ROLLUP: Crypto Top? | $3B ETH ETFs | Saylor Minting Shares | Fed Turns Bullish

TRANSCRIPT

Ryan Sean Adams:
[0:04] Bankless nation is the third week of august time for the bankless weekly roll up david we got to get to this question first uh this is uh i mean my saw on twitter that i think encapsulate what what everyone is feeling right now what if 124 000 bitcoin was the cycle top and there won't be an alt season and this is a picture of a bald wojack just lying in bed thinking about this question

Ryan Sean Adams:
[0:24] it is mcdonald's attire wearing a mcdonald's.

David Hoffman:
[0:26] T-shirt yeah it's mcdonald's polo I mean, I think it's a good question because questions like this, I think we should always be asking ourselves. To me, this is a sign of market rationality.

Ryan Sean Adams:
[0:37] Are you like laying up at night thinking about this?

David Hoffman:
[0:39] We are not guaranteed an alt season. We are never guaranteed an alt season. And the fact that this is a question that the market is pondering and turning over, I think is healthy.

Ryan Sean Adams:
[0:47] You think it's a good question?

David Hoffman:
[0:48] Yeah.

Ryan Sean Adams:
[0:49] Yeah. It allows us to not feel entitled as investors to question our assumptions. Although this is a depiction of someone in a McDonald's shirt, which implies he's like going and getting a job and he's deeply worried.

Ryan Sean Adams:
[1:00] He's spending all night thinking about this question. Do you think that gets unhealthy territory?

David Hoffman:
[1:05] I mean, at some point, crypto Twitter memes are guaranteed to come out of the mental health asylum that is crypto Twitter.

Ryan Sean Adams:
[1:11] Well, we're going to try to answer that question the best of our ability. Do I buy the dip or do I sell everything? The two extremes of that spectrum. And we'll give our takes on the question. Also, we've got 30 peak bull market signals. Not one, not two.

David Hoffman:
[1:25] Not three, not four, but 30 signals.

Ryan Sean Adams:
[1:28] The question is, okay, these are the top signals. Which of those 30 top signals are flashing red at the moment? So David and I are going to get into that too.

David Hoffman:
[1:38] ETH ETFs continue to keep smashing records. So at least we have some good strength signals despite some red on the market. Tom Lee bought another $1 to $2 billion of ETH. Jesus. Yeah. And then Sailor wants to mint more shares of MicroStrategy to buy more Bitcoin. Because that's what he wants. There was a small amount of Bitcoin buying this week from Saylor, but not a lot. But he is getting ready to do an ATM, an at-the-market sale of MicroStrategy. All this and more. Ryan, why is this episode coming out on Thursday?

Ryan Sean Adams:
[2:12] Oh, yeah, that's right. So this is a day early. So maybe we'll package it. This is a gift to Bankless. We're doing this a day early, so you get on Thursday rather than Friday. But the real reason for that is because David has taken a little trip.

Ryan Sean Adams:
[2:24] And we never miss a roll-up. It was just not an option for us to record on Thursday, put it out on Friday this week, because David is going to Burning Man once again, aren't you, David? So you're hitting the road.

David Hoffman:
[2:34] It's not a mountain trip, so don't bid.

Ryan Sean Adams:
[2:38] Oh, yeah.

David Hoffman:
[2:39] It's a Burning Man trip, yeah.

Ryan Sean Adams:
[2:41] This is your second Burning Man, and I can't recall the first time. What happened? Did anything good happen in crypto while you were gone?

David Hoffman:
[2:47] Yeah, actually. XRP won their case against the SEC, which cleared the path while I was gone. at Burning Man. So even though I wasn't on a mountain, I was gone. And we had the court case that happened that cleared the way for the approval of the Bitcoin and Ether ETFs.

Ryan Sean Adams:
[3:02] So you defeated some bosses there.

David Hoffman:
[3:03] So that was pretty good, actually. That was pretty good.

Ryan Sean Adams:
[3:05] Burning Man style, it would be something weird like XRP. That's what you affect in the markets, right? So it's going to be something equally weird, right? Yeah. Okay, well, so David is out and I will be substituting with, who am I doing this with next week?

David Hoffman:
[3:19] You're with Haseeb next week.

Ryan Sean Adams:
[3:20] Of course. Fantastic. So we'll be doing that next week. Also, David, We've got to thank our sponsor. All right, David, let's get to something not so bullish. Feeling some pain in the markets this week. And maybe we'll... Start with some tweets from Joe Weisenthal. We're talking about the NASDAQ. So that's the ticker is QQQ for the NASDAQ index, having its worst two days since April 7th. All right. So some bad days for QQQ on the week. And maybe this accounts for some of the broader selling that we've seen into crypto. We'll get into some of those numbers in just a minute. Why is this activity happening? We've got a couple of reasons that we can maybe assign it to. Of course, maybe this is a narrative following price. You could take that interpretation, but still, there are some things that happen on the week from a narrative perspective. What are they?

David Hoffman:
[4:07] I feel like the investors have chalked it up to about two reasons. The first being the AI bubble kind of feels skitterish, and then also macro worries. We'll go dive into each one of those. But I'm just going to say markets climb a wall of worry, and this is what this looks like to me. The S&P, nonetheless, up to like four days ago, was at an all-time high, same with crypto. And there's macro fears. There is economy weakness fears. But to me,

David Hoffman:
[4:34] this feels very par for the course. And so I'm not overly scared right now. The first one, we'll talk about the AI bubble. One of the big factors is that just Wall Street's worry is that the value coming out of all of these AI companies, open AI, Anthropic, all this stuff, and especially NVIDIA, which is also having its worst two days since April, is just like the productivity coming out of those things It's not worth the capex going into those things. The costs are not actually resulting in material gains. And so there was a Sam Altman publicly stated that last week that he believes the AI sector is in a bubble. So Sam Altman says AI is in a bubble.

Ryan Sean Adams:
[5:11] Yeah, actually, I dug into this to actually see whether this was a headline or what he actually said. And this was an interview on The Verge. So it's all posted here. He said this. The question to him was, are we in a phase where investors as a whole are overexcited about AI? And Sam goes, my opinion is yes. And he went on further. When bubbles happen, smart people get overexcited about a kernel of truth. If you look at most of the bubbles in history, like the tech bubble, there really was a thing. Tech was really important. The internet was a really big deal, but people got overexcited. And then he said that he's seeing some insane valuations, like three or four people with an idea, receiving funding at massively high valuation. So he actually did use the B word bubble, which is kind of interesting because OpenAI, of course, is like one of the leaders of the pack in this whole AI expansion thing. You'd think that would be against his interests here, but he used those words.

David Hoffman:
[6:06] Yeah. Also, I think I saw OpenAI stock, like private shares of OpenAI stock got approved to sell for a minimum of a $500 billion valuation. So OpenAI being valued at half a trillion dollars. I mean, like, it'd be still doing okay. Still doing great. But like, also, like, if we're talking about a bubble, let's talk about the half a trillion dollar valuation of a company that just started turning a profit like a couple years ago.

