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Welcome to galaxy brains. An amount

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back to Galaxy always, I'm your host

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your host, Alex head of firm wide research

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at research at Galaxy. Bitcoin, and we have

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a great episode for you today. Sam

0:35

for you today. Sam author of analyst, author of the news

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our friend. He's back. He's a

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returned guest, and we're going to talk

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with Sam at length about Bitcoin

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markets, where we are in the cycle

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we are probabilities and possibilities of of strategic

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reserve or other nations doing something

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similar. talk about about with him a

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bit as well. well. Of course, we'll

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check with our good friend, our good friend, BIMNet,

0:56

a BB from to talk about markets as we

0:58

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1:15

of a BB from Galaxy to or As always,

1:17

BIMNET, welcome back to Galaxy Thanks Thanks for having

1:19

me. me. Well, we're still sort

1:21

of in the in the chop chop time after the

1:24

the major uplift, November, 2024. I think the third best

1:26

I think the only the third best in the

1:28

third best in Bitcoin history. looks like Bitcoin's

1:30

taking a little now it looks like Bitcoin's

1:32

taking a little bit of a

1:34

breather. You've seen some. know, it's a little

1:36

bit of you know, it's a little bit of

1:38

rotation to crypto, but But your sense on where we are

1:40

right now? now? I I think folks are

1:42

reaching along the risk curve at the

1:44

moment. the And that and that

1:46

is largely why you know alts

1:49

have have outperformed

1:51

and so you know Ripple was

1:53

a big was a big over

1:55

the over the last couple

1:57

of weeks, going from 50 cents

1:59

the way to almost $3 so

2:01

that was an insane move. We've

2:03

had other alts that are large

2:06

caps, trade incredibly well, defies, trading

2:08

super well, Ave, you know, I

2:10

think got up to 250 compound,

2:12

etc. And so I think folks

2:15

have done really well this year

2:17

in crypto and are now more

2:19

comfortable with the downside risks in

2:21

in crypto and so they're just

2:24

reaching out out the risk curve

2:26

and i think that's best uh...

2:28

demonstrated in east bt c which

2:30

is now testing, you know, 0.04,

2:32

which is a big level. And,

2:35

you know, I think that's something

2:37

that that's a trend that could

2:39

continue. And from a risk reward

2:41

perspective, E3TC has gotten crushed over

2:44

the past year. And so it

2:46

offers, you know, really good risk

2:48

reward. And it doesn't take much

2:50

to move E. Like there's no,

2:52

like if somebody tried to buy

2:55

a billion dollars worth of Eith,

2:57

it's going to go up a

2:59

reasonable amount. And so. You know,

3:01

what we're having now is just

3:04

folks going out the risk curve

3:06

with memes, defy tokens, and alts.

3:08

I think that's a trend that's

3:10

likely going to continue for a

3:13

short while. Yeah, that's kind of.

3:15

Yeah, I think that's right. I

3:17

think our viewers will know, you

3:19

know, and my audience will know

3:21

that I've been a very vocal,

3:24

eith, BTC, short for years. I

3:26

did tweet, however, on November 9th,

3:28

that the reversal may be about

3:30

to happen. I didn't clip the

3:33

bottom exactly, it went slightly lower

3:35

from where I said but it

3:37

has started to meaningfully move higher.

3:39

I'm not prepared necessarily to say

3:41

that we're really confirmed out of

3:44

this trend, this multi-year down trend,

3:46

but it does feel like there

3:48

are reasons why Ethereum and alt-coins

3:50

could perform well relative to Bitcoin

3:53

because of the regulatory stuff is

3:55

mostly good for them more than

3:57

that. I just come back to

3:59

the flows and the positioning, right?

4:02

Folks want to allocate to this

4:04

space right now. folks see the

4:06

return profiles of some of these

4:08

alts recently, etc. and are like,

4:10

oh, I want to diversify my

4:13

crypto exposure, right? And so when

4:15

you've got capital coming in and

4:17

folks are generally underweight, these alts,

4:19

Ethan in particular, it's going to

4:22

cause a pretty meaningful reaction. And

4:24

they have ETFs, so you can

4:26

easily imagine. Yeah. And, you know,

4:28

I think there's so many things

4:31

in terms of the regulatory stuff

4:33

that will come and help Ethan

4:35

as a product. So options on

4:37

ETFs, dating, right? Eventually, in-kind create

4:39

redemption into for both. Yeah. and

4:42

so you know i i i

4:44

think that's super you know notable

4:46

uh... the other thing is just

4:48

you know he doesn't necessarily have

4:51

the same supply dynamics as as

4:53

big coin uh... if you guys

4:55

remember throughout this year you know

4:57

we've had to absorb you know

4:59

gox selling chinese german probably some

5:02

u s and you know the

5:04

gb gb t c unlock et

5:06

cetera and So the market had

5:08

to absorb a ton of supply.

5:11

With eith, you really only have

5:13

had to absorb the eith e,

5:15

you know, kind of outflows from

5:17

that gray scale product. But outside

5:20

of that, minimal government holdings. I

5:22

mean, there's some, there are some,

5:24

but it's, yes. And it's like,

5:26

okay, you want to own crypto

5:28

and you're really large. There's only

5:31

like a couple places to put

5:33

it. And so, you know, it's

5:35

Bitcoin and it's eith. either dramatically

5:37

underperformed over the past year or

5:40

so. And so I think the

5:42

story is pretty simple. I also

5:44

do think that the 100K level

5:46

is super significant in terms of

5:48

like when you see that breakthrough,

5:51

I think it'll be explosive once

5:53

it happens, you know, I don't

5:55

think it's like, oh, you. go

5:57

from, you know, you might go

6:00

up to 101,000 or something like

6:02

that, but realistically, I think the

6:04

move will be violent. You'll probably

6:06

be 105 to 110 when you

6:09

actually do break it. And what

6:11

do alts do in that environment?

6:13

All right? If anybody's actually genuinely

6:15

thinking, oh, Bitcoin's going to break

6:17

through 100. it'd be kind of

6:20

silly not to have some exposure

6:22

to other higher beta assets. And

6:24

so I think that's, you know,

6:26

partially why, you know, you're getting

6:29

some of this outperformance is, we

6:31

all think Bitcoin's going to go

6:33

higher. So positioning for that higher

6:35

beta outcome as the space of

6:38

this overall, yeah. Right. And, you

6:40

know, you go back to the

6:42

classic construct where, you know, to

6:44

move an alt token 5% it

6:46

requires much much less capital than

6:49

it does to move Bitcoin up

6:51

to 5% and so if you

6:53

do like those marginal inflows into

6:55

the alt complex are a lot

6:58

more meaningful from a subsequent price

7:00

return standpoint yeah and so like

7:02

that's where that's the part of

7:04

the you know the market cycle

7:06

you're in yeah and you know

7:09

it likely continues for a little

7:11

bit I think that's right I

7:13

think On the macro side, there

7:15

was some jobs data I saw,

7:18

like some downward revision, it was

7:20

not the best, right? And then

7:22

all- So it's been a bit

7:24

mixed, right? So you had, the

7:27

joltz figure released yesterday, which showed

7:29

a very dramatic increase in job

7:31

openings, the magnitude was not seen

7:33

since like November of 2023. uh...

