Speaker 1: Our job is simply to build on top of those
Speaker 1: platforms to build the future of wealth management and banking.
Speaker 1: We have a brisk business in lending against the coin
Speaker 1: and as a produciary, we want to simply have as
Speaker 1: many viable options that are liquid, easy to get in
Speaker 1: and out of, and technologically safe.
Speaker 2: I'm a big believer in the free market. However, there's
Speaker 2: been a lot of controversy with insider trading in much more.
Speaker 2: What are your thoughts on prediction markets in the future.
Speaker 1: Prediction markets are a quagmuire because of that exact issue.
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Speaker 2: Thinking Crypto link will be in the description. Hey, folks,
Speaker 2: welcome into the Thinking Crypto Podcast. I'm your host, Tony
Speaker 2: Edward and joining me is Bill Barrheight, who is the
Speaker 2: founder and CEO of Abra, which is a global digital asset,
Speaker 2: wealth and treasury management platform providing clients with a suite
Speaker 2: of sophisticated digital asset products and services. Bill, Great to
Speaker 2: see you, Great to have you back.
Speaker 1: Always great to see you, Tony. Love your work.
Speaker 2: Bill certainly want to get your perspective and thoughts on
Speaker 2: the markets and everything that's happening around Claritiac and much more.
Speaker 2: I think it's good time that we're going to be talking.
Speaker 2: And there's also, you know, the potential. I don't know
Speaker 2: if you can give us a timeline of when abramight
Speaker 2: go public, but I get ahead of myself. Bill, Where
Speaker 2: do you think we are in the crypto bear market?
Speaker 2: Do you think we're near a bottom?
Speaker 1: Yeah?
Speaker 2: I do.
Speaker 1: I think we're chopping around what I think is a
Speaker 1: price bottom, and you know, it could go on until
Speaker 1: you know, end of Q three, early Q four, but
Speaker 1: I think we've been ranged by Look, I probably see
Speaker 1: this a little bit differently than people who look at,
Speaker 1: you know, stock market returns as kind of the basis
Speaker 1: for what it means to invest and speculate. I think
Speaker 1: we're dealing with exponential growth and right now, you know,
Speaker 1: AI basically clearly has the narrative around exponential growth. It
Speaker 1: really is a very unique time and opportunity. But I
Speaker 1: think crypto is still in exponential growth mode.
Speaker 2: Right.
Speaker 1: We haven't even gotten into token iss real world equities,
Speaker 1: which is worth trillions of dollars on top of what
Speaker 1: we have. The stable cooin narrative has died down a
Speaker 1: little bit post Circle IPO, but the usage is ballooning.
Speaker 1: It's actually it's accelerated since the narrative of last summer,
Speaker 1: and so you know, the space is at hypergrowth, but
Speaker 1: the narrative shifted away from l towards institutional. But if
Speaker 1: what you're focused on is price, you need retail and
Speaker 1: right now retail money is looking at AI and certain
Speaker 1: tech stocks like crypto during COVID, and that's unsustainable in
Speaker 1: my opinion. There's a real profitability problem with AI. In
Speaker 1: my opinion, I'm super bullish on AI, right. I mean,
Speaker 1: I spend so much of my day on AI strategy
Speaker 1: it's crazy. But I think the stock thing is going
Speaker 1: to play itself out in the next six months, and
Speaker 1: I think you're going to see a big rotation into
Speaker 1: I think l ones that lend themselves towards AI crypto
Speaker 1: integration are going to get a big bump in the
Speaker 1: next eighteen months. You know that's just my personal opinion, right,
Speaker 1: you know, not necessary. I'm not telling anybody what to
Speaker 1: buy and only think that's going to happen. What do
Speaker 1: I know? But long winded way of saying, I do
Speaker 1: think we're chopping around a short term price bottom. But
Speaker 1: it's a very big range, right because you know, yeah,
Speaker 1: it does feel like a like a big drawdown. But
Speaker 1: first of all, fifty percent means on bitcoin means volatility
Speaker 1: has compressed signific since the last cycle. It's hard to
Speaker 1: believe that the last cycle was significantly worse, but it was.
Speaker 1: It was significantly worse, right, So so in my mind,
Speaker 1: because I think in exponential terms for crypto, this is
Speaker 1: a big sideways channel. You just have to basically have
Speaker 1: a time horizon that allows you to chop in a
Speaker 1: big sideways channel so that when we do break out,
Speaker 1: you understand the difference. Right, And when we're at two
Speaker 1: hundred and fifty thousand big point, which I'm pretty sure
Speaker 1: is coming, people aren't. People are going to look at
Speaker 1: this like a long like a seven month sideways channel
Speaker 1: that you see what I'm saying. So again, I don't
Speaker 1: have a lot of I don't have the luxury to
Speaker 1: think about price all day. I'm really thinking about next
Speaker 1: gen products. But but I know a lot of people do,
Speaker 1: and that's my perspective.
Speaker 2: Yeah, that's I really appreciate that. Then that's great perspective
Speaker 2: because if you have the macro view, to your point,
Speaker 2: you kind of see this part of the cycle kind
Speaker 2: of like a sideways channel. And then you know, in
Speaker 2: the past ballmark, a lot of people had the questions
Speaker 2: of why was it so lack of low luster all
Speaker 2: coins hitting perform as they did in previous bull markets.
Speaker 2: Bitcoin itself didn't perform as well as it did in
Speaker 2: previous bull markets, you know, talking about percentage gains. But
Speaker 2: to your point, the AI trade there was also a
Speaker 2: big bull run with gold and silver. Precious metals did
Speaker 2: really well. But and you highlighted that, you know, the
Speaker 2: AI bubble is going to start to cool down a
Speaker 2: bit and there's going to be rotation. So it's having
Speaker 2: that macro view and being paid. Not only that, but
Speaker 2: let's keep if I one, I think bitcoin bottom that
Speaker 2: like what fourteen, maybe it dwiged down to fourteen post ftx.
Speaker 2: That's an eight x run from from the bottom to
Speaker 2: the top. So let's have a little perspective. If we
Speaker 2: get an ad X run from the bottom this time,
Speaker 2: we'll be at you know, close to half a million, right.
Speaker 2: I'm not saying that's going to happen in one shot.
Speaker 2: It's going to happen at some point because the government
Speaker 2: government keeps printing money. That's the only thing that slows
Speaker 2: the train down is stop printing money. And we obviously
Speaker 2: don't know how to do that. So, you know, and
Speaker 2: as it relates to the old coins, I think that
Speaker 2: the good news is is we see three things. One,
Speaker 2: we see what works, right. A lot of token economics
Speaker 2: are broken, right. You know, I'm super bullish on the
Speaker 2: suy platform, for example, I hold a lot of it,
Speaker 2: full disclosure, I love it. But the token economics of
Speaker 2: all of these l ones concern me right now, meaning
Speaker 2: meaning how do they sustainably make money? Right, so that
Speaker 2: the foundation isn't out raising money every year? You know,
Speaker 2: I'm on the board of Algorand and I spend a
Speaker 2: lot of time thinking about the future of token economics. Right,
Speaker 2: how are we going to build as an industry a
Speaker 2: sustainable model? You know?
Speaker 1: You know, hyper liquid is a perfect example of something
Speaker 1: that has built a sustainable model. So that's that's issue
Speaker 1: number one. Issue number two is the stuff that has
Speaker 1: no value and adds no value to people, it should
Speaker 1: just wither and die. You know, I heard I heard,
Speaker 1: you know, pop one of your peers basically talking about
Speaker 1: crypto is dead. And I think that's what he meant.
Speaker 1: I don't think he means that Sowana and Suey and
Speaker 1: aptos and tokenized equities and stable coins and bitcoin are dying.
Speaker 1: I think he's personally invested in bullish on those things.
Speaker 1: I think he's basically saying, all the bullshit, all the chafe,
Speaker 1: it's going to go away, whether and diet it deserves to,
Speaker 1: quite honestly. And I think the third point is is
Speaker 1: you know this retail narrative that I mentioned before, and
Speaker 1: so all of those things I think are going to
Speaker 1: be good for the industry, and we will figure out
Speaker 1: a viable economic model so that, you know, once block
Speaker 1: space is at a premium, that the companies are actually
Speaker 1: making money and that will be reflected in the value
Speaker 1: that people are willing to pay to hold the asset.
Speaker 2: Pardon the interruption. Hi, I'm Tony. I'm the host of
Speaker 2: the Thinking Crypto podcast. I wanted to ask you if
Speaker 2: you can, please support the podcast by hitting the like
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Speaker 2: get your podcasts, please be sure to follow and hit
Speaker 2: the five star rating. I'll let you get back to
Speaker 2: the content. Thank you so much. Yeah, you know the
Speaker 2: first issue you mentioned with generating revenue, I know that's
Speaker 2: something a lot of people are thinking about and what
Speaker 2: that token model looks like and so forth, and is
Speaker 2: it more institutions building on these chains and a share
Speaker 2: of the fees that are being generated on the chain
Speaker 2: goes to some sort of pool or to the users.