Ryan Sean Adams:
[6:32] I don't know. Maybe he is talking about that, too. What's really interesting is AI kind of is the stock market right now. AI kind of is the economy in the U.S. right now. It's responsible for about half a percent of GDP and all the capex that's going into data centers and energy around AI. Like, that's the big story of the fuel for S&P, for NASDAQ, for this entire economy. So if this is a dot com.

David Hoffman:
[6:55] Nvidia is 14% of the Nasdaq.

Ryan Sean Adams:
[6:58] That's crazy, right? And that's just Nvidia. The other big tech companies are right there with it. And so this is the driver of the economy right now. And so if this is a bubble, if this does something like .com, okay, that's what investors are worried about. And this is Sam Altman saying, eh, bubbly, bubbly. There was also this MIT report. Do you see this? I haven't read the whole report, which I mean to, but the MIT report said 95% of generative AI pilots at companies are failing. failing to produce some sort of profit. So we're trying all these AI tools. We're trying to get this diffused within our companies in the US, but they're not returning that investment, at least not yet. And so the market looks at these things and gets a little skittish. It's a sell signal.

David Hoffman:
[7:42] Yeah, I think this is healthy. We don't really know how AI is going to penetrate into society. Like maybe AI more selectively benefits the margins and allows more people to become entrepreneurs and build startups with fewer employees and get to market faster. Maybe that's how AI penetrates. Maybe it doesn't penetrate into like large enterprises and streamlines their workflows because there's just so much incumbent bureaucracy in those systems that we don't really know how to make AI work in there. We don't really know the answers to these questions. But overall, I do enjoy somewhat material pullbacks across the board because, again, markets climb a wall of worry. Without having pullbacks, that's when you should get really worried.

Ryan Sean Adams:
[8:21] Do you know what's funny? This is kind of a pullback for ants, though, David. Look at this, man. This is the QQQ chart, okay? We are all the way. We teleported all the way back to August 4th pricing on the NASDAQ. Not even a month, man.

David Hoffman:
[8:34] Just a few weeks. Not even a month?

Ryan Sean Adams:
[8:37] Look, August 4th.

David Hoffman:
[8:39] I mean, crypto investors are like feeling bad. It's like, it's all over. And I go look at ETH price and like, bro, we're at $4,200.

Ryan Sean Adams:
[8:47] Yeah, yeah, yeah.

David Hoffman:
[8:48] Okay, but there's not one. There's two. There's two. Yeah, there's there. So the double whammy. It's like maybe the line of the aligning of the double whammy is worthwhile. So the macro worries are the second one. Investors are worried about stagflation due to the combination of the weak jobs report that's come in over the last two weeks and the high PPI numbers that we talked about last week. Jobs data starting to look very weak. Inflation seeming to be sticky and hot, more sticky and hot than previously understood to be. And that combination of inflation spiking with weaker job data is just putting the Fed in a tight place. The Fed has the dual mandate of stability in jobs and also managed inflation. And they are just being placed in a particularly difficult spot to do both of those things. The Federal Reserve Chair Jerome Powell will deliver a keynote address at the annual Jackson Hole event on Friday, this coming Friday, the 22nd, at a crucial time as the economy anticipates the central bank's next interest rate cut and as his tenure at the helm of the Fed will wind down. So this incoming speech from Fred Jerome Powell might be his last since his tenure ends in May of 2026. And so this will be his last big speech, apparently.

David Hoffman:
[9:57] And so the incoming September 17th is the next big Fed meeting that happens alongside the FOMC. So Powell and the Fed is going to present the summary of economic projections, basically like forward guidance for the economy. And so the FOMC meeting and the next Fed September 17th meeting happening at the same time, these combinations of these two events usually coincides with a Fed decision to make just bigger announcements about any potential change in a rate cut policy. Brian's got the polymarket pulled up ever since the PPI numbers came in last week. I think that's what the change in those graphs look like. All of a sudden, the numbers about what the Fed is going to do has jumped around quite a bit. 70% chance according to Polymarket of a 25 BIPs decrease. That didn't used to be the case. It used to be pretty tied between a 25% BIPs decrease and no change. So right now, 70%, 25% BIP decrease and 30% no change. But now the decrease has taken the lead with the high inflation numbers. People are worried about if Powell does not cut rates, then Trump is just going

David Hoffman:
[11:07] to get very angry and become a bull in a China shop. And so that's potentially also a fear. But overall, between like AI being skitterish, stagflation worries, job market worries, inflation worries, and then Trump being a bull in a China shop, I think people are just like, ah, scary. and we are seeing a pullback.

Ryan Sean Adams:
[11:23] And I think this is mostly narrative following price, right? Because price pullback and then we're like, oh, you remember those things that were scary that were lingering out there? Those were the reasons. And it's the same things that we've been talking about that, you know, of course, if AI is a bubble, that, you know, things will be bad. But I don't see that that's the case, at least at this point in time. Anyway, we'll give our takes on whether this is a buy the dip moment or whether you should sell everything a little bit later in the episode. Let's talk about the price of our beloved crypto assets on the week. Unfortunately, they are down. Give us the bad news for Bitcoin.

David Hoffman:
[11:57] Bitcoin down 6.5% to $113,600. Ether doing something similar down 10% to $4,200. Yet, nonetheless, over the last week, ETH ETFs have attracted $3 billion of net inflows. I get, well, this is for August at large. So for the entire month. So Bitcoin attracted basic, rounding up to $1 billion during that same time period. Ether, $3 billion. So a 3 to 1 increase.

Ryan Sean Adams:
[12:25] 3 to 1 for ETH over Bitcoin in terms of ETFs for August?

David Hoffman:
[12:29] In dollar terms, yeah. Wow. We did see some outflows this week. And so $422 million came out of the ETH ETFs in the last seven days. $650 million came out of the Bitcoin ETFs over the last seven days. But nonetheless, It's still a fantastic August so far.

Ryan Sean Adams:
[12:49] This is a Hildabi metric here. At current pace, the percent of ETH in ETFs will exceed Bitcoins in September. That's at current pace, which has been ferocious. But look at this. We already have just over 5% of all ETH supply in Ethereum ETFs. Bitcoin is 6.3%, looking at like 6.4%. If we keep moving like this, there'll be more ETH in ETH ETFs than there is Bitcoin in Bitcoin ETFs. I'm trying to.

David Hoffman:
[13:20] Understand what this means. Is higher better? Is lower better? Is it kind of neutral?

Ryan Sean Adams:
[13:25] It's just like, it represents, I think, institutional capital flows for sure in a big way.

David Hoffman:
[13:32] Yeah.

Ryan Sean Adams:
[13:32] So that's good. That's good. I mean, if you start to get like, you know, institutions have like, you know, 20, 30%. Yeah.

David Hoffman:
[13:41] More than 30% starts to really materially scare me.

