The 2024 Presidential Election Breakdown With Alex Thorn

Alex Thorn, Head of Research at Galaxy Digital, joins us to unpack the impact of last night’s sweeping Republican victory on the crypto landscape. We dive into record-breaking price action, potential shifts in crypto legislation, and the role Polymarket played in election coverage. Tune in for insights on what lies ahead for crypto in this new political climate. Alex on X - https://x.com/intangiblecoins ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🐧 CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiSimple ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🦄UNISWAP | BROWSER EXTENSION https://bankless.cc/uniswap 🤖 dYdX | UNLIMITED LAUNCHING SOON https://bankless.cc/dYdXUnlimited ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/90?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 1:06David Hoffman?

  Bankless Nation, last night the United States had an election and last night, an election was concluded. Today, to unpack all of that with us is Alex Thornd, the head of research at Galaxy Digital. He's going to help us understand the impact of the election results last night and what it means for the crypto industry moving forward. Alex, thanks so much for, I know it was a long night last night and it's an early morning this morning. Thank you so much for coming on the show and unpacking all of this with us.

• 1:31Speaker 01

  Yeah, you're welcome, David. Hey, Ryan. Wow. I mean, wow. What a night. I think better than certainly the mainstream media would have had anybody expect.

• 1:40David Hoffman?

  I think that's right. I think that's right. That's definitely a big topic is the gap between the mainstream media and our more crypto native news sources. Polly Market definitely having a front and center role here. But first, I want to just kick things off, Alex, with the red sweep. Last night, the Republicans won the presidential race, the Senate, the House, and the cherry on top, it looks like the popular vote as well. Just first reaction, what does this mean for crypto? What does this mean for our industry?

• 2:07Speaker 01

  It's game changing. We are about to enter a golden era of crypto and Bitcoin in America. There that sound that you're hearing, maybe you're you're hearing some static. That's thousands of crypto entrepreneurs buying tickets to move back to the United States. This is an absolutely it's an absolute game changer. You're going to have endless, nonstop catalyst every week for 18 months. The headlines are going to knock your socks off, just like the former president said in Nashville. We're going to be so tired of winning, sir. We're going to be begging him, please, sir. No more winning, no electricity, sir. I mean, no, it's truly game changing. The former president has his own DeFi protocol.

• 2:44Speaker 01

  I mean, he's plenty, you know, he's he's sell his NFTs. This is, obviously, he's made tons of pledges. He's he's adopted an entire pro crypto agenda, but it's not just that. He's got Howard Lutnick said he owns shed loads of Bitcoin, said it's hundreds of Who's that? Howard? Who's Howard? His the chair of his transition team, it's the CEO of Cantor Fitzgerald, the primary dealer bank that Tether does all its banking. They deal with Tether too, Cantor Fitzgerald, okay. And they're also, I mean, one of the biggest and most iconic American banks. And he's leading Trump's transition team. You've got Vivek Ramaswamy on the team who loves Bitcoin and crypto. JD Vance owns a bunch of Bitcoin, at least we know, and and loves it, right? You got Robert F. Kennedy, Jr.

• 3:27Speaker 01

  I mean, this is a team of people around him, not not, you know, not to mention his entire family, right? Don Jr. And and Eric supposedly Baron also all love crypto, right? So I think there is a very, very strong chance that the next four years are just truly game changing for the upside for crypto.

• 3:45David Hoffman?

  I think the big surprise here, I think if you asked the average crypto participant, who is going to win, they would say, you know, it's probably it's probably going to be Trump. The polls were giving us 50 50. Polly Market was giving a decent edge to Trump. But I think the new thing, the the surprise is the sweeping landslide. So can you like, what is what is, why is that gap significant? So like, you know, the difference between a solid Trump victory and a completely sweeping landslide? What's the significance of that?

• 4:15Speaker 01

  Yeah, this is a shot across the bow, across a number of bows, right? I mean, let's start just maybe with the mainstream media. There was a significant divergence between even sort of major proprietary forecast models and the prediction markets and odds, right?

• 4:28Ryan Sean Adams?

  Yes.

• 4:28Speaker 01

  David, like, yeah, Calshi, Polymarket, Predictit, Interactive Brokers, Robinhood, all these bookies, they all had it in Trump's favor the whole time, at least since like, but in some cases, sixty, forty or higher, right? And but like Nate Silver's model converged to fifty fifty last, you know, on Monday night, like five thirty eight was much closer. Now, they mostly slightly favored Trump. So, but these, you know, that's there's this joke about statisticians that like, there's all these like, you know, like lines and charts on the thing. And at the end, they're like, I don't know, fifty fifty coin flip, right?

• 5:07Ryan Sean Adams?

  Oh, they can never be wrong.

• 5:08Speaker 01

  Yeah. I mean, he, look, he was probably slightly favored to win, but I don't think that, you know, certainly even in his camp, from Republican friends of mine last week were concerned, they were worried, maybe it was slipping, right? You know, a near victory, let's say, I mean, there are outcomes on both sides where it could have been two seventy to two sixty eight in the Electoral College. That would have been a disaster for the country in general. Like, I think it's fair, given what happened in twenty twenty. Trump's grievances about the outcome of that election that we, no matter who won, you hoped it would be big so that there wouldn't be like weeks, months of litigation, right?

• 5:44Ryan Sean Adams?

  That's worst case scenario, right?

• 5:45Speaker 01

  Yeah, it really is. Like, and so, I mean, look, I think he's gonna win the popular vote. He's not just gonna win the Electoral College. It looks like he's gonna win the popular vote. That hasn't happened in like, you know, five or eight elections for Republicans.

• 5:58Ryan Sean Adams?

  That's a clear mandate.

• 6:00Speaker 01

  More of a mandate, yeah.

• 6:01Ryan Sean Adams?

  Yeah. Okay, so, so the presidential is obviously confirmed, very confirmed, Senate, House as well? Is the House now?

• 6:09Speaker 01

  The House is, it's leaning Republican.

• 6:12Ryan Sean Adams?

  Yeah.

• 6:13Speaker 01

  It is Republican now, but only by two, two seats currently, right? Like, it's barely Republican today. We won't probably know even maybe for a couple of weeks. There's just a lot of races and a lot of little places and many will be very close and some will go down the recounts. That'll just take a little while. The Senate is confirmed. That was not unexpected. Even a, even a big Harris, Harris would have had to really landslide, I think, to carry, to hold the Senate and The map was just really bad for Democrats this cycle. The big, the big, big win for crypto here is Bernie Moreno unseating Sherrod Brown in Ohio.

• 6:48Ryan Sean Adams?

  Let's talk about that.

• 6:48David Hoffman?

  Yeah, explain the significance of that. Who's Sherrod Brown and why is his unseating so important for the crypto industry?

• 6:54Speaker 01

  Yeah, Sherrod Brown is the current Chair of the Senate Banking Committee and a Democrat. He is a big ally of Senator Elizabeth Warren, who's, you know, senior on the Senate Banking Committee. He, I would say he has not been good for crypto. He hasn't been the most vocal, like outspoken opponent, but fair shake spent the most money of any race in this race. Crypto money, I think when I looked yesterday, they had spent $20 million in this race.

• 7:23Ryan Sean Adams?

  Wow.

• 7:23Speaker 01

  Sherrod Brown in favor of Bernie Moreno.

