsoring today's episode. This episode is brought to you by Avalanche. Avalanche is a leading network of blockchains giving some of the world's largest financial institutions, new use cases, and business models while leveraging completely customizable infrastructure. Check them out, it's core.app/discover. You can explore Avalanche's subnet ecosystem at core.app/discover.

I was playing around earlier today, really cool.

Hey everyone, Jason Yanowitz here. Have you ever wanted to play casino games with your friends right from your couch? I'm excited to tell you about MyPrize, the first multiplayer online casino where you can play chat, and win together. When you make your first deposit of $10 or more, you'll get $20 for free. Head on over to myprize.com/invite/empire to get started.

What's up everyone, welcome back to the Roundup. Santi, how we doing?

I'm doing great, doing great. I'm in, uh, I'm in the land of the free, the home of the brave, and it just feels like a really good week to be in the US.

Nice. Why, why, why are you in the US?

Uh, you'll see on Friday, but, uh, yeah, I'm just here to meet up with a bunch of people. Um, and, um, yeah, I had a pretty good opportunity this Friday to something related to the ETH ETF. Let's put it that way.

Nice. The pod will come out Friday at 8:00 AM. So do you want to give a sneak peek or no?

No, because it would have to be after 4. So if you don't get it by now, then you'll understand. Yes.

You want to— are we, are we running with that Bloomberg TV in the background? Oh, you want to punch that? Yeah.

Let me turn it off.

We can't give Bloomberg any airtime on a Blockworks podcast, Santi. You know that. I'm sorry.

Well, you know, we talk about Bloomberg here a lot because, you know, actually a quote that people really seem to like, I tweeted about it, was like, don't worry about people stealing your ideas. If they're any good, you'll have to shove them down their throat. And of course, got like a lot of hits and likes. Mike, your co-founder, really liked it. And he said, yeah, that's certainly true for Blockworks. I think you've talked about like, at the time you're raising, you're like, people like, why would you want to build a media company? There's already Bloomberg's gonna like come in, steamroll through this. And of course, they haven't. Yeah, I turned it off.

So thank you. Thank you. Now we like Bloomberg. We like, I like, well, you're looking very dapper. Nice haircut.

I got a haircut and the guy said, you look younger. I'm like, you know you're old when people start commenting that you start looking—

you do look younger. You do look like—

goddamn it, maybe I should shave my beard and see what that'll probably shave more years.

Um, so crypto is taking a—

crypto is taking a toll on my, you know, physique, bro.

If it's taking a toll on your physique, what does that make me? I'm, I'm hurting over here. I was like, I'm gonna get nice and tan. I'm out of the city for the month. It appears that has not happened. What else? Any, any interesting meetings in New York?

Yeah. So I had the— I was invited to a dinner by VanEck guys. So Pranav, we actually have to have him on the pod. So there was a small group. Someone from Solana was there. Someone from a large Canadian pension fund that is investing in crypto was there. Jean VanEck, which is Um, you know, the son of the founder of VanEck. It's pretty amazing story actually. They really kind of grew a lot with ETFs and then they have of course the HODL ETF, which is a Bitcoin ETF and the Ethereum ETF. So it was on the day that the ETH ETF launched, which is going to be something that we're going to talk about during the pod. And they were, I think they received like $45 million in inflows the first day. So it was a really good conversation. And then there was Pranav, which runs his hedge fund strategy. and he's very smart, someone that I talk to on the daily almost. Uh, and, uh, this, um, this other guy called Anthony Borges, he's, uh, like an entrepreneur, he's a professor at USC, really interesting background, uh, and it's awesome to see very successful entrepreneurs like that are also looking to invest in crypto. He's actually a gaming founder. He's had like all his life, he's just like been early in games, has developed games. So we had a really good conversation around like why he likes crypto and why he thinks that crypto is good for games, um, particularly at a time where most people are fading games, right? Because of, you know, the tokens themselves haven't performed as well, per se. So he would also be someone that would be great for the podcast, I think.

Nice. Yeah, um, that's great, man. Good trip. Excited to see the announcement. That's cool.

Yeah.

Um, We launched pickleball tournament at Permissionless.

That was our week.

So we're hard at work over here at Blockworks. What are you doing to move this industry forward, huh? Yeah, we are out here launching pickleball tournaments. So go, we'll put a link in the, in the show notes. You can fill out a form. Go, go get that. All right.

Should we talk about, I mean, there's a couple of things we want to talk about. I think markets.

Uh, yeah, why don't we just talk about, like, I mean, it's pretty chaotic week in the markets, so I'd love to hear how you're thinking about that. Are you— yeah, why don't we start there?

Well, you were gonna ask—

I was gonna ask, are you uncomfortable talking about the public market buys that you made and how you structured those? Sure, sure.

Yeah, I can do that. Uh, well, as a— maybe just to level set the conversation, if you've been hiding under a rock, uh, The equity markets just shed $1.1 trillion yesterday. This is like the NASDAQ, S&P, which is just a casual 40% of all crypto market cap, just poof. And there were some pretty big swings, like Tesla was down 11%, Coinbase was down 5%, CrowdStrike continues to be beaten down because obviously the bug So yeah, anyways, there's been a big rotation out of tech over the last week or so or two, and actually more than that. Joe McCann, actually, we've had him on the pod. He has a good newsletter. He tracks this well. And yeah, there's some interesting stuff going on in the equity markets. And then, of course, people are still projecting rate cuts as early as September. But I think the market— my read is that Tech has had a very big outperformance relative to the rest of the market. And then just there's a rotation into other stuff like value and like the Russell and like small-cap stuff. And I don't necessarily read much into it. I'm not an expert on it, but it's just interesting. I do pay attention— transitioning more into your question— when something that I like goes down like 11%, then I think it's It's those moments where I think as an investor, as a trader, you really get out of bed to do some stuff. And so I— yeah, yesterday, I bought some structured product that is kind of like— we're Tesla and Coin, sort of the worst off, and with a pretty big buffer. And so this is like— this is part of my non-crypto portfolio. Of course, I guess I have Coinbase. My private banker keeps reminding me that I don't need more crypto concentration in my portfolio, but I don't know, I just feel that these are names that I like and it's a shortlist of things that I, that I track. And so, yeah, I don't know if you want me to go more.