Ryan Sean Adams:
[13:45] Yeah. Yeah. But I feel like we're at safe numbers. And the thing that we've been looking for that ETH pools have been looking for is like where the institutional flows into Ether. and we're starting to see them in a big way. I want to zoom out on these charts. So we're talking about, you know, the seven day and the weekly and Bitcoin's down, Ether's down. If you kind of zoom out, both Bitcoin and Ether have had different months. So if you're a Bitcoin holder, right, you are like, you're feeling on the monthly, you're like down on the month. Like this month or the last 30 days, we were at 118 and now we're back in the 112 range, right? 112, 113 range.

David Hoffman:
[14:16] Can we go to three months? Let's look at three months.

Ryan Sean Adams:
[14:18] I'd like to see three months. Let's look at three months. Three months. So we're still up on three months for Bitcoin?

David Hoffman:
[14:22] Wow, that is flat. We're kind of flat. That is pretty flat. It's green, but it's flat.

Ryan Sean Adams:
[14:27] It's green, but flat. Now let's look at Ether. There's a difference. So we talked about the seven-day. This is the month. You're still up on the month. So in the last 30 days.

David Hoffman:
[14:35] I should say. Months looking good. Months looking good.

Ryan Sean Adams:
[14:37] Yeah, about 30 days ago, price of East was $3,800. And now we're above 4K, of course. The three-month, though, looks real good.

David Hoffman:
[14:47] Yeah, that's different. We were down in the dumps here. Uh-huh.

Ryan Sean Adams:
[14:50] 2.6K, right? And now we're above 4K. So ETH holders feeling better about the momentum here than Bitcoin, which has been relatively flat. That's going to show up in the ETH Bitcoin ratio too. What's that on the week?

David Hoffman:
[15:04] That is right, 0.037. I think we just like grazed 0.04. We never really crossed it. 0.037 is where we are now. Still looking to climb up to that 0.05, 0.06 range before anything I think needs to be reconsidered about the ETH-BTC ratio.

Ryan Sean Adams:
[15:21] And total crypto market cap is down below $4 trillion, right?

David Hoffman:
[15:25] We are healthily below $4 trillion at $3.9 trillion. Yeah, I think the new all-time high for the total crypto market cap is like $4.2 something.

Ryan Sean Adams:
[15:33] $4.2, which we hit the second week of August.

David Hoffman:
[15:37] Yep, yep. And now we are below at $3.9. All right. I think, like, just summing it all up, right? Like, you're not supposed to feel good the entire bull market. Like, you need to have moments of fear and uncertainty and doubt in your mind before it resumes. Yeah. And the people that, you know, have diamond hands, the people that hold, that have some level of stoicism about them. Get rewarded. Yeah. If it goes back up, obviously. Yeah. You know, some people are going to get shaken out and they're not going to make it. And that's just how it goes. Or some people are just ahead of the curve and they get shaken out because there's actual real fear. We don't really know. And I'm not being helpful at all.

Ryan Sean Adams:
[16:18] I think, well, I think that is somewhat helpful because I think what you're indicating is like, we're going to talk about top signals coming up next. But what you're talking about is if you're feeling too good about these markets, like they can't go down. If you're feeling like a genius in these markets, right, that just like everything's unstoppable, that's probably a top signal and i'm not seeing crypto markets feeling like that right now they're constantly questioning we're in the stage of here's the stage that we're in are we really in a bull market or is 124k the top and there's going to be no each season really there's going to be no alt season you're questioning it okay and uh you don't question things when like previously in previous cycles you're not questioning things you are drunk okay you're like you.

David Hoffman:
[16:58] Are winding up leverage at the top yeah

Ryan Sean Adams:
[17:01] Yes or at least many people are uh anyway we'll talk about that next because we got tom lee buying one to two billion in eth we got uh him trying to catch michael sailor it feels like but m nav premiums remember the m nav premiums david those are going down so some people are saying is the treasury meta over and then more broadly we got to talk about this was this the cycle top should you buy the dip we'll get into those top cycle indicators all that and more. But before we do, we want to thank the sponsors that made this episode possible, including the treasury companies keep buying, but that MNAV premium is losing its premium status. So the question is, is the treasury meta over? Let's talk about some big things that happened this week first. BitMine became the second largest crypto treasury. Okay. Not just ETH treasury. They've been the first for a number of weeks, but the second largest crypto treasury, completely. So just behind MicroStrategy, of course, is the first. It's going to be hard to catch Michael Saylor. They overtook Mara Holdings, which was a Bitcoin treasury, the second largest Bitcoin treasury. And they are now in second place with about $6.5 billion worth of Ether, primarily. You can actually track this.

David Hoffman:
[18:16] One and a quarter percent of the total ETH supply.

Ryan Sean Adams:
[18:18] Yeah, one and a quarter percent. I mean, he's getting there. He's getting, like, over the last 50 days or so, I mean, he is 1.26% of his 5% total. He is chomping. Buying that ether. My question is, are we really going to let him, he almost, depending on the price.

David Hoffman:
[18:36] Yeah. I mean, like Tom Lee, slow down, man. Like I want to, I want this to like be a long-term thing. Like if you just win like next month, like it's not really as fun.

Ryan Sean Adams:
[18:46] Well, I think he's in a hurry to buy it under 5k and it feels like crypto is going to let him. Like he's probably going to stack 10 billion in ether under 5k and the market's just going to let him do that.

David Hoffman:
[18:56] I mean, I kept on asking the same question every single time I saw Michael Taylor buy a bajillion dollars of Bitcoin every single month. I'm like, where the fuck does the money come from?

Ryan Sean Adams:
[19:04] That's one of the questions. So that's one of my big questions is like, where's the money coming from? And Tom Lee, maybe we could go scan some SEC filings or something like that. But when we talked to him, he was kind of private about that. Someone secreted it.

David Hoffman:
[19:15] Yeah, I asked him twice. And I was like, Tom Lee, what's the strategy? How do you use velocity and liquidity and all that stuff to get more ETH on the balance sheet? And he's like, David, stop asking me this question.

Ryan Sean Adams:
[19:25] That question is inappropriate.

David Hoffman:
[19:28] That's an inappropriate question.

Ryan Sean Adams:
[19:31] God bless him, though. I mean, he's doing, look at this. This is crypto treasury companies. This blue line here is Ether in terms of percent supply of the network. This orange line is Bitcoin. Look at Ether ratcheting up. We are almost at Bitcoin levels as a percent of the network in treasury. So Bitcoin level is almost 3.5%. ETH has climbed all the way up from 0% in June, all the way to almost 2.5% of total ETH supply and treasury companies. So this buying is happening at a frenetic pace. But my other question about this is like, why isn't it moving price more?

David Hoffman:
[20:08] Yeah.

Ryan Sean Adams:
[20:09] Do you have an explainer for that?

David Hoffman:
[20:11] I have a partial explainer for that. One of them is Joe Lubin's SBET and Andrew Keyes' The Ether Machine. Sure. Each of those contributed their own personal Ether into those treasury companies.

Ryan Sean Adams:
[20:25] As part of the initial raise, the pipe raise.

David Hoffman:
[20:28] Yes, and that is showing up in this chart, in this line that's going up to the right here.

Ryan Sean Adams:
[20:33] Some of the early stuff.

