ROLLUP: Is the Bull Market Back? | Treasury QE | Trump Pumps Crypto | SEC Token Rules

Crypto just had one of its biggest breakout days in years. Ryan and David unpack the Treasury’s QE-like move, the White House and SEC’s crypto push, ETH’s violent rebound, and whether this rally finally broke the back of the bear market. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓 NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near-pod 🔑 BITKEY | GET 10% OFF USE CODE: BANKLESS | #bitkeypartner https://bankless.cc/bitkey 📊 BITGET | TOKENIZED STOCKS 2.0 https://bankless.cc/bitget-stocks 🎯 THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 👑 BANKLESS CONTENT MCP https://www.bankless.com/premium --- TIMESTAMPS & RESOURCES 0:00 Intro 0:08 Crypto Market Breakout: BTC, ETH & ETFs https://x.com/Matt_Hougan/status/2090070306199089249 https://x.com/HHorsley/status/2090198850485338569 https://x.com/jonnym1ller/status/2090196488500723745 https://x.com/TheBlockCo/status/2089338657605898711 17:14 White House Pumps Crypto https://x.com/WhiteHouse/status/2090152688302411815 https://x.com/Bankless/status/2090449581171454021 https://x.com/ChairmanSelig/status/2090159414170771778/video/1 https://x.com/tradfi/status/2090154939675021396 22:40 Treasury's QE-Like Move https://home.treasury.gov/news/press-releases/sb0607 https://x.com/Hedgeye/status/2090058257180029345 https://x.com/biancoresearch/status/2090065814581911653 https://x.com/KobeissiLetter/status/2090212967317115053 https://x.com/fejau_inc/status/2090071008652980699 31:42 Did the Bear Market Just End? 40:58 SEC Unveils New Crypto Rules https://x.com/SECGov/status/2089784594409103507 https://x.com/SECPaulSAtkins/status/2089788275913322994 50:53 Stablecoins Get Accounting Boost https://www.fasb.org/news-and-meetings/in-the-news/fasb-seeks-public-comment-on-proposal-to-enhance-cash-equivalents-disclosures-and-clarify-the-cash-equivalents-evaluation-for-certain-digital-assets-425287 https://x.com/TrustlessState/status/2090230682781938071 https://x.com/austincampbell/status/2090231550080094599 53:01 Crypto Apps & DeFi Momentum https://x.com/ErikVoorhees/status/2089375845425287610 https://x.com/business/status/2089077253778915636 https://x.com/paulerlanger/status/2089733900109021486 https://x.com/TrustlessState/status/2090140422513348899 https://x.com/Compound_xyz/status/2089386082441871388 1:01:11 Bullish Into the Close --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

• 0:04Speaker 00

  We just had one of the most legendary days in the crypto markets in a long, long time. Bitcoin has probably the biggest green candle I think I've ever seen since before 1010. Everything in crypto is up and up for a handful of different reasons. It's a double-digit week for so many crypto assets. The big question I think I want to ask in this episode is, is the bull market back? Was that it? Was that the starting pistol for the next bull market? Today, this day, yesterday, at the time of recording, Wednesday, August 19th. Do you remember when BlackRock filed for the Bitcoin ETF? And Bitcoin popped like 12%? And it was just like a moment that everyone was like, this is it.

• 0:43Speaker 01

  Yeah, that seems like such a long time ago.

• 0:47Speaker 00

  This, that is, it feels a little reminiscent of that, of just like, this is it. It's a this is it moment.

• 0:54Speaker 01

  I think-

• 0:54Speaker 00

  Not completely, but it feels a little bit like that.

• 0:56Speaker 01

  Well, I think that is the question to ask is like, did that move just break the backs of all the bears that were still out there and then had such momentum? But first, in order to answer that question, I think we have to ask the question and answer the question, like, why did this even happen on Wednesday? It just seemed like out of the blue, but we did have some-

• 1:14Speaker 00

  Out of the blue, left field.

• 1:17Speaker 01

  Out of left field, but QE, Treasury QE, may be back this time. Okay, we'll define what that is and what Besant said, what the Treasury is doing. That was a key catalyst to these markets. Also, the White House, Trump gave a speech, basically pumping crypto and also-

• 1:35Speaker 00

  Spent all day pumping crypto.

• 1:36Speaker 01

  Yeah, and also the SEC released a regulation of crypto assets. Here's actually how Matt Hogan put it, which I think was great. In the last 24 hours, he's talking about earlier this week, the SEC released regulation crypto assets, it's a 402-page document that we'll get into. The Treasury launched yield curve control. The White House prepared for a meeting with top crypto executives to discuss tokenization in the Clarity Act. It's hard not to be extremely bullish, both Bitcoin and crypto right now. And indeed, the market was bullish. We got Bitcoin up double digits. I think ETH was up like, was it up like 20% on the week or something crazy?

• 2:16Speaker 00

  Dude, the president said hyper liquid on air, on live TV. You know, Bitcoin goes up because of QE. All of this stuff happened, you know, Venice crosses $100 million in ARR and the winner on the week is ETH, actually. ETH is up like the most, so we're going to talk about all of that and more. But first, we're going to talk about Iron Claw from our friends and sponsors over at Near. Iron Claw 1.2 just dropped. We probably all remember OpenClaw, like personal agents to do your bidding, except OpenClaw was super insecure, leaking passwords, deleting documents, revealing API keys, it was a mess. Iron Claw is Near's fix for rogue AI that's misaligned with his users, protects your secrets in a vault that the model never sees, all in pursuit of creating user-owned AI,

• 3:01Speaker 00

  user-owned agents that are safe to use with crypto. So 1.2 just dropped that lets your Iron Claw plug into all your day-to-day apps like Slack and Telegram, just to give it the context that it needs to be a really useful assistant. It is also MCP ready, so you can now connect your Iron Claw to any MCP tool, which is perfect, Ryan, because out of the bankless universe, we have the bankless MCP. You know how much, you know how many podcasts we've done, Ryan?

• 3:29Speaker 01

  We gotta be, I know we're over 1,000. Are we over like 1,100?

• 3:33Speaker 00

  We are over 2,000 podcasts.

• 3:35Speaker 01

  Wait, we're over 2,000 podcasts? You've been busy.

• 3:38Speaker 00

  Yeah, we've been doing this for six years.

• 3:40Speaker 01

  Oh my God. So that's a lot of transcripts, right? That's a lot of-

• 3:43Speaker 00

  Lots of transcripts, direct from the source, data that like AI labs don't have. And AI labs famously just haven't trained well on crypto data. So I don't know if you go into, if you notice going into your like your Claude or your Venice or your OpenAI, whatever you use, and you ask crypto questions, usually it's pretty constrained with how good it can answer. You can answer the basics, but you can ask anything, anything beyond the basics and then you get pretty poor answers.

• 4:08Speaker 01

  Yeah.

• 4:09Speaker 00

  This is what the bankless MCP is for. And so you can, using your bankless premium account, you can hook in the bankless MCP to your Near Iron Claw agent and you just have the most crypto-capable, crypto-ready AI LLM ever. And so this is available for bankless premium subscribers. And if you want that, you can go into your account and you can just tell your agent to install it and then all of a sudden your crypto-related prompts will be much better.

• 4:35Speaker 01

  Dude, that's very cool. I want that. I can't wait to ask myself some questions using the bankless MCP.

• 4:40Speaker 00

  Dude, I put out, I put out this tweet about like announcing the bankless MCP and then you know what I got? Somebody generated like a fanfiction of you and me debating about ETH.