• 7:26Ryan Sean Adams?

  Sherrod Brown gets an F strongly against crypto. I mean, he even voted against things like Sab 121 repeal.

• 7:32Speaker 01

  Yeah, I mean, even when, you know, Democratic senators voted for that, right? So he, he is a, and, and, and the Senate Banking Committee oversees the Securities and Exchange Commission, right? And so that, that committee is integral to financial regulation in America. And he is a major roadblock to getting anything done, right? If you had like any, you know, even just a moderate on crypto in charge of that as a Democrat, we might've seen Fit 21 come up on the floor in the Senate or Stablecoins or something. For, for crypto to spend so much money and unseat a guy who it was so important in the Senate, like this is a shot across the bow against every anti crypto member of Congress right now. This shows that the industry can flex muscle and deliver.

• 8:17Ryan Sean Adams?

  This is Brian Armstrong. He said this in the aftermath, "Welcome to the new members of America's most pro crypto Congress ever. 219 plus pro crypto candidates and counting have now been elected to the House and Senate. Tonight, the crypto voter has spoken decisively across party lines and in key races across the country. Americans disproportionately care about crypto and want clear rules of the road for digital assets." I mean, I think this speaks very highly to cryptos that like, well, let's talk from an industry. Perspective and kind of a campaign perspective to its ability to like organize this election. I mean, the stand with crypto website was, you know, like kind of genius and all of the the funding and PAC money in directed races.

• 9:00Ryan Sean Adams?

  Like also had a massive impact that I don't think the presence of crypto in any other race has like felt anything like this. But you really felt the presence of of crypto and not just like, uh, you know, organizers and donors and groups like Coinbase and A16Z. But like kind of in the grassroots with with stand with crypto. I mean, there was a really a push to overturn some of these. Anti crypto army type candidates and it seems to have worked like it seems to have paid dividends. I don't think we go back from that. I mean, like big winners coming in the election, obviously, were crypto. I think the crypto industry and its ability to shape politics. Also, I would say polymarket.

• 9:43Ryan Sean Adams?

  By the way, on polymarket, that's how I um, you like saw that Trump was winning. And I I was watching kind of mainstream news as I usually do, like calling elections, going state by state. And that's

• 9:55Speaker 01

  Going so slow.

• 9:57Ryan Sean Adams?

  So slow.

• 9:58Speaker 01

  So slow.

• 9:58Ryan Sean Adams?

  And while I was on my phone, I was just seeing like this, which I'd seen in many poly. This is what a market looks like when it's resolving. Okay. So if you can't see the screen, what I'm what I'm showing is kind of like Donald Trump suddenly spiking up like volatility. And like Kamala Harris odds suddenly spiking down. I saw this in so many markets and polymarket that are resolving and I, you know, when you saw it creep up beyond 75% to 80%. I was like, well, it's over. And that happened around like 8:30, 9 o'clock, like polymarket was a huge winner in this as well. And that's a crypto. It's a crypto project at the end of the day. So a lot of wins here.

• 10:33Speaker 01

  Yeah, big wins in in Polly was, you know, we were watching as you sort of go east to west, right? They come in in the East Coast states first and then and then as you go across the country and polls close. Florida was something we were watching really closely, right?

• 10:48Speaker 01

  It's been Republican for several elections, but Miami Dade County, where Miami, the city is, and then Pinellas County, right outside of Tampa, two that we were watching really closely. And you could see it react on Polly market. So Hillary won Miami Dade by more than 30 points. Okay. Biden only won it by seven. Trump won it by 13, 12 or 13. And so it massive shift. I mean, we're talking almost a 20 point shift in his favor. Same thing. Pinellas has voted correctly in every presidential election for like the last 10, except for 2000. And as those results and Trump, Trump won it last night. And as those results and even just those counties and in Florida, the margin of victory in Florida, more than 10 points, it's going to end up being 10 or 11.

• 11:33Speaker 01

  You saw Polly start reacting and the same thing. It looked like Virginia was way closer for Trump than it, than it was expected to be. And you just saw that Polly was creeping up 72, you know, 28, then it's like.

• 11:45Ryan Sean Adams?

  It felt like reading the 20. As I was like, looking at mainstream news, kind of reporting on this and looking at like Polly market, markets, it felt like, oh, I know this like six hours in advance.

• 11:55Speaker 01

  Yeah, exactly. It really was. It's a big deal too, right? I mean, if Polly, like if the election goes the other way, everyone's going to say, wow, prediction markets don't work, right? Oh, it's too thinly traded. Polly's offshore, you know, predicted is this crazy one. And you know, this Australian one where they have a consent decree with the CFTC that allows them to exist as like an academic project, that they actually have a limit on the total number of trades and amount bet that can be done. So for like the last two weeks, it's been at like 55, 52, like unable to resolve properly as a market.

• 12:28Ryan Sean Adams?

  Cause it's constrained.

• 12:30Speaker 01

  Yeah, they're only letting like, like one out, one in at the end. So these, these could have looked, I mean, if Harris had won, Polly market would be, have a lot of, you know, reputational problems. It's not like their fault. It's a free market. But I mean, this, you know, I mean, again, the margin of lead he's had for frankly, months, like I think is vindicated here. We know that Polly odds are not forecast models for how much he's going to win by, right? Their likelihood of victory. And it turns out, I mean, he won bigger than he won in 16, or it looks like at least as much, right? I mean, it's going to be, it's going to be a big resounding win. And so those like 60, 40 odds, like.

• 13:10Speaker 01

  That seems reasonable right now. And so I don't know, this is especially again, if you get changed in regulation, obviously, Cal she won that suit against the CFTC like a month or two ago that has basically made prediction markets on elections illegal now in the US. Um, the these things may have a very bright future.

• 13:27David Hoffman?

  I want to unpack a nuance between the difference between polymarket and mainstream media. The the common uh, talking point about the reaction to watching the election last night was polymarket called it first. You could have guessed who is going to win by watching polymarket hours before. Had you been watching like mainstream media. This is like a big plus to to polymarket to the prediction market model. Uh, but um, and then people are just like lamenting about uh, um, mainstream media saying like, man, they they're so biased. There are these swing states that they're saying are too close to call, even though they're like eighty five percent of the ballots have been counted. And so people were saying like, there's, there's a bias in mainstream media.

• 14:08David Hoffman?

  Uh, because they're just refusing to call these things. I want to actually be devil's advocate for this. Uh, mainstream media, when they call a state, you do not un-call a call. And so they have to be rock solid sure. They need to be like ninety eight percent sure that that state is going to go in that direction. So I'm kind of like pushing back against the mainstream media not calling states soon enough. Uh, is biased idea. I'm actually just saying, I'm going to present the idea. It's not about the bias mainstream media. It's about the better mechanism of prediction markets that can actually inform us at a sooner and less biased um, uh, point in time

• 14:46David Hoffman?

  than mainstream media. That's kind of like my take about pushing against the kind of the discourse about like the biased nature about states that are too close to call. Alex, do you have a reaction to that?

• 14:55Speaker 01

  Yeah, I totally agree. I mean, think about the the way they they call the states, um, like AP, NBC News, these, I forget, there's a third one that Polly needed to in order to resolve. Um, they they look at the actual votes. They say, how, what is the margin of of of lead by one candidate and how many votes are outstanding? Until the votes outstanding can't possibly flip the the election to the underdog, they don't call it. Right? So it's they're not predicting the outcome. They're saying, is it even possible? When it's not possible for the leading candidate to then lose, that's when they call it.