Speaker 2: Any ideas that you can share that you know think, Well, yeah,
Speaker 2: this is a longer discussion, but basically Ethereum's scaling roadmap
Speaker 2: completely screwed the space. In my opinion, it was just
Speaker 2: a huge architectural faux pa. And they know now that
Speaker 2: they screwed this up right, I mean, Ethereum is a
Speaker 2: mess in my opinion, and everything basically all of the
Speaker 2: value is accruing to L two's and you know, Base
Speaker 2: doesn't charge fees because it's basically centralized from a deployment perspective,
Speaker 2: so the incentives aren't required. I don't know how it's
Speaker 2: going to work if BA becomes truly distributed, because there's
Speaker 2: no incentives to participate other than the applications you might
Speaker 2: be running on top of it. And so if you
Speaker 2: look at like most of the other competing l ones,
Speaker 2: the cost per transaction is so low that they just
Speaker 2: don't make money, right, I mean, think about the volume
Speaker 2: in mean coins that Solana needed to be doing to
Speaker 2: make money. They needed to basically do Visa like volumes
Speaker 2: in mean coins in order to generate some revenue. And
Speaker 2: you know.
Speaker 1: That's not sustainable. So we need a business model for
Speaker 1: the space, and hopefully competing business models. I'll like the
Speaker 1: hyper liquid example I gave you, which is totally transparent,
Speaker 1: says Okay, this project can sustain itself. I don't want
Speaker 1: to be using technology that I think is going to
Speaker 1: go away because they have no financial viable way to
Speaker 1: financially stay in business, and so nobody wants that. A
Speaker 1: developer doesn't want to make a bet on better technology
Speaker 1: that's going to go away because they're going to go broke. Right,
Speaker 1: So the space needs to figure that out. And I
Speaker 1: think when Ethereum stopped making money at the layer one
Speaker 1: layer right because they went to this layer two layer architecture,
Speaker 1: it just screwed the whole space up, and I think
Speaker 1: now they're kind of stuck. And so look, the lot
Speaker 1: of layer two technology is very interesting from a technology perspective,
Speaker 1: but from an economic perspective, it perpetuates the problem, right,
Speaker 1: And Solana may have the best of the worst economic
Speaker 1: models that are out there. It's something I'm very focused
Speaker 1: on in trying to add value in the discussions. I
Speaker 1: can tell you you know, behind the curtains at Algoran,
Speaker 1: but the space in general has a problem with this
Speaker 1: technology is improving at an awesome rate. The ability, Like
Speaker 1: you know, I'm just having conversation with the Salona folks
Speaker 1: earlier today on their vault technology, which I'm really bullish on.
Speaker 2: You know.
Speaker 1: I just mentioned Algoran and the stuff they're doing on
Speaker 1: being quantum ready of super bolish on and that's great,
Speaker 1: but we got to get our economic house together as
Speaker 1: a as an industry so that you know, people who
Speaker 1: are holding these assets aren't just making staking revenue on
Speaker 1: us diluting everyone else, you know, that's that wasn't really
Speaker 1: the intention of migrating to proof of steak. It was
Speaker 1: that there would be a viable, you know, financial model,
Speaker 1: business model behind the scenes that perpetuated these platforms at
Speaker 1: you know, very large visa like scale.
Speaker 2: Yeah. Absolutely, And do you think that might be one
Speaker 2: of the big catalysts or narratives for the next bull
Speaker 2: run up? Usually there's things like AI privacy. You know,
Speaker 2: we had DeFi summer at the last bowl up well,
Speaker 2: you know, twenty twenty one. Uh, do you think some
Speaker 2: sort of yield or generating revenue might be a big narrative?
Speaker 2: I do? I do.
Speaker 1: I mean hyper Liquid showed us the way look at
Speaker 1: the on the side. Now, DM is not crypt native project,
Speaker 1: but they use crypto to facilitate access to the to
Speaker 1: the you know, to their API. Cloud fare Flare is
Speaker 1: doing something similar with their API for their web stuff,
Speaker 1: which I tweeted on, which I think is brilliant. I
Speaker 1: think that's the future of transaction processing in AI. But
Speaker 1: it's very clear in that model how those applications of
Speaker 1: dum and cloud flare and hyper liquid all make money.
Speaker 1: But how does and I mean I mean hyper Liquid
Speaker 1: the app, not hype the blockchain. It just so happens.
Speaker 1: In that case, they don't have to worry about how
Speaker 1: hyper liquid makes money because it's the same group more
Speaker 1: or less.
Speaker 2: Right.
Speaker 1: So, So, but in the model I'm describing, if I'm
Speaker 1: running a PERP dex on Solana, is Solana printing money
Speaker 1: if they're getting the same level of traction as Hype
Speaker 1: probably not? Right, So, so that's a problem. We want.
Speaker 1: We want Solana to make money. We want Ethereum to
Speaker 1: make money. We want Algorth to make money because we
Speaker 1: don't want them to die, right, we want them to
Speaker 1: be the future of AI transaction processing.
Speaker 2: M Well, I hold all those in my portfolios fully
Speaker 2: agreement with you.
Speaker 1: And look, look, I think everyone in those foundations is
Speaker 1: focused on this problem now, I really do. I believe
Speaker 1: that if they're not, they're crazy. I can tell you
Speaker 1: we are. I can tell you know, I'm not not
Speaker 1: in the ABRA, but but you know algorith is and
Speaker 1: you know ABRA.
Speaker 2: My day job.
Speaker 1: Our job is simply to build on top of those platforms,
Speaker 1: to build the future of wealth management and banking. And
Speaker 1: from that perspective, it's going great. You know that the
Speaker 1: capabilities just keep getting better and better all the time.
Speaker 2: Hm. That is certainly a problem we have to figure out, Bill,
Speaker 2: and hopefully we can figure it out within the next
Speaker 2: year as we potentially head back into a bull phase
Speaker 2: of the market. Yeah.
Speaker 1: Yeah, I think I think there's some a few narratives
Speaker 1: that will cause the bull phase to to kind of
Speaker 1: catch up with the liquidity that's been driving crypto prices
Speaker 1: for ten years, but that will keep for another ten years.
Speaker 2: And speaking of the four year cycles, Bill, do you
Speaker 2: think that may break at some point? I know you
Speaker 2: mentioned like when you zoom out on the charts, this
Speaker 2: phase or this possible market could look like a you know,
Speaker 2: a channel that we're just in before a major cycle peak.
Speaker 2: Do you think that four year cycle breaks at all?
Speaker 2: I don't think.
Speaker 1: I think the liquidity cycle for the dollar bitcoin correlation
Speaker 1: will hold. And whether that stays four years or you know,
Speaker 1: morphs into something else based upon you know, havings and
Speaker 1: how mining morphs over time, I don't know. But I
Speaker 1: do think that the correlation between the liquidity cycles that
Speaker 1: you know, many other macro folks talk about all the
Speaker 1: time publicly, that has been holding reasonably well, especially on
Speaker 1: a log chart, and it does you know, correlate with
Speaker 1: four years pretty well. A lot of people thought it
Speaker 1: didn't this cycle, and it turns out it actually is.
Speaker 1: It's not you know, one to one as it relates
Speaker 1: to other coins which tend to move in lockstep with bitcoin.
Speaker 1: I don't see how that persists over time. I think
Speaker 1: that the l ones in particular will be largely platform
Speaker 1: driven at some point, meaning they will get some halo
Speaker 1: effect on the ability to take profits from bitcoin and
Speaker 1: come back, But largely I think it's going to be
Speaker 1: the last discussion on figuring out the economic model plus
Speaker 1: massive scale and usage. Right, everything gets a halo effect
Speaker 1: from liquidity. Everything that's tech, NASDAC, Bitcoin, you know, alternative
Speaker 1: l ones, AI, it doesn't matter, it all gets a
Speaker 1: halo effect.
Speaker 2: Right.
Speaker 1: The correlation there to global liquidity over time is like,
Speaker 1: you know, ninety seven percent. It's just a question of
Speaker 1: if it's a levered bet, which one is going to
Speaker 1: get the most benefit. And I think basically what's going
Speaker 1: to happen is is that you know, the l ones
Speaker 1: are simply going to have to survive on their own, right,
Speaker 1: be a very significant usage with a viable economic model,
Speaker 1: and then the applications will always move at the pace
Speaker 1: of adoption. Right, hyper liquid right now doesn't care that
Speaker 1: cryptos and aduldrums. It's doing fine because it's basically growing
Speaker 1: like a weed. You know, dm is is Venice is
Speaker 1: growing like a weed right on the AI side, right
Speaker 1: because it offers real value with its with its privacy platform.
Speaker 1: Actually don't understand how it works, but supposedly it does
Speaker 1: give you privacy on a you know, crypto AI API
Speaker 1: usage that's that's value to someone. And so as a result,
Speaker 1: the usage has been going through the roof and the
Speaker 1: price of those assets is ten xt and then deservedly
Speaker 1: so and has nothing to do with global liquidity in
Speaker 1: my opinion, how do.
Speaker 2: You think this situation with all coins and you know,
Speaker 2: the problem that they have to figure out affects digital
Speaker 2: acid treasure companies like you got tom Lee and bitmind
Speaker 2: buying incredible amounts of Etheroreum. There's obviously other out there
Speaker 2: for avax and Swee and so forth. How do you
Speaker 2: think those fair you know, are they going to be okay?
Speaker 2: Once did we get back into bold cycle?
