Crypto’s Power Week: Politics, ETH Whales & the Rise of Stablecoin Summer

Episode Transcript:

Ryan Sean Adams:
[0:03] David, you remember last year around this time we were talking about the Bitcoin conference, we played this clip from Donald Trump, okay, and this was like an

Ryan Sean Adams:
[0:10] election promise at the Bitcoin conference. He was like, if you elect me, I am going to fire Gary Gensler. Do you remember that clip?

David Hoffman:
[0:17] Yeah, it was, this was like when timelines seemed to diverge from the very bearish hole that we were in versus a very bullish positive outcome with a potential coalition of Donald Trump. Yeah, absolutely.

Ryan Sean Adams:
[0:28] Followed by the most raucous applause I've ever heard at any conference whatsoever. OK, flash forward to this year. This is J.D. Vance at that same conference. The thing that we did for this community, we reject regulators and we fired Gary Gensler and we're going to fire everybody like him.

David Hoffman:
[0:46] Wow.

Ryan Sean Adams:
[0:49] So there you go. J.D. Vance at the Bitcoin conference, Trump didn't show, but J.D. Vance did. And this is sort of a promises made, promises kept type of clip. And again, same amount of applause as last year.

David Hoffman:
[1:01] It's crazy that we're already one year around the sun from that conference. I think they're talking about this as an even bigger conference, a Bitcoin conference, which makes sense because Bitcoin is like three times higher price than it was last year. But I don't think there will be anything ever as monumental as the Bitcoin conference from that year when Donald Trump said all those things. And like I said, there were two timelines and we chose the bullish one.

David Hoffman:
[1:24] Yeah. Yeah, downstream of that.

Ryan Sean Adams:
[1:26] Yeah, but there are some repercussions for that. We're going to talk about that with the Trump dinner and other things going on. But first, guys, this is time for the Bankless Weekly Rollup. Got a lot to talk about. Number one, David, the micro strategy of Ethereum, is it finally here? I kind of think so. What is it? How much they buy in? What's going to happen next? And what other acquisition vehicles are hitting the public markets these days?

David Hoffman:
[1:49] And what could possibly go wrong by too many crypto acquisition vehicles?

Ryan Sean Adams:
[1:53] Yeah, nothing. stock markets.

David Hoffman:
[1:55] Also, courts have made a halt on all Trump tariffs effective immediately. So we're going to get Ryan's macro analysis coming down the pipe here. And then also the Circle IPO.

David Hoffman:
[2:05] Is that story finally coming to a close? Will they IPO? Will they get acquired by Ripple or what? We're going to get into all of those topics and more. But first, a message from our friends and sponsors over at...

Ryan Sean Adams:
[2:15] Let's get to prices on the week, David. Tell me about Bitcoin.

David Hoffman:
[2:18] Bitcoin down on the week, down 3%. The all-time high for Bitcoin was set seven days ago, Ryan, at $111,800, $111,800. Come on. We are currently at $107,400. The low, low, cheap, cheap price of $107,400.

Ryan Sean Adams:
[2:36] I thought we were going to get all-time high somewhere, and it was just week after week on the roll-up. Week after week after week. Just like all-time high, right? Bitcoin let me down this week.

David Hoffman:
[2:43] You might have to just wait one more week. But on Ether, though, we are... Up. We are up 0.2%. Now, right, I would usually say at 0.2%, I would usually say we are flat on the week. Yeah. But since we are counting the weeks and we are five for five weeks of Ryan Sean Adams being back and the ETH US dollar price being green. And the ETH Bitcoin price being green four out of five of those weeks.

Ryan Sean Adams:
[3:09] Never been down.

David Hoffman:
[3:10] This streak continues. Yeah, it's unbroken. ETH has yet to go down in price since Ryan has, yeah, it's unbroken.

Ryan Sean Adams:
[3:16] Yeah, well, yeah, it's part of the blue money gospel. And actually, there's some really good news for ETH this week, which is it kind of was down for a little bit, but then it popped back up. And you know what? I'm going to make a call, okay? 3K by the end of May. We got to hit that 3K number by the end of May. You've got two days. Yeah.

David Hoffman:
[3:33] That's in two days,

Ryan Sean Adams:
[3:34] Bro. I think we can get there.

David Hoffman:
[3:35] That's the call.

Ryan Sean Adams:
[3:35] Check me next week.

David Hoffman:
[3:37] All right.

Ryan Sean Adams:
[3:37] I've got the magic. I may as well use it. You said it yourself.

David Hoffman:
[3:40] Are you sure you don't want to extend that to – okay, so the 31st is Saturday. So June 1st, Sunday, June 1st. I think you should take that extra day. This is the time to be bold.

Ryan Sean Adams:
[3:48] No, it rhymes. 3K in May. We're going with it. Ship this. Don't edit it out. Yep. This is the clip. All right. All right. Check back next week. How about the total crypto?

David Hoffman:
[3:59] You are just taking your luck and you are just throwing it on the roulette table, bro.

Ryan Sean Adams:
[4:02] I'd be too risky with it. All right. We'll see. We'll see how we hold up. Total crypto market cap. What are we on the week?

David Hoffman:
[4:08] What are we on the week? We're at $3.4 trillion crypto market cap. Yeah. Or 3.5. Excuse me. 3.5.

Ryan Sean Adams:
[4:13] That's exciting, right? Have we ever hit 4 trillion? I'm just, I can't remember.

David Hoffman:
[4:18] 3.9, 3.85 or something like that. We crazed it. Yeah, we clipped it.

Ryan Sean Adams:
[4:22] We crazed 4 trillion. We clipped it. We'll get there. I'm not calling for that

Ryan Sean Adams:
[4:25] in May, all right? No, I'm not getting ahead of myself here. David, you want to hear about the Trump tariffs? You must have heard about this, right?