So you bought Tesla in coin, but you didn't just buy the stock.

I didn't buy the stock. These are like, they're called in the US Phoenix Notes. Outside the US, they're also called reverse autocall converts. I think I've talked about this structure in the pod before. Basically, I'm betting that you can choose your, your barrier, meaning like I'm betting that both Coinbase and Tesla don't go down more than like 30% or 35%. If they do go below that, then I just, after a year observation, then I basically buy the stock at that level down 35%. So the risk, of course, is if the stock goes down more than 35%, I start losing after that point. Um, but it is compensated by the fact that during this period, if the stock kind of stays within this range, like below the current price that I, that I, where I bought, like, you know, the close yesterday and down 35%, if it stays within that range, then I get paid a pretty compelling coupon. In this case, it was like 46% annual coupon. So for me, it's a way to like um, have equity-like exposure to names that I like and feel comfortable holding long term. Because worst case for me, um, you know, I, I, um, I end up buying the stock and it's two names that I feel comfortable holding in my portfolio long term, uh, and in the meantime I get paid a pretty substantial coupon that behaves more like equity, right? Because, you know, the stock market, S&P, NASDAQ historically go up 15%, what give or take. Um, now these names have a lot of volatility. Tesla, I think, historically has had like a 60% vol, so there's a very big chance that it might dip below $35. But I get paid a pretty substantial coupon that I can then use to, you know, basically, uh, there's a point by which, like, um, you know, I start losing. But for me, it's a good way. I like, uh, I prioritize cash flow. I've, I've talked here and tweeted about, like, for me it's important to have diversified sources of cash flow, and this is like a good way to earn a coupon, right? The way I generally think about it is like, if you're earning that type of coupon, then you can reinvest it into much higher risk stuff, or keep it as a buffer to fund your lifestyle, do other stuff, right?

What's the reason for buying Tesla?

Um, well, actually, a good conversation with Pranav. Uh, he's been like, um He's an uber Tesla bull, him and Cathie, I think, are like the ARK guys. Like, uh, I think the market— and Elon kind of tweeted about this, or the earnings call, I think earnings came out yesterday, and Elon was like, you either believe that we're solving like the self-driving, um, like self-driving has come a very long way. And I first experienced like self-driving in Palo Alto, actually.

My—

I drove from Silicon Valley to San Francisco like 4 years ago. My buddy had like a Model 3, I think, or X or whatever. And he didn't touch the wheel. It was like a surreal experience. I'm like, you're not going to touch it? He's like, no. And we just had a normal conversation in the hour commute. It was incredible. And it's come such a long way. And I think basically the argument that ARK and someone like Pranav makes is that, uh, it's not priced in, and the benefits of like, like autonomous driving are massive. And Um, I think that's like a sort of like a long tail call option on that. Um, anyways, I like it. Yeah, I like it. But like, for me, it's like, I don't know, I pay attention when, when something's down a lot. Like, I, I don't know, there's something about feeling like you're getting stuff at a discount. But it might be one of those where it's like you're buying something that is already super overpriced, right?

No, I like it. I like it. Yeah, I, I have a Tesla.

Do you dabble? Do you know, talk about it, but do you, you dabble in stock market, I guess?

No, I don't. I have zero. I, I sold most of— about a year and a half ago, I sold most of my equities and moved into coin.

I remember this when you said this in your private— your banker was like, you're making a terrible mistake.

Yeah. I was like, I want to buy some stocks. He's like, oh my God, you never buy stock. I was like, I want to buy Coinbase. It's like, you idiot.

Yeah, I don't know, man. I am of the mind that if like concentration doesn't scare me because I still like, I don't know, for me it's like I don't have any fear over the volatility.

So like when things go down 80%, it doesn't spook me. But for other people for, like, for example, my wife, like, really does not like things drawing down 80%. So, like, the emotional toil of that is not worth the potential upside. So I think you just, you have to optimize for, like, the money that you will, could be making and the, and the return, but also, like, the emotional side of it. It's the same reason I don't trade is because, like, I just want to put my mental bandwidth into Blockworks.

So yeah, that makes sense.

I think you have to optimize for more things than just, like, the return. So let's, let's talk ETH ETFs. I'm curious if the VanEck guys had any interesting insights, but like, I think my takeaway is like these things massively outperformed. So to run through some of the numbers here and I'll— I should have put this together before, before the episode. Maybe I can just share my screen and show you guys some tweets from Eric and James and the Bitwise folks. Let's see, I'll pull this up. This is from Eric, the New Eight. So for people who have not been paying too close of attention, the, the ETH ETFs and I'll list listed are the Grayscale Ethereum, which is ETHE, which a lot of people are talking about. That's Grayscale. Then iShares, which is BlackRock, Fidelity, Bitwise, Grayscale's mini trust, VanEck, Franklin, Invesco, the Invesco Galaxy ETF, and then 21Shares Core. So very similar list. There was a— Juan Lee from Bitwise put out a nice comparison of the Bitcoin versus ETH day one comparison. So total ETH flows were $108 million. That's 16% of the Bitcoin flows, but actually 79% if you exclude the outflows from ETH-e. So if you— what, what people might be talking about in week 1 is the massive outflows from Grayscale's ETH-e, and then I think the outperformance of inflows into the other ones. So things like Bitwise brought in a lot more than people expected. Things like the Grayscale You know, Grayscale's ETH, uh, ETH-E had some pretty big outflows. So I would say there's pretty big outperformance on day 1. What people always look at is, okay, well, there's the day 1 hype. What about day 2? Uh, and day 2 had, I think, even bigger performance than day 1, or just, just about as big of performances as day 1. So, uh, bring in, I think there was over a billion and either $900, $950, a billion in volume in day 2 as well. So pretty massive start to the Ethereum ETFs.

