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Speaker 1: technology is security. How often have we seen a startup
Speaker 1: be hacked by a state sponsored actor? And when a
Speaker 1: state sponsored actor goes after a startup and tries to
Speaker 1: hack them, guess what the startup's going to lose.
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Speaker 2: the biggest players in crypto trust Bitgo. Hi, everyone, welcome
Speaker 2: into the Thinking Crypto Podcast. I'm Tony Edward and I'm
Speaker 2: Amanda Wickcroft and joining us today is Chris Perkins, who
Speaker 2: is the CEO of two fifty Digital Asset Management, which
Speaker 2: is a spinout of coin Fun Liquid Strategies. Chris, great
Speaker 2: to have you back.
Speaker 3: On Tony and Amanda, So good to see you guys.
Speaker 3: How's it going? Very good? Happy Friday.
Speaker 2: We're recording us on Friday, May eighth, and excited to
Speaker 2: dive into the big news around Franklin, crypto and much more.
Speaker 3: Yeah, me too. Happy Friday to you.
Speaker 2: So Chris, why don't we start with two fifty Digital
Speaker 2: tell us about how this acquisition came about and what's
Speaker 2: the mission here?
Speaker 3: Right?
Speaker 1: So I'll start by saying we are absolutely up to
Speaker 1: our eyeballs in this thing I like to call the
Speaker 1: institutional era of crypto. If you've noticed, crypto to date
Speaker 1: has really been largely a retail phenomena, and the institutions
Speaker 1: have kind of come, they've kind of gone. They're trying
Speaker 1: to figure it out. Maybe a couple of them dip
Speaker 1: their toe in the pool in twenty one, some of
Speaker 1: them got burned. But I think it's fair to say
Speaker 1: that the institutional era of crypto is upon us in
Speaker 1: a major, major way.
Speaker 3: And why is that.
Speaker 1: It's because now you have a favorable regulatory climate. And again,
Speaker 1: most institutions they're more than comfortable using technology, they're more
Speaker 1: than comfortable investing in assets, but they don't like taking
Speaker 1: reputational risk. And I think a lot of that has
Speaker 1: come off the table now with what we're seeing the
Speaker 1: progress around Clarity Act and regulations and everything else. And
Speaker 1: so with that Clarity no pun intended, they're comfortable in
Speaker 1: entering the space in a major, major way.
Speaker 3: And so as.
Speaker 1: Retail's kind of like come and gone, and now i'd
Speaker 1: say they're they're kind of out of the picture right now,
Speaker 1: but they're thinking about coming back in because like the
Speaker 1: conditions that are hard to argue, it's pretty favorable set up.
Speaker 3: The institutions have continued to march forward.
Speaker 1: And so with that in mind, Franklin Templeton announced in
Speaker 1: April first that they were acquiring two fifty Digital, which
Speaker 1: is a spin off of my last company on our
Speaker 1: liquid strategies, and they've also announced that once that deal closes,
Speaker 1: I will be the new head of Franklin Crypto along
Speaker 1: with my partner Sethkins and then Tony piccor And our
Speaker 1: job now is to really you know, I talked about
Speaker 1: the institutional error and how it's so important. These are
Speaker 1: businesses of scale, and the fact of the matter is
Speaker 1: is that I don't care who you are. Right now
Speaker 1: around the world, there's probably more risk in not having
Speaker 1: a crypto strategy than in the past. You had all
Speaker 1: this risk for being in this space, like we all
Speaker 1: lived it, right, we would get slammed and attacked, But
Speaker 1: now you actually have risk for not having a crypto strategy.
Speaker 1: And so wouldn't it be great if institutions around the world,
Speaker 1: as they're thinking about strategies and ways to gain exposure
Speaker 1: to our asset class, to partner with people that have
Speaker 1: been around and very native for a long time, but
Speaker 1: also now reinforced with the most robust set of institutional
Speaker 1: support groups, whether I'm talking about compliance, operations, regulatory policy folks, right,
Speaker 1: that is the reinforce, Like we can bring all the
Speaker 1: nativity in the world. But you bring that together with
Speaker 1: like enterprise, robustness and controls and like it's it's a
Speaker 1: very very powerful combination. So our goal is to be
Speaker 1: that trusted agent. Our goal is to say, guys, we
Speaker 1: have You know, the Franklin Templeton brand is without question,
Speaker 1: one of the best in the space. They've been into
Speaker 1: space since twenty eighteen. They have the vision. I spent
Speaker 1: a lot of time with with some time with Jenny
Speaker 1: Johnson last week at the Milkan conference. Daniel Gaba that
Speaker 1: the president of Franklin Templeton, and he was up there
Speaker 1: on his panel talking about the power of tokenization. So
Speaker 1: here's an institution that's all in. They've put all their
Speaker 1: chips on the table. They've asked us to come and
Speaker 1: be part of that incredible growth that we all expect.
Speaker 1: And I'm telling you, I couldn't be more excited.
Speaker 4: Your new role as CEO, Chris, are you So, does
Speaker 4: that mean you're still connected to coin fund? Explain to
Speaker 4: us how that works with this acquisition.
Speaker 1: Yeah, so exactly upon once once the deal has closed,
Speaker 1: and that should be imminently, then I'll move from from
Speaker 1: my previous shop into Franklin Templeton as a full time.
Speaker 4: What's the mission of two fifty Digital Investments Strategy.
Speaker 1: Yeah, So as we transition into Franklin Crypto, our mission
Speaker 1: is to be exactly what I'm what I talked about.
Speaker 1: So we want to be we want to help our
Speaker 1: clients around the world solve for their entrance into this
Speaker 1: space we call crypto.
Speaker 3: Now.