David Hoffman:
[4:31] Yeah, yeah, yeah. So this is something that Hasib even talked about when I had him while you were out on sabbatical. He gave a take on one of the two rant... rants about tariffs that he made that the these they ran the tariffs are unconstitutional and they that the courts are going to deny them and that's the news that we got this week right yeah well

Ryan Sean Adams:
[4:50] Basically and the courts move a lot slower of course infamously right but they do move and they do have power in this country remember three co-equal branches of government at least that's what it's supposed to be right so what happened was u.s court blocked most trump tariffs okay so So when I say most, I'm talking about the, you know, the 10% across the board tariff that was in place, the 20 to 25% rates on China, Mexico, Canada, all of those things, all blocked, David, effective immediately. And so this is a lower court, a three-judge panel of the U.S. Court of International Trade issued a permanent injunction, not a temporary, permanent injunction, which basically wipes out all of these tariffs.

David Hoffman:
[5:33] So even the 10% global reciprocal tariffs, even that is gone?

Ryan Sean Adams:
[5:38] Yeah. I mean, the only thing that still stays is some of the more, I guess, niche tariffs like on steel and some of these things. Trump still has the power to do that. The courts didn't take that away. But this is a permanent injunction across like all of the Liberation Day tariffs.

David Hoffman:
[5:52] What was the premise?

Ryan Sean Adams:
[5:54] The premise was that he doesn't have the constitutional authority to do that. That the power actually rests in Congress, that other branch of government that just like doesn't do very much, but apparently they have some power to just like do tariffs and Trump doesn't, at least according to this system. And this is nationwide. Okay. So this is a, you know, like federal court, of course, there's going to be a Trump reaction. Do you see the Trump reaction?

David Hoffman:
[6:18] There was one? No, I did not see it.

Ryan Sean Adams:
[6:20] There was one. And Trump said, this is a truth social tweet. This is it. This is Trump. He's on a mission from God.

David Hoffman:
[6:26] This is the meme. It's a meme.

Ryan Sean Adams:
[6:28] It's a picture. From Trump, though, from the president of the United States. Nothing can stop what's coming, he said. Okay.

David Hoffman:
[6:33] So this is a picture of Donald Trump walking down what looks like a New York street.

Ryan Sean Adams:
[6:38] Tariff Lane. It's Tariff Street in New York. Yeah.

David Hoffman:
[6:41] He's on a... It's so Blues Brothers. We're on a mission from God. And nothing can stop what's coming.

Ryan Sean Adams:
[6:47] I don't know. some people like this but what's going on in the background is basically trump's legal team the justice department they're appealing this so this lower court doesn't have the final say so what's going to happen is there's going to be a fight so the injunction is in place right now so no tariffs as of now david like that's been completely lifted that the courts do have that power and this is going to get escalated in in the federal circuit there's going to be some request from the trump legal team to like pause this injunction and that could come into play eventually this could escalate to the Supreme Court.

David Hoffman:
[7:19] Why aren't the markets sending? The markets are flat or perhaps even bearish.

Ryan Sean Adams:
[7:24] That's a good question. I think, I mean, I'll throw out some opinions on this, but these are just like opinions. Like one opinion is basically the Arthur Hayes take of like the tariffs were sort of dead in the water anyway. Trump was on the way to like walking them back. You know, the Chinese negotiations, all of these things, they were sort of end of the line because Trump was spending too much political equity on them anyway. So maybe the markets just price that in. The other possibility is that, you know, the markets are saying, look, this is just a lower court kind of injunction. It won't hold. Trump might win on appeal. The tariffs could come back. You know, Trump's going to bypass them in some way otherwise. So maybe the market is pricing that factor in as well.

David Hoffman:
[8:03] I'll also say the S&P 500 is 1% off of its all-time highs. And so maybe, yeah, the tariffs, elimination of the tariffs or whatever has just already been factored.

Ryan Sean Adams:
[8:15] Yeah, that's right. Maybe the markets are on a mission from God too, which is like all-time high mission from God. I don't know.

Ryan Sean Adams:
[8:22] David, let's talk next about the Trump dinner. Yes. So there were 220 attendees at the Trump dinner. How was it? We're going to fill you in. And I want to tell you about Ethereum's microstrategy, David. Maybe in the Michael Saylor behind it. We'll talk about all that and more.

David Hoffman:
[8:35] Who is Ethereum's Michael Saylor? Who is it? Who is it?

Ryan Sean Adams:
[8:39] Maybe it's my co-host, David Hoffman. I think he filled that role very well. All right. We'll get to all of that and more. But before we do, I want to thank the microstrategy of ETH.

David Hoffman:
[8:47] Sharplink Gaming is the company which, interestingly, has no relation to Ethereum in this title. This was previously a modest player in the sports betting and internet gaming

David Hoffman:
[8:58] market sector. Very modest. Yeah, I think this has... Very modest. This has basically been converted, call it an acquisition, by Joseph Lubin. Joseph. Yeah.

Ryan Sean Adams:
[9:10] Full name, huh? Joseph.

David Hoffman:
[9:11] Joseph Lubin, yeah. Who's, of course, the founder, CEO of ConsenSys. Yes. But this is not consensus going public, which has also been like a long rumored thing. This is strictly being like turned into an ETH acquisition vehicle. So the company plans to use its proceeds to acquire ETH, positioning it as the primary treasury reserve asset for Sharplink Gaming. Now, you might ask what proceeds? They have announced a $425 million private placement. So they are raising $425 million for the specific purpose of buying ETH and then staking ETH. They want to go stake their ETH so that they can go and do this again. So, of course, this is how this works. They raise cash below net asset value. They buy and stake ETH. If the stock trades above the ETH per share, they raise more cash, and then they repeat. S-Link Gaming jumped something like 500%.

Ryan Sean Adams:
[10:05] Oh, let's look at the chart here.

David Hoffman:
[10:06] Yeah, so it's currently at $43. Oh, wow. What was it just a moment ago? What was the price? You're looking at it

Ryan Sean Adams:
[10:12] What was it here? It was $3. $3.76.

David Hoffman:
[10:17] We went $3 to $44. And I don't know what market cap that that puts Sharplink gaming at.

Ryan Sean Adams:
[10:23] I don't know how to use these charts, yes.

David Hoffman:
[10:25] But if it is above $425 million, that means that they can go issue more Sharplink gaming equity, and then they can turn that into more ETH, and they can get that flywheel as much as they can. And they can just squeeze that juice, and it can just turn into ETH on the balance sheet.

