#1489 Bill Barhydt | This Bitcoin Bull Run Is Just Getting Started

Bill Barhydt is the Founder & CEO of Abra. In this conversation we talk about bitcoin, regulation tailwinds, how we think about DeFi for institutions, memecoins, stablecoins, and what Bill is excited about in the future.======================The future is being built today and the future of currency isn’t dollars, euros, pounds, or yen, it’s crypto. And Gemini thinks that’s a great thing. Because a future where money is decentralized, inclusive, and globally accessible, that’s a future that we are anxious to be a part of. Go where dollars won’t. With Gemini. ======================This episode is brought to you by Bitdeer (NASDAQ: BTDR), a global leader in Bitcoin mining and high-performance computing for AI. Led by a seasoned management team, Bitdeer is driving innovation with its proprietary SEALMINER ASICs for Bitcoin mining and has a massive 2.5 GW power portfolio across three continents. Learn more about Bitdeer at www.bitdeer.com======================Polkadot is a scalable, secure, and decentralized blockchain technology aimed at creating Web3. Created by Gavin Wood, co-founder of Ethereum, Polkadot empowers users to build decentralized applications with ease. Backed by industry leaders, making it a preferred choice for big names, Polkadot stands out as a leading choice for investors seeking a reliable, future-proof solution in the growing world of Web3 technology. Learn more at https://polkadot.com/.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on guys? Today we've got a great episode with Bill Barhite. He's the founder and CEO of Abra. In this conversation, we talk about what's going on with Bitcoin. Are we actually going to get the regulatory tailwinds that have been promised? How do we think about DeFi for institutions, family offices, RIAs, and wealthy individuals?

• 0:45Anthony Pompliano?

  And then what is he most excited about moving forward, both for his business, but also crypto in the coming years? This conversation is filled with unique insights, and I think you'll learn a lot. Here's my latest conversation with Bill Barhite.

• 0:55Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:19Anthony Pompliano?

  Today's episode is brought to you by Gemini. The future is being built today, and the future of currency isn't dollars, euros, pounds, or yen. It's crypto. And Gemini thinks that's a great thing, because a future where money is decentralized, inclusive, and globally accessible, that's a future that we are anxious to be a part of. Gemini teamed up with futurists, technologists, and designers like award-winning artist Matt Griffin, known for his illustrations for Dune, to craft a vision of the future with crypto at its core. The creative theme "Go Where Dollars Won't" emphasizes exploration, growth, and the crypto market's limitless potential. Whether it's going on that Martian safari to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet, or using Bitcoin

• 2:00Anthony Pompliano?

  to pay for your Lyft pass to go strata skiing down the mountain peak of a breathtaking comet. Whatever adventures we'll be living, one thing is for sure. In a future... This fantastic. The limits of traditional currency simply cannot keep up. Financial innovation will usher in this new frontier. And so go where dollars won't with Gemini. Go check them out at gemini.com/go-were-dollars-won't. Again, go check it out at gemini.com/go-were-dollars-won't. Today's episode is brought to you by NASDAQ listed Bitdeer. They trade under the stock ticker BTDR. They're led by a seasoned management team. Bitdeer is a global leader in Bitcoin mining and high-performance computing for artificial intelligence.

• 2:43Anthony Pompliano?

  And they are backed by technological innovation and a massive 2.5 gigawatt global power portfolio. Recently, Bitdeer launched its own Bitcoin mining ASIC named the Seal Miner to target what Wall Street analysts project to be a multi-billion dollar annual market. Their proprietary Seal Miner ASICs are redefining efficiency and performance. And they are backed by the industry's most advanced chip roadmap with two more groundbreaking models set to launch in 2025. To learn more about Bitdeer's cutting-edge technology and business, visit their website at bitdeer.com. That's B-I-T-D-E-E-R.com. Go check out Bitdeer today. Today's episode is brought to you by Polkadot. Polkadot offers secure, scalable, and decentralized blockchain technology

• 3:26Anthony Pompliano?

  that perfectly aligns with the needs of innovative projects. It was developed by Gavin Wood, one of the co-founders of Ethereum and the creator of Solidity. Polkadot aims to build an internet where users have full control over their data and their applications. Polkadot offers tons of unique features, a shared security model, along with the new auction model and significant implementations like ASIC banking. Given these characteristics, it's easy to understand why Polkadot is gaining more and more traction in the cryptocurrency world. Some people even are talking about it as the AWS of Web3. Now, companies such as Mythical Games, Astro Network, and over 50 other independent blockchains with hundreds of applications already leverage Polkadot's technology to power their platforms. If you're looking for a reliable, scalable, and cutting-edge solution,

• 4:11Anthony Pompliano?

  Polkadot seems to be the top choice for industry players. Go check them out today at polkadot.com.

• 4:18Anthony Pompliano?

  So Bill, I thought a great place to start, when we think about Bitcoin, obviously, there's been a sea change when it comes to the new administration. Regulators are switching out. It feels like what was a headwind where banks and politicians were very against Bitcoin has now become a tailwind. Everyone's super excited. What are the big things that you're seeing change in the market, both in terms of a Bitcoin holder, but somebody who's building in this industry?

• 4:39Speaker 02

  So there's three things that I think have changed significantly, right? So the first is, there was this regulatory headwind that that was probably keeping Bitcoin down post FTX by maybe 40, 50%.

• 4:51Anthony Pompliano?

  You think that the regulators were actually suppressing the Bitcoin price, not intentionally?

