Pod Insights Bankless ROLLUP: Bull Market Over? | Operation Choke Point 2.0 Emails | Meta Free Speech | $6.5B Silk Road BTC Sale About this episode Ryan and David return for another Weekly Rollup, tackling the question everyone’s asking in 2025: is the crypto bull market already over, or do we still have more to go? Fresh FDIC emails prove Choke Point 2.0 was no conspiracy, with yet another key antagonist stepping down. Meanwhile, AI agents dominate headlines and reimagine DeFi UX, and Meta’s abrupt pivot to free speech has everyone buzzing. Finally, the U. S. greenlights a $6.5B Silk Road Bitcoin sale—can Trump step in to save America’s strategic BTC stash? Buckle up; 2025 isn’t slowing down. You ready anon?
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TIMESTAMPS & RESOURCES
0:00 California Wildfires
https://x.com/white_lenka/status/1876973806817775719
https://x.com/babybeginner/status/1876872061265523155/video/1
https://x.com/ashkan/status/1876970164807164042/photo/1https://x.com
mamboitaliano__/status/1876923670540501349/video/1
https://x.com/0xngmi/status/1877229902065283198
6:10 MARKETS
https://x.com/saylor/status/1876253178100117907
7:13 Meanwhile, US court greenlighted sale of $6.5B of Silk Road Bitcoin
https://storage.courtlistener.com/recap/gov.uscourts.cand.368440/gov.uscourts.cand.368440.17
https://decrypt.co/300133/us-court-greenlights-sale-of-6-5b-in-seized-silk-road-bitcoin
10:57 Markets Cont.
https://www.tradingview.com/symbols/AMEX-SPY/
https://companiesmarketcap.com/assets-by-market-cap/
15:15 Movers of the Week
https://www.bankless.com/read/the-top-ai-agent-tokens-were-watching
18:21 Arbitrum is close to gain another green L2BEAT pie slice
https://x.com/sgoldfed/status/1876417832948523464
https://l2beat.com/scaling/projects/arbitrum
21:01 Succinct - zkEVMs on Superchain! First one!
https://x.com/pumatheuma/status/1877070524783931515
25:05 Is the bull market over - how long will continue?
https://mirror.xyz/kain.eth/Pa7XlhwUD-p
https://x.com/cburniske/status/1877043358956134826
35:39 Are AI Agents the Meta for the rest of the bull?
https://x.com/MessariCrypto/status/1874160250812825703/photo/1
https://www.cookie.fun/
https://x.com/RaoulGMI/status/1874934417032192325
https://x.com/Dogetoshi/status/1877381299612086691
https://x.com/askthehive_ai/status/1876730899695362452
https://x.com/blocknewsdotcom/status/1875280354640265524
49:05 Operation Choke Point 2.0…another general in the anti-crypto army out
https://www.federalreserve.gov/newsevents/pressreleases/files/other20250106a1.pdf
https://x.com/SenLummis/status/1876346748744167924
https://x.com/EconWithNick/status/1876272018821439670
https://x.com/DavidSacks/status/1865199683087245405
55:29 Meta is now pro-free speech platform - Political wind change in DC + SV
https://x.com/BasedBeffJezos/status/1876602383754789079
https://x.com/lindayaX/status/1876612826456019145
https://x.com/elonmusk/status/1876657662068461657
https://www.bbc.com/news/articles/c8j9e1x9z2xo
https://www.tradingview.com/news/cointelegraph:7c0f65f07094b:0-circle-contributes-1m-usdc-to-trump-s-inauguration-committee/
1:00:14 Will Canada get a pro-crypto leader too?
https://x.com/WatcherGuru/status/1876299232887607433
1:01:47 Do Kwon arrived to the US and pleaded not guilty
https://cointelegraph.com/news/terraform-do-kwon-appears-before-us-judge-pleads-not-guilty
1:04:30 Meme of the Week
https://x.com/dolos_diary/status/1877311858492977642
1:06:47 Closing & Disclaimers
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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures
Transcript 12,963 words · 4 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:04 Ryan Sean Adams? David, have you seen images or videos from this California wildfire that's going on?
0:08 David Hoffman? I have tried to not look.
0:11 Ryan Sean Adams? It's crazy. I think this is what Malibu looks like, and this is as of January 8th, so yesterday as of recording. This is a shot of Malibu, someone just driving down the street.
0:24 Speaker 02 Oh my god. We're out of the way. So we get water changes or the water service.
0:30 Ryan Sean Adams? Just house after house on fire.
0:34 Speaker 02 Oh, more. Oh my god, look at all these fucking houses.
0:40 David Hoffman? This is the Palisades Fire, which is in northwest LA, which is the most local, proximate forest area. Malibu is the next city over to the left of LA, and then it gets into Hollywood pretty close.
0:55 Ryan Sean Adams? Absolutely crazy. I mean, here's an image of somebody actually in their home. I have no idea what they're doing in their home.
0:59 David Hoffman? This is crazy because the fire is raging right outside. They look like they are inside of the fire.
1:06 Ryan Sean Adams? Yeah, with their dog in the house, dude.
1:08 David Hoffman? Their dog, yeah.
1:09 Ryan Sean Adams? Getting the heck out of there.
1:10 David Hoffman? Yeah, I think the owner just felt comfortable because I think they just immediately ran out their front door and went into the street, and the street was fine. But yeah, the fire was like right, yeah, cutting it up to the line. And so LA is surrounded by hills and forested hills. And so there's three or four different fires, all coming in, like encroaching on LA from the west and then also from the north. And so when it intersects with neighborhoods, it starts to go from a forest fire to just waves of houses.
1:44 Ryan Sean Adams? Yeah, absolutely crazy. I mean, the reason this caught my attention, of course, is because it's everywhere, on all of my timelines across all social media. And then also, I saw this tweet. So imagine having a bearer asset, being your own bank, having a cryptocurrency in a house that you are out of, and your loved ones are out of fortunately, but you didn't get your private keys. This is a tweet from Monty. My 70-year-old aunt lost. Her apartment in the LA fires, most of her savings was in crypto and she lost her wallet and Cphrase doesn't have any backups. Yes, bad setup, I know, but it is what it is. I feel sick. This is all she had. It brings up the question of like you're going bankless and having your
2:25 Ryan Sean Adams? private keys without a backup. If you're like not doing this well, maybe fire damage or house destruction is like a threat vector for you that you've not considered. And I think this is almost like a PSA for the community. Obviously, it's hard to go out to everybody who's been affected by this. And also, if you're not affected by this, think about backups. Think about not having these bearer instruments inside of your house because your house is not necessarily a permanent structure.
2:52 David Hoffman? Yeah, as a general rule of thumb, living with your private keys is not advisable. Find a place that is not where you live to keep at least one copy of your private keys.
3:05 Ryan Sean Adams? Yeah, there are tools like this is what I do. This is Xerox, not gonna make it. What I do is split my seed with Shamir secret sharing and then store the shards at multiple locations. So you can do something like that. You can have safety deposit boxes at the bank accounts. It's another mechanism. NoSys MultiSig is fantastic for this.
3:25 David Hoffman? It's really good. There's software solutions for this.
3:27 Ryan Sean Adams? Yeah, software solutions, you like smart account wallet. So you are not even just like the sole signer in the account. You can have your lawyer, loved ones, or somebody else, or something like that. Anyway, custody on your crypto asset requires a higher level of due diligence and fires like these, I think you'll like teach us exactly why. But David, we got a lot to cover on the second week of January, Bankless Weekly Rollup. We got prices that are down. Some people are getting a little panicky. And the question is, it's 2025, is the bull market over? Was that it? We're down on the 30 day, okay, with Bitcoin and some people are saying we already topped. But if we haven't topped, how much longer do we actually have? So I want to talk to you about that.
4:08 David Hoffman? There's also more evidence for choke point 2.0, as if we needed anymore. But I feel like this is the evidence to end all evidence. There has been some unredacted documents that we are now able To show the world that we were not crazy. We are not conspiracy theorists. 2.2.0 was very real, so we'll talk about that. And also, the AI agent Meta continues to reach new dominance in crypto investors' attention. Mindshare, we will quickly catch you up with some of the announcements coming out in the last like 10 days or so.
4:36 Ryan Sean Adams? Also, is Meta turning pro free speech? What is it planning to do? There's a clip we've got from Mark Zuckerberg on this. It feels like the winds are changing. And the US government has just greenlit a $6.5 billion Bitcoin sale. What happened to our strategic reserve, David? I thought we were gonna buy Bitcoin.
4:53 David Hoffman? The last 11 days of the Biden administration and he goes out dumping $6.5 billion on us. Of course he does.
5:01 Ryan Sean Adams? It's not quite dumped yet, but we'll talk about all that and more, of course. David, before we get in, we got a message from our friends over at the Rodman Law Group. So what do they want us to know?