Yeah, yeah, it's pretty crazy, um, the volume that it's gotten. I don't know what to read into that. My interpretation is I've always felt that like, um, the, the ETH ETF is like the first time maybe that Wall Street understands that this is like a tech bet. Like buying the ETH ETF is like a— my suspicion is it's like it will open Wall Street's eyes to, hey, this is a pure, pure-play tech bet, whereas Bitcoin is something different. I think, um, I may be wrong, but I just feel that like it might be the first time where Wall Street says, hey, I'm gonna allocate this as part of like my tech bucket.

That's what I think too. I— well, first and foremost, I think the Ethereum ETF was so big because it's a— it's the— it's the one of the biggest regulatory clarity steps we've had, right? ETH is not a security. If there is an ETH, an Ethereum ETF, right, it's— ETH is not a security. The SEC finally made it official. So that's just like a big stamp of approval that opens things up. And I think you have to call that out. But yeah, I think, I think you're right. Like, this is— this week was when Ethereum kind of crossed the chasm into the investment mainstream. And I think they're two totally different investment theses. Bitcoin is like a hedge against chaos. You heard, um, Larry Fink talking— we talked about this last week. I read that quote, like, it's kind of like if you're depressed about something in the world or you're scared about something in the world, it used— the best way to get exposure to that is by going short. Now the best way to get exposure is by going long Bitcoin. ETH, I think, is just the tech platform that could foster the growth of crypto, right? It's kind of like I don't know. We, we talked, we had a call with a very large institution early this week. And he said, look, I've no idea what's— I don't understand DeFi. I don't understand NFTs or the metaverse or DAOs or any of these things. But what I do understand is that when the internet grew, it grew on top of these cloud providers like AWS and Google Cloud and Azure. And if you just bought those cloud providers, you would have had exposure to all the websites that got built on top. And he's like, I'm buying Ethereum because I don't know about NFTs or gaming or stablecoins or any of that stuff. I just want exposure to the underlying growth of this, like, digital economy. And I think that really sums up the—

it's also an easy narrative to understand. It's also like an easy narrative to get behind, right? It's like this, as Chris Dixon talks about in his book Read Write Own, uh, and like, analysts' reports have started to appreciate Ethereum. I mean, even as far back as the last cycle, JP Morgan was putting out a note that's saying Ethereum is far more interesting than Bitcoin. It was like, it's like a tech kind of bet. And it's like the next evolution of the internet. And that was before— I mean, that was over 4 years ago. I remember I picked this report up, this JP Morgan analyst was talking about Ethereum, and they appreciated kind of the tech element of it. And what is really exciting now is that ETH is— it sort of now forces, you know, research analysts to start writing about Ethereum. And that is, I think, going to be really interesting to observe, even how they think about valuing something like Ethereum on a cash flow basis based on fees, MEV, Um, like, because again, valuing Bitcoin as a commodity is very different. It's just a supply and demand. But Ethereum is, is very much, uh, could be valued on cash flows, right? And I'm actually quite excited to see the— how the different analysts, um, cover, um, Ethereum, um, and, and start recommending or not the exposure to the ETF.

100%. 100%.

It's also, uh, you might confirm or deny this, but I think even it's also this— when we think about the flows, like, it's— I, I didn't talk to VanEck guys in terms of like how they saw the type of buyer for the ETF, but I would assume it's similar to Bitcoin, which is it's still mostly self-directed accounts, not institutional accounts, right? Like, not private banks of the world, which is— my understanding is a lot of, a lot of large financial institutions, private banks, can't recommend this to clients or won't unless the client specifically calls and says, hey, I want you to buy me this, right?

Yeah. So at the Coinbase Summit, the head of— I think it was head of ETF products or head of chief investment officer or whatever from, from BlackRock, and Cathie Wood both said the same thing, which is about 80% of the buying for the Bitcoin ETF is coming from self-directed individuals. Right. And it's not even the end of— not even really the institutions right now. Institutions make up about 20% of the buying.

Right.

Another takeaway from the ETF, seeing this, which is Bitwise just continues to massively outperform. It's like very remarkable. I was looking at some of the data. I mean, they, they were beating out Fidelity. Like, they're beating out Fidelity in the first 90 minutes. They're beating out Fidelity in the first day. Like, they just had massive volume. It was Grayscale, obviously, because Grayscale's had their product in the market for a long time, then BlackRock, then Bitwise. So Fidelity's beating out— uh, excuse me, yeah, Bitwise is beating out Fidelity, VanEck, Franklin Templeton, Invesco. And I think that just you got to, you got to stop and just respect it for a second and think about how much work they've put in. But also like, yeah, it's kind of a new era of like these crypto-native companies coming to Wall Street. You would, you would think that Fidelity—

and they have way more distribution.

Fidelity has been in the Bitcoin game for a long time too, right? They've been mining since 2015. So that's very true.