• 4:51Speaker 01

  Who won the debate?

• 4:53Speaker 00

  I don't know, it was a Socratic debate. Like, okay, or answer crypto questions if you want, or just make bankless fanfiction. Both work.

• 5:02Speaker 01

  You know what? We might repeat that debate in today's episode, okay? Because I want to get your thoughts on ETH. But before we do, you got prices up. Let's just celebrate what happened last week. We have bounced-

• 5:13Speaker 00

  We're like gargantuan candle.

• 5:14Speaker 01

  Oh my God, we have bounced hardlyly off of the 200-week moving average for Bitcoin, which was something like 63, 64K, if I'm recalling correctly, the 200-week moving average. What are we at the time of recording right now?

• 5:26Speaker 00

  Yeah, last week we were recording Bitcoin was right at the 200-week moving average, $64,000. We were at $72,300. We paused right around 7,000 and we have just had continuation as of this morning. So we had a huge bullish day yesterday and we are continuing that bullish day today. And so firmly away, we are, we are, how much is that? We are up-

• 5:49Speaker 01

  That's double digits, right? We are-

• 5:50Speaker 00

  We are up 14% in a day and a half. Yeah, really, really, really great, really, really great.

• 5:56Speaker 01

  Incredible.

• 5:57Speaker 00

  Some just absolute winners on the week. EtherFi, EtherFi announced kind of like an evolution, you know, EtherFi, the neo-bank, I'm calling it a neo-brokerage, they're adding in assets and margin into their account. And also they improved their tokenomics. And so EtherFi pumped 38%. Pump.fun is up 28% because usage and revenue on Pump.

• 6:18Speaker 01

  On the week you're talking about.

• 6:19Speaker 00

  On the week, yeah.

• 6:20Speaker 01

  And it's been up already.

• 6:21Speaker 00

  It's been up 50% on the month, so huge continuation from PumpFun, just because revenues are growing and therefore Pump buybacks are growing. Hyperliquid is up 25%. We're going to get into this because Donald Trump said hype, hyper liquid on national TV or just the White House, the White House event. So Hyperliquid is up. Venice, VVV, is up 20% on the backs of OpenRouter getting acquired and also Venice crossing 100 million ARR. And so I think people are reacting to yesterday, the Treasury announcing they're doing QE, we're going to talk about. And then also Donald Trump just having a day of pumping crypto. It's like, wow, this one single bullish day. No, no, there have been bullish catalysts for the last like eight days.

• 7:06Speaker 00

  EtherFi had its own bullish catalyst, Venice had its own bullish catalyst. And all of this kind of happened. And I think one of the reasons why it was so violent yesterday was the combo of the QE announcement and then the White House just blew out people's shorts, which is why one of the biggest winners on the week is ETH. ETH is the biggest winner of the week because so many people got wrecked shorting ETH.

• 7:31Speaker 01

  All the haters got wrecked?

• 7:32Speaker 00

  They just got, so I saw a account like lost $30 million because they had like a huge ETH short opening. That's why, that's why ETH just pumped so violently. So Bitcoin is up 13% on the week. Ether is up 23% on the week, $2,330.

• 7:49Speaker 01

  Incredible. Jamie Coates said this, ETH's move yesterday, just to put this in historical context, was the eighth-largest single-day move since 2018. ETH's eighth-largest single-day move since 2018. And history says the short-term follow-through is close to a coin flip, but the odds skew meaningfully higher over the next three to six months. So when you see that up explosion, usually that, that proceeds like even more explosions.

• 8:17Speaker 00

  Even further up, even further up. Okay, so you can, you can zoom out and you can see this green candle. It's quite notable.

• 8:25Speaker 01

  It is, it is quite notable, but that blue line there is the 200-week moving average. So we're not there yet.

• 8:31Speaker 00

  Despite, despite having an incredible day, ETH is still about 7% below its 200-week moving average, which if you're bullish and you're looking to the upside on ETH, you're like, oh, there's so much more room just to have mean reversion here.

• 8:43Speaker 01

  But that's, that's strength is something we haven't seen in a while. Strength on the ratio too, strength disproportionate to Bitcoin on this move up. There's some strength in the charts. I think even traders are starting to acknowledge this. I know this is a question bankless fans wanted me to ask, but I was going to ask it anyway, okay? Does this move cause you to be tempted to go back and refill your ETH bag, sir? And retract some of the words that you've said about ETH? Is this it? Did this break the, the bearish sentiment in David Hoffman?

• 9:17Speaker 00

  Retracts my words? No, I put a lot of thought into those words.

• 9:22Speaker 00

  I don't know if short, a short squeeze is like the confirmation that like I want.

• 9:30Speaker 00

  It's it, no.

• 9:32Speaker 01

  No, okay.

• 9:33Speaker 00

  Is the answer, but like, I don't mean to say like, no, is therefore bearish. Like, I think, I think you could absolutely justify being bullish ETH here.

• 9:43Speaker 01

  Listeners, you guys hear that hesitation in his voice? He's, he's, he's not quite certain that his position is correct as he's saying these words.

• 9:50Speaker 00

  I'm not trying to be like, too, like, concrete on either direction, which was also the conclusion of my article. It's like, ah, it's just like so much priced in. Like, it's not gonna have, it's not gonna go too far up, it's not gonna go too far down, and I'm gonna look for opportunities elsewhere. And so I'm not trying to say like, give an affirmative, absolutely, I'm, I'm buying back my bags, or absolutely not, I'm totally bearish. It's the same position. It's like, eh, it's eh, I'm looking for excitement elsewhere.

• 10:19Speaker 01

  All right, ETH Maxies, we still have some more work to do. But the, a, a way to start into that position of you flipping on your, your ETH position and refilling your bags is maybe to start with some BMNR, which is Tom Lee's DAT for Ethereum. And I know you spoke to Tom Lee earlier this week, on Tuesday, I believe. I actually haven't talked to you about that episode. Uh, Tom Lee purchased another, uh, what? 10,000 ETH on the week? So every single week, he continues to purchase, now has 4.8% of all ETH. Okay, so how about bullish BMNR if you're not bullish ETH?

• 10:58Speaker 00

  Look, okay, so right after that podcast episode, I think Tom Lee and the Bitmine team, everyone thinks Bitmine is Tom Lee, it partly is, but I think the Bitmine team also is kind of like a sleeper about Bitmine.

• 11:12Speaker 01

  Oh, that team is cracked.

• 11:14Speaker 00

  Cracked team, cracked team. And, and Tom Lee's a great, just, uh, like, figurehead. Like, my hot take is that I think Tom Lee is a better Michael Saylor than Michael Saylor is. And like, these are apples to oranges, but these are both leaders of the number one and number two Dats. And Saylor is a classic steak-eating Bitcoin maxi, laser-eyed maxi, who's a little bit too aggressive. Tom Lee is a measured, moderate, balanced, reasonable leader of Bitmine. And I think Bitmine, I think between Bitmine and MSTR, I think Bitmine wins big. I think Bitmine outperforms MSTR.

• 11:55Speaker 01

  So you'd rather own BMNR than MSTR? That means you're bullish ETH relatively, those are the assets, you're bullish ETH relative to Bitcoin.

• 12:05Speaker 00

  Yeah, I, well, I think it's not quite the same. I think Michael Saylor disrespects his equity like none other. And I think, I think this Tom Lee respects the fuck out of his equity. And I think, I think that is going to be, uh, I think that is going to be the story between these two assets moving forward. Uh, and so like, really, I came out of that episode with Tom Lee as being like, I think BMNR is quite bullish, because to your point, like, I do see upside, like, a, a possible upside with Ether, the asset, in the future.