Speaker 1: Yeah, Ethereum is in a unique position versus everyone else
Speaker 1: because Ethereum is still you know, the granddaddy of you know,
Speaker 1: DeFi and crypto based lending and bitcoin back loans are
Speaker 1: predominantly issued on Ethereum, and and that's the killer use
Speaker 1: case for DeFi remains borrowing against bitcoin, right, So, so
Speaker 1: so you know, I think I think Ethereum has more
Speaker 1: runway to get there, just based upon the existing momentum,
Speaker 1: you know, with with ave and token is equities coming,
Speaker 1: and you know UNI swap, and you know all the
Speaker 1: great work that's already been done at the base layer
Speaker 1: forgetting about the L two's right, and and and then
Speaker 1: there is great work happening there. So so I think
Speaker 1: Ethereum could get to a trillion dollar market cap if
Speaker 1: it really figures out and publishes a viable L one
Speaker 1: roadmap that starts giving economic value to the base layer itself.
Speaker 1: And I think that Batalic gets that now. I think
Speaker 1: he I don't know if he would say regret. I
Speaker 1: think he should feel regret over the roadmap that they
Speaker 1: published years ago. I'm in some way I'm guessing they do.
Speaker 1: But he'll never say that publicly, not the way I'm saying,
Speaker 1: but I'm pretty sure he feels that way based on
Speaker 1: you know, the vibe and and so if they do that,
Speaker 1: which I think is going to happen this year, I
Speaker 1: think you could see a real spike in ethereum based
Speaker 1: upon the promise of what's coming, meaning I could actually
Speaker 1: accrue real revenue by holding you know, eth so so,
Speaker 1: and whether the other ones can get there the same way,
Speaker 1: it's going to be harder, you know. I do think
Speaker 1: that that we're going to see probably seven or eight
Speaker 1: interesting or even up to ten interesting l ones competing
Speaker 1: in different ways public blockchains, I not even counting the
Speaker 1: private ones with different economic models. But everyone is going
Speaker 1: to have to get there in their own way.
Speaker 2: Absolutely. And on the Bitcoin side, you have Michael Saylor
Speaker 2: and Strategy now having to pivot to selling a lot
Speaker 2: more bitcoin because they're involved in what they would like
Speaker 2: to call digital credit and paying out yield and so forth.
Speaker 2: What are your thoughts on that situation and the pivot
Speaker 2: they had to take.
Speaker 1: I don't think he had to sell a lot more bitcoin.
Speaker 1: He was selling none. So versus selling none, you know,
Speaker 1: selling one is infinitely more. But so I guess two things.
Speaker 1: One the narrative before stretch, which is their preferred you know,
Speaker 1: for the non cryptodati folks listening it's their preferred shareholding,
Speaker 1: which basically gives you a fixed return on the principle
Speaker 1: paid for the stock or the par value of the stock.
Speaker 1: I think he basically was marketing mstr to institutions and
Speaker 1: basically telling retail hold Bitcoin, don't hold micro strategy, and
Speaker 1: so you can get away with a lot more from
Speaker 1: a securities marketing legal perspective, I think, And I'm not
Speaker 1: a lawyer, I'm not using legalies here. If you're basically
Speaker 1: telling people, don't buy my shares, okay, But now with Stretch,
Speaker 1: he's telling retail buy my shares because it's a great
Speaker 1: way to hold dollars because you're basically going to earn
Speaker 1: a than and a half percent. The problem with that
Speaker 1: is implicit in that statement is is that the par
Speaker 1: value of the shares is going to stay the same.
Speaker 1: Because if I'm paying you eleven and a half percent
Speaker 1: of what you paid, but what you paid is worth
Speaker 1: eighty twenty percent less, that's a big problem.
Speaker 2: Right.
Speaker 1: So that's a retail legal issue for him. So he
Speaker 1: has to do, in my opinion, whatever he can to
Speaker 1: get that thing close to one hundred cents on the
Speaker 1: dollar quickly. And there's only really two ways that he
Speaker 1: can do that end of the day. First is keep
Speaker 1: raising the rate, and the second is to buy back
Speaker 1: some of those shares and stop itsuing new ones, right
Speaker 1: so to create less supply and more demand artificially. The
Speaker 1: problem with that is is either one of those is
Speaker 1: he has to fund both of those somehow, and the
Speaker 1: money that he raised by selling those shares in the
Speaker 1: first place has all gone to buy bitcoin, and so
Speaker 1: that basically limits his options because he can raise more
Speaker 1: money and you know, dilute his shareholders, or he can
Speaker 1: basically sell some bitcoin. And I think he did the
Speaker 1: ladder initially to send a message to the market that hey,
Speaker 1: you know, MSTR and Stretch will both be fine, because
Speaker 1: even at fifty k bitcoin, you know, we're still sitting
Speaker 1: on tens of billions of dollars of of bitcoin. And
Speaker 1: so I think he has figured this out. The question is,
Speaker 1: you know, what will it take to get Stretched back
Speaker 1: to close to one hundred cents on the dollar. And
Speaker 1: my guess is is that you know, they'll probably end
Speaker 1: up having to buy some of it back, wait for
Speaker 1: another bull market, and you know, figure it out. But
Speaker 1: I think this theory that you can just sell into
Speaker 1: a bear market to raise money on the cheap has
Speaker 1: a downside this and it's what you're seeing right now.
Speaker 1: If you're using retail to fund, if you're using institutions
Speaker 1: to fund, it doesn't really matter because you have a
Speaker 1: way to convert to them to my MSDR shares right.
Speaker 1: He doesn't have that option with stretch.
Speaker 2: Billy. Does any of this feel like what happened before
Speaker 2: two thousand and eight? And again, I don't want strategy
Speaker 2: to collapse. I'm not calling for that, but the amount
Speaker 2: of debt worries me. You know, it feels like and
Speaker 2: again I could be off base here, but it just
Speaker 2: has the feelings of and look and feel of the
Speaker 2: mortgage bonds house of cards, right leveraging that up to
Speaker 2: the max and then we know what happened after that.
Speaker 2: Is there any danger of that happening here with what
Speaker 2: sailors doing?
Speaker 1: Not? Really? Look if he just basically said we're going
Speaker 1: to buy all stretch back, I don't know how much
Speaker 1: has been issued, but you know it certainly would cause
Speaker 1: you know, I could imagine a five or ten K
Speaker 1: drop in bitcoin because it's just the amount of bitcoin
Speaker 1: you'd have to sell. But that would be a one
Speaker 1: time thing, right, and then he'd just get back to
Speaker 1: doing what he was doing before, which is at the
Speaker 1: market deals and you know, convertibles and probably at a
Speaker 1: slower pace, right and slow. That's fine he did. It's
Speaker 1: an experiment. It's not going to kill him. It's not
Speaker 1: going to kill micro strategy. It's not going to kill bitcoin.
Speaker 1: It might hurt you know, some preferred shareholders in the
Speaker 1: meantime who need that liquidity now, right if they were
Speaker 1: If you're in a Stretch and your goal is to
Speaker 1: basically earn ten percent annualized over a six month period,
Speaker 1: and you bought it one hundred cents in the dollar
Speaker 1: and not trading at eighty seven cents, which is where
Speaker 1: I think it is now, and you have to sell now,
Speaker 1: you've actually lost money on a net basis, right, So
Speaker 1: that's the problem, right, It's it's micro Strategy will be fine.
Speaker 1: Bitcoin will be fine, the space will be fine. Those
Speaker 1: people who bought Stretch for a short term replacement for
Speaker 1: something like a money market product at a higher yield,
Speaker 1: those people might get screwed. And so he knows that,
Speaker 1: and that's why he basically did his announcement last week
Speaker 1: that you know, they're committed to, you know, maintaining that
Speaker 1: peg and by raising the rate and potentially even buying
Speaker 1: back some of the shares.
Speaker 2: M That makes sense. I want to ask you about
Speaker 2: the Clarity Act because we're recording this on Friday, July tenth,
Speaker 2: and the Senate and Congress is back in session next week.
Speaker 2: There may be a big push to get this bill
Speaker 2: done through the Senate. Obviously they have to go through
Speaker 2: all their respective hoops and all those things. What odds
Speaker 2: are you giving that this bill passes by the end
Speaker 2: of July?
Speaker 1: Oh man, you know, you could probably create a montage
Speaker 1: of me answering this question seventeen times with seventeen different numbers.
Speaker 1: I'm wondering what the average of those numbers would be
Speaker 1: for the nonsense that I've probably spewed on this topic
Speaker 1: over the last year. And I readily admit that I,
Speaker 1: in hindsight, had no fing idea what I was talking about.
Speaker 1: How often do you hear that from guests on your show?
Speaker 1: And we're so close though, Yeah, I mean, look, my
Speaker 1: intuition says this thing is passable. Right, the big issue
Speaker 1: remains ethics and warrant and and can we get seven
Speaker 1: people on the Senate side to you know, come over
Speaker 1: and and vote and get this thing and and get
Speaker 1: through reconciliation, et cetera, et cetera. Next week is a
Speaker 1: big week and a bunch of us are going to
Speaker 1: be in DC, and you know, anyway, I'm not answering
Speaker 1: your question directly because I actually don't know.
Speaker 2: It's tough.