• 15:28David Hoffman?

  Let's get into some price action. Bitcoin touched $75,000 last night, which is an all-time high. Congrats to Bitcoin. Well done, well done. Dogecoin up 15%, likely due to Elon's significance. And I can't help to notice that some classic SEC-targeted coins like Uni are also, Uni is the number two big mover in the top 100 coins in the last 24 hours.

• 15:52Ryan Sean Adams?

  Oh, we finally get the fee switch, huh?

• 15:55David Hoffman?

  We're getting the fee switch on. The boot is coming off a lot of these like invested, like investment tokens rather than meme coins. Alex, just any comments on like the price action?

• 16:06Speaker 01

  I mean, again, Bitcoin was moving well before, like sort of in line with Polly. I mean, I looked at these, these markets looking, moving similarly. I think it's undeniably bullish for, I mean, like I was saying at the top, I don't want to get into more detail, but it is a Trump presidency alone, let alone a Senate that's also Republican that can appoint his, confirm his appointees. It's undeniably bullish for the industry. I think, so I don't think it's unexpected. I think it's, it's quite poetic that Bitcoin made an all-time high on election night. I mean, that's, you do like to see that. We, it was very exciting here at Galaxy, you know, pretty much the entire trading and research teams was here until like, you know, one in the morning. So we were watching this live and,

• 16:50Speaker 01

  you know, I don't, I don't know. I hope, you know, I'm not, I'm not sure that I'm ready just yet. I think mostly because of Solana's competition here, but you've got to think ETH BTC is, is at or near a bottom. I think if the regulatory regime is about to move in, you know, broad crypto's favor, because again, you mentioned Uniswap, the app layer, Ether has been sort of through, it's, it's made it through finally with the ETFs, but the app layer in crypto is, is under regulatory scrutiny, right? And Ethereum is the largest, you know, platform for crypto apps there is, particularly the biggest one and the, and the one most subject to financial regulation, which is DeFi. So I think you're going to see more gains in, in, in DeFi tokens and in broad crypto altcoin land. I think

• 17:35Speaker 01

  it's going to be. You know, it's, we're really just getting started. I mean, I, I went right to bed, right as the thing was being called by them. So I like, I, I, and then I, I only got up at like 8 a.m. right and, and rushed here to get on, on this. So I, even I'm still digesting this. I think the market is still digesting it too. You're about to have TradFi markets open in three minutes as well. So.

• 17:54David Hoffman?

  Oh, yeah.

• 17:55Ryan Sean Adams?

  I, I feel it. So, so we'll see what coin price does. We'll see what Robin Hood does.

• 17:59David Hoffman?

  Coin is up so big pre-market. Coin is up, uh, over 10% in pre-market.

• 18:02Ryan Sean Adams?

  I mean, right. It's like the, these companies literally have Wells notices against them that are going to like, literally you said at the top evaporate. They're gonna go away. They're gone. Okay. So, man, there's so many, so many, uh, like ways we could take this, right?

• 18:15Speaker 01

  S and P 500 is pre-market up to 2.1% like.

• 18:19Ryan Sean Adams?

  Yeah.

• 18:19Speaker 01

  All the major indices are up like, um, the crypto-linked equities are up.

• 18:25Ryan Sean Adams?

  I think, I think, I actually, I'm, I'm.

• 18:27Speaker 01

  Gold is down.

• 18:28Ryan Sean Adams?

  I'm a bit like you. I'm kind of like, I'm surprised, I'm letting this sink in, but I'm surprised that markets haven't reacted even more favorably. Like particularly crypto markets, because I just want to paint this framing. Okay. So like, for the first decade in the U.S. regulators largely kind of like ignored crypto, right? It was like the first they ignore you type of thing. Then we got into, they were laughing at crypto. It's just like Ponzi schemes, whatever, right? And then for the last four years or so, we've been in the then, then they fight you type phase. Okay. So they have been fighting us. This is what Operation Choke Point is. This is what the embodiment of Gary Gensler, sending seven Wells notices just this year. One, I'll note, six days before the election, he sends a Wells, Wells notice to immutable, a gaming platform.

• 19:13Ryan Sean Adams?

  If, by the way, if this doesn't signify the hubris of the Democrats in like the Kamala Harris campaign, like letting this happen. The White House letting this happen, another Wells notice to crypto, six days before the election. Like, that's basically like crypto voters don't matter to us. Okay. The, you know, the results show that they maybe should have thought that through a little bit more. Anyway, all of this, all of this reverses. We have never been in crypto in, at a time when we had U, U.S. regulatory tailwinds. They've, they've always either been nothing, like completely ignoring us or laughing at us or headwinds. Okay. And that's what we've had for the last four years, headwinds. All of these tokens here, they can only be like.

• 19:57Ryan Sean Adams?

  Useless governance tokens because we can't have a fee switch on top of them even though they're generating so much cash, right? So all of our tokens are neutered. We have Operation Choke Point. We have like stablecoin legislation that can't move forward. We have Gary Gensler blocking all of our crypto entrepreneurs from like doing anything. We, I can't even, it's the US and I can't even get like an airdrop because I'm geo-blocked.

• 20:20Speaker 01

  Yeah, free, free token.

• 20:22Ryan Sean Adams?

  Free money. And it's all because of like the, the regulatory headwinds that we've been facing and all of that will completely reverse. I don't think I'm overstating this.

• 20:34Speaker 01

  I don't think you are.

• 20:35Ryan Sean Adams?

  Okay, okay. Like, can we go through methodically of like what exactly is going to reverse and be undone? All of the, the, these like bad spells that have been cast for the poor, the last four years are gonna like go away. So I know Gary Gensler is getting fired.

• 20:50Speaker 01

  I, yeah, well, I, I think, um, let's start with the SEC, right? Because I, I think Gensler, we know that, uh, Trump, I mean, his biggest line of applause at, in Nashville was to fire Gary Gensler. He was taken aback.

• 21:02Ryan Sean Adams?

  We had to say it twice.

• 21:03Speaker 01

  Yeah, he was like, yeah, he was like, wow, I didn't know he was so unpopular, like.

• 21:06Ryan Sean Adams?

  How did, by, by the way, how did the Democrats not see that clip and just be like, oh, this is an unelected official and he's like sinking our party like that. He seems unpopular. Why didn't they not throw him under the bus? Anyway, go ahead.

• 21:17Speaker 01

  Good, great question. And you can imagine the, the political capital that President Biden had to spend vetoing that SAB 121 overturn is ridiculous. Like, they came out, uh, when the House passed the overturn and then, uh, the National Economic Council released by the White House's Statement of Administration Policy, which is their position where they said they would veto it if it came to his desk. They described the SAB 121 overturn as basically an apocalyptic financial terms, which is like ridiculous. It's a, it's an arcane like tax issue and banks are the most heavily regulated industry in America. So like, you know, they can do stuff and the regulators, they have prudential regulation, okay? That means that the regulator can come in and tell the bank what to do. It's not like, oh, I'm not sure. They can be like, take this off your balance sheet and sell

• 22:00Speaker 01

  it right now, whatever, something bad, right? So it was never that big a deal. And the fact that then in face of that veto threat. A bunch of Democrats voted to overturn it anyway, and Biden had to veto it. Do you think Biden wanted to waste political capital on this ridiculous minor thing from the SEC? Worse return on investment. I mean, that is literally investing in a political shitcoin right there.

