ROLLUP: Are Record Inflows Good For ETH? | New Crypto & AI Czar | Record Liquidations | Where To Next? AI transcript and summary - episode of podcast Bankless
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Episode: ROLLUP: Are Record Inflows Good For ETH? | New Crypto & AI Czar | Record Liquidations | Where To Next?
Author: Bankless
Duration: 01:06:45
Episode Shownotes
This week on the Weekly Rollup: Bitcoin briefly plunged to $93K amidst $1.1B in crypto liquidations, marking the largest single-day event since 2021, with $815M wiped from long positions alone. Meanwhile, Ethereum ETFs hit a record inflow day of $428M, and Layer 2 solutions like Mantle are driving the ecosystem
forward with nearly 1M ETH bridged to Base. On the regulatory front, the crypto world sees both challenges and opportunities as Trump appoints David Sacks as Crypto Czar while Microsoft shareholders reject Bitcoin on their balance sheet. With bullish predictions, such as Bitcoin reaching $250K, and major milestones like 1B unique crypto addresses, the crypto market continues its rollercoaster of volatility and growth. ------ 📣 DYDX | UNLIMITED ERA https://bankless.cc/dydx-unlimited ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 🦄UNISWAP | BUG BOUNTY PROGRAM https://bankless.cc/Uniswap-Bug-Bounty 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle 🐧 CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiSimple 📈 iYield: YOUR FINANCIAL PICTURE, SIMPLIFIED https://bankless.cc/iYield 🔒 SAFE | INTRODUCING SAFENET https://bankless.cc/SAFE ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/113?referrer=0x077Fe9e96Aa9b20Bd36F1C6290f54F8717C5674E ------ TIMESTAMPS & RESOURCES 00:00:00 Trump On Bitcoin Reserve https://x.com/tftc21/status/1866895723410673988?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 00:03:43 MARKET https://x.com/QuintenFrancois/status/1866445089909653545 https://x.com/DegenerateNews/status/1866957840805409049 00:13:47 L2 Update https://x.com/jessepollak/status/1867047990843916334 https://dune.com/eekeyguy_eth/eth-supply-tracker 00:16:40 Bitcoin Reserve https://x.com/InvestorAsh/status/1866221541400219847 https://x.com/el33th4xor/status/1866255029033943551 00:27:06 Donald Trump appointed David Sacks as a Crypto and AI czar https://truthsocial.com/@realDonaldTrump/posts/113603133222686186 https://x.com/BitcoinNewsCom/status/1864857461481422934. https://x.com/DavidSacks/status/1865199683087245405 00:32:26 CFTC Chair Rumors https://x.com/emiliemc/status/1866686542649102586?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 00:34:08 SEC - Crenshaw https://x.com/eleanorterrett/status/1866981517932822540?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g https://x.com/brian_armstrong/status/1865913522670260680 https://x.com/masonlynaugh/status/1866877145902948483 00:39:52 Should Ethereum Pump The Gas https://x.com/dankrad/status/1863412876901306599 https://x.com/dankrad/status/1867078641118789787 https://x.com/drakefjustin/status/1865894859468427 00:44:44 MOVE Token https://x.com/movementfdn/status/1866093209719579011 00:46:00 Magic Eden https://x.com/MagicEden/status/1866483682367693227 https://mefoundation.com/ https://www.coingecko.com/en/coins/magic-eden 00:46:37 Pudgy Airdrop https://x.com/pudgypenguins/status/1864851993094664602 https://nftpricefloor.com/pudgy-penguins 00:51:38 EtherRocks https://x.com/etherrock/status/1865480491773640830?s=46&t=2ZINVXJQKx6xO_6Wiiu_2g 00:53:30 Quantum Computing https://x.com/InvestorAsh/status/1866221541400219847 https://x.com/caprioleio/status/1866355221670302170 https://vitalik.eth.limo/general/2024/10/29/futures6.html https://x.com/el33th4xor/status/1866255029033943551 00:59:36 Stablecoin News https://x.com/jerallaire/status/1866733181728366593 https://defillama.com/stablecoins https://x.com/aave/status/1866127138820112562 https://x.com/defiignas/status/1866831563272712393 01:05:16 Meme Of The Week https://x.com/sherlock_hodles/status/1866557875671187912 ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures
Full Transcript
00:00:03 Speaker_09
So David, did you see this? Donald Trump was asked by Jim Cramer about crypto this week. Should we just play the clip? Yeah, absolutely.
00:00:11 Speaker_01
You're embracing crypto. Very different from the previous administration. Strategic petroleum reserve like for crypto?
00:00:17 Speaker_00
Yeah, I think so. We're going to do something great with crypto because we don't want China or anybody else, not just China, but others are embracing it and we want to be the head. We're going to be ahead of AI. We're going to be way ahead of AI.
00:00:28 Speaker_00
And we've got to produce tremendous amounts of electricity. You know that it's unbelievable when you think that we need more than twice what we already have. If you think that's pretty for a specific industry, but we'll be able to do it.
00:00:42 Speaker_00
We have Lee Zeldin in charge of the environment. He's going to be giving us very strong approvals, I think, and he's going to make sure everything's good and clean and proper, but he's going to give us very fast approvals. There you go.
00:00:53 Speaker_09
Donald Trump's saying he will be doing something great. Full send.
00:00:56 Speaker_08
Great with crypto. Full send. It's for him. Donald Trump, I don't even know if he knows what accelerationism is, but he's embodying it and he's leaning in. Oh, that's exactly what I was going to say. It's just full. Turn it up to 11.
00:01:07 Speaker_09
Yeah, it's an accelerationist kind of like, what are the accelerationist tech, AI, energy, and crypto. Boom, all three. We're going to be great. We're going to exceed China. That's his message today. It is. I will admit, it is pretty refreshing. Wow. Okay.
00:01:20 Speaker_09
Well, we are in the second week of December. It's time for the Bankless Weekly Rollup.
00:01:24 Speaker_08
In the world of politics, crypto and AI has gotten a czar. Who is he? And will he be all in on crypto? You have heard him on this podcast before. We have clipped some of his content before.
00:01:37 Speaker_08
Also, Liquidation Thursday, right after we finished recording the Weekly Rollup last Thursday, crypto prices tanked. Record liquidations in crypto as leverage washes out of the market. But we're back. Leverage is back on the menu.
00:01:51 Speaker_08
The Dgens are gambling. We're not stopping here. Ethereum is getting record ETF flows. So we'll talk about that, painting some pretty big numbers. And then also is the Ethereum layer 1 finally getting a scaling upgrade.
00:02:05 Speaker_08
There are some murmurings in the EF camp and in the L1 capacity world. We're going to talk about that. A bunch of tokens launches this week. MOVE, ME, Magic Eden, and Pengu, and MicroStrategy.
00:02:16 Speaker_08
is expected to enter the QQQ, and how will that change crypto's market structure? These are the subjects, but there's like 20 more that we're going to get into as well throughout this episode.
00:02:25 Speaker_08
But first, before we get to all of those, a message from our friends and sponsors over at DYDX, which is introducing its whole new era, Unlimited, DYDX Unlimited.
00:02:35 Speaker_08
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00:03:05 Speaker_09
There is a link in the show notes. I'm seeing a 49% yield here for the megabyte.
00:03:09 Speaker_08
Yeah. That's pretty juicy. Measured today. We'll see. We'll check back in next week and see what it's at next week. Bankless.cc slash dydx hyphen unlimited.
00:03:19 Speaker_08
There is a link in the show notes so you can position your USDC and receive yield and do other things that dydx offers.
00:03:27 Speaker_09
I was pretty bullish when we talked to Antonio on Twitter a couple weeks ago on DYDX Unlimited, particularly this permissionless perps. Imagine AI agents creating a permissionless perps.
00:03:39 Speaker_08
I'm not sure I'm ready for that. You're ready for it.
00:03:42 Speaker_09
Let's talk about the market price this week. We got Bitcoin and another week, not an all-time high, can't say that, but we are above $100K, aren't we, David? What are the numbers on the week?
00:03:53 Speaker_08
Even with the nuking that we all experienced last week, Bitcoin is up 0.2%. On the week, we are still... Not two, point two. Not two, point two. We are green on the week, call it flat. Start of the week, $101,400. Ending of the week, $101,600.
00:04:09 Speaker_08
Actually, it's up $100 since I brought these numbers in, so maybe we're up .4.
00:04:13 Speaker_09
Actually, this feels really good because on Thursday, as you mentioned, we got a massive liquidation. This was a sell-off. Some people were saying it was over, David. at that point in time.