• 4:54Speaker 02

  Not intentionally, but but but you know, just the the fear, right? You know, the the Gensler warrants, you know, so what happened right at the election, right? Boom, 50%, right? There was no, you know, incremental liquidity happening at the same time. It wasn't like all of a sudden there was a massive injection of liquidity, which tends to drive Bitcoin price. So I think from a regulatory perspective, Bitcoin was kind of like a beach ball in the water, right? When you let go, boom, it goes up, but it stops when it hits the water. Right? So under normal circumstances, Bitcoin is going to do what it's going to do, which means it basically acts like a suck for liquidity in in a in a market where basically you just print money like a, you know, and spend it like a drunken sailor, which is what the Western governments have been doing for 50 years, right?

• 5:38Speaker 02

  So that's number one, right? Number two is the same point, which is Bitcoin's going to do what Bitcoin's going to do anyway, which we've seen for four cycles now, you and I, right? So so in other words, we can assume that the government is going to continue to print money to pay off the debt. And Bitcoin basically acts like a levered bet on tech stocks, which tend to get the outsized portion of that liquidity. Because in the case of stocks, discounted cash flows, but in the case of Bitcoin, it's a pristine asset because we know exactly what the float is going to be. And you can't just keep making more of it, right?

• 6:12Anthony Pompliano?

  Now, on this idea, one thing that I've been talking to a lot of friends about, which is Doge is claiming that they're going to be able to reduce the deficit. There wasn't promises on the campaign trail about there being a balanced budget, but now it feels like, hey, people are like, could this actually happen? Could they balance that budget? Would that be negative for Bitcoin? Like if all of a sudden the debt was not exploding higher?

• 6:32Speaker 02

  You know, in the midterm, you could see Bitcoin stabilize relative to liquidity injections. That makes sense, right? If I'm saying it's a liquidity suck and there's less liquidity because we're not printing money. It makes sense that Bitcoin may not be skyrocketing the way it was before. But first of all, even if you balance the budget tomorrow, which they're not going to do, right? How much incremental debt are we carrying that needs to be serviced? Right? And you're basically looking at several years at a minimum, even if Musk and Co. are wildly successful, right? Which leads to the third point that we track, which is what now are governments and companies doing? Now, I don't think that governments and companies are what's going to make Bitcoin go to Valhalla. I think the liquidity does that.

• 7:17Speaker 02

  But what it does is it sends a message to consumers who are afraid necessarily, or don't necessarily understand the tech, are afraid to jump in. That says, okay, there's some kind of implicit blessing on this, right? It's not just my crazy Michael Saylor. It's 50 companies, it's 1,000 companies. It's every government looking at this, it's every state. I'm way up to 30, 35 states now that are looking at holding Bitcoin and lots of governments now, sovereign wealth funds. So I still think it's retail and liquidity in each cycle. But the blessings, the anointed, Bitcoin has become the anointed one in terms of having a kind of pristine apex predator of digital currencies.

• 7:57Speaker 02

  Those three kind of factors to me say it's another cycle, right? There's more tailwinds than headwinds now. But still, it's going to do what it's going to do anyway. Just like it did when China banned it, just like it did when FTX happened, et cetera, et cetera.

• 8:12Anthony Pompliano?

  Does that mean that you think there's going to be a big 80% drawdown on the other side? Or do you think those four-year cycles are dampened or gone?

• 8:18Speaker 02

  So there's Bitcoin and crypto, right? So for Bitcoin, I think, and I think you've pointed this out, the drawdowns will become less over time, right? It's just a function of adoption of an exponentially growing asset. If you zoom out and look at charts of tech stocks from dot com era, right? If you zoom in on 19 1998, 1999, the sky is falling because Amazon fell 90%. But if you zoom out in a 25-year chart, it looks like a straight line up and to the right. And Bitcoin is following a similar pattern, which means that the drawdowns on that log chart should look like less and less over time on the way to, you know, Valhalla. And I think Bitcoin is playing that out. So even this cycle,

• 8:58Speaker 02

  right, the mentality of, oh, Bitcoin went from 106 to 95. Oh, my God, what's happening? That sounds crazy to anybody who's been in this space for more than seven, eight, nine, 10 years because we've seen the 80% drawdowns. But I don't see, I don't think you're going to see 80%. I think you might see, what was the peak last time? 70%? You'll probably see like 45% and then it'll probably get less and less and less we start getting into some hyperinflation mode in the West, which luckily I think we're at least, we've kicked that can down the road for at least another four years, hopefully 12. But, but yeah, I think, I think the volatility will decrease. But then there's crypto, which is a totally different animal, right? And, you know, with crypto, I think in the short term,

• 9:41Speaker 02

  it looks a little bit like venture wildly volatile because there's no cash flow, right? And then you see these DeFi platforms and protocols start to generate massive cash. And then you can actually do an analysis on what they're doing and value the tokens based upon where that money's going, which is really interesting. And, and so that, those are going to be really volatile for a while. But if you look at the, I don't know, Ethereum, Solana, Sui, Aptos, is they kind of look like Bitcoin did in the early days, plus the, plus the yield and the cash flows, right? So, so I think there's a dynamic there that's going to play out kind of in parallel over, over the next 10 years or so.

• 10:15Anthony Pompliano?