7:35

so that's that's healthy that's as

7:38

the economy wants to grow correct

7:40

yeah you don't put job openings

7:42

up unless you're intending to hire

7:44

yeah now we had i some

7:47

services this morning and i some

7:49

services is really important because you

7:51

know services comprise caught seventy percent

7:53

of the u s economy right

7:56

so that's really the engine of

7:58

of of the u s it

8:01

came in much softer than

8:03

expected. It came in around

8:05

52 versus expectations of 54.

8:07

Anything above 50 is expansionary.

8:09

Below is contractionary. And the

8:11

fact that it came in

8:14

soft was, you know. a

8:16

sign that things are cooling

8:19

a little bit. The employment

8:21

section as well in ISM

8:23

services came in a bit

8:25

softer than expected as well.

8:28

While the prices paid component

8:30

was elevated. And so what

8:32

that data print essentially shows

8:34

you or suggests is that

8:37

the U.S. might be in

8:39

a period of stagflation or

8:41

might be moving closer to

8:44

a stagflationary period. Stagflationish, right?

8:46

It was a slight weakening

8:48

in the growth figures with

8:50

a slight increase in prices,

8:53

right? Right. And so it

8:55

really says stagflation. Yeah, so

8:57

be cautious. Be cautious. But

8:59

I do think that. you

9:02

know the economy still fine yeah

9:04

and no matter what you think

9:06

about doge and you know all

9:09

the promises made during the election

9:11

one thing i know for sure

9:13

is that politicians are really good

9:15

at spending money and they're allergic

9:17

to not spending it uh... and

9:19

so i think the Fiscal side

9:21

of the US is going to

9:23

be fine for next year. The

9:25

other thing I'd like to highlight

9:27

on the macro front is just,

9:29

I think there's a really strong

9:32

technical picture in US equities for

9:34

the balance of the year. Strong

9:36

seasonals. Tech stock buybacks, which, you

9:38

know, points in time are like,

9:40

you know. maybe like four to

9:42

five billion dollars a day at

9:44

their peak. So that's a lot

9:46

of just natural buy pressure that's

9:48

inequities. And so even today on

9:50

a soft ISM number like stocks

9:52

is continuing to make highs. And

9:54

I think that's just a function

9:57

of just flows. But again, you

9:59

know, the S&P is really driven

10:01

by five to seven names on

10:03

any given year. those companies are

10:05

still doing great. And so I

10:07

think for the rest of the

10:09

year, you know, you're probably still

10:11

gonna have a pretty strong equity

10:13

market. Now where I do. Santa

10:15

Claus rally. Now where I do

10:17

turn more cautious though is in

10:20

January in the new year. And

10:22

I think that. folks need to

10:24

be reminded about how slow government

10:26

is. And I think there's a

10:28

lot of expectations about the Trump

10:30

administration and folks will realize that

10:32

even though it's a second term

10:34

and he should be more efficient,

10:36

etc. Like the wheels of government

10:38

are like stone wheels. They move

10:40

slowly. They do. They do. And

10:43

so I think I've said this

10:45

a lot. I mean, Chair Gary

10:47

Gansler wasn't confirmed by the Senate

10:49

until April of 2021. Right. So

10:51

and that's, you know, the SEC.

10:53

even the major cabinet officials, the

10:55

secretary treasury would probably be among

10:57

the first to be confirmed, along

10:59

with like the secretary of defense

11:01

or these very critical cabinet roles,

11:03

but still could take a while

11:05

and certainly then takes them time

11:08

to like get their feet wet,

11:10

right, to get the stuff going.

11:12

And certainly to get policy, they

11:14

always talk about the first hundred

11:16

days. Well, that takes a hundred

11:18

days. That's more than three months.

11:20

Right. So you're not, yeah, you're

11:22

not expecting a ton of action

11:24

early. right and so i i

11:26

i think that's kind of your

11:28

catalyst for stuff to to moderate

11:31

a little bit at the actual

11:33

policies actually starting without and it's

11:35

also like the guy is crazy

11:37

put simply i mean that's not

11:39

to say he's not crazy in

11:41

a good way or crazy in

11:43

a bad way it's just that

11:45

His idea of like what a

11:47

reasonable response is, is outside the

11:49

normal once in a deviation ban

11:51

for what regular government officials, right?

11:54

Proposing 100% tariffs and all this

11:56

stuff and governing via social media,

11:58

etc. And so you're going to

12:00

have a lot of volatility as

12:02

a function of just how policy

12:04

is done. some of the policies

12:06

proposing like i don't necessarily think

12:08

the market should react well to

12:10

them take this china back and

12:12

forth right during his last administration

12:14

the concerns about a trade war

12:17

with china got so aggressive that

12:19

you know stock market rolled and

12:21

the fed started cutting And so

12:23

now, like, what were you reading

12:25

about today? Like, China already started,

12:27

you know, canceling, I think, germanium,

12:29

or one of these rare earth

12:31

metals. They're, like, going to stop

12:33

exporting to the US. And so,

12:35

like, the idea of trade conflict

12:37

and geopolitical stuff, I think, will

12:39

become much more apparent once he's

12:42

in office. And I don't necessarily

12:44

know if that's going to be

12:46

good for risk. All right, well,

12:48

it's going to be interesting anyway.

12:51

Let's go now to our guest Sam

12:53

Callahan, Bitcoin analyst, author of the news

12:56

block. Welcome to Galaxy Brain. Sam, welcome

12:58

back. Thanks Alex. Happy to be here.

13:00

Beautiful headquarters. Thank you. And it's great

13:03

to have you in person. You were

13:05

on the show a couple months ago,

13:07

maybe like six months ago. Some time

13:10

after the ETFs, I think, or around

13:12

the ETFs. But you were remote, so

13:14

it's great to have you here in

13:16

New York. Thanks for having me. Let's

13:19

talk about Bitcoin and the cycle. We've

13:21

got a bunch of interesting topics to

13:23

talk about. You wrote a great paper

13:26

with Lynn Alden about Bitcoin and global

13:28

liquidity. We'll dive into that a little

13:30

bit too. But first, I mean, you

13:33

know, Bitcoin, well, right as we started,

13:35

the block clock got disconnected from our

13:37

Wi-Fi or something, but we're about like

13:40

900K, is that what that means? 96K,

13:42

basically, you know, had a huge November,

13:44

one of the biggest, I think. percentage

13:47

increase in Bitcoin in the 15 years

13:49

of Bitcoin's history was just last month.

13:51

Huge uplift. What's the reason for that

13:54

in your mind and you know how

13:56

are you feeling over the last month

13:58

since we finally exited that 237 days

14:00

of chop? Yeah I mean I think

14:03

that's part of it. was this long

14:05

consolidation. It was very volatile in that

14:07

range. So if you were a trader,

14:10

I mean, if you're a good trader,

14:12

you're kind of enjoying it, but if

14:14

you're not experienced, you probably got shopped

14:17

up pretty hard the last six months.

14:19

But that was kind of like a

14:21

coiled spring, right? It was going to

14:24

go one way or the other. And

14:26

then you kind of had this Goldilocks

14:28

scenario where you, with the election, we

14:31

have regulatory clarity, these headwinds, or North

14:33

Hal winds. For the first time ever,

14:35

I feel like in the United States,

14:38

we have a potentially really positive regulatory

14:40

environment for this entire industry to operate

14:42

in, which is just extremely bullish. And

14:44

so I think you're seeing kind of

14:47

a scramble from institutions, from corporations, all

14:49

kind of recognizing that they're short Bitcoin.