00:04:22 Speaker_08
Idiots.
00:04:23 Speaker_09
Not me. First cyclers. Not me. I think it's a lot of the, you know, people that are like looking in on crypto.
00:04:30 Speaker_08
We're like, ha, see, I told you. You hit 100K. Told you it's a scam. Dropped down to 20. You got scammed.
00:04:35 Speaker_09
Bitcoin always crashes, idiots. Anyway, that's a pretty steep candle here. Look at this. Did we go from 102K all the way down to 92?
00:04:44 Speaker_08
To 92 and then we whipped back up. What? Yeah. That's like a 10K drop.
00:04:48 Speaker_08
Do you remember April, May, May of 2021 after ETH ran from $1,000 to $4,000, Bitcoin did something similar, liquidity just dropped out of the market and ETH crashed from like $4,100 down to like $2,300. And liquidity just ran away from the market.
00:05:07 Speaker_08
The floor just fell out of the entire market. Now, was that the fair price for Ether? Was that a justified crash? Well, in the narrow timeframes, yes. Liquidity couldn't enter the market that fast.
00:05:16 Speaker_08
In the zoomed-out timeframes, no, because ETH just went back up to $4,000. It took it half a year to do that. But just a reminder, liquidity can just flee this market so fast.
00:05:28 Speaker_08
And this is why we can go and drop, this is a small drop in the grand scheme of things, but it is a reminder that how fast liquidity can change in this market.
00:05:37 Speaker_08
And you can make very big movements very, very quickly, which is why so many people got liquidated.
00:05:42 Speaker_09
Yeah, it's healthy too. I mean, this kind of thing needs to happen. We're kind of like, you know, cleaning up all the scraps here. I guess I was expecting, after that kind of a liquidation, a 10K drop in Bitcoin price.
00:05:52 Speaker_09
The rest of the market, of course, followed suit. I was expecting a longer duration. The fact that we are fully recovered now, David, tells you that we are in a bull market.
00:06:02 Speaker_08
We are bullish. A mega bull market. People are bidding.
00:06:05 Speaker_09
That kind of liquidation doesn't tend to recover so quickly. But give us the stats on the liquidation, like this chart we're looking at.
00:06:11 Speaker_08
What's this? $1.1 billion in liquidations across centralized exchanges. That's the largest daily crypto liquidation since December of 2021, which is when the market started to turn. $815 million liquidations came from long positions.
00:06:26 Speaker_08
$280 million came from short positions, which I don't know how they did that. Who's shorting this? I don't know. I don't know why anyone would short crypto. I do not know. And with that market turbulence behind us, people are still very bullish.
00:06:38 Speaker_08
Not just crypto people, but also Tom Lee. Tom Lee went on CNBC earlier this week predicting $250,000 Bitcoin. Let's go ahead and listen to Tom Lee.
00:06:46 Speaker_03
But how much of what we're seeing, maybe even a little bit today, is there's been such a regulatory overhang on a lot of these names under the current administration. Now you have a new FTC chairperson. Is that playing a role in any respect to this?
00:07:03 Speaker_03
Because Dan Ise put out a note today, said Christmas comes early with the new head of the FTC for tech.
00:07:10 Speaker_07
It's probably the best way to sort of measure this is what Bitcoin's doing, because Bitcoin faced enormous regulatory burdens over the last few years. And now we have a White House that's embracing digital assets, a new SEC chairman, FTC chairman.
00:07:28 Speaker_07
a new commerce secretary. I think these are actually being viewed as pro-business, reviving animal spirits, but I think a good proxy is watching Bitcoin.
00:07:37 Speaker_03
All right, now I'm going to have to pin you to a target again on Bitcoin because, I mean, you've been among the most optimistic and outspoken about it for years, to be quite honest. So here we are above $100,000.
00:07:49 Speaker_03
What's a legit target for 2025 for Bitcoin?
00:07:52 Speaker_07
We think it's going to follow a similar halving cycle that we've seen in the past that would imply something around $250,000 for Bitcoin in 2025.
00:08:03 Speaker_07
And on top of that, we have a trump put because Bitcoin is potentially a strategic reserve asset for the world.
00:08:08 Speaker_09
There it is. 250K as his base target, plus the Trump put on top of that. I got to say, Tom Lee has totally culled this in the last half part of the year. We had him on in August.
00:08:20 Speaker_09
You remember, this was right after the yen trade dip, where the stock market plunged, and everyone was talking about recession worries and all of these things. And he was like, not a recession. We're still in a bull market.
00:08:33 Speaker_09
You're going to see higher highs in NASDAQ, S&P, and then also, and most especially, crypto. So Tom's been right on in kind of the last quarter of this year. On the other side of that, though, is the Microsoft board.
00:08:46 Speaker_09
You'll recall, David, we were talking about the last couple of weeks. They had the opportunity to vote, shareholders, that is, of Microsoft, on whether to add Bitcoin to their balance sheet.
00:08:55 Speaker_08
So the company- Obviously they did it, right?
00:08:57 Speaker_09
Why wouldn't they do it? What was the vote? Well, they put it on the balance sheet, right? Big company, a lot of cash reserves. What are you going to do with all that cash? Would you buy back your shares? You're going to buy Bitcoin.
00:09:06 Speaker_09
Or you do what Michael Saylor's doing. It's working for him. That vote got turned down, and not just by a little bit. Only less than 1% of Microsoft shareholders actually voted yes on that one.
00:09:16 Speaker_08
Is it too early in this market cycle to say, have fun staying poor?
00:09:21 Speaker_09
I mean, they don't have to buy Bitcoin. Microsoft shareholders are doing okay this cycle. Have fun staying poor. Microsoft shareholders. Wow. Wow. I don't know. I mean, they don't have to buy Bitcoin.
00:09:34 Speaker_09
In fact, I think it's kind of silly sometimes for big balance sheet corporations to kind of ... They should be investing in their business.
00:09:42 Speaker_08
What are they doing with it instead? Dividends.
00:09:44 Speaker_09
Right now, all I ... Give me dividends. Give me dividends. I don't know. I'm a dividend man. Give it back to shareholders. If you don't have anything to do with it, don't try to run a fund or something like that, keeping cash. Don't do a Michael Saylor?
00:09:56 Speaker_00
Yeah.
00:09:56 Speaker_09
I don't know if that's old school or what that is.
00:09:58 Speaker_08
Tell me about ETH price, David. ETH price. $3,925 is where we started, up 1% to $3,942. ETH price during the big wick went from $3,900 down to $3,500. It has since bounced back. But it recovered slightly more than Bitcoin did.
00:10:05 Speaker_08
Still below that $4,000 mark. So we did get across $4,000 last week, which is pretty cool. Which is also when we recorded. It's something like $4,813 or $50. Real all-time high will happen around $4,900. That's true all-time high. That counts.
00:10:29 Speaker_08
But it's really $5,000 is the number to beat. I think we could be all-time high ETH in December. Oh, I totally agree. Yeah, sure.
00:10:46 Speaker_08
That's totally within reason all-time high December all-time all-time highs Yeah, you could paint $1,000 like weekly candle for sure It's all discovery like when we're getting this 4k range and above you could just see it just wants to punch through it wants to punch through so Ryan I right after this weekly roll up I hop on a flight back to the Patagonia to go walk around some mountains.
00:11:04 Speaker_08
I'm out of No cell service, no Wi-Fi for like eight days, nine days. So you can't check price. Which is an entire weekly candle of price action.
00:11:13 Speaker_09
You don't have like Starlink or something? You can just like dial in and check the prices? Not, not, I'm not backpacking on Starlink.
00:11:19 Speaker_08
No, no, no, no. So we'll see. We'll see what happens when I get back. But I'm going to be like, it's just going to be one price when I leave and a completely different price when I get back. Yeah, so.
00:11:28 Speaker_08
You're going to do the weekly roll with Zazzle next week, so I will be out.
00:11:31 Speaker_09
Yeah. So are you saying like, I guess there's a history of David goes out and good things happen for crypto.
00:11:35 Speaker_08
Things have happened. Correct. Things have happened. It's all been regulatory stuff. And like, there's no like more regulatory person to ask. Like we've already asked to ask to them all.
00:11:47 Speaker_09
I mean, it's about time for the market to figure out how bullish this space is. It's building. It's still building. One thing you can see that's building are these ETH inflows, man. It has been crazy. Look, total net inflows now.