  Yeah. What's interesting to me, I think about Bitcoin in particular is all the drawdowns in this bull market so far have been suppressed. And it almost feels like, although it went up 50% after the election, it does feel like even the upside has been suppressed as well. And you're just getting less volatile and it's more this like grind up. And then there's a separation between Bitcoin and kind of all the other crypto assets. And I think that Bitcoin outperforming, you know, whether it's ETH or Solana or whatever in certain timeframes, people are surprised by that. Usually the large cap asset should not be the one that outperforms. I mean, the the small caps, when everything is going up. Do you think that there is like a separation now? We have like two separate markets? Or in my opinion, Bitcoin has been the winner of like that global store about it's kind of like digital gold.

• 11:00Anthony Pompliano?

  And everything else is, you know, kind of like a tech stock almost. And there's going to be some winners and losers in there or what?

• 11:04Speaker 02

  Yeah, I'm not convinced that it's playing out any different this cycle than previous cycles. Okay, so so what's happened in previous cycles, right? Bitcoin has a run. Stabilizes for a while, kind of sideways, up and down in like a thirty five, forty percent band, which to a lot of people sounds crazy, but that is sideways for Bitcoin. And then it has a huge leg up, but all the gains tend to make their way into other things. Because people have this kind of funny money now, whether it was investing into ICOs. Or investing into Ethereum, which made its way into NFTs. Or investing into Solana and and meme coins. It tends to be the Bitcoin. That drives access to other things. And I don't think that's going to play out any different this cycle. So in other words. Bitcoin is probably going to have another huge leg up.

• 11:50Speaker 02

  But I think all coins will most likely, particularly the L ones, are going to outperform Bitcoin, right? And so we've seen Bitcoin, this this this measure called Bitcoin dominance, right? I think it's about sixty, sixty two percent right now. It's peaked in the last few cycles at around seventy percent. I don't think it's going to get to seventy percent this cycle. I could be wrong. That doesn't mean it's not going to continue to go up. In my opinion, it is. It's consolidating. If you if you believe in any way whatsoever on technical analysis, Bitcoin is consolidating for another leg higher. The question is, what is everything else going to do? I think everything else, not everything else, but the L ones that look like Ethereum did five years ago are going to outperform. Which is why Bitcoin dominance is going to plummet.

• 12:28Speaker 02

  And it's going to look like an alt season, but it's basically waiting to flush everyone out, which is what happened last time as well. That's what I'm saying. It's not. Significantly different than last time. It's just that Bitcoin's volatility is a little bit less.

• 12:42Anthony Pompliano?

  Well, what's interesting, I guess, also is um. Altcoin season, right, that everyone is is waiting for.

• 12:50Anthony Pompliano?

  If it does come, to your point, you need capital to come into the market. Capital can come in through Bitcoin gains. It can come in through fresh fiat coming into the market. But also another thing is like, there are these new protocols that seem to be getting launched all the time. And, you know, each one's a little bit different, but there's like magic creation of value that you can swap. And so which one do you think is a bigger feeder? Do you think Bitcoin? Or do you think actually just like all these crypto projects get launched? There's the, you know, the quote, quote, funny money floating around and people are converting that back into, you know, O1s.

• 13:20Speaker 02

  My intuitive answer is the answer is yes. So, so in other words, I do think there's significant liquidity coming in. You've got, you know, seven trillion in debt that has to be refinanced. You've got treasury, general reserves being depleted. You've got, you know, I know they're talking about Doge refund checks. I don't know that that's going to happen.

• 13:40Anthony Pompliano?

  I think that's a bad idea.

• 13:41Speaker 02

  Yeah, I think it's a very bad idea, but, but, you know, if they're going to give out the money, a lot of it's going to go to crypto, just like, you know, COVID stimulus checks. But I also think that, like I said, we're going to have liquidity via new Bitcoin gains. I mean, we see a huge benefit to that at Abra where we're doing loans against the Bitcoin, right? So people are waiting to ride gains, borrow against those gains. In some cases, they're actually doing a small amount of leverage to buy more Bitcoin, right? Which just kind of feeds the cycle as well. And then to your point, there's all these kind of next generation alts that are, that are, you know, riding huge gains that tend to act as liquidity for other things, whether it's memes or NFTs or, you know, games. I think there's this kind of growing belief that gaming is going to have its day in the tail end of the cycle, which I tend to believe, but, you know, we'll see.

• 14:26Anthony Pompliano?

  Have you paid attention at all to what's going on in Argentina with this like meme coin slash sovereign coin or whatever?

• 14:33Speaker 02

  Yeah, it's bizarre.

• 14:35Anthony Pompliano?

  What is, what is your general take on those types of things? Cause to me that is like, the Bitcoin community thought, hey, Bitcoin is going to be the like pristine thing that's going to save, you know, first individuals, then companies, corporations, and then eventually you'll get kind of nation states. I don't think a lot of people thought that countries were going to be launching essentially, you know, meme coins.

• 14:53Speaker 02

  So, okay, so I have a lot of feelings about this whole kind of meme coin thing. The first thing I'll say is just get the, for me, the obvious. Part out of the way, if you're a person of notoriety, large social media following, politician of any importance, please don't get involved in meme coins, just don't do it. Just say no, right? I don't, if I hear the word meme coin, I don't want to do it to my staff. If you're getting involved in meme coins, stop it. Yes. That's the first thing I would say to all of them. Okay? Now, let's put that crowd aside, even like the Kanye's, the Kardashians, like who I don't follow any of that world. Please don't do it. Yeah. Okay? It's just from, from, it just looks like a grift. Now, if you're, if you're like me and you don't have like a huge social following and I decide I want to create