Speaker 1: It's it's really interesting because the line between native crypto
Speaker 1: craziness and traditional finance is blurring. And so whether it
Speaker 1: comes down to you know, tokenization or that access to
Speaker 1: products that they're that they're looking for exposure to. We
Speaker 1: want to be that trusted agent. We want to solve
Speaker 1: for their investment needs in this space and and and
Speaker 1: be that you know, trusted agent as they navigate into
Speaker 1: this this new world, this really exciting new world. Right,
Speaker 1: We're about to tokenize one hundred and twenty seven trillion
Speaker 1: dollar equity market cap. You know, the world is going
Speaker 1: in that direction. How's that going to work? How are
Speaker 1: you going to pay for that stuff? What are the
Speaker 1: rails that are going to live on? What are the
Speaker 1: new opportunities that you're going to see? And so, you know,
Speaker 1: we've been in this space for a long time. We've
Speaker 1: been immersed in this encrypto to our eyeballs for for
Speaker 1: years and years and years, and so hopefully we can
Speaker 1: lend our expertise, you know, not only our expertise in crypto,
Speaker 1: but our expertise in traditional market's. Pretty much everyone on
Speaker 1: the team has some kind of background in traditional markets
Speaker 1: as well, and so I think the goal is to
Speaker 1: kind of be that Rosetta stone, be able to translate
Speaker 1: and be able to explain and make it easy for
Speaker 1: our clients. Pardon the interruption. Hi, I'm Tony. I'm the
Speaker 1: host of the Thinking Crypto podcast. I wanted to ask
Speaker 1: you if you can please support the podcast by hitting
Speaker 1: the like button subscribing. If you haven't as yet, you
Speaker 1: can leave a comment below as well. And if you're
Speaker 1: listening on a podcast platform such as Spotify, Apple or
Speaker 1: wherever you get your podcasts, please be sure to follow
Speaker 1: and hit the five star rating. I'll let you get
Speaker 1: back to the content. Thank you so much so, Chris.
Speaker 2: I'm assuming you're gonna be working closely with Roger Basin
Speaker 2: and Sandy Call, both of who great people, very smart,
Speaker 2: and they are adding your brilliant mind to the team
Speaker 2: as well.
Speaker 1: I don't know about my brilliant mind, but some of
Speaker 1: the minds that you spoke about are certainly brilliant. And yeah,
Speaker 1: we've known Roger Sandy for a.
Speaker 3: Really long time.
Speaker 1: What people don't know is that Sandy and I got
Speaker 1: into crypto together when we sat next to each other
Speaker 1: for about ten years city group and we're like, what
Speaker 1: is this thing called bitcoin? That's kind of interesting. Ely,
Speaker 1: there's a blockchain. Like, wow, we had blockchains that would
Speaker 1: really make my life so much better because I'm scared
Speaker 1: the death of the settlement risk I'm taking in this
Speaker 1: current business. Oh gosh, that would be cool. So we
Speaker 1: got into it years and years ago together. She's a
Speaker 1: dear friend, and gosh, she's an incredible thought leader, right,
Speaker 1: she was talking about stuff, you know. She she's the
Speaker 1: type of person who talks about things years before they happen.
Speaker 1: And if you listen to her carefully, you know, for
Speaker 1: many years she was a CEO whisperer. She would go
Speaker 1: around to CEOs tell them about the future, and a
Speaker 1: lot of that future's actually arrived.
Speaker 3: So I'll tell you another funny story.
Speaker 1: I started business back years ago and I sat down
Speaker 1: with her and she helped me really think through the
Speaker 1: business model. I don't remember the exact number, but she's like,
Speaker 1: you know what, if we do everything right, it'll be
Speaker 1: year three, It'll be seventy three million dollars or whatever
Speaker 1: the number was.
Speaker 3: And I remember that I.
Speaker 1: Was closing my books here end and it was like
Speaker 1: seventy three million dollars and I'm like, oh my god.
Speaker 3: I called her.
Speaker 1: I'm like, Sadi, one of the best minds in the business.
Speaker 1: Can't wait too, you know, to be working side by
Speaker 1: side with her again.
Speaker 3: Absolutely, So.
Speaker 2: Franklin's been doing a lot, you know, with tokenization, et
Speaker 2: apps and much more. I've had conversations with Sandy and
Speaker 2: Roger as well. Two fifty Digital tell us about the
Speaker 2: specific services that you're going to be enabling in addition
Speaker 2: to what they're already doing. Right, So, we're going to
Speaker 2: be here to very simply provide scalable asset management solutions
Speaker 2: for institutional clients, ones that meet their the highest of
Speaker 2: their standards, and that that you know, you can think
Speaker 2: about numerous strategies that you're going to hear us announce,
Speaker 2: can't announce it just yet, but from the liquid side
Speaker 2: on through where you'll hear a diverse array of scalable,
Speaker 2: institutionable strategies.
Speaker 3: That's our focus.
Speaker 4: I'm part of the acquisition. I read on the coin
Speaker 4: desk article was using Benji tokens that are tied to
Speaker 4: Templeton's on chain money fund. Can you just talk a
Speaker 4: little bit about that.
Speaker 1: That's pretty cool, right, so let's think about it. I mean,
Speaker 1: this is like a much much bigger story. But if
Speaker 1: I'm going to receive value for something, would I rather
Speaker 1: receive it in a yielding asset or a non yielding asset?
Speaker 1: H And, like, I think this is worth a much
Speaker 1: much bigger conversation. But what's the difference between a money
Speaker 1: market at tragy back money market fund and a stable coin?
Speaker 3: What do you guys think?
Speaker 4: They're really at the wrapper and there's.
Speaker 1: Really like the from a risk perspective, one pays interest,
Speaker 1: one doesn't.