00:12:01 Speaker_09
Last week, I remember it was just above $1 billion. Now, it's almost $2 billion in total Ethereum ETF inflows.
00:12:08 Speaker_08
No, I think, if I remember correctly, last week we were saying, it was the fourth, I think, and we were saying we are going to break above a billion by this time next week. Okay, we're just under a billion.
00:12:18 Speaker_08
The next day it painted 0.43 billion in one single day, $430 million in inflows the next day. And now we are about to cross two billion. So we've added basically a billion dollars of inflows in seven days. That's crazy, crazy.
00:12:34 Speaker_08
And you can see this on the charts here.
00:12:36 Speaker_09
See this green line here? This is when we started to get into positive inflow territory. It looks like the inverse burn. It looks like the inverse burn. It's actually a fun fact. How much do you think percent of total supply is inside of ETFs right now?
00:12:56 Speaker_09
1% to 2%. It's higher, David. We are 3%, I want to say.
00:13:03 Speaker_08
3%? I'm just looking at this. Oh, no, 2.78%.
00:13:06 Speaker_09
OK. All right. That's pretty good.
00:13:09 Speaker_08
That's pretty good.
00:13:10 Speaker_09
And a lot of it has happened in the last month. Almost one MicroStrategy's worth of heat in there. It's just looking good. How about the ratio?
00:13:19 Speaker_08
Ratio, I will say it has neither shown strength nor weakness. It has shown flatness since we started the month. But historically, December has been a very good month, so we'll see what the rest of this month has in store.
00:13:34 Speaker_08
Total crypto market cap, we are almost at $4 trillion. $3.85 trillion, which is just nuts. We'll be at $4 trillion. We'll probably be at $4 trillion this year, before you know it. Next week, it's within reason.
00:13:48 Speaker_08
Also, Layer 2 update brought to you by Mantle, a Layer 2 that we know and love. Jesse from BASE says, countdown to 1 million ETH bridge to BASE. We are at 994,000 ETH in the BASE bridge contracts.
00:13:59 Speaker_08
And Mateus from GrowThePie put out the tweet that I liked. Today, three years ago, the median transaction costs on Layer 2s like Arbitrum, OP, Mainnet were between $2 and $5. Now they are between $0.001, so one-tenth of a penny.
00:14:14 Speaker_08
and five pennies, 99% cheaper. Long way. We've come a long way since 2021. Still a lot of juice left to squeeze.
00:14:19 Speaker_09
I think that's a pretty good story for Ether. It's getting locked up in Layer 2s, right? So you got like about 3%, maybe 4% of ETH supply in Layer 2s. You got another 3 or 4% inside of ETFs, Ethereum ETFs.
00:14:33 Speaker_09
That's a pretty good story, I think, for the cycle, while you have fees dropping on Layer 2s. So, you know, some tailwinds there, certainly.
00:14:42 Speaker_08
And then movers of the last two weeks, we usually do movers of the week. We're doing movers of the last two-day period. We have some pretty impressive numbers. Aave is up an incredible amount. I couldn't believe it when I saw $366 Aave.
00:14:53 Speaker_08
That's up something like 60% in two weeks. Is that all-time highs? No, I was talking about something like $600. Really? OK. But it got there in the peak of DeFi summer. So Aave up 40% on the week, up 83% in two weeks. Aave is up 83% in two weeks.
00:15:11 Speaker_08
Well, I mean, it's just hitting numbers. And that is a DeFi index.
00:15:15 Speaker_09
I mean, it's hitting record numbers in terms of loan value. Also, the World Liberty Finance, Trump and team, buying Aave. They're buying a ton of ETH, they're buying a little bit of Bitcoin, they're buying Aave, and they're buying LINK right now.
00:15:29 Speaker_09
They're buying the Aave token? Yeah, dude.
00:15:31 Speaker_08
Well, they're building on Aave, so why wouldn't they? DyDX is up 28% in one week and up 50% in two weeks. That's probably triggered by the hyperliquid airdrop in Meta.
00:15:44 Speaker_08
The hyperliquid new token, brand new token, is up to $18 billion when it launched at something like $4 or $5 billion last week. That's pretty crazy. That's been an incredible breakout story. Aerodrome on base up 22% in seven days, up 66% in 14 days.
00:15:59 Speaker_08
Athena is up to $1, coming up to 56% increase in two-week period. And then Uniswap at $18, up 42% over two weeks. DeFi tokens catching bids. Again, consistently, consistently getting bids.
00:16:15 Speaker_09
I got to be honest, this collection of tokens here makes a lot more sense to me than what we were talking about the previous two weeks of XRP being up 80-90%. There's some fundamentals back here. All of these protocols are doing something, right?
00:16:31 Speaker_09
And doing something big. So this is like DeFi renaissance territory.
00:16:35 Speaker_08
All of these have cash flows to them. Every single one.
00:16:39 Speaker_09
Yeah, it's amazing. So suffice it to say, things are going pretty well right now in crypto land. It is a full on bull market and everyone's very excited. Now, we might be in a crypto bubble of sorts, right? We live and breathe this stuff.
00:16:53 Speaker_09
It's all we talk about. We're like permabulls have been since we entered this space. There is another section of the world. that is not in this crypto bubble at all. I ran across this clip.
00:17:06 Speaker_09
This is a news anchor on MSNBC in the context of Trump kind of pivoting super pro crypto, talking about a Bitcoin reserve. This is the type of conversation that's going on on MSNBC. I'm just going to play the news anchor here.
00:17:21 Speaker_05
And in the new Congress, a Senate Republican, I want you to please pay attention to this. I know you want to tune out, but please don't. They plan to propose a bill that would sell off some of the Federal Reserve's gold to buy Bitcoin. Watch this.
00:17:35 Speaker_09
I just want to pause it here, because that's not even correct. That's not what Lummis is proposing, Senator Lummis is proposing. Remember, we had her on the podcast. She's not talking about selling any gold, okay?
00:17:44 Speaker_09
She's talking about adjusting gold, the fair market value of gold and balance sheet, essentially to its fair market value instead of its book value. So, we're not talking about selling any gold.
00:17:55 Speaker_09
Anyway, that's flat out incorrect, but let's continue playing.
00:18:00 Speaker_04
Have we got a president for President Donald Trump? Here it is. This is the Bitcoin Reserve Bill. Over five years, the United States will assemble one million Bitcoin, 5% of the world's supply.
00:18:25 Speaker_04
And it will be held for a minimum of 20 years and can be used for one purpose. Reduce our debt.
00:18:39 Speaker_05
Well, Cynthia Lummis, you can take that bill and sit down with me any night of the week. And I would love to go through every word, every paragraph, every page. But I'd first like to know how much the crypto industry has given you.
00:18:53 Speaker_05
Because for fact's sake, you cannot pay debt down with Bitcoin. If Bitcoin crosses the $100,000 mark, like it did last week, that means it would cost the government at least $100 billion.
00:19:07 Speaker_05
And former SEC official John Reid was on 60 Minutes last night to sound the alarm about just how dangerous this industry is.
00:19:14 Speaker_06
Listen to this, David. Crypto is a scourge. It's not something that you want in your society. It has no utility. fifth I didn't joke.
00:19:41 Speaker_08
Think of anything bad. Let's associate Bitcoin with everything bad. Wow. You know what I thought while I was listening to that whole thing? What's that? This is such a great marketing tool for Bitcoin. Yeah, it really is. It's so bullish. It is so bullish.
00:19:56 Speaker_09
It's just everywhere. Once you cross $100K, even those that are kind of like triggered by the Bitcoin reserve and the $100K price point, they start talking about it too. And attention feeds into crypto like nothing else.
00:20:09 Speaker_09
Do you know actually who that was, John Reed?
00:20:11 Speaker_08
John Reed? No, tell me.
00:20:12 Speaker_09
Yeah, so that was a 60 Minutes interview on Sunday that aired. And Brad, the Ripple CEO, was on there. This guy was on there. John Reed is an SEC prosecutor. So he was like one of the ones who was going after crypto.
00:20:27 Speaker_09
So you could kind of see the fervor through which they pursued. Actually, I want to play some more of this clip because then they had some guests on MSNBC. And let me just play this for you.