• 15:38Speaker 02

  an Abra meme coin, I wouldn't call it Abra because we have a company named Abra, but like, you know, some Pepe meme coin, fine. Right? Because you're not necessarily hurting anyone. I actually think that the meme coin craze has in general, independent of the, the politician issue, has been a big win for crypto. Because now you have Solana, Sui, to a degree Aptos, that are massively scalable layer one blockchains that have been tested on public networks, right? To a degree that surpasses what Visa or Mastercard probably combined can do in terms of transaction processing. How do you can test that on a test net, but how do you do real world testing

• 16:19Speaker 02

  of a massive layer one blockchain meant to process 25,000 transactions a second? I think meme coins is probably the single best way we could have done that. All of the Trump and Legion or whatever those tokens are aside, which I don't support, right? So, so again, stop, stop the stupid grift, even I think in the case of, of it's called Libra, right? I think, yeah, I think in the case of Libra, I'm going to give me like, me like, okay, he was dumb. He should have put a stop to it immediately. I think the narrative of, oh, I just republished it. I wasn't promoting it. I shared it. I didn't promote it. Yeah, I mean, it's just, come on, you can say, you can actually say the words, this shouldn't have happened.

• 17:01Speaker 02

  I shouldn't have put my name behind this. The people that actually did this will be out of my administration and we'll figure out how

• 17:09Anthony Pompliano?

  To take whatever money's left and redistribute it to basically existing holders, something like that. He could have done that. That's what I would have done. I mean, as I am a wildly big, you know, melee supporter in terms of what he's done for Argentina. This was a mistake.

• 17:23Speaker 02

  Yeah.

• 17:23Anthony Pompliano?

  Own it up. Own it.

• 17:24Speaker 02

  And it's okay if you make mistakes.

• 17:26Anthony Pompliano?

  Exactly.

• 17:26Speaker 02

  Right? Just own it.

• 17:27Anthony Pompliano?

  Say it. Hey, it's a mistake. Move on.

• 17:28Speaker 02

  Okay, 100%, 100%. So, so, you know, I, I would highly encourage you to not create a pump token because I think you have like, you know, seven figures of followers.

• 17:39Anthony Pompliano?

  We were talking recently and I tried to calculate how much money I've been offered over the years to do pump coin.

• 17:47Speaker 02

  NFTs, whatever. Yeah.

• 17:49Anthony Pompliano?

  Tens of millions of dollars.

• 17:51Speaker 02

  I don't doubt it at all.

• 17:52Anthony Pompliano?

  Every single time. It's just like, it's not even a conversation.

• 17:54Speaker 02

  Yeah.

• 17:54Anthony Pompliano?

  Right? And I think that people, people who are drawn to do it, what I've noticed are usually people who do not create companies. They don't, they don't build companies and they don't understand that like for something to have value, it needs to have some fundamental value creation.

• 18:10Speaker 02

  Yeah.

• 18:11Anthony Pompliano?

  Right? It needs to solve a problem for somebody. It needs to have, you know, revenue. It had like, like all these components that go into building a business. You look at the meme coin, you're just like, dude, that has none of that. Obviously it's going to eventually lose the value once the belief system.

• 18:25Speaker 02

  Here's the difference. One of the NFTs, I forget what it was called, but you know, Kevin Rose, he created one of them and I can't remember what it was called. I think it was bird something.

• 18:33Anthony Pompliano?

  Okay.

• 18:34Speaker 02

  I'm sure, I'm sure you knew it if I can remember the name. When, when, and, and he created this project not to just issue NFTs. He had a whole idea of a community and, and a value added model and wanted to build a long-term sustainable company. Now, of course, all of the people who had made a shit ton of money on Ethereum who were aping into his NFT didn't really pay that much attention to what he was trying to do. But when the price went up, everybody was happy and then the price plummeted and he was Satan's spawn to that community.

• 19:02Anthony Pompliano?

  Of course.

• 19:03Speaker 02

  And it hit him, he did a, an interview with Tim Ferriss where I heard about this and it hit him like a ton of bricks. I mean, it personally put him into a depression because he was there for the right reasons.

• 19:14Anthony Pompliano?

  Yep.

• 19:14Speaker 02

  Right? And, and we did a test with a, a token that we created, which was a rewards currency. We didn't even have A sale or wouldn't make any money on it. We literally just gave it away to customers. And I still to this day, because we don't do that kind of retail anymore, I still to this day get like pocks on you and your children DMs on my Twitter feed from people who lost $5 on some rewards token that we literally gave away, right? So, so I think you need, if you're in this for the right reasons, one, you can sleep at night.

• 19:45Anthony Pompliano?

  Yep.

• 19:45Speaker 02

  And, and two, there is not 100% bad happening via meme coins. I actually think the meme coins have added value to harden these networks. We just need to separate the grift.

• 19:56Anthony Pompliano?

  Yeah, I was talking to somebody recently and Richard Dawkins talked about kind of what is a meme coin? He, I think he coined that phrase and it was basically, it's like a unit of culture or a unit of, you know, whatever. And so this guy who is building on top of Bitcoin said that Bitcoin was like the original meme coin in the sense that, you know, it really was the first digitally sovereign token where you could own it. But it represented a lot of values and, you know, ethos and like all these things that, you know, now is kind of like Bitcoin, maybe even Bitcoin maximalism or whatever like kind of represents. But it was backed by real substance. It was backed by real value. It was backed by the strongest computer network in the world, right? All the, all these components to it, which is a kind of a, a unique way, I guess of looking.