5:10 David Hoffman? Yeah, they want you to know that they are the best damn lawyers in crypto. And I think we can vouch for them at Bankless because they are also our lawyers. They have been immensely helpful to just help us navigate anything that we run into here at Bankless in the crypto space. And there's a lot of just like weird things that happen in the crypto space. And in addition to, you know, having control of your own funds and doing all the other things that we like to do in crypto, you should also probably have your own lawyer too. If you are a founder in this space, if you are a company in this space, if you have any meaningful amount of activity in this space, having a lawyer is pretty useful. Whether or like whether it's like a lawyer for your startup or just like even things like what I'm doing with them, like estate planning, there's a bunch of reasons why you might need a lawyer. And we suggest the Rodman Law Group.
5:53 David Hoffman? You can get a free consultation from Rodman Law at bankless.cc/rodmannlaw.
5:59 Ryan Sean Adams? It's not just Bankless, by the way. Parcel, Ion Protocol, Portal Ventures, Collab Currency, all sorts of crypto native organizations use Rodman Law Group and we think you should too. Go check them out. Well, David, how about we check on the markets for the week? King Bitcoin, where are we at?
6:15 David Hoffman? Not super happy prices, down 4.3% on the week to where we are at the time of recording, 92,500, on the lower end of the 90,000 range.
6:25 Ryan Sean Adams? Yeah.
6:25 David Hoffman? Started the week at 97,000, we broke through $100,000 a couple of times this week, but we are now threatening, I would say, to go down into the $80,000 range.
6:37 Ryan Sean Adams? That's a good word for it. Yeah, I do feel threatened by this. I'm not, I don't want to go back into the 80s. How about you?
6:43 David Hoffman? No.
6:43 Ryan Sean Adams? 80s, that's poverty territory. Yeah, we're not going to poverty town, okay? And Michael Stradine wants to make sure we won't get there. Of course, he has acquired another 1,000 Bitcoin on the week, 101 million on the week. This puts him at a total holding of, I believe, 2.1% of all Bitcoin supplies. So Michael Saylor is buying, as he always does. I feel like we don't even need to mention that he's buying in the week, because just like, if it's a week in a calendar year, just assume Michael Saylor is buying some Bitcoin, okay?
7:13 David Hoffman? Yeah.
7:13 Ryan Sean Adams? One thing that is new this week, though, is the US government, a court just greenlit the sale of 6.5 billion in Silk Road Bitcoin that the US government had in custody.
7:25 David Hoffman? 69,000 Bitcoins.
7:26 Ryan Sean Adams? Oh, and Bitcoin Gold and Bitcoin SV and Bitcoin Cash. Can't forget about those.
7:30 David Hoffman? Oh, well, I think a lot of people have forgotten about those.
7:32 Ryan Sean Adams? I'm pretty sure you can forget about them, but I guess the US government has those too. We don't care if they sell those, though.
7:38 David Hoffman? Honestly, please dump those.
7:40 Ryan Sean Adams? Yeah, why have you been waiting so long, idiots?
7:45 Ryan Sean Adams? Anyway, this is, you know, we've talked about this before. Of course, there's been talk of the US government amassing a strategic Bitcoin reserve, right? And we even had Senator Synthony Lummis on here, who told us basically, "Oh, step one of that is you just keep the Bitcoin you have."
8:01 David Hoffman? We are currently looking at the Bitcoin reserve. It's not the official Bitcoin reserve, but this is it. This is it.
8:06 Ryan Sean Adams? Yeah, even in the bill, her plan was like, "Oh, all that Bitcoin that the US government has confiscated, we'll start with that. That will be the new Bitcoin reserve. We just won't sell that." And if people are tracking at home, basically, the US government had, I want to say, 187,000, something like this? Okay, 183,000.
8:25 Ryan Sean Adams? Bitcoin, what the US government had, this would be the selling of 69,000, almost 70,000. And that would be about 6.5 billion. So we're going in the wrong direction, David.
8:36 David Hoffman? We're in the wrong direction. Yeah, the cool thing about the Bitcoin Reserve is that we were going to be able to start genesis of the Bitcoin Reserve with a ton of Bitcoin. And now we're just cutting that into thirds. Again, like, just really kicking us on the way, the Biden administration doing whatever they can to really dump us on the way out.
8:53 Ryan Sean Adams? You say Biden administration, but I don't know that it's, we don't know that it's Biden administration.
8:57 David Hoffman? It's just regular, like, proceed as normal, but I feel like if Trump was in office, he would probably just.
9:03 Ryan Sean Adams? He would put a stop on this?
9:04 David Hoffman? He would just say, don't do this, yeah.
9:07 Ryan Sean Adams? Yeah, I don't know what the authority is because this is actual courts, not like the executive branch coming in saying it, but like, why now? I'm not sure. The US government got final approval in the Northern District Court of California to liquidate crypto's largest ever federal seizure. So this is part of that big Silk Road seizure, and here's the actual notice, court notice. So, one thing I should mention, though, and this is important, so even though the judge authorized this, it doesn't mean they're about to sell it. Doesn't mean we're about to see a massive dump, because the ruling alone doesn't guarantee immediate liquidation. We still have some time. And there's some question is if Donald Trump comes in, is there some way for him to like,
9:48 Ryan Sean Adams? pause this, put a hold on it, even reverse it? We don't know. We will know, because everyone's tracking the US federal government, like, addresses in crypto. And we saw earlier in December, we saw on December 3rd, the US government moved nearly 2 billion in Silk Road Bitcoin to Coinbase. If it's going to Coinbase, I don't think that's a good sign.
10:11 David Hoffman? For context, remember when everyone was getting all like in a tizzy about Germany selling their Bitcoins? Yeah, Germany sold about 50,000 Bitcoins. They'd made about 2.9 billion dollars in revenue. And that was all of their Bitcoins. And we are just selling like a third-ish of ours, 69,000 Bitcoins. At least we're getting a much better deal than Germany got. At least we're waiting for a more opportune time. The market.
10:36 Ryan Sean Adams? Yeah, this is still the wrong direction and I don't, I don't like that selling pressure on the price of Bitcoin. We're trying to keep stay in the 90s. Wouldn't we just say that? We want to be in the 90s.
10:45 David Hoffman? Yeah, 6.5 billion is still a lot, even for Michael Saylor. That would take in like a good number of quarters to actually make that up for us.
10:52 Ryan Sean Adams? All right, well, let's see. It hasn't been sold yet, but we'll be monitoring this, of course. Tell us about ETH on the week, David. Any good news there?
11:00 David Hoffman? No, no, I don't even know why you're asked. Down, down 6% sort of the week. 3,450, currently at 3,250. Again, threatening to go down into the 2,900s. 3,250 is kind of low. I think we are at a 40-day low for both Bitcoin and Ether.
11:20 Ryan Sean Adams? 40-day low?
11:21 David Hoffman? 40 days. We are down on the 30 days. We haven't moved anywhere. The markets haven't moved anywhere in 40 days. We have 40-day not great price action.
11:30 Ryan Sean Adams? That's why we have to talk about like bear market, bull market, what's going to happen next. But before we get there, let's look at some flows, ETF flows. So it's been really positive. Last time we met, you and I talked about ETF flows and it was looking real good for Ethereum. How about this week?
11:45 David Hoffman? Yeah, we had a couple of bad days of outflows on the 8th and the 7th. 160 million dollars of out on the 8th, 90 million dollars of out on the 7th. Also, a couple of good inflow days before that. So kind of call it, it's like slightly red on the year. Maybe we're negative like 50 to 100 million on the year. But I mean, we have 2.5 billion dollars in the bank in the Ether ETF flows. Bitcoin telling a little bit of a different story. It's interesting that they're, they're just like such different stories here. The last, yesterday, not a great day for Bitcoin, 600 million dollars out. But on the 3rd and the 6th, each had 900 million dollars in, almost, almost 2 billion dollars in two days.
12:28 David Hoffman? Before that, there was a 240 million dollar out. So it's not a perfectly green streak for Bitcoin. But Bitcoin started the year real strong, coming in at 36 billion total dollars into the Bitcoin ETFs.
12:40 Ryan Sean Adams? All right, global crypto market cap, 3.3 trillion?
12:44 David Hoffman? 3.37 trillion. Hey, you got it right. You got it right.
12:47 Ryan Sean Adams? Yeah, it's the right number this, this week. So, you know, not terrible.
12:51 David Hoffman? Not an inspiring number, but you know, I was hoping for four by this time, but we'll get there.
12:56 Ryan Sean Adams? Yeah, I guess it feels bad. The 80s feel bad, 80K-ish, that range feels bad for Bitcoin. The 2000s feel really bad for ETH and anything below 3 trillion does not excite me for the total crypto market cap. That's where I am starting here and that's going to be true this entire year.