• 12:41Speaker 01

  I know, we've said before, Tom Lee is probably the most important person in the Ethereum ecosystem as of right now, certainly the most important new entrant over the last 18 months. Uh, I can't wait to listen to that episode, I think it's coming out on Monday. I just have one question about that episode. Did you ask him the question of, where's he getting all his money to go buy ETH every single week? And did you get a good answer? What did he say?

• 13:03Speaker 00

  I got a partial answer.

• 13:05Speaker 01

  Yeah, what was it? Where's he getting the money?

• 13:07Speaker 00

  No, you gotta listen to the episode, bro.

• 13:11Speaker 01

  Oh, always money in the banana stand, right? Okay, okay. There was also a big day for ETFs, as I understand it. What's, what are we looking at?

• 13:21Speaker 00

  Yeah, this is a hundred-horseley from a Bitwise. $300 million of volume today across just the Bitwise ETFs, which are our favorite ETFs here on the podcast.

• 13:31Speaker 01

  We have favorites?

• 13:32Speaker 00

  Yeah, I like the Bitwise ETFs.

• 13:33Speaker 01

  Okay.

• 13:34Speaker 00

  Yeah.

• 13:34Speaker 01

  Yeah.

• 13:35Speaker 00

  Yeah.

• 13:35Speaker 01

  Crypto native.

• 13:36Speaker 00

  I mean, who are you gonna pick? BlackRock?

• 13:39Speaker 01

  Okay, I'll, I'll pick for this week, I'll pick Bitwise ETFs, they're the best. Anyway.

• 13:43Speaker 00

  These are our favorite ETFs, uh, top five by volume. Uh, Bitcoin ETF, Solana ETF, Hyperliquid ETF, Ethereum ETF, and XRP ETF. So, uh, these are just volume. There was also just broad inflows into the ETFs as well. I know, I just talked shit about the BlackRock ETF, but here's Alex Thorne talking about IBIT, and IBIT had his biggest retail buy of IBIT in the last two years.

• 14:08Speaker 01

  Wait, wait, wait, that candle? That's the biggest candle? Yeah, this is the biggest candle in the last two years.

• 14:12Speaker 00

  That's right.

• 14:12Speaker 01

  Incredible.

• 14:13Speaker 00

  That's right. So, so we got, we got some bullishness out of the ETFs as well.

• 14:15Speaker 01

  Well, uh, somebody had to say it, somebody did say it. If you're in AI, pivot to crypto, the capital rotation of the year, that's what you gotta do. Uh, crypto outperformed basically everything on the week, including, of course,

• 14:31Speaker 00

  In a big way.

• 14:31Speaker 01

  AI, in a big way, and this seemed to come out of nowhere. I think we need to talk about why, after the break, David. Was it the Besen Treasury QE thing? Was it the White House remark? We're gonna discuss that and then talk about whether this bullish sentiment has changed things, whether it can be sustained. So all that and more, but before we do, we want to thank the sponsors that made this episode possible.

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• 16:25Speaker 00

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• 17:10Speaker 00

  Start trading today through the link in the show notes. This is not investment advice.

• 17:14Speaker 01

  Trump giving a speech at the White House, here's one of the things he said.

• 17:19Speaker 02

  I understand that Mike is also working to bring hyperliquid into the United States in a fully compliant and legal fashion, he's working very hard on that.

• 17:29Speaker 01

  He said the words, he said "hyperliquid." Did you?

• 17:33Speaker 00

  He said them in all caps, did you hear that?

• 17:37Speaker 01

  I think that's what the, the hype believers want people to believe.

• 17:40Speaker 00

  Do you see Mike Selig's absolute shit-eating grin? Cause he knows the hyperliquid people are gonna be over the moon about this. He is so happy with himself.

• 17:53Speaker 01

  Yeah, that is somebody who is, uh, who's very excited that, that he said the thing that crypto Twitter wanted him to say, I suppose, in this moment.

• 18:01Speaker 00

  The hyperliquid people are gonna love this one.

• 18:02Speaker 01

  This is not the only thing he said. This is, um, you know, from Bloomberg Business Daily, Trump speaks alongside crypto leaders at the White House as part of a longer speech. This is about, I don't know, 30-minute, 45-minute speech, not just, not just-

• 18:15Speaker 00

  I think it's almost an hour.

• 18:16Speaker 01

  Yeah.

• 18:17Speaker 00

  45 minutes, yeah.

• 18:17Speaker 01

  Not just, not just Donald Trump, other, you know, leaders in his administration also spoke, including, I think, uh, Mike Selig, and surrounded by, actually, you know what? So let's hear some clips from that, just a highlight reel.

• 18:32Speaker 02

  I want to thank the chairman of the Commodity Futures Trading Commission, Mike Selig, for his tremendous leadership. Come here. Thank you, Mike. And thanks as well to a very special man, a man that everybody respected for a long time, Chairman Paul Atkins, who's also doing an outstanding job in everything else he touches. He's doing a lot of things for the, for the country, so I want to thank you very much. And many of the top industry leaders, including Coinbase Brian Armstrong, CEO, he's one of the greats.

• 19:05Speaker 02

  CEO of Robinhood Vlad Tenev. Thank you. And CEO of Kraken Arjun Sethi. And thank you very much, wherever you are. Brad Garlandhouse, CEO of Ripple. Brad, thank you very much, Brad. Sergey Nazarov, co-founder of Chainlink Labs. Thank you very much. Good, Sergey. And Tyler and Cameron Winklevoss have tremendous people, tremendous investors, brilliant people. Chris Dixon is here.

• 19:34Speaker 01

  I mean, okay, that was just like, who's who of people in crypto.

• 19:38Speaker 00

  Who's who, yeah.

• 19:39Speaker 01

  Standing around Donald Trump for this, for this speech.

• 19:42Speaker 00

  Yeah, yeah, I just love it. Cameron and Tyler Winklevoss just, you just get, everyone just lumps them together.

• 19:49Speaker 01

  He also said this, um, day one, we fired Joe Biden's rogue Gary Gensler. We like Paul better. He said that, and there's like a lot of Trump classic quotes coming out in, in this speech. But this was, this was really for the crypto people. You know, part of, part of this struck me as like, um, maybe Trump realizing that the clarity bill may not pass. And that he had, I guess, promises that he had made and campaigned about for the crypto industry. And this was a speech like on how to keep his promises through, you know, proposed rulings and through the executive branch. If Clarity Act is, is not going through, that's partially how I interpreted this.

• 20:35Speaker 00

  This also came at the same time as announcements from the SEC, which we're going to get into later in the show, which is basically the SEC doing their part of clarity. And then we also kind of just got another verbal announcement from the CFTC saying, hey, we're going to do a similar thing. So to your point, like, yeah, it's like, okay, clarity is not looking great. So what do we need to do to like follow through on promises? Let's do a little pump in the bags of the crypto industry. Let's pat everyone on the back, thank everyone. And then also we're just going to round about our way back into, we're going to back our way into clarity.

• 21:08Speaker 01

  Yeah, very much. This is how Chair Selig put it. The United States has a choice. We can either write the rules that define the next generation of financial markets, or we can let other countries write them for us. Under the President of the United States leadership, we've made our choice. America will lead. Executive branch taking action to continue crypto. The US is the crypto capital of the world. This is a Trump campaign promise.

• 21:34Speaker 00

  Can you play the clip with Donald Trump talking about him signing the Genius Act?

