Weekly Roundup 04/19/24 (Stablecoin bill, Halving, Code is not law) (EP.520)

This episode delves into significant developments in cryptocurrency regulations, the implications of Bitcoin's halving event, and a discussion on the principle that "code is not law."

1. The upcoming Bitcoin halving could significantly impact the cryptocurrency's economics and miner profitability.
2. The Lummis-Gillibrand Stablecoin Bill has received mixed reactions due to its stringent requirements and potential implications for stablecoin issuers.
3. The legal case discussed in the episode illustrates that despite the decentralized and autonomous nature of blockchain technologies, traditional legal frameworks still apply.
4. Regulatory clarity and adjustments are crucial as the intersection of technology and law evolves.
5. The episode also underscores the importance of considering long-term impacts and ethical considerations in the rapidly evolving tech landscape.

1: Introduction

The hosts introduce the episode's themes, focusing on cryptocurrency regulations, Bitcoin's halving, and the principle that "code is not law."
Matt Walsh: "Welcome to this week's roundup where we dive into some of the most pivotal discussions in crypto."

2: Bitcoin Halving and Its Impacts

Discussion on the specifics of the Bitcoin halving and its potential effects on the market and mining community.
Nic Carter: "Bitcoin's fourth halving is due tomorrow, which will slash block rewards, potentially influencing Bitcoin's future pricing and mining landscape."

3: Examination of the Stablecoin Bill

Analyzing the details and potential impacts of the Lummis-Gillibrand Stablecoin Bill.
Matt Walsh: "The bill includes both state and federal regulatory elements, which could complicate things for stablecoin issuers."

4: Legal Perspectives on Cryptocurrency

Exploring a legal case to argue that despite the autonomous nature of blockchain, traditional laws still apply.
Nic Carter: "Turns out law is law, and the ideology that code supersedes law is not only misleading but legally inaccurate."

1. Stay Informed: Regularly update yourself on regulatory changes in the cryptocurrency space to ensure compliance and strategic adaptation.
2. Evaluate Mining Investments: Consider the economic changes due to Bitcoin's halving when investing in or starting cryptocurrency mining operations.
3. Legal Consultation: Always consult with legal experts when launching technology products to ensure they comply with existing laws.
4. Community Engagement: Participate in community discussions and forums to better understand and influence legislative developments affecting technology.
5. Educational Outreach: Educate your peers about the implications of technological advancements and their regulatory environments.

Matt and Nic are back for another week of news and deals. In this episode:

Dubai is underwater The Lummis Gillebrand stablecoin bill and its prospects Do stablecoins affect the US’ ability to make sanctions? Avraham Eisenberg has been found guilty for the Mango markets hack Stablecoins as proto CBDCs Do stablecoins disintermediate commercial banks? What do the 13F filings tell us about ETF flows? Sponsor notes:

Bitcoin’s 4th Halving In Coin Metrics State of the Network Issue 255, we understand the significance of the Bitcoin halving, its impact on miners and potential effects on BTC’s price as the 4th Bitcoin halving nears. Content mentioned in this episode:

Timothy Massad, Stablecoins and national security: Learning the lessons of Eurodollars

People

Matt Walsh, Nic Carter

Companies

Castle Island Ventures

Books

None

Guest Name(s):

None

Content Warnings:

None

Matt Walsh
Brought down by bad mortgage investments. Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International group AIG $85 billion. This is a different kind of market and the Fed is asleep. The federal government is stepping in to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis.

The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry we have something called a bitcoin. Bitcoin. Bitcoin.

Welcome to on the brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Coinmetrics. And here is the metrics minute.

Nic Carter
Today's metrics minute. We are talking about bitcoin's fourth halving, which is due tomorrow, Saturday, April 20. It will reduce black rewards from 6.25 btc to 3.125 btc, cutting dilations from 900 bitcoin to 450, lowering annual issuance from 1.8% to 0.9%. Since the third halving in 2020, minor revenue from block rewards climbed to $43 billion in the aggregate, while fee doubled to 2.5 billion over the period. Popular mining rigs like the Antminer S 19 may become unprofitable at us industrial electricity rates.

Eight cents kilowatt hour as breakeven power costs drop, which would phase out less efficient machines. Historically, bitcoin's prices reached new all time highs within 500 days after the halvings. 500 days. Keep in mind, that's only based on three data points. So not sure that's predictive, but that's what it says here on the text that I'm reading.

And 19.7 million out of 21 million bitcoins have been mined. Time to rekindle the security budget conversation. That's your metrics minute. All right. Bitcoin having.