David Hoffman:
[20:33] Some of it. Well, I mean, like Joe Lubin and Andrew Keyes are very large Ether holders previously. And so there was the hundreds of millions of dollars that is their own Ether that got contributed into these Ether treasury companies is not net new buying. There's no new money coming in to buy that Ether. They already owned it, and now it's showing up in a chart that we call the ETH Treasury Company chart. And so that, at least, is not actual buy pressure. I know. It's just like saying Ether getting wrapped into wrapped Ether is not going to move the ETH price.

Ryan Sean Adams:
[21:04] But that explains some of it. It doesn't explain all of it. It doesn't explain all of it. Look at these Tom Lee purchases, man. This is $6.3 billion in a dollar reserve. He bought another $370K last week. What's that? you know, one to $2 billion worth of ETH. He just did that last week. Oh, and then he bought another one to $2 billion the week before. And then the week before that too, like that's a lot of net new buying pressure. That's not all existing ETH pipe funding.

David Hoffman:
[21:30] Yeah. There's like other theories about this that I think are unsubstantiated because no one really knows because these are all kind of black boxes at the end of the day. But like some people have pointed out to like some of these treasury companies

David Hoffman:
[21:40] are doing like paper ETH, not true ETH. And so they're having Ether as kind of their denominator and they're using financial derivatives to accumulate more like paper ETH. And so with ETH goes up, they have exposure to it, but it's not actually true vanilla spa ETH. And no one really knows. No one really knows.

Ryan Sean Adams:
[21:59] Yeah, I just, I mean, this is buy pressure. A simple explainer is there's still people selling ETH. There's still enough sell pressure to kind of neutralize all the buy pressure. And it's not just Bitmine and Tom Lee, of course, like Sharpling Gaming, SBET. Big week last week, too. I mean, on August, let's see, August 17th this week, they bought 75K ETH. That's after on August 10th, they bought 83K ETH. Their total right now, SBET. But almost 740,000 ETH, so $3.1 billion in ETH. So they're buying lots too.

David Hoffman:
[22:36] Yeah. Either there is a commensurate amount of sell pressure or the ETH is, the supply of ETH on the secondary market is truly drying up. And it will do one of its things that it did. It's done it twice now where it went from $1,300 to $2,500 in two days. And then it went from $2,500 to $4,500 in like two weeks. And then it goes flat and everyone's like, why isn't it going up? And then it goes up in two X's in like three days because all the supply runs out.

Ryan Sean Adams:
[23:08] Yep. And people are trying to trade that, you know, they're like, oh, okay, I'm like bearish and try to trade that. Just stay in the market. I think that could be the simplest Occam's Razor explanation.

David Hoffman:
[23:17] I mean, we have two data points that that's how it's happened.

Ryan Sean Adams:
[23:21] That's how it always happens in crypto, right? Yeah. Oh, it seems like it's barely going up. All this like, you know, bullish energy, all this buy pressure and then suddenly it teleports up step function change super volcano explosion i think that's my base case for eth at this point but absent uh another explainer um some other news on the week when it comes to eth treasuries the the company ethzilla they uh used to be a different ticker atnf uh it was like a life sciences ticker they are now officially ethz so if you want to find great ticker yeah great ticker.

David Hoffman:
[23:53] I love it ethz you know all right The ETH Zilla name is kind of growing on me. Yeah. Did you ever watch the Rugrats?

Ryan Sean Adams:
[24:01] Of course I did. Tommy. You remember Reptar? Yeah, I remember Reptar. Oh, my God. That's been a long time.

David Hoffman:
[24:07] Yeah, every time I see ETH Zilla, I just think of Reptar just eating up all the ETH. Reptar!

Ryan Sean Adams:
[24:13] Yeah, that's a throwback, man. They're number five, by the way. So not to be dismissed, they've got about $400 million worth of ETH, about $100K worth of ETH, and they're chomping it, Reptar style. So, yeah, we got that going on again.

David Hoffman:
[24:28] But, of course, the ETH treasury companies are not the only people putting crypto on their balance sheet. The OG, MicroStrategy, is buying once again. They bought 430 Bitcoin, a modest amount in MicroStrategy terms. They spent about $51 million near the Bitcoin all-time high price for an average purchase price of around $119,000. MicroStrategy stock owners didn't really like it, mainly because it was partly because it was just a small amount of Bitcoin in the grand scheme of things. But also, the bigger story is after MSCR fell 8%, It fell 8% after the company indicated that it would lower its restrictions on issuing more shares. And it's actually interesting to note that MicroStrategy has not been doing this as of late. Michael Saylor originally promised that he wouldn't mint new shares of MicroStrategy unless the trading price was at least 2.5 MNF. So 2.5, 2.5 a market cap of MicroStrategy versus the actual amounts of Bitcoins that they hold. And so he would only mint new shares above 2.5x. He's reneging on that. He's going back on that and saying, just kidding, I'm going to do that. MicroSegger is currently trading at 1.6 MNav. And I'll say 1.6 MNav is good. Like, that's healthy.

Ryan Sean Adams:
[25:46] It's still good.

David Hoffman:
[25:46] You have a lot of premium to be able to juice to just buy more Bitcoin. And so, I mean, this is very rational. Like, if Michael Saylor says, hey, MSDR holders, I'm going to dilute you to buy more Bitcoin, It makes sense that MicroStrategy goes down by 8%.

Ryan Sean Adams:
[26:02] Yeah, I mean, that's what ETH Treasury companies are doing primarily. I mean, they have some debt instruments, but primarily they're doing it with these ATM purchases, which is basically any time MNAV premium gets higher than, you know, and they decide to mint more shares in order to buy more of Ether. And the thing, though, with MicroStrategy, though, is Michael Saylor said he's not going to do that below 2.5. And now he's changed his mind. At 1.6, he's still minting new shares. So there's some there's some anger at this. So he tweeted this out, this new guidance. You know, here's a Twitter account. I've been a holder of MSTR since August 2020. I've held to the Bears, Bulls and Splits. Until today, this is now, I will be taking some profit at this point. There's too many question marks, red flags about what you're doing that making me feel a bit unsettled for the first time. So it's just a little bit of maybe promises broken for MSTR holders. But Michael Saylor just wants more Bitcoin, right? And this is a way to do it. But doesn't this indicate that some of his debt instruments, that kind of ammo in the toolkit is probably running out?

David Hoffman:
[27:05] Milking the MNAV premium is like kind of the last thing you do not to say that it's a bad thing to do but it's kind of the last thing it's the thing you want to preserve the most which is the MNAV value of the equity over the actual assets that you hold if you can access the debt markets if you can can access credit then you should do that first before issuing shares and so there's like Michael Saylor has made a bunch of tranches he has all these like fixed income coupons that he's issue that pay out 10% and he can issue those without issuing new equity to buy more Bitcoin. And he has done that to great effect. To me, saying that like, yeah, we're actually going to go in and mint new shares indicates that like the rest of the tranches have kind of dried up. And now he's going back to the last source, the kind of the final backstop to

David Hoffman:
[27:52] squeeze out any sort of liquidity premium that he can get. And I mean, it's actually bullish that he hasn't been doing this up to this point uh the each treasury companies smaller as they are and more new as they are they don't have the same level of debt instrument optionality that michael saylor has and so they like if you're a brand new treasury company you only have the m nav as a source to squeeze juice out of to put more eth on the balance sheet i think it's like the hopes of people like tom lee joe lubin to be able to access the credit market as they get the market caps larger but microtrategy market cap is is massive by comparison i i can i don't know it off the top of my head, but like tens of billions, if not a hundred.