• 22:24Speaker 01

  So Gensler, though, firing Gensler, I think most constitutional scholars agree that the president cannot actually fire a duly termed and appointed independent commission member. Most, alternatively, most agree that the president can appoint a different acting commissioner, almost, acting chair almost immediately. So whether Gensler is fired, I think remains to be seen whether the Trump administration even tries to fire Gensler. We don't know. But he is very likely, upon taking office, to appoint one of the existing Republican commissioners, Hester Purcell. Hester Purcell?

• 23:00David Hoffman?

  Hester.

• 23:00Speaker 01

  Hester Purcell? I know, or Marco Iada, who's also great for. I agree, it would be great.

• 23:05David Hoffman?

  Mark's fine, but like.

• 23:06Speaker 01

  I would love Hester. I love Hester as well. I've had Hester on Galaxy Brains, my podcast. She's brilliant. I mean, she's a brilliant mind. One of those two is likely. Yeah, very principled. Very thoughtful, very polite, and very bright. I mean, one of those two is likely to become the acting chair almost immediately. So they, and. That's so good. I haven't gone through every single action the SEC has taken, and which of them were actually voted on by the commission versus can be immediately changed, but they can replace the entire staff of the Enforcement Division or the entire leadership of enforcement almost immediately. That's why I think among the first things you're going to get is exemptive relief. So you're going to see no action letters sent. You're going to see the Coinbase and Kraken

• 23:50Speaker 01

  lawsuits withdrawn. You're going to see process. How do they do that?

• 23:53David Hoffman?

  Wait, every single Wells notice will turn into a correspondent no action letter?

• 23:57Speaker 01

  Sorry, I'm sorry. Yeah, very, very possible. I think if you, if you have received a Wells notice, in general, that's an indication from the staff of the Enforcement Division of the SEC that they intend to sue you. If they haven't filed, I'd be shocked if you see any of those filed. If you've gotten a Wells notice but not been sued. I'd be shocked if you end up getting sued. If you have been sued, it's gonna be a little bit trickier because courts really don't like it when big lawsuits are filed with big, like apocalyptic angry terms and then just you're like, oops, just kidding, let me withdraw that. Like, so honestly, there might even be some instances where instead of actually withdrawing, the court forces a settlement between the SEC and whatever.

• 24:36Ryan Sean Adams?

  And the SEC just takes a settlement.

• 24:38Speaker 01

  Yeah, I mean, these are largely at the discretion of the enforcement division and the chair, I would say.

• 24:44Ryan Sean Adams?

  But the big ones, Alex, like the ones against Coinbase and Kraken and Uniswap, the ones that we've heard about, like how far, I know they've had Wells notices.

• 24:54Speaker 01

  Yeah, it's, yeah, and Coinbase is the most far along, right? It's been what, almost a year and a half, maybe, or a year? But again, like, they're not like too far. I mean, they can definitely be amended or withdrawn or settlement reached.

• 25:08Ryan Sean Adams?

  Defanged, yeah.

• 25:09Speaker 01

  Yeah, I mean, think about this, dude, I didn't even realize this really until we saw them send the Wells notice to Cumberland, but I don't know why I didn't realize this, maybe I'm just too optimistic, but we know they've basically gone after every single US exchange, right? You basically have Coinbase, Kraken, Gemini, and Crypto.com, I think, really operating at scale in the US and not many others. I don't think maybe any others. All of those, Coinbase and Kraken have lawsuits filed against them. Crypto.com received a Wells notice and preemptively sued. I don't know what's up with Gemini, but they had a whole bunch of SEC stuff with Gemini Earn and other stuff. So that's the entirety, basically, of the US, like, retail exchange market. Then you start to see Cumberland, which is OTC institutional only market, same basic lawsuit,

• 25:52Speaker 01

  failure to register as a national securities exchange, trading unregistered securities. I think if Gensler and this current SEC had remained in for like another year or two years, it's very likely that within that time period, you wouldn't be able to buy or sell anything in the US other than like Bitcoin or Ether.

• 26:08Ryan Sean Adams?

  Seriously, okay, okay, this is what, I feel like non-crypto people who are just like, ah, crypto is kind of a fringe issue, they have no idea what was going on in the crypto industry.

• 26:19Ryan Sean Adams?

  Gary Gunzler's SEC in particular, and he combined that with Choke Point, which I'm sure we'll talk about, was like targeting all legitimate crypto companies in the US. This to me, I've never, I've never been on the inside of an industry in the way that I am in crypto, but this has got to be unprecedented. Like the attacks, they just kept coming and it was everybody in the industry. Like, I don't think people realize how extreme it was and why this was existential for crypto. And so some people point at like the amount of money that crypto has kind of put into this cycle. And they're like, oh, you're trying, you're trying to buy all the politicians. It's like, we're trying to stay alive. Okay, like without this, without playing the game, we didn't create the game. We didn't create this game. We didn't like vote yes on Citizens United.

• 27:03Ryan Sean Adams?

  We didn't vote for money in politics.

• 27:05Speaker 01

  Right.

• 27:05Ryan Sean Adams?

  But like, we're in the game. And if you're not at the table, you're on the menu. And this election cycle, crypto decided to be actually at the table. And it, you know, that's the reason it like it got these wins coming out of it.

• 27:19Speaker 01

  That's totally right. I agree. It's not fair to malign crypto for advocating for itself. It's also, you know, Ryan, to your question about like, has this ever happened before? I've only, I worked at Fidelity and Galaxy in my entire career. I was at Fidelity for 12 years, so I haven't exactly been around a bunch of other industries either. But you know, one, if we think about Choke Point, right? Choke Point 1.0 was against like what we call, you know, like gray area businesses. Not even gray, but like things like the payday lending industry, very predatory, right? In the scheme of things, right? But also like guns, totally legal, constitutionally protected, right? And so those are legal industries, you know, that were directly targeted, right? Specifically targeted with the, by the way, Choke Point 1.0, Choke Point, that was their name for it.

• 28:03Speaker 01

  As far as we know, I think there are some FOIA requests to the government to see if it was ever called Choke Point 2.0.

• 28:10Speaker 01

  Regardless of whether they called it that, it absolutely has been that. And for an industry as benign, I mean, it's not payday lending. Don't get me wrong. I think we all know there's been plenty of scams. It's open source financial software, right? So like, of course. Uh, you know, bad actors can use it. We're not asking the crypto industry is not asking for a free pass. We're asking for rules that allow good innovative actors to thrive and we want the regulators to go after scammers and thieves. Nobody is saying we don't, right? But of course, you mentioned like the most high profile actions taken by the SEC have been against the best actors, right? FTX, they did nothing, right? Celsius, they did nothing, right? But, but, but, um, you know, Coinbase, this is a publicly traded company.