• 20:40Speaker 02

  Yeah, 100%. You could also make the case that in 71, when the dollar was no longer a gold-backed stablecoin, that it became a meme coin because it was basically backed by nothing except people's belief. Or, or basically you could almost say it was like a mafia token because it was backed by the full power of the mafia that ran a protection racket that said, we're going to continue to protect you as long as you use our, our dollar, which is more or less what the game has been for, for 50 years. But it just depends on your perspective, I guess.

• 21:06Anthony Pompliano?

  What's, what's interesting about that is it would make the dollar the most successful meme coin ever.

• 21:10Speaker 02

  100%.

• 21:11Anthony Pompliano?

  Right? How do you think about dollar dominance? You know, obviously Bitcoin has been very successful, but dollar has continued to be used for bilateral trade. It seems like stablecoins really are helping to extend that dollar dominance.

• 21:23Speaker 02

  Yeah, yeah. I mean, we could actually talk about that for a minute, the regulatory kind of tailwinds that I'm seeing, right? So there's a new. Stablecoin bill. I think that this administration, because they're so crypto savvy, especially, I mean, just the cabinet is all in on Bitcoin, right? Which is amazing. Congrats to Litnik, by the way. And, and so I think that the stablecoin legislation is going to set the tone. I'm very encouraged by what I'm seeing, but most importantly, this administration realizes that, you know, 100% fiat backed, stablecoins are one of the largest holders of US treasuries right now, right? In the aggregate, right? I think Tether is like larger than Germany and or larger than many governments in terms of holding

• 22:04Speaker 02

  US treasuries. And they realize that the more dollar hegemony they can promote via stablecoins, the lower interest rates become, because it basically drives demand, right? Which, which raises the price, right? And bond prices move in the opposite direction of interest rates. So if the price of the bonds goes up because there's demand, interest rates go down. It's common sense, right? So they intuitively get that. I mean, David Sacks has been pushing that. I've heard of say it many times. It's very obvious. I'm a fixed income guy, so that that stuff's very obvious. So I think that they're going to do right to basically promote the kind of traditional collateralized stablecoins. I have some concerns about some of the wording about putting a stop to algorithmic stuff, which I think companies should be allowed to do within a sandbox framework, which we can talk about. The other concern I have is, is that

• 22:50Speaker 02

  SWIFT allows for the conversion of a euro to a dollar, meaning if I wire money from Deutsche Bank Germany to the US, it can send euros and land in dollars, right? They need to make sure that if a, a, a stablecoin is issued in another country, it can still be used to send money to somebody's wallet who's hosted on an exchange in the US. And the way it's worded today is it confuses that issue a little bit, but I have a feeling they'll, they'll clean that up. But I'm hoping that it starts a kind of a windfall of positive clarity for the US market, whether it's stablecoin issuers, what exchanges can and can't do via stablecoins or wallet, you know, hosted wallets can, can and can't do, all the way down to securities

• 23:32Speaker 02

  and CFTC oriented regulation, which I'm very hopeful now that we're going to get right. Yeah. Um, what are the things you want to see regulators do or change? Uh, I would say there's a few things. I'll focus on the highlights. With stable coins, like I said, it's on the right track. I would definitely get clarity to make sure that we can interoperate with internationally issued stable coins. So that if I send money cross border, it can still work, just like with Swift. We can't break what worked in the TradFi system when we move to digital currency. That's number one. Number two is I personally want to see a sandbox between securities and commodities regulators. Remember, we're unique in the world in that we have different regulators for both commodities and securities.

• 24:17Speaker 02

  Most regulators in most countries, it's one regulator. I want to see a sandbox that allows a company in the US to innovate, issue a decentralized platform by raising money via token sale, and then have the ability over two to three years prove that that platform has become decentralized. Right? So that nonsense that every token out there is a security clearly goes away. Right? So to me, the litmus test has always been if something has no off switch, who are you suing? Right? So if I sue the Uniswap Foundation, well, okay, you're technically suing developers because that system really can't be shut off anymore. Right? So you really Do you think it can't be shut off?

• 25:02Speaker 02

  I don't know for certain. I think the probably the original version can't be at this point. Interfaces can get shut down. Applications is different for sure. And that should be addressed so that people who provide application layer access to these things that aren't holding people's assets aren't sued. That those people are deemed software developers protected by free speech in the United States, which I think we with the Biden administration in parallel to screwing up securities enforcement also screwed up, you know, protected free speech. Right? With a lot of the FinCEN and kind of coordinated actions with the tornado cash developers and other things. So we need to double down on free speech, which they clearly are in things unrelated.

• 25:47Speaker 02

  To crypto, of course. But but if we get this sandbox right, right, the amount of developers who've had to move to Switzerland and Dubai and Singapore just because of out of out of fear of basically, you know, coming in and registering and then getting, thank you very much. Here you go. Here's your Wells notice. Have a nice day is is going to go away. And I think a flood of money will will come into US, especially now with the convergence of of AI and especially the kind of agentic web and smart contracts, right? So if you look at what's coming, right, we've got this whole agentic web coming, which says there's going to be millions of these kind of AI bots out there that are going to provide services

• 26:27Speaker 02

  to enterprise, supply chain, consumer services, your personal assistant, and the ideal way for those services to transact is DeFi, whether it's Bitcoin, Lightning, or Ethereum, what doesn't matter. It's it's it's DeFi regardless.

• 26:42Anthony Pompliano?

  Some sort of software automated product where there's not a lot of centralized control.