Speaker 3: Which one's more risky? Do you think seems pretty similar
Speaker 3: to me? Right?
Speaker 1: So would you rather have one that pays you interest
Speaker 1: or one that doesn't definitely pays interest?
Speaker 4: Yeah?
Speaker 1: So anyway, it's kind of it's kind of look when
Speaker 1: you step back for a second and you look at
Speaker 1: what's happening here. It's this company that's trailblazing again, right,
Speaker 1: they've been. They were like the first real is tuitional manager,
Speaker 1: you know, I think Fidelity was there. Black Rock came
Speaker 1: along maybe around this, maybe a little later or whatever,
Speaker 1: but one of the very very first investment galible investment
Speaker 1: managers to really trailblaze in this space. And this is
Speaker 1: just another example of that trailblazing. But I like to
Speaker 1: step back and say, like, wait a second, let's really
Speaker 1: think about what's going on here. Maybe this is part
Speaker 1: of something even bigger, and that's the kind of stuff
Speaker 1: that I'm excited to explore. Chrisy, it's really fascinating to
Speaker 1: look at these players such as Franklin, black Rock, Fidelity
Speaker 1: and others in this race. And you alluded to it
Speaker 1: earlier where you mentioned it was kind of taboo, you know,
Speaker 1: not to talk about crypto back in the day.
Speaker 2: But now if you don't have a strategy, it's almost foolish, right,
Speaker 2: you need to risk. Yeah, So are we at that,
Speaker 2: you know moment where we cross the chasm now trad
Speaker 2: fives in this race. The innovation is kicking off and
Speaker 2: we're going to see some incredible new products, financial products,
Speaker 2: and much more developed in the coming years.
Speaker 1: I mean, you're going to see an I think, stepping back,
Speaker 1: it's an most incredible era of innovation we could ever imagine.
Speaker 1: We have two and a half like civilization changing technologies
Speaker 1: right now. I'm pretty soon it's going to be three.
Speaker 1: So you've got AI, which is AI is such an accelerator.
Speaker 1: It accelerates so much. It accelerates development, it accelerates thinking.
Speaker 1: And the better it gets, the more of that acceleration
Speaker 1: you'll see. You've got crypto. You can't look at AI
Speaker 1: and crypto separately. They accelerate each other. Crypto forms the
Speaker 1: rails through for agenttic commerce, and the development and the
Speaker 1: innovation across the crypto landscape will also be accelerated by AI.
Speaker 1: And then you have this other technology that's coming on
Speaker 1: pretty fast. It's also being accelerated by AI and will
Speaker 1: have I think probably a pretty strong impact on crypto.
Speaker 3: And that's quantum.
Speaker 1: Right, these are three civilization changing and they're all kind
Speaker 1: of related, whether it's quantum for compute, AI needs compute,
Speaker 1: you know crypto are those payment rails. They all kind
Speaker 1: of go together. And then you know, what are what
Speaker 1: are some of the new commodities that we need to
Speaker 1: focus on well, compute is one of them, energy is
Speaker 1: another one. These are going to be invaluable commodities. Gosh,
Speaker 1: we can probably tokenize them. Gosh, there's that that's going
Speaker 1: to be perhaps a better store.
Speaker 3: Of value than gold.
Speaker 1: It could be compute, right, and wow, like bitcoin is
Speaker 1: correlated too because it needs energy. So these things kind
Speaker 1: of all work together, kind of on this interesting continuum
Speaker 1: of compute, energy and these defining technology. So it's such
Speaker 1: an interesting, interesting time applied to asset management.
Speaker 3: What are you going to see?
Speaker 1: You're going to see a lot more timely and and
Speaker 1: hyper bespoke solutions to an individualized solutions, you know, via
Speaker 1: things such as of faults, leveraging AI immediately deploying smart
Speaker 1: contracts to drive the hyper customized.
Speaker 3: Solutions for the client. You know.
Speaker 1: And I think that I'm not saying that people aren't
Speaker 1: going to be interested in some of those bigger, you know,
Speaker 1: strategies that everybody likes, but now give the ability to
Speaker 1: create hyper precise strategies and cash flows for individuals and
Speaker 1: institutions as they see thing.
Speaker 4: You know, there's a lot of talk as we're seeing
Speaker 4: this institutional convergence. There's always the talk of trad fi
Speaker 4: learning from the crypto natives. You know, are you finding
Speaker 4: us as you are becoming, you know, incorporated by Franklin Templeton,
Speaker 4: that there's also the reverse happening of your crypto natives
Speaker 4: having to very quickly, you know, become a sponge to
Speaker 4: the trap FI world and the terminology and the compliance
Speaker 4: and regulation.
Speaker 1: Roles violent agreement, Amanda, like, it's such an important thing
Speaker 1: to highlight. A lot of crypto people think that, you know,
Speaker 1: the trai FI people need to learn from us, and
Speaker 1: you know what, they're right. I don't often hear as
Speaker 1: much as hey, we have to learn from the Chad
Speaker 1: five people. But if they don't think that they're wrong.
Speaker 1: You learn so much from traditional finance right, enterprise scale
Speaker 1: real tps right. And you know, the needs of institutions
Speaker 1: are much different than the needs of retail.
Speaker 3: And I'll give you an example.
Speaker 1: A lot of crypto people say don't need intermediaries, like
Speaker 1: get rid of all the intermediaries, forget it, like, we
Speaker 1: don't need them anymore, and they're kind of right and
Speaker 1: and you and that's one of the beautiful things about
Speaker 1: decentralization is that anyone can access DeFi via their own
Speaker 1: Internet connection and they should absolutely have that right. But
Speaker 1: that doesn't mean intermediaries are going away because a lot of
Speaker 1: institutions like the value added service, right. They like the
Speaker 1: insulation that they get, you know, from maybe some of
Speaker 1: the downstream enterprise risks. They like that, like white touch,
Speaker 1: that like white glove service.