• 28:55Speaker 01

  This is the most transparent crypto company in the United States, basically. By, by rule, because they're public, right? Theoretically, the SEC should want more to be public. That, that's transparency. So, yeah, it's been really unfortunate in general, I would say. And, you know, a choke point, here's another good example of what's can happen quickly, right? SEC, it's a little tricky. It's an independent commission. I said that, you know, you'll see some immediate relief. I, I would say also the industry wants longer term statutory relief. We want legislation, right? So that, you know, if in four years, you know, our, our biggest, if Elizabeth Warren were to become president, you know, like, you know,

• 29:32Speaker 01

  then, then, uh, you know, it won't be just immediately rolled back, right? We don't just want exemptive relief, like no action letters and halting actions against us. We want permanent legal status, right? That will take, it could take the entirety of a four year term for that to even happen. But what will happen quickly is all the stuff under treasury, right? There's no question whether the president can appoint a new comptroller of the currency at the OCC, which is the primary prudential regulator for national banks. So if you remember that, um, a couple of weeks ago, uh, the SEC sort of, I said, was exemptive relief. Technically, it's not, but they created this effectively a loophole that let BNY Mellon, uh, avoid SAB 121.

• 30:13Speaker 01

  They said, well, if you're prudential regulator, your primary prudential regulator says that you can do crypto. And you know, and you have a bunch of other risk mitigation stuff. Of course, it's the oldest bank in America, BNY. They do have that stuff. Then you can proceed and you don't have to carry it on your balance sheet, your client's crypto assets. And so we were all like, well, I mean, there's only BNY is its primary prudential regulator is the New York Department of Financial Services. And so we know that though NYDFS has, I mean, they're strict, obviously, but like they have the bit license, they have legalized crypto in New York if you have the right license. So that's why we knew it was BNY even before they said it was them, was because that's the only big bank that we think wanted to do it, that has a primary prudential regulator that would allow

• 30:57Speaker 01

  it. Well, a lot of other banks that are national banks, their primary prudential regulator is the OCC. And we knew that the current OCC under acting comptroller Mike Su would not allow it. Well, a new Trump appointed one will almost certainly allow it. So, so banks being allowed to do stuff with crypto, let alone that allowing crypto companies to open bank accounts was really what choke point was about. That's kind of that, that changes fast. I mean, you can appoint a new acting almost right away with a senate that's in Republican hands. He can probably get them confirmed for the full term. Right? And so you start to see now, then you have the FDIC, an independent commission also, but similar to the SEC, he can probably, Trump can probably make a new acting, right? Because the, the main players in choke point is the OCC, the FDIC and the Fed,

• 31:42Speaker 01

  right? Can't, can't do much against the Fed, but if the national primary prudential regulator is, is saying it's okay, or to stop discriminating. I think one of the first things you might see out of OCC is a, is a rule expressive, expressively prohibiting, you know, bias against companies that want bank accounts if they're legal, right? I think we had that in the first Trump presidency. They came in, one of the first things that they did at the OCC was explicitly make that against the rules, choke point style. So I think that that that just ends pretty fast. I mean, it's not it's not much of a question.

• 32:18David Hoffman?

  Yeah, which of course isn't just good for crypto, but I'll just call it good for freedom. Good for good for the right to transact in America, kind of restoring some of the foundations that this country stood upon. Alex, there's a bunch of more topics that I want to get to. Free Ross is on the table. I want to talk about the tech sector because historically the tech sector has been liberal. It's been very conservative this election. Also Elon Musk is a topic I want to bring up. There's a lot more we have to unpack, but first, before we get to all those subjects, we have to take a break and talk to some of these fantastic sponsors who make this show possible. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Kraken, one of the longest-standing and most secure crypto platforms in the world.

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• 35:24Ryan Sean Adams?

  Crypto, what's going to happen next? I want to summarize some of this with a tweet from Victor Bunin. He says, "Crypto won. Next, we're going to free Ross, fire Gary, end Operation Choke Point 2.0, pass commonsense stablecoin legislation, enable in-kind redemptions, turn on staking in Ethereum ETFs, shutter the SEC lawfare investigations, and provide regulatory clarity for crypto." I feel like that about summarizes it. And Alex, before the break, you were talking about Operation Choke Point getting unwound, like the changes coming to the SEC. I think a lot of the regulatory headwinds that we've been facing have been due to the administrative state.

• 36:06Ryan Sean Adams?

  They've been really coming out of the White House and the cabinet and those that the Biden administration have kind of like selected in positions of power and surrounded themselves with. Do you have any sense for what like the Trump cabinet might look like and the Trump administration might look like? Because we're all expecting sort of a complete pivot from the types of folks that were in the White House and would have been part of a Kamala Harris administration. Like, do we have any names for who's going to be Treasury Secretary next and that type of thing?

• 36:38Speaker 01

  I mean, there's a bunch of speculation that really has only really just begun this morning. Like I was watching CNBC before I got here and talking about Rich Besson, they're talking about Howard Lutnick at the Treasury.

• 36:49Ryan Sean Adams?

  Are there poly markets for this yet?

• 36:51Speaker 01

  Ted Hagerty, there should be Ted Hagerty, Senator from Tennessee has been a long time, who's by the way, very pro Bitcoin and crypto. Has been a long time mentioned as a party, you know, the Robin Hood's chief legal officer, Dan Gallagher, has been mentioned at SEC. Robin Hood does a lot in crypto. I'm sure that would be good for crypto. We don't really know. I would say at a high level yet. It's still pretty early, but.

• 37:16Ryan Sean Adams?

  We do know that they're going to be pro crypto because like actually last Trump administration, here's like Steve Mnuchin. The Secretary of the Treasury was not pro crypto. In fact, people forget, but during like the parting days of the Trump administration, he was actually trying to like pass some sort of administrative state lawfare against, you know, self custodial wallets. That was like a nightmare scenario.

• 37:40Speaker 01

  Yeah, he wanted to, they wanted to require reporting on unhosted wallet transactions if they were over like $3,000. So you were going to have to like effectively register your treasure or your ledger with the FinCEN or with Coinbase. They were going to have to give over information. It's kind of like a national crypto registry, right?

• 37:58Ryan Sean Adams?

  We're going to get none of that this time around, though. You're like 100% confident of this.

• 38:02Speaker 01

  Yeah, I think the only things that frankly probably aren't going to be much different under Trump or Biden or Harris is relating to like the like the sanctions and Bank Secrecy Act. I think, you know, because Trump and his team are so pro crypto, that probably be slightly better. But if you think about all of that stuff like out of FinCEN and the TFI, the Terrorism and Financial Intelligence Office inside Treasury and FinCEN and OFAC, like that stuff is on a very like hard to reverse snowball like post 9 11 bureaucracy where it's like. And you could imagine some of Trump's foreign policy goals like bump up against like, you know, never sanctioning a crypto company and stuff like that. I still think even on like

• 38:46Speaker 01

  big topics like tornado cash or Samurai wallet, you still probably see easing in crypto's favor, because those are patently unfair as well. I mean, in the scheme of things, right? But in general, like, other than that, it's going to be like a major improvement. I think maybe that's a slight improvement.

• 39:03Ryan Sean Adams?

  Yeah, OFAC and kind of FinCEN and the Financial Surveillance State is like tied up into kind of national security, really hard to roll back. But I do, I do want to ask, because not on Victor's list was the Remen Storm case, which is like top of mind. By the way, for Bankless listeners, that was scheduled for December. Now that's been pushed back to April, I believe. And of course, Remen Storm's tornado cash developer rested from his home for the DOJ. He deployed like a privacy smart contract and OFAC made that illegal. This is actually something that I've not heard Trump talk about, but you have to kind of wonder, depending on who's running Treasury, whether would they remove sanctions from tornado cash? I would guess likely not, but will they at least drop charges

• 39:46Ryan Sean Adams?

  in the Remen Storm case? Or like, would Trump even pardon him? We have Ross Ulbricht on the list as someone he intends to pardon. This is a campaign promise, I believe. What are your thoughts on this?