• 26:47Speaker 02

  Hundred percent. It doesn't make sense to have to get a PayPal account for a bot that has no off switch because you've just added an off switch, right, by definition. So so we need to get that right. And we want those companies in the United States, in my opinion. And I'm guessing that Lutnik does and Saks does and by proxy, Trump does, even if he doesn't understand all the nuances of of the tech, right? And and so getting that sandbox right is crucial, not just for number go up, but for the future of AI transaction processing, even banking, because I'm convinced the next generation of banks is going to be DeFi based, right?

• 27:21Anthony Pompliano?

  What would that look like?

• 27:22Speaker 02

  Well, if I was developing, I tweeted this the other day, if I was building a neo bank right now, especially in developing markets, I'd probably build it on Solana, because the transaction fees are really low. The meme coins proved it can scale. You've got Visa partnering with them to issue debit cards. You don't need a bank partner in most non-US countries to issue a debit card. So you've got all the pieces in place to effectively launch a a kind of competitive neo bank in these markets that doesn't require a traditional bank core and heavyweight expenditures that can hold dollars, which is beneficial to the United States, earn yield. Right, by definition, in ways we've discussed, do collateralized lending if you promote Bitcoin and other pristine assets.

• 28:04Speaker 02

  Eventually we'll have tokenized real estate, which I think we can talk about it coming down the pipe. And basically, it's a bank without all the heavyweight crap, without all the cobalt-based centralized cores that people have to go out and partner with in order to build their banks. And it also limits the operation chokepoint potential, you know, by basically allowing companies to control their own destiny via these next-gen L1 platforms.

• 28:28Anthony Pompliano?

  Do you think that whether it's the public.coms, the Robin Hoods, maybe even the Stripes of the world, like there's all these fintechs that have their hands in certain, whether it's brokerage accounts, there's obviously neo-banks, but even payment providers, is it all just a race and they're going to converge and kind of offer as much as possible?

• 28:44Speaker 02

  Yes, but I also think that ultimately it's going to be upstarts that win. I don't, I mean, so, okay, so the question is, is banking different than any other industry that's been completely transformed by the internet? And up until now, it's been different because of the regulatory moat around the banking industry, right? Whether, and I'm putting securities and commodities, investments and, you know, banking all in one big kind of, you know, moat-protected industry.

• 29:09Anthony Pompliano?

  Finance.

• 29:09Speaker 02

  Finance, exactly. I think that moat's going away. I think you can't stop what's coming. When you have systems that are on 24/7, have no border by definition, you know, have no off-switch by definition, et cetera, et cetera. Long-term, the regulatory moat becomes very difficult to protect. I think the dollar hegemony gives you a certain amount of power, because if you're going to issue dollar, you know, collateralized stablecoins, those dollars need to be stored. So the collateral needs to be stored somewhere, right? And right now, it's most, even for Tether, the collateral is stored in the US, which is very interesting, right? You could ask yourself, why are they doing that? Well, because they want access to the US Treasury market, which is why they're doing it, right?

• 29:50Speaker 02

  So, but long-term, right, I really do think you're going to see upstarts become the biggest banks in the world, right? It's not Blockbuster that became the biggest streaming company, it's Netflix, Prime, companies that didn't exist while Blockbuster was the fastest-growing company in the United States. It's crazy, right? So is banking different? I think it has been because of the regulatory moat, but I do think over the next decade and decade and a half, that's going to change significantly because you can't stop what's coming by definition.

• 30:19Anthony Pompliano?

  Yeah. Does that blur the lines of the different countries as well?

• 30:23Speaker 02

  Hundred percent.

• 30:24Anthony Pompliano?

  Yeah, where basically now you're just like on the internet.

• 30:27Speaker 02

  Yeah, probably more so even than traditional dot com services because with streaming and whatnot. When you have services with a login and a credit card, it's very easy to say, okay, my streaming rights in the U.S. are this for this product, this in this country for this product, et cetera, et cetera, down the line for 100 countries. But when it's a DeFi service where you connect your wallet and it has no concept of what country are you in? You know, and you can't block it, right? I think a lot of those nuances of the web two services go out the window. And the idea of a country or a border becomes greatly diminished.

• 31:03Anthony Pompliano?

  Yeah. Um, when you look at kind of the DeFi space in general, like you guys have a SEC registered investment advisor. You've been building a lot of these services for customers. What are they using? Are they looking for yield? Are they, you know, using some of the other thing like where is, you know, kind of customer flows? And I always think of it as from an academic or theoretical standpoint, there's much people who pontificate as to like what people are supposed to be doing. But you have the data, like what are people actually doing?

• 31:29Speaker 02

  We have three types of customers today. We have the high net worth customer, could be high net worth or family office that maybe is in crypto. Wants to basically earn safe yield either via some of these new kind of Bitcoin L two products. Or maybe they're holding Ethereum or Solana, they want to stake it, earn yield there. Or they want to borrow against it because they've been holding Bitcoin for, you know, five, six, seven years. They've written significant gains. They don't want to sell, but they want to maybe either get a tiny amount of leverage. Or they want to, you know, buy a house or, you know, fancy car, whatever. And so we're seeing people do kind of relatively safe 25, 35% LTV loans against those Bitcoin holdings. Then that's been wildly popular for us.