Speaker 3: Right.
Speaker 1: So it's not a matter of either or it's yes both.
Speaker 1: And that's what we're seeing is this collide. So I'll
Speaker 1: tell you what TRADIFI needs to learn, which they're learning
Speaker 1: very quick and they're very scared right now. They have
Speaker 1: to figure it out. Twenty four to seven markets, that's
Speaker 1: what the natives bring, that's what their infrastructure brings, and
Speaker 1: that's what their culture brings. That is really really hard
Speaker 1: for traditional markets. And if you think about it and
Speaker 1: you step back for a second, markets are naturally twenty
Speaker 1: four to seven. That's how they exist in nature. Our
Speaker 1: technology has always prevented us from keeping up with natural markets.
Speaker 1: Natives now sorted that and we are in the market
Speaker 1: twenty four to seven. And so that takes a complete
Speaker 1: rewiring of culture, rewiring of systems, are rewiring of risk apparatus.
Speaker 1: That is the world that has always been the world
Speaker 1: that we've lived in, but we haven't been able to
Speaker 1: keep up with it. That's probably the biggest unlock that
Speaker 1: crypto people bring to trad fy twenty four to seven markets. So, Chris,
Speaker 1: on that note, with tradfi moving twenty four to seven
Speaker 1: to match the crypto market and what exchanges have been
Speaker 1: doing for a while, trad FI institutions are launching crypto
Speaker 1: investment products. This week, Morgan Stanley launched crypto trading via
Speaker 1: e trade with very low fees.
Speaker 2: So, Chris, what does this mean for the native crypto
Speaker 2: exchanges and platforms. Are some of them potentially going to
Speaker 2: lose market share or they're going to be consolidated in
Speaker 2: the mix, you know, tradfy and the native firms coming combining. Maybe, yeah, Tony,
Speaker 2: it's a really great point.
Speaker 1: So crypto and tradifi like, they don't change the rules
Speaker 1: of markets, and the rules of markets are very very
Speaker 1: clear if you observe them. Spot trading is one of
Speaker 1: the hardest businesses in the world. It's kind of an
Speaker 1: awful business. The margin is incredibly low. I mean, look
Speaker 1: at equities, right, you know, you know used to pay
Speaker 1: these huge commissions the intermediaries. Now you know, most doc
Speaker 1: trating is free because they because PI FI.
Speaker 3: There are the other ways people get paid.
Speaker 1: But my point is this, for spot markets, typically fees
Speaker 1: go to zero and that's one of the laws of markets,
Speaker 1: and that's what we've seen over and over again. And
Speaker 1: so if you are a major crypto exchange, this is
Speaker 1: not a surprise to them. Like I remember, they've been
Speaker 1: working on this for years and many of them have
Speaker 1: they've gotten into custody, they've gotten into financing or prime finance,
Speaker 1: they've looked at derivatives, always go back to markets and observe.
Speaker 1: So there's a reason why ICE bought NISI. And I'm
Speaker 1: not talking about homeland security guys. I'm talking about the
Speaker 1: Intercontinental Exchange. There's a reason why ICE bought NISY and
Speaker 1: nysy in by Ice. Right, what does this mean? What
Speaker 1: businesses are going to be important data businesses, Like what's
Speaker 1: the data that you accumulate? There's going to be an
Speaker 1: incredible focus on derivatives. Derivatives is the arms CME's in
Speaker 1: ninety billion dollar market cap company. Ice is a ninety
Speaker 1: billion dollars market company. That's where you make your revenue.
Speaker 1: And then of course all those other add on services custody, financing,
Speaker 1: et cetera. So yeah, I think Spot's going to get
Speaker 1: more and more competitive as we go on. The folks
Speaker 1: who win will diversify. The other thing you'll notice is
Speaker 1: that the one thing if you observe markets, regulation kills competition.
Speaker 1: And what you'll see over and over again is as
Speaker 1: regulation and legislation is introduced, it's really regulation. It really
Speaker 1: forces consolidation. And here's why. Regulation results in a very
Speaker 1: significant fixed cost. And if you want to get into
Speaker 1: that business, it's the same for everyone. If you're like
Speaker 1: a monster bank, GCIB whatever, you pay the same amount
Speaker 1: for that minimum compliance layer as the startup. But if
Speaker 1: you're if you have scale, you can drive your revenue
Speaker 1: or your your fees pretty low because you have to
Speaker 1: eat that that that fixed cost for your for your
Speaker 1: regulatory compliance. And so what happens is the folks who
Speaker 1: can scale will win. The folks who can't scale will
Speaker 1: die because they'll be priced out of the market and
Speaker 1: they have the same costs. So stand by for a
Speaker 1: lot of consolidation. And then on top of that, you know,
Speaker 1: we talked about how Crypto's trying to get into trad FI.
Speaker 1: Trad fis trying to get into crypto. You're going to
Speaker 1: see incremental consolidation due to M and A because it's
Speaker 1: really hard to build these things organically and hire the
Speaker 1: teams and figure it out. And so you're because you're
Speaker 1: in an arms race. Watch the M and A space,
Speaker 1: it's going to move very fast.
Speaker 4: Do you have a right in regard to innovation and consolidation?
Speaker 4: You know, you have so much competition because of that,
Speaker 4: But there's almost this competition that is building to be acquired.
Speaker 4: And I always worry about that because it's you know,
Speaker 4: where's the sustainable entrepreneurs that actually want to build something.