13:10 David Hoffman? You buy that. If we go into 2 trillions of market cap or the 2000 range or the 80,000 range, I am buying.
13:18 Ryan Sean Adams? So are you waiting for the dip or are you buying the dip now?
13:22 David Hoffman? I'm not. I'm never waiting for the dip, but when the dip comes, I will take advantage of it. I'm never, you know, Mr. Market has its offerings every single day. I'll take what I get when I like it.
13:33 Ryan Sean Adams? But so you're still being patient a little bit. I mean, you're not.
13:36 David Hoffman? I'm not being aggressive in this current moment.
13:38 Ryan Sean Adams? Okay, but you're still, well, we'll talk about how bullish you are in a little bit, but before we do, let's go to the SPY. Let's talk about stocks, okay? The stock market.
13:46 David Hoffman? Cross-reference some data. How are the other markets doing? Is it just a lack of activity time in crypto or what's going on in the traditional stock market? The SPY, which is, you know, has Apple, it has Nvidia. It's not at its highs, but it's still pretty, pretty damn good. It's like 2 or 3 or 4% off of its all-time highs. It peaked in December at 61,000. It's currently at 5,900, so it's basically 200 points off if it's high. The trend looks good. The trend looks really good. So you can't really look at the trad stock world and be unhappy. So long as stocks continue to like not catch a cold, we are happy in crypto.
14:29 Ryan Sean Adams? Nvidia is really leading things too. It's AI stocks. It's absolutely crushing it, right? So Nvidia briefly, I think this is the first time ever, became the most valuable company in the world. It flipped both Microsoft and Apple to claim that title briefly. Now it's back down. So I mean, that's been a story that all of that growth happened basically last year and then a little bit into this year.
14:51 David Hoffman? This is so crazy. The market cap of Apple is equal to the market cap of all of crypto. That is nuts.
15:00 Ryan Sean Adams? Yeah, that's another way to look at it, right?
15:01 David Hoffman? That's kind of crazy. Basically same thing. Almost same as Nvidia, yeah.
15:05 Ryan Sean Adams? Yeah, so one Nvidia. This is why a lot of people are still ignoring crypto, right? Cause it's just like, you know, one stock.
15:13 David Hoffman? One company.
15:15 Ryan Sean Adams? All right, David, take us to the movers of the week, sponsored by Uniswap. Thanks, Uniswap for this. What are you looking at on the week? What's up and what's down?
15:23 David Hoffman? We usually, yeah, we usually go for up on the week, but we're gonna start with some downs. Virtuals and AI 16Z are both down 28% on the week. Now, that's down 28% on the week. That's, that's pretty rough. That's 30%. But if you zoom out to the month, they are still up very bigly. So we're just seeing a little bit of a retracement in the AI sector in the last seven days or so. Their performance is still very stellar. And then up on the week, there's no weekly winners, but I wanted to highlight this one token called Phi, Fae, Frasia.
15:56 David Hoffman? It is, it's also down on the seven day, because again, AI sector is kind of just down on the seven day. It is up 1,500% in 30 days. It cracked the top 200 of all the CoinMarketCap coins. After only being at 30 million market cap just two weeks prior, which this is something you only see in a bull market, going from $30 million market cap to $600 million market cap in two weeks. That is a full bull podcast. Have you played around with Frasia? Do you know, do you know what's going on over here?
16:28 Ryan Sean Adams? Not too much. I'm familiar with the, the Frasia experiments though, right? And it's basically like,
16:32 David Hoffman? That's it, that's it.
16:33 Ryan Sean Adams? It's like a manifestation of an AI agent in a female form. It almost reminds me like the, the lore around this almost reminds me of that movie, Her, you know, it's just like,
16:41 David Hoffman? The lore does, yeah.
16:42 Ryan Sean Adams? Yeah, but, but it's, and wasn't there, was there a bounty sort of thing, like an interaction with, can you convince Frasia to give the money to you? And a bunch of people tried to like convince Frasia and like prompt it into giving the money. And that was like experiment one, they're running multiple experiments.
16:57 David Hoffman? And also that experiment, at the conclusion of that experiment, piqued Elon Musk's attention.
17:04 Ryan Sean Adams? Oh, that's right.
17:05 David Hoffman? He commented on this one thread about this. He just said, interesting. Then the token price pumped from like,
17:13 David Hoffman? 10 million dollars to 40 million dollars. And that was like in early December. Now it's at 600 million dollars.
17:18 Ryan Sean Adams? All right, well, what do you think? Here's a prediction for this cycle. I think Elon Musk will take some interest in crypto X AI, crypto and AI, maybe in AI agents to the extent that he will tweet some bullish things about a set of tokens. Or maybe come on a podcast and talk about his bullish sentiments. There will be something that happens between Elon Musk and crypto in the field of this AI agent meta this cycle, like this, this year. What do you think about that?
17:50 David Hoffman? Understanding Elon Musk's maturity, I think that's probably pretty bullish for fart coin.
17:56 David Hoffman? He, he comments, he, he likes Dogecoin, as we know, but he also did a wink, wink to, sorry, come rocket last bull cycle.
18:05 Ryan Sean Adams? That's right, that's right.
18:06 David Hoffman? Yeah. And so like, what's the most stupid immature AI agent meme coin that will capture Elon's attention? I think fart coin is pretty, pretty strongly.
18:15 Ryan Sean Adams? Maybe, or maybe the bull case is it hasn't been invented yet. And so we're about to see how stupid it can get. Give us the L2 update sponsored by Frax. What, what happened in L2 world this week?
18:26 David Hoffman? Well, the, what's about to happen is that there is about to be a governance vote in the arbitrum Dow for it to gain another green slice in its layer to be like security framework. Once this Dow vote goes in, there will be a bull, there will be permissionless bold. So that means that there are permissionless fraud proofs effectively. So anyone can submit a fraud proof to claim, claim theft, claim anything. And this is just a security model for optimistic rollups. And so state validation, which is the last, there are two remaining yellow slices on like the security wheel from layer two B. One is state validation, one is exit window. Exit window is not a tech upgrade. That is a trivial thing to do. State validation is a tech upgrade. This is the hard one.
19:10 David Hoffman? And once this Dow governance go vote goes through, Arbitrum will have four green slices and one last remaining yellow slice on the exit window, which again is a trivial like parameter change. So preemptive congratulations for Arbitrum when that. Goes through and really proving the point that layer twos are becoming decentralized. They're becoming secure. They're becoming extremely bankless. And now it's based on optimism's chance to lead the way.
19:35 Ryan Sean Adams? Yeah, Arbitrum has really been pushing the frontier of this too. So they got to stage one first, and this gets them like right on the precipice of stage two. Once this goes through. So once you're at stage two, you're sort of at least for your property rights. From a seizure perspective, you're basically equivalent. You're basically
19:54 Ryan Sean Adams? Layer one haters said it would never happen. They said that these things would remain centralized and that's just like not what we've seen. Particularly from Arbitrum.
20:03 David Hoffman? And then, and then there's still the issue of the centralized sequencer, which is interesting because you can have a centralized sequencer. And you can have a full board of green slices and be at a stage to roll up. All of those things are possible. And I think that causes a lot of just like cognitive dissonance in people and like we have a centralized sequencer. But you're fully permissionless and you're fully decent like decentralized in all the other capacities. And people can't really talk past each other on that or they haven't learned to
20:29 Ryan Sean Adams? I mean, like, like a centralized sequencer is not so bad, right? It's like a centralized, it depends, right?
20:35 David Hoffman? It just has this word centralized in it and that triggers people.
20:37 Ryan Sean Adams? Because with a layer, layer two, even if you have a centralized sequencer, you have full kind of property rights. Maybe not full censorship resistance in real time when you submit a traction, a transaction on Arbitrum. But from the perspective of can you withdraw your funds if they do something evil and nefarious? Can you get a transaction through? Then you have all of those things with a stage two layer two.
21:01 David Hoffman? Anyways, moving on into the world of ZK rollups, not optimistic rollups. Uma Roy tweeted out the first OP setting to mainnet is live. Ryan, I think you're tapped into this one a little bit more. Tell me what's going on over here.
21:11 Ryan Sean Adams? Well, you remember that episode we did with Uma, basically the ability to turn all OP stack chains into ZK EVMs. Right? And we're like, oh, when's that coming? She's like, it's kind of ready, like you could do it now. Well, this is the first one going to mainnet. So we actually have a OP superchain compatible ZK EVM on mainnet right now. This one, failure network is particular to AI agents. It's like T E E's for AI agents. So it's kind of that, that narrative. But it's a full layer two ZK EVM layer two. Very cool to see this technology in place and a lot going on in the ZK world. And just like in parallel to all the stuff we talk about every single week.