Ryan Sean Adams:
[10:38] That's a 14,000% gain for the folks at home.

David Hoffman:
[10:42] Well, I think that's because the market cap of this thing prior to this was approaching. So tall. I don't want to. Oh, yeah. Oh, look. It was approaching zero.

Ryan Sean Adams:
[10:51] It was probably in the low, I don't know, five. I'll estimate something like that. It was pretty low. Now it's about $30 million market cap.

David Hoffman:
[10:58] $30 million market cap. I think that needs to be higher. I think that

Ryan Sean Adams:
[11:01] Number needs to go higher. Well, I mean, when they buy the ETH, it will become higher because it'll be worth at least as much as the treasury.

David Hoffman:
[11:08] Right, because they have to raise the money first. Or they already raised the money, and now they have to buy the ETH. I don't know.

Ryan Sean Adams:
[11:12] They don't have ETH yet. They get to buy it, which is nice. That's $425 million worth of buy pressure on ETH, effectively.

David Hoffman:
[11:19] Which is probably why ETH is up like half a percent and Bitcoin is down 3%. Ether has just been slammed against Bitcoin because Michael Saylor has just been buying billions and billions and billions of dollars of Bitcoin. Now we have one particular investment vehicle to do the same thing, but on ETH's side.

Ryan Sean Adams:
[11:38] Yeah it's funny that this is like i i some people could look at this and be like it's a gaming company so that the ticker the ticker is not if the ticker is sbet all right so it's sbet on the nasdaq that was just a public vehicle for making this happen essentially you guys remember microstrategy.

David Hoffman:
[11:54] Remember what it was it was

Ryan Sean Adams:
[11:55] A business analytics software company still is they still kind of is they still make money selling software yeah but sailor is obviously kind of letting that slowly die in the background and the main thing is the purchase of bitcoin right so i guess does this make joe lubin the michael saylor of ethereum do you think he can carry that stature.

David Hoffman:
[12:15] Now i will say ryan there are others out there there are other like decks that i've seen and other like micro strategies of ethereum going around the space that are not yet public yeah i haven't sent you sent you the one that got sent to me yet because i haven't sorry oh you were keeping

Ryan Sean Adams:
[12:32] Isn't that alpha for me?

David Hoffman:
[12:34] David, this is how I find out? I'm not investing in either of them, and I don't think you want to either. But yeah, there are others. This is not the only one.

Ryan Sean Adams:
[12:42] Well, the game is basically, this is sort of a levered play on the purchase of ETH. That's kind of what it is for MicroStrategy. They sort of, and it's a public vehicle for that. What's interesting about the FIT versus something like MicroStrategy is there is no, I guess, investor-friendly traditional mechanism to buy staked ETH because we don't have a staked ETH ETF. So we just have the vanilla ETFs of just ETH. And so if you stake ETH within this SBET platform, then that's kind of the only publicly traded way you can get staked ETH inside of your 401k portfolio. So even that alone kind of makes sense. There are a whole bunch of other public companies that have ETH on the balance sheet, by the way, including Coinbase, but there's also BitDigital. This is ticker BTBT. most of them have smaller amounts of ETH.

Ryan Sean Adams:
[13:33] So this is definitely the largest one really making a play for the micro strategy.

David Hoffman:
[13:38] Yeah, ticker BTCS. I can't remember what that goes for. But they're also doing the Ether micro strategy play as well. They've already been like raising money.

Ryan Sean Adams:
[13:48] Yeah, so I guess the flywheel is you raise cash below the net asset value of the stock price. You buy and stake ETH. And then if the stock trades above ETH per share, you raise more cash and you repeat. You just keep doing this. And as long as number goes up, things are fine.

David Hoffman:
[14:02] It's the longest number. Well, yes. And the difference here is if number goes down, things aren't necessarily bad. And that is the crux, the fulcrum on which many of these acquisition vehicles will lay on. Because, you know, this is technically, this is neutral. Like MicroStrategy pioneered this. And because no one really copied Michael Saylor for so long, he was able to hoover up a bunch of lending credit in the market. There's only so much like lending dollars willing to be lent out to a micro strategy. Michael Saylor was the only player in town. So he got to absorb a lot of that lending demand for like pretty secure loans from micro strategy. But now there are many more players on the scene as well that are turning into like acquisition companies. GameStop just acquired 4,710 Bitcoin for $510 million this week. GameStop, of course, has still a decently large real business. but they are also leaning into the Bitcoin acquisition strategy. Interestingly enough, GME, the equity of GameStop, dropped by 11% when this went out, which is the opposite of what you want. You need the equity to go up, not down. But nonetheless, GameStop now has almost 5,000 Bitcoin on the balance sheet. Trump Media.

Speaker2:
[15:15] Announces a $2.5

David Hoffman:
[15:17] Billion Bitcoin treasury deal. So Trump Media and Technology Group plans to build one of the largest Bitcoin treasuries held by a public company. This is also the same company, the parent company of Truth Social, and they have confirmed that they have raised $2.5 billion from around 50 different institutional investors, which will include $1.5 billion in common stock and a billion dollars in billion dollars of convertible notes. This cash will go straight into buying bitcoin so that's 2.5 billion dollars of incoming bitcoin buy pressure the tmtg stock the djt dipped about nine percent after the announcement again not what you want

Ryan Sean Adams:
[15:52] Yeah you can't have that.

David Hoffman:
[15:53] If we want this to work you need the equity to go up not down and but again this is not just for bitcoin or even ethereum sole strategy has filed a one billion dollar preliminary base shelf prospectus no clue what that means i think that TLDR is that they don't yet have a billion dollars, but they are like, it's a precursor of having a billion dollars to buy soul. So the soul strategy thing is, is trying to finagle its way into a billion dollars. The listener is going to need to like go and do their own homework on this.

Ryan Sean Adams:
[16:26] This is on the Canadian Stock Exchange as well. Do you remember there was a company called EtherFi that was listed in the Canadian Stock Exchange and this is years ago. Not EtherFi, excuse me, Ether Capital. Ether Capital.

David Hoffman:
[16:36] Yeah.