Speaker 4: That's why I actually love the CEO of zero Hash,
Speaker 4: who was offered, you know, to be bought out by MasterCard,
Speaker 4: and he turned it down because he wants to be
Speaker 4: one of the real players. And I think he's actually
Speaker 4: also backed by Templeton. You know, what do you have
Speaker 4: to say for people who are building to be acquired
Speaker 4: because of this climate?
Speaker 1: I mean, look, when when you're in the venture space,
Speaker 1: one of the questions that a lot of venture capitalists
Speaker 1: will ask is say, hey, you know, if somebody gave
Speaker 1: you a check for one hundred million dollars, you can
Speaker 1: take it, you know, And and that's part of a
Speaker 1: lot of due diligence that that venture capitalists will undertake.
Speaker 1: And so look, I can't speak for every single founder,
Speaker 1: but the best founders, you know, as you're looking at
Speaker 1: them through that lens for the adventure capital lens, are
Speaker 1: the ones who are mission driven and who want to
Speaker 1: win and and you know, don't want to turn over
Speaker 1: the keys when it's too early. And so I think
Speaker 1: you're pointing out something is like, if you're building to
Speaker 1: be acquired, then maybe that's not the best. You know,
Speaker 1: you're not building the best foundations. That's not to say
Speaker 1: that if if a founder decides to be acquired for
Speaker 1: the right price and the right vision like that, that's fine.
Speaker 3: You're seeing a lot of that.
Speaker 1: But you know, the other thing is that we're seeing
Speaker 1: it very difficult, you know, and I know Chairman Atkins
Speaker 1: is trying to fix this, but I think eighty one
Speaker 1: percent of companies in the United States with over one
Speaker 1: hundred million dollars in revenue, they're private. It's not easy
Speaker 1: to go public, and many people don't want to go public,
Speaker 1: and so what kind of exit is available if you
Speaker 1: can't go public? Well, M and A is typically the
Speaker 1: route it would be. It wouldn't be fair for me
Speaker 1: to say, you know that that's not an obvious exit
Speaker 1: for many folks, But yeah, you want mission driven founders
Speaker 1: when you're looking through a venture capital lens.
Speaker 2: Chris you mentioned in private equity. Do you think tokenization
Speaker 2: is going to change that market where I don't necessarily
Speaker 2: have to go public, but I can do some sort
Speaker 2: of token issuings. I hope it does in a way.
Speaker 1: I really hate the fact that, like I just gave
Speaker 1: you guys that quote, around eighty one percent of companies
Speaker 1: that remain private.
Speaker 3: That's not good.
Speaker 1: We have a huge issue with income inequality in this country,
Speaker 1: and if we're saying, hey, sorry, you're too poor, you
Speaker 1: can't invest in the best companies.
Speaker 3: Sorry, you're just too poor to do it, that's like
Speaker 3: not cool.
Speaker 1: And so I really commend some of the efforts that
Speaker 1: are being undertaken, and I'm not sure they were executed
Speaker 1: perfectly just yet. But how do we give retail access
Speaker 1: to the best companies, the most innovative companies that continue
Speaker 1: to be private. Now, maybe there's a way where we
Speaker 1: get them public earlier by alleviating some of the overhead
Speaker 1: and the stresses that they currently under that they face,
Speaker 1: you know, and sec SI. Maybe we don't need to
Speaker 1: report four times a year, maybe we do it twice whatever.
Speaker 1: But there's always this give and take between consumer protection,
Speaker 1: et cetera. I don't like the idea of saying, sorry, Amanda,
Speaker 1: we're protecting you. You can't invest in a you can't
Speaker 1: use your hard earned money to invest in a company
Speaker 1: that you want because I'm going to protect you. Like
Speaker 1: you're like, no, dude, that's not how it is. And
Speaker 1: I hope we get past that as a country. That said,
Speaker 1: it's important to give people open disclosures to understand what
Speaker 1: they're investing in. And the one trend that I'm seeing
Speaker 1: that's really moving fast and I hope it continues because
Speaker 1: oftentimes it starts and it stops. That's democratization. So crypto,
Speaker 1: to your point, gives people access to tokens as long
Speaker 1: as they've got access to the Internet, and that's pretty democratic.
Speaker 1: Now pretty much everyone in the world, even developing country,
Speaker 1: they have mobile phones.
Speaker 3: Right, that's great.
Speaker 1: AI is democratizing access to information as well, and so gosh,
Speaker 1: I'm in a much better position now, even if I'm
Speaker 1: not trained in anything to say, hey, I go into
Speaker 1: my deep research and I'm like, hey, look at the financials,
Speaker 1: what does this tell me? And you can really start
Speaker 1: teaching yourself and so hopefully together this allows for regular
Speaker 1: folks to invest in the best companies in the world.
Speaker 1: That's where you want to get and you want to
Speaker 1: make sure they do so in a way that they
Speaker 1: know what they're getting into.
Speaker 4: I know on Twitter you've been making a lot of
Speaker 4: analogies with the Revolutionary War in comparison to the bitcoin reserve.
Speaker 4: You know, your privateers and how this would work with
Speaker 4: a bitcoin reserve at no cost to the tax payer.
Speaker 4: Can you explain how that exactly would work?
Speaker 3: Yeah, thank you for bringing it up.
Speaker 1: It's something I'm pretty passionate about, and yeah, I do
Speaker 1: spend a little bit of time on social media talking
Speaker 1: about it. I'm a big believer in crypto and in
Speaker 1: the technology and the potential of this technology to do
Speaker 1: all the things I'm talking about twenty four to seven
Speaker 1: market is access, democratization, et cetera. And if I were
Speaker 1: to say, the one thing that keeps me awake at
Speaker 1: night around this technology accomplishing its full potential is security.
Speaker 3: And I've been living this for years.