14:51

So I think a lot of this

14:54

has been people kind of saying, OK.

14:56

We really got to take this seriously.

14:58

We have nation states talking about adopting

15:01

it as a Bitcoin, treasury. Yeah, it

15:03

does feel like, I mean, the level

15:05

of discourse, or I should even say

15:08

the levels in the world where the

15:10

discourse is now happening, has elevated significantly,

15:12

right? The question, if you've got nation

15:15

states even considering it, I mean, even

15:17

the fact that it's being talked about.

15:19

at all and not being laughed out

15:22

of the room at all. Whether or

15:24

not it happens in the US or

15:26

anywhere else, just the fact that it's

15:28

a legitimate conversation. Yeah, we've come so

15:31

far. Yeah, you have the game theory

15:33

and I mean, it's not just the

15:35

regulatory environment. It's also the market infrastructure

15:38

is maturing and the access to gain

15:40

exposure to Bitcoin is better than it's

15:42

ever been with the ETFs that we

15:45

mentioned that we have options, all these

15:47

different investment vehicles. And so the access

15:49

is there, the regulatory environment is there.

15:52

And then in terms of macro, I

15:54

mean, I think Black Rock puts it

15:56

well, it's primarily driven by its use

15:59

case as an alternative. Okay. know,

16:01

monetary asset and especially amid

16:03

global and monetary and monetary uncertainty

16:05

how how they put it

16:07

Basically that means is you

16:10

know is you know There's more. more

16:12

you know, disruption of the current

16:14

system, so to speak, and and tensions,

16:18

you know know, we have

16:20

tariffs, have, you know know,

16:22

all these all these inflationary

16:24

drivers, instability more instability. as

16:26

well as in currencies economically, as well as you

16:28

know that around the world, you know,

16:30

that all drives demand for what that's

16:32

what Bitcoin's fundamental use case is. And

16:34

so so macro environment's there. And then

16:36

also the global liquidity component, which

16:38

is also, you know, that was in

16:40

kind of a sideways action of a

16:42

the same time. And we time, and of

16:45

start to creep up in the

16:47

fall. up in the fall. And you know, Lynn

16:49

and I did that report, that report, really

16:51

tightly. tightly correlated to different

16:53

measures of global liquidity. But

16:55

explain more about what that

16:57

means. that means. And did it start it

16:59

start going, rising? Was that because of rising?

17:02

Was that because of rate cuts Yeah, I to that

17:04

the world? of it. You I think that was

17:06

part of it. begin to really saw around banks begin

17:08

to cut rates around the world it, before

17:10

the Fed did it, right? There of the Bank

17:12

of England, Bank of Canada. of Canada, they all

17:14

started cutting rates and then the Fed finally

17:16

did as well in a big way. that was

17:18

And so that was definitely part of it. M2,

17:20

look there's a lot of different there's a lot measure to

17:22

measure liquidity. There's proprietary liquidity

17:24

measurements people sell them you can

17:26

get the weeds and can get in

17:28

the weeds and get really granular.

17:31

Everyone thinks they have the better

17:33

liquidity measure because it is

17:35

complicated And there's, you know, Lynn and I chose Lynn

17:37

and I chose for a for

17:39

a number of reasons. We We

17:41

think it's a pretty good measure.

17:43

It makes sense kind of

17:45

fundamentally. of It's basically a measure

17:47

of the broad money supply global,

17:49

it measures the broad money

17:51

supply of the biggest eight economies, basically, the

17:53

the top eight central banks. And

17:55

we use the we use the M2

17:57

because that's kind of the

17:59

most readily available cash in the system,

18:02

way to think about it. It's

18:04

saving accounts, it's checking deposits, it's

18:06

currency. And so it's kind of

18:08

like the ones that are readily

18:10

available to spend and invest in

18:12

the economy. And you could think

18:14

of it as a way of

18:16

money creation, right? The amount of

18:18

credit creation that's happening in the

18:20

economy. And then it's important that

18:22

you think about it's also denominated

18:24

in USD. And so it's kind

18:26

of those two components built into

18:28

one metric because the fact that

18:30

it's denominated in USD, you know,

18:32

that's important because say when there's

18:34

a strengthening dollar that can be

18:36

thought of as taking liquidity out

18:38

of the system because of the

18:40

amount of US dollars nominated debt

18:42

in the world. And so if

18:44

it gets more expensive to service

18:46

that debt, you know that that

18:48

money has to go to service

18:50

the debt instead of doing something

18:52

else in the economy so it

18:54

pulls the quality of the system

18:56

and so that metric of global

18:58

and two denominated in the USD

19:00

kind of captures the relative strength

19:02

or weakness of the dollar as

19:04

well as the amount of credit-creation

19:06

happening in the dollar as well

19:08

as the amount of credit creation

19:10

happening in the economy so that's

19:12

why we chose that it's one

19:14

of the best data sources by

19:16

the way Yeah, so that's why

19:18

we chose that one. Ideally, we

19:20

would have included things like T-Bills

19:22

as well, like short term, like

19:24

that's probably another one. You know,

19:26

there's so many things that could

19:28

go into liquidity, but again, it's

19:30

readily accessible for us to use.

19:32

But some of these, since rising

19:34

in the fall, some of these

19:36

metrics I've seen people post of

19:38

global liquidity seem to be declining

19:40

slowly at the moment. So is

19:42

that correlation with Bitcoin give you

19:44

pause for the near-term prospects for

19:46

BTC USDA? Yeah, so apparently, you

19:48

know, Bitcoin, we try not to

19:50

like back, track that data, that

19:52

correlation too much, you know, in

19:54

terms of looking back like when

19:56

it moves, like a lead lag

19:58

analysis, we just kind of... look

20:00

at the relationship. Typically people are

20:02

like, hey, Bitcoin typically moves two

20:04

to three months, you know, after

20:06

global liquidity. So people have been

20:08

posting this chart of. global different

20:10

measures of global equity in decline

20:13

recently and they're like well Bitcoin's

20:15

gonna follow the Bitcoin's gonna drop

20:17

right but in the report we

20:19

mentioned that you know global liquidity

20:21

and Bitcoin move 83% of the

20:23

time of 12 month period over

20:25

the last 10 years but there

20:27

are 17% of the time where

20:29

it doesn't so when does that

20:31

happen well typically it's when idiosyncratic

20:33

events happen to the Bitcoin itself,

20:35

the industry itself, that causes that

20:37

correlation to break down. And it

20:39

makes sense, it could be bad

20:41

things, like the FTX collapse, where

20:43

it doesn't matter what's going on

20:45

with global liquidity, there's a ton

20:47

of shift in sentiment, there's a

20:49

ton of fear, a lot of

20:51

cell pressure when that happened. There's

20:53

also good events, like when the

20:55

ETFs launched, you know, liquidity wasn't

20:57

like spiking up in the beginning

20:59

of the year, but there was

21:01

an industry-specific event that launched of

21:03

the ETS that caused the price

21:05

to run. And right now, I

21:07

think we're in one of those

21:09

events with what happened with the

21:11

election and the regulatory change. I

21:13

think what we're seeing is Bitcoin

21:15

respond to that and its price

21:17

being driven by that factor more

21:19

than its long-term correlation with liquidity.