Ryan Sean Adams:
[16:37] So Ether Capital was kind of doing this play back before it was cool in the Canadian Stock Exchange, it's not as big a deal until you get listed on the New York Stock Exchange or you get listed on the NASDAQ and you have access to that level of capital. So what's interesting to me is like, there are all of these levels of sophistication. So you mentioned, you know, Bitcoin has been running this play for the longest with MicroStrategy. Fun fact, he started in the year 2020 doing this. Before that, Michael Saver is actually a Bitcoin skeptic okay so like he wasn't he wasn't bullish on the asset and so he started buying it fun fact guess what the price the market cap of bitcoin was when microstrategy started doing this.

David Hoffman:
[17:18] $200 billion.

Ryan Sean Adams:
[17:20] Yeah, around $200 to $300 billion, which interestingly enough is the exact market cap of Ethereum today. And so what you kind of hope happens is that if you're an ETH holder, you hope that Ethereum and Ether, the asset, just follows in the footsteps of Bitcoin. So this is the first one. This is like $500 million of capital. That's half a billion dollars. That is size. And the NASDAQ, you get some. And so you start there at the same market cap, and then it continues, it rolls, you convince other treasuries to sort of buy ETH the asset, and it follows in the footsteps of Bitcoin. I mean, that's the case for ETH holders, and Eric Conner puts it this way. The upshot for ETH holders, supply compression, new narrative fuel, potential leverage via an equity wrapper, and a bullish milestone in ETH's march to mainstream balance sheets.

Ryan Sean Adams:
[18:12] There's kind of a worry, though, in the waters, isn't there? Because all of these are levered plays on the underlying asset. And so whenever you see that, you have to ask yourself, like, what could go wrong?

David Hoffman:
[18:25] Yeah, a lot of people's pattern recognition parts of their brain are perking up and correlating this to the GPTC wind up and then ultimate collapse of the last bull market. So as a trip down memory lane, the 2020 through 2021 bull market started with this GPTC, the Grayscale Bitcoin Trust, having this premium to NAV. And so you could take your Bitcoins, put it in the trust and then pocket some like 20, 30, 40% premium. And then you could do it over and over and over again. That premium turned into a discount. And then all of a sudden everyone was underwater. But that took like 18 months. And during that 18 months, it fueled the yield of every single thing in crypto. It fueled the Celsius yield. It fueled the pool twos. It was this cascading like yield system.

Ryan Sean Adams:
[19:08] Three arrows capital. Yeah. Entire hedge funds.

David Hoffman:
[19:11] All of that stuff. Yeah. And the pattern, it's not a one-to-one pattern matching, but I think people are kind of like recognizing that there is a pattern here. And then the other thing that people worried about, like, okay, Bitcoin, great. Like it's a $2 trillion asset. Feels like relatively safe to add leverage onto Ether, like same, same. But like once you start to go down the market cap stack, people are looking at like, okay, what happens when there is like a acquisition vehicle on something much smaller than this? And what happens if this becomes a little bit too replicatable for a little bit too long? And then also Michael Ebolito from Blockworks, I think he put out a pretty good tweet, kind of diagnosing the situation. And so he said, quick thoughts on the acquisition vehicle meta. It seems like we found the 2025 equivalent of GBTC. To spell out the risk, it's that if these acquisition vehicles accumulate a lot of crypto at much worse terms than sailor, They might eventually become forced sellers. And then he says, I'm not sure people truly understand how much of a wizard Michael Saylor is. Saylor financed the majority of his Bitcoin buys with converts. So there's plenty of equity risk for investors, but little risk of liquidation. Basically, Michael Saylor is the CTO, or excuse me, the CFO, Chief Financial Officer of MicroStrategy, and he's making sure that he's acquiring Bitcoin at very low risk terms. If we hurriedly copy and paste this crypto acquisition vehicle over and over and over again, and you're not smart about your acquisition terms,

David Hoffman:
[20:38] Then this can turn into leverage in the system that will result in cascading liquidations.

Ryan Sean Adams:
[20:43] Yeah. And even MicroStrategy, Michael Saylor, a lot of people point to that and have some worries too. And he has probably, you know, like the best terms and has been doing this the longest. I don't know if you saw like Nick Carter, for instance, he's like, all this stuff is a ticking time bomb is his take on all of the, you know, like kind of treasury assets type side of things. So I don't know. I like in order to diagnose this, you really have to get into kind of the, all of the financial statements, all of the leverage vehicles. And it's just so much for me to unwind, but it's just kind of raising an eyebrow at this point. We have a segment, I think, where Michael Saylor actually comments

Ryan Sean Adams:
[21:19] on this at the Bitcoin conference. We'll get to that in a minute. First, should we talk about the Trump dinner, David?

David Hoffman:
[21:24] Okay, so the Trump meme coin dinner happened last Friday. This happened at his Trump National Golf Club in Virginia for the top 220 holders of the Trump token. It was promoted as the most exclusive invitation in the world. That was reminiscent of 2021 NFT clubs. So what actually happened at the dinner, Trump did arrive, although he was not promised to make an appearance at the dinner. He did make an appearance at the dinner. He delivered a 20-minute speech. From what I hear, it was normal Trump stump speech. I'm the crypto president. Biden sucks, blah, blah, blah. You know, normal Trump things.

Ryan Sean Adams:
[22:00] I fired Gensler. I hope he said that.

David Hoffman:
[22:02] Yeah, I fired Gensler. Yeah, yeah. He did not mingle with any of the guests. He spent 23 minutes at the event before leaving by helicopter again. So 23 minutes in and out.

Ryan Sean Adams:
[22:10] He did have time to dance the YMCA. He danced the YMCA?

David Hoffman:
[22:15] Yes. All right, that might have been worth it. According to sources. That might have been worth it. Reportedly, most guests were disappointed, especially some people who spent large sums of money but did not get to interact with Trump personally. It also featured a three-course meal that TikToker Nicholas Pinto described as Wired as the worst food he's ever eaten. This is it. And the Trump speech at the event was pretty much like bullshit. Oof. Ouch. Ouch. Rough words.

Ryan Sean Adams:
[22:39] I don't know. I mean, what did people expect from this? What did they expect?

David Hoffman:
[22:42] I don't know.