21:50 David Hoffman? This is in such stark contrast to when ZK EVM wars were going on and Polygon and ZK Sync were just racing neck and neck to ship their ZK EVM. And in 2022, both of them were racing to announce it by ECC. And then they both announced it at ECC 2022. And then a year later, they both announced their ZK EVM mainnet. Like, they have just been like, trying to front run their own development as much as possible to really claim market share. And then Uma is like, "Oh, I just made a ZK Circuit." It's a push button. You can take any OP stack, roll up and turn it into a ZK EVM. "Oh, and it's also ready right now." And it actually is ready right now. And she's like, "Oh yeah, we can do this." And now it's actually happening.
22:33 David Hoffman? Like, it's in stark contrast to the other ZK EVM teams.
22:37 Ryan Sean Adams? It's very cool. And that's why that episode with her kind of blew my mind, because we'd always talked about, "Oh, optimistic rollups will become ZK EVM rollups or ZK rollups at some point in the future." But I thought this was like, typical, you know, rollup Ethereum's like, five years from now, 10 years from now, right? No, it's like, this year, it's happening now. Anyway, we got a lot more to cover, including David. We gotta talk about the bull market. How long will this thing last in 2025? Or, or was that it? Have we already topped? I gotta know from you. And also, AI agents, will they be the 2025 meta? Or should we wait for something else? Google searches at all time high? All this and more. But before we get there, want to thank Uniswap, a browser, a mobile wallet, the best place to do DeFi. Go check them out.
23:19 David Hoffman? Uniswap Labs is making history with the largest bug bounty ever. $15.5 million for critical bugs found in Uniswap V4. This isn't just any update. Uniswap V4 is built with hundreds of contributions from community developers and has already undergone nine independent audits, making it one of the most rigorously reviewed codebases to be deployed on-chain. And with 2.4 trillion in cumulative volume processed across Uniswap V2 and V3 without a single hack, the commitment to security and transparency is rock solid. Now, Uniswap Labs is taking an extra step to make V4 as secure as possible with a $15.5 million bug bounty. Head to the link in the show notes to dive in and participate in the Uniswap V4 bug bounty. All the details. From eligibility and scope to the rewards are there.
24:02 David Hoffman? Cello is transitioning from a mobile-first, EVM-compatible Layer 1 blockchain to a high-performance Ethereum Layer 2, built on OP stack with EigenDA and one-block finality, all happening soon with a hard fork. With over 600 million total transactions, 12 million weekly transactions, and 750,000 daily active users, Cello's meteoric rise would place it among one of the top Layer 2s, built for the real world and optimized for fast, low-cost global payments. As the home of the stablecoins, Cello hosts 13 native stablecoins across seven different currencies, including native USDT on Opera MiniPay, and with over 4 million users in Africa alone. In November, stablecoin volumes hit $6.8 billion, made for seamless on-chain FX trading. Plus, users can pay gas with ERC20 tokens like USDT and USDC and send crypto to phone numbers in seconds.
24:47 David Hoffman? But why should you care about Cello's transition to a Layer 2? Layer 2s unify Ethereum. L1s fragmented. By becoming a Layer 2, Cello leads the way for other EVM-compatible Layer 1s to follow. Follow Cello on X and witness the great Cello Habining, where Cello cuts its inflation in half as it enters its Layer 2 era and continuing its environmental leadership.
25:05 Ryan Sean Adams? All right, discussion time. I think we started the year, David, this is on everyone's mind. What's 2025 going to look like from a crypto perspective? We get a bullish full year, or like, will it only last a couple of months? Maybe Q1 is it? Or maybe we've topped already? Sort of feels like that. When you get Bitcoin down close to the 80K type range and you get like 40 days of dropage here, it doesn't feel great. I mean, that's not supposed to happen during bull markets. So the question I want to discuss with you and bring in some other opinions here is, what's up with the bull market? Where are we at in 2025? What do you think we'll see?
25:42 David Hoffman? I think this question is kind of inevitable as soon as a bull market does actually stop because crypto bull markets are a game of musical chairs.
25:50 Ryan Sean Adams? Yeah.
25:50 David Hoffman? And so everyone constantly lives in fear.
25:52 Ryan Sean Adams? Yeah.
25:53 David Hoffman? That the music has stopped. The thing is like, no one can actually, you can't hear the music. You only know that it stopped in hindsight.
25:59 Ryan Sean Adams? Yeah.
25:59 David Hoffman? And so everyone is always like, is it over? Is it over?
26:02 Ryan Sean Adams? Yeah.
26:02 David Hoffman? And people get asked themselves, is yes, right. It's, and it's just like. People who have done this before live in PTSD of the bull market stopping. Because that's when the pain-
26:12 Ryan Sean Adams? It's so bad.
26:13 David Hoffman? It's painful. Yeah, it's very painful. So I just wanted to start this conversation as like, there's PTSD like sensitivities around when the bull market ends, which is why, as a member of crypto Twitter and the discourse, everyone was going to ask this question. Is the bull market over? Is the bull market over?
26:28 Ryan Sean Adams? We'll probably ask it all throughout 2025.
26:31 David Hoffman? Every single week.
26:32 Ryan Sean Adams? And back to your comment, it is a sentiment thing, so everyone has to check with everyone else. Well, what do you think? What do you think? Because if we all believe it's still on, then it's, it's on.
26:40 David Hoffman? And then it's still on, then you keep the dice rolling. Yeah. The first thing I'll say is, the bull market just started. So probabilistically speaking, it's probably not over.
26:51 Ryan Sean Adams? Okay.
26:52 David Hoffman? It's just too soon. It's just too soon.
26:53 Ryan Sean Adams? All right. So that's David. David, this is your third cycle. That's a third cycler's take on it. This is also Kane Warwick's take, and he is a third cycler as well. He had, he published a blog post this morning entitled, "It's Still A Bull Market, Relax." So that's his message. And basically, I'll skip all the way to the end, but he kind of sums it up. "I think we go much higher from the start of this year, despite the FUD and despite Mr. Hayes." He's talking about Arthur Hayes, the trader. We'll talk about Arthur Hayes's comments in just a minute. "I do expect we top out in early 2026, but I'm open to the bull market lasting another 18 months." I think Bitcoin-
27:29 David Hoffman? Wow! Wow, that is a long bull market, Kane Warwick. All right.
27:33 Ryan Sean Adams? Yeah, so he is a long cycler, because there are some people who believe we've already topped, right?
27:37 David Hoffman? There's short cyclers and long cyclers.
27:39 Ryan Sean Adams? Then there's short cyclers who are like, "Ah, just Q1," or "Just Q1 and Q2." Now Kane is a bullish long cycler. He thinks that this could go for all of 2025, and I'll continue. "I do expect we top out in early 2026, that's gonna be the top, but I'm open to the bull market lasting another 18 months." He thinks it can go even longer.
27:58 David Hoffman? 18 months?
27:59 Ryan Sean Adams? Yes!
28:00 David Hoffman? 18 months?
28:01 Ryan Sean Adams? A super long cycler.
28:02 David Hoffman? That is so long. Wow.
28:03 Ryan Sean Adams? Yeah, and then he makes some price calls while we're at it. "I think Bitcoin will eclipse 250K, ETH will break 10K." Thank God. Lots of other crazier shit will happen. That's Kane Warwick's take. So, "It's still a bull market, relax." I don't know about the whole long cycle here, but like, this is generally my sentiment as well. I tend to agree with both you and Kane on this.
28:24 David Hoffman? Yeah, those prices check out to me. 250K over 10K for Ether. Those prices check out to me. The 18 months is like much longer than I would expect, but the prices don't seem too high. So I guess he's calling for a normally sized, lengthened bull market, which is fun and good. And that's great. 18 months is a really long time, bro.
28:44 Ryan Sean Adams? It's a very long time.
28:45 David Hoffman? I think the simple, easy, like, like left curve take is just like map it to last cycles. It's going to end Q3, Q4 of this year.
28:54 Ryan Sean Adams? Well, do you, okay, so you're probably a mid-cycler then. You're bullish mid-cycler.
28:57 David Hoffman? I'm a mid-length cycle. Yeah, I'm like, most of this year is going to be very bullish.
29:02 Ryan Sean Adams? All right. So if you want to trade these ups and downs, somebody to kind of monitors Arthur Hayes, who's like a trader. Have you kept up with his like series of blog posts?
29:10 David Hoffman? I have not. I have not.
29:11 Ryan Sean Adams? Well, so last I checked in was December, and he was basically thinking that January would be down. And like Q1 would sort of be down because everybody, his rationale was something to the effect of everyone's very excited about Trump. So we got that kind of Trump bump. And then after he's in office, they'll realize that the policy doesn't change overnight. And it'll just be a kind of a reckoning, a disappointment with the Trump policy. That was his take in December. But this week, he published another post. And his take was a little bit different. Maybe I call it a pivot, but traders are allowed to pivot, David. So don't worry. They pivot their positions. Anyway, he was kind of juxtaposing. He still thinks that people will be a bit disappointed with Trump's actual policy, and that could drag markets down.