Speaker 1: It's tough. It's in my mind right now, it's fifty
Speaker 1: to fifty, and I'm I'm really trying to basically not
Speaker 1: just be optimistic. I'm trying to basically look at all
Speaker 1: sides here because I have clients who this matters to
Speaker 1: and to whom this matters, and I do think that
Speaker 1: it is probably, you know, as an odds maker of
Speaker 1: fifty to fifty, you know, I think some of the
Speaker 1: endorsements that came out last week are going to help
Speaker 1: with the Dems, especially for things like public safety. There
Speaker 1: was like a Shriff's Association and some of the law
Speaker 1: enforcement groups that came out in favor of Clarity, and
Speaker 1: I think what they're basically getting educated on is this
Speaker 1: idea that hey, this underlying technology is actually beneficial to
Speaker 1: law enforcement, and that's been proven on a pretty steady
Speaker 1: basis over a ten year period now, whether it's the
Speaker 1: early days of bitcoin and Silk Road or crap, you know,
Speaker 1: all the way through to you know what what has
Speaker 1: happened in you know, myriad thefts and DeFi and whatnot.
Speaker 1: So so so that's good news that probably would get
Speaker 1: I might have said forty percent two weeks ago, and
Speaker 1: I think I'm at like fifty to fifty with a
Speaker 1: slight up swing maybe fifty one percent right now, you know. So,
Speaker 1: so it's it's tough. It's so much emotion now, which
Speaker 1: shouldn't you know, I don't know, it's too much emotion
Speaker 1: with this issue for too many people.
Speaker 2: Absolutely, And I know government moves slow. So we'll see,
Speaker 2: you know, could they pull a rabbit out of that
Speaker 2: hat and you know, you know, fast track this, it's possible,
Speaker 2: but well we'll have to wait and see. You know,
Speaker 2: you mentioned some of your clients without giving names. You
Speaker 2: mentioned that this is very important to them. Is it
Speaker 2: that they want that regulatory clarity so they can start
Speaker 2: building and investing more?
Speaker 1: Well, okay, so we have clients who don't even understand
Speaker 1: what I'm talking about here or what we're talking about here.
Speaker 1: I just know that it's indirectly important to them because
Speaker 1: of what we're building for them. Okay, meaning our chances
Speaker 1: of success with clarity go up passing are are incrementally better. Okay,
Speaker 1: We've just licensed up and you know, registered as or
Speaker 1: I AD all these things to put a motor around us,
Speaker 1: and that moat gets thicker with clarity, wider than with
Speaker 1: clarity than without it. So and then we have clients
Speaker 1: who are smart enough to make, you know, trading bets
Speaker 1: based upon which way the wind is blowing, smarter than
Speaker 1: their mind. And that's fine, that's that's not necessarily wrong.
Speaker 1: And some of them, you know, are asking our opinion
Speaker 1: pretty regularly. Hey, you know, one is this thing going
Speaker 1: to pass? And two is it going to represent a
Speaker 1: tailwind for the broader crypto space from a price perspective?
Speaker 1: And you know, I basically tell them what I tell
Speaker 1: you now, which is, if you've asked me seventeen times
Speaker 1: over the last two years, you've gotten seventeen different answers,
Speaker 1: and you're probably annoyed as hell. And it's a function
Speaker 1: of the visibility we've had into this process at any
Speaker 1: given time. And but if we don't get this done
Speaker 1: before summer, recess or whatever the right term is. It's
Speaker 1: a problem because right now, my bet is our odds
Speaker 1: on the House have improved, but they're still against us
Speaker 1: in terms of like the crypto space. I'm not talking
Speaker 1: just you know, yes, Democrats are likely to take back
Speaker 1: the House, which hurts clarity. I think Senate, we've improved
Speaker 1: our situation a little bit. I think this thing in
Speaker 1: Maine that happened this week is a little odd, so
Speaker 1: that might have helped our case a little bit as well.
Speaker 1: But anyway, I don't know, but I have a feeling
Speaker 1: we'll keep the Senate. But regardless, it becomes very difficult
Speaker 1: to get controversial legislation done if it's not done before
Speaker 1: the midterms. Based upon the visibility that I have. I'm
Speaker 1: not a political polling expert, but I just the basic
Speaker 1: reading of the tea leaves says we need to get
Speaker 1: this done now or it could be years before we
Speaker 1: get another shot. Years.
Speaker 2: Yeah, time is certainly of the essence. You know. One
Speaker 2: of the things I saw recently from the Senator Kristen Gillibrand,
Speaker 2: who's been a crypto champion and she's a Democrat, she
Speaker 2: put out a provision I believe to block politicians and
Speaker 2: elected officials from holding or having meme coins, and maybe
Speaker 2: that's a compromise that the Democrats can agree upon and say, hey,
Speaker 2: you know what, this works. We agree that we'll figure
Speaker 2: out the other assets, even stocks, and the larger ethics issue,
Speaker 2: because it's not a crypto specific issue. But if we
Speaker 2: block meme coins, maybe that works, and might hope I'm
Speaker 2: praying that that's the compromise.
Speaker 1: Yeah, hey, look, maybe it'll motivate some of these politicians
Speaker 1: to spend less time in office, and we'll get term
Speaker 1: limits by default because everybody just desperately wants to own
Speaker 1: meme coins and they can't because they're in Congress, and
Speaker 1: so they'll all start resigning in mass and we'll have
Speaker 1: natural term limits, which is obviously I'm kidding, it's not
Speaker 1: going to happen. But my point is, like, there's a
Speaker 1: million things that are more important that we could be
Speaker 1: spending time on. I get why she's doing it. I'm
Speaker 1: not you know, I'm not knocking her. I think she's
Speaker 1: been a great champion. I'm just making a point facetiously, like, hey,
Speaker 1: come on, let's get this done. Let's move on to
Speaker 1: important things. By the way, like, you know, not allowing
Speaker 1: people in Congress who've been in office for forty years
Speaker 1: to have it trade on inside information. You know, that's
Speaker 1: kind of table stakes in my opinion, for you know,
Speaker 1: like a code of ethics, and the fact that that
Speaker 1: we still don't have that is insane to me. Insane
Speaker 1: And the fact that people don't voluntarily do that is
Speaker 1: also insane to me. And and so if we want
Speaker 1: to fix something, let's fix that. Ultimately, we should fix
Speaker 1: term limits, but that's not going to happen anytime sooner.
Speaker 1: I mean, that's a constitutional amendment. So that's just that's
Speaker 1: just not gonna happen. But at least we could, you know,
Speaker 1: fix some ethics issues which have nothing to do with crypto.
Speaker 1: It just has to do with, you know, how people
Speaker 1: who are in office for decades enrich themselves.
Speaker 2: It's wild, Bill, And it's only until crypto and social
Speaker 2: media that I've learned that, you know, I and I
Speaker 2: and I wonder if Bill, because the information is spreading
Speaker 2: out there. There's portfolio trackers, you know, the Pelosi tracker
Speaker 2: and all that.
Speaker 1: It's unbelievable. I mean, I don't know if it's legal
Speaker 1: to create an ETF called the Pelosi Tracker, but I
Speaker 1: mean everybody should just I guess it's not investment advice.
Speaker 1: But if you plowed into that, you'd be doing really well.
Speaker 2: But I wonder, you know, from a macro perspective, larger
Speaker 2: conversation because of this technology, because people are able to
Speaker 2: share information fast and crowdsource that this exposes the politicians
Speaker 2: and it puts pressure on them to change things. And
Speaker 2: maybe my daughter's generation, as he's eight years old, it's
Speaker 2: much better. There's less of this, and eventually they get
Speaker 2: around to passing legislation to fix that. I don't know.
Speaker 1: I don't know. I think I think the way AI
Speaker 1: is coming on strong and the exponential growth at its abilities.
Speaker 1: I think we're approaching AGI at a PhD level. I
Speaker 1: think we had a GI at a master's level last year,
Speaker 1: and I think we're going to have a GI at
Speaker 1: a PhD level where it can start to have original
Speaker 1: ideas over the next twelve months. And then I think
Speaker 1: ASI comes two to three years later, and then it
Speaker 1: and then it's no longer LLM. It literally can think
Speaker 1: from first principles perspective. It can't think from first principles.
Speaker 1: Now it's still guessing based upon lots and lots of data.
Speaker 1: It's just getting really good at guessing. And so when
Speaker 1: it starts to think from first principles perspective, who the
Speaker 1: whole universe that we know is going to change so
Speaker 1: dramatically that every one of these discussions, you know, it's
Speaker 1: all going to change. So and that's you know, that's
Speaker 1: DVANCE will inherit that hopefully or AOC will inherit that,
Speaker 1: not not Trump. And so in that world it's going
Speaker 1: to come down to, is that is that superintelligence that
Speaker 1: thinks from first principles controlled by US government and the
Speaker 1: Chinese government, or has it become basically commoditized and free
Speaker 1: for all and we basically move towards you know, a
Speaker 1: true kind of utopian society and have to think through
Speaker 1: bigger issues like you be, universal basic ownership and things
Speaker 1: like that, which you know, I don't know the answers
Speaker 1: for all that stuff, but but you know that's where
Speaker 1: this is headed. And I think crypto is going to
Speaker 1: play a key part of that because it is going
Speaker 1: to become for the ASI world probably the transaction processing system. Right,
Speaker 1: They're not going to say, oh, you know, my monkey user,
Speaker 1: please install an oracle database. It's not going to happen, right, So,
Speaker 1: so so I realized this is not about This doesn't
Speaker 1: sound like it's about politics, but it is because I
Speaker 1: think we're basically the rocket is I use this analogy
Speaker 1: all the time. The rocket is heading towards the cliff, right,
Speaker 1: and it's heading towards the cliff, and you can't stop it.