• 21:37Speaker 01

  Yeah, this is, this is Donald Trump talking about himself signing the Genius Act.

• 21:41Speaker 02

  One year ago this summer, I signed landmark legislation known as the Genius Act. I named it after myself. I didn't want anyone to, I didn't want to use my name, so I just called it the Genius Act.

• 21:57Speaker 00

  That's so unnecessary.

• 21:59Speaker 01

  So unnecessary. At least no meme coins were mentioned. I mean, I guess that era is over. Man, I would like Trump so much better in this position as kind of like political leader of crypto. If he didn't do all the grifting shit.

• 22:15Speaker 00

  If you didn't, if you didn't pocket, like, how much did he pocket? Tens of billions of dollars?

• 22:21Speaker 01

  It's like a moving target at this point, right? But because like, this was not just a speech. I mean, this is the executive branch moving on things. The SEC and CFTC standing right beside him, moving on some things. So there's some substance to this that we'll get into later in the episode. But that happened Wednesday, right? The same day that Treasury came out with some major announcements. There's almost a question, did the, uh, the White House speech move crypto markets? Or did, did the Treasury QE news move crypto markets more?

• 22:53Speaker 00

  That's kind of what I was saying. Even other than those two things, which definitely moved crypto markets. We also just had fundamental growth in some of our like big crypto assets. Like I talked about them before, like Venice, a bunch of revenue. FOMO is making a bunch of revenue. I know that's not a crypto asset. EtherFi revamping its tokenomics. And so like the, the lead up to these very big announcements was underscored by revenue, buybacks and revenue in some of like the fundamentals of our crypto industry. And then we just got, get hit with this wallop of news from the Treasury. Treasury announcing the increased size of nominal, long end liquidity support buybacks, which is just, just words for like, hey, we're going to buy bonds. We're buying bonds.

• 23:38Speaker 01

  Yeah.

• 23:38Speaker 00

  We're buying, we're buying long, long dated bonds, starting September 9th. And so this isn't QE in the traditional sense, because QE must come from the Federal Reserve region of the United States. This is coming from the Treasury region of the United States. It's the same thing though. We're, we're creating dollars to buy back long dated bonds to increase the value of bonds and lower yields. I'm sorry, isn't that QE?

• 24:05Speaker 01

  It is kind of like QE. It's not QE in the Fed sense. So some people are calling this QE light. Other people are calling this Treasury QE. And it's not a lot right now, it's a trickling, but it is a doubling. So what they're actually doing is they're doubling the, and this was announced on Wednesday, the maximum size of purchases of a longer dated debt, longer dated bonds from $2 billion to $4 billion. So a $2 billion increase. It's more the direction of travel that is the thing that investors have observed. And this brings into the question of, well, is the debasement trade back on? And the market thinks yes. I mean, you can, you could see gold prices, you could see the Bitcoin price, you could see the ETH price.

• 24:47Speaker 01

  These are debasement, debasement hedge assets that really pumped on this news. I was trying to understand exactly what Treasury was doing here. And it's not so much that they're printing new money. Here's the nuance. They are buying long bonds. So these are, you know, 30 year bonds, that sort of thing with T bills, with short duration bonds. So they're swapping out the duration. Okay. So in a sense, that's not printing new dollars.

• 25:17Speaker 00

  It's not pure QE, it's, it's soft QE. It's a little bit softer, but it's directionally QE nonetheless.

• 25:23Speaker 01

  It's directionally QE and it's directionally also money printing, even though no new, net new units got printed. Because you're moving that, like a, a T bill is money like, okay? A 30 year, you know, bond is not, a 30 year bond has volatility. A, a T bill does not have volatility. So you're knocking duration out. And it's also the Treasury saying, hey, we're going to work in conjunction with the Fed to set a top on yields, on long-term yields. So we'll, we'll pull up the long-term yield chart in a second, but it's like, it was floating upwards. You know, 5.3%, we've remarked on this last two rollups, like 20 year highs.

• 26:04Speaker 01

  And they're saying it's not going to go higher because if it starts going higher, we're going to buy the long duration with short duration. And if you recall, Yellen was doing this as Treasury Secretary. Now Besen is kind of like doubling down on it, uh, tripling down on it. But the initial effect was, uh, yields started to fall from the 5.3% range on down. I don't think it was like 5.1%. And also the dollar falls too. Okay, the reason the dollar falls is because there's more dollars in circulation on the short end. So this is at a time, of course, when, uh, we have, you know, debt, US debt. This was a, another tweet I saw you threw into the agenda.

• 26:47Speaker 01

  $40 trillion this week, David, we just passed nominal debt exceeding $40 trillion that the US has right now. Okay, so this is moving some of those debt payments from a 30 year problem to like a, you know, three month type problem by moving it to the short end. And, um, there were some updates you threw into the agenda this morning is that price chart that we're seeing, right? Where we see yields on 30 year government bonds heading towards excess of 5.3%. The Treasury stepping in and saying, we're going to buy the long end of, uh, of bonds. Immediately yields dropped to like 5.1%. And then they started popping back up.

• 27:29Speaker 01

  That was early Thursday morning, popping up to 5.24%. So I liken this to like the Treasury trying to keep a beach ball underwater here. They're like, okay, like we're just going to push it down. But the beach ball wants to keep popping back up, popping back up. And so they made another announcement this morning, what, that they were doing even more of this same?

• 27:50Speaker 00

  They're doing it again. They're just doing it more. They're just going to, they have an infinite money printer. These are the words that I'm familiar with. But Besen said buybacks could soon be bigger than the $4 billion that we announced. Whether or not he's going to follow through on that, I don't know. It kind of is, it's, this is what he's telling the market is like, yo, we, we can buy back as much bonds as we want. So you, you better, the market better fall in line anyways.

• 28:16Speaker 01

  So he said that this morning, right? Like that.

• 28:18Speaker 00

  Yeah.

• 28:18Speaker 01

  You know, buybacks could continue. And you're sort of seeing the top that the Treasury is willing to sustain. Like, once it starts getting the 5.3% zone, that's the beach ball surfacing. They want to push that thing down.

• 28:30Speaker 00

  This is a taco moment, like Besen is just tacoing on Trump's behalf. Like Trump tacoed at 5% with, uh, the Liberation Day tariffs. He tacoed at 5% with the Iran war. We got, we got there organically anyways. And so now Fed is just once again, like, or excuse me, the Treasury is once again doing this. You asked me the question at the start of the section, it's like, why did we pop so aggressively? It's like, is this the Treasury, was this like the White House pumping the crypto assets? This is for Bitcoin and ETH. Like Bitcoin and ETH pumped the most because of this, which obviously sets a floor for the whole rest of the industry. Cause those two things are like 70% of the entire market cap of crypto. But like, it was all of these things, all at once.

• 29:12Speaker 01

  I agree.

• 29:12Speaker 00

  This is the big one, because the White House doing a big press thing and shaking Brian Armstrong's hand and Vlad's hand and all that kind of stuff, that's a nice shot in the arm. And especially for hyper liquid and like the other perp coins, like shot in the arm for that.

• 29:26Speaker 01

  And tokenization and all of that.

• 29:28Speaker 00

  Yeah. This is structural.

• 29:30Speaker 01

  This is store of value asset, you know, debasement stuff.

• 29:34Speaker 00

  This is, this is putting the tailwinds in our industry's sales. And so it's nice to get the shot in the arm stuff, but this is like the big one, but it really just all happened at once.