21:21

So it could be one of

21:23

those situations where that long-term correlation

21:25

breaks down because Bitcoin is benefiting

21:27

from things that are specific to

21:29

it. I think that does make

21:31

sense. And I think if you

21:33

look at just the chart this

21:35

chart this year. It's been mostly

21:37

like, I mean, the uplift into

21:39

the ETFs is an ETF-driven catalyst.

21:41

It's, oh, wow, a whole bunch

21:43

of people get to buy Bitcoin

21:45

that weren't able to before. Huge

21:47

inflows into those vehicles, right? And

21:49

you see a big rise. Then

21:51

it's like, well, okay, a lot

21:53

of people did that. Still there

21:55

was, you know, choppy flow in

21:57

those ETFs from March until September,

21:59

October. event, then

22:01

we tried to figure out what to

22:03

do. Then we had another big uplift

22:06

on another Bitcoin event, which is the election.

22:08

And I don't think it's going to

22:10

be 237 days of chop now again. But

22:12

it's sort of like, I mean, and

22:14

we got the block clock working while

22:16

you were talking. So the, you know, but

22:18

it does feel like, well, we're up

22:20

40% in November, you know, month over month

22:23

in that month. And now it's kind

22:25

of like, well, okay, like. Should

22:27

we take a breather, right? Is

22:29

that how it feels? And it

22:31

doesn't feel, to your point, like

22:33

it's because of a forward look

22:35

on global M2 declining slightly. No,

22:37

I mean, honestly, I think it's

22:39

just taking a breather. I mean,

22:41

it's been pretty wild. I expect

22:43

kind of the dips to be

22:45

bought. And they have been. And

22:47

they have been. Like I said,

22:49

I haven't really seen an environment

22:51

that this, it's this positive for

22:53

Bitcoin. It just seems like. all

22:55

the everything's kind of aligning and

22:57

then like you said I think

22:59

global equity even I mean the

23:01

Fed's likely gonna keep cutting rates

23:03

yeah I mean they're expected I

23:05

think to do another cut in

23:07

December right and then the and

23:09

then the government keeps spending so

23:11

That's true. That's the other thing.

23:13

A lot of these, like, didn't

23:15

really matter who took office. Both

23:17

of them had pretty high inflationary

23:19

fiscal policies for different ways, but

23:21

they were all going to keep

23:23

spending. I agree. And I think

23:25

that was the market. The market

23:28

has really thought that even with

23:30

President Elect Trump coming back for

23:32

his second non-consecutive term. Still, he

23:34

didn't, you know, deficit remained and

23:36

debt went up under Trump won

23:38

or 45. And I think most

23:40

were thinking, you know, tariffs are

23:42

likely to be inflationary, right? There's,

23:44

he's not likely to dramatically reduce

23:46

the physical picture. I think there

23:48

has been a little bit of

23:50

a pivot in some people's analysis

23:52

now that with Scott Besson at

23:54

Treasury with this 3-3 concept on

23:56

GDP and debt and deficit and

23:58

inflation and then also with the

24:00

Department of Government efficiency that maybe

24:02

it really is possible that he

24:04

would cut spending. And I think

24:06

people are starting to want, I

24:08

mean, we're not going to know

24:10

and even if he and his

24:12

administration really want to try hard,

24:14

it's possible they may not be

24:16

able to. Right, I mean we

24:18

know a lot of the spending

24:20

is, you know, entitlements and defense

24:22

and stuff that you really probably

24:24

can. Something is a small part

24:26

that you can actually change. This

24:28

discretionary, yeah. Exactly. What's your view

24:30

on that or on Besson, like

24:32

a likelihood of that of a

24:34

Trump macro, you know, effect on

24:36

macro? I mean, I'm

24:38

under the same opinion that nothing stops

24:40

this train because of the entitlements. Like

24:42

what you just said, I mean, so

24:45

much the fiscal deficit is kind of

24:47

set in stone unless, you know, Congress

24:49

changes that, right? And I don't see

24:51

politically that happening, even though it definitely

24:53

needs to happen. I mean, Stanley Chucka

24:55

Miller has been warning about this for

24:58

a long time. He's like, something needs

25:00

a change and something need to change

25:02

yesterday in terms of the entitlement programs.

25:05

And so I think the deficit

25:07

is going to continue. I think

25:09

he wants to continue those tax

25:11

cuts. There's estimates from like Penn,

25:13

Penn Warren, does a budget model.

25:16

They thought that Trump, you know,

25:18

his policies would increase the fiscal

25:20

deficit to greater than 7% of

25:22

GDP. I mean, that's a lot.

25:24

It's a lot. It's a lot.

25:26

And so I don't think that's

25:28

going to change. Now, I think

25:30

a lot, there's a lot of

25:32

positivity around the Bitcoin reserve strategy

25:35

as well, the stockpile. And I

25:37

don't know. I don't know what

25:39

your thoughts are. I feel like

25:41

I've heard a lot of chatter

25:43

that if that happens, it's going

25:45

to happen pretty fast. You

25:48

know, when Scott Besson takes office, he's

25:50

inheriting a mess. I mean, he really

25:53

is. So I saw some piece from

25:55

Bloomberg that about a quarter of the.

25:57

has to be refinance next year because

25:59

of how Yellen was issuing on the

26:01

short end the whole time. So $6.7

26:03

trillion, he's going to have to refinance.

26:05

And if you want to term that

26:08

out, it could be a problem because

26:10

if he has to issue more on

26:12

the long end, you know, the 10-year

26:14

could maybe rip upwards and that's going

26:16

to put a lot of pressure on

26:18

asset prices more broadly. And so Scott

26:21

Besson actually said this in January before

26:23

maybe, you know, he thought he was

26:25

going to be Treasury Secretary. He said

26:27

this is this is going to be

26:29

a problem. It could really stop. I

26:31

think he called it Trump's economic lollopalooza

26:33

if the long end yield rise. So

26:36

those dynamics, like he has a lot

26:38

of things to focus on. And so

26:40

I don't know what the odds are

26:42

of getting. you know, the Bitcoin Reserve

26:44

done fast because he has a lot

26:46

of problems that he has. Yeah. Yeah.

26:49

What are your thoughts on the reserve

26:51

as an idea? Is it a good

26:53

idea? Or so like, how should it

26:55

be done? Because I found President now

26:57

elect Trump's speech in Nashville, the language,

26:59

to be pretty careful on this, right?

27:02

He did not say a strategic Bitcoin

27:04

reserve. No, he's a national Bitcoin stockpile.

27:06

And I think to me, I mean,

27:08

he's also the president. or in president

27:10

elect is extremely vocal about maintaining dollar

27:12

dominance and to me like if you

27:14

start backing the dollar with anything other

27:17

than the full faith and credit of

27:19

the US doesn't that like raise questions

27:21

about the dollars you know hegemony like

27:23

isn't that a so wouldn't you if

27:25

you also want to do the Bitcoin

27:27

reserve or stockpile like shouldn't it be

27:30

done like away from the dollar so

27:32

that it There's no need to like

27:34

nuke the dollar just to buy some

27:36

bit. You could just, the government could

27:38

strategically own Bitcoin, doesn't have to do

27:40

it as part of a, I think

27:43

this is my question about the word

27:45

reserve. I think that scares a lot

27:47

of dollar, you know, maximalists. Well, I

27:49

guess like there's two parts to that.