Speaker 1: The question is which way is it going to go
Speaker 1: when it gets to the cliff, And in my opinion,
Speaker 1: is the rocket going this way is basically the government
Speaker 1: not owning it, and the rocket going this way is
Speaker 1: the government owning it. And that is basically going to
Speaker 1: affect everything everything. There's nothing that it won't affect. It'll
Speaker 1: affect your money, it'll affect your how your schooled, It'll
Speaker 1: affect how transport works, how vacations work, how you know,
Speaker 1: social security systems around the world work, how basic ownership works,
Speaker 1: et cetera, et cetera. And so you know that's that walls.
Speaker 1: The rocket is heading towards that cliff right now.
Speaker 2: You know you mentioned that AI will use blockchain rails
Speaker 2: to transact, and we're seeing a lot of folks building
Speaker 2: AI agent wallets, crypto wallets, and different types of applications.
Speaker 2: Do you also see blockchain being used to police AI
Speaker 2: because we have a problem with deep fakes, they're going
Speaker 2: to get more sophisticated. But to your point, the intelligence right,
Speaker 2: the IQ so high, how do we put the guardrails
Speaker 2: in place? And it seems like cryptography, blockchains using cryptography
Speaker 2: will be a way to do it. Yeah.
Speaker 1: So, so I was listening to a talk on you know,
Speaker 1: my friend Peter Demonus does the Moonshots podcast, which is
Speaker 1: pretty good. Yeah, and they were, they were actually it's
Speaker 1: very good. They were talking about this issue of KYC access.
Speaker 1: You know when when Anthropic went offline with their mythos,
Speaker 1: like where their mythos light because of the you know,
Speaker 1: the executive order and should we have KYC and you know,
Speaker 1: you could use the K technology to solve a lot
Speaker 1: of this. Now, they wouldn't have said that on their
Speaker 1: podcast because they don't know what K technology is, right
Speaker 1: at least I would guess they don't. And and so
Speaker 1: someone will figure that stuff out. Right, if you need
Speaker 1: to basically police and you being the euphemism for somebody
Speaker 1: arbitrarily decides that they need to police, I don't think
Speaker 1: you need to police anyone. But but I think you
Speaker 1: need to be able to react to people who do
Speaker 1: bad things and with evidence, right, And the good news
Speaker 1: is is with crypto the evidence is there to see
Speaker 1: and if you do need to know who that person
Speaker 1: is for whatever reason, then the ZK technology does allow
Speaker 1: you in a very relatively safe way to figure all
Speaker 1: of that out. But my guess is is between the
Speaker 1: open source technology and yeah, the direction that this is
Speaker 1: going with people running AI on the local laptop, it's
Speaker 1: going to be very difficult to police this at global scale,
Speaker 1: and the things that they're doing in the short term,
Speaker 1: like if you are developing code unfable now and you
Speaker 1: ask it to do security checks on the code that
Speaker 1: you literally created for your application and you don't word
Speaker 1: that request correctly, now, it won't do it.
Speaker 2: Now.
Speaker 1: That's in my opinion, that's a bug because they didn't
Speaker 1: know how to fix what the government was trying to
Speaker 1: get them to do before, so they had no choice
Speaker 1: but to swing the pendulum too far the other way.
Speaker 1: But open source systems will be just as strong soon
Speaker 1: and the government won't be able to stop them, right,
Speaker 1: just like they couldn't stop PGP when I was a kid.
Speaker 1: You know, from basically allowing us to export strong encryption
Speaker 1: which they also used to write. Right, So so open
Speaker 1: source solve that problem too, you know. And and so
Speaker 1: I think that it's going to be a lesson on. Okay,
Speaker 1: are people fundamentally good? Can people with access to you know,
Speaker 1: godlike technology be fundamentally good? Or we just fundamentally bad?
Speaker 2: You know?
Speaker 1: And and there's enough bad apples that, you know, cause
Speaker 1: us to want to move towards some dystopian centralized control.
Speaker 1: And I just don't think that's true. I I you know,
Speaker 1: maybe it's just a naive I don't know, but I
Speaker 1: just I just don't think that's true. And we'll see Bill.
Speaker 2: Life tends to imitate art many times. I love. I'm
Speaker 2: a big Terminator movie fan. I've seen I robot. We're
Speaker 2: getting to a point where the AI becomes against so
Speaker 2: smart the IQ of these artificial intelligent beings so to speak,
Speaker 2: you want to call them, that their IQ's vastly outweighs
Speaker 2: the collective human IQ. And we have a Skynet moment.
Speaker 1: Well that's a different question. So I think we're at
Speaker 1: a point now. Look, the average the average human does
Speaker 1: not have a master's degree in anything. So the ai
Speaker 1: l ms now have master's degree level knowledge of pretty
Speaker 1: much every topic, okay, and so they don't have PhD
Speaker 1: level abilities in every topic. The difference being a PhD
Speaker 1: can basically create something that didn't exist before with original thoughts.
Speaker 1: It can simulate that pretty well in a lot of areas,
Speaker 1: like some math problems that have been solved, but the
Speaker 1: math problems that it's solving are basically using known techniques.
Speaker 1: I don't think that the ais are creating new techniques
Speaker 1: to solve, you know, what would be a PhD problem, right,
Speaker 1: And so there's some conjectures that were solved recently Viams
Speaker 1: this spring that we're pretty mind blowing, but they were
Speaker 1: using existing techniques that a master's student could even learn
Speaker 1: in that, right. So that's my understanding. So the next
Speaker 1: evolution is will they basically be able to reason original
Speaker 1: thought the way a PhD would? And that's what ASI
Speaker 1: is to me, because when you can do that, you
Speaker 1: can the litmus tests. For me, and I disagree with
Speaker 1: some of the current things that you know, the San
Speaker 1: Francisco what I call the San Francisco or Silicon Valley
Speaker 1: thinking of this, which is, you know, LLLMS will get
Speaker 1: us to ASI. I don't believe that's the case. I
Speaker 1: think LLLMS will basically get us to the very limit
Speaker 1: of what a master's student who understands infinite existing knowledge
Speaker 1: can possibly have, can do, comprehend, or have. And then
Speaker 1: the next step is going to be how do we
Speaker 1: use those information sources to basically start creating feedback loops
Speaker 1: to create original knowledge. And you have to basically do
Speaker 1: trillions of tests. But at some point what that does
Speaker 1: is it starts to recreate knowledge from first principles. In
Speaker 1: other words, you know the idea that you know, if
Speaker 1: you're on Earth and you push an object, you realize
Speaker 1: that e F equals M right force eqls mass times acceleration,
Speaker 1: But that becomes untrue at the speed of light, right,
Speaker 1: you know, I And but it will figure that out
Speaker 1: from testing in first principles as opposed to I read
Speaker 1: it in a book, I read it on Reddit, right.
Speaker 1: And when it does that, and it learns at an
Speaker 1: accelerated rate, it will have godlike abilities, probably within months, right,
Speaker 1: because it will figure things out that we never even
Speaker 1: thought of figuring out.
Speaker 2: Right.
Speaker 1: So that's what I think is coming that people don't understand,
Speaker 1: not the increased abilities of the LPs. I think it's
Speaker 1: the next phase that really becomes almost godlike in a way.
Speaker 2: If you put it into a humanoid robot that can
Speaker 2: actually do physical things, and to your point, it can
Speaker 2: learn the physics, law, physics and other things.
Speaker 1: Yeah, and I look at it more like you know, Okay,
Speaker 1: So you can look at it like the Terminator movies,
Speaker 1: or you can look at it like the Star Trek movies.
Speaker 1: And I tend to look at it more like the
Speaker 1: Star Trek movies because I think, I think Star Trek
Speaker 1: what was so interesting about it was it it captured
Speaker 1: the imagination of potential plus a viable future around technology
Speaker 1: potential not speaking about light travel, but but everything else
Speaker 1: you know, I think is totally viable.
Speaker 2: It's a brave new world a bill, and I'm so curious.
Speaker 2: I almost want to freeze myself and wake up fifty
Speaker 2: years from now to see what it looks like. Yeah.
Speaker 1: Other than my my family, who I love dearly, I
Speaker 1: was definitely born too early. I do. It may not
Speaker 1: matter because we're about to basically solve the human hardware
Speaker 1: and software problems, So I guess it's so important.
Speaker 2: Sure, Like you upload your consciousness of AI version of
Speaker 2: you in a robot. I don't know where.
Speaker 1: You just have interchangeable body parts, and you know it's
Speaker 1: the brain that they have to preserve, so in the
Speaker 1: nervous system, right wow.
Speaker 2: And then yeah, like the use stem cells to regenerate.
Speaker 1: I don't know, there you go. I think it's coming.