• 39:57Speaker 01

  It's sad when something so important to people's lives and also, you know, Romans' life, obviously, and but also, you know, liberty, I think on its face is subject to such sort of political machinations, right? There is going to be a point where it's like, I don't know where that line is, but where it's not politically helpful for the Trump administration to do certain things. And so then you're looking at like, well, you know, maybe even we agree with it, but we've got to get this other bill passed right now. We don't have time to like go to war on this issue. Like, and I think the problem for me with tornado cash and frankly, some of Samurai is on a principle basis, what was done, I think is very defensible, right? Like, releasing autonomous software, it's like

• 40:38Speaker 01

  going after Microsoft because like Al Qaeda wrote a memo in Microsoft Word, right? There's, I really think it is like that. On the other hand, like there's those, there's chats, they'd never blocked the front end, front end, when they knew they could, like there are bad facts there that speak a little bit to intent rather than, now they're not the facts that actually matter for what the charges are, in my opinion, right? So it shouldn't matter. I think if you're Roman, you hope, if that goes before a jury, though, there's going to be plenty of, of stuff for, for, you know, prosecutors to point to that make them look like bad actors, right? And so I think, and, and also, I'm not an expert in this, but like DOJ historically has been one of the more independent, you know, cabinet level agencies at the federal government.

• 41:22Speaker 01

  It's not clear that like the president can call up the US attorney of wherever and be like, drop the case. He, he, again, he might try.

• 41:30Ryan Sean Adams?

  He probably, I mean, we don't want that in the scheme of things, right? We do want some separation here of prosecutor, prosecution ability, right? Of course, and the kind of the court systems, this kind of thing, but I guess.

• 41:42Speaker 01

  Pardon, he can pardon.

• 41:43Ryan Sean Adams?

  He can pardon.

• 41:44Speaker 01

  Yeah.

• 41:45Ryan Sean Adams?

  This brings up the question, because I believe there was a campaign promise about, like pardoning Ross, for example, but not just that, there were a number of other campaign promises that Trump basically made, right? He went to the Bitcoin conference and said all sorts of things, right? Including like buying Bitcoin.

• 42:02Speaker 01

  He said he was going to make America the crypto capital of the world and, and the Bitcoin like center of the universe or.

• 42:07Ryan Sean Adams?

  Okay, okay, so he's written some checks during the campaign, as all politicians do. And now the big question, I think, you know, we have to ask is which of those checks is he going to cash? Because to, to our comments earlier, of course, all of these things require some amount of political capital. Now, there's a clear mandate, I think, and like, he'll have a lot of ability, so have hordes of, of political capital. Will he keep these campaign promises? Which of them do you think he will keep? Which of them won't? What's his track record of keeping campaign promises?

• 42:38Speaker 01

  It's, it's okay. His track record, I think, between the 16 election and his first presidency. He, he also, and I think people know this, obviously, we've all been watching Donald Trump now for years. He, he likes to stake out really firm positions as a negotiating tactic in general, whether it's on tariffs is a great example, right? So he's going to add all these tariffs. By the way, same exact issues on the table in 1892, when Grover Cleveland was, became the first president to win a second non-consecutive term. Immigration, tariffs, hard money, there was a big silver thing back then. And similarly, like the. The American manufacturing base would benefit, I think, from foreign export, uh, import tariffs,

• 43:19Speaker 01

  right? But, you know, that could cause a lot of inflation. Like, there's, there's issues with this. I think he's made, he and his surrogates have made very clear, like, that these are negotiating positions he stakes out. I think you'll see that similarly on, on other issues. So it's not so much that he, he, uh, on some of these issues won't deliver, but that, you know, coming out strong and then, you know, trying to be smarter is, is what I saw some of, on some of these issues on the last one. Immigration too, I mean, rightly so. Like, this is a very contentious election with some serious issues, right? Outside of crypto. And, you know, people are like, what's it gonna deport 12 million people? I mean, they've already started saying, like, we're gonna start looking at, like, the 800,000 or so, like, known criminal aliens that, like, the Biden, uh, administration says are criminals,

• 44:04Speaker 01

  right? Like, so I think you're gonna start to see, like, come in a little bit and get a little bit more tactical. Take, on crypto, um, I think something like a free Ross is very easy. This guy has served more than 10 years in jail already. He's not gonna be pardoned. He'll probably be offered clemency, right? Which will give him, he'll, he'll, his sentence will be commuted, so he'll get time served. Not like it will come off of his record. Right. Um, most likely. Because he doesn't have to. And by the way, I'm sure Ross is fine with that, right? I'm sure, yeah. He'll, wait, at the end of the day, if he's out, he's out. Cause the slogan is free Ross day one. I mean, he has said he'll pardon Ross Albright, but I, I think that's mostly because, like, Americans don't broadly, probably know the difference. I'm learning that difference right now. Yeah, in commutation. Um, I think he's gonna do that. He said it so many times. He

• 44:48Speaker 01

  said it at the Nat, remember he went to the National Libertarian Party's conference? And pitched them, which I thought was a very, uh, fascinating speech. And he said it there. And that was what the libertarians clapped for and screamed for. I think that happens. I think the national Bitcoin stockpile is, something will happen. I, I think it's not likely. This is the almost direct parallel to this other election I keep talking about. You know, he's the only president ever to win, then lose his reelection, and then win again. He's the second president ever. Grover Cleveland was the first. And, and Grover Cleveland, Benjamin Harrison, the president in between, it's kind of the same in reverse. Um, there was this huge question about whether to back the Dollar with gold or gold and silver and both were legal tender, but only the dollar was only backed by gold.

• 45:29Speaker 01

  And so and the value of silver was fixed in a legal ratio to gold, right? So the market value could fluctuate, but it was always tradable and redeemable at this legal fixed ratio. So when when silver traded below its legal fixed ratio, everyone would try to pay for everything in silver because it's Gresham's law, right? You're basically getting relief like so you could pay your taxes in silver. So when it was actually trading below its redeemable value, everyone would pay their taxes in silver. And the government would see a huge inflow of silver, but then foreign creditors all wanted gold to repay the debt. So then a huge outflow of gold. So then there was this massive issue of how to back the dollar. And Benjamin Harrison, who was in between, he passed this thing, the Sherman Silver Purchase Act,

• 46:13Speaker 01

  which was directing the government to buy a bunch of silver. It's not unlike the national Bitcoin stockpile, right? So I think he'll do something. I think he's also very vocally been the only dollar candidate, right? He's been saying, we want a strong dollar. The dollar is going to be huge. I think if you were to buy like toothpicks to back the dollar, it would harm the value of the dollar. It doesn't matter what it is. The second, I mean fiat currency is is it's a confidence game, right? I mean, it's it's backed by nothing but faith and credit. I mean, but he could just stop selling Bitcoin because that's been a policy, right? The US has like 200,000 Bitcoin plus. That's why that's what his proposal has been. His proposal was that he said, never sell your Bitcoin. Everyone knows this, so we should stop the government selling. That that is much more palatable, I think, than directing.