Speaker 1: How often have we seen a startup by a state
Speaker 1: sponsored actor? And when a state sponsored actor goes after
Speaker 1: a startup and tries to hack them, guess what the
Speaker 1: startup's going to lose. And yes, I've been criticized and
Speaker 1: people have said, well, this is a very you know,
Speaker 1: confrontational environment, and people need to be robust, and it's
Speaker 1: shame on the victim. But like I don't know in
Speaker 1: any place that I've ever been, when you start shaming victims,
Speaker 1: probably not the right way to direct your angst. And
Speaker 1: so why don't we start pivoting on policies that will
Speaker 1: actually protect our founders attract entrepreneurs on shore. And did
Speaker 1: a little bit of research and it brought me to
Speaker 1: the US Constitution, which I used to be in the
Speaker 1: military and I used to defend and I'm like, wow,
Speaker 1: and the little history and here's how it goes. In
Speaker 1: the Revolutionary War, we didn't we couldn't afford a navy,
Speaker 1: We didn't have the surface area to really fight the British,
Speaker 1: who is the greatest naval power in the world. And
Speaker 1: so we went through this thing called we issued letters
Speaker 1: of mark, which were started in the Middle Age where
Speaker 1: you commission private citizens and ship captains to go on
Speaker 1: the attack against str enemy. And if you don't know
Speaker 1: the history of the Revolutionary War, the Revolutionary War large
Speaker 1: and a large part came to an end because we
Speaker 1: ravaged the British economy. If you look at the newspapers
Speaker 1: at the time in London, they were upset because their
Speaker 1: shipping was destroyed. Our privateers would raid it, take you know,
Speaker 1: take take their goods and really hurt their economy.
Speaker 3: And they had enough. So that helped us.
Speaker 1: When the Revolutionary War War eighteen twelve came around, James
Speaker 1: Madison issued five hundred letters of mark and again that
Speaker 1: helped with the stalemate there. And again this is as
Speaker 1: American as apple pie. To an Article one, section eight
Speaker 1: of the Constitution. Now why does this apply to crypto today?
Speaker 1: We have decent capabilities within our government, but it's really
Speaker 1: hard to attract and retain talent, and our surface our
Speaker 1: defense service areas tiny. And so the thinking is is like, gosh,
Speaker 1: what if we could look back at our history and
Speaker 1: come up with a fully regulated opportunity to let private
Speaker 1: companies go out and help help us recover those stolen assets.
Speaker 1: The numbers are big I think we had twenty nine hacks.
Speaker 1: Like recently, last month alone we had six hundred millions
Speaker 1: stolen from hacks, whether it's the KELP, Dow Layer zero thing,
Speaker 1: drift and so what are we doing about it? It
Speaker 1: keeps happening. And to me, there's only one policy solution
Speaker 1: I can think of, and it's not to blame the victim.
Speaker 1: It's to go after the bad guys. And the bad
Speaker 1: guys keep doing it. So how do we create policies
Speaker 1: that protect our founders? And to me, it's around issuing
Speaker 1: these these regulated letters of mark where they can go
Speaker 1: and recover assets. When they're successful, they will receive some
Speaker 1: of you know, using a pirate term, some of that
Speaker 1: booty and some will go to the house and then
Speaker 1: of course some will go to the victim. And like
Speaker 1: back in the day, they would actually have prize courts
Speaker 1: that adjudicated this. And a great thing about crypto is
Speaker 1: it's all chain. You could track who ones what right.
Speaker 1: So look, I'm all about solutions and that's the only
Speaker 1: I can think of, But we have to get much
Speaker 1: better from a security per The second thing on security
Speaker 1: is that people are freaking out about like AI, like
Speaker 1: oh a I is going to destroy our security situation,
Speaker 1: and they're right. It brings a lot of new risks,
Speaker 1: like deep fake technology is very scary. But the point
Speaker 1: is that AI is also going to be great from
Speaker 1: a defense perspective because it's not going to be game
Speaker 1: over like the bad guys win because they have AI.
Speaker 1: I know we're going to be able to strengthen a
Speaker 1: lot of our protocols as well. At the same time,
Speaker 1: So to me, security remains really important and has to
Speaker 1: be saw one way or the other. But thank you
Speaker 1: for asking me, Amanda, I think I'm crazy on that one,
Speaker 1: Like what do you think?
Speaker 4: Well, I think it's interesting, I do I did I
Speaker 4: hear how it works with no cost to the taxpayer?
Speaker 4: Did you answer that? And did I missed that?
Speaker 3: Yeah?
Speaker 1: So if you were to recover those assets, and always
Speaker 1: traditionally we get a cut, right they give you the letter,
Speaker 1: they're like, Amanda, you know you can go out and
Speaker 1: hack the bad guys, and you're like, okay, I I
Speaker 1: reclaimed I recovered one hundred million dollars and maybe I
Speaker 1: had to violate OPHAC to do it because I have
Speaker 1: the special license. But then you got to pay your
Speaker 1: taxes to the man, and so that would that could
Speaker 1: potentially go into the bitcoin reserve no cost to the
Speaker 1: tax payer.
Speaker 3: Everyone's happy.
Speaker 4: Thank I'm all for that.
Speaker 2: Yeah, I like the idea, and Christy, you and I
Speaker 2: have talked about it in the past. But yeah, by
Speaker 2: the way, how do you get this to Congress? To Antony,
Speaker 2: I'm trying, man, I'm trying call your congressman. I've spoken
Speaker 2: to numerous congress people on it.
Speaker 3: They like it.
Speaker 1: My Christian Carlo and I former chair of the CFTC,
Speaker 1: we published a couple of papers on it. No one's
Speaker 1: really told me that they think it's awful. There's some
Speaker 1: people that have concerns about people going rogue whatever, but
Speaker 1: like that can be solved. But uh, I think we
Speaker 1: need to do something. I can't think of anything else.