Speaker 1: I think this is you know, I say this to
Speaker 1: my kids all the time. Besides basically learning, which you
Speaker 1: should always be doing it, the other thing is that
Speaker 1: the single most important thing you can do for yourself
Speaker 1: is not die. Because we are so close to reaching
Speaker 1: escape velocity from a lifespan perspective, and and and you
Speaker 1: know that at that point again, all of these things
Speaker 1: that we've taken for granted in terms of like centralized systems,
Speaker 1: they all break down, right the way monetary systems come
Speaker 1: and go. And if people start living to one hundred
Speaker 1: and thirty or one hundred and forty, the cycle of
Speaker 1: empires doesn't work anymore, right, right, And everything lends itself
Speaker 1: towards you know, trustless kind of what I call enlightened
Speaker 1: self interest systems. And even then the issue becomes well
Speaker 1: one of the great drivers for pushing society forward. Is
Speaker 1: this idea that we all share the same destination, which
Speaker 1: is the great and if we don't share that destination anymore,
Speaker 1: how does it change the psychology of of you know,
Speaker 1: enlightened self interest, which is basically what's the only method
Speaker 1: of kind of self government or governance that's really proven
Speaker 1: over time to really push society forward in a positive way,
Speaker 1: which is why the American experiment has been largely successful.
Speaker 1: It's it's you know, it's what I call enlightened self
Speaker 1: self interest. But it also has partially been based upon
Speaker 1: this idea that we do all share the same destination.
Speaker 2: Right, It's a motivator like I need to get this
Speaker 2: done before this time period and which the average human
Speaker 2: lives on what's seventy seven years old?
Speaker 1: Right, Yeah, yeah, exactly. Well, I don't know, I don't
Speaker 1: know what's going to happen, but we're going to know
Speaker 1: a lot quicker than people think.
Speaker 2: Yeah. Absolutely. I didn't want to ask you about prediction
Speaker 2: markets this. Do you seem to be all the rage Bill?
Speaker 2: I'm a big believer in the free market. You want
Speaker 2: to go, you know, to Vegas, bet on black or
Speaker 2: red on a roulette table, no problem, However, there's been
Speaker 2: a lot of controversy with insider trading in much more.
Speaker 2: What are your thoughts on prediction markets in the future.
Speaker 1: Yeah, I mean prediction markets are are a quagmuier because
Speaker 1: of that exact issue. I think. I think to a degree,
Speaker 1: if an outcome can be affected by somebody who's conflicted
Speaker 1: in terms of their access to a prediction market, you're
Speaker 1: crazy to participate. I mean, or you should basically understand.
Speaker 1: You know that, you know, you're participating in an outcome
Speaker 1: bet where somebody who is involved can influence the outcome
Speaker 1: in a way that's explicit to the you know, to
Speaker 1: the odds against the odds that you're participating in. I'm
Speaker 1: not saying that eloquently, but you get point right, And
Speaker 1: so on the one hand, people should understand that. On
Speaker 1: the other hand, you know, you may say, well, okay,
Speaker 1: this is unethical and so the government should stop it.
Speaker 1: That's a very natural tendency for people now to say
Speaker 1: it's unethical, therefore the government should blah blah blah. We
Speaker 1: need to stop equating those things, in my opinion, as
Speaker 1: a society and say, okay, carpetdium, yes, but buyer beware yes, okay,
Speaker 1: So what does the buyer beware part of this? And
Speaker 1: why do I need the government to basically not do
Speaker 1: keep me from doing stupid things? How about I just
Speaker 1: don't do stupid things?
Speaker 2: Right? And so.
Speaker 1: I think that prediction markets are a perfect example of
Speaker 1: have fun with it. There are probably good institutional use
Speaker 1: cases like CFD markets internationally where you can do things
Speaker 1: like hedge. If you're a farmer, you can buy CfDS
Speaker 1: on the weather. For the Americans here don't know what
Speaker 1: a CFD is. A contract for difference. It basically allows
Speaker 1: you to bet on an outcome where the relative value
Speaker 1: of the outcome determines how much money you win. And
Speaker 1: those bets are basically, you know, very common in places
Speaker 1: like Europe or Asia. They don't exist in the US
Speaker 1: because it's considered gambling and which is illegal at the
Speaker 1: federal level. So prediction markets put us closer to that model,
Speaker 1: which has institutional value. And I think that's a good thing,
Speaker 1: and I think it's interesting technology and it should exist
Speaker 1: and buyer beware and all that stuff. But yeah, the
Speaker 1: problem you highlight is like if, okay, so for example,
Speaker 1: if I'm a public company and I go on CNBC,
Speaker 1: and I know that there's a prediction market bet that
Speaker 1: Bill is going to say the we're bullshit on CNBC
Speaker 1: and the odds of that are ten percent. And I say, oh, well,
Speaker 1: wait a minute, I can go on CNBC say the
Speaker 1: warre bullshit legally and make a million dollars. Now, I
Speaker 1: don't think I should do that ethically, but it's not
Speaker 1: against the law as far as I know, right, So,
Speaker 1: you know, you may get people who disagree with my ethics,
Speaker 1: because no one's bound to my ethics hopefully, And so
Speaker 1: how do you deal with that, right, Well, you deal
Speaker 1: with it with common sense, which is it unless you know,
Speaker 1: there's no way to hide the fact that this bet
Speaker 1: exists from Bill who's going on CNBC. Don't do it,
Speaker 1: don't make the bet. Right, So, you know, again, we
Speaker 1: were allowed to operate with common sense and we don't
Speaker 1: need to overregulate everything to the point of stupidity.
Speaker 2: Yeah, because then it becomes big brother, big government one
Speaker 2: hundred times worse. Right, they must police every single thing,
Speaker 2: Like no, we as humans have to have some decisions
Speaker 2: and you know, study and educate ourselves. We can't have
Speaker 2: the government babysitting us everywhere.
Speaker 1: Yeah, Well, personal agency is part of the enlightened self
Speaker 1: interest that has made the American experiment work and the
Speaker 1: idea of going from that to the socialism experiment which
Speaker 1: has destroyed Venezuela, for example, and heark goes out to
Speaker 1: them with what they're going through with the airspick right now,
Speaker 1: which is not because obviously this discussion, but but you know,
Speaker 1: it just proves that there is a viable way to
Speaker 1: conduct the experiment, and in by a large has been
Speaker 1: you know, the first two d and twenty five years
Speaker 1: of the American experiment, with some you know, issues that
Speaker 1: we've created over the last twenty five but but you
Speaker 1: know this, it's a very interesting case, this this prediction market,
Speaker 1: because it really it highlights the issues of agency and
Speaker 1: centralized government control in a very stark way because now
Speaker 1: you have states saying, well, wait a minute, this is
Speaker 1: gambling which we regulate, and it's not you know, commodities
Speaker 1: derivatives which you regulate, and the federal government is saying, no,
Speaker 1: these are a form of commodities derivatives which we regulate,
Speaker 1: and they're going to.
Speaker 2: Fight it out.
Speaker 1: But it's more, it's more existential than that around personal
Speaker 1: agency and rights in my opinion. And and so that's
Speaker 1: why I think in many cases, the states are willing
Speaker 1: to have these fights because they know that, right, you know,
Speaker 1: especially the more kind of socialist, collectivist leaning parts of government,
Speaker 1: are very afraid by what they're seeing with the prediction
Speaker 1: markets because they simply lose that potential for more control.
Speaker 1: And I'm not I'm not opiing on whether that's good
Speaker 1: or bad. I'm just saying that that's the difference in perspectives.
Speaker 1: And it is a it's a healthy debate to have.
Speaker 1: You know, I can give you my opinion, nobody cares,
Speaker 1: but but you can probably guess what my opinion is.
Speaker 1: But but you know, we need to I guess we
Speaker 1: need to have the debate. And and but it does
Speaker 1: highlight this idea of personal agency versus you know, some
Speaker 1: growing centralized modeled with the control over, you know, over
Speaker 1: every aspect of society. And some people that I know,
Speaker 1: and even my friends, believe that we need that in
Speaker 1: order to survive in this age of you know, growing
Speaker 1: wealth disparity and technological singularity that's coming. And when I
Speaker 1: explained to them, well, it's the big government that created
Speaker 1: that divide in the first place. You've just been sold
Speaker 1: a bag of goods to say no, it's big companies
Speaker 1: that have created that divide. Big companies didn't print, you know,
Speaker 1: thirty seven trillion dollars in debt, right, and so they
Speaker 1: just took advantage of them that was already set up.
Speaker 2: You know.
Speaker 1: So it's a very interesting fight that's coming.
Speaker 2: Yeah. And I look at prediction markets too as like
Speaker 2: a great you alluded to it, a source of truth.
Speaker 2: Is it perfect? Of course not? You know, do I
Speaker 2: trust everything with one hundred percent? Of course not. But
Speaker 2: I can go there, Bill and versus the narrative that
Speaker 2: the government tell me or mainstream media is telling me
Speaker 2: and say, wait a minute, is that actually real or
Speaker 2: is that just a narrative of your yeah so thought experiment.