Ryan Sean Adams:
[28:31] Oh, yeah. Did I see like 60, 70 trillion, billion, excuse me, at some point in time? I think it's in that range still.

David Hoffman:
[28:38] And Bitmine and SBET are in the single digit billions.

Ryan Sean Adams:
[28:42] Yeah, he's still saying, though, that he's going to buy more Bitcoin, right? So if you're bullish Bitcoin, he's still buying it. He's just doing it with the MNAV premium. Actually, there's an interesting reporter asked Michael Saylor what he thinks, because some of the story of why the convertible debt type instruments are drying up might be because ETH treasury companies are snapping some of it up. And he was asked what he thinks about, quote unquote, altcoin treasuries that are spinning up right now. Do you want to hear him?

David Hoffman:
[29:09] Let's hear it.

Ryan Sean Adams:
[29:10] Of course micro strategy strategy as it's now known really started this crypto treasury company trend that we're seeing now. I know that you broadly are supportive of seeing that seeing competitors come out and also raise their own crypto treasuries. But how do you feel about the trend that now it's moving more into altcoins. It's moving away from Bitcoin. Do you think that that's a sustainable setup. I THINK BITCOIN IS GOING TO OUTPERFORM THE S&P INDEX OVER I STILL THINK THE VAST MAJORITY OF THE CAPITAL FLOWING INTO THE SPACE IS FLOWING INTO BITCOIN. WE HAVE GONE FROM ABOUT 60 COMPANIES CAPITALIZING ON BITCOIN TO 160 COMPANIES IN THE PAST SIX MONTHS. I'M LAZER-LIKE FOCUSED ON BITCOIN. I THINK BITCOIN IS DIGITAL CAPITAL. IT WILL OUTPERFORM THE S&P INDEX OVER THE INDEX INDEX IN.

Ryan Sean Adams:
[30:03] Highest return most straightforward strategy if you want to outperform the S&P. And if you want to inject vitality and performance into your balance sheet. So it sounds like you're not concerned that perhaps the fact that we're seeing these other digital digital asset treasury companies come to the fore here expand into all coins. You're not concerned that that's going to detract attention away from what strategy is doing. You know I you know I think there's an explosion of innovation across the entire crypto economy. And on the margin, it's really good for everybody in the digital asset space right now. I think the big idea is $100 trillion plus of capital and the traditional equity capital markets and traditional credit markets. And what we're focused on is delivering digital asset backed equity and digital asset backed credit. And I think those credit instruments and equity instruments are just going to outperform the traditional fiat credit and traditional fiat equity instruments all around. And capital is going to flow into the digital economy due to that. By the way, David, that was Michael Saylor. Did you see those numbers on the screen actually had?

David Hoffman:
[31:17] Yeah, 67%. Yeah.

Ryan Sean Adams:
[31:19] Yeah, that's the strategy premium. But the value of Bitcoin held is $70 billion. We should correct this. And the diluted market cap of his company is $120 billion. 120 billion 120 billion microstrategy right now So what do you think of his comments there?

David Hoffman:
[31:35] And very friendly to what is essentially his competition. I mean, he did the thing, which is like, yeah, I'm laser focused on Bitcoin. I share Bitcoin is digital capital. But yeah, there's an explosion of innovation across the crypto industry. And this is good for everyone. It was a very tide lifts all boats kind of stance that he had. It's very not like a Bitcoin maxi of him.

Ryan Sean Adams:
[32:01] Yeah, yeah, very much. I mean, maybe he changes based on the venue. This is Bloomberg. So maybe like very, very, very rational on that. But the bigger question is this, okay? Is this treasury meta diminishing or is it over? I'm going to go through some numbers with you, particularly that MNAV premium. So there was a time that good old MicroStrategy was trading. This is the orange line. Look at the orange line. Above three from an MNAV premium perspective, like well above, like not, well, yeah, decently above three. This was October, November of last year. And then since that time, it has been on a decline. There's some periods of flatness here, but it's basically at a local low, let's say, of 1.5x MNAV premium at this point in time. And if you go, if you look at the Ethereum treasury companies, which, of course, they're brand new, but we do have some MNAV premium stats, it's actually very low, lower than MicroStrategy. So you've got SBET. There's some different reports on this. Well, you know, the Strategic ETH Reserve has a different MNAV premium, but this is showing an MNAV premium just above one. OK, so valued not much more than its underlying. I think the Strategic ETH Reserve shows something similar, maybe a little bit higher. Tom Lee's entity, 1.35.

Ryan Sean Adams:
[33:20] OK, some of these other ones. And that's the highest of the ETH treasury companies. Actually, one of these is under one at this point in time. It's um i think it's the number seventh largest eth treasury company so they actually are about 0.7 and that so they're trading under their m nav premium and um maybe this is related but they offered their first ever ether dividend to uh those stocks so basically um They'll pay you a dividend equal to 0.05% of the share in cash or in Ether. You actually collect that if you're a shareholder in Ether. They were doing this basically to say, hey, we shouldn't be valued under our book value. You're getting dividends for this. Market, you should at least give us an MNAV of one, if not an MNAV higher than that. So MNAV premiums are collapsing, it looks like, at least locally. And some people are saying, that's it. You know, the Treasury play is over. We had MicroStrategy, now ETH enter, and we're not going to see premiums again. And that's going to be a bearish indicator because not as much buying will happen on the Treasury institutional side. What do you make of this?

David Hoffman:
[34:36] The MNAV premium collapsing down to one is what's supposed to happen. That's just the market doing its normal thing of all of these treasury companies are supposed to be milking their premium to be able to put more crypto assets on their balance sheet. And they do that as much as they can until they can't do that anymore. Like the MNAV premium is why people have kind of like jokingly called this stuff perpetual motion. The energy to fund the perpetual motion runs out when the MNAV premium collapses to one. And then it gets a little bit harder. So all of the treasury companies, I feel like, have been in this...

David Hoffman:
[35:11] Kind of like tutorial island, like the beginner mode, easy mode, while they have this MNAF premium. And then once it runs out, actually the real game starts of like, okay, now how do you do this? Now that you don't have this MNAF premium, now that the market is a little bit more rational, now you have to figure out how to get more ETH on the balance sheet. So what's your next move now? This has been according to plan. MNAF premiums, we're always going to go to one. Not only this, they are supposed to fluctuate between going, being higher and then also being at one. And right now, during periods of like, we're worried about the AI bubble, we're worried about the economy and the inflation and the jobs, jobs reports. So it makes sense that the MNAP premium has approached lower levels of froth, more closer to market rationality. And like maybe they go back up, but like there's nothing inherently wrong about finding its way back to just complete rationality.