00:20:52 Speaker_05
which one? they know nothing about it
00:21:11 Speaker_02
I mean, it's wild people are mad right now about the health insurance industry's profits 100 billion dollars That's a couple of years of the entire industry's profits that would be spent buying bitcoins from people who are yes It hasn't delivered on any of its promises it's as old as uber it's old as whatsapp, but nobody's really using it No one's using it for anything
00:21:37 Speaker_02
a while
00:21:57 Speaker_08
Like, okay, probably the woke lefties are watching this and they're like, okay, I'm fearful of Bitcoin now. But then if the average person watched that, they were like, oh, the government's going to pump Bitcoin. I'm going to go and buy Bitcoin.
00:22:12 Speaker_08
Thank you. I'm listening to that and they are just telling the world, not with the right tone, but like, yo, the government's going to buy Bitcoin and isn't that terrible? And I'm like, the government's going to buy Bitcoin. I'm going to buy Bitcoin.
00:22:25 Speaker_09
Well, it's just interesting because I think it's because Trump is supporting it that they have to be on the other side of that.
00:22:30 Speaker_08
Right.
00:22:30 Speaker_09
Because this is, you know, MSNBC. And so they have to do that. But this is a narrative that that's also going on. It just sounds like I believe me. I know what Cope sounds like. OK, so I'm an ETH holder.
00:22:41 Speaker_08
OK, that probably sounds like what it was like to listen to Bankless when Solana was pumping so goddamn high.
00:22:49 Speaker_09
All right. Well, you know, the interesting thing about all of this, all this discussion is anybody who's listening to that and has stocks will likely have purchased
00:22:58 Speaker_09
will likely be a net purchaser of Bitcoin in the future, because MicroStrategy, this month, is very likely to enter the NASDAQ indice.
00:23:07 Speaker_09
A lot of the people who own mutual funds, of course, they're invested in the NASDAQ, they're invested in the S&P 500. If MicroStrategy enters the NASDAQ, then they'll essentially own Bitcoin.
00:23:19 Speaker_09
MicroStrategy is a holding company for Bitcoin, so they'll own Bitcoin without even knowing it. I find that ironic. Also, BlackRock this week, People have been asking BlackRock all the time, hey, what percent of crypto should I hold?
00:23:32 Speaker_09
What's the reasonable range as a percentage of my portfolio? They finally came out and gave us a number, and that number is not 1%, it's 2%, which is a lot. A doubling. That's a doubling. A lot coming from BlackRock.
00:23:48 Speaker_09
Four years ago, BlackRock was saying 0%, and then it was get off zero, now it's 2%.
00:23:54 Speaker_08
All right, that's a wrap on the market section. Coming up next, Trump has appointed the crypto czar. We're going to introduce you to David Sachs, if you don't listen to the All In podcast.
00:24:02 Speaker_08
Also, a new name for the CFTC chair that would be pretty bullish for crypto. If you are a longtime bank assistant, you have heard of this man before. And a reconfirmation vote for SEC Commissioner Caroline Crenshaw. is up in the air.
00:24:14 Speaker_08
Will she be reconfirmed? Will she be confirmed? We do not like her. She was Gary Gensler's right-hand lady. So we're going to bring up this conversation and more.
00:24:22 Speaker_08
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00:27:03 Speaker_08
All the details from eligibility and scope to the rewards are there.
00:27:06 Speaker_09
OK, let's set the scene here. We've got Trump, of course, new administration. We've mentioned some of the cabinet positions in previous weeks. And just the overall context here, David, is this is a 180 on crypto that we're seeing. It's like whiplash.
00:27:20 Speaker_09
I think you called this in our conversation with the Bitwise guys earlier this week. It's like a whiplash, but in a good way, because the previous administration was so hostile. 10 out of 10 hostile.
00:27:31 Speaker_09
10 out of 10 in ways we didn't know was actually going on. They were hostile. And the opposite is happening. The new administration in the executive branch- 10 out of 10 favorable. Yeah. It's like a pro-crypto army on the other side.
00:27:44 Speaker_09
Some people will look at this, like the MSNBC host previously, and say that this is bad. This is an example of corruption or something like this. We are unapologetically pro-crypto. So for us, crypto is a freedom technology. This is clearly good.
00:28:00 Speaker_09
We need it to pivot in the other direction in the United States. Now, I do think it's important that we continue to preserve the decentralization values of crypto and not become kind of a banking cartel. But this is definitely the step that we need.
00:28:14 Speaker_09
So all of that is context. We're gonna talk about a few more of the executive types of positions. But the first is this, the crypto czar, David, Can you give us some context? What happened this week with that position?
00:28:27 Speaker_08
So it was the position itself was announced. TBD on what a SAR position is. I think it's more symbolic in this present moment, but it's probably something along the lines of like Trump's chief advisor. We'll talk about that here in a sec.
00:28:42 Speaker_08
Crypto and AI call it like tech czar, frontier tech czar. They combined it, right? They combined it. Yeah. And you also heard Trump talk about crypto and AI in the same breath when we opened up this podcast. It's accelerationist.
00:28:55 Speaker_08
So call David Sachs the czar of accelerationist technologies in the United States. It's going to be something adjacent to deregulation. We know that if you listen to the All In podcast, basically all of them are fans of deregulation.
00:29:08 Speaker_08
If you don't know David Sachs, he is a member of the PayPal mafia. He also founded Yammer, sold it to Microsoft in 2012.
00:29:16 Speaker_08
He's a general entrepreneur, venture capitalist, co-host of the All In podcast, which is definitely one of the most dominant podcasts that are out there.
00:29:23 Speaker_08
Big fan of Elon Musk, big fan of Peter Thiel, definitely in the inner circle of right-wing tech Silicon Valley types. He also commented on Operation Chokepoint, so he is aware of Operation Chokepoint. He's got exposure to crypto.
00:29:40 Speaker_08
So his VC fund, Kraft, invested into BitGo and BitWise. And then also, I think he has personal investment into multi-coin capital. So he has a lot of Solana exposure, or maybe it's through Kraft, one of those two things.
00:29:53 Speaker_08
He also launched an AI-powered work chat app called Glue. He says to support a freer ecosystem, empowering AI companies to grow. Strongly against AI models displaying any sort of censorship. So open source AI, open AI.
00:30:07 Speaker_08
and advocated for the integration of AI technology into warfare and national security tools. So, depends on how you feel about that. And so, big question. What is ASAR and what does ASAR do anyways? Do you have any clarity on this for me, Ryan?
00:30:23 Speaker_08
Because I do not know.
00:30:24 Speaker_09
Yeah, a czar. I mean, that's a good question. It's certainly not a role that's like, you know, in the Constitution or in any legislation anywhere. Right. So as you said, it's unclear how much power this position actually holds.
00:30:36 Speaker_09
There was a article this week from Bloomberg, and according to Bloomberg, the The designation is a special government employee, okay? So this is like a part-time role. It doesn't require him to divest of his assets.
00:30:51 Speaker_09
It's not like a public servant in that way. Or he doesn't even have to publicly disclose his assets. So that's interesting from a conflict of interest perspective. And there's also, it's a part-time job, okay?
00:31:01 Speaker_09
So there's a maximum number of working days per year that a special government employee is supposed to spend, and that's 130 working days a year. So David Sachs is going to be still full-time on Kraft.
00:31:13 Speaker_08
So it is an actual employed position. There's like a contract and a signature that has to go down, and it's a real position, not just a title.
00:31:22 Speaker_09
It depends, I guess, how Trump sort of uses it, right, and what that role is. But I would have to think it's going to play a coordinator-type role inside of the Trump administration, right? An interface with AI, an interface with crypto.
00:31:35 Speaker_09
It's interesting that Trump seems to favor these kind of media personalities as well. I mean, like, David Sachs has the megaphone on the All In podcast.
00:31:43 Speaker_09
So if there's any shenanigans, any anti-crypto shenanigans going on in government, he not only says it,
00:31:51 Speaker_09
in a kind of official crypto czar type way, and tries to sort of defang it, but he'll also have the all-in platform, you know, the podcast platform to be a megaphone for that too.
00:32:01 Speaker_08
So, I mean, all in all- It'll be the first podcast coming from inside the White House.
00:32:06 Speaker_09
This was, you know, I think I was, I'm not surprised by this choice, I would say. It feels very Trump, and you know, David Sachs has been a huge Trump supporter the entire time.
00:32:15 Speaker_08
Oh, he has been beating the drums about Trump from a very early part of the all-in podcast. It's a reward for loyalty as well, right? It is. Yeah, it is compensation in a way. In a different corner of the White House, CFTC chair rumors.
00:32:30 Speaker_08
So former CFTC Commissioner Brian Quintenz, who left the CFTC to join A16z Crypto to work on policy over there, is now emerging as a top pick for... Wow. The CFTC. The chair this time. The chair, the chair.