Ryan Sean Adams:
[22:43] It's a meme coin dinner, right?

David Hoffman:
[22:44] I think you get to, I mean, if you invest in something, you want to be like aligned with it. I do know someone who is at the dinner. I asked him what his take was and they said.

Ryan Sean Adams:
[22:53] My disclosed source, right?

David Hoffman:
[22:55] He didn't. Don't disclose it. Yeah, I'm not going to disclose it. I'm not sure it matters. I'm not going to disclose it. It was pretty cool. Honestly, had some good conversations at the dinner with people I probably would not have met otherwise. A lot of market maker CEOs were there. Best part was definitely the VIP room and being able to be near Trump and have him give a short speech to 25 of us before he went into the bigger ballroom. Oh, I didn't know that. Oh, and then the next sentence is between us. And so I'm not going to repeat that.

Ryan Sean Adams:
[23:19] You know who else was there, David? Justin's son, of course. And not only was he there, he is the largest Trump holder, top holder of Trump coin, okay, which of course is what you need in order to get to this. You have to be top 220 owners of Trump coin in order to get to here. And not only was he excited to attend the dinner, he put out this fantastic influencer video about it. I got to show you this.

David Hoffman:
[23:39] Oh my God, Justin Sun, what a guy.

Music:
[23:42] Music

Speaker2:
[23:53] You know what?

Ryan Sean Adams:
[23:54] I just, I can't watch anymore, David. It's just like more of that. It's Justin Sun, photo op.

David Hoffman:
[23:59] The most Trump glazing I have ever seen. Even the music, dude.

Ryan Sean Adams:
[24:05] Never a wasted opportunity with Justin Sun. Wow, that's incredible. But let's talk about some of the controversy outside of crypto about this because it's not insignificant, right? Do you see this? Even in the Trump 20-minute speech he gave, this is the presidential seal. Right.

Speaker2:
[24:22] He's giving a speech at a podium with a presidential seal in front of it. And when that seal is present...

Ryan Sean Adams:
[24:29] It signals that the president of, like, it's not just Donald Trump speaking,

Ryan Sean Adams:
[24:33] it's the president of, that represents the people, the United States of America, who is here.

David Hoffman:
[24:38] And this goes against the rhetoric that the Trump administration was saying, which is that Trump was there at the

Speaker2:
[24:43] Dinner in his

David Hoffman:
[24:44] Personal capacity. So this is directly antagonistic to those statements.

Ryan Sean Adams:
[24:47] So what backlash have you seen about this?

David Hoffman:
[24:49] Oh my God, dude, everywhere, like everywhere in like mainstream media. So 35 democratic lawmakers or right before this sent a letter to the Department of Justice urging an investigation into possible violations of federal bribery laws and the Constitution's annulment cause. This raised concern that foreign actors, Justin Sun, could buy influence via the Trump meme coin and gain undisclosed access to the president. The letter demanded a press conference and public disclosure of the dinner guest list. Well, you could actually get that on chain. Just before the event, Representative Maxine Waters introduced the Stop Trading, Retention, and Unfair Markets Payoffs in Crypto Act, targeting crypto-related corruption by U.S. officials. She cited Trump's and Melania's meme coins, the family, a world liberty financial-backed stablecoin, and Trump's proposed national Bitcoin reserve as risks of foreign influence. Even some Republicans, right?

Speaker2:
[25:43] Senator Cynthia Lummis, one of them.

Ryan Sean Adams:
[25:45] Huge Bitcoin supporter.

David Hoffman:
[25:46] Huge crypto supporter. Laser-eyed Bitcoin cyber hornet senator, Cynthia Lummis. I was like, oh, this makes me uneasy. I am not really cool with this.

Ryan Sean Adams:
[25:56] Her quote was, this gives me pause.

David Hoffman:
[25:57] Gives me pause. Gives me pause, yeah.

Ryan Sean Adams:
[25:58] Even though I support the president, this gives me pause.

David Hoffman:
[26:01] Yeah. During the dinner, there were protesters gathered outside chanting shame and calling it an illegal crypto party, among other things. The way that this- I'm paywalled.

Ryan Sean Adams:
[26:12] I want to see this photo of the protesters, but I'm paywalled.

David Hoffman:
[26:15] Can you describe it? Imagine a left-leaning crypto-hate. with the word shame. Just imagine what that looks like and then you're going to get pretty close. Thank you. The way that I stumbled across the pushback here was from Ezra Klein. I listen to the Ezra Klein show every now and then. He's definitely like a democratic liberal commentator. And also, I've mentioned this a handful of times, Sam Harris loves to bring up the Trump meme coin as a conduit for corruption because he also hates Trump. Ezra Klein, also disposed to not like Trump, did a one hour and like 20 minute show on the relationship between Trump and crypto.

Ryan Sean Adams:
[26:53] The entire thing was the video is titled The Growing Scandal of Trump. And what he means is hashtag Trump coin.

David Hoffman:
[27:01] Trump coin. But not just that. He talked about World Liberty Financial. David Bailey got mentioned as well. And like there were clips of David Bailey being like, we, the Bitcoiner community, can use Trump as a conduit to make Bitcoin go to the moon. And it's like pretty unfortunate clippings of David Bailey talking about Trump as a way to get the Bitcoin community to make Bitcoin go to a million dollars.

Ryan Sean Adams:
[27:24] You sort of see, I sort of see the dry tinder for like an epic backlash here.

David Hoffman:
[27:30] I see the same thing.

Ryan Sean Adams:
[27:32] And that it's not going to happen immediately. It's not going to happen now. but the Trump coin in itself is probably the most notable. But there's other things too. So it's like we just mentioned earlier in the episode that Trump media acquiring $2 billion worth of Bitcoin, $2.5 billion of Bitcoin. What's sort of interesting is we've been talking about kind of treasury policy, which may be effectively to inflate U.S. treasuries away at some level, right? So it's kind of interesting. It's like you're the president, you inflate treasuries away.

Ryan Sean Adams:
[28:04] while you're buying an alternative store of value. It's like, remember, like, okay, crypto is the escape boat. So you're loading up on the escape boat while you're in charge of.