Matt Walsh
We're not doing any parties this year, right. When we were in fidelity, they used to have great bitcoin having parties. Shout out to Hadley Stern used to organize a great, great having party. Isn't the having that exciting? It.

Well, I think it's pretty exciting. You know what the exciting thing for the having is? Runes. Casey Rodimore's runes. Yeah, that's coming out.

People are going nuts about runes. That launch is on the having block. From what I can tell, it's just a better BRC 20. I actually gave runes a shout out on Bloomberg today. That's probably the first runes mentioned on Bloomberg.

I saw that good Bloomberg appearance there. They're asking you about price predictions, and you. You did not give financial advice. That was good. I was proud of you.

Nic Carter
Yeah. That's my media training kicking in, which I was good received, but I. Did you like my joke about Dubai? Yeah, Dubai's underwater. I'm so happy we didn't go.

Yeah, I canceled my trip at the last minute, and then they had the biggest rainstorm in 25 years. Well, not to mention the Israel Iran thing started to break out right before the conference. Yeah. I mean, it looked like an absolute nightmare of a lot of friends that were there, and they were, like, sleeping at the airport. Honestly, terrible.

Matt Walsh
Yeah. It sounds like a really tough conference to be at, but. Wow. Yeah. So that was good media hit.

We had a busy podcast week. I sat down with Cynthia Lobasette and Matt Horn from Fidelity Digital Asset Management. Talked about fidelity strategy in the crypto asset space tokenization space. Had a lot of fun with that. Recorded that in our studio in Boston.

Nic Carter
Did you really? I did. In person. In person is always better. For sure.

So fidelity digital asset management, to be clear, it's different from fdas. Yeah. And you of all people should know this. But you posted the show notes as. FDA, and I got it wrong.

Matt Walsh
A separate entity. This is the asset management arm that does the bitcoin ETF. They use fidelity digital assets. The custodian. Yeah, I got that horrendously wrong.

Nic Carter
So badly wrong. I don't like getting emails from communications people at fidelity pointing out inaccuracies that I should know. And I did know. Yeah, that. That won't look.

That's my bad type situation. That's hands up. That's fine. That's fine. So we have to address something from last week's podcast.

We had audio quality issues, which I thought we were beyond that. Major league audio quality issues. I'd say there was a dull hum. I think it was your air conditioner. But it could be this new podcast setup that we're trying to do the video thing.

Matt Walsh
And we will post that video. I guess it'll be the last episode, but it's just us slamming down instruments and just complaining about things we had to cut. All. Yeah, no, the video wasn't good. We don't need that.

Nic Carter
So we're evaluating the cause of the hum, and I've now turned off my AC, so I'm suffering for this podcast. It's hot here. I live in South Florida. Yeah, that is hot. I was in Florida this past week went to Disney World.

What was your favorite ride? I went on the Mount Everest one, the big roller coaster at Animal Kingdom. I'm a big animal kingdom. I went on dumbo three times. I think animal Kingdom is by far the best section.

Matt Walsh
Yeah, I mean, if you were an animal, that would be the zoo you'd want to be at, for sure. Really? Oh, yeah. I mean, you get all. It's basically like the Franklin Park Zoo, but in a beautiful, beautiful climate.

And they take care of all the animals a lot better than if you're just in a caged zoo. I would think. So. Disney World is still pretty much intact. Like, DeSantis hasn't destroyed it or anything yet.

I had a great time. My NP's score was very high. It's fun for all ages. Two year old and a four year old. And they had a blast.

Nic Carter
All right, so Disney is not canceled? No, I never canceled Disney. Okay. We're not canceling Disney. All right, well, there is actually a ton of news and an avalanche of deals, so you might as well get into those.

Matt Walsh
Yeah, I mean, people haven't really slowed down here, so why don't we hop right into it? First one up is uplink. This is a decentralized physical infrastructure network. There is 10 million from framework, blockchain and outlier. Next up, we have AI Avalon.

Nic Carter
They're a blockchain gaming company. There is 10 million from bitcraft, hash, Coinbase Ventures, Spartan and foresight. Then we have inference labs. It's an AI web three company that raised 2.3 million from DACM, Delphi mechanism. Then we have aligned layer.

They're a decentralized ZK proof verification platform. There is 2.6 million from Lemniscap, bankless and paper ventures. Then it's mayan. It's a cross chain swap protocol that raised 3 million from six man borderless, Solana Ventures and others. Then we have Azuro, a prediction market protocol.