• 46:59Speaker 01

  Actually buying it, yeah. Buy it, I think, I mean, he may, they may buy it. I think the government should buy it, but it's they've got to be very careful to buy it for to telegraph what the reason. Messaging us as. Yeah, if you buy it to back the dollar, then people, the dollar is going to plummet. And no one wants that, like, you know, it may, it's going to happen eventually. All fiat currencies do collapse, but there's no need to accelerate that unnecessarily. So I think you'll get something on that. I think, I mean, again, on all of the executive agency stuff, I think he's likely to deliver. Whether we get any, we may never get any like progressive legislative.

• 47:34Speaker 01

  Package past market structure, stable coins. So you may end up just with a situation where you have regulatory relief, but no new clear framework. Um, in fact, we were, we are, I think our baseline hypothesis is that the more unified the branches of government, like let's say Republicans take the house also. And I've got all three branches are Republican, very unlikely, I think that you see something move on crypto in the first two years because.

• 47:57Ryan Sean Adams?

  Wait, really? Like I thought this like part, part of Victor's like statement is, um, uh, like.

• 48:04Speaker 01

  Stable, notice it doesn't say market structure. I think stable coins has a lot less hurdle here.

• 48:09Ryan Sean Adams?

  Well, I'm just assuming if everything like goes the way it's looking.

• 48:12Speaker 01

  They're gonna work on other stuff. They're gonna do taxes. They're gonna do all these big, giant Republican things.

• 48:17Ryan Sean Adams?

  We're gonna get stable coin though. We're gonna get fit, aren't we?

• 48:20Speaker 01

  Pro, I, I'm not sure. I think it is, fit is more like, I, the, these are great deal making bills, right? Like where there's a lot of bipartisan. I think if you get a, if you had a Harris wave across all both houses, uh, in Congress and the White House, or Trump wave across both houses in the White House, they're gonna focus on like high priority dollar spending stuff. They're gonna do, they're gonna try budget reconciliation, do big giant tax cuts. These things take a long time to move through Congress, uh, Congress, right? I think there's more air in the room and space to do something that's a little further afield like crypto. If you can't do those big things, now you're looking for bipartisan stuff. So the irony is, um, you, you're gonna get relief.

• 49:02Speaker 01

  I don't know if we're gonna get a, a framework in the, like out of a, a unified Republican government. Uh, it's possible, certainly. I think, I don't, I can't speak for Victor, but when it comes to stable coins versus market structure, right? He doesn't say fit 21 here. To me, I, I, I think the, the daylight between Republicans and Democrats on, on stable coins is, is much less than, uh, on market structure, right? Pretty much the only dispute that we're aware of out of House Financial Services between Maxine Waters and Patrick McHenry, has been about which banks can do it and which entities, right? Like the the Democrats wanted only national banks that the Fed directly regulates, right? And the Republicans want a state pathway, right? So to me, as far and and perhaps even

• 49:44Speaker 01

  non-bank entities, right? Like, why couldn't Walmart issue a stablecoin? I don't know. But Republican, but like, that's the dispute. I think on like, what they hold in order to back it and like, what disclosures have to be made. And frankly, even like, what regulators would oversee it like, that's table stakes. There's a lot of agreement there. So I think and then, by the way, if you throw in, you know, Howard Lutnick, the head of the transition team has all of Tether's, you know, treasury collateral. If he's going to be important, like, there are also dollar strength reasons to do stable coins. So I think that's more likely than in a Republican government than fit 21. So yeah, it's it's kind of a paradox. I think they're just gonna, they're gonna do immigration and taxes and who knows what else. But but crypto and that's,

• 50:29Speaker 01

  you can imagine that if Trump delivers on regulatory relief on these issues at the agencies that they say, look, guys, like, now we got to work on other stuff for a little bit. Like, you got a lot of what you wanted.

• 50:38David Hoffman?

  Right, right, right, right.

• 50:39Speaker 01

  Right? I think in a, in a, in a divided Congress with a Trump presidency, you're very likely to see a good deal struck on this because it doesn't. And by the way, we want it to be a deal. You don't want some

• 50:51David Hoffman?

  Right, unanimism.

• 50:52Speaker 01

  It's lasted for decades because it was bipartisan, right? Like, you don't, you want, we want crypto, whatever comes out of Congress to be bipartisan, whether or not it's unified government or not, like, it should be bipartisan. You don't want to ram through, it's gonna be hard to tell the crypto industry this, right? But we don't want to ram through something that's like unequivocally bolt, like, too easy for us, too bullish for for crypto. Like, you want it to have longevity.

• 51:18David Hoffman?

  Alex, I want to get your take on the impact of this election on Silicon Valley. Notably, Silicon Valley has moved far more right than it has previously, previously when I was, you know, growing up in the thousand, in the early thousands and into the 2010s, Silicon Valley was known as liberal, was known as blue. And that was not the case this election. Notably, Mark Andreessen and Ben Horowitz put out this very, very pro-Trump podcast about why they are supporting Donald Trump, which was just a very big move to come out of Silicon Valley. Elon Musk. Putting all of his marbles on Donald Trump. There are tweets, I thought this tweet this morning was pretty funny from Paddy McCormick, where he says insane how lucky Elon keeps getting, which is facetious, his tongue in cheek.

• 52:02David Hoffman?

  He's like, no, Elon, Elon makes his own luck. And now Elon is like very, very tied to this Trump presidency. He also now owns Twitter and is landing rockets and catching them with chopsticks. And this guy has like the ear of Donald Trump, who has now won the election. What would you say is the impact upon Silicon Valley and the tech sector?

• 52:27Speaker 01

  Yeah, this is a really interesting one, honestly, because like, you know, you're seeing some winners and losers and the tech stocks. And, you know, I think, you know, you mentioned, David, when you were growing up, that Silicon Valley was liberal. I also recall that Wall Street was conservative and Republican, but most of the big banks and big bank employees are big Democratic donors today.

• 52:50David Hoffman?

  Yeah, that's right.

• 52:50Speaker 01

  And it's kind of flipped. I think, look, I think, yeah, I think, look, J D Vance, I think, is really instructive here. Right. He worked for Peter Thiel. He is what I would describe as a class, almost a classic techno optimist. I think you're going to see a much bigger focus on innovation and maybe relaxing of some of the

• 53:12Speaker 01

  anti-trade stuff that sort of prevents the growth of some of these companies and, you know, venture exits, for example, right? I mean, we haven't had, I don't have the data in front of me, but the the public IPO market has been just lackluster, right? Under this last administration, you're probably going to see a lot more companies go public. That gives the exits to the VCs that can keep the machine moving. So I think it's going to be very positive for American tech. I think you're going to see AI is going to be really interesting what happens with AI, because Europe is classically taking this over regulation standpoint. America looked poised to maybe do the same. I'm on AI Safety Council and all this stuff. I mean, again, I don't want to be ruled by robots either.

• 53:54Speaker 01

  I want it to be safe, but like, you know, that's sort of an Orwellian AI Safety Council. Who knows what that means? Sounds like a lot of regulation, probably going to get some relief there. So I think it's going to be pretty positive for tech overall for American tech. I think you saw basically every major tech leader hedging at least, right? I mean, Zuckerberg called Trump after the assassination, publicly praised his bravery and wrote a letter to Congress saying that we were pressured to censor during COVID.

• 54:26Ryan Sean Adams?