Ryan Sean Adams:
[36:08] So do you think it's over or do you think there's some more juice in the treasury side of things?

David Hoffman:
[36:12] No, dude. I think it's like as the S&P and QQQ reach reach, all-time highs, NVIDIA goes back up. The trend is across all markets is good right now. And I've said this a few roll-ups ago. Just like the trend feels very good. I'm happy to have these normal pullbacks. Inflation is going to scare people. The jobs report is going to scare people. Like whatever. So long as just keep the trend intact. They'll reinflate in the future. They'll go back up. Maybe they don't really have the same level of like main character focus that they had. And so maybe MNF premiums are just fundamentally more modest moving forward. So like 1.1, 1.2, 1.3, maybe.

David Hoffman:
[36:53] I just can't really think of like why this would be really bad. This just seems healthy.

Ryan Sean Adams:
[36:58] I kind of agree. And I think they could spike back up. And I also think Tom Lee is still dead serious. I mean, his velocity of accumulation, I think he's still dead serious in targeting 5%. And I think he's going to find a way to do that or get something close to that. So I don't think it's over for the treasury meta this cycle. At some point it will be, but it still seems early to me. Let's talk about how early we are, though, in the total crypto cycle.

Ryan Sean Adams:
[37:23] This is a fantastic table I saw from CoinGlass. These are, David, these are 30 bull market peak indicators. All right. And this is looking at things historically of how things have played out in previous crypto bull cycles and what those top indicators have been. What I like about this is there's 30. So you look at a whole bunch in an aggregated view, and that's what they do on CoinGlass as well. And then it's also just like, it's kind of what's happened at previous times. So if you believe that this market will play out as previous crypto markets have played out, which I think that's still my base case. Like, I don't see why this time is different. It's certainly not looking different. We're getting many of the similar things that we've seen, patterns we've seen in previous crypto bull cycles. This is what this looks like. So do any of these metrics, like, you know, like, what do you think of when you see some of these metrics or any of them? Are they things that you track?

David Hoffman:
[38:22] Yeah, well, some of them are just kind of like a blast from the past. It's like, oh, I remember looking at like the Puell multiple and of course, Eric Wall's Bitcoin rainbow chart, MV, RV, like all of these things I remember individually learning about one by one over the years. Because it's kind of cool to see it all in one spot so you can kind of view all of them. You know, what was that line? Like all models are wrong and some are useful. And I think we're just making them in aggregate more useful by putting them all in the same spot and kind of evaluating them in uniform, in unity. I think it's kind of cool.

Ryan Sean Adams:
[38:58] Yeah, it is cool. There's a ton here. So we'll include a link in the show notes if you guys want to go over here. But yeah, you mentioned a few. The Bitcoin rainbow charts in here. I know you're a big fan of that. The simplicity of that, okay. We're at about 60% of our way to that being a bull market peak you should think about selling, just that one metric alone. We've got the MVRV score, which we talked about, which is kind of like how long are the buyers holding for or the long-term buyers are they starting to sell. We've got Bitcoin bubble index, Bitcoin dominance, all of these all put together. And what you get actually is of these 30, zero of these 30 indicators.

David Hoffman:
[39:35] Not one of these should cause you alarm.

Ryan Sean Adams:
[39:37] Not one of them have hit the cell signal. Not one of them are in the red. And, you know, there are a few that are somewhat close, but pretty much like the majority are like 60% or under.

David Hoffman:
[39:49] There are a few that are somewhat close and then there are a handful that are just nowhere. They're close to zero. Yeah.

Ryan Sean Adams:
[39:56] So we're not in red territory at all from these long term indicators. And what should you be doing this type of market? You should be holding. If you can, maybe you should be buying more. You should be buying the dip. I think that's my that's my case, man.

David Hoffman:
[40:10] If you're aggressive, you're buying. I think it's totally fine to also just hold.

Ryan Sean Adams:
[40:15] Yeah, you could totally hold. Just don't do margin. Just don't do margin. Never do margin. Never do margin.

David Hoffman:
[40:22] Don't do what I do.

Ryan Sean Adams:
[40:23] That's one indicator for you. Also, another one that I saw was somewhat good here is Nick Carter posted this. But this is a report from Galaxy Research, which is the amount of lending in crypto right now. Okay? So the amount of- The credit markets. CeFi lending, crypto markets, CeFi lending. And you can see right now in the second quarter, 2025, it is about half of its peak. Last peak was 2022, Q1, 2022, right? Right before we had the major bear market. The you know what. All right. And that was at its peak. It was above 35. It was closing in on um almost 40 billion dollars right now we're uh just at what 16 17 billion dollars so that's.

David Hoffman:
[41:11] There is so much of that

Ryan Sean Adams:
[41:12] Yeah tether tether is a.

David Hoffman:
[41:14] Lot of that yeah

Ryan Sean Adams:
[41:14] So i mean the lending markets in crypto are looking kind of healthy they're not looking toppy they're not looking peaky that's another thing you could look at basically.

David Hoffman:
[41:23] This means that like people's lines of credit are just modest people are not borrowing a lot

Ryan Sean Adams:
[41:28] And then you got stuff like this so um this This was a report that Nick Jarcy highlighted from the Bank of America, the Bank of America Global Fund Manager Survey. OK. And of all the Bank of America Global Fund Managers, 75 percent of them own zero crypto right now. Zero percent.

David Hoffman:
[41:47] Nice.

Ryan Sean Adams:
[41:48] All right. Six percent own two or less. But like 75 percent of them don't own crypto at this point in time.

David Hoffman:
[41:57] Yeah. I mean, I'm in New York. And so I talk to a lot of like asset managers when I'm, in my travels with normies outside of the crypto world and like most frequently like they're like yeah i don't care about crypto and then i ask like okay what kind of like asset manager are you and they're like the big ones that trade tiny amounts of bips because they have like people's pensions and so they can't think about bitcoin so

Ryan Sean Adams:
[42:23] I can't i guess you're not gonna you're not gonna listen to this on uh burning man but we got an episode um with eric peters that's coming out on.

David Hoffman:
[42:30] I'm very I'm very sad. A, I'm very sad that I missed that. And then B, I'm also sad that I'm not going to hear that for 10 days.

Ryan Sean Adams:
[42:35] It's a great episode. Love Eric Peters. So he's an institutional investor. He's kind of behind the scenes. Probably the biggest crypto institutional influencer allocated that most people have never heard of.

David Hoffman:
[42:47] Institutional influencer.

Ryan Sean Adams:
[42:49] Like, honestly, that influencing happens in, like, different settings. You know, it's like Zoom calls and phone calls and text messages, stuff we don't see. Anyway, his take was, guess what? the institutions haven't even arrived yet because when he thinks of institutional money he's thinking of sovereign wealth funds he's thinking of pensions and he goes through this story of basically 2021 they were all getting set up to buy crypto they're like they had these teams of like 15 people they're gonna like uh go into crypto big and then 2022 happened blew it all up.