Speaker 1: And I've had good support from Democrats as well. It's
Speaker 1: not just a Republican thing, and I'm not not partisan,
Speaker 1: but I think in fact, I heard the Secretary best
Speaker 1: likes it. Christian Carlo spoke to him. So a lot
Speaker 1: of people like it. We just got to do it.
Speaker 1: And as you guys know, as we're heading to the
Speaker 1: end of the Clarity Act, here getting when they say
Speaker 1: it takes an Act of Congress. It takes Anact of
Speaker 1: Congress at it easy, So you know, we'll see what happens.
Speaker 1: But fingers crossed and call your congressman.
Speaker 4: Speaking of clarity, you've expressed a lot of concern about
Speaker 4: section five oh five. Well, first of all, do you
Speaker 4: think this bill will pass? It seems you know, early
Speaker 4: next week, end of next week. What are you? What
Speaker 4: are your thoughts?
Speaker 1: You know it's a coin flip, no matter what anyone
Speaker 1: tells you, it's a coin flip. I remain bullish that
Speaker 1: it gets passed. I think prediction markus went pretty high recently,
Speaker 1: but you know, I'm probably in the sixty percent range
Speaker 1: right now. Because things get weird at the end. And
Speaker 1: if you looked at the Genius Act, who got really
Speaker 1: weird at the end. People want to extract, they have
Speaker 1: their little agendas whatever. You never know, and it's a
Speaker 1: hard bill and a lot of people don't like it,
Speaker 1: and so there are some political challenges. The good news
Speaker 1: is that there are no more technical issues. The bill
Speaker 1: is the bill. Now you're getting into the political issues.
Speaker 1: Those political issues, there's some stuff around. People want commissioners
Speaker 1: to be appointed to balance things out. Fine, but the
Speaker 1: big issues ethics. And it's unfortunate that this has to
Speaker 1: be the issue because this is not an ethics bill.
Speaker 1: We really need an ethics bill, and we should have
Speaker 1: a big ethics bill, and I would love it, and
Speaker 1: I think it would be great for our country. But
Speaker 1: why are you tying that to crypto? And the reason
Speaker 1: is is that in some people's minds, Donald Trump and
Speaker 1: crypto are a thing. What I tell them then is like,
Speaker 1: let's really like get rid of real estate too, Like,
Speaker 1: let's go after real estate ethics because like he likes
Speaker 1: real estate too, Like, come on, guys, it should be
Speaker 1: an entire like a focus on ethics should be across
Speaker 1: all asset classes. In the State of the Union address,
Speaker 1: Trump said twice he talked about to Stop and Saider
Speaker 1: Trading Act twice. I would like I would I'd be
Speaker 1: a fool to come up here and say, oh, no,
Speaker 1: we don't need ethics, Because we do need ethics. The
Speaker 1: question is is does it need to be in this
Speaker 1: bill or should it be done you know, more broadly.
Speaker 1: I would vote for more broadly, but politics or politics
Speaker 1: are tough. The thing that makes me bullish on this
Speaker 1: getting done, though, is that when Operation Epic Fury started
Speaker 1: and the bullet started flying, Trump literally said I want
Speaker 1: clarity done. And so he's got a lot of chips.
Speaker 1: I think he's putting them on the table and I
Speaker 1: hope he gets it done.
Speaker 2: Chris, we've seen the market recently rally bit quite over
Speaker 2: eighty thousand for a bit. You know, what are your
Speaker 2: thoughts on where we're at in this cycle and could
Speaker 2: the institutional crypto institutional error break some of the four
Speaker 2: year cycle patterns we've seen over the years and make
Speaker 2: things less wild for your cycle is a thing. You
Speaker 2: can't ignore it.
Speaker 1: You can't just say it's not important, because it continues
Speaker 1: to show that it's one of the inputs. However, it's
Speaker 1: starting to be offset by others, and I think the
Speaker 1: institutional bid especially will help that. So I don't think
Speaker 1: it's fair to say, oh, it's dead, forget it, ignore it.
Speaker 1: It's just one input into many other inputs, and I
Speaker 1: think it's waiting will decrease over time.
Speaker 3: I think the market setup is very, very constructive. A
Speaker 3: few reasons.
Speaker 1: Number one, retail burned in ten ten. This is a
Speaker 1: retail market. They kind of pulled back. They're not so
Speaker 1: sure and those are the dgens, the people with the
Speaker 1: early adopters. Right typically, when price action picks up, they'll
Speaker 1: come pouring back. They needed to go after gold for
Speaker 1: a while. Blah blah blah blah blah. Look at the
Speaker 1: bitcoin gold graph. It's really actually quite beautiful right now. Ever,
Speaker 1: since epic Fury began, people are like, I think there
Speaker 1: was a little bit of concern amongst retail saying, well,
Speaker 1: wait a second, why did everyone buy gold and not bitcoin?
Speaker 3: Oh my gosh, Like my narrative is broken. I'm so sad.
Speaker 1: But the truth of the matter is is that once
Speaker 1: epic fury started, people like, wait, this gold stuff, it's
Speaker 1: hard to transport. We really don't know how much there
Speaker 1: is if I used derivats. On top of that, I'm
Speaker 1: backing US financial system. Maybe there's a better asset that's
Speaker 1: more transparent, that I can move around easier. That's that's
Speaker 1: just a better store of value. And I think that
Speaker 1: realization is coming back. So I think the narrative, first
Speaker 1: for a hot minute, broke down in some people's minds.
Speaker 1: But when you step back, the narratives are very much intact.