27:51

The first is, I mean, I do

27:53

think it's a good idea that the.

27:55

hold Bitcoin on its balance sheet for

27:58

a number of reasons. I think it

28:00

could actually, and specifically the Bitcoin Act

28:02

by Cynthia Lemus, I mean, they specifically

28:04

say you have to hold it for

28:06

20 years, and the only reason to

28:08

sell it is to pay down the

28:11

debt. I mean, that's pretty reasonable. Yeah.

28:13

I mean, that's pretty reasonable. It's a

28:15

pretty, it's a solution. Nobody else is

28:17

coming up with any solution. That's right.

28:19

They're just like, yeah, we need to

28:21

stop spending, but let's spending. Yeah, but

28:23

we can't stop spending. relax for the

28:26

house six years for the same you

28:28

don't have time to No, they actually

28:30

make a policy like that. There can't

28:32

be. Yeah, so like and but the

28:34

actual mechanics of how to do it.

28:36

I mean, you're right. I thought Trump

28:39

was very careful and I bet he

28:41

was a little upset when RFK Jr

28:43

came up before him and was like

28:45

very specific. Like this is what we're

28:47

going to do because he was a

28:49

little bit even more specific because he

28:52

was careful with his words. Right. And

28:54

I think there's two things like you

28:56

can take the Bitcoin. you know, keep

28:58

that, say you're going to keep that.

29:00

And then there's the other one which

29:02

is actually like buying more Bitcoin, right?

29:04

And one seems more feasible than the

29:07

other. And then the way to actually

29:09

fund the Bitcoin purchases if they get

29:11

through, I thought that was an interesting

29:13

detail of the Bitcoin Act, because they're

29:15

like, hey, we're going to re-value the

29:17

gold certificates, because in 1973, you know,

29:20

the gold is still valued at like

29:22

$42 at like $42. you know that

29:24

is crazy I didn't know about this

29:26

until I saw this from Senator Loomis

29:28

about yeah that actually is wild it

29:30

is wild yeah and so they haven't

29:33

been marking it to market like it's

29:35

yeah I kind of looked into it

29:37

I guess they didn't want to like

29:39

affect the the market for gold prices

29:41

and it didn't matter anymore because it

29:43

wasn't And it's effectively like like non

29:45

circulating supply like it just sits there

29:48

right it's just like sitting there Is

29:50

it is it sitting there? Right gold

29:52

bugs have wondered for a long time

29:54

audit Fort Knox right is there gold

29:56

there? They say there is the Treasury

29:58

says there is trust no take them

30:01

for their word on this one. So

30:04

it's just like interesting how do you

30:06

pay for it because they're going to

30:08

take the difference. It's an accounting trick.

30:10

You're basically revaluing the gold and taking

30:12

that to buy the Bitcoin. And then

30:14

the other interesting way that they said

30:16

they're going to pay for it is

30:18

to take, you know, the Fed remittances

30:20

and have them pay that. But the

30:22

Fed has been operating in that it

30:24

lost for the last two years because

30:26

they still have to pay. you know

30:28

the reserves the interest on the reserves

30:30

it's all the yeah the primary dealers

30:32

and so much and so like they're

30:34

that they're operating a loss and that's

30:36

actually really interesting dynamic happening around the

30:38

world with central banks operating at a

30:40

loss because the Fed could do this

30:42

thing where they put it as a

30:44

deferred asset and they don't have to

30:47

you know the treasury doesn't have to

30:49

recapitalize the Fed that's not the case

30:51

over in like the UK right actually

30:53

to recapitalize the bank so it actually

30:55

just like blows up their deficit even

30:57

more over there because the bank it's

30:59

the central bank itself is you know

31:01

losing money it's losing money it's it's

31:03

a you know what's with its purpose

31:05

because they're not like they're losing money

31:07

which affects the price stability of one

31:09

of their mandates and that's this happening

31:11

all over the world in terms of

31:13

the central banks after everyone had to

31:15

raise interest rates on themselves and they

31:17

were doing all the QE and putting

31:19

all the bonds on their balance sheets.

31:21

But this is kind of a tangent,

31:23

it's just something I find interesting. So,

31:25

but those are the two ways, but

31:27

really, I mean, like, if they really

31:29

want to pay for it, they should

31:31

just, I mean, you don't, they, they

31:33

print money, they borrow a bunch of

31:36

money to do a bunch of silly

31:38

stuff. They could borrow it to buy

31:40

Bitcoin. They could borrow it to buy

31:42

Bitcoin. I mean, like, that's what they

31:44

should do. They shouldn't get all cute

31:46

with it. They should just borrow some

31:48

money and buy some money and buy

31:50

some money and buy some money and

31:52

buy some money and buy it. There's

31:54

a lot of the money and buy

31:56

money and buy money and buy. Well,

31:58

let's talk about people borrowing to buy

32:00

Bitcoin, specifically micro strategy, which we were

32:02

chuckling about. Of all the Bitcoin that

32:04

micro strategy. purchased, they purchased the most

32:06

last month, which is actually just kind

32:08

of wild to think about, right? I

32:10

think you said, was it their Bitcoin

32:12

holdings were up 60% in November? He

32:14

bought 150,000 BTC in November. At high

32:16

prices, now micro strategy CEO Michael Saylor

32:18

has said he'll be forever buying the

32:20

top, which, so I'm not, it's not

32:23

about timing that I'm like, oh my

32:25

gosh, they bought at high prices. It's

32:27

more just like incredible that the demand.

32:29

from the bond market is sufficient

32:31

enough to fund that much Bitcoin

32:33

purchasing by micro strategy. Yeah, I

32:36

mean the demand for Bitcoin back

32:38

bonds is just insane. Yeah, this

32:40

is kind of, I joked about

32:42

this yesterday when we were talking

32:44

like it's almost like Bitcoin defy.

32:46

It's not defy, but it's like.

32:48

This is financialization of Bitcoin exposure

32:50

and bringing it into TradFi, bringing

32:52

it to the fixed income market

32:54

in the case of microstrategies converts.

32:56

There is apparently a lot of

32:58

demand. I mean, the last slug

33:00

that he issued had a 0%

33:03

interest rate. Yeah, 50% conversion premium.

33:05

Right. 55% I think. Implies much

33:07

higher stock price. Yeah. Do you

33:09

think that demand is going to

33:11

persist? Or can he keep doing?

33:13

I mean. I mean, at some

33:15

point, and the long term, can

33:17

he keep doing this? Look, at

33:19

some point, I mean, the convertible

33:21

debt market is only so big,

33:23

but we don't really know where

33:25

that is, but his convertible debt

33:27

or microstrategies has destroyed every other

33:30

convertible debt on the market. Yeah,

33:32

like they had to buy. They're

33:34

performing so well, and, you know,

33:36

they've been kind of, they want

33:38

that volatility. And so, It makes

33:40

sense because I explained it like

33:42

he's providing Bitcoin with training wheels.