  I mean, Ben Horowitz too, David, you mentioned the podcast, but he sort of pivoted more recently, three or four months out and said, hey, I've donated to the Kamala Harris campaign.

• 54:35Speaker 01

  But Bezos declined to allow Washington Post, which he owns to endorse, like Sinhar from Google. Trump said on the Rogan podcast that Google CEO had called him. So they've obviously been sort of like, at a minimum, we're hedging for a Trump.

• 54:52Ryan Sean Adams?

  Yeah, they were. They were.

• 54:53Speaker 01

  Yeah. So I think they, you know, they're, look, they want to grow. I think the big question for me with tech, like, let's go to Elon too with like X. Like, and he really did go all in. It's incredible. I do love that tweet from Paki because, I mean, Elon even, I mean, it's stunning how much money he put into it, how much time. I think like the social media censorship questions, both parties, there was a period where they both wanted censorship, maybe for different reasons, or they're both mad at like Facebook, either for censoring like anti-COVID lockdown speech or for censoring Donald Trump content, right? But both were, or for censoring like alternative COVID. Like both parties were mad about this, right? And there was all this discussion about Section 230 and if it would be repealed,

• 55:38Speaker 01

  which limits the liability of those platforms legally. I think now you're looking at some kind of reworking and rethinking among the tech firms about how they do on content moderation. Again, total divergence from Europe on this. Total divergence.

• 55:52Ryan Sean Adams?

  As we start to draw this to a close, Alex, so one question I have for you is ETFs. So Gary Gensler out of the way, right? It took so much work to just get two freaking ETFs out of the sky and the SEC. Now Gary Gensler is going to be gone. Do ETFs magically start happening? Do we get an Ethereum like ETH stake ETF? Do we get like kind of the long tail of other ETFs as well? Do floodgates just open or is that still a process?

• 56:20Speaker 01

  Yeah, it's definitely a process. I think it's tricky. I mean, I think there's a lot of work to be done. I think you need some. Movement and whether it's no action letters or a new framework imposed or legislated at the SEC on tokens and are they securities and those questions before you start to see the floodgates like I mean they there's literally just even if they let's say it's you know if they could just wave a magic wand they'd still have to wave some of the underlying magic wands first so like there's some time I think it takes but you know if you if you ask me four years from now like whether we have only have two crypto assets with ETFs or if we have 20 like I'd be leaning towards 20 at that point so it there's a lot to be done but I if you ask me to bet I'd say you know we're likely to get more.

• 57:05Ryan Sean Adams?

  This is a take.

• 57:06Speaker 01

  And he's taken by the way too just to answer that other question like there's some procedural stuff right these people have talked about whether you know the the thresholds with which ETFs can lend their underlying collateral and maybe that's a comp that should be looked at for staking I think right the main one of the main issues for allowing the Ethereum ETFs to stake is whether or not unstaking could happen fast enough to meet redemptions should they occur.

• 57:27Ryan Sean Adams?

  I see.

• 57:27Speaker 01

  So you could see like theoretically let's say that you have a bunch of proof of state coins that have ETFs you could see the SEC look literally at like exit queue times like on Ethereum right on the.

• 57:38Ryan Sean Adams?

  But these are all valid things, right?

• 57:39Speaker 01

  Yeah, it's valid. I think it's on the table. I mean, I think you know and that's been I don't know if that's the main reason why the Ethereum ETFs have underperformed flows wise to the Bitcoin ETFs but it's definitely one of them, right? If you're sophisticated enough you can buy Ether and put it on Coinbase and just earn your your staking rewards like why wouldn't you do that? Is that much harder than buying ETF? Well, it is for all those old reasons about ETFs you know financial advisors can't do that for their clients. But I I think that would make those products much more compelling and competitive.

• 58:08Ryan Sean Adams?

  Yeah, well, let's talk about this as we draw this to a close then so that in the death of the anti crypto army is it kind of over for them? Here's a tweet from Justin Slaughter, overheard from a Biden White House staffer, he says. So this is rumor mill territory, but this is what the Biden White House staffer said, no Democrats are going to fight with crypto to the death anymore. We have too many other things to worry about and crypto clearly has more staying power than we thought. Crypto clearly has more staying power than we thought. So Elizabeth Warren famously came out with the kind of the anti crypto army. She amassed some recruits, including like much of the the Biden White House administrative state. Are we calling that dead now? Do you think the Democrats in the wake of this

• 58:52Ryan Sean Adams?

  loss, this, I think, you know, Obama at one point, you know, called a loss of shellacking. They got shellacked this election. They just got absolutely destroyed. Do you think that this causes them to call off the dogs with respect to crypto? So my hope and our hope all along has been, Alex, that crypto, crypto should not be a partisan issue. It's silly that it is, right? And I think there's a subset of Democrats that you can kind of blame for this, some Republicans too. There's a subset of people in politics you can kind of blame for making this a partisan issue in the first place. But the ideal state is it's not. It's like the internet. Like, how can you be elected as a politician in the United States if you don't support technology, the economy, and the internet, right? Like,

• 59:34Ryan Sean Adams?

  that's just should be a nonstarter. So are we back to that as the new normal? So being anti crypto cannot win elections and the Democrats kind of regroup in the wake of this and they change their platform. I'm sure they're gonna have to reform a lot, a lot of introspection, hopefully for them in the wake of this. But the conclusion of that is they're pro crypto?

• 59:54Speaker 01

  Yeah, I think very, very unlikely you see high profile members of Congress or elected officials take bold stands against crypto. It doesn't seem like it is a good idea. Again, Bernie Moreno, I think, is the, his victory over Sherrod Brown in Ohio is the clear signal. I mean, this is not a back benching senator who got ousted. This is a very, very prominent one. And, you know, and you've already seen, I think, A16Z and Coinbase, you saw like maybe yesterday, the day before, have already pledged a combined 50 million just to play in the midterm election in 20. So like

• 1:00:28David Hoffman?

  Two years, play in the long game.

• 1:00:31Speaker 01

  Exactly. So, I mean, I think, look, this is how politics works in America. And like, not only did the crypto industry deploy significant capital to influence and support their candidates, but they Succeeded and that speaks volumes. Why come out? You could just say nothing, right? I mean, I, we've talked about this even on this show before, but like, I don't think there's a lot of anti crypto voters. I mean, there's maybe many Americans who don't like crypto, but they're not like, that's not what's motivating them to, to vote.

• 1:00:59Ryan Sean Adams?

  They don't care. They don't care. You know, yeah. I, uh, all right. Well, um, we'll, we'll see what happens next. But Alex, this is, this has been great. And I think for everybody out there, regardless of who you voted for, right? I think anyone who's an advocate of crypto can be happy at the dismantling of Gary Gensler and the administrative state that has attacked this crypto industry for so long. And it seems like that reign of terror is over. So I gotta call this, uh, overall a big victory for, for crypto on the back of this. Alex Thornd. Thank you so much for joining us today.

• 1:01:30Speaker 01

  Brian, David, thank you so much for having me.

• 1:01:32Ryan Sean Adams?

  Gotta let you know, of course, this is not a political podcast. None of this has been political advice. It's not, um, like buying or trading advice either. Crypto is risky. You could lose what you put in, but this is the frontier. We're glad you're with us on the bankless journey. Thanks a lot.

• 1:01:45David Hoffman?

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