It's just really important to understand also that what is really cool about Bitwise is that they've publicly committed to allocating 10% of the revenue, I believe, or the fees that they generate from the ETF to fund open source development of Ethereum.

Oh, I didn't realize that.

That's cool. Yeah, yeah, yeah. I don't— I gotta ask and wonder, like, why? I mean, when you look, the fees for these products are very different, uh, but what's like the end game for like Grayscale, like, can, can you explain with your right, like, what is like self-sabotage? Like, why, why their fees are like, they haven't changed their fees where it's like they're like 5 or 10 times more than normally. ETH, like, ETF fees are like anywhere from like 25 basis points to 75 basis points, maybe 1%. But like Grayscale is like 2.5. It's crazy.

Or 2. I really don't understand the game. And they're like, just, I, I thought that was a, I originally thought that was like Sonnenschein's play, and then it didn't work out, and then Sonnenschein got the boot, and then they put in place someone new, but then they just continue running with the strategy. So I really don't get it.

Just feels, uh, yeah, feels like self-sabotage.

I think Barry's just trying to just milk the cow, just like, yeah, I don't know, maybe Barry's trying to hang up the cleats and just, uh, I have no idea.

Yeah, it's, it's very Very strange. There's a lot going in. Go ahead.

What about, I mean, Coinbase? Like, Coinbase, I know I'm— we're both talking about how we own Coinbase and we're both biased, but like, they are the custodian on 8 of the 9 ETH ETFs here. On one hand, I'm like, well, that's awesome because like, go Coinbase, congrats to them. On the other hand, I'm like, that feels like some concentration risk that I don't—

Lord, oh mercy, please have your setup.

I don't love to see, honestly.

So I don't— and I don't actually know what people are doing. Like, I don't know if there's a, a 3-party custo— like, hopefully these guys have set up like 2 or 3-party custodian systems.

But yeah, yeah, when I think of this is, um, you need insurance. I'm sure they have some insurance policy in place, but Maybe not, but I'm actually— this is a company that I'm investing in that I'm quite excited about. They're probably the— they are the farthest along that I've observed on like regulatory insurance, like doing it the right way. And it's by a large, large financial institution. So I'm— again, these things like get solved with proper insurance and risk management solutions. So yeah.

So final, final numbers, I think from day 2. It was, I think on day 2, the Bitcoin ETFs traded $1.5 billion and the ETH ETFs traded $1 billion. So if you ask me, if you ask me going into this week, I would have said ETH probably would have traded about 20% of Bitcoin. And we're looking at, yeah, about 60, 70%. So yeah, I would call that a big success.

Yeah, yeah. I would really like to bring on someone that can maybe it's Fanagise or maybe it's Eric from Bloomberg to just where are these flows coming from? Is it like even like, hey, is there rotation away from the Bitcoin ETF into the ETH ETF or is it new capital? Is it mostly still self-directed accounts? What's the average ticket size? What's the holdings? Like all these kind of things I think is going to be really interesting to observe over time, right?

Yeah. Yeah.

All right.

We were talking about the Germany selling. Well, what's Bitcoin doing today? Hmm.

The market's a little down, right?

So, I mean, after— Yeah, it's at $64,000. So it's interesting. There's this price action that Alex Kruger called out. So Wednesday, the markets got clobbered. The Qs were down 3.5%. Bitcoin was down 2.2%. ETH was down 7.5% and SOL was up 1.5%. So what do you make of some of this? Like, there's not only divergence in equities to crypto. So some, some days equities will be down now and crypto will be up and the inverse is true. But now you're starting to see like Bitcoin's down 2%, ETH's down 7%, SOL's up 1%. Like, is this people trying to front run? I mean, it's like ETH ETF week. Is this people starting to try to front run a Solana ETF? What do you make of that?

I mean, uh, I'll tell you what my long-term thinking is, and I— is that you're just seeing SOL converge on ETH. And I think it's rotation internally in crypto where I think more people are starting to realize that. I wouldn't want to read too much into a day's performance or underperformance because it's just noise, I think. But on a— I think if you were to trace even back to our predictions in December earlier this year, like, uh, I was, I was talking, you know, I mean, I was talking about, uh, I just don't think that SOL. Exactly, this, this is a really good one. And then Kyle also kind of went something to the effect of like, you know, they were of the mind that Solana was going to flip Ethereum on across a number of metrics. Um, I also shared that view earlier this year, back in December, and, and that was like where my thesis is predicated on, which is you're already seeing Solana surpass Ethereum across a variety of metrics. Except price, market cap.

Yeah. So for those who aren't watching on YouTube, there's a really interesting chart that Ryan Connor, who's a research analyst at Blockworks, shared July 1st. So about 3.5 weeks ago, he said the next meaningful flippening in crypto is likely DEX volume market share will probably take a few months. And it showed this chart of kind of the ETH DEX market share collapsing and the Solana market share going up. And it took— yeah, it took 3 weeks. He said it'll probably take a few months. It actually ended up taking a few weeks. I said the most interesting and consequential milestone in crypto markets today: Solana has surpassed Ethereum in trailing 30-day DEX volume for the first time ever. It is now the most used chain by that measure. And if you can actually look at some of these charts, so you can look at the 30-day DEX volume. Solana just passed ETH for the first time ever. 30-day DEX volume, ETH and SOL. You can look at that here. These are just different ways of showing it in percentage or the amount, the volume, volume market share and top chains by market share. So you've got Solana and ETH. Actually, this is a really interesting chart right here. So top chains by market share, 30-day DEX volume. Solana is at 29.5%. ETH is at 29.3%. Arbitrum is third at 12.8%, BNB at 10%, Base, Base up to 8%. So Base is now top 5 in DEX volumes. And then there's a big drop-off. It goes Blast at 1.5%, OP at 1.5%, AVAX at 1%, Matic at 1%, Sui at 1%. So very interesting data from Ryan.