33:44

Right. Or it's like bowling with

33:46

bumpers. Yeah. Just like people that

33:48

want like a little bit of

33:50

Bitcoin, but they want to limit

33:52

the downside risk. And they've actually

33:54

been performing even better. Bitcoin which

33:57

is the crazy thing. I thought

33:59

that was the craziest slide of

34:01

his Cantor conference was that the

34:03

convertible debt for microstrategies outperform Bitcoin

34:05

itself because you basically have like

34:07

principal protection plus the upside of

34:09

Bitcoin. I mean and so You

34:11

know, I don't know how long

34:13

he can keep doing it. I

34:15

don't think anybody really knows, but

34:17

it seems right now that there

34:19

is just a crazy amount of

34:21

demand for it. And then you

34:24

have different companies also, like MARA

34:26

and others that are starting to

34:28

replicate the strategy. And their debt

34:30

offerings, their convertible that offerings just

34:32

continued to get upsize, oversubscribed, that's

34:34

yielding zero percent two. I think

34:36

the conversion premium was 40% on

34:38

the last MARA offering. So the

34:40

same thing, just incredible demand for

34:42

Bitcoin backed fixed income instruments. And

34:44

I think Saylor says the right

34:46

thing where it's like some of

34:48

them literally can't get exposure to

34:51

Bitcoin. Right. They can't. They can

34:53

only buy, you know, fixed income.

34:55

And if you're a fixed income

34:57

fund or desk and you're only

34:59

allowed to look at debt, that's

35:01

your mandate, right? So you can't

35:03

like go buy Bitcoin or go

35:05

buy MSTR or go buy stocks,

35:07

right? You're a fixed income fund.

35:09

And if somebody is saying, hey,

35:11

look at this note that's the

35:13

best performing note, like fixed income

35:15

instrument of the year, aren't you

35:18

a fixed income guy? Why don't

35:20

you own this? Isn't that your

35:22

job? Right? Like, there's like career

35:24

risk to missing that. Absolutely. Absolutely.

35:26

I mean, I don't, I think

35:28

he's gonna keep doing it until

35:30

the market says he can't. Yeah.

35:32

But right now, like, I mean,

35:34

it's just. It's not

35:36

just like I said, it's not just micro

35:38

strategy, it's other companies as well that are

35:41

doing it and there's incredible demand. Let's go

35:43

back a little bit on the reserve but

35:45

not in the US. What about other countries

35:48

like, does it make sense for something like

35:50

Bitcoin and non-sovereign decentralized store value to be

35:52

adopted by, I don't know, America's allies, adversaries?

35:54

non-aligned countries. I mean, we've got this Bitcoin

35:57

Mina conference coming up in Abu Dhabi, but

35:59

I think next week, a lot of stuff

36:01

was announced at the Bitcoin Nashville, the USA

36:04

One, you know, the Emirates, and there's a

36:06

lot of chatter that, you know, people are

36:08

buying out there. Does that make sense to

36:10

you? Yeah. Absolutely. I mean, of course. I

36:13

like what Jack Maller said one time on

36:15

like I hit last year. It's like, how

36:17

many people have to deal with the problem

36:20

of currency to basement? And he's like, eight

36:22

billion. Everybody has to deal with it. And

36:24

so, you know, everybody could use Bitcoin for

36:26

just the reason that it protects them from

36:29

currency to basement and it's a premier way

36:31

to store value over time. But then for

36:33

an adversary of the United States, I mean,

36:35

ever since they sanctioned Russia, I mean, we

36:38

see the record demand of gold buying. You

36:40

know, there's the diversification of their reserves. And

36:42

then Bitcoin obviously has, you know, it's censorship

36:45

resistant. You know, nobody can tell them to

36:47

send money. It's a political neutral monetary network

36:49

that they could access. It's a new system

36:51

that they can access. And that's. really important

36:54

to consider when you're an adversary of the

36:56

United States and the dollar system is weaponized

36:58

against you. And so with the tariffs even,

37:01

you know, Trump recently came out and he

37:03

said if any of these BRICS nations has

37:05

a currency we're going to put 100% tariffs

37:07

on them, right? He threatened them with that.

37:10

And then the Kremlin came back the next

37:12

day and they said, If you threaten us

37:14

with that, that's going to do the opposite

37:17

effect. It's going to cause us to actually

37:19

flee the dollar more into alternatives. And so

37:21

if they keep leaning into weaponizing the US

37:23

dollar, it could actually have the opposite effect.

37:26

That's been something I've always worried about when

37:28

it comes to like sanctions in general and

37:30

the sanctions regime weaponizing it. Like, you know,

37:32

pretty simple, you know, is aggression. like the

37:35

most, well it's not even really it's

37:37

not even really in general

37:39

in general the most

37:42

widely accepted currency is

37:44

the best money what

37:46

that's if you you want

37:48

if you come into

37:51

the jail and offer

37:53

to pay me in

37:55

cigarettes Sam wasn't like they were

37:58

like they were trading or

38:00

or something cans of

38:02

tuna it well it

38:04

turns out in that

38:07

jail cans of tuna

38:09

were better money so

38:11

like if you have have

38:14

it's gonna it's to

38:16

discount at a value in

38:18

tuna right like you

38:20

want to use the

38:23

money that's the most

38:25

widely most widely accepted. and doesn't

38:27

adding like to the dollar make it

38:29

harder to it harder to accept

38:32

like you're adding frictions right you're adding frictions at at

38:34

some point the frictions become yeah

38:36

it's more geopolitical tensions more frictions

38:38

and so again it just

38:40

kind of kind of bitcoin with its

38:42

ability to you know cross -border

38:44

payments payments it you're basically pushing

38:46

them into monetary alternative so good

38:48

specs so it gets back to black rocks right so

38:50

like This is why, know, to know, to go

38:52

back to what you said too of like they would

38:54

want want, why the U.S. the U .S. to

38:56

to adopt Bitcoin, and you know, would that be that

38:58

be anti Yeah. I loved what what said said recently

39:00

on an interview. and it's what it's what Trump

39:02

said. He said, he he said it's the

39:04

new oil. oil. I I don't know if you

39:06

saw that clip. I did, yeah. clip. Yeah. and

39:09

it makes sense and like in of

39:11

it's just like in the the 70s

39:13

they you know the petrod dollar they back the dollar

39:15

with a dollar with a commodity to

39:17

continue the u .s. dominance they do

39:19

so could they do something similar

39:21

with bitcoin right I like like this

39:23

better if you are thinking about

39:26

it's relationship to the dollar because

39:28

it's more of a strategic commodity

39:30

it's not so much it's not so much a

39:32

yeah what he's saying too is like the yeah he's

39:34

uh... he's talking about talking about driving

39:36

Bitcoin demand which drives stable demand,

39:38

which will drive. demand

39:41

for the and so we already

39:43

know know like what's Heather like the 10th buyer buyer of

39:45

its top 20 for sure yeah something like that

39:47

I mean it's insane right that's a

39:49

good point and so like he's

39:51

just saying like there's actually a

39:53

symbiosis between them right right and

39:55

I wanted to look in what

39:57

after what Luke said after what Luke said

39:59

you know stable coin demand with Bitcoin

40:01

price, like if there's a relationship there,

40:04

which I think there is. There is.

40:06

Yeah, I haven't looked at it in

40:08

in a while. It's, I haven't tracked

40:10

it against Bitcoin in particular, but in

40:13

general, stable coin volume. Yeah, like supply

40:15

rising is bullish for crypto markets broadly.