00:32:47 Speaker_08
He went from commissioner to private sector to chair. Maybe. Maybe, maybe. That's the rumor. Potentially going to chair. So a little bit of a revolving door there. Reportedly has been advising the Trump transition team on crypto policy.
00:33:00 Speaker_08
Current boss Marc Andreessen and David Sachs run in the same conservative venture capitalist Silicon Valley circles. Emily Choi from Coinbase says, super bullish on the future of digital assets in the US if Brian Quintenz heads up the CFTC.
00:33:13 Speaker_08
I would say if Brian Quintenz sits on the chair of the CFTC, that's like if Hester Perse sat on the chair of the SEC. That's how you should think about this.
00:33:23 Speaker_09
Brian Quintenz is just fantastic. He understands crypto from the ground up. We've had an opportunity to meet him. We've had an opportunity to talk to him on the podcast.
00:33:31 Speaker_08
He was at Permissionless. You were on a panel with him at Permissionless.
00:33:33 Speaker_09
I was just on a panel with him. I mean, you talk about, again, the whiplash we were talking about, the pro-crypto army being instantiated. Imagine you have all of these places.
00:33:42 Speaker_09
And by the way, in the new administration, it could come to pass that the CFTC actually has more authority over crypto than the SEC under Gensler was trying to get, right? So this could be a very important role.
00:33:53 Speaker_08
But either way, SEC and CFTC, with Paul Atkins covered it last year, fantastically played crypto. Last week, yeah. If Brian Quintenz, yeah, last week. If Brian Quintenz gets this one, I don't know, pick one. I don't care. How can he get any more crypto?
00:34:04 Speaker_08
We're winning either way.
00:34:06 Speaker_09
I know. Okay. And so actually, maybe the cherry on top for this week is there's actually a vote going on. So do you remember Commissioner Caroline Crenshaw, David? Does that name ring a bell?
00:34:17 Speaker_08
I know the name, the only time I put a face to a name and a voice to a name was when she was testifying along the other side of the other SEC chairs. And she was basically just like Gary Gensler mini.
00:34:27 Speaker_09
Yeah, it was a mini me Gary Gensler basically. And she's been against the Bitcoin ETF. She was on the side of like, even when Gary voted yes for the Bitcoin ETF, she was a no. Okay. She's been very anti-crypto.
00:34:39 Speaker_09
In addition to her, there was another anti-crypto commissioner, Jamie Eliza Ranga, and Jamie has decided to resign, actually, due to some family health issues. So that person's gone. Caroline Crenshaw was going to be re-nominated for her position.
00:34:55 Speaker_09
So she goes in front of Congress to be voted in again, re-nominated. And she's kind of like the last standing anti-crypto SEC commissioner. My God, the Gensler army has really fallen apart, hasn't it?
00:35:08 Speaker_09
Anyway, this was scheduled, a vote for her renomination was scheduled for December 11th. So that would have been Wednesday of this week. And it's been postponed. It's actually been deferred. The vote itself has been deferred.
00:35:22 Speaker_09
There has been an outcry from the crypto community to deny her vote. And a lot of Republicans are sympathetic to this. A lot of the politicians who want to get some check marks in the pro-crypto column would also presumably vote no to this.
00:35:40 Speaker_09
This is Brian Armstrong. Caroline Crenshaw, he says, was a failure as an SEC commissioner and should be voted out. She tried to block the Bitcoin ETFs and was worse than Gensler on some issues, which I didn't think was possible.
00:35:51 Speaker_09
The Senate Banking Committee should take note. The crypto community is watching the vote. I'm told it will be factored into the stand with crypto scorecards for politicians. Wow.
00:36:01 Speaker_09
That is Brian Armstrong wielding the political stick on the back of some major crypto wins this election cycle and sort of like saying, hey, politicians, you vote for Caroline Crenshaw, there will be consequences. We will remember.
00:36:17 Speaker_08
You really got to hand it to, I think, one of the least appreciated galvanizers of the pro-crypto army, which is Elizabeth Warren, the leader of the anti-crypto army.
00:36:28 Speaker_08
I think without that one meme of that blue picture of Elizabeth Warren is here to recruit an anti-crypto army, did the most Some of the biggest ROI for crypto that I've ever seen and maybe she's a pro crypto plant.
00:36:46 Speaker_08
Yeah, yeah Elizabeth Warren number one pro crypto advocate well done for your work Elizabeth Warren All right, coming up next, is there growing consensus around increasing the Ethereum L1 capacity?
00:36:57 Speaker_08
More and more proponents are starting to voice their opinions. Not everyone is convinced, but some pretty key stakeholders have voiced their opinions on Twitter. We're going to go through some of them. Also, a bunch of tokens launched this week.
00:37:07 Speaker_08
MOVE, Magic Eden, Pudgy Penguins. And then this is, Ryan's going to take this one. Quantum computer breakthrough this week could spell trouble for crypto down the road. Bitcoin going to zero. Those are Ryan's words, not mine.
00:37:20 Speaker_08
He's going to explain them to you. But first, before he does that, we're going to get to all these sponsors that make this show possible. Imagine if the world's GDP moved on-chain.
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Dankrad Feist, one of the core contributors to Ethereum says on Twitter, I think it's time we increased the gas limit. That means increasing the layer one scale. He says, if you run a validator, you can contribute to this.
00:40:02 Speaker_08
Every block acts as a vote on whether to increase it. If more than 50% of the stake agrees to an increase, the gas limit will increase. I just set my validators to vote for up to 60 million gas. So a little bit of context. This is actually how
00:40:16 Speaker_08
Ethereum has worked since the dawn of time. Previously miners, now today validators, would just signal what they think the gas size of a block ought to be.
00:40:27 Speaker_08
The current size of a block is 30 million, but miners, now validators, can actually vote this up individually. So this is kind of a validator run consensus of Ethereum is how big should the blocks be.
00:40:38 Speaker_08
There has just been long sticky consensus at 30 million. Dankrad is saying that he has just set his validators for a doubling of up to 60 million, but not yet.
00:40:47 Speaker_08
He had to follow that up saying, quick write up to explain what's happening about the gas limit raise. That first tweet that I just read was December 1st. The tweet that I'm reading right now is from today, December 12th.
00:40:57 Speaker_08
There has never been an increase in the gas since the merge. However, before the merge, it was an established practice that miners would not use this power arbitrarily, but typically only after core devs signaled it would be okay to change.
00:41:09 Speaker_08
Recently, some of us have started signaling that we think it is time for an increase in the gas.
00:41:14 Speaker_08
Unfortunately, that has hit a bit of a speed bump as core devs discovered that raising it over 40 million was not actually safe to a constant that needs to be changed in the clients first. I'm calling this kind of like a one-off anomaly
00:41:27 Speaker_08
construction of a client. We just needed to get that fixed first. However, Dankral continues, I think there was a lot of messaging agreeing that 36 million is a good first step. So not over 40 million, but up to 36 million, again, from 30 million.
00:41:39 Speaker_08
And clients are releasing updates to make this the default. So validators don't have to manually use command line flags to vote for this. I think It is likely that some big pools will join us in the next few weeks and we will see this increase.
00:41:50 Speaker_08
Justin Drake also tweeting out on December 8th, configuring my validator for a 36 million gas limit. Staking operators control the limit. Ethereum has held a 30 million limit for 3.5 years. A 20% bump to 36 million safely greases wheels.
00:42:06 Speaker_08
You can see gas limits at pumpthegas.org. And then he goes on to ask when at GigaGas and talks about snarked execution clients are the key to scaling gas, 10x, 100x, 1000x, and then a few more details on that.
00:42:19 Speaker_08
So there's growing consensus that we can very quickly today basically get 20% more capacity on the Ethereum layer one. which I think is really just a gateway drug to get it to 60, which is where Dankrad wanted it in the first place.
00:42:33 Speaker_08
And then we'll probably let the network stabilize a little bit. Some people will fall off the network. They will learn how to get back onto the network. They will get faster internet. They will just tinker with things. Optimizations will be had.
00:42:44 Speaker_08
And then 60 will become the new norm. And then we can do this again and again and again safely. So I am very appreciative of these conversations. I'm happy that Justin and Dankrad are putting these messages out there.
00:42:55 Speaker_08
What do you think about all this, Ryan?
00:42:57 Speaker_09
Yeah, I mean, I guess the context is, right, when you increase the block size from 30 to 60, you're just increasing the amount of transactions and throughput that Ethereum can sort of sustain. And so the question is, why not 100 then? Why 60, right?