There was some pushback on this post, which I think is phenomenal. Kudos to Ryan and the research. Team that should you be counting the L2s, right? Arbitrum and, you know, Blast and Base. And there are some pretty— I actually don't think that you should be counting it, or because, I mean, the fees that are being posted back to the L1 are like not very substantial.

Oh, I definitely don't. I definitely don't think that you should because I mean, you're going to start seeing these L2s break off into their own chains, I think, soon. So like you saw what Blast was doing, like, I think you will probably see more and more of that. What should be counted?

Most of the— because if you go back to the episode we recorded with Kyle, which I shared the views, and most of the, of the value, like when you think about how to value an L1, I think most of the cash flow is coming from MEV capture and not fees. And so a lot of the MEV is captured at the L2 and is not shared back to the L1. Uh, so the posting data is to back to the L1, and the settlement is sort of like inconsequential and small over time, and, and more so over time. Uh, so most of the value capture is going to happen at the L2. So I almost think of them as like, for that reason, I don't think you count it in this analysis.

Yeah. Now what maybe should be counted here is there's all these— so OP's got the OP stack, Arbitrum's got Arbitrum Stylus. They're starting to be these L3s or other L2s built on it. So like Optimism has Base, Zora, Mode, and these are all other chains. Like that data should probably be put back into the OP.

And I think we talked about this in the episode with Steven from Arbitrum. It's just, yeah, I think maybe you, you factor in all the fees, the actual fees, um, that are flowing back to the L1 or the L2 from the L3 or whatever. But nonetheless, I mean, I think the— I, I don't think you should be get too caught up in the nuance. Uh, I think it— the, the point stands, which is, uh, think about the criticisms around, oh, Solana is just a meme coin chain. I'm like, I hear you, a lot of the activities like been meme coins, but, uh, there's also a fair amount of healthy projects like Helios and, uh, other deep-end projects You've had, you know, what is it, Pump.fund, you have, which is I guess meme coin activity. But what I'm trying to say is I think meme coins and the fact that meme coins have thrived largely in Solana is telling you that this is the most retail-friendly chain. And other breakout apps, while social has worked outside, right? You have Fantasy on Blast and FriendTech and what have you. I just think that the fact that meme coins have mostly thrived in Solana to a greater extent than any other chain, it just tells you where most of the activity is going to continue to happen. And that's the most important thing in my mind.

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Did you see Chamath talking about BitTensor?

Yes.

So I'll play this. Tell me if you— tell me if you can hear this. Can you hear that?

Yeah.

Okay, so Chamath got a lot of shit because he's like, you know, people were like, oh, he's just dumping on retail. I'm going to take the other side of this, actually. I think that this is what we talked about at the beginning of the year. This is one of my predictions, which is that everyone wants allocation to AI. The best way to do that is via NVIDIA. NVIDIA. I still don't know how to pronounce it. Price looks— price looks too high. Is it NVIDIA or NVIDIA?

NVIDIA.

NVIDIA. Okay. Thank you. Price looks too high, the chart looks ridiculous. They're like, oh, what other AI things do I buy? And then it's like Microsoft and Facebook. They're like, well, I don't want— like, that feels so like mid-curve. Okay, let me try to get more cute with this. And then they— there's no other things they can buy except for these like super risky, uh, you definitely call tech deals in Silicon Valley that they maybe don't have access to. So they start looking at Akash and Render. And BitTensor and things like that. And I actually, I mean, that was one of the predictions for the year. I think it's starting to come true.

And so like, I mean, these things straight out, I mean, BitTensor is trading at $8 billion fully diluted, up to $10. I think it might be down to $6 or something, but it's not—

it's got a nice little like 10% CHAMATH pump.

So yeah, well, people should be cautious, right? But, uh, yeah, there's, uh, AI is a sector that I've allocated to Not— I don't know any Liquid tokens, um, but I've invested in Exolabs, which by the way, fascinating stuff. It's like running your nodes on— you're running like models on, on your computers. Like, people should go follow Muhammad or some of the Exo guys. Like, they're run— basically the idea is to run your models at the edge, right? Computing. So with one, your MacBook or two MacBooks, you have really good performance. That surround like Llama. Um, really cool stuff, like guys from Oxford, very smart. They're really doing, uh, some really cool stuff. So that's Exolabs. I've invested in Renzo, uh, I've invested in, uh, MyShell, um, and Hyperbolic. I think those are— maybe one or two I'm missing, but those are— and they're all doing really interesting stuff, uh, But I actually want to do a part 2 AI episode, bring back Casey, who's someone that I lean on a lot. She's launching her fund Topology, which is very much focused on AI, and then bring on another founder because last time we had, oh, Daniel from Modulus, right? But we, yeah, I think we're due for an update on the AI stuff.

Yeah. Yeah. I like it. You see the Senator Lummis Bitcoin Reserve plan?

Oh, yeah.

All right. So I can talk about this. So there was rumors starting about last week that Trump was going to announce something at the Bitcoin conference. I think he's speaking on Saturday.

Yes.