40:17

It does signal, and it makes sense,

40:19

right, because it signals capital inflow. Exactly.

40:22

Right. If we, you know, tether and

40:24

circle, which make up, you know, the

40:26

majority of the majority of the market

40:28

of the market, That means someone is

40:31

taking US dollars and sending them into

40:33

tokenizing them, right? And they're taking them

40:35

from without the crypto markets and bringing

40:37

them into the crypto markets. That's in

40:40

flows, it's effectively in flows. Yeah, and

40:42

Bitcoiners have been talking about this for

40:44

years in terms of stable coin issuers

40:46

being that demand for treasuries. Yep. And

40:49

like that's why, like I talked about

40:51

Scott Besson having to refinance 6.7 trillion,

40:53

and if he has to term that

40:55

out, the real problem is like, will

40:58

there be demand for the long dated

41:00

treasury bonds? And that's the worry, right?

41:02

Because the foreigners aren't buying as much.

41:04

You know, China's not buying as much

41:07

treasuries. Russia's not going to buy the

41:09

treasuries. You know, for a number of

41:11

different reasons, foreigners aren't buying as many

41:13

treasuries. The commercial banks, you just like

41:16

stuff them in there as much as

41:18

you can. You can kind of change

41:20

regulations, but they're kind of stuff full

41:22

of treasuries, too. You can change like

41:25

pension funds, like who's going to be

41:27

buying it. Stable coin issuers. They definitely

41:29

do. It's net positive for the dollar,

41:31

absolutely. Yeah, so like, and then it's,

41:34

that's an interesting, yeah, the, I got

41:36

to look at what Luke said too.

41:38

I saw people quoting this and I

41:40

haven't actually seen the clip yet, but

41:43

I was asked about this and the

41:45

symbiosis between not, we know that stable

41:47

coins are supportive of the dollar. Certainly

41:49

they extend its reach, like, literally becomes

41:52

easier to the dollar. than that let

41:54

alone sending money across a border but

41:56

it also extends the dollar because they

41:58

buy the collateral that the Treasury issues

42:01

the debt yeah but I hadn't thought

42:03

of the the idea that growing usage

42:05

of Bitcoin can also will also grow

42:07

the dollar I mean it's funny that

42:10

I hadn't thought of it in this

42:12

way because you're right we we've been

42:14

talking by the way critics of tether

42:16

have been talking about this for years

42:19

they just look at it backwards they

42:21

think that Heather is making up the

42:23

dollars and then using them to buy

42:25

Bitcoin. It's actually the opposite. People are

42:28

sending in dollars and using them to

42:30

buy Bitcoin, right? But I think that's

42:32

a really interesting idea. Yeah, I think

42:34

it's just interesting too because it shows

42:37

that there's a lot of different reasons

42:39

for people in general to want Bitcoin.

42:41

There are different drivers of Bitcoin adoption,

42:43

whether that's the adversaries trying to look

42:46

for some kind of protection against the

42:48

weaponization of the US system against them.

42:50

Or it's the US wanting to drive

42:52

more adoption of the dollar. It's kind

42:55

of like they're two sides. They're like,

42:57

okay, well I want this because of

42:59

the censorship resistance and nobody telling me

43:01

what to do. And then the US

43:04

is coming over here. He's like, well.

43:06

If we adopt more Bitcoin, then that's

43:08

going to increase demand for our treasuries.

43:10

And so it's just like, it's very

43:13

interesting, like dynamics going up, but it

43:15

all comes back to the same thing,

43:17

which is just more demand for Bitcoin.

43:19

It really is strange that thing somebody

43:22

has been said for everything is good

43:24

for Bitcoin. And like, it's really, you

43:26

know, that isn't true, not literally everything

43:28

is, but you're right, like competing. interests

43:31

and competitors both finding value in the

43:33

same this is what really makes it

43:35

feel like a commodity to me right

43:38

because like you know allies and adversaries

43:40

alike both need oil right or gold

43:42

or corn or whatever right like natural

43:44

gas so why not a digital commodity

43:46

I mean it makes sense but it's

43:49

just people even someone like me I

43:51

mean I'm following it for following it

43:53

and learning about it and studying it

43:55

for so long and it still surprises

43:58

me Yeah, the wide interest. Yeah, not

44:00

everything is good for Bitcoin, I guess.

44:02

I mean, I mean, banning it is

44:04

bad, isn't it? Well, Benny, this was,

44:06

so that's kind of off the table

44:09

now. I think that's why we've seen

44:11

the price. Yeah. It just doesn't seem

44:13

that possible anymore for. It's like, even

44:15

like Morocco was one of the, you

44:17

know, there are one of the, I

44:20

don't know, a dozen countries in the

44:22

world who have actually banned it. Yeah.

44:24

And it's funny because if you look

44:26

at chain analysis, like crypto adoption index

44:28

that they put out every year, in

44:31

2022, I think Morocco was like the

44:33

14th on that list, and then in

44:35

2023 it was like 20. So it's

44:37

one of the top. Top countries. Yeah,

44:39

it might be good for it. Yeah,

44:42

it's like, you know, you're banning it,

44:44

but it just shows that it's how

44:46

hard it is to ban it. They

44:48

called them the SARS protests in Nigeria,

44:50

where it was the, it was an

44:53

anti-police brutality protest movement, and they banned

44:55

it because they... debanked the protesters and

44:57

everyone started using Bitcoin. So then they

44:59

tried to ban it and it just

45:01

like exploded and used. So actually maybe,

45:04

yeah. Well, maybe, yeah. We know banning

45:06

it. I just brought that up because

45:08

like they pivoted, right? Yeah. Because they're

45:10

eventually, it's a sign that like, okay,

45:13

governments aren't going to ban it because

45:15

A, the ban wasn't effective. Right. And

45:17

B, you know, they just pivoted it

45:19

completely. And now they're saying, hey, we're

45:21

going to use it. competitors to the

45:24

U.S. or allies, allies, adversaries, everyone basically.

45:26

The U.S. says it's going to do

45:28

something. At a minimum, you have to

45:30

consider looking at it yourself. So if,

45:32

whether or not we get any, a

45:35

stockpile or reserve of Bitcoin in the

45:37

U.S. is one thing. we know we're

45:39

getting much more progressive and innovation focused

45:41

policies on this topic. So at a

45:43

minimum you've got to look at doing

45:46

the same, right? Morocco can't ban Bitcoin

45:48

while the US is considering adopting it.