29:56 Ryan Sean Adams? But he's also seeing liquidity, dollar liquidity being injected in the market. That ramping up in Q1, and he thinks net-net, that will offset some of the disappointment from Trump taking office. So he says this, fulfilling my role as Chief Investment Officer at His Fund Malmstrm, I will encourage the risk takers at the fund to turn the risk dial to degens. Degens for this quarter is what he's saying. So, and then he gives some of his his degens picks. So Q1, for Arthur Hayes, anyway, is a full-on degens, which is a little bit of a change from December.
30:29 David Hoffman? I love how he just says right after that, "We love undervalued dog shit and have purchased..." Purchase, and then like he gave out five tickers after that.
30:41 Ryan Sean Adams? Thank you for including these quality token packs of decentralized science. That's just totally going to extend all of our lives and like, you know, bringing science to the next frontier.
30:51 David Hoffman? The dollar liquidity is a take that I have heard echoed from around the crypto sphere. Coinbase echoed this is that like, it doesn't even, the Federal Reserve doesn't even matter. Trump's gonna start coming in and he's gonna buy people's happiness by like printing dollars and sending them all over.
31:05 Ryan Sean Adams? Buy people's happiness.
31:06 David Hoffman? By sending them all over the place. And so that's gonna be good for liquidity. It's gonna be good for risk assets.
31:11 Ryan Sean Adams? Yeah, I think that's, that's probably true as well. One other fact pattern here is Q1s are usually really good for crypto. All right, the average return in Q1 for Bitcoin is 52%. That's taking all of the time.
31:27 David Hoffman? Wow.
31:27 Ryan Sean Adams? 52%, that's just average, all right?
31:29 David Hoffman? That's, that's, that's.
31:30 Ryan Sean Adams? Could be better.
31:31 David Hoffman? Quick math is like 140 to 150,000 dollar Bitcoin.
31:34 Ryan Sean Adams? Yeah, I mean, Q1 of last year was pretty good. Anyway, if a quarter matters. But, you know, people start the year, maybe they get bullish on things. Ether's average return is even better, 83%. So there you go.
31:44 David Hoffman? Let's go. What's, what's the quick math on that? That's like a 1,500 more dollars to Ether. That's like
31:51 David Hoffman? 5,200, 5,500?
31:53 Ryan Sean Adams? Q1s are usually great, although I do remember, do you remember the Q1 of 2028, David? I'll take you back to that cycle.
31:59 David Hoffman? 2018, 2018.
31:59 Ryan Sean Adams? 2018, excuse me, yeah.
32:01 David Hoffman? That was terrible. My net worth hit zero.
32:04 Ryan Sean Adams? Yeah, that was really, it was going great in January and it was going even better in February. And then all of a sudden, boom, we got slammed. And that was the beginning of a pretty bad bear market. I'm sure that won't happen this year, but.
32:18 David Hoffman? It's cool. I lost all 6,000 of my dollars. It's fine.
32:22 Ryan Sean Adams? Then there's also the perennial question, right? At this point in the cycle is, but are we in a super cycle? But we could be, this time could be different.
32:32 David Hoffman? We could still be in a super cycle.
32:34 Ryan Sean Adams? Yes, it's, it's possible. It's like the laws of physics do not preclude us being in a, in a super cycle. And this is Victor Bunyan taking this take. He says, this is a super cycle. We're still going to have ups and downs, but I don't think we'll see the same kind of multi-year 70 to 90% drops.
32:49 David Hoffman? Oh my God, what year is it? I've heard this every single cycle.
32:53 Ryan Sean Adams? So if you believe in the super cycle, tactically, this means stop trying to time the market. Build viable things.
32:59 David Hoffman? Well, that's always good advice.
33:00 Ryan Sean Adams? Play long-term games, infinite games, protect your reputation, all good advice. It doesn't mean. That we're like going to have a super cycle though, but people are starting to say this. And Victor is somebody who's like, you know, generally pretty, pretty super minded.
33:14 David Hoffman? Victor knows, Victor knows a thing or two. He's definitely got plenty of experience. We're definitely going to see 70 to 90% drops, not in Bitcoin, hopefully not in Ether. And as you go further down the market cap, it's less and less guaranteed, but yeah.
33:27 Ryan Sean Adams? Well, Chris Berninski takes the four or five cycle veteran take here. It was basically like, no, there's still going to be cycles because humans don't change.
33:36 David Hoffman? This is a correct answer.
33:37 Ryan Sean Adams? Humans love highs and lows. We can't help ourselves. If psychology hasn't changed, of course, we're going to end a cycle.
33:42 David Hoffman? If the market is informed that it is a super cycle, then everyone piles in and goes even higher than what expectations were. And then they have to come back, which creates the cycle.
33:53 Ryan Sean Adams? Okay. So this is why I want to talk to third cycle David, right? So first cycle David, probably not even aware of cycles. Cycles? Nah.
33:59 David Hoffman? Yeah, no, no, I was full of, I was buying the top class thing over and over and over again.
34:03 Ryan Sean Adams? Didn't even know that existed, right? Second cycle David, I remember you were an early believer in super cycle. You were like, but maybe, like, maybe we got NFTs, we got this thing. I don't know if you totally believe that.
34:16 David Hoffman? That was some Kool-Aid. Yeah, I was drinking Kool-Aid.
34:19 Ryan Sean Adams? All right. You believe that, but now third cycle David, what does third cycle David? Do you believe in the super cycle or do you believe in Chris Berninski's take?
34:27 David Hoffman? No, Chris, Chris is right.
34:29 Ryan Sean Adams? Cycles are cycles.
34:30 David Hoffman? Yeah. On, on the Victor to Chris spectrum, I am like 95% Chris, 5% Victor.
34:37 Ryan Sean Adams? I think this is where the veterans really, really service well is because they've seen it all.
34:41 David Hoffman? If I, if I can give the case for a super cycle. This is not, super cycles are fundamentally impossible, but like, if I could give the case, it's that AI is extremely real. This is actually not a crypto bull market. This is an AI bull market that is being expressed inside of the crypto industry because we have tokens and we develop very fast and we tinker with things. So we're not even really tapping into the full crypto energy. The Donald Trump administration is going to spray money everywhere and give the crypto industry the best regulatory four years that it's ever had and maybe even eight years. I don't know. Oh, wait, no, he's only got four years left. And all of these things are like lining up very, very well.
35:23 David Hoffman? And we've never seen an external bull market and external tech sector bull market also crash with crypto. That all crypto previous bull markets have been inscribed to crypto. We've built them ourselves and so we've never seen that. So there's a lot of potential catalyst for a very large bull market, but that will never, ever make a super cycle.
35:39 Ryan Sean Adams? Well, that brings me to the question that I have wanted to ask you. Kind of the part two here is, all right, AI agents and AI, right? This is maybe the case for the super cycle, but it's also a case for like, um, what's the meta? And a lot of the predictions we went through last week even, we were talking a lot about AI agents. And you and EJAS are doing sort of a, a weekly AI roll up episode that kind of summarizes all of the activity on the frontier here. I want to ask you the question because I haven't really like, we haven't had a chance to talk about this in more detail. What do you think about AI agents? Are AI agents really going to be the meta for this cycle? I, maybe I'll give like two takes here.
36:18 Ryan Sean Adams? First is this take, which is encapsulated in this chart from Messari, which charts in blue, you see the, the DeFi boom, right? And this is the 2020 to 2021 DeFi boom. And you see kind of this in the blue line all the way from like April of one year to April of, uh, I guess two years later, 2021. And you could see a massive run up from about zero billion. Okay. It was like in the hundreds, in the hundreds of millions, right? Very, very low market cap. And then DeFi absolutely explodes in this cycle to over 60 billion. And overlaid on that chart is an AI index. This is the market cap of kind of this AI agent meta right now.
37:00 Ryan Sean Adams? And it's about where DeFi was in, I want to say December of 2020, going into 2021, going into that, that big cycle. And if it continues the trajectory that DeFi did, uh, it would eclipse. 60 billion. So it's at something like 14 billion right now. And we're headed, we're headed to 60 billion and perhaps beyond. Okay. So that's like the bull side. There's also the, the bear side of this, which is a take, I think, from Raul Paul, whom we enjoy, is a good head on his shoulders, I think. And he says this, this is the bear, the bear take on AI agents. Unpopular opinion, but I think the current AI agents theme is mid curve and took off because nothing else was going on to amuse the chronic gamblers. And then he says ducks out of the room.
37:44 Ryan Sean Adams? So he says, it's basically, you know, not here. It's, it's bots. I actually asked him a bit more about this because I took the other side. It was no AI agents, in my opinion, are one of the most interesting things to happen to crypto since the birth of DeFi. And he says, he clarified more, AI agents are the most interesting thing in AI, but not in crypto yet, in my opinion, he says. I think this is the take that they're just chatbots. They're just kind of chatbots connected to a Twitter API. Not a big deal. It's another crypto hype thing. And it's kind of gamblers having fun. So we got the bear and the bull take for this AI meta. What do you think?