There is 3.5 million from seven X Ventures, Fanbushi and Arrington Capital. This is a cool name. Homeium. It's a real estate securitization platform. It's building on the avalanche blockchain.

Matt Walsh
They raised 10 million from Sorensen Impact fund and the Avalanche blizzard fund. We have crypto Valley Exchange, a Defi platform. There is 7 million from fabric Ventures, Kyber Capital, and Wave Digital. Then it's sending network. It's another deepin network that raised 7.5 million from Nomad, symbolic Baladri, Srinivasan, and a number of angels.

Nic Carter
Next up, we have Geodnet a company building a blockchain enabled global navigation satellite system. Wow. There is 3.5 million from North island modular road capital and reverie. Then it's puffer finance. It's an Ethereum liquid restaking protocol.

Matt Walsh
They raised 18 million from Brevin, Howard Electric, Coinbase, Avon Ventures, and others. Then we have Plena, an account abstraction app. They raised 5 million from consensus and big brain holdings. Then it's Ordeo. It's a bitcoin ordinals block explorer.

And they raised $2 million from Sora, Bitcoin Frontier fund, and Baliji Srinivasan Balaji is getting on the board this week. Huh. I think that's probably the first deal we've announced from bitcoin frontier fund, if I'm not mistaken. Is that right? Maybe I am mistaken.

Nic Carter
I don't know. Next up, we have usual labs are an RWA stablecoin developer. There is 7 million from iOS, G, Kraken, GSR and hypersphere. Then it's Nebra. This is a zero knowledge proof research organization that raised 4.5 million from nascent and bankless ventures.

Then centric, well known on chain finance, RWA platform. There is 15 million from parafy, Greenfield, Arrington, Bordelis and others. And the last one up is an M and A event. So Safe has acquired Maltus, which is a cryptocurrency treasury management platform. Man, busy, busy deal week, huh?

Where do we start? Here. There is the Lummis Gillibrand stablecoin bill, formally entitled the Lumas Gillibrand Payment Stablecoin Act 2024. There's a lot in here. Yeah.

Matt Walsh
So this is the Senate stablecoin attempt? I guess so. I don't know. There's a lot of people going back and forth on not liking this bill on x, but I don't really know that it matters. So my take on this, I'd be curious.

Your perspective, is that McHenry and waters are clearly negotiating the House version of a stablecoin bill. No one knows what's in that, so nothing is leaked about that. No one in the industry that I talk to has any idea what's in that McHenry Waters version, but it seems like they're trying to get something together. I don't think that lummis and Jillbrand have been involved in any way in the host version of this bill. It doesn't sound like they're under the tent negotiating or being present in any of these conversations.

So they went out and released their own version. There's a bunch of stuff in there. I mean, it has a state and a federal element to it. So you can issue a stablecoin out of a state wrapper and be regulated in the traditional kind of two tier banking model, and then there's a $10 billion aum threshold upon which you'd get tossed into the federal bucket. So that's one thing I think that's problematic for a bunch of issuers.

Um, some people will like that, some people won't. Uh, there's also a ban on algorithmic stablecoins, which I think is good. Um, I don't think we need algorithmic stable coins. There's a bunch of language in there around the reserve composition and how that's going to work. But I guess my net net on this is that I don't see this bill in particular moving forward.

I don't think this is a standalone passable bill in the Senate. Doesn't seem like it has the support that it would need in order to pass in this current form. I don't really see this getting thrown onto any other bills that are going to pass like the. I think there's a TSA bill that is coming up in a few weeks. I don't see it getting bolted onto that.

I don't really see this getting bolted onto the Defense Authorization act either, towards the end of the year. So I think our best bet on stable coins is if McHenry and waters come to some sort of a detent, and then the Senate can pick up something that looks like that. Whatever it looks like. Yeah, there are specific things that are problematic with this bill, actually. Like Austin Campbell had a good tweet on it.

Nic Carter
The bill is very specific with regards to what assets are acceptable for reserves, and it excluded overnight reverse repos, which actually, if you look at circles reserves, I believe that's actually the majority of their reserve composition, is overnight repos, which is a very important tool. So it's kind of weird that they didn't include that. So there's, you know, technical problems and, yeah, I think overall, we don't have to worry about it too much. I think they also capped the state pathway issuance at 10 billion, which is very problematic, in my opinion. So, yeah, I don't like that cap.

Yeah. Come on. Completely arbitrary. Yeah. Yeah.