David Hoffman:
[28:15] Like, You, the leader, are getting on the ark while you are also potentially causing the flood at the same time.

Ryan Sean Adams:
[28:23] Yeah, it's one of those. And so, okay, so, like, tell me about this episode. I don't know if I'm going to watch it, but, like, what was the...

David Hoffman:
[28:29] Dude, it was really thorough. They even went into the Trump baseball card NFTs that he launched in like 2022. Yeah. So they just touch on everything he's ever done with crypto. And of course, they put it in a pretty like bad light, but it's also a light that's like not wrong.

Ryan Sean Adams:
[28:44] It's accurate.

David Hoffman:
[28:45] Yeah, it's not wrong. Like they're not making up lies.

Ryan Sean Adams:
[28:48] Do they other side it a little bit? Do they talk about how like shitty like Gary Gensler was and how like terrible.

David Hoffman:
[28:55] They talk about Gary Gensler, but not that he, no, they don't talk about how shitty he They don't talk about that.

Ryan Sean Adams:
[29:00] That's what frustrates me so much.

David Hoffman:
[29:02] Yeah, yeah, yeah.

Ryan Sean Adams:
[29:03] But I mean, I think- This.

David Hoffman:
[29:04] Is what we did. This was the bargain. We got the crypto president. We got everything we wanted. Did we? We're also getting the crypto president grift too. Got to pay the grift tax. Yep. And we, the industry, are going to, in the future,

Ryan Sean Adams:
[29:19] Have to- Reckon with that?

David Hoffman:
[29:21] Reckon with this in the future. Yeah.

Ryan Sean Adams:
[29:23] Well, we'll see how it goes. I still think the alternative may have been worse and probably would have been worse.

David Hoffman:
[29:27] I agree that the alternative was worse, but there's no free lunch. Bullish? There's no free lunch.

Ryan Sean Adams:
[29:31] I don't know.

Speaker2:
[29:32] Let's talk about what's next.

Ryan Sean Adams:
[29:33] More on the Bitcoin 2025 conference. Who attended? What are they doing over there? And Circle, are they going to IPO? Is that what's happening now? I think so. We're going to talk about that and more. But first, I want to tell you about...

David Hoffman:
[29:44] All right, time to get into the annual Bitcoin conference, Bitcoin 2025. It was in Vegas this year. Let's tune into a little bit of a compilation clip of what exactly was talked about at the Bitcoin conference. Let's go hear from this clip. Stablecoins. Stablecoins. From stablecoins. Stablecoins. Stablecoins. Stable coins.

Speaker2:
[30:02] Stable coins.

David Hoffman:
[30:03] Stable coin. Stable coin. Stable coin. Stable coin for Bitcoin. Stable coins. Stable coin. Stable coin. Stable coin. Stable coin. Stable coin. Stable coin. Stable coin. This thing goes for over a minute.

Ryan Sean Adams:
[30:12] How long are we going to have stable coins?

David Hoffman:
[30:14] It goes for a whole minute. Stable coins.

Ryan Sean Adams:
[30:16] Stable coins. These faces here. I mean, this is Robbie from BlackRock.

David Hoffman:
[30:19] It's a huge who of financial leadership.

Ryan Sean Adams:
[30:22] Who did I just see? A CEO of Robinhood, right? Who else did I just see?

David Hoffman:
[30:24] Vlad. Vlad. Robbie from BlackRock. There's Paul from Coinbase. There's Cynthia Lummis. Pete Rizzo's Stablecoin. Stablecoin. He's turning him. There's Sam from Frax at the 30 second, 31 second. Who else is there?

Ryan Sean Adams:
[30:38] Oh, Representative Emmer here.

David Hoffman:
[30:40] Tom Emmer. Tom Emmer. Tom Emmer, yeah. Stablecoin, Stablecoin, Stablecoin, Stablecoin. Yeah.

Ryan Sean Adams:
[30:44] Okay, okay, okay. So are you implying that- Oh.

David Hoffman:
[30:46] And J.D. Vance. J.D. Vance to finish it as well.

Ryan Sean Adams:
[30:49] Yeah. Are you implying that this was like a lot of talk at Bitcoin was about stablecoins?

David Hoffman:
[30:53] I mean, I just saw this clip. I wasn't, I'm not at Bitcoin, the Bitcoin conference. This has been the meta of crypto. But like, you know, Bitcoiners don't necessarily like

Speaker2:
[31:02] They're not anti-stablecoins because more stablecoins makes Bitcoin even better, I would say.

Ryan Sean Adams:
[31:07] I feel like it's very nice for Bitcoiners, like, from a narrative perspective, to promote stablecoins because that feels very U.S. aligned. Like, the government gets stablecoins and we get Bitcoin. It's non-threatening to Bitcoin, obviously. Yes, it's non-threatening. It's super non-threatening, yeah. Bitcoin and stablecoins, that's sort of the Bitcoin or barbell here. So, it makes sense that there would be a lot of... But this is a three-day conference, happened in Vegas this year, 30,000 attendees registered, okay? 5,000 companies, 400 speakers, a whole bunch of people. We mentioned J.D. Vance was there, you know, senators, Bo Hines, Eric and Donald Trump Jr. were there. So sons of the president, not the president. Of course, he had Michael Saylor's there and all of Bitcoiners, Jack Maulers, Adam Back, CEO of Tether. So, and they spent three days. They talked a lot about stable coins. I'd imagine, but pretty much talking about Bitcoin, the asset, a three-day conference talking about Bitcoin, the asset.

David Hoffman:
[32:07] Well, I'm not talking about Bitcoin, the blockchain, let me tell you.

Ryan Sean Adams:
[32:11] Yeah. So, I mean, have you ever been to one of these conferences?

David Hoffman:
[32:14] I have. Yeah. I went to the 2019 Bitcoin conference in San Francisco and then the 2021 in Miami, but I didn't actually, I went to the 2021 one very briefly. I went to the mainly the side events.

Ryan Sean Adams:
[32:25] It's very impressive. The amount of-

David Hoffman:
[32:27] Conference is a it's the industry's biggest conference so yeah yeah

Ryan Sean Adams:
[32:31] And just like the the energy there the excitement there this is jd vance we'll play another jd vance clip from his speech 50 million americans own bitcoin and i believe that's going to be 100 million before too long, 100 million Americans owning Bitcoin is just a doubling. We got 50 million with Bitcoin right now.