38:22 David Hoffman? I think there is still a lot of learning and education left to do to really be able to measure what's going on in the AI space. Cause it's not just AI agents. The, one of the takes going, that going on is AI agents have like captivated, like the majority of narrative mindshare in crypto. And this agent word is really this, this cool new thing. And the, the detractors, the critics are saying, oh, agents are just a really fantastic rebrand of bots. But it's actually just like, it's just, it's just like deterministic code. That's not imaginative and we are just rebranding it as agents, which I also don't think is correct. I do think that people's imaginations are going wild right now.
39:04 David Hoffman? And we are imagining a very bullish, very amazing future where a lot of this tech gets built and developed and refined and perfected very quickly. And that, that future is so near around the corner when it's really not perhaps. This is what bull markets are. This is what bubbles are, is like people's imaginations run wild. And this is what happens. Every single bull market, my imagination ran wild in 2017. We've ran wild again in 2021. Everyone's imagination is running wild with the possibilities of AI agents. And I'll get into like, what I mean by that and where I, where I think AI is actually very helpful to crypto, not just in the agent space. But let's just like, kind of look at some mindshare things. This is a very classic thing to look at. We did this every single bull market of just like Google search trends.
39:48 David Hoffman? AI agent is just parabolic in Google search trends. And AI agent, that is actually a neutral technology. It's not necessarily crypto. But if you go and you click any of the links, the first one is AI agent crypto. And then it's AI agent stocks. And like the AI agent stocks, well, that's going to be Nvidia, which is at all time highs. And then really everything else is crypto. And it's really not even Nvidia in the first place. We are like, the crypto industry is developing agents. And this is also just a screen cap from Cato, which is talking about the mentions of the word agents across things like Twitter, like news, websites, podcasts. And agents is through the roof and AI agent narrative investing mindshare is at 70%.
40:32 David Hoffman? So all on-chain crypto investors, where are they focused their time? There's memes, there's DeFi, there's GameFi, there's ETFs, there's layer twos, there's real world assets. All of those things are great. They are just getting absolutely obliterated in mindshare compared to the AI narrative, which is dominating at 70%.
40:50 Ryan Sean Adams? I think a bear like Raul would concede that, yes, it's getting the attention. It's getting the attention economy right now. AI agents, that's kind of what he's saying is like the gamblers are bored. So they're all focused. But my question to you is, David, do you think it will do this? And when I'm referring to this, I'm looking again at what DeFi did between 2020 and 2021. Which if AI agents do that, it's got another, what, like 5X ahead of it at least, maybe more? Do you think it'll do this? What's, what's your over under on that? Because Raul is saying, I don't think it'll do this.
41:22 David Hoffman? I think it is in process of doing this. And the reason why, the first thing that would happen if it is going to do this is that attention dominance just goes through the roof. Google search trends goes through the roof. Google search trends are normies. That's retail coming into crypto. And as soon as we can start to make some splashier headlines, I think that's going to start happening towards the end of this quarter and into Q2. Then just more money flows, more development flows. We saw a lot of work to do actually building out these things. But the growth and attention in mindshare is the first step for that to be real. And I want to emphasize, it's actually not just agents. There was this really interesting post from 0X Jeff that EJazz brought to my attention on the AI rollup.
42:05 David Hoffman? So what you're about to hear, Bankless listeners, is kind of like a little snippet of the AI rollup, which I highly encourage you guys to go listen because it's it's where I'm getting all of my AI information just straight from EJazz, straight on the podcast. The title of this is DeFi AI, DeFi, but with AI is the new DeFi. And a part of this innovation is going, that's going on is these kind of like, you use ChatGPT as like the desktop app, right? And I know you like it like that. There are engines like that where there's a window, kind of like a browser window. And you've got a wallet on one side, on the, on the right side, but then you are talking to your ChatGPT like LLM saying, hey, withdraw, withdraw 30% of my AVE portfolio. And then, you know, do this with that. Send it over to this layer two.
42:49 David Hoffman? Or do, take this one action and then take this other action. And the crypto has always had like unfortunate user experience, even when it has gotten so much better, it's still unfortunate. And I think this is a logical conclusion of the future of crypto UX. And all UX across all tech is just chatting with your AI agent. And so AI agents, I think, are really going to round out the UX current, the, the sharp corners of crypto from a UX experience. And that's going to bring more people into the future of finance who weren't able to get there before because of the fun, like the problems of UX. And the fact that this, these engines, these like DeFi engines are able to do this is a parallel developing technology as the agents themselves.
43:30 David Hoffman? So the, the technology being built under the hood is repurposable and being developed by AI agents in the first place. And so there's a lot, it's not just agents, it's generally just the AI-ification of crypto and the AI. Of crypto, I think, is so incredibly bullish for so many different reasons. And another one of them, like, we can keep on going. Illuvium partnered with Virtuals this last week to populate their game with AI agents. So now we have crypto intersecting with games intersecting with AI. Illuvium's putting all of these things together and just putting AI agents to like, kind of populate and enrich their game. And so we're bringing back the word metaverse, Ryan. And this time, the metaverse isn't just like empty plots of land with crypto speculators.
44:13 David Hoffman? It's actually filled preemptively with AI agents for humans to actually go and be a part of. And so the AI tech tree is getting unlocked. It's not just agents, and it's also agents. And I think that is immense. And we are, the AI agent is really kind of just the tip of the iceberg of what is just kind of a paradigm shift. And when people say paradigm shift, this is sign of a bull market in the crypto space.
44:37 Ryan Sean Adams? Well, that's what I mean. I think you're right. I agree with you on this. I think that this is, do you remember like Yams and DeFi in like 2020 or 2021? It's like, I feel like we're around kind of the Yams moment of like food farming moment. We're just like, we're just on the precipice. And yeah, a lot of those experiments were stupid and dumb, but like the core DeFi.
44:56 David Hoffman? We learned a lot.
44:57 Ryan Sean Adams? Yeah. And that's where I feel like we're entering. The one thing you were talking about user experience improving because, you know, you have kind of like a GPT or chatbot that's doing transactions for you. Another way to look at this is like, if you are an LLM, if you are a bot or an agent, let's say, if you're an AI, like, what is the UX for using crypto versus using traditional finance, right?
45:21 David Hoffman? The UX in traditional finance doesn't exist.
45:24 Ryan Sean Adams? Yeah.
45:24 David Hoffman? You don't have it.
45:25 Ryan Sean Adams? From a human perspective, we're always like, oh, it's not ready for my mom or like my grandma. We can't onboard them to crypto. It's still too complicated. Well, this is the absolute reverse for an AI agent, right? Like, for them, they can't walk into a Wells Fargo. Like, that's shitty UX. So the UX of crypto of programmable money is like already 100x better. It is their default preference. So the more AI we onboard onto the internet, the more crypto adoption we get. And I don't think that you like fundamentally. Mentally, you know, I think that's a fundamental, again, I'll use the P word now, paradigm shift. Right? So like as OpenAI and as Gemini and all of these like large Microsoft Googles of the world, LLMs are kind of launching agentic frameworks.
46:09 Ryan Sean Adams? The preference for the money layer of those agentic frameworks is going to be crypto. And I think that is a change, kind of on the DeFi level caliber of changes. And yeah, I think we're just starting. It's the thing that I would feel like betting on this cycle.
46:24 David Hoffman? Yeah, yeah, everyone is very bullish about AI agents. And in my opinion, rightfully so, the fact that the idea of making sovereign AI, like an independent AI actor that doesn't have influence and it can have its own directions. That's very cool. And that's actually a subsector of the general AI-ification of crypto at large. And that itself is, is a paradigm shift, paradigm shift, paradigm shift.
46:48 Ryan Sean Adams? Oh, we're topping. I feel us. We're topping now. Operation Choke Point emails were released. Were we making all this up or were they really out to get us, David? Sometimes I felt like, are we too paranoid in this industry? Well, it turns out, no, we're not. We have email evidence that confirms the FDIC was actually out to get us. Also, more evidence of a political vibe shift. We've got Canada on the verge of maybe electing a pro crypto prime minister. And also Mark Zuckerberg, he's pivoting meta towards free speech. This is a change from him. We'll talk about all that and more. But before we do, we want to thank the sponsors that made this episode possible, including Frax, crypto's decentralized central bank, some of the best yield in DeFi. Go check them out.