David Hoffman:
[43:21] And they all got scared

Ryan Sean Adams:
[43:22] They all oh it's dead it must be dead and now the u.s regulatory regime is against it's dead and they went in complete hibernation mode and they got caught off sides and they still haven't rebuilt those teams all right and i was looking at this you know norway sovereign wealth fund they just increased their bitcoin holdings okay like they just doubled now it's like oh that's cool norway you know it's a sovereign wealth fund let's go norway yeah yeah you know what they're buying though it's like micro strategy and circle dude they don't yeah and it's just a tiny sliver and it's not actual, it's not even an ETF. It's not actual crypto.

David Hoffman:
[43:56] And so-

Ryan Sean Adams:
[43:58] Who knows? Maybe it's because their regulatory apparatus doesn't allow them to. Maybe the kind of the risk risk managers when they float this up the chain, you know, it's just still too risky. It's just they're offsides on this. Pensions are offsides.

David Hoffman:
[44:10] Are they buying MicroStrategy and Circle because those are sufficiently large that they're in an index or are they buying that because they want the crypto exposure?

Ryan Sean Adams:
[44:17] No, they're buying it for the crypto exposure. This was exactly Eric Peter's point. He's like, that's why you're seeing stuff like Circle go crazy because institutional allocators are, They're nibbling at it, and they've been cut off sides on this whole crypto trade. So they haven't even entered.

David Hoffman:
[44:32] So when people who have like a trillion dollars in assets nibble at Circle, it pumps by like 3x off the IPO price. Yeah, it's that kind of thing. Right, right, right. Well, why don't you nibble at my bags, please?

Ryan Sean Adams:
[44:43] He said they will. They will. So you just got to be in the market and wait a little bit.

David Hoffman:
[44:48] Speaking of that,

Ryan Sean Adams:
[44:49] Gemini is coming into the market. We got this coming up next. They've filed for their place on the NASDAQ. How do the financials look? What's this going to do? Also, New York, your state, David, is trying its absolute best to not become the crypto capital of the world. We'll talk about that. And the Fed?

David Hoffman:
[45:04] Why do you think I'm not in New York right now?

Ryan Sean Adams:
[45:06] The Fed is getting bullish on crypto right now. There's a recent speech I want to tell you about as well. All this and more. But first, we want to thank our sponsors.

David Hoffman:
[45:13] Gemini, one of the oldest crypto exchanges founded by the Winklevi, of course, Cameron and Tyler Winklevoss, publicly filed for an IPO to a list of shares on the NASDAQ under the ticker GEMI. GMI. So the leading underwriters are banks like Goldman Sachs, Citigroup, Morgan Stanley, and Cantor. Number of shares and their price have not been disclosed yet, but nonetheless, the Winklevii are pushing to make Gemini a publicly traded company. There was also a loan agreement with Ripple revealed that it gave it $75 million of credit for extra liquidity for its IPO. It can potentially extend that to $150. I don't know what that means. What does that mean?

Ryan Sean Adams:
[45:52] I don't know. I guess they're just, yeah, I don't know. Something between Ripple and Gemini, just providing some additional capital here.

David Hoffman:
[45:59] Okay. Gemini will operate through two entities, the Gemini Trust in New York for its regulated services and then Moonbase in Florida, where Gemini will transition most of its users because, of course, New York is the most hostile state to put them under the bit license rules. As we are about to see when we talk about the new proposed, proposed not actual not there's not yet law but it's being proposed and the reason why we're talking about it because how ridiculous it is 0.2 percent tax on digital asset transactions inside of new york and so this is assembly bill 8966 introduced by the democratic assembly member phil deck stack the bill notes that funding from crypto tax sales would be used to expand a substance abuse prevention and intervention program to schools in upstate new york it would include the sale and transfer of any crypto or NFTs CryptoPunks Pudgy Penguins any of those 0.2% tax how do you if you just transfer a Pudgy So, say you transfer a $10,000 Pudgee and you owe 0.2% off of something you didn't. Just transferring it?

Ryan Sean Adams:
[47:05] Absolutely ridiculous. No, I don't think so. I don't think this is just transferring. It couldn't be. It would have to follow.

David Hoffman:
[47:09] It says it would include the sale and transfer of any crypto or NFTs.

Ryan Sean Adams:
[47:13] That's what it says. That's what I'm going to say. But it's got to be sale. It's got to be. It can't be just a 0.2% tax. Even if it's just on sales, though. Your tax situation in crypto is already more complicated enough. And now New York State is going to add.

David Hoffman:
[47:27] Why? They don't realize how incredibly complicated that that makes everything.

Ryan Sean Adams:
[47:32] Right. And this, well, no, maybe they do realize that. Maybe they don't care. I don't know. They just, it's, why digital assets? Yeah. Why digital assets in particular? That's the question. It's like New York, New York state is trying to not become the crypto state, trying not to become the crypto capital of the world.

David Hoffman:
[47:47] I think you see like a lot of like, I don't know, crypto socialists out there who are like voting or anti crypto socialists, excuse me, who are voting for like Zoran Mamdani who are like, yeah, let's get the crypto bros to pay for our substance abuse programs. That sounds great. I don't know any crypto people, so they can pay for that.

Ryan Sean Adams:
[48:04] Yeah.

David Hoffman:
[48:05] It's also worth saying that New York, especially New York City, is the most tax-prosperous location in all of America. They have so much tax income. And the reason why, I'm not saying New York's, they have some problems with allocating all that capital. They don't have a budget problem. They have a capital allocation. They can't figure out how to appropriately spend the money. And then you have people like the socialists, like Zohan Ramdani, coming in and being like, you know what?

David Hoffman:
[48:35] We need to fund more stuff because look at all the broken stuff around us. So let's tax more people.

Ryan Sean Adams:
[48:41] Tax the monkey JPEGs.

David Hoffman:
[48:42] Tax the monkey JPEGs so we can fund more stuff. When we realize we have so much money, we just can't figure out actually how to spend it correctly.

Ryan Sean Adams:
[48:51] Yeah. Well, meanwhile, you got other states and maybe this is a state that you might consider exiting to. You could do Balaji Srinivasan. You could use your agency to exit New York and you could go to Wyoming because that is a crypto friendly state. And this week, this is actually pretty surprising to me. They launched the first stable coin issued by a U.S. state. The state of Wyoming did this. They're saying it can be used to fund public services. It's a revenue driver, and it's also kind of a hallmark of Wyoming innovation. And you could actually do this. So this was in the genius bill. I don't know if you remember, we talked about this very briefly, but I'd sort of forgotten about this. States can actually issue their own stable coins. So every state of the 50 states in the union, they could have their own like branded stable coin if they want to. And that revenue can be used for public goods or whatever else they want. I'm not sure practically how commercially useful this is or how many more states will actually go do this. It does have to stay under like $10 billion or so. So it's more like an innovation sandbox. But this is just Wyoming saying, like, we are welcoming the crypto industry here.

Ryan Sean Adams:
[50:02] We're welcoming crypto people here. And by the way, we got our own stablecoin. Kind of cool.