And then Lummis is speaking today on Friday or on— we're recording this Thursday. She's speaking on Friday, which is when you'll be listening to this. Um, and so there were rumors starting about last week that Trump was going to announce this, that Bitcoin was going to be a reserve asset for the US. Seemed kind of crazy, but you never really know with Trump. And then Senator Lummis came out and announced— or I don't actually know if she announced it, I think Fox reported and they kind of scooped it— that on Friday she's going to share something on stage at the Bitcoin conference with, um, uh, Tulsi Gabbard that they are going to craft new legislation that could try to establish Bitcoin as a mainstream financial asset by requiring the Federal Reserve to hold Bitcoin as a strategic reserve asset. So I don't think this will get passed because Lummis is like one of the most far-right people in the Senate that you can possibly get out of Wyoming. And like a lot of her stuff doesn't really get passed. This is a little more for show. But I do think it's interesting because she's speaking on Friday and then Trump is speaking on Saturday. And what would be very— well, the most interesting outcome here, which oftentimes tends to happen, is Trump hearing this and trying to get more support from the Bitcoin crowd and saying, ah, I like what Lummis said on Friday.

And then someone asked him the question.

Now you've got the headlines.

In every mainstream media publication that Trump supports plan to make Bitcoin a global reserve currency asset. And like in that outcome, I mean, that's—

you meme it into existence.

That's the— that's the Bitcoin's at $100K before you know it outcome.

So I thought you were going to say $1 million, but yeah, I mean, sure, calm down, hold back your enthusiasm.

That's the— that's the Cathie Wood's $1.5 million. Yeah, yeah. Um, but it is like, it is aligned with what Mark Cuban said a couple weeks ago with that.

Yeah, he said, look, someone, uh, mentioned this because right after the episode we recorded last week, I, I tweeted about like, in what version would this make sense and the risks potentially around announcing this. You're kind of tipping your hand that you're concerned about the dollar. Um, but, but I think, uh Someone mentioned, I mean, the US government already holds like, what is it, a couple thousand Bitcoin? I mean, it's, uh, quite a lot.

Yeah, just that they've confiscated—

no, they own much more than that. They own like, uh, they're the largest holder of Bitcoin. I believe it's— I forget the exact figure. Non-trivial. Not, um, I mean, in the grand scheme of their reserve basket, yes, but I think it's like 1 to 1.5% of all Bitcoin in circulation they own. Um, so anyways, um, someone had mentioned— so that's held, I think, in the Department of Justice or whatever. And so they could transfer that amount into the Strategic Reserve, um, as a starting point at least. And someone was mentioning that just that, doing that alone— I think there was a clip on CNBC that was talking about this, I forget who exactly mentioned this, but I think it's pretty interesting observation, which is just the transfer of it alone I think would give markets a lot of confidence in that they're not going to sell it and they're going to hold it, um, unlike Germany. Um, and that would be— that act alone would be pretty, pretty meaningful to— for the market, right, in terms of their intent of what to do without Bitcoin. Because, you know, they could on they wanted to just sell it, right, at any point, like Germany. But if you're holding it in the, the Treasury, right, in the Department of Treasury, like in the balance sheet, then I think at least it would signal to the market their intent to hold it on a long-term basis.

Yeah, yeah. Selkus resigned from Asari this week, right?

Yeah. Do you know what he's going to do next?

Uh, I do, I do, but I cannot.

Is it, uh, politics related?

Um, I don't think I should blink twice.

Ladies and gentlemen, he's blinking 3 times. I don't know what to make of this.

He's doing what he should be doing. That's what— that's, that's what I think.

Sounds like he's found his, uh, true calling, I guess.

Yeah.

So good for him. Well, you know, who's taking over Messari, by the way?

Uh, Eric is Eric Turner. So like there are two, two. So, uh, Selkis has a co-founder, Dan, I think his name is, but he kind of took a step back a couple of years ago. And then there were two early hires, Ben O'Neill and Eric Turner. Ben left a couple of years ago, went to different places, Chaos Labs and some, some other places. Eric has stayed around. I think Eric's either the chief revenue officer or the COO today. I see.

And he's great.

Eric is awesome. I really, really like him. Good, good operator. Good. Just like level-headed guy and has done great work at Messari. And so he's taking over as the interim CEO. And then I think they're going to try to find another CEO. It sounds like that's great. Yeah. Well, I don't know. Kamala is not speaking at the Bitcoin conference. There are some rumors that she was going to and that she's not.

Actually, I would like to pick your brain here on the political expert that you are. What do you make of this? So like I was listening to two different like banks organize calls around this election update this week, and both of them were like, the election is going to be very close. Like, and then actually Pranav was the one that brought it to my attention, like the last election in the key swing states, it was won by a margin of less than 100,000 votes.

Yeah.

And my question to you is, do you think that they're like— do you think it's actually accurate that this will be a close election? And if so, how meaningful will a crypto voter, single-issue voter, be to potentially determine the outcome in these key swing states?

I think it will. With Biden, when Biden was running, I don't think it would have been close. I think Trump would have had a historic sweep on the level of Dwight Eisenhower or Reagan's second term or Nixon's— Nixon, like, you know, one of these like 20-point, one of the, you know, they win by like 20 points or something like that. Now that Kamala is running, even though I think crypto people don't want to hear this, my take is that it's going to be much closer than people— than people actually think. She had the like absolute record like blew past every record for fundraising in a 24 or 48-hour period. And really it comes down to like 43% of people in this country were already going to vote Democrat no matter what. It's like 43% of people were going to vote Democratic no matter who was up there. And so it basically just comes down to the other, to the, to the, yeah, the swing states, which is what Arizona— I won't try to do this, but Pennsylvania.

So Michigan, Ohio.