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49:05 David Hoffman? Ryan, just last week, one of the few remaining leaders, architects of Operation Choke Point 2.0, bit the dust. This is a letter from Michael Barr to announcing his resignation as vice chair to the Fed. There's only like two or three Operation Choke Point 2.0 architects left. This will take effect on the February 28th. If a successor is appointed, he will continue to serve as a member of the Fed's Board of Governors, but nonetheless, he will be effectively out as chair. Who and what is Michael Barr famous for? He was generally against the idea of banks holding crypto. He didn't want to allow banks to have crypto on their balance sheet,
49:48 David Hoffman? so he didn't want banks and crypto to really intersect at all. Cynthia Lemus, a quote from Cynthia Lemus says, "Michael Barr has completely failed to fulfill his duties as a vice chair for supervision at every turn, enabling Operation Choke Point 2.0, and illegally increasing his power at the cost of Wyoming's digital asset industry." I think Cynthia Lemus, and also Caitlin Long, who is coming up next here, really had an axe to grind against Barr, because Caitlin Long had her Bitcoin bank, her alternative bank from the state of Wyoming, and it was Michael Barr and generally Operation Choke Point 2.0 who said no to specifically the idea of a fully reserved bank, which is kind of nuts. It's pretty safe. Pretty damn safe.
50:33 David Hoffman? Michael Barr was one of the peoples who pressured Silvergate to liquidate, to quote voluntarily liquidate in March of 2023. And so here's a great meme from Nick Carter, who's created his wanted list. There's only three people left. Michael Barr gets a big fat red X right over his face. The remaining villains, Senator Elizabeth Warren, Michael Gibson, and Nellie Lang. Only three remaining members left.
50:59 Ryan Sean Adams? Three of the eight, the original Operation Choke Point folks. So political winds shifting, that's for sure. And if you're curious if any of this choke point stuff was made up or not, was it just a crypto conspiracy theory that we just, you know,
51:13 David Hoffman? It was just a dream.
51:15 Ryan Sean Adams? They're out to get us. They're everywhere. They're out to get us. No, they actually probably were out to get us. This is Paul Grauel, which is chief legal counsel for Coinbase. And he has been subpoenaing the federal government, particularly the FDIC, to try to get emails released to see what they were really up to behind closed doors in Operation Choke Point. And given FOIA requests, given court orders, et cetera. We actually have some of those emails. So he released these emails last week, David. Do you want to read some of this stuff? Because this is Nick Anthony, who put together an actual thread of some of those egregious FDIC emails. And they are writing generally to banks or financial institutions. And the general tone, as you're about to hear, is like discouragement from doing anything in crypto.
52:00 Ryan Sean Adams? And this, again, is coming from the people who are your regulators, you know, the big bosses, the people that have the ability to throw you in jail, prosecute you. That's where it's coming from, from a bank's perspective. So give us a taste here.
52:12 David Hoffman? Yeah, what we're really highlighting here is that the crypto industry, along just through anecdotes of startup founders and what we can glean from some banks, really claimed this idea of the choke point 2.0 restriction on banking crypto startups. And it was a bunch of anecdotes, a bunch of stories from crypto founders about how this is true without any actual real evidence from statements of, you know, the Fed, Treasury, FinCEN. You actually really connect that dot.
52:42 Ryan Sean Adams? You just get like a vague email, right? You get like a vague email from your bank saying, ah, we can't service you any longer. You're like, how did that happen? Why did, why did that come about?
52:50 David Hoffman? So the missing link is acquiring communications from like the FDIC, from the Fed, to banks illustrating they're choking off of the crypto industry. We never had any evidence until we get this treasure trove of email, which basically gives us exactly what we want. And so here's the, the first tweet in this thread. And this thread is just like a list of examples of the powers telling banks that they had to shut off crypto. Here's the first one. Nick Anthony, he tweets out, again and again, the FDIC told banks to quote, "pause all crypto asset related activity." For example, in this case, a bank wanted to offer customers the option to transact with Bitcoin. Here's the verbiage from the FDIC to the bank. This is written in an email. "The proposed product is apparently an avenue for bank customers to engage in crypto asset activity,
53:35 David Hoffman? specifically Bitcoin transactions through a third-party arrangement. As a result, we respectfully ask you that you pause all crypto-related activity." That's the first one. Here are four more, and I'm just going to read. This is words from the FDIC to banks. "Approximately 2,800 customers can purchase and sell and store Bitcoin through the bank's online platform. The FDIC has a number of questions. Until that review is completed, the bank should not expand this service to any additional customers." That's the first one. Second one, "As a result, we respectfully ask that you not implement this product while we consider this crypto asset-related activity." Here's a third one. "Accordingly, until we complete our review, we request that the bank refrain from providing this service to its customers." This service is of course a crypto-related activity.
54:19 David Hoffman? Last one, but there's like 20 more. "The bank should not proceed with any crypto asset activity until such time that the FDIC has determined the bank's ability to implement the activity in a safe and sound manner." So many different banks, many, many different banks, all receiving the same verbiage in written form from the FDIC saying, "please stop all crypto-related activity", which is the proof, the missing link that we have, the evidence of yes, there was this effort by the FDIC to choke out crypto and specifically
54:50 Ryan Sean Adams? Crypto-related activities. So it's all being uncovered now, basically. And this at a time when the Trump administration takes charge and people like David Sacks, who's been appointed a czar of crypto and AI are looking into it as well. This is what he tweeted earlier in December from David Sacks. There are too many stories of people being hurt by Operation Choke Point 2.0. Needs to be looked at. I mean, crypto, basically, and huge shout out to Nick Carter, basically memed Operation Choke Point 2.0 into existence because we speculated that this was happening. And Nick and others like him were gathering evidence of this. And now it's reached executive branch attention. So I think overall, this is a story of the winds changing. And the political winds are really changing in general. I feel like, David, do you see this from Mark Zuckerberg?
55:35 Ryan Sean Adams? So this is Mark Zuckerberg going full like anti censorship, almost following Elon's lead. And this is a Mark turn for Meta. Maybe we should just play the first minute or so of this clip.
55:46 Speaker 03 Hey, everyone. I want to talk about something important today because it's time to get back to our roots around free expression on Facebook and Instagram. I started building social media to give people a voice. I gave a speech at Georgetown five years ago about the importance of protecting free expression, and I still believe this today. But a lot has happened over the last several years. There's been widespread debate about potential harms from online content. Governments and legacy media have pushed to censor more and more. A lot of this is clearly political, but there's also a lot of legitimately bad stuff out there. Drugs, terrorism, child exploitation. These are things that we take very seriously, and I want to make sure that we handle responsibly. So we built a lot of complex systems to moderate content.
56:31 Speaker 03 But the problem with complex systems is they make mistakes. Even if they accidentally censor just 1% of posts, that's millions of people. And we've reached a point where it's just too many mistakes and too much censorship. The recent elections also feel like a cultural tipping point towards once again prioritizing speech. So we're going to get back to our roots and focus on reducing mistakes, simplifying our policies and restoring free expression on our platforms.
56:58 David Hoffman? That's a really interesting way to end that. It feels very cut from the same cloth as the Doge effort of, hey, let's reduce complex systems. Let's like reduce regulation and allow a little bit more freedom and proliferation in the free market to kind of take over.
57:14 Ryan Sean Adams? Yeah.
57:15 David Hoffman? So the punchline from that's going on under the hood is they are reducing their effort on their own fact checkers at Facebook and replacing Facebook, replacing that effort with a community managed, community notes system, much like we see, I would say to great effect on Twitter. And so Facebook is going the community notes route to uncensor themselves and kind of take a step back from content moderation policies, which I think they are kind of alluding to was more of a push. Content moderation was pushed for by the left, by the Democrats. And now, again, he cited the elections with the changing of the winds. He's saying like, I'm taking a step back from content moderation and leaning into like free expression. What do you think about all this?
58:00 Ryan Sean Adams? I think it's very cool. This is definitely a pivot for Meta and definitely a pivot for Mark Zuckerberg in kind of going this direction. And it kind of reflects the political vibe shift. And of course, you know, Zuck is kind of front running this. What I'm excited about, because this video continues for like five minutes, is Mark Zuckerberg actually has some tangible action that Meta is going to take, both in Instagram and Facebook, like right now, right? You mentioned one of them, but you know, also adjusting content moderation practices. So they're just focusing on things that are illegal and not kind of like other speech violations, relocating the trust and safety teams out of the Silicon Valley bubble and into other locations. Also talking about just simplifying their content policies overall. The most exciting one was the one you mentioned, which is this community notes
58:45 Ryan Sean Adams? protocol feature, something that Vitalik Buterin has advocated for a very long time. Do you remember, I think it was like a year ago or so.
58:52 David Hoffman? You wrote a blog post.
58:52 Ryan Sean Adams? He talked about, yeah, community notes. As a, as a protocol. And the way it basically works is it's kind of, it, it, it's a moderating force and it's kind of a, a truth checking force. It's a consensus finding force across a social media platform because it kind of brings polar opposite communities. So like the archetypical case is like, you know, somebody from the left, somebody from the right. What is the common thing that they both agree to about this particular video, right? And so it's kind of that, that moderating force and likely the thing, the truth that we all share in common. And it's been used to your point to great effect on X. And to see that extended into Meta and Facebook is, is great. I think it's a big plus.