That kind of just forces issuers to go for the federal pathway, I guess. Yeah. And I think you're just going to have a bunch of companies that have already spent a ton of resources on the state pathway, and, you know, there, there should be a path there to there's really, there ought to be a kind of reciprocity rather, with conventional assets. So I don't know. But in any event, people are getting all worked up about this and I don't think it is going anywhere.

Yeah, look, I don't love the bill, but it also probably doesn't matter, so. Yeah, but it would be good to see this McHenry Waters thing move forward. We're kind of getting into crunch time with this congress. You get another two, three months here, nothing's going to go through before the election. All right.

Also on the stable coin front, I read one of the most interesting pieces of research written on stable coins ever. This is courtesy of Timothy Massad, Brookings. He used to be Obama's CFTC chair, I believe. So he under, he is dialed in, understand stable coins very well. He compared them to euro dollars.

Not, I'm not claiming that he plagiarized me, actually, because it's a very easy comparison to draw. And so I totally grant that other people would have this exact same idea. So anyway, they closely resemble euro dollars, that's for sure. Yeah, totally. So he makes the exact same analogy that I've been making about stable coins being like euro dollars and the way they grew, the reasons for them growing, and the way that policymakers reacted or should react.

In the case of stables, he's pretty concerned actually about stablecoins eliminating the sanctions making ability of the US, which I guess makes sense for someone of his station. My view on that is that the cat's out of the bag. Actually, with the dollar and sanctions, we've overused the tool so much that both our allies and our adversaries have built or are building independent networks that aren't as exposed to treasury or to sanctions. Yeah, maybe stablecoin. The other thing is, if we do want stable coins to be less of a threat to our strategic toolkit, then we should fold stablecoins into the regulated apparatus here in the US.

So if you're worried about that, then pass a stablecoin bill and make the issuers accountable and bring the issuers onshore. The thing to not do is to force all the stablecoins to offshore jurisdictions where they will be unaccountable. So it's a very easy and simple solution, if that is what you're concerned about. Do you think in 25, 30 years we'll look back on the weaponization of the swift network as really being the straw that broke the camel's back in terms of the US's ability to levy sanctions? Yeah, I mean, it's like a general trend, right?

I mean, there have been so many specific things that I think cause people to seek to divest from the dollar network. For me, the most important one was the seizure of the russian reserves in 22. Right. Which again, there's a moral dimension to that, but there's also practical dimension. So we can have a separate argument over whether that was the right thing to do.

But undeniably, it's caused other central banks to revisit the notion of, okay, should we store value in treasuries? Are they a store value asset? The gold rally coinciding with the Iran attack on Israel? I actually don't think that's a coincidence. We know the sovereigns are buying gold.

You see that in the data for sure. I think there's a very concerted effort to divest away from treasuries as the sort of gold standard, gold like store value asset. No doubt. Yeah, gold has had a great run here, and it's definitely the sovereign, it's the central banks that are buying it. Oil is no longer fully invoiced in dollars.

You know that 20% of oil trades were settled in not dollars now. Yeah. And that used to be staggering. Yeah, it's already begun. Well, really was the realignment.

The new axis between Russia, Iran and China, especially for commodities trades, those are being sold in other currencies. This de dollarization of trade invoicing has begun for sure. So many reasons why this stablecoin thing is pivotal. Obviously, you have just the strength of the dollar and pushing that, but you also have. It's no surprise to me that Blackrock is out there in the lead on this and tokenizing a money fund, because they are going to be able to settle securities transactions in something like that money fund or some blackrock stablecoin at some point, and it is going to directly accrue value to holders of blackrock funds, and it's going to bring down the cost basis for owning Blackrock investment products.

Matt Walsh
So it's a very rational strategy. I think you'll actually see the security settlement landscape shift as a result of just getting cash on chain. In completely different news, the former main character, you never want to be the main character at all. One of the former main characters, Abraham Eisenberg, if you remember him, has been found guilty of commodities fraud, commodities market manipulation, wire fraud, in connection with his exploitation of the mango markets exchange, which, if you remember at the time, he had a whole bunch of tweets about this saying, yeah, I did it. But it's not it's just code is law.

Nic Carter
It turns out law is law. Yeah. Code is not. Law is law. I believe the technical term for this guy is jerk.

Matt Walsh
This guy is total jerk. I think there's also like a child pornography angle in there as well. Oh, maybe that's it. Maybe I was jerking. He's just a little.

He's a bad boy. Yeah. Not. Not a good guy. There are some, there are some discussions on sort of crypto lawyer Twitter about, you know, maybe this is too harsh because he was sort of like, dealing with the protocol as it was specified.