• 32:12Speaker 02

  Then we have companies and nonprofits looking to execute the micro strategy playbook. We get a lot of privates who are doing really well, who are quietly starting to buy Bitcoin. It's really amazed how many private companies now have not disclosed that they're actually holding Bitcoin. I was in a meeting yesterday with a very, very well-known studio, private company that is holding Bitcoin and is basically going to fund future projects by borrowing against the Bitcoin at a very low LTV on a reasonable assumption that, you know, the gains may not be 75, 80% each cycle, but even 25% yearly gains, given how much they're holding, is going to allow this company to flourish for a very long time, right? And so we're seeing more of that. And

• 32:57Speaker 02

  then we're seeing newbies looking for advice because we're a fiduciary. We have to do what's best for our clients as an investment advisor, saying, how do I invest in this space? How do I do tax planning in this space? How do I do estate planning in this space? I want to get into crypto. I don't know how to allocate. I don't know how to do estate planning. What happens if I die? I'm in my 60s, et cetera, et cetera. So we have those conversations as well. So those are generally the RIA clients that we that we deal with.

• 33:22Anthony Pompliano?

  And when you're talking to the larger, kind of more institutional crowd, whether it's the RIAs or me, some of the institutions, what are the things they're worried about? Like, why are they not, you know, maybe they're at half a percent or 1%. Why are they not at 5% or 10%? Or, you know, the kind of young people would be like, you should be, you know, 50-plus percent in various assets or these technologies?

• 33:43Speaker 02

  Well, first of all, if somebody makes their way to Abra, they're generally not trying to be convinced about whether they should be in the crypto space. I would say 80-ish percent of people that make their way to Abra are already in the crypto space and need help, right? Either it's for lending, yield, better custody solution, or some combination of all of them, like implementing that micro strategy playbook. So our clients' biggest fears are, do I have my allocation right? Do I have my tax strategy right? Am I getting screwed on this lending facility? Am I, you know, I'm borrowing from this kind of small shop at 15%? And I feel like I'm getting screwed. And by the way, you probably are, if you, you know, and so, you know, we help them with that. And there is a small percentage, and I do a lot

• 34:25Speaker 02

  of speaking at RIA events, you know, other kind of wealth management events where people are new to the space, and we'll help them, free education, free consulting. I actually also think this is going to be, the next kind of 24, 36 months is going to be a big, big kind of turn in the RIA space, where you're going to see all of these RIAs that don't offer any crypto services today start to get into crypto. And that's something that I spend a lot of time on, is how to take our platform and make it RIA. Friendly so that even though we're an RIA, other RIAs can offer our platform. Today, all they can do is offer ETFs by and large to their clients, which is easy. But you know, for somebody who wants to earn yield, who wants to borrow, who wants multi-asset exposure,

• 35:10Speaker 02

  the ETF is not a viable solution, obviously. And so I think that's, that's going to be a big deal in this cycle.

• 35:18Anthony Pompliano?

  Let's talk about the psychology of kind of crypto. I saw somebody tweet recently and he was, he was very bearish. He was like, basically crypto screwed up tech. And his thought process was a bunch of people came in, they kind of were playing this like PvP zero-sum game in crypto. It was all about just get rich quickly. When crypto crashed in 2022 and into 2023, a number of people left crypto, went into AI. Now they're like running the grift in AI and it's just like, get rich, get rich, get rich. There's definitely some of that like mentality that I see. Do you think that's the majority of the industry?

• 35:58Anthony Pompliano?

  Or like, how do you think about the psychological component of you have something that is early with a ticker that trades up and down, is very volatile. And then you go online and you're seeing people who are like getting rich every day.

• 36:12Speaker 02

  Yeah.

• 36:12Anthony Pompliano?

  Right? Like, like just talk through maybe some of that.

• 36:14Speaker 02

  So it's a great question. I mean, I, first of all, I separate Bitcoin and crypto, right? So we kind of understand the psychology of Bitcoin reasonably well at this point. And a lot of people get it, some don't. The percentage that don't is decreasing, which is great. And there's going to be a few people who will never get it until they die. And then we all die and get, you know, things get flushed and technology moves on. Crypto is a different animal for a couple of reasons, right? First, it does, to a degree, act like venture, right? Because you're fun, you're constantly funding new products and some of those products are funded by venture. And on the promise that they're going to generate significant revenue, in some cases for equity holders, in some cases for token holders.

• 36:59Speaker 02

  And I think you're seeing more and more interest in crypto projects generating revenue for token holders, right? I mean, if you look at Athena last year, right? It went from zero to hundreds of millions of dollars in revenue for the protocol in, in weeks. It's crazy, right? But I mean, real revenue, right? Not just the, the value of the token. And so, you know, I'm just not in this for the number go up, right? I am actually trying to build a crypto-based bank that takes advantage of this technology, right, to build the future of money and investing, financial management and investing. And that's what we're committed to at Average. So we analyze, how are these protocols working? What value do they provide?

• 37:43Speaker 02

  You know, what's missing in the, in the, the financial and investing and banking stack as it relates to crypto and, and, and smart contracts? And so that is hard, right? So if you're trying to understand where all this is going, there are a ton of moving parts to understand. So then there's the people who are like, to your point, just here for number go up. And, and that's okay, right? But my, my, my warning slash strong suggestion, suggestion to those people is forget 99% of what's out there because your chances of picking super early-stage winners, unless

• 38:23Speaker 02

  you're just making throwaway bets, unless you do this 24/7 for a living is like zero, right? I mean, we get it wrong a lot, and this is my job, right? My job is to think about where it's going and why, and to align a large team around that vision, and we get it wrong sometimes, and we do nothing else, right? So, so the average investor from a psychology perspective should probably come in this when something is slightly established, getting traction, if they care about number go up, and make those bets. That's why I tell most investors, stick to the, the next-gen L1s if you really want to make a next-gen bet, because the metrics are kind of proven via what happened with Bitcoin and Ethereum in the past, vis a vis liquidity cycles, wallet adoption, et cetera,

• 39:08Speaker 02

  et cetera. Those are things that you can understand, right? If you're really far out there on some real-world asset platform, platform that hasn't launched yet, and you think you know something that the public doesn't, and you're an armchair, you know, quarterback investor, you're going to lose your money.