David Hoffman:
[32:52] David Sachs, the AI and crypto czar, he was also there at the conference interviewed by Cameron and Tyler Winklevoss. He said that while he can't promise anything, a pathway does exist for the government to buy more Bitcoin, which, again, this line was cited in the Ezra Klein show as like the corruption of a corruption vehicle. It's like, oh, yeah, like Bitcoiners paid Trump. now the government the government money is the biggest money out there and if you can get the government money to buy your bitcoin that's bullish but anyways the question is the david sacks continues saying the question is can we get either the treasury department or the commerce department to get excited about that because if they do and if they can figure out how to fund it they actually do have presidential authorization so so the president's on board the president's

Ryan Sean Adams:
[33:40] Buying bitcoin is he's definitely on board with this right they just have to get the treasury department which is basically president's cabinet and commerce department on board and then it's going to happen according to david sachs senator lummis actually she had kind of a sequence of events she's like first we get the stable coins bill then we get the market structure bill which is you remember fit defines what's a commodity and what's a security and then she thinks we get Bitcoin in the U.S. Treasury. So she's still bullish on.

David Hoffman:
[34:10] That last piece. She's really bearing that under a pretty tall order. The stablecoin bill will get passed relatively easily. The market structure bill, it's not trivial for that to get passed. There's a lot of work to be done on that one. There's not a guarantee.

Ryan Sean Adams:
[34:24] You know, the Genius Act, right? It didn't really move very much this week, right? I think, what's the status of this? I was asking you to chat GPT. Yeah, what is that? Nothing legally changed this

Ryan Sean Adams:
[34:33] week. The bill is just in momentum. It's still kind of a holding pattern okay.

David Hoffman:
[34:37] Okay yeah yeah the fit bill or the market structure bill austin campbell has some pretty spicy takes he thinks that that thing is not going to get passed as is he thinks it's going to get unbundled and like pass in like piecemeal fashion which will take a lot

Ryan Sean Adams:
[34:49] Longer yeah i guess that's less important immediately given the current sec right i mean yeah under the gensler sec it was it was really critical yeah true david michael saylor was there and maybe we should continue the discussion we were having about what happens if MicroStrategy starts trading at a discount to NAV price. And NAV price is like, I guess, the book value price of all of its assets, right? That's NAV for MicroStrategy.

David Hoffman:
[35:16] So the market cap of MicroStrategy was less than the value of all the Bitcoin that it owned.

Ryan Sean Adams:
[35:21] Exactly. Exactly. Yeah. Well put. And so right now it's trading at 1.7X.

David Hoffman:
[35:26] Premium to which is the premium that they just keep on juicing and they keep on turning into that premium into bitcoin on their balance sheet so what

Ryan Sean Adams:
[35:34] Happens if that goes negative that's kind of the the nightmare scenario that people worry about this is michael saylor commenting on that.

David Hoffman:
[35:40] Gbtc and grayscale went below one times nab before And what they miss is that Grayscale was a trust company, a closed-in trust, and we're an operating company. And a trust company doesn't have the option to refinance or take on leverage or to sell securities, buy securities, recapitalize, or buy their own stock back.

Ryan Sean Adams:
[36:05] So this is Saylor saying, we're not like GBTC. It's not going to happen this way. And the reason is that trust had no options, basically. Right. It was rigid. Yeah. Saylor saying, look, if worst case scenario happens, you know, we get into some like trouble here. We got all sorts of we can print more stock. I can find financing like I can figure it out. And I think that's probably true if it's very short term, let's say. So you get months like this. I'm sure he can figure it out. I mean, if that ever turned to years, I think maybe then you have more of a problem. But he's probably right that he does have more options than a trust. It's just like the question is, is all of that dry powder enough? It depends on the severity of the discount to NAV.

David Hoffman:
[36:51] Right. Part of the crux of the issue, I think, is Saylor's commitment to always be buying. And if you are always buying, like if that is what you are doing, you are never really giving yourself padding. And so if there was like a moment where a sailor had enough Bitcoin and he just stopped buying, I would feel a lot more comfortable with it. But I think if you will make a commitment to always be buying, you are also simultaneously making a commitment to like potentially put yourself under duress in an extreme situation.

Ryan Sean Adams:
[37:19] Yeah, that's right. David, Echo announced Sonar. What is this?

David Hoffman:
[37:24] Okay, so Echo is Kobe's startup, which allows for people to like create groups to invest in deals. You still need to be an accredited investor, but it's a way to like democratize access to like early stage investing.

Ryan Sean Adams:
[37:36] Like kind of like an angel list for crypto, would you say?

David Hoffman:
[37:38] Yeah, crypto native angel list. That's right. Yeah. They have since announced Sonar, which is I think even more of like trying to be an open platform. So Echo was designed with kind of these rigid groups that people said that they didn't really like groups. They just wanted to invest as an individual into opportunities that they found exciting. So Sonar, think of this as like a compliant ICO platform. So Kobe, with Echo and now Sonar, is trying to bring back ICOs, which... I love ICOs. I think I wish crypto would go back to ICOs. And so this is just like better ICOs,

Ryan Sean Adams:
[38:13] Right? Like, like fair, more transparent.

David Hoffman:
[38:16] ICO mechanism is solid. And I'm sad that we ever got away from that. Why did we get away from that? Securities regulations. We can get back there. Kobe's doing it like compliantly. So there's still like KYC, AML. You still need to be accredited investor, all that kind of stuff. But it does open up access for like founders to kind of just route around venture capital. if they so choose and just go straight to Sonar to do a public sale. Yeah. This has pros and cons, of course. Like there are reasons why VCs are VCs, but if you don't think you need VCs and you just want to go straight to like wide as a distribution as possible, then maybe Sonar makes sense for you. It's pretty cool.

Ryan Sean Adams:
[38:52] I mean, Kobe's very passionate about this, right? To the extent that he said, hey, like he doesn't do podcasts anymore. He's like, hey, I'm willing to come on the Bankless podcast and do an episode.