00:43:13 Speaker_09
And the reason is because the more you increase, the increase in kind of the capacity it requires for staking, in particular on the bandwidth side of things, right, which is the real constraint. Bandwidth and state growth, yeah.
00:43:27 Speaker_09
Yeah, bandwidth and state growth, and in particular, like bandwidth, right? So for other networks, it requires data center level connections, like one to 10 gigabits per second, right?
00:43:40 Speaker_09
And Ethereum is supposed to be consumer-grade hardware, consumer-grade internet, and then you can kind of stake using it, right? So that's really the trade-off space. But the big point is, we haven't adjusted anything in three and a half years.
00:43:51 Speaker_09
Bandwidth has gotten better. Hardware has improved, according to Moore's Law. And on a more routine basis, maybe we just increase the gas fee gradually and preserve the staking requirements for validators.
00:44:05 Speaker_09
So that's kind of the conversation, what's going on.
00:44:07 Speaker_08
Definitely something that I'm going to be keeping an eye on.
00:44:10 Speaker_08
I think there's like path dependency here where if we just jumped from $30 million to $60 million, that would be pretty aggressive and that would cause a lot of people to fall off the network.
00:44:19 Speaker_08
But if you like ease your way into $60 million, you can get there sustainably, reliably, securely, and you can end up in the same spot, but with a more resilient network along the way.
00:44:29 Speaker_08
So I'm a fan of this incremental improvements towards a higher capacity.
00:44:32 Speaker_09
a fan of some way to just not program it, but have it regularly scheduled. So we don't have to always have this kind of community debate every year or something like that, right?
00:44:40 Speaker_09
And that's sort of what Dankrad proposed, but it's going to take some time to get there.
00:44:44 Speaker_08
All right, getting into some token drops. The Movement Foundation has launched the Movement Mainnet and MOVE token. This is a layer two on Ethereum using the MOVE programming language. So this is a MOVE coming into the scene.
00:44:56 Speaker_08
Again, MOVE is this very well-respected, sought-after programming language coming out of the Facebook DLibrem project, which has spawned many of these people who are building MOVE languages, chains like Aptos.
00:45:09 Speaker_08
There's another one sui sui after sui and now move being the layer 2 on aetherium So move is the gas fee token.
00:45:17 Speaker_08
So eth is not the gas fee token is also the staking token and governance token Dropped to a 1.6 billion dollar market cap with a 7 billion dollar totally diluted valuation 10 billion total supply the tokens 2 billion of them are circulating 10 percent of the total tokens was the initial move drop with 40 percent going into staking rewards ecosystem initiatives liquidity providing
00:45:39 Speaker_08
and then also some early contributors and backers, and then the foundation. There is a claims.movementnetwork.xyz to go see if you can claim your token if you're eligible. Otherwise, just use the Bankless Claimables app. That's why we built it for you.
00:45:52 Speaker_08
Snapshot was taken on November 23rd, 2024. So there is a link in the channel to find out all that information. Also, Magic Eden dropped ME, a little different of a token drop. I've never seen this before.
00:46:06 Speaker_08
1 billion supply came in at a $4.7 billion valuation, but the claim will be available across Bitcoin, Solana, and multiple EVM chains, Ethereum, Mainnet, Base Optimism, Arbitrum. Allocation fully unlocked at TGE.
00:46:21 Speaker_08
And ME is an SPL token, but the token is available across eight different chains, including Bitcoin. I don't know how they do that. Solana and some EVM chains. You have until February 1st, 2025 to claim. NFT project.
00:46:59 Speaker_08
Pengu is the ERC-20 token that goes along with the Pudgy Penguins NFT. So if you have a Pudgy Penguin NFT, that is your claim on the token, along with Little Pudgies and Pudgy Rods. So makes sense. Tokens go to the NFT holders.
00:47:12 Speaker_08
But interestingly, like the Magic Eden token, but still slightly different, this token is being launched on Solana, which is interesting because the penguins are NFTs on Ethereum, but the token is being launched on Solana.
00:47:25 Speaker_08
In the tweet thread that goes out, it says that they are looking to reach out to alternative broader communities because they already have the Ethereum community with their NFT. Why not just capture the Solana community with the token?
00:47:36 Speaker_08
So therefore launch it on Solana for distribution. I tweeted out this tweet that caused a bunch of consternation in the Ethereum space saying, massive L for Ethereum, scale the layer one.
00:47:48 Speaker_08
My reasoning here was that, well, Solana has this community that is not the Ethereum community because Solana scaled the layer one.
00:47:56 Speaker_08
And so Pudgy Penguins went to go to that community, launch their token because that community exists because Solana scaled the layer one.
00:48:03 Speaker_08
So this is my call to action for the Ethereum community, why I'm interested in the whole pump the gas thing, because there wouldn't be as much distribution elsewhere if Ethereum had scaled its layer one. Now, I went and I asked
00:48:15 Speaker_08
to verify this take with Luca Nets. I just went to DMs with him on Twitter and asked him, like, hey, like, can you just give me the spark notes about why you guys launched the token on Solana? And he goes, I think it starts and stops with gas fees.
00:48:28 Speaker_08
They're going to launch on Abstract, which is the chain that they're going to build on, but they just don't want to rush it.
00:48:32 Speaker_09
Is that a ZK chain?
00:48:34 Speaker_08
That's a ZK-SYNC chain, yeah, hyperchain, yeah. And they didn't want to launch on another layer, too, because they're building abstract. ETH mainnet, not feasible for the millions of people that he wants to come into crypto.
00:48:44 Speaker_08
And so because Solana has the cheap fees and the alternative community that's not Ethereum, they decided to launch on Solana. So that was kind of the analysis behind there. That tweet, the Ethereum community really did not like that tweet from me.
00:48:56 Speaker_08
They thought it kind of lacked nuance, which, yeah, it kind of does. So I'll admit that. But directionally, I stand by it. You said this tweet was lazy and lacked nuance, though, David. That's what you said. But I didn't say it was wrong.
00:49:08 Speaker_09
I said it was lazy and lacked nuance. There are many ways of scaling the LLN, and the majority of them I do not agree with. For the much-needed elaboration, Dank Rad. Going back to Dank Rad.
00:49:19 Speaker_09
So, I think the reason some people took issue with your tweet was basically scaling the L1 is not enough capacity for all of the world's- It'll never be enough. It'll never be enough, right? So, it's not necessarily going to solve this, right?
00:49:33 Speaker_09
It's almost like some people saw this as an orthogonal thing, which is basically like, yeah, we should- It's definitely not orthogonal.
00:49:38 Speaker_09
We should scale the L1, but realize that scaling the L1 and becoming Solana, let's say, in a monolithic chain was never possible. And I don't think that's what you're saying here, but that's why I didn't capture the nuance.
00:49:52 Speaker_09
One other general question I have for you, though, is why do Pudgy penguins need a coin? Just wondering. Don't ask questions.
00:50:02 Speaker_08
Don't ask questions. Sir, it's token season.
00:50:05 Speaker_09
Look, man, Luca is an incredible shipper. He's really turned that project around, killing it. Pudgy Penguins, I think, are NFT floor all-time highs now.
00:50:14 Speaker_08
Wow. Look at this turnaround, David. 26 ETH. If you bought Pudgy Penguins below 2 ETH in the bear market, you're up 10X in ETH terms. It's because of his leadership. They actually executed and delivered.
00:50:27 Speaker_08
I think Pudgy might turn into the biggest bag fumble I'll ever have. Oh, really? You had some pudgies, right? I had three or four pudgies, including two very clean pudgies. And when did you lose confidence? It wasn't about pudgies specifically.
00:50:44 Speaker_08
It was just getting burned on NFTs. All my art blocks were down to zero. Everything that I owned other than my CryptoPunk was basically at zero. And I was like, all right, well, this was dumb. I just bought JPEGs. I just got bear market burned.
00:50:57 Speaker_08
And I was like, okay, I'm just, and I wanted to like clean out the wallet because I always rotate my wallets. And so it's just easier just to liquidate them to eat.
00:51:03 Speaker_09
I mean, this was a turnaround though. It was a founder led turnaround. That's what really happened. So who could have predicted that?
00:51:07 Speaker_08
Dude, it was the next day, bro, that Luca acquired Pudgy Penguins. I sold my Pudgies. The next day, Luca acquires Pudgy Penguins and it puts like three X off the floor.