• 39:24Anthony Pompliano?

  Yeah, I guess part of people coming in is like, you know, they buy some Bitcoin. They're trying to figure out what it is. Is it a psychology thing where they're like, hey Bitcoin, the people who bought Bitcoin early, they made a lot of money. I'm not going to be able to make as much money because the return is coming down. So I have to push out on the risk curve. And it's almost like they're seeking the highest percentage return. And that's pushing a lot of capital into these, you know, kind of components.

• 39:49Speaker 02

  Yeah, I mean, look, it's tough because I think people's expectations are unrealistic when they think about these crypto cycles, right? Meaning if I just follow the four year cycle, am I going to make 5X my money every five years? I can pretty much assure you, you're not. Okay. And so if you get rid of that mentality, first of all, and say, okay, I'm a long-term investor for life. And if I focus on early-stage technology and I'm really good at it and I go super deep, yes, on that allocation of my money, I can in theory make 30% a year. But there's very few people that consistently, consistently achieve a 30% per year IRR return, whatever you want to call it, in early-stage tech, right?

• 40:33Speaker 02

  It's in the maybe tens of thousands, I don't know, on the whole planet out of eight, out of billions of people. Okay. So, you know, I actually think that the wealthiest people out there became wealthy via significant concentration in order to get wealthy. But they made those bets with extreme conviction, meaning they didn't just follow Bill and Pomp and say, I'm going to do what they do. First of all, we don't tell everybody everything we do. So they wouldn't even know, right? And most people who have super concentrated bets aren't out there screaming from the rooftop what their concentration is for whatever reason. But, but the reality is people who make super concentrated bets have extreme conviction around those bets, in my experience. Okay, I'm sure there are people who get lucky, right?

• 41:17Speaker 02

  And so how do you get that conviction? How, right? You know, just by reading on Twitter? No. You do a lot of homework. You dig in. You understand the tech. You understand the adoption curves, whether it's enterprise or consumer, if it's tech, whatever. Okay. Then people tend to diversify because they Care more about asset protection than they do about or wealth preservation than growing the wealth. Right. And that's when, you know, people's expectations around returns are greatly diminished. So your only chances, in my opinion, of growing huge wealth today are either owning a business. And it's the owner mentality of I'm all in, I'm going to do whatever it takes to own that business. Or I'm making super concentrated bets as an early stage investor.

• 42:01Speaker 02

  So the psychology of everything else is burning cash unless you have realistic expectations around what your return profile is going to be over, you know, years and decades. Yeah.

• 42:13Anthony Pompliano?

  What is on the horizon for Abra? Like, we see the tailwind now coming from politicians. You guys have been able to get the regulatory. I'll call it a prove. I don't know if that's right language, but like you're a registered investment advisor, etc. What is the future look like?

• 42:26Speaker 02

  Yeah, so we're involved with a lot of licensing processes. We're now a registered, I forget what the term is, in Europe. We're live with our licensing there. You're going to see more announcements this year in the US on other international licensing. Moving more and more in the direction of basically what I would call crypto banking services. Full, full stack of services for custody, yield, lending, trading on a global basis. And then building more and more on top of that over time. Moving down the incompirements, starting at the top, you know, institutional clients, high net worth clients, family offices. Eventually moving back down into retail, but right now focusing at the top of the pyramid. It's just easier to navigate the licensing world to do that.

• 43:11Speaker 02

  But you'll see us moving more and more in the, in the direction of kind of licensed appropriately crypto banking service provider.

• 43:18Anthony Pompliano?

  Yeah, it makes, it makes sense. What are you most excited about for this year?

• 43:21Speaker 02

  Oh, you know, being able to run my business. Without a bunch of wackos behind me that look like Fred Flintstone and Barney Rubble chasing me with a big bat with spikes on it, trying to smash me in the head all day long. It's a pretty good feeling and I shouldn't have to feel that way. But the fact that I do now, it's, it's pretty awesome. You know, just, I just want to, I just want to run my business like every other American. You know, I mean, how many times do you have a discussion with the average American who's trying to build a business where you say, well, well, there's a bunch of regulators chasing me around all day like lunatics, trying to beat me over the head with a bat. That actually has me the most excited because I know that this business is going to exist and it's going to be successful. That's the kind of conviction I was talking about. I have that conviction. But what I didn't have

• 44:06Speaker 02

  conviction for until recently was, was that I was going to be able to do that in the United States, unencumbered by lunatics trying to kill me.

• 44:13Anthony Pompliano?

  And now you're here?

• 44:14Speaker 02

  Now I'm here. Still.

• 44:16Anthony Pompliano?

  Yeah, still, still. Uh, where can we send people to find you on the internet and also find out more about Ever?

• 44:20Speaker 02

  Sure. I'm, I'm pretty active on, on X these days. Billbar X is my, is my handle. Billbar X and then abra.com is the best place, place to get a bunch of free information on how our products work, services, register, both as an individual or institutional client.

• 44:35Anthony Pompliano?

  A B R A.

• 44:36Speaker 02

  A B R A dot com, baby.

• 44:38Anthony Pompliano?

  Amazing. Thank you so much. We'll do it again in the future.

• 44:39Speaker 02

  See you, bud.