Speaker 1: Bitcoin's a wonderful store of gold. Wonderful like digital gold
Speaker 1: store value. But you know, right now Macro has been
Speaker 1: you know, keeping its foot on the neck of crypto
Speaker 1: a little bit, but it's been very resilient. Right we
Speaker 1: just hit ady. It feels very constructive, and then you
Speaker 1: have those institutions continuing to march forward. So sentiment is bad,
Speaker 1: fundamentals are improving. Typically results in a really constructive market setup.
Speaker 4: And see its fundamentals. You know, data is clearly one
Speaker 4: of those the biggest things with prediction markets and other derivatives.
Speaker 4: And as you I think I saw you Reshare this
Speaker 4: morning again on social media. But this this company True
Speaker 4: True Inflation. I believe it's the name of it. And
Speaker 4: you know this is this is showing better data, timely data,
Speaker 4: transparent data. It's giving you instant access to actionable inflation print.
Speaker 4: Can you just tell us a bit about about this
Speaker 4: company and why you're championing it.
Speaker 1: Yeah, So not investment advice or anything else. Stefan's a
Speaker 1: friend a step and rust I just did a podcast
Speaker 1: with him. But he if you look at the way
Speaker 1: financial data was released by the government in the past,
Speaker 1: Bureau of Labor Statistics, it's latent. The methodology is pretty old.
Speaker 1: They survey a bunch of households, they.
Speaker 3: Move it around a little bit.
Speaker 1: And so this entrepreneur identified a way to improve the
Speaker 1: calculation to go from something that's super lagging to something
Speaker 1: that's near real time. And one of the most exciting
Speaker 1: things that are that's coming out of crypto is the
Speaker 1: transparency and the discovery of new data points like predicated
Speaker 1: in prediction markets. So like, let's let's look unpack that
Speaker 1: for a second.
Speaker 3: I don't know.
Speaker 1: About you, but I would argue that the world is
Speaker 1: becoming more trustless and more permissionless as we go on.
Speaker 1: We're in a world of real politic. People are acting
Speaker 1: in their interests. It's really hard to trust, you know, polls,
Speaker 1: it's hard to trust news, and like it's hard to
Speaker 1: trust social media. And frankly, the best way to truth
Speaker 1: from my perspective is via markets. Markets tell the truth.
Speaker 1: I had a good friend, He's like, you want to
Speaker 1: know the truth, watch financial news. That's the closest you're
Speaker 1: going to get, and markets tell the truth. Now, what
Speaker 1: we have now is we have these things called prediction
Speaker 1: markets that are telling the truth in real time. Put
Speaker 1: your money where your mouth is, and they're not perfect.
Speaker 1: They can be manipulated and we're seeing issues around that already.
Speaker 1: And the great news about market manipulation in this space
Speaker 1: is that it's illegal. It's always been illegal. We don't
Speaker 1: need new laws because of a new technology.
Speaker 3: You can't do it.
Speaker 1: And I think people are going to start realizing that
Speaker 1: you don't get a free pass because it's a new market. No,
Speaker 1: it's a fully regulated market market. You can't manipulate it.
Speaker 1: So what you can start doing now, and I think
Speaker 1: we're just at the beginning of this phenomena. You can
Speaker 1: start ripping apart different parts of a company's balance sheet
Speaker 1: and have prediction markets to see how they're doing in
Speaker 1: a region. And and like the opportunities or inflation, you know,
Speaker 1: why should I wait for like a monthly report or
Speaker 1: you know, any other government data like a weekly report
Speaker 1: or whatever. When I can have the market tell me
Speaker 1: the more accurate number in real time. That makes markets
Speaker 1: more efficient, that gives people a better opportunity. And that's
Speaker 1: just one example of many. So yeah, Stefan's good friend.
Speaker 1: It's been interesting to watch as policymakers start looking at
Speaker 1: his metrics as well against the BLS. But it's great
Speaker 1: to see private sector enhancing and disrupting to get more
Speaker 1: accurate data.
Speaker 3: That's exactly what you want to see.
Speaker 2: And Chris, with blockchain tech, you know, being used as
Speaker 2: the rails for many of these different data sources and
Speaker 2: so forth, you see that it will get more efficient,
Speaker 2: better quality data with blockchain tech in the mix one
Speaker 2: hundred percent.
Speaker 1: You're seeing companies around the world. There are a couple
Speaker 1: of different streams. So one stream is that people are
Speaker 1: looking into to invest in cryptonative assets. But another humongous
Speaker 1: stream during this institutional era is that they're integrating blockchain
Speaker 1: technology for the value that it brings, which effectively is
Speaker 1: real time settlement in many cases, and it eliminates risks
Speaker 1: and eliminates settlements risk. In tradify, we call it herstat risk,
Speaker 1: which was named after a bank that defaulted in nineteen
Speaker 1: seventy four because it couldn't settle things on time and
Speaker 1: it had this huge issue with settlement latency. So yeah,
Speaker 1: you're seeing that across the board, and I know guys
Speaker 1: who are building entire pe funds around that concept.
Speaker 3: So yeah, it's interesting.
Speaker 4: Well, Christopher, this has been super informative. You're one of
Speaker 4: the few guys that doesn't get overly technical when you respond.
Speaker 4: It's very understandable and I really appreciate you joining us
Speaker 4: this morning.
Speaker 1: I really appreciate your time. Keep doing all the good
Speaker 1: work that you guys do. Big fan, and thank you
Speaker 1: Tony and Amanda. I really appreciate you coming on.
Speaker 2: Thank you Chris, Thank you so much for tuning in.
Speaker 2: Please hit the like button subscribe if you haven't as yet.
Speaker 2: If you're listening on a podcast platform such as Spotify
Speaker 2: or Apple, please follow and leave a five star rating.
Speaker 3: Thank you so much,