• 29:44Speaker 01

  Yeah, kind of incredible. It almost seemed coordinated that it all happened the same day, but I don't think it was. And then the reason you see this as, as the debasement trade as well, as other debasement asset, gold and silver added 1.3 trillion dollars after the Treasury's announcement that happened on Wednesday morning, right? So the debasement trade has been pretty dormant. The AI trade has kind of taken all of the attention, all of the glory superseded it. AI stocks flat on this news, basically flat.

• 30:13Speaker 00

  AI stocks down, no.

• 30:14Speaker 01

  Down a little bit?

• 30:15Speaker 00

  Nvidia was down 2%, Intel was down 6%, like chips, chips and AI stocks were down.

• 30:20Speaker 01

  Because AI stocks are going to trade based on AI token demand. That's how they're going to trade, the forecasted demand and all of this. And this is some issues in the credit markets. And this seems to indicate that the Treasury is going to step in and like fix things when yields get high enough. And that is, that is a debasement type trades. The market is really sniffing this out at this point in time. Ralph Paul calls this the best put, okay? So it's like the Treasury put, similar to the Fed put.

• 30:49Speaker 00

  That's what this is.

• 30:50Speaker 01

  That's what they're going to be doing.

• 30:51Speaker 00

  The 5% put, just can't touch 5%, 5% is lava.

• 30:55Speaker 01

  Yeah, I think a great summary here, the dovish signals keep firing. Marginal macro policy is moving towards the Treasury, so now the Treasury is more important than the Fed to watch what they do. The government will ensure the AI build out goes off without a hitch. This is the US government doing that. And since the new marginal build out is being funded debt, we've seen that with Nvidia, BlackRock, et cetera, deals that happened last week, the long end must be kept in check through that. So this is Felix from Ford Guidance saying, because of all this, I'm liking debasement trades again, like gold and Bitcoin. He thinks Bitcoin will do well in this type of environment. So this is an environment shift. It's a Fed, Treasury, macro type shift that happened.

• 31:40Speaker 01

  And that all happened on Wednesday, too. I think the question for us is, these enormous moves in crypto, did that break the bear markets back, David, right? So again, you had stocks flat-ish, maybe down-ish a little bit. And we have Bitcoin and ETH moving double digits on the week, shorts getting absolutely liquidated in the process.

• 32:03Speaker 00

  Shorts getting wrecked.

• 32:04Speaker 01

  You know, a lot of people have said that the bear market will end with a, you know, massive capitulation, a lot of volatility, right? Or a lot of volume, I should say, okay? Well, this was a lot of volume, but it was to the upside. Is this kind of a, a market ender? I think there's a case for yes. Like, what would you say is the case for yes?

• 32:22Speaker 00

  I think there's a very big case for yes, mainly just because, again, it goes to the fundamentals of this industry. We are a debasement industry. Bitcoin and ETH are fundamentally scarce assets. They are non-sovereign stores of value. When we are doing money printing, I don't care if it's not technically QE, we're creating more money. And so scarce assets do well. This is, and maybe you could, you could be bearish and be like, oh, but like, look at gold, gold's doing just fine. And gold will take all the oxygen out of crypto sales because people are just tired about crypto. Gold is doing fine, you're totally right about that. On top of that, we have what we're going to talk about next with the SEC providing basically the SEC sides of clarity and the CFTC's doing the CFTC's job and doing the

• 33:07Speaker 00

  CFTC side of clarity. So fuck clarity, we're getting it anyways. And so it's just, there's momentum here. And I don't know, dude, like, I should have looked at the numbers before doing this podcast, but it's, it's actually notable how bad shorts just got blown out in the last two days. And so people aren't going to be touching shorts for a while.

• 33:29Speaker 01

  Yeah.

• 33:30Speaker 00

  Actually, maybe, maybe that's bearish because now people are going to like lever long and maybe they get blown out. But I, this is a, it's a very reasonable claim to make, that there is enough energy and momentum here that, that defines the bottom.

• 33:46Speaker 01

  Are you ready for the opposite case? The case for maybe no, we didn't break the back of the, the bear market here?

• 33:52Speaker 00

  Do you, do you believe it?

• 33:54Speaker 01

  I...

• 33:54Speaker 00

  Or is it, is it real? Is it a real argument?

• 33:56Speaker 01

  I think it's real. Yeah, I think it's a real argument. And I think the argument is this, so, okay, what Treasury is doing is, yeah, maybe hinting towards debasement. They're also using all of the credit facilities and kind of like protecting the long end to protect credit markets so that credit markets can, can continue funding AI tokens. And so the entire US market, at some level, like almost the entire world market, is now like dependent on AI token demand itself. We keep, you push inflating that bubble. And now that bubble is starting to increasingly be filled with... And the reason I call it a bubble, by the way, it may not be a bubble. It all depends on what you think AI demand goes in the future.

• 34:38Speaker 01

  But now we're doing it on credit, not just profits and retained earnings of these companies. And so if you get one demand blip, right? Oh my God, AI tokens, we have more supply than we have demand, just like we saw when we had a period of time in 2021 where we didn't have enough block space. And, you know, ETH gas price were going to $200. And then that suddenly changed and we had like too much block space, no one was buying it, okay? Same thing could happen with AI token demand. If that happens, that could cause a massive cascade, risk off sell, that will just pull crypto down with it. And that, in that context, you could see new lows for crypto. Out of that, the good news is more debasement is probably the answer, right?

• 35:21Speaker 01

  Treasury and Fed stepping in, print money, get us out of this, more debasement. But before that happens, you could see a pretty massive blip down because this is a lot of credit being injected into the AI speculation. I asked Mike NATO about what he thought about this, because it was funny. We just finished recording a podcast and he gave basically this exact case. And then crypto prices went crazy. And he said, he's fading this bull run in crypto right now because NASDAQ weakness and the 30-year moving back up is pretty telling. He's saying the base case is that crypto makes an idiosyncratic move up based on short positioning on Bitcoin, that the shorts getting blown out based on...

• 36:06Speaker 00

  Well, that happened.

• 36:07Speaker 01

  The Trump comments.

• 36:08Speaker 00

  That just happened.

• 36:08Speaker 01

  Yeah. But he said, that might be what's needed before then we go down. So he's watching for signs of durability, okay? This was kicked off, he says, by a massive short squeeze. And you got to see if that squeeze is durable, ETF flows, spot volumes. Until, until it's durable, he's staying a bit skeptical. So that's the, that's the bear take. I give it kind of equal weight, honestly. I'm like 50/50 on whether this is a sign of we've broken the back and debasement is back on, or we still have more to go.

• 36:40Speaker 00

  Yeah, I, I do think about like, there, people are making fun of all the people who said like, oh, I'm going to wait for the capitulation week in October. And then like 10,000 people are saying that and like, so therefore we're not getting it. But now, now people aren't saying it anymore. Now that, now that's non-consensus.

• 36:57Speaker 01

  Yeah.

• 36:58Speaker 00

  I don't know. I think, maybe I'll invite Ben Cohen back on and, and see what he thinks.

• 37:01Speaker 01

  I think you could always take the position of just always be that long, dollar cost average in, you don't have to, you don't have to worry about these weeks.

• 37:08Speaker 00

  I'm always exposed.

• 37:11Speaker 01

  Always exposed, always exposing yourself, aren't you?

• 37:15Speaker 01

  Also on the week, David, Iran shifting from kinetic to economic, what is this about?

• 37:21Speaker 00

  Yeah, this is a, a truth social that got tweeted out by the White House. Basically, Donald Trump is, is communicating that we are shifting our strategy with Iran. We're not really doing kinetic stuff. We are just going to continue the economic chokehold on them, which is pretty, pretty, it was working, is working.