00:51:18 Speaker_09
We all have regrets, David. Let's not live in the past. All right. The future is bullish. Give me a regret of yours to make me feel better. Did you, my regret is, let me see my regrets. All of my NFCs are regrets that I have.
00:51:32 Speaker_09
I could show you some ugliness in my portfolio, okay, and it's still there. I didn't even sell anything and they're still down bad. I never owned an EtherRock though. Did you own an Etherrock? Bro, bro.
00:51:43 Speaker_08
OK, so Etherrocks are these crazy NFTs that are literally just rocks, basically making a farce of how NFTs are just JPEGs. So if somebody made JPEGs of rocks with like different shades, they're just different shades.
00:51:57 Speaker_08
One's kind of gray, one's kind of blue, one's kind of green, but they're basically just rocks. And I remember, and these went for, I think the top one went for like something like $50 or $60 million in 2021.
00:52:07 Speaker_00
That's stupid.
00:52:08 Speaker_08
It was so dumb. How are we so dumb? It was so dumb. And I saw EtherRocks. I looked at EtherRocks, the OpenSea. I shared it in my alpha group in 2021, like my friends, my college friends.
00:52:20 Speaker_08
And the EtherRocks were going for like half an ETH to like one and a half ETHs. And I'd shared it in the group and I was like, this is absolutely redacted, but that's probably bullish. No one did anything. No one bought. I did not buy. No one bought.
00:52:36 Speaker_08
And a week later, one sold for like $100 million. Wow.
00:52:41 Speaker_09
Wow. Well, so you missed it that time. You also missed it this time, David, because I regret to inform you, EtherRock number 19 was purchased this week. It's not 2021, for 235 ETH. That is almost a million dollars. A million dollars.
00:52:55 Speaker_09
OK, so our NFT is back. We got Pudgies. CryptoPunk's doing well. We got EtherRock selling. Is this a little comeback story, you think?
00:53:03 Speaker_08
I don't think so. Not yet. Not yet. Pudgy's, absolutely. But Pudgy's is like the anomaly. Pudgy's is like buying Link or Aave or Synthetix.
00:53:11 Speaker_09
You got to have fundamentals this time.
00:53:13 Speaker_08
Yeah. Maybe. I don't know. But like CryptoPunks are up to a 40 ETH floor when they were once at 100. They're not dead. So what's happening right now is NFTs are not dead. Yeah. Pudgy's very much alive. NFTs generally not dead.
00:53:26 Speaker_08
Well, a lot of it is just like ETH beta exposure.
00:53:30 Speaker_09
You want me to give you the story of the quantum compute fud? Yeah, Ryan's going to fud our entire industry. Bitcoin is not going to zero. Let me just say that up front.
00:53:39 Speaker_08
He wrote it in the notes.
00:53:40 Speaker_09
A lot of people were saying this type of thing in mainstream. But the question is, could quantum computing threaten crypto? We've always known this is on the horizon. Why was quantum compute even in the news cycle this week?
00:54:11 Speaker_09
And it's not that Willow and the quantum computing at Google is very powerful now. It's not. It's just if they are able to reduce the errors exponentially, then they can actually scale this technology in a way they previously couldn't.
00:54:24 Speaker_09
So there are some estimates out there that, you know, we could start beginning, begin to break some of the strong encryption in like, you know, the year 2030, 2035, something like this. Bring those timelines actually closer.
00:54:37 Speaker_09
This is you know hailed by many as a breakthrough technology So a lot of people are asking the question is okay if quantum computing is now right around the corner Could it break our cryptocurrencies could it break Bitcoin right?
00:54:49 Speaker_09
There's a tweet from investor ash University of Sussex researchers estimate that breaking Bitcoin encryption in one day would need 13 million qubits willow right now has 105 qubits. You need 13 million. We got 105 right now.
00:55:07 Speaker_09
Not possible today, but theoretically, if you had 124,000 Willows, you could break encryption in one day. If you had 340 Willows in one year. So it's closer than it's been previously, and this breakthrough might have brought it even closer.
00:55:22 Speaker_08
So the real reason that people are scared is like you if the time to break a wallet is like if it's one year, well, then you can just move your bitcoins on your wallet. And so you'll never catch up to you because you're moving your wallet.
00:55:36 Speaker_08
Not Satoshi though.
00:55:37 Speaker_09
That's right. Not Satoshi's wallets. That's that's right. So that that's kind of the thing. So this is the founder of avalanche who's commenting here Emin He says there is an issue with Satoshi's 1 million Bitcoin.
00:55:49 Speaker_09
Remember this Bitcoin that his mind's been locked Estimates are he's got about a million of it
00:55:55 Speaker_09
So, apparently, these Satoshi EarlyMind coins use the very old pay-to-public-key, P2PK format, which reveals the public key and gives the attacker time to grind for the mother of all cryptography bounties.
00:56:07 Speaker_09
P2PK isn't used by modern Bitcoin wallets or modern systems, but it was there in the early days of Bitcoin.
00:56:14 Speaker_09
So, as quantum computing gets threatening, the Bitcoin community might want to look into freezing Satoshi's coins, or more generally, provide a sunset date.
00:56:22 Speaker_08
Isn't that a hard fork? hard fork, bro.
00:56:24 Speaker_09
Right. That's a hard fork. You can't hard fork Bitcoin. You cannot hard fork Bitcoin. But the problem is there's a one million Bitcoin bounty on Bitcoin, which is like, I mean, I don't know, four times, five times the amount that the U.S. government owns.
00:56:40 Speaker_09
It's like three times as much as Michael Saylor owns. available to whoever gets quantum computing to the level to be able to crack this, unless Bitcoin does something, unless it hard forks. So the threat is not imminent, by the way.
00:56:54 Speaker_09
I mean, we're still talking right now, five to 10 years away, unless something massive actually happens. But still, it's out there, David. It's the closest it's ever been, that's for sure.
00:57:04 Speaker_09
And I'm not saying it's existential, because we all know that Bitcoin has the ability to do things socially. At least most people who study crypto can do this. You can hard fork, you can correct this.
00:57:14 Speaker_09
But Satoshi's not moving his coins anytime soon, so that means there's a one million Bitcoin bounty out there. What do you think this means? Do you think this means we'll have hard fork wars?
00:57:24 Speaker_09
There'll be a Bitcoin quantum and Bitcoin classic in the future?
00:57:28 Speaker_08
This has been a long conversation in the Ethereum space, as there are some inevitable brick walls that Bitcoin runs into. One being the security budget, the other being quantum computing.
00:57:40 Speaker_08
And Bitcoin is like fine until then, but then once those things arrive, then it's like, then it's already too late. Like you actually have to be proactive against those things.
00:57:49 Speaker_08
And so yeah, like the idea here with quantum computing is there, Bitcoin has a death day. And so people talk about, oh yeah, Bitcoin's not gonna.
00:57:57 Speaker_09
It's not, when you say death day, it's not quite, it's like, it has a reckoning, let's say, because it has to decide. I mean, what Emin suggested was freezing Satoshi's coins Can you imagine that?
00:58:10 Speaker_08
Which is what people would say is not Bitcoin. If you are freezing people's coins, then that's something else other than Bitcoin.
00:58:16 Speaker_09
21 million in property rights is Bitcoin. People were happy to tell him that in the Twitter comments, basically.
00:58:23 Speaker_08
I saw the first response was, you can't freeze Satoshi's coins. Those are his coins, which I appreciate the sentiment. Also might be untenable.
00:58:32 Speaker_09
Well, or, or you could just allow this game to play out and allow the first quantum computers, probably a nation state with, you know, imagine the nation state reserve currency wars heat up, everyone's stacking Bitcoin.
00:58:43 Speaker_09
And so China and the US are in a race.
00:58:45 Speaker_08
Is this an arms, a Bitcoin inspired arms race for quantum computing? Yeah. Can you imagine that? Donald Trump, you got to add quantum computing to the acceleration of this.
00:58:53 Speaker_09
Get that one million in Bitcoin? Is that how it goes down?
00:58:56 Speaker_08
Yeah, that's the reserve. That's how you fill the reserve. That's, that's how you pay off the national debt.
00:59:02 Speaker_09
You gotta fund quantum computing. We should have a symphony alumnus bill to just fund the quantum computing to go collect the one million bitcoin. Is that it?
00:59:10 Speaker_08
I mean, things get weird. That's right.
00:59:13 Speaker_09
Of course, it's not just bitcoin. There are other crypto networks that require a quantum computing upgrade, notably Ethereum, which is sort of in the roadmap.