Speaker 1: Right. So, so if you remember the first election Trump Hillary,
Speaker 1: I think the New York Times like a couple of
Speaker 1: weeks before the election gave her like a close to
Speaker 1: a ninety percent chance of winning or high eighties or
Speaker 1: something like that. And obviously she lost. And so I'm
Speaker 1: wondering what the prediction markets would have said at exactly
Speaker 1: the same time if they had existed then. And I
Speaker 1: don't know the answer to that. I'm guessing it wouldn't
Speaker 1: have said eighty percent chance of Hillary winning, and so
Speaker 1: now would it have said, you know, fifty eight percent
Speaker 1: chance of Trump winning, for example, I don't know, but
Speaker 1: that's probably what it should have said. If it's if
Speaker 1: it's giving you the source of truth that you're implying
Speaker 1: in your comments, and it leads me to believe we
Speaker 1: might have at a you know, a very different set
Speaker 1: of talking heads in the media who were you know,
Speaker 1: basically calling bs on the pollsters at the time, who conflate,
Speaker 1: They were flat outlying. A lot of them conflate, you know,
Speaker 1: the national polls with electoral college polls, which often have
Speaker 1: nothing to do with each other, right, And so I
Speaker 1: totally agree with you that as a source of truth.
Speaker 1: It's it's it's very interesting. And the more decentralized we
Speaker 1: can make those things the better.
Speaker 2: And that's the ability to go back. And this is
Speaker 2: up your value because your pedigree, of course, in nature
Speaker 2: of the Internet, the ethos of the Internet was to
Speaker 2: bring down the centralization and then you have these layers
Speaker 2: of blocking prediction markets. It's taking away power from these
Speaker 2: government constructs and the kings of the past and things
Speaker 2: like that where I'm not saying we one hundred percent
Speaker 2: have control of the people that is, but we're getting
Speaker 2: more back.
Speaker 1: Maybeah yeah, Look the cipherpunk eth it was always very clear,
Speaker 1: but ultimately for me what resonated was this idea of
Speaker 1: personal agency online you know, free information, freedom of choice,
Speaker 1: freedom of access, and and you know that that is
Speaker 1: now you know, made its way into this new world
Speaker 1: of decentralized transaction processing and decentralized money. Uh. And I
Speaker 1: just don't see how we can effectively build the future
Speaker 1: we're building without that now. Yeah, just kind of full
Speaker 1: circle back to the economic models for the space that
Speaker 1: we need because it's we we so desperately need this
Speaker 1: decentralization technology as part of this future of the Internet,
Speaker 1: which is, you know, the Internet of things, meaning whether
Speaker 1: it's robots or nanobots which again injected or other ais,
Speaker 1: all of which are self aware and all of which
Speaker 1: have to trans act in some way.
Speaker 2: Absolutely, Bill, I know we're coming up on time here.
Speaker 2: Conversation's going great, but I don't want to be respectfully
Speaker 2: your time, and I did want to add Abra there's
Speaker 2: some major news items. So there was an integration with
Speaker 2: the Threshold Network to bring TBTC to abra tell Us
Speaker 2: above them. Yeah.
Speaker 1: So you know, we have a brisk business in lending
Speaker 1: against bitcoin, and we're always looking at the best ways
Speaker 1: to facilitate that for our clients, and we're a very
Speaker 1: large user of the myriad defied networks to facilitate access
Speaker 1: to the capital on our client's behalf. As a as
Speaker 1: a fiduciary, we're always looking to do what's best for
Speaker 1: them in terms of how they can borrow against their bitcoin.
Speaker 1: As I mentioned earlier, that's the killer use case still
Speaker 1: for DeFi is borrowing against bitcoin. I think that's about
Speaker 1: to what what it's done is it's proven that once
Speaker 1: we have tokenied equities, it should be very easy to
Speaker 1: pump my Apple shares into ABBA and borrow against my
Speaker 1: Apple shares or my SpaceX or whatever. And so what
Speaker 1: with with because Ethereum doesn't know what bitcoin is, we
Speaker 1: have to basically have an Ethereum token. And so for
Speaker 1: those of you who never used DeFi, what you're doing
Speaker 1: is is you're basically wrapping bitcoin to turn bitcoin in
Speaker 1: stable coin. Right, still equal to one bitcoin, still equal
Speaker 1: to one bitcoin, but at bitcoin issued on the Ethereum network,
Speaker 1: where the original Bitcoin is simply held in custody by
Speaker 1: like you know, a large custodian, and the largest issuer
Speaker 1: of this bitcoin stable coin, which we call rapped bitcoin,
Speaker 1: was formerly well still is. I think bitco and coin
Speaker 1: base is now coming on strong with their c b BTC.
Speaker 1: We were originally the large user of w btc, and
Speaker 1: then the platform you just mentioned we've also started using.
Speaker 1: And our goal is to basically give our clients choice
Speaker 1: where they care. A lot of our clients don't even
Speaker 1: understand what the hell we're talking about. They just want
Speaker 1: to borrow against their bitcoin, and in some cases we're
Speaker 1: making the choice for them, and as a produciary, we
Speaker 1: want to simply have as many viable options that are liquid,
Speaker 1: easy to get in and out of, and technologically safe.
Speaker 1: Right because when you wrap bitcoin, you're actually centralizing the bitcoin,
Speaker 1: but you're also centralizing it because you want to borrow
Speaker 1: against it, so you have to basically post the collateral obviously,
Speaker 1: but all of this is technology risk, and we go
Speaker 1: very deep in terms of understanding that's how it works
Speaker 1: and making it very easy for our clients to ultimately
Speaker 1: borrow against bitcoin earn yield on the bitcoin earn yield
Speaker 1: on dollar stable coins, stake their ethereum, stake their salon.
Speaker 1: It's all related, right, and so this is yet another
Speaker 1: another tool in the toolbox for us to facilitate those
Speaker 1: defive transactions for our clients.
Speaker 2: And then also there was an expansion of the executive
Speaker 2: leadership team with four senior leadership appointments.
Speaker 1: Yeah, we're getting ready to go public and you know
Speaker 1: we're to get public market ready is no easy undertaking.
Speaker 1: We announced our attentions to you know, go public via
Speaker 1: a merger to spack opportunity back in I think it
Speaker 1: was April and and we're down the path of doing
Speaker 1: that and it's going, you know, pretty well. In my opinion,
Speaker 1: I think the timing of the markets versus when we'll
Speaker 1: get it done could be could be good. We'll see,
Speaker 1: not my call. Regulators have a say in that. But yeah,
Speaker 1: to do that, we've hired a new CFO, Jenny is fantastic,
Speaker 1: comes from not only the alternative asset space, but you know,
Speaker 1: its former H and q H you know just you know,
Speaker 1: really made a big, big impact on the company. We
Speaker 1: just announced a new chief legal officer, Nicole also awesome.
Speaker 1: I think she was the first head of crypto legal
Speaker 1: at at robin Hood and you know, just between just
Speaker 1: sheer legal power, regulatory knowledge experience in crypto, great great
Speaker 1: hire for us. You know, Dan Perry joined us from
Speaker 1: from a few different fintech organizations. He's going to run
Speaker 1: marketing growth for US globally and so you're going to
Speaker 1: really see abra out there a lot more now in
Speaker 1: the coming year. And Eddie Chung joined us as head
Speaker 1: of corp dev and business Development, working on a lot
Speaker 1: of the partnerships for our new token issuance platform. So
Speaker 1: USDAF is doing really well for us. It's a yield
Speaker 1: bearing stable coin, which so in other words, you put
Speaker 1: circle in, you mint us DAF, you simply get more
Speaker 1: circle out. And so you know that yield is you know,
Speaker 1: more or less between like eight and twelve percent since
Speaker 1: we launched. And his goal is to facilitate distribution deals
Speaker 1: for that you'll see you know, a BTCAF soon and
Speaker 1: then other Abrafi tokens that all generate yield on the
Speaker 1: original asset, and eventually I think you'll see even AF
Speaker 1: tokens on equities, so you can earn incremental yield on
Speaker 1: your Apple shares. And you know, lend your Apple shares
Speaker 1: into the networks and things like that, and so Eddie's
Speaker 1: facilitating that. So the exec team expansion for us has
Speaker 1: been awesome this year. You know, we didn't need a
Speaker 1: lot more energy in the company, but we got it anyway,
Speaker 1: and so I'm really happy about that. It's been a
Speaker 1: great set of additions for the company.
Speaker 2: That's great, and congrats, and I'm looking forward to when
Speaker 2: you go live on the NASNAC and hopefully I can
Speaker 2: maybe join you guys in New York if you have.
Speaker 1: Room, Yeah, come come help us. Ring the bell yeah, figures.
Speaker 2: On the one. Well, build a couple oft wrap up
Speaker 2: questions here before I let you go early bird or
Speaker 2: night out.