• 37:37Speaker 01

  And kinetic is not, is that what this implies? Kinetic is kind of stopped working?

• 37:41Speaker 00

  Yeah, I think kinetic is firmly not working, yeah. Or at least it's, it's not working as much as it once did. The takeaway here is that this is going to be months, like three plus months for the chokehold to really actually have like a capitulation moment for Iran. The Iran economic situation is dire, but the whole point of the Islamic regime is like, they can, they're cockroaches, they can just hold on for, for, they can just hold, that's what they do.

• 38:06Speaker 01

  They've been economically sanctioned in the past. Is this like a de-escalation in your mind of just like, you know, because Trump has these words.

• 38:13Speaker 00

  Kinetic de-escalation for a, in trading for an economic escalation.

• 38:17Speaker 01

  Okay, Trump has these words, this is going to be the most crushing economic operation ever taken against any country, but the fact that he's moving from kinetic to just purely economic seems to be a de-escalation. But it also seems to indicate this whole thing is going to continue to grind on.

• 38:34Speaker 00

  This whole thing is going to continue to grind on, yeah. I, I bet you we go through the midterms. Wow.

• 38:40Speaker 01

  Uh, when we come back, let's talk about the SEC's new 402-page document. Is this

• 38:46Speaker 00

  I read it.

• 38:46Speaker 01

  SEC version of the Clarity Act. David read it and he can give us the details on that. A few other things in crypto, including FOMO, Base App and Hyperliquid, Compound, Rebirth, and Hayden Adams' first blog post since 2019 that I thought was really good. We'll talk about all that and more, but before we do, we want to thank the sponsors that made this possible.

• 39:05Speaker 00

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• 40:10Speaker 01

  Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael NATO. He runs the DeFi Report. This is the guy that sent me a sell alert before the 10-10 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year, we started recording weekly podcast episodes. Each one, we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most, so let's do it together. Go subscribe to this podcast, search The DeFi Report wherever you get your podcasts,

• 40:53Speaker 01

  YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now.

• 40:58Speaker 00

  The SEC has a new proposed rule titled Regulation Crypto Assets. This is what we were talking about earlier in the show, which is basically this is the SEC just doing their half of clarity, whatever they can do to clarity. I'm going to say some things. I'm going to tell you what's going on in here, and you're going to feel like, oh, we've talked about this for all of my, our time in crypto. This has always been what has been discussed about what we want out of the crypto industry, and we're just, we're just getting it from the SEC as rulemaking, not laws, but rulemaking, which is the second best thing is to a law. And so the first one is how startups in crypto can raise money with, with a token

• 41:37Speaker 00

  that doesn't make the token a security. Uh, and so there is exemptions, three different exemptions that have been produced in this rulemaking that allows for this to happen. One is a startup exemption, allowing token issuers to raise up to $5 million in a one-time event that allows a team to launch and release a network token. No financial statements are required, no accredited investor limits, no resale restrictions on the token. General solicitation is allowed. The issuer can be an entity, an individual, or a loose group of people each signing on, but there's a $5 million raise cap on the raise amount. And so this would kind of like token sales, airdrops, like that general kind of like

• 42:22Speaker 00

  token issuance behavior can be applied here. That's the first exemption. The second exemption is a fundraising exemption. If you're, if you speak trad, this is just Reg A for tokens. Uh, so issuers can raise a constrained amount of money every 12 months. You have to do a filing with the SEC. You have to tell them that you're doing this. And there's two different tiers. So tier one with unaudited financials, issuers can raise $20 million every 12 months. And then tier, tier two, if you submit audited financials, that unlocks the ability to raise $75 million every 12 months. So Reg A for tokens. And then the third, the third exemption is an investment contract safe harbor. This is kind of the big one. Rule 400. A crypto

• 43:05Speaker 00

  asset is deemed no longer subject to be an investment contract and therefore not a security if the issuer has completed or permanently ceased all essential managerial efforts it promised and isn't making any new promises. Again, it has a file of form with the SEC saying that it is doing this with a certification and supporting analysis, but nonetheless, you get to say, hey, we are no longer managing this token. This is a decentralized network and, you know, and it's not a security. And so this is the new pathways for tokens to be issued, funds to be raised, but those security words just never be invoked.

• 43:43Speaker 01

  Why are you saying this is all we've ever wanted? Like, this is kind of what, like, what, I guess what this is doing, if I understand it, is it's saying that all of the kind of the ICOs for decentralized networks, the Ethereum ICO, for instance, which was under the crosshairs of the Gensler administration, that is all okay in this new regime, in this new paradigm. And also, that last one you talked about, the Rule 400, the investment contract safe harbor, that is explicitly painting a path, providing clarity to the, uh, the crypto industry of how something that is an investment contract, something that is a security, becomes a commodity, becomes a decentralized network, if it no

• 44:25Speaker 01

  longer has essential managerial efforts. So it's essentially providing a pathway for networks like Ethereum, or say Solana, or other crypto networks that launched in that way to become decentralized and no longer securities. That's kind of all we've ever wanted from the SEC, right? Just like, stop coming after tokens and give us some clarity. Like, this is the SEC's portion of the Clarity Act, is it not, through rulemaking?

• 44:51Speaker 00

  Yeah, yeah. And you remember when the XRP versus the SEC versus Gary Gensler case? Ripple won that case?

• 44:58Speaker 01

  Yes.

• 44:59Speaker 00

  And really what that was about was not about XRP being a security, but it was

• 45:03Speaker 01

  The investment contract.

• 45:04Speaker 00

  Yeah, the investment contracts. These are the investment contracts that creates the token. So A, it's even more defended that tokens are not securities. And now, in addition to that, the investment contracts, these are about the ways that you can create an investment contract that is also itself not a security. So these are legal investment contracts to create a token, and both of these things are not securities. That's, that's what's very, very exciting. It's very generalizable. It's very scalable. You know what this does away with, Ryan? Airdrops, points programs, healed farming, any other stupid, convoluted way to issue and distribute tokens to the general public?

• 45:44Speaker 01

  Interesting.

• 45:44Speaker 00

  That is just inefficient, gamable, poor, like, all that mess that we went through time and time and time again, because we needed to find like creative ways to get around securities laws?

• 45:56Speaker 01

  Yeah.

• 45:57Speaker 00

  Now we have the paths to doing that, that's direct and efficient, that is confirmed to be not securities.

• 46:04Speaker 01

  And the requirements are light, and there's somewhat of kind of a sandbox, right? So as you get bigger, as it's more fund, funding at stake, like from 20 million to 75 million, you have to do various things, but you don't have to file, you know, 10K filings and the whole SEC.

• 46:19Speaker 00

  Right, the burdens of compliance.

• 46:21Speaker 01

  That comes with that. Um, okay. Well, I guess a couple of reactions. First of all, that's great. And that means that all of these things that were in this ambiguous area in the past, we did particularly our blockchains to centralized networks, like, we don't have to worry about that being under the crosshairs anymore. And I don't even think, David, a future administration can really reverse this. If the SEC in this administration, 2026, comes out with this rulemaking, right? Let's say you have AOC's administration or something like this, and it's Gary Gensler v. 2, and they try to reverse this, the court's got to laugh them out of the court, right? Because just like, guys, guys, hold on. There, there is some precedent that your institution has to uphold. If you say something is okay

• 47:05Speaker 01

  in 2026, there has to be continuity. You can't reverse everything in 2029.

• 47:09Speaker 00

  You have to have legal rationale for reversing it, not just a vibe rationale.