David Hoffman:
[39:02] If you guys make an echo group. So we did. Which we did. We actually already had our Echo Group in process. So I actually think Kobe owes us because it comes on the podcast. I think that's how this lays out.

Ryan Sean Adams:
[39:14] I wonder where the takes are, just like on the market. It's always got really interesting, reasonable takes. And yeah, we'll have to ask him when he comes on, right? Because he owes us. David, Circle and the IPO, what's the status?

David Hoffman:
[39:27] Yeah, okay. So I think Circle is moving forward with the IPO, declining the Ripple acquisition. And I think therefore also declining the Coinbase acquisition, even though Coinbase already owns like a quarter of Circle to begin with. So they are offering 24 million Class A shares. And the shares are going to be priced between $24 and $26. They're looking to raise $624 million-ish, which would make the value of Circle around $6.7 billion. Okay. $6.7 billion.

Ryan Sean Adams:
[39:56] That's pretty cool. I mean, another publicly traded company. Obviously, we've got Galaxy in there now, crypto company. We had, you know, Coinbase. There's a lot of smaller ones, but this would be a pretty large market cap size public company on the NASDAQ, I imagine. So this IPO is expected to occur next week, it looks like. June 2nd, is that right?

David Hoffman:
[40:16] Yeah. I'm reading the same notes, yeah.

Ryan Sean Adams:
[40:19] I'm almost surprised, though, David, that Coinbase didn't, like, snipe this. You know, there was a conversation about Ripple, but, like, maybe in some way because they have an ownership percent.

David Hoffman:
[40:28] Maybe they felt like we don't need to. Yeah. I don't know if they need to, yeah.

Ryan Sean Adams:
[40:33] Okay, so like what's interesting is USDC is primarily distributed through the Coinbase wallet. And so the deal that Coinbase, the deal that Coinbase and Circle have for USDC yield proceeds is that Coinbase receives 100% of the USDC when it's held on the Coinbase exchange in custody. Okay, I don't know if you knew this, fun fact. If you hold your Coinbase in custody on the exchange, or if you hold your USDC on the exchange, then they get the yield. But if it's off platform, it's split 50-50 with Circle. So that means if it's on base layer two, or if it's in the Coinbase wallet, their revenue share gets cut in half. And this is not a small amount of revenue for Coinbase. You know, it's like 13% of their revenue.

David Hoffman:
[41:16] It's a large amount of revenue. Coinbase printed on this deal.

Ryan Sean Adams:
[41:19] Yeah. And so it's kind of interesting. I wonder if Circle is going to stay a separate entity, And that's the Coinbase play or like what's going to happen long term.

David Hoffman:
[41:31] Yeah. Yeah. When you're buying a share of Circle, you are buying affiliation with Coinbase. For sure. Coinbase will always be in the room with you.

Ryan Sean Adams:
[41:38] The distributor. The distributor. There was this. This seems almost like a rumor. But the question is, what are the big banks going to do in the stablecoin summer meta right here? This is big banks exploring a venture into the crypto world together with a joint stablecoin venture. So this is JP Morgan. This is Chase. This is Bank of America. This is Citigroup and, of course, our friends Wells Fargo reportedly in a deal or sorry, reportedly in a joint discussion about launching a venture, a joint venture around stable coins. And the idea here is to create a digital dollar alternative that could be used across all of these banks.

David Hoffman:
[42:15] I am so bearish on this. There is no way that they are going to be able to coordinate and cooperate with each other on a joint venture. Banks do not innovate. Right. I'm getting the same vibe as this, as when the central bank or the Federal Reserve said that they were going to research and produce reports about their potential experimentation to CBDCs. The same energy. Nothing is coming out of this. This is never going to hit mainstream. They're never going to release this. Not going to do it. It's not going to work.

Ryan Sean Adams:
[42:47] Some people disagree with you, David, including Arthur Hayes. He said, this is bye-bye Circle. Thanks for playing. Basically, Arthur thinks that the banks control kind of the world, and they're going to control the stable coin. They certainly control the dollar, and banks will win the long game here, and it's just like only a matter of time for Circle.

David Hoffman:
[43:06] Who is inside of these banks? Who's an employee in these banks that has the innovator's juice or the hunger to make this product? Because if you have that, you don't go work at a bank. They don't have the talent. The way that I could see this working is like some sort of Swift system where like they all can mint the same stable coin. And whoever mints like 40% of the stable coin has 40% of the governance, which is kind of how Swift works, kind of how Visa came to be. Sure. I could kind of see that, but... No, I'm betting against this. Yeah, so the thing is- My gamble is that we never talk about this on the weekly roll-up ever again.

Ryan Sean Adams:
[43:43] If we have anybody from these banks that listens to Bankless is probably trying to get a job in crypto, if they haven't already. Yeah. So there is definitely a brain drain because it's got to be so hard to

Ryan Sean Adams:
[43:54] get anything done in these banking systems. So we'll have to see. In the meanwhile, David, let's end it here. I do think Stablecoin Summer will be a big deal once this Genius Act is signed. I don't think anyone else is saying stablecoin summer. So I guess I'm saying it. But Scott Bessent, the Treasury Secretary of the United... Yeah, no one's excited about that because price stays flat. But I think stablecoins are going to be a big freaking deal. We should end the roll-up on this clip, and then I'll read out the disclaimers. Here it is. Scott Bessent, U.S. Secretary, Treasury. When asked about stablecoins, here's what he said. I've seen estimates that just over the short term, stable coins could create $2 trillion of demand for U.S. treasuries and treasury bills. To put that in context, the number is probably about $300 billion right now. If that doesn't get you excited about stable coin summer, David, I got nothing else for you. Scott Besson's voice.

David Hoffman:
[44:49] Stable coin summer. What? Anything else, dude.

Ryan Sean Adams:
[44:55] Got to let you know. numbers stay flat.

David Hoffman:
[44:57] Technology summer let's go our wealth is staying the same

Ryan Sean Adams:
[45:01] Yeah and fiat you have fiat denominated crypto is risky you could lose what you put in maybe not stable coins though we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot.

Music:
[45:26] Music