Yeah, yeah. So there's 6, there's 6 swing states basically. And so, yeah, I think you said Pranav said this, it really does come down to like 100,000 voters. I think what these people don't understand is that crypto is a much more powerful group of people than they understand today. And I think the Republicans and Trump understand that, right? There's 50 or 60 or whatever number million Americans hold, hold crypto. Let's say it's, uh, so let's say it's, let's say it's 50 million, right? If you want to try to back, do like a consulting type project, 50 million. So that's probably, so that's, I would guess there's 1 to 2 million of those. Let's say there's, let's say there's 5 of the 50 million are in swing states. So that's 5 million in swing states. And then let's say 10% of the population is, uh, is in, is, is independent. Maybe 10% is, is like undecided right now. So that's of the 5 million in the swing state who's on, then, then you're backing into like 500,000 undecided people in swing states where they care about crypto a lot. And that's, I think, why you're seeing Trump like lean so heavily into this. If I were Kamala and like I got that dog in me trying to win this election, like I'm doing everything I can get to. Like, she's got to get Novogratz, Mark Cuban, and Anthony Scaramucci just shilling the hell out of her to the crypto crowd. And I would be trying to appeal to them.

Right.

So that's, that's what I would be doing.

I mean, I guess you could invert and say, is being very pro-crypto and being vocal about it going to hurt you in capturing that, those undecided voters? That are going to matter on Election Day.

I don't think it'll hurt. I think it only benefits you.

I think so. I think that's the calculus that the team, the Trump campaign team, has actually made. And it's like, it's not— whereas in the prior election, people should remember, he was not very pro— he was not pro-crypto. He was vocal against it. Now he's totally changed his tune. And I think that's the simple calculus. It's like he believes that it's not going to hurt him this time around. Because crypto continues to be more in the zeitgeist, and it's actually going to help him win, um, in these swing states. And so yes, you best believe that there are probably more, or at least 50,000-100,000 people in these swing states that will make a decision because of crypto, or be marginally influenced to skew towards your direction if you're pro-crypto.

I mean, and you can just see it like changing on crypto Twitter. Like, there's some people who are very, very, very like pro-Trump and They're like, yeah, you know, if Kamala, if Kamala like became pro-crypto, I'd probably vote for her. Like, that's— I think that's an indication of how people feel in general. Now, if they're— whether or not like you agree with that or not, and I know there's a one argument which is like, look, like, don't, don't buy what the Dems are putting out right now. Like, I, I— so it's, it's everyone's personal belief, but like, I do think— and I, I have— I know colleagues and friends who will vote for Trump, but if Kamala became very pro-crypto in the next couple months, like, they, they would vote for Kamala. And so that's like, that's it happening on his mic.

I would want to see a more substantial plan around what her— what actually pro-crypto means concretely.

Same, same, same, same. But look, like, if you, if you fast forward this out, it's like, okay, so she'll probably pick— if I were her, who would I pick as VP? I'd probably pick Mark Kelly in Arizona because like where the Dems are probably weakest is immigration stuff. And Mark Kelly is like in, in Arizona, he's a Dem who's kind of like tough on the border. So I'd probably pick— and he's an astronaut, like, you know, so I'd probably pick him or I'd pick Josh Shapiro in Pennsylvania, but he's Jewish and people don't like Jewish people. So I feel like I can say that as a— my last name's Yanowitz, so I feel like I'm allowed to say that. So yeah, I would I don't know, you do that, you pick like Mark Kelly, and then you like go super heavy pro-crypto. And like, I think the race will be tighter than people think.

We'll see. Prediction markets are telling a different story, but obviously we're going to continue to monitor that. And, you know, the, the peak— the odds of Trump winning peaked, um, right after the assassination attempt. Now they're all probably only going to continue to go down. But yeah, I still think he wins the election.

Yeah. We should do— we're getting Polygon involved in permissionless in a— we're getting PolyMarket involved actually, and Polygon involved in permissionless. We're talking to Shane right now about speaking. I'd love to have Shane on the podcast because I really do want to do— there's like PolyMarket has really— I tweeted this thing out. I sent a text to a friend who sends me Polymarket charts all the time. Yeah, non-crypto guy, works in private equity. And I basically, I just text him.

I said, did you know that Polymarket is built on Ethereum?

Which I was wrong, it's built on Polygon, but screw me. He said, I said, did you know Polymarket is built on Ethereum? He said, lol, had absolutely no clue. Is there any relative value to it being blockchain-based?

Honestly, I just see it as value for utility it offers.

Could care less about the underlying tech. I just like the data it provides in quantifying odds of meaningful shit happening in this world. So I thought that was cool. But it'll be interesting to see how Shane and Polymarket are thinking about like keeping the attention after the election. After the election, because that's been the problem. I think you and I have been looking at a couple interesting—

I've looked at 6, even one today this morning. I mean, everyone wants to build now a prediction market. For context, I led the Seed round. I was a parafund.

Uh, in Polymarket.

Yeah, yeah, yeah.

What did Shane do before, do you know?

He was early in Ethereum. He was very much in NFTs actually, and he had like been early in Ethereum, very young, at a very young age actually. And, uh, he's just a very scrappy, like, in the weeds kind of guy. And he was very active in the Ethereum ecosystem and paying attention early on, early in NFTs. He was talking to me about, you know, he was collecting on, um, What is it? Because that round was led also by, I think, Nick from One Confirmation, or so. He participated in that round as well. So anyways, he was also early in NFTs. So yeah, Shane was a very scrappy, agile kind of builder, like in the weeds. And so, yeah, but the challenge, I think, of these prediction markets is, yeah, what happens after the election? What happens to the the tail end of markets. And do people want to bet on these things? And can you convince people to— you either put the money yourself to get me— you need to get critical size for these markets to be useful. And the other component is like, it's like there's different— not to get too much into it, but like the early redemption feature is something that is— I've been thinking about quite a bit because it's like the opportunity costs, like back in January, putting money into even the US election markets, you know, that's going to be resolved in November, and there's an opportunity cost of capital in that during that period. And crypto, the opportunity cost of capital is very high, right? And so yeah, I think, um, I think we'll— I'll put it this way, I think we're gonna see many different iterations of prediction markets. On the back of Polymarket's success that particularly address the bootstrapping of these markets, right? And maybe allowing features to get users to front the capital to come in and out of these markets more easily as opposed to being binary outcomes.