• 47:13Speaker 01

  Exactly. So even if we don't have a bill out there in the clarity, I just think this is really hard, given the precedent that's being set by an institution that has to have continuity from one administration to the other, um, to like reverse this. Maybe some things can be reversed around the edges. So that's one thought. I guess my other thought is like, how much do we really need this anymore? Because like,

• 47:37Speaker 01

  I mean, for our existing assets, we do, but like, how many more decentralized crypto networks are we actually going to launch? Like, we have Bitcoin, we have Ethereum, we have kind of the long tail of blockchain. Are there more that we have to launch? Are we done?

• 47:53Speaker 00

  It is a little bit ironic that the appetite for issuing a decentralized network to the general public and doing a token distribution program is a thing of the past. Now that we have the clarity and the regulation that we need to do it, like, no investor wants to invest in any of the stuff that this, like, regulation actually protects, at least in this current form of crypto. Like, no one wants new L1s, no one wants middleware, like, that's, that's, the appetite is gone.

• 48:23Speaker 01

  Right. The question is, how many more decentralized networks without managerial efforts do we actually, like, want or need?

• 48:29Speaker 00

  Yeah, people are really into managerial efforts these days.

• 48:32Speaker 01

  Like, I want them for some things. I don't want them for Bitcoin. I don't want them for ETH, but like, I do want them for, like, a lot of other things in crypto, and I wish I had them for those things.

• 48:41Speaker 00

  Yeah, actually, we need more managerial efforts in crypto.

• 48:48Speaker 01

  But anyway, it's great we have a path, and this is, I think, the CFTC's portion of the Clarity Act.

• 48:54Speaker 00

  Let me round out this one part that I think is worthwhile. In addition to the startup extensions I talked about, in order to have those startup extensions be applied to you, you need to take part in standardized disclosures. Again, if you speak trad, this is basically S1 filings for tokens, but it's much easier. These, there are a couple of rules for how you do this. It must be in plain language and stage appropriate. So what this means is plain language. You can't obfuscate details with overly technical terminology, and stage appropriate means that forward-looking plans must be clearly delineated from what actually exists. Again, this is like a reminiscent of the 2017 ICO era, where like, you would read a white paper, and there were some

• 49:35Speaker 00

  stupid fucking white papers back then, with incredibly complicated math that promised the world, and retail investors would look at this and be like, wow, geniuses wrote this white paper. I understand nothing. The team is amazing, when in fact, the team is intentionally writing ridiculous, ridiculously complicated white papers that don't actually make sense, and the team's actually scammers. And so, there's, so you write, you write these disclosures, and then there's 10 specific subjects of the disclosure requirements. You have to disclose what you promise and how far you've gotten, what you're selling and what you'll do with the money, who's behind it and what they hold. So, management conflicts of interest, related party transactions, like, market making

• 50:17Speaker 00

  stuff, like insider holdings, like, all of that, like, the Blockworks Token Transparency Report type stuff. All of that must be disclosed, and then how the code works and who controls it. And so, in addition to all this, we're getting kind of the disclosures that the industry has also wanted for a very long time.

• 50:30Speaker 01

  That's great, and it fulfills what Hester Percy's vision has been for the SEC of don't be a merit-based regulator, okay? Just like, emphasize disclosures, but it's up to investors what they invest in. You're not trying to protect investors from making bad decisions. People can always still make bad decisions. So, I think this is a good path for the SEC to take. David, there was a big win for stablecoins, actually. It kind of went under the radar with all of this other good news this week, but you picked up on it. What happened?

• 50:58Speaker 00

  Yeah, so this is the FASB, what is the FASB? Financial Accounting Services Board, Sanders Board, Sanders Board. They are creating a comment period, this is like the first step, this is probably going to happen, that will allow stablecoins to be considered cash equivalent on corporate balance sheets. And so, right now, stablecoins are not considered corporate cash equivalents. The issue that they're fixing is like, before this, they're trying to fix this. Right now, some companies will report stablecoins as like, yes, this counts as cash. Some will say no. And also, the auditors don't agree with the interpretation, so FASB is just standardizing everything. And so, according to this rule, the answer can be, yes, stablecoins are cash or cash equivalent if the

• 51:43Speaker 00

  following things are true. You can cash out whenever you want, which means you need a direct relationship with Circle, basically, or Paxos. You must cash out with the issuer itself, not a middleman, so you can't use Coinbase, you have to go straight to Circle, and also, the issuer itself backs every coin with real cash or short-term T-bills, which is just Genius Compliance, which means not Tether. So this is, I think, is uniquely bullish for Circle.

• 52:08Speaker 01

  Oh, for Genius Compliance stablecoins?

• 52:10Speaker 00

  For Genius Compliance stablecoins, probably Paxos too, but like, I think Circle is the big winner here. I think maybe the not the middleman is probably going to be argued out in the, in the comment period, just because it constrains things. But, yeah, this is going through comment period, this is probably gonna happen.

• 52:29Speaker 01

  You asked if this is a big deal, like, publicly, and Austin Campbell says, yeah, it's a big deal, David, you're correct, like, FASB is a big deal.

• 52:36Speaker 00

  Granted, Austin Campbell is the stablecoin risk guy, so he would think it's a big deal.

• 52:39Speaker 01

  I kind of like, I agree with this. I mean, FASB's GAAP standards for accounting, right? That is all corporate balance sheets, that's everything in the US. That's the largest capital market standards body setting thing in existence, and they're saying this is now, stablecoins are cash and cash equivalents. So I do think it's a big deal for adoption, and probably went under the radar. Some other things we should cover in crypto, Venice just crossed 100 million in annualized revenue, David. That's a pretty big deal.

• 53:11Speaker 00

  Very big deal, very big deal. Over 4 million users, and Venice also had seven days of consecutive all-time highs of VVV burns, so there's a lot of energy in the Venice ecosystem right now. At the same, the same time, Stripe acquired OpenRouter this week, which is very comparable, comparable to Venice itself. It's very different at the same time, but also very similar, and that is both model aggregators. And then also Ramp bought Router. OpenRouter is not Router, that's a different company, but it's also very similar. It's just like, there's a bunch of models out there, they're router, like OpenRouter, way too similar of name, aggregate all the models. And so, the other two model aggregators out there just got bought this week. OpenRouter for 7 billion.

• 53:54Speaker 00

  OpenRouter has 8 million users, got bought for 7 billion. Venice has 4 million users, currently at a 1. something billion dollar FTV on the token.

• 54:03Speaker 01

  And they're kind of like aggregators, like, right? They're almost like a one-inch, you know, for purchasing AI tokens. They just like route it to various models.

• 54:12Speaker 00

  One-inch, yeah, this is, I was trying to learn about the details about how to actually compare the thing. I would take the one-inch comparison and actually apply it closer to Venice, in the sense that it is user-forward, like, users go to one-inch and users go to Venice. OpenRouter is a little bit more like Google AdSense, in that it is a marketplace and an auction mechanism for models. And so, it's slightly different.

• 54:36Speaker 01

  It's fascinating, because OpenRouter doesn't use stablecoins right now. So if you wanna, you purchase something, it just does the old-fashioned way, where it'll take like, you know, I don't know, $1,000 or whatever, aggregate all these transactions, and kind of settle it later. So you sort of wonder if Stripe is gonna integrate them into the stablecoin ecosystem, micropayments, tempo, all of that. A lot of possibility there. I think the theme really has been energy on the week. Some energy also in FOMO, crossing 150 AR. We talked about FOMO last week. I learned, David, that you're actually, I don't know if you're daily active at this point for FOMO, but you enjoy the app, do you not?