Speaker 1: Unfortunately both these days I see the bags here. So
Speaker 1: I mean, historically the last few years, I'm an early riser,
Speaker 1: and it just depends. I'm in a lot of time zones,
Speaker 1: right so I'm in New York right now, but I
Speaker 1: live and well, I go back and forth, being East
Speaker 1: to West coast different times of the year. This time
Speaker 1: of year, I'm usually in pale Alto, so so you know,
Speaker 1: I'm usually up by four am pala Alta time, but
Speaker 1: that's seven am here in New York, so I get
Speaker 1: screwed up. But generally I'm a very early riser. I
Speaker 1: do my meditation, my gym, my run, you know, some
Speaker 1: other time zone calls, and then you know, try to
Speaker 1: be in the office before before nine. But keep that
Speaker 1: early morning time for myself. Window seat are ile, Okay,
Speaker 1: So story, and I'll have to tell my friend to
Speaker 1: listen to this. So one of my best friends, I
Speaker 1: am not an ex. I would consider myself on like
Speaker 1: in the middle on the introvert extrovert scale. So I
Speaker 1: have a friend who is literally the most extroverted person
Speaker 1: right now, is like my best friend, and he doesn't
Speaker 1: do this anymore. But when we were kids and he
Speaker 1: would fly by kids, I mean, like you know, just
Speaker 1: starting in business, like he was like in his twenties whatever,
Speaker 1: and we would fly, he would ask for a middle
Speaker 1: seat because he would literally have a chance of having
Speaker 1: someone to talk to. So you need to fix your
Speaker 1: question because I can actually show you somebody who would
Speaker 1: have said, well, my preference used to be middle seat.
Speaker 1: Now he doesn't do that anymore because he realized that's
Speaker 1: certifiably insane. And so, but I generally ask for an
Speaker 1: aisle seat. These days, but you know, I don't care
Speaker 1: that much. I try to use miles to upgrade whenever
Speaker 1: I can, because I flush so much that it's it's
Speaker 1: pretty If the seats are available, I can usually upgrade
Speaker 1: pretty well out at that point it doesn't really matter.
Speaker 1: But my policy is is if I'm flat over like
Speaker 1: five hours forever, then I in business. But under five
Speaker 1: company pays for economy, and then I'll upgrade myself, which
Speaker 1: is pretty fair. And then you know, figure out the
Speaker 1: policy later for a big public company.
Speaker 2: But yeah, sure, text, email or call.
Speaker 1: Oh my god, it depends who it is. My kids
Speaker 1: can do whatever they we My kids would never send
Speaker 1: an email, so whatever they want, and however or however
Speaker 1: I can find them because they are you know, in
Speaker 1: different parts of the country now. But for clients, it's
Speaker 1: whatever is convenient. There are legal issues I can't there
Speaker 1: are certain platforms I can't really use anymore as an
Speaker 1: r A. But other than that, it's whatever the clients
Speaker 1: really want if they have access to me. And a
Speaker 1: lot of our large clients do call me pretty regularly.
Speaker 2: Uh.
Speaker 1: They like to text. Now people are you know, we
Speaker 1: use slack internally.
Speaker 2: Uh.
Speaker 1: And and I I hate when people put slack threads
Speaker 1: on an email because it's just it's just you lose
Speaker 1: the ephemeral kind of real time nature of that communication.
Speaker 1: But yeah, I'm evolved to hopefully use the right channel
Speaker 1: for the right the right the right issue or the
Speaker 1: right Yeah, the right channel for the right issue is
Speaker 1: probably the right way.
Speaker 2: To say it. What's one company outside of Crypto you admire?
Speaker 1: Hmmm? Who do I love? Wow, that's a great question.
Speaker 1: I mean, I'm I've always been an Apple fanboy, but
Speaker 1: that's too easy. You know, I'm a gadget guy. I've
Speaker 1: pretty enamored with these glass lately, Like I've been looking
Speaker 1: at the even Realities glasses. Those are super cool. I'm
Speaker 1: going to get those eventually. I was trying to figure
Speaker 1: out when the next ones are coming out. In general,
Speaker 1: if there's a gadget you don't know how to sell,
Speaker 1: you should usually just call me because I'll probably buy it.
Speaker 1: Although I think I've been semi cured because I've been
Speaker 1: doing less of that the last couple of years, probably
Speaker 1: because I just don't have enough time in the day
Speaker 1: to look at all this stuff. But I started learning
Speaker 1: how to play golf badly about a year ago. And
Speaker 1: so I've become enamored with golf technology, probably more enamored
Speaker 1: with golf technology than I am playing golf. And because
Speaker 1: it's such a big business, it's crazy, It's absolutely crazy.
Speaker 1: I had no idea how big the business of golf
Speaker 1: technology was. Like these home setups where you can hit
Speaker 1: the ball into a screen and supposedly it works the same,
Speaker 1: like you can see the same shot as if you
Speaker 1: were outside, and I don't know. So so I'm enamored
Speaker 1: with some of that stuff right now. And I don't
Speaker 1: really have a lot of time to play golf. So
Speaker 1: I probably have been on a golf course in the
Speaker 1: last year four times. But I'll go to the driving
Speaker 1: range in Palo Alto, for example, you know, at seven
Speaker 1: am some mornings, and just you know, worked out my
Speaker 1: frustrations on golf balls.
Speaker 2: And top golf. I don't know if you've been there, Yeah,
Speaker 2: I have.
Speaker 1: There's one. There's one here. Were not here, but there's
Speaker 1: one here in New York. There's one in Miami which
Speaker 1: I've used a few times, and there's one in San
Speaker 1: Jose which I've used with friends a few times. They're fun,
Speaker 1: and so you know, that's probably better for me because
Speaker 1: like my chances of hitting it straight at any given
Speaker 1: time or pretty slim and none.
Speaker 2: So for sure, if you could have dinner with any person,
Speaker 2: living or dead, who would it.
Speaker 1: Be, Well if Einstein? For sure. I think that's interesting
Speaker 1: to be aout Einstein. And not only was he brilliant,
Speaker 1: but he was, like I think, a great interesting person
Speaker 1: as a conversationalist.
Speaker 2: You know.
Speaker 1: A lot of times you meet people and I haven't
Speaker 1: been in a position because I have a lot of
Speaker 1: famous clients, so I can't always talk about and and
Speaker 1: you get disappointed when you meet them in person because
Speaker 1: like they're just so good at what they do that
Speaker 1: you don't think about the actual real person in real life.
Speaker 1: But the other one who I have had dinner with
Speaker 1: is Tony Robbins. He's unbelieved, you know, when you talk
Speaker 1: to him in person, he's exactly the same in person
Speaker 1: as he is on stage. And he has no off
Speaker 1: switch and and it's unbelievable at his age that what
Speaker 1: he does. And I've learned a lot just from you know,
Speaker 1: he has this saying proximity is power, and and I'm
Speaker 1: not a student of his, I actually speak at some
Speaker 1: of his events. But but but he just has his
Speaker 1: energy that you can't help but absorb some of it
Speaker 1: when you're around. So those would be you know and
Speaker 1: you know, you know else I'm a huge a fan
Speaker 1: of is Meryl Streep. I would love to meet Meryl Streep.
Speaker 1: And because I think man or a woman, she's the
Speaker 1: greatest living American actor we've ever had.
Speaker 2: Mhm. So on Tony Robbins, I listened to him maybe
Speaker 2: I don't know, three four times a week. He's part
Speaker 2: of Wow You're in motivation. Yeah. I listened to him
Speaker 2: and some other folks. But I hope to meet Tony
Speaker 2: at in person at one point. He'saw on my list
Speaker 2: of people. To me, he's been impactful all my life,
Speaker 2: you know, like going healing from past trauma and all
Speaker 2: those things and in good for you. Yeah yeah, yeah really.
Speaker 1: I I've gotten to know some of his He had
Speaker 1: a lot of high net worth clients who are also
Speaker 1: ABUR clients, and they've been very good, good to us,
Speaker 1: and and and it's very quite a group. I mean
Speaker 1: talk about a lot of self motivated people. People have
Speaker 1: it wrong in terms of like oh he's like he
Speaker 1: doesn't motivate people. He finds people that are already motivated
Speaker 1: and and the way I've seen it, like gives them
Speaker 1: practical tools. And you probably if based on what you
Speaker 1: say you're going through, I'm guessing you get that. And
Speaker 1: so I I didn't know that because I didn't have
Speaker 1: a lot of experience with him until the last five years.
Speaker 1: I knew obviously knew he was everybody knows who he is,
Speaker 1: But now that I've seen him in action, I'm like,
Speaker 1: whoa this guy is? Just he has so many tools
Speaker 1: in the shed. Yes, it's unbelievable. I've never seen I
Speaker 1: haven't seen a lot of his content, but what I
Speaker 1: have seen, I've never seen a question where he didn't
Speaker 1: have some tool in the shed that he could bring
Speaker 1: the bear to enlighten someone as It's remarkable.
Speaker 2: It's incredible.
Speaker 1: As somebody who has to coach my execs or others
Speaker 1: on a pretty regular basis, you know, I'm striving now
Speaker 1: to have a fraction of that many tools in my shit.
Speaker 2: M Yeah, he's really great and we've been very helpful
Speaker 2: for me personally. So it's like all my list of
Speaker 2: things I listened to and just really great. Bill. I
Speaker 2: wish we had more time, but thank you so much.
Speaker 2: A great conversation and like I said, I'm looking forward
Speaker 2: to seeing abro Go public on the Nasdaq. Thank you
Speaker 2: so much for joining me. Always great to see you.
Speaker 2: Thanks for having me, Tony, Thank you so much for
Speaker 2: tuning in. Please hit the like button subscribe if you
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Speaker 2: five star rating. Thank you so much.