00:59:21 Speaker_09
That might need to be accelerated, but Ethereum doesn't have a problem doing these types of quantum hard forks. Anything that can hard fork does not have this issue. Very interesting. We'll see how this ends up. Again, not an imminent threat.
00:59:32 Speaker_09
No, Bitcoin's not going to zero, but it is in the water out there somewhere.
00:59:36 Speaker_08
Alright, three big stablecoin news this week. First, Circle and Binance entered a strategic partnership. This is something that I don't think I could ever have seen had CZ ever not bent to the knee, but he did bend the knee.
00:59:50 Speaker_08
And so Binance bent the knee. Now Circle and Binance have a strategic partnership over USDC to announce that USDC will be extended inside the Binance platform. Wow, never thought I would see that.
01:00:01 Speaker_09
That's exactly what it is, David. It's bending the knee. It's saying, like, hey, we don't want to go to jail. Sure, we'll use your stablecoins, U.S.
01:00:07 Speaker_08
government apparatus. Your private CBDC, yeah. So that's first news. USDE, the dollar stablecoin from Athena, has flipped a die. Wow.
01:00:17 Speaker_08
So Athena's synthetic dollar USDE is now the third largest stablecoin behind USDT, Tether, and USDC after doubling its market cap. currently clocking in at $5.5 billion, which DAI sits at $5.2.
01:00:30 Speaker_08
It has grown quite a lot because demand for leverage is increasing. So does Athena's yield, which is currently at 27%. So this is definitely bull market growth, which, Ryan, makes me a little nervous.
01:00:43 Speaker_07
A little bit. A little nervous.
01:00:44 Speaker_08
A little nervous. Keeping an eye on that. But nonetheless, it is pretty cool to have a new style of stablecoin that's out there doing well. So congratulations to the Athena team. I'm sure their eyes are on it even more than mine.
01:00:55 Speaker_08
Coinbase third will restrict the EU citizens access to die due to MECA regulations. So because die is not a MECA compliant stable coin, Coinbase will restrict EU citizens access to die, interestingly.
01:01:09 Speaker_08
But nonetheless, die is being replaced in the maker system by USDS, which are MECA compliant.
01:01:17 Speaker_09
It seems like there's no way for Dai to be MECA compliant as well. They just designed it in such a way that it's just impossible. So Europeans just don't get access to it. By the way, this is related. Did you see this?
01:01:28 Speaker_09
It was floating around the last week or so. This is public from scratch US companies, all the US bubbles here, versus EU companies that have gotten to $10 billion in market cap in the last 50 years. Look at EU over here, Europe over here.
01:01:43 Speaker_09
Just a few tiny bubbles.
01:01:44 Speaker_08
The U.S. just has massive bubbles. You know, Apple, NVIDIA, Microsoft, huge bubbles with companies with huge market caps. EU just getting absolutely mogged by the United States. Tiny little bubbles.
01:01:54 Speaker_09
It's just regulation, man.
01:01:55 Speaker_08
It's just regulation, man.
01:01:57 Speaker_09
It's just like, you can't do Mika, you can't do DeFi, you can't do all of these things, and we've got a taste of it in the US.
01:02:02 Speaker_08
Can't have fun, can't make money.
01:02:05 Speaker_09
Speaking of not having fun, the UK is no longer able to access pump.fun.
01:02:15 Speaker_09
Enough of these meme coins the UK's Financial Conduct Authority FCA another three-letter agency It issued a warning about pumped out fun stating that a platform is not authorized to operate in the country Okay, added that customers dealing with pumped out fun won't have access to consumer protections I feel like we kind of knew that but as a result pumped out fun is no longer available in the UK I think they geo-blocked everybody in the UK meanwhile some goddamn whiplash
01:02:43 Speaker_08
Check. Checks do not have to pay taxes on crypto they held for three years. What the hell? Tax-free three-year crypto gains? Are you serious?
01:02:54 Speaker_09
Yeah, that's happening. That is nuts. This is the Czech Republic. So if you hold your crypto for three years plus, encouraging holding behavior, that's EO, very bankless aligned of them, good long-term hold.
01:03:06 Speaker_09
You don't have to pay capital gains if you sell it after three years. That is awesome. There's a tale of two jurisdictions going on right now.
01:03:14 Speaker_09
There's jurisdictions that are super crypto hostile and other jurisdictions that are turning to crypto friendly because they want the growth and the economics and the jobs and the industry to come to them.
01:03:26 Speaker_09
And those that are open to crypto will do much better. Those that are closed will not. I mean, this is how it works.
01:03:33 Speaker_08
Congratulations, all Czech listeners of the podcast. I'm very jealous.
01:03:37 Speaker_09
You think that could come to the US?
01:03:40 Speaker_08
No. No capital gains on crypto? Definitely not. That would be insane. That would be insane. I mean, I've seen some pretty crazy things doing crypto in these years, so I'm not going to count it out, but that'd be kind of crazy.
01:03:50 Speaker_08
All right, this is going to be the end of the roll-up, guys. Thanks for sticking with us. We have fun doing these every single week. If you don't mind, please like and subscribe if you are watching this on YouTube.
01:04:00 Speaker_08
If you're doing Apple podcasts, if you don't mind, again, opening up that podcast player and giving us a five-star review. We definitely appreciate these things. We made number 10 on the tech charts. That's right.
01:04:09 Speaker_08
Bankless is the number 10 technology podcast.
01:04:13 Speaker_00
Let's get us to top five.
01:04:14 Speaker_08
Let's get us to top five. That'd be great. And also, just shout out, if you haven't tuned into the AI roll-up that I'm doing weekly with eJazz, have you listened to it this week, Ryan? We're on our third. What do you think about it?
01:04:24 Speaker_09
No, it's in my queue. I love them, though. It's fantastic. It's getting me very bullish on AI. Crypto is so ... I mean, that is the new frontier. And there's so much going on these days.
01:04:36 Speaker_09
You need like a dedicated weekly podcast just to keep up with the frontier of AI.
01:04:39 Speaker_08
It feels like early DeFi. Yeah, it's amazing. It feels like early DeFi just four years later. Yeah, I'm having a ton of fun with that. So definitely, this is your call to action to not miss the AI meta.
01:04:48 Speaker_08
The AI meta is the meta to pay attention to for 2025. That is where the hot ball of money is going to go. It is where it currently is. And so, I think it's going to attract outside retail capital, like all bull markets do.
01:05:00 Speaker_08
And they are not yet here, but they're definitely coming, and you are ahead of the curve. And that is why we are doing the AI Roll-Up, so you can front-run the opportunity. What do we always say on Bankless? Yeah.
01:05:10 Speaker_09
Every Thursday. Every Thursday.
01:05:12 Speaker_08
Every Thursday. It comes out Thursday. Yeah, the day before the Friday weekly roll-up, which is just the normal news. All right, meme of the week, meme of the week. This one, I really, I chuckled at this one.
01:05:21 Speaker_08
I don't even know how to, I don't know what this meme is. I've seen it before, but this is a man who is looking at a picture of his younger self. The younger self is saying, is titled first cycle me.
01:05:31 Speaker_08
And then it's second cycle me thinking how stupid I used to be.
01:05:34 Speaker_08
So second cycle me is looking at a picture of younger self, but then there's third cycle me looking at a picture of second cycle me looking at the first cycle me, just looking at second cycle me reminded of how stupid I used to be, which Ryan?
01:05:47 Speaker_08
I don't know how you feel, but that is how I feel. Second Cycle Me was an idiot. Third Cycle Me is doing great.
01:05:55 Speaker_09
Second Cycle You was an idiot?
01:05:57 Speaker_08
A complete idiot? No. First I was very, very smart. And then I was dumb. In that order.
01:06:04 Speaker_09
And you're just like much older and wiser this cycle.
01:06:07 Speaker_08
That's right. Imagine what you're going to be like.
01:06:09 Speaker_09
What kind of zen state are you going to be? You're going to be Eric Voorhees in the fourth cycle because that guy's on like the fifth or sixth cycle.
01:06:14 Speaker_08
All right.
01:06:15 Speaker_09
That's how you get to Voorhees level. We're all just chasing Voorhees. That's right. All right. Got to end with this. Of course, you guys know crypto is risky. You could lose what you put in. But we're headed west. It's a frontier.
01:06:26 Speaker_09
It's not for everyone, but we're glad you're with us on the Bankless Journey. Thanks a lot.