• 55:14Speaker 00

  I enjoy the app. I mean, in terms of like, just a casual gambling trading app to throw pocket change into, it's a great app. It's a great app. I don't know if the 100 million annualized revenue, I think that's like a high watermark, because, because trading volumes are so volatile. But there's at least a day where they had 100 million, 150 billion annualized revenue, but the growth around FOMO has been just pretty, pretty crazy. And so, again, we had, you know, the feds, the Fed is pumping our bags, excuse me, the Treasury's pumping our bags, the White House is pumping our bags, which is great. Companies in crypto, startups in crypto are making money, are making bank. And so, there's just like fundamental strength in the industry.

• 55:56Speaker 01

  Yeah, it's really, I guess, social crypto was meme coins all along, wasn't it? I mean, you can kind of think of, Farcaster tried at this for five years, you know, and before throwing the towel.

• 56:06Speaker 00

  And then they pivoted to becoming a wallet, because they realized that people just wanted a wallet to trade meme coins, and it was just Farcaster-flavored meme coins.

• 56:12Speaker 01

  And now FOMO is having the success there. Maybe that was the, the product market fit all along, they revealed preference. Also, Base App integrating HyperLiquid, this has got to be the Kobe effect of not prioritizing the base blockchain.

• 56:25Speaker 00

  This is the work of Kobe.

• 56:28Speaker 01

  Do you think that's a sign of things to come? The Base App is just going to be much more agnostic with respect to, you know?

• 56:34Speaker 00

  To Coinbase?

• 56:34Speaker 01

  Yeah, it's just like user-centric. It's like, we're gonna get you, the thing that you want, we don't care what chain it's on, we're not gonna prioritize Base over anything else, and so, we'll just bring HyperLiquid in here.

• 56:46Speaker 00

  Yeah, yeah, I do kind of wonder how far that will go. Like, will HyperLiquid try to be the backend for Coinbase, or will Coinbase try and build out their own native products? You know, if it's Kobe's way, it's like the former.

• 56:59Speaker 01

  Why? You think Kobe's way is just user-centric, like, DGEN trader-focused?

• 57:04Speaker 00

  No, Kobe's way is, he's very bullish on HyperLiquid. He owns a ton of hype.

• 57:08Speaker 01

  Oh, okay, so type-specific. Interesting. That is interesting. I wonder if that comes out in the disclosures. Anyway, moving on. Compound? Are they having a little bit of a rebirth? I don't know if I see that yet, but I see something. They have announced new leadership in, I mean, one of the first DeFi protocols that really took off. It was like, kind of like second to make your DAO back in the day, and it had a lull where Aave took over, Robert Leschner and leadership kind of like faded, just almost, it felt like, kind of like, not abandoned it, but it just didn't have any leadership.

• 57:43Speaker 00

  Well, it was supposed to be very constrained, and so it was like, anti-adding new assets, to be conservative, but then they also just got straight outcompeted by Aave. But they were, they'd been printing money for a very long time. I don't know how much TVL is left in Compound, but like, they, they, they held on to TVL for a very long time, just because of how safe it was.

• 58:03Speaker 01

  So what's happening now?

• 58:05Speaker 00

  Uh, new leadership, as you said, $52 million approved from the DAO for a development program, aimed at institutional credit and real-world assets. And so, like, yeah, let's see if we can kind of like, kick, restart this thing.

• 58:17Speaker 01

  I think that'd be nice.

• 58:18Speaker 00

  TBD.

• 58:19Speaker 01

  I think that'd be nice. But there is some energy coming back to OG DeFi protocols. In fact, I would almost feel like saying that OG DeFi protocols are back. And here's the thing that really crystallized that for me, is, did you read this Hayden Adams post? This is his first blog post, founder of Uniswap since 2019.

• 58:39Speaker 00

  I have not read it. It's on my to-do list, but I know you read it, so maybe you can explain it to me.

• 58:43Speaker 01

  It's worth the read, man. I read it this morning and he's basically saying AMMs could actually eat the world. Okay. And he compares them to index funds. The frame he puts on it is, you know, index funds in 1976, you know, John Bogle, the index fund guy, people are saying it's un-American, couldn't ever compete against more actively managed funds. And now passive index funds are the way most Americans hold their capital. Okay, it's passive funds rule. He's equating that to passive LPing, basically. Passive AMMs are going to eat the trading market

• 59:24Speaker 01

  the way passive index funds ate traditional finance. And he gives a lot of reasons why. He's, you know, first, we came for the long tail in AMMs. You know, had the long tail of tokens and better trading experience to do that. The second thing, AMMs, AMMs went and conquered was sort of paired assets, you know, like USDC and USDT, those types of pairs. The next thing they're going to start doing is give you options for correlated pairs. So he sees a world where it's actually something like Nvidia and Spy that are the correlated pairs. And they become much more liquid than say just Nvidia and USDC or US dollars or something like that.

• 1:00:08Speaker 01

  So he provides a whole, I guess, theoretical basis for how AMMs can start really competing against traditional market makers, against siloed TradFi, and just really like start to dominate the market. It's a compelling article and it just feels like Hayden, Uniswap is back and the DeFi energy is starting to come back. And they're like, no, like DeFi is actually better and here's how. And this is after a decade of doing this. So, I don't know, second wind, energy, rational points made. I'm excited to see what AMMs and Uniswap and Hayden do in the future.

• 1:00:50Speaker 00

  The word that comes to mind is creativity.

• 1:00:54Speaker 01

  Yeah.

• 1:00:54Speaker 00

  And I think that that's something that this industry has really been missing and I think something that we all saw in DeFi. And we don't, we haven't had that as much lately. And so if Hayden, you're telling me that we can get really creative with our asset structure in the backend, then I can get bullish again.

• 1:01:11Speaker 01

  Well, can you get bullish again? Is that the, the end of today's, this week's episode? Are you bullish again officially, David?

• 1:01:17Speaker 00

  Well, I mean, since we started recording an hour ago, Ryan, ETH is up eight more percent.

• 1:01:24Speaker 01

  What?

• 1:01:24Speaker 00

  It's at $2,350. Bitcoin is almost at 73,000. And I'm going to go watch the CFTC innovation talk that Mike Selig is giving right now and Vlad from Lighters talking at right now. There is a lot to be bullish about. Can I just say that?

• 1:01:41Speaker 01

  You could definitely say that. That's a good way to end this episode. And I guess we'll check in next week to see if this is sustained.

• 1:01:48Speaker 00

  All right. I see you. Oh, I will, you will not be checking in with me next week because I will be at Burning Man. So bye. I'm gone for two weeks. Haseeb's taken over, so I will see you in three weeks, Ryan.

• 1:01:59Speaker 01

  All right. Time to get bullish then. David's gone. Time to get bullish. You better buy your ETH before you leave, my friend.

• 1:02:03Speaker 00

  Did you know, Ryan, that ETH hit all-time high while I was at Burning Man one year ago?

• 1:02:10Speaker 01

  I think you should give that some serious.

• 1:02:11Speaker 00

  That's when ETH hit all-time high was a year ago. That's insane. I thought it was so much longer.

• 1:02:15Speaker 01

  You need to get your buys on before you leave. That's what that means to me.

• 1:02:21Speaker 00

  All right. I'll see you in three weeks. Bankless Nation, you guys know the deal. Crypto is risky, but not risky enough. The institutions are here, so we are leaving and going even further west. This is the frontier. It's not for everyone, but we're glad you were with us on the Bankless journey. Thanks a lot.