David Hoffman:
[50:07] That's kind of cool. That's kind of cool. Going up a level higher to the White House, the executive director of crypto in the White House, Bo Hines, has left to go to Tether. So they're going from the White House to Tether. He served as the executive director of Trump's White House Crypto Council until just last week, where he announced that he's going to work in the private sector. So what is he going to work at Tether? He's going to lead and coordinate Tether's U.S. Strategy and expansion efforts, advise on digital asset policies and compliance for the U.S. Market, cultivate relationships with policymakers and regulators, and help oversee Tether's continued investments in U.S. Infrastructure. So Tether, with the passing of the Genius Bill, wants to make inroads into the United States because they're the foreign stable coin. They would like to also become the domestic stable coin. And Bo Hines, the guy who's the executive, previously the executive director of Trump's White House Crypto Council, is going to go help him do that. Who would be better? Who would be better than that?

Ryan Sean Adams:
[51:06] Of course. I mean, there's a bit of a revolving door going on here for sure, right? It's like, I don't know how you get out of that or get past that. But what's really.

David Hoffman:
[51:15] Interesting- Is a revolving door a United States, America native term? Like, will European or like South American listeners know what that term is?

Ryan Sean Adams:
[51:23] I guess revolving door just means somebody gets a job in government, right? And they're not making as much money, but they gain kind of influence and the ability to kind of, you know, make phone calls in government and get companies what they want. And then after their government job, they go back into industry where they can basically make lots of money or they go to a lobbyist group or something like that.

David Hoffman:
[51:42] And they use their network and their influence, yeah.

Ryan Sean Adams:
[51:45] Right, right. And that's essentially what's happening. Like, that's how the game works. I don't know. There's some elements of this is just, like, how the game works. I don't know how you accomplish things in DC or actually –, The other option that crypto tried, which is just to kind of like lay down and die and not be at the table. And they were definitely on the menu, right? And I think in 2023, 2024, the entire industry realized it had to be present. So it is. And this is the type of thing you see. But what's interesting is Tether, David, last quarter, they bought more treasuries. They bought $8 billion worth of treasuries. Okay, so only six other countries, sovereign countries, bought more treasuries last quarter than Tether did. All right? They are a quasi-nation state with respect to the amount of treasuries they buy from Bessent. They are a customer of Bessent. And so you can see the interlinking here between government and private sector in this way. Yeah.

David Hoffman:
[52:43] In a different part of Capitol Hill, the SEC is investigating the CEO of WLFI, the Trump World Liberty Financial treasury company. So we talked about this last week, the World Liberty Financial has a treasury company coming online. The information reported that the SEC investigated John Isaac, the CEO, sometimes referred to as the president of Alt-5 Sigma, World Liberty Financial Treasury Company. There were accusations that Isaac and Alt-Five Sigma misrepresented earnings by overstating revenue and understating expenses to boost the company's financial results. Which, I mean, Trump does this and has done this in the past.

Ryan Sean Adams:
[53:26] Look, if they did this, right, and they could prove this, then the SEC is the regulator to hold them accountable for this. This is what we should be striving for. If we don't see this, if this type of thing gets pardoned, repealed, if the dogs are called off, that's evidence of corruption, basically, in the government. Totally. We had a very crypto-unfavorable government that was corrupt in different ways. We don't want to swing to the other side of having a grifting, fully corrupt government that just allows this type of.

David Hoffman:
[53:54] Thing to happen. Crime is still crime. Crime is still crime. We don't want crime season.

Ryan Sean Adams:
[54:00] It's really hard to have a nuanced conversation about this stuff, right? But I'm going to be watching this one to see what the Trump White House actually does with this, to see whether we've gone too far in the other direction here.

Ryan Sean Adams:
[54:12] Speaking of going far in the direction of crypto, which I am very supportive of, this is the Fed turning bullish on crypto. So this is a speech. Our Fed.

David Hoffman:
[54:22] Our Federal Reserve.

Ryan Sean Adams:
[54:23] Our Fed. Yeah. Jerome Powell's Fed, the same thing. That same Fed we were talking about earlier. This is Michelle Bowman. She gave a speech. Now, what's her position? She is the vice chair for supervision of the Fed. All right. So she kind of, I think she reports to Powell. She's one of two vice chairs that are under Powell right now. And she's the vice chair for supervision. She said this in a speech, I believe at a crypto conference, that the US is at a crossroads and must embrace crypto and new technologies to stay ahead of financial innovation. She said regulators need to abandon an overly cautious mindset and essentially double down on crypto. And you know that whole Fed bank supervision that like department within the Fed that made banks feel like it was very risky to do anything with crypto. She completely gutted that. So that's no longer this bank supervision program is no longer in effect. And she's easing all the restrictions there. And she also added this. This is what I thought you'd really like. She added that Fed staff should hold small amounts of crypto to better understand the technology. She said, he's comparing it to learning to ski by actually putting on skis.

David Hoffman:
[55:34] That's so good.

Ryan Sean Adams:
[55:36] Right?

David Hoffman:
[55:36] We have been saying that for so long.

Ryan Sean Adams:
[55:39] The last executive office basically banned anyone... Who owned crypto to be a regulator of crypto.

David Hoffman:
[55:46] So if you were bullish crypto and say you were in government office, the SEC, and you were like, oh, wait, wait, Bitcoin is actually pretty dope. Yeah. I would like to own some of this to hand down Bitcoin to my kids. You would have to quit. And then all the people who are inherently are left at the SEC are people who don't give a fuck about crypto and don't see the value in it.

Ryan Sean Adams:
[56:09] All the regulators, the entire executive branch. And this is the thing we're saying. You're self-selecting for people who are bearish, hate crypto, don't understand it. And this is the opposite of that. Now, by the way, we're not advocating that you shouldn't have full transparency over your holdings. You can't trade this type of thing. Maybe you should be locked in a trust or something. We should have full transparency and visibility. But to put out a blanket rule in the White House that if you own crypto, you can't do anything to regulate crypto. That's like the opposite. I guess what I'm saying.

David Hoffman:
[56:38] The number one way to onboard someone and get them into crypto and see crypto, the value of crypto is just give them some crypto. Just give them some crypto. And they will become a crypto person. It works. It's the highest success rate I've ever discovered.

Ryan Sean Adams:
[56:53] Yeah, I totally agree. And what's amazing to me is how 180 we've come from like 12 to 18 months a year ago when we're going to completely. Now, this is somebody in the Fed saying, hey, everyone in the Fed should own some crypto. So you guys understand it. Go use some stable coins. You know, go grab some Ether, grab some Bitcoin. So very cool from that perspective. Yeah, definitely. All right, guys, we're going to end it there. Got to let you know crypto is risky. You could lose what you put in, but we are headed west and David is headed towards Burning Man.

David Hoffman:
[57:21] This is the frontier. That's west. That is west.

Ryan Sean Adams:
[57:23] That's west. He's literally going west. It's not for everybody, but we're glad you're with us on the Bankless Journey. Thanks a lot.

Music:
[57:34] Music