Yeah.

So, but yeah, everyone's, every ecosystem, every, you know, there's 6 projects that I'm looking at right now. I'm like, I don't know.

Yeah. All right, man, good pod.

Yeah, yeah, yeah, really good. Um, just as a side note, I continue to interview for, um, analyst. Oh yeah, have you feel really good about that? Yes, well, I have a shortlist. I'm continuing to talk to a few folks, but it's just been fascinating. Really encouraged by the interest across, you know, people from all over the world. All kinds of backgrounds, all kinds of ages, like really exciting. Um, so yeah, I'll, uh, I think the program is gonna— I'm setting everything in motion. I think we'll be off the ground by, you know, later this year. But yeah, I'm really excited about it.

Have you noticed a trend in who you like? Like, is it like degens, or is it like ex-crypto VC people, or is it like— what's the trend of who you like?

It's no different than investing in a startup. I think it's just people that people that, um, are very— have been in crypto for some time, have taken hits, have made mistakes, have— and are very willing to talk about, um, that. And so I usually have 20, 30— like, I usually talk to them back and forth, and then if I like it, I'll schedule a call. And then in that call, I'm just very open-ended, like, looking to see how they think. And I think you just get a good feeling about someone that is very The biggest— maybe you also— I mean, I'll ask you like what you look at for when you're hiring at Blockworks, but for me, it's like a sense of true ownership and accountability.

Yeah.

And obviously drive, like you love it, like you love talking about it, you love crypto, like you're here, you're using stuff, but it starts with like accountability and ownership. Because then I think that's why I love liquid markets a lot. And I never thought I'd actually like them as much because I was coming from a venture background. But there's something about hedge funds or just investing in something that is constantly either telling you you're right or wrong because it's a bit harder, right? In venture, you put money in and you're 10 years down the road, or 4 in crypto, or 3, you're going to be told if you're right or not. But you actually don't have to live through the day-to-day of the vol and like the markets You're absolutely wrong. You buy something, it's down 10, 20, 30%. You're like, uh, okay, I'm an idiot, or no. And I think something about that in investing in liquid markets is the, the intellectual stimulation and the honesty that it requires, and managing your emotions and all that. I think so. I, I think, uh, yeah, those are the things I'm looking out for. And I've met some really interesting people in this in this process. So already it's been a really nice journey.

Nice. That's great. When do you think you'll make the hire?

I'm pretty sure I already know who they're gonna be.

Um, love that.

Yeah, but it was like, and it was actually like the first, I interviewed the first 3 people, 2 out of 3, but I'm allowing myself to meet like other candidates. Um, uh, but yeah, by September, I think.

Do they work at a fund currently or at a crypto company, or are they just an individual?

Without tipping my hand too much, but one, yes, the other one does not.

You're like, they might work at Blockworks Research. I'm not going to—

no, no, no, no, no, no, no. And they're from like different, totally different places, um, and age too, like 10 years apart.

That's great.

Well, yeah, I'm really excited.

Nice.

See, it's a good experiment.

That is a good experiment. All right, folks, good pod. Thanks for listening. Uh, permissionless tickets go up next week in pricing. They're $499 now. I think we're moving them to $599. We've had a crazy month of buying. Uh, July was our biggest month by, uh, by like 4x or something like that. So yeah, go get your tickets if you have— if you haven't got them yet. Tickets go up July 29th, I think so.

Yeah. And if you want to, I guess it's a play pickleball, you know.

Oh, and we have a code. It's Empire10.

You'll save 10%. Usually that's how it works.

Every, every time after the podcast, our marketing team is like, you forgot to mention permissionless. Like, fuck. Link, link, click, click.

All right everyone, well I hope you're having a great summer or winter wherever you are in the hemisphere, uh, but, um, yeah, interesting time. So thanks for listening and whatever— we didn't get to read comments actually, but we'll have to do that, we'll have to do that next time. So feel free to drop us— one thing I'll mention, last episode you, Jana, was to ask people if they wanted to hear about founders and early narratives. We had a great episode that we recorded earlier this week with the founder Jonathan from SkyTrade. That episode should go live in the next couple of days. I really enjoyed that conversation just from an education perspective of how air rights work, the nuance, and, and why it actually— I think it's going to be one of our better episodes to— everyone understands real estate, But I think it's one of those, we really went and focused on why does this actually need to be built on crypto? Why crypto? And I think that's going to be— it's coming at the right time where people are really, A, skeptical of there's no utility in the space and we need more apps and less infra. And two, real estate is something that a lot of people, particularly as they pay more attention with the ETF, can understand and relate to. So I'm really excited to see how that performs. And if people like it, would love to continue to, you know, do more of those type of episodes.

100%. 100%. So, all right, everyone. Great Friday.

Thanks for listening.

We'll see you next week.

Have a good weekend.

Thanks for watching today's episode. Just wanted to quickly mention that the wait for crypto's killer app wave is nearly over thanks to today's sponsor, Anoma, the universal intent machine. To stay up to date with Anoma, you can follow them at x.com/anoma. Or sign up for the newsletter at Anoma.net. Thanks again to Anoma for sponsoring today's episode.