45:50

That's the bad policy. Yeah, I mean,

45:52

and then the other thing that was

45:54

actually bad for Bitcoin is if they

45:57

cut off on ramps and off ramps,

45:59

you know, they'll adoption if they can't

46:01

ban it. So that was always like

46:03

a realistic I'd say risk of Bitcoin

46:05

just delaying adoption through I mean what

46:08

we saw with the banking for instance

46:10

you know we saw it we saw

46:12

like the weaponization of regulatory agencies against

46:14

the industry being able to operate in

46:16

the United States I mean this really

46:19

happened like Nick yeah brought a lot

46:21

of attention to it but I lived

46:23

I've lived it I you know I

46:25

worked at a Bitcoin company like we

46:28

we dealt with it our customers dealt

46:30

with it I mean it was very

46:32

very real it's crazy to me that

46:34

people are suddenly waking up about it

46:36

like we've been talking about it for

46:39

a long time I went to DC

46:41

maybe two years ago to talk about

46:43

this specifically with policymakers about what was

46:45

happening in terms of the banking and

46:47

so that risk also seems to be

46:50

off the table because there seems to

46:52

be a total change happening you know

46:54

Trump might I think he's about to

46:56

pick Paul Atkins for SEC check he's

46:58

reluctant to take the job yeah I

47:01

don't know exactly but it was reported

47:03

that Loreshin's outlet on Shane reported that

47:05

Atkins has been decided on the pick

47:07

In any case, he's been discussed as

47:09

a possibility. Yeah, and he's like the

47:12

co-chair of something called the token alliance

47:14

with the Chamber of Digital Commerce, which

47:16

is an initiative to like teach people

47:18

about this industry. Yeah, yeah. So I

47:20

think he's generally an advocate for innovation.

47:23

Yes. So it's a good thing. It's

47:25

a good thing to have like a

47:27

change of guard across the board that's

47:29

more open to this industry just to

47:31

stop some of this unconstitutional debanking banking.

47:34

And when they came in and. the

47:36

45th presidency, Trump won, they instituted the

47:38

fair access rule and undid Operation Choke

47:40

Point 1.0. So there's quite even, aside

47:42

from crypto and Operation Choke Point 2.0

47:45

and what happened and the noise about

47:47

it and advocating to undo that, the

47:49

Trump presidency already did undo it once,

47:51

right? Like so we, very high likelihood,

47:54

I agree that it rolled back. deference

47:56

too I mean it's it's big it's

47:58

like Sab 121 is a me a

48:00

perfect example of that where it's just

48:02

like a regulator a regulatory agency just

48:05

like throwing down some random rule making

48:07

stuff up yeah where the experts this

48:09

is what we should do and it

48:11

was actually you know the banks were

48:13

like we don't want this like nobody

48:16

wants this I don't think the bank

48:18

regulators wanted that they might want it

48:20

but they want to do it themselves

48:22

so this The effect, I mean, they

48:24

did it as a public company accounting

48:27

rule, right? It's not only banks, but

48:29

like, I mean, there's only one public

48:31

company that cussities Bitcoin, it's coin base.

48:33

So like it's basically like either you're

48:35

referring to just coin base or you're

48:38

also talking about every single bank, which

48:40

almost all of them are public companies,

48:42

right? So it dramatically obviously affected banks.

48:44

And I feel like they're saying, you

48:46

know, SEC, FD, FDIC, OCC, NYDFS, whomever.

48:49

Like, wait a second, like, this is

48:51

a policy that is basically a banking

48:53

regulation you've created. Yeah. That's not in

48:55

your remit. That's supposed to be in

48:57

our jurisdiction. So, like, even they didn't

49:00

like it. Yeah, I mean, Congress didn't

49:02

like it. No, Congress, yeah, Congress passed

49:04

a, I think, technically a measure of

49:06

disapproval of it, officially speaking. Yeah. The

49:09

Congressional Review Act. that passed both houses

49:11

of congress and the president had to

49:13

veto it right and it was crazy

49:15

so like that was crazy these that

49:17

is crazy and like even like the

49:20

the ABA you know the lobbying groups

49:22

for the banks wrote letters saying yeah

49:24

we don't want this like we want

49:26

we want to be able to custody

49:28

Bitcoin on behalf of our clients right

49:31

that's all they're saying like we want

49:33

to be able to serve our clients

49:35

which is the craziest thing because You

49:37

know, while they stop the most regulated

49:39

institutions in the country, you know, they'd

49:42

allow like the FTX that happens. Yeah.

49:44

So it pushes people away from like

49:46

very, you know, quote unquote, safe. Like

49:48

I think self-custs your Bitcoin, but like.

49:50

And I do too, but like, again,

49:53

institutions can't, right? Oh, but it pushes

49:55

people. And look, Coinbase is a great

49:57

company, like, so I'm, but you know.

49:59

if you're an institution, coin base is

50:01

a great company to be clear, I'm

50:04

not throwing shade on them, but you've

50:06

got a younger technology, you know, company

50:08

like coin base, or you've got Alexander

50:10

Hamilton's Bank, or you've got State Street,

50:12

you know, or like, these are the

50:15

largest custody banks in the world. So

50:17

like, wouldn't you want them to be

50:19

safeguarding this stuff too? Being my melon

50:21

and State Street, I mean, they were

50:24

building out their custody services for, I

50:26

remember. years ago they started doing it.

50:28

State Street had a whole, I mean

50:30

in like 17 they employed like 50

50:32

hyper ledger developers at one point, right?

50:35

Right, I mean. And they had to

50:37

stop though because of these like silly

50:39

rules and like the regulatory tape and

50:41

restrictions, which is sad, right? It kind

50:43

of probably delayed things a little bit.

50:46

I do think your point though that

50:48

the approach particularly at the SEC under

50:50

under Chair Gensler it

50:52

had an opposite effect. It

50:54

pushed, it kept out good

50:56

players or punished good players

50:58

and let too many bad

51:00

actors through. Yeah, so. All

51:03

those things I would say were net negative I

51:05

guess for for Bitcoin adoption for for Bitcoin's price

51:07

and now it seems like the pendulum has shifted

51:09

so you would just think that these things are

51:11

going to be positive for Bitcoin adoption and Bitcoin's

51:13

price I mean it just makes sense better solutions

51:16

you know improve maturing market infrastructure better access. Yeah,

51:18

these are all good things. All right, Sam, before

51:20

we wrap, where can people find you? Where can

51:22

they read the news block? Yeah, it's the news

51:24

block dot subsack.com. We'll throw in the show notes.

51:26

Yeah, yeah. It's just, you know, Natalie and I

51:28

kind of work on like a market update every

51:31

week, where we just kind of pick three or

51:33

four of the most important stories. Curate, have all

51:35

the links in there, all the interesting reports I

51:37

find. I just kind of throw it all in

51:39

one place that people see. Natalie reads it really

51:41

well like she does and doing a little video

51:44

now. it, charts, all that

51:46

kind of stuff. that can

51:48

find that there. I'm

51:50

on Twitter all the time

51:52

on X, I guess. that

51:54

there. I'm .com, sorry. website, great

51:56

website. X. No, on X, I

51:59

yeah. Yeah, X app. X.

52:01

X. X. -A -M -C -A -L -L -A

52:03

-H. And also you can

52:05

find that liquidity report

52:07

I did with X app. At Sam.

52:09

That's on At Sam. website. At

52:11

Sam. At Sam. At Sam. this has

52:14

been great. Sam Callahan,

52:16

my friend. you so much

52:18

for coming. At Sam. it. it.

52:20

That's it for this week's it for

52:22

this week's episode of Brains.

52:24

Thanks to our our guest

52:27

Sam Sam Callahan from the news block.

52:29

Check him out. We'll put

52:31

his stuff in the

52:33

show notes. our And our

52:35

friend, from Galaxy you Trading as As

52:37

always, everyone have a

52:39

safe and happy weekend and

52:42

we will see you

52:44

next week. week. Thanks

52:50

for listening to Galaxy Brains,

52:52

the weekly podcast from Galaxy Research.

52:54

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52:56

please you rate, the show, and subscribe rate,

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