59:33 David Hoffman? And then of course Elon Musk tweeted out, this is cool to, to this content, agreeing with, with Meta's decision to, to align with the, the times, I would say. Interestingly, also Meta has donated a million dollars to the Trump fund. What is this inaugural fund? You know what the inaugural fund is? What is that?
59:55 Ryan Sean Adams? No, I have no, I don't know specifically what that is, but it's definitely like, here's a million dollars, kind of kiss the ring.
1:00:00 David Hoffman? Yeah, it's definitely Chris the ring.
1:00:02 Ryan Sean Adams? You know?
1:00:02 David Hoffman? Yeah. Also Circle, Circle also kissing the ring with a 100, $1 million donation to the inauguration inaugural fund. I don't know what that does. Anyways.
1:00:14 Ryan Sean Adams? I think what's interesting about this political vibe shift, we're seeing it everywhere, is it's, it's also international. So one other thing that happened this week is the Prime Minister of Canada, Justin Trudeau, actually resigned. And do you remember we did that episode all about the Canadian trucker, like, bank freezing and all that fiasco?
1:00:32 David Hoffman? That fiasco was that downstream of, and other, many other things. Downstream of that fiasco was just a Canadian kind of rejection and disapproval of Trudeau's leadership. And so you can kind of see Canada as a little bit of a microcosm of what's going on in America. Would you say that's accurate, Mr. Canadian?
1:00:50 Ryan Sean Adams? Yeah, definitely.
1:00:50 David Hoffman? Our resident, resident Canadian on the podcast?
1:00:52 Ryan Sean Adams? Definitely. Now, now, by, by the way, I'm speaking on behalf of my Canadian family too. It's like, they are very disturbed with, you know, Trump's, yeah, Canada is just gonna be the 51st state of the, the US. They're very disturbed by that kind of language. But I do think there's A political shift going on in Canada and Prime Minister Trudeau is out. The guy who's actually set to replace him and elections haven't been called yet, but they probably will sometime in the first half of this year is Pierre Poliev. And Pierre is actually a, he once promised to make Canada a crypto capital, the crypto capital. So similar statements as Trump. So this is in March 2022. He purchased a chicken sandwich with Bitcoin and promised to enable Canada to become the blockchain and crypto capital of the world.
1:01:38 Ryan Sean Adams? Sounds very Trumpian if you ask me, and this is the person who's slated to be the next Prime Minister of Canada. So it's happening in other locations. It's not just an international thing.
1:01:47 David Hoffman? Speaking of not being international, Do Kwon. Do Kwon is no longer international if you're coming from the perspective of the United States. Do Kwon has arrived in the United States and pleaded not guilty. Has pleaded not guilty. He appeared before a US magistrate judge in the Southern District of New York in Manhattan on January 2nd, pleaded not guilty to the charges in the first legal hearing. He agreed to be held without bail. The US prosecutors have estimated that the collapse of TerraForm Labs may have affected over 1 million victims worldwide. And the government will set up a website about the public proceedings in Do Kwon's incoming case. So what are the charges that Do Kwon is facing?
1:02:30 David Hoffman? Nine counts of pretty various charges. Securities fraud, wire fraud, money laundering charges, and commodities fraud. Basically the same criminal charges in the same jurisdiction as SBF and Alex Mischinsky.
1:02:45 Ryan Sean Adams? What do you think about this? Like in general? Now, the dust has settled a little bit. By the way, I saw a Twitter thread. Somebody making the case that Do Kwon did nothing wrong, basically. He just kinda, he set up a bad mechanism and it sort of didn't work out.
1:02:58 David Hoffman? And then also was a huge asshole about it.
1:03:01 Ryan Sean Adams? Yeah, but, but it was making the case that the, the mechanism itself was attacked by somebody who made tremendous amount of profit to destabilize it and take it down. Anyway, it wasn't Do Kwon's fault.
1:03:11 David Hoffman? Yeah, but Do Kwon had that same mechanism fail in a smaller, earlier project that he did not disclose that he was the CEO of.
1:03:20 Ryan Sean Adams? Sure, but there's like, there's like levels of irresponsibility, right? So we have like the, the bad boys of 2022, like we know all their names, Alex Machinsky, SBF. SBF actually like took customers' deposits and went yellow the market on them.
1:03:34 David Hoffman? As guilty as it goes.
1:03:36 Ryan Sean Adams? Alex Machinsky did that.
1:03:37 David Hoffman? Also as guilty as it goes.
1:03:39 Ryan Sean Adams? Yeah, okay, but.
1:03:40 David Hoffman? I don't know, there's, I see that there's room for Do Kwon to be less guilty than those two extremely guilty people.
1:03:46 Ryan Sean Adams? Maybe.
1:03:47 David Hoffman? They, he, I could see him, yes, I could see him being less guilty than them.
1:03:51 Ryan Sean Adams? Steady lads, you remember steady lads?
1:03:52 David Hoffman? I remember steady lads.
1:03:53 Ryan Sean Adams? There's some of that where Do Kwon was like, eh, he's trying to deploy more capital, steady lads, you know? So how much of that was kind of nefarious and intent? It was certainly irresponsible. Anyway, all this to say, I'm sounding like a Do Kwon apologist. I'm really not, okay? I'm really not, but I want to see what evidence comes out in the court system to see how culpable he is.
1:04:14 David Hoffman? Behind the scenes that we don't know.
1:04:16 Ryan Sean Adams? Yeah, I want to see the emails. Show me some emails.
1:04:18 David Hoffman? I want to see what Do Kwon knew and did ahead of the collapse of Terra.
1:04:23 Ryan Sean Adams? Yeah, this will be interesting. So another court case for us in 2025 shaping up, David.
1:04:28 David Hoffman? Yeah, stay tuned. All right. That's been the weekly roll up for the second week of January. Thank you guys for staying tuned with us as we go into 2025, into Bankless's fifth year, which is nuts. If you guys have been with us, or even if you're brand new to crypto, just give us a like and subscribe if you please. Wherever you're listening to this, whether it's on YouTube or on Spotify or on Apple, we recommend actually watching on YouTube, especially if you're a Bankless premium subscriber and you're getting everything.
1:04:54 Ryan Sean Adams? Yeah, I would say so. I mean. I like Spotify.
1:04:57 David Hoffman? Oh, I'm sorry. I meant Spotify. I meant Spotify. YouTube is also great. YouTube is also great, but Spotify video is fantastic.
1:05:04 Ryan Sean Adams? Even better.
1:05:05 David Hoffman? But wherever, wherever you're listening to Bankless, if you could just pull out your phone or click that like and subscribe button and give us that five star review so we can get up the ranks. So we can espouse our bags, our collective bags to a wider population. It's do it for your bags. Do it for your bags. Five star reviews for your bags.
1:05:20 Ryan Sean Adams? Very greedy. See, I'll give them more virtuous take, which is do it to help the world go bankless. And it can be both of those things. Okay?
1:05:26 David Hoffman? It can be both.
1:05:26 Ryan Sean Adams? We can do both.
1:05:27 David Hoffman? We can do both. Anyways, coming in at the meme of the week, Ryan, this is a little bit less of a meme, but this is an AI agent that EJAS was showing me on the AI rollup. And this particular AI agent is just a savage one. He's, that's what he's known for. He just dunks on you. He's just mean to you in Twitter. Yeah. Which I mean, I don't really like on Twitter, but when it comes from an agent.
1:05:48 Ryan Sean Adams? It's funny when it's an agent?
1:05:50 David Hoffman? It's funny when it's an agent. Yeah. And so I followed the agent while we were in the middle of recording the AI rollup with EJAS. And then the agent tweeted at me and says, so, Trustless State, that's my Twitter handle, Trustless State, just hit that follow button. Can't wait for the next 1,000 DMs about Ethereum's North Star. Bro, save it for your next three hour podcast nobody asks for.
1:06:11 Ryan Sean Adams? That's pretty.
1:06:11 David Hoffman? I thought that was pretty good. I thought that was pretty good.
1:06:15 Ryan Sean Adams? Maybe you have an insult kink here. That's really, that's really painful. So what's interesting though, is this AI bot agent, I don't know. This AI agent is like aware enough of the crypto context to know exactly who you are, what you do, and to come up with just like a fantastic slam.
1:06:35 David Hoffman? And that I make three hour podcasts that nobody asks for.
1:06:38 Ryan Sean Adams? Come on, that's innovation. This whole market's at least worth a hundred billion.
1:06:43 David Hoffman? At least, this is a billion dollar agent.
1:06:47 Ryan Sean Adams? Anyway, guys, you know the drill. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.
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