Nic Carter
But I mean, look, he clearly manipulated the market and took money that wasn't his. So I think this is probably a reasonable outcome. Yeah. There's no place for this guy in this industry or really any industry, it sounds like. I'm not shocked that he is going to jail.

Matt Walsh
This idea. This guy was running amok on these Defi protocols. Do you remember this? He's tweeting out. He's basically just.

He wasn't technically hacking, but he was doing these market manipulations that effectively was stealing money from these Defi protocols. And this guy had to go to jail. And it looks like. Yeah, I mean, like, playing the game according to the rules of the game that are specified by the protocol can still be breaking the law. That's just the long and short of it.

Yes. So, yeah, just because you're following, just. Because someone leaves their door open, doesn't mean you can go in and steal their money. Right. I don't understand why this is like a difficult concept for people.

Actually, non crypto people are going to be listening to this podcast and be like, what are you even talking about? This is open and shut case. This guy's a total crook. He stole the hundreds of millions of dollars. And people in crypto like, well, the code, you know, the code technically said that, you know, you could access.

It's like, what are you talking about? Yeah, the term code is law has caused enormous damage to the industry over the years. Code is not law. I think it's one of the dumbest things that people say in this industry. Oh, code is law.

You know, the code technically, you know, permitted people to steal money from this pool. It just makes no sense. Yeah, that, and there's a lot of dumb stuff that people say in crypto. That's top dumb stuff. I mean, like, having was priced in.

Nic Carter
That's pretty darn having Liz priced in for sure. I was actually looking. I went on Bloomberg four years ago and I said the exact same thing that I said today the having is not a factor and I stand by it. Well, Michael Saylor would disagree with you. Well, just because he's more money than me doesn't make him more, right?

Okay. A lot, lot less net. New omission here. So I want to talk about something I read this week that was really interesting and kind of plays of into the CBDC world that I think we're going to in some jurisdictions. So in China, they apparently have a new system where if you are in default on your debt, you cannot ride the fast trains.

Matt Walsh
Have you heard about this? Yeah, I mean, that's kind of the essence of the social credit system. Right. So it wasn't clear to me. So you, you can't stay in nice hotels.

So you're just, your money does not work there and you can't ride on the fast train. You have to take the slow train. So it's all the people that are kind of a in default on their debt or behind on their payments. They ride the slow train and they need to stay in the bad hotels. Yeah, it's, that's pretty crazy.

Yeah. I mean, you want to throw a. CBDC on top of that. You're just going to have, you know, they're going to expire people's money and make it impossible for them to spend. Yeah.

Nic Carter
Or like, where does this go? If you have BMI over 30, you can't buy certain kinds of groceries, you know? Yeah, yeah, for sure. I mean, pretty scary future. I think it's pretty established in China, like fully established, especially with public.

Matt Walsh
You're not going to be able to use your CBDC to buy like cigarettes and stuff like that. Yeah. Coming to a western country near you. I do think these cbdcs are going to be a thing. I mean, we talk to a lot of stable coin infrastructure companies that are doing on and off ramps.

And I actually had a good podcast episode. We'll release it, I think, next week with Chris Harms from BVNK. But you know, there are a bunch of these regional cbdcs that are popping up that I think will more or less be the way that people onboard into the cryptocurrency ecosystem. So coming to a jurisdiction near you, hopefully not the United States, I would. Say, I mean, isn't art stablecoins basically a form of a CBDC?

Nic Carter
I keep saying they are a form of the CBD. No one likes it when I say that, but they're effectively a wholesale CBDC. Kind of. I mean, but you don't have the government necessarily going in and saying, here are the spending conditions for the asset. So you could imagine during COVID when they were trying to, you know, boost GDP and, you know, get money flowing in the system, they could have said, all right, we're going giving a stimulus of $1,000 to every person in the United States, but you have to spend the money in the next 60 days or else it expires.

Matt Walsh
Like, you wouldn't be able to do that with a stable coin. You could encode that into a stable coin, don't you think? Well, you could encode it for sure, but then you'd have to go and you'd have to have the US government tell circle and all of the other stablecoin issuers. Here's what you have to do. And I think that would be a stretch.

I think that would get challenged in the course. Yeah. My contention though is that the line between stablecoin and CBDC is going to get more blurred in the coming years, especially if stablecoins, the large ones, become more heavily regulated. And it's not just a matter of responding to law enforcement requests for occasional seizure or freezing of certain addresses. If they layer on more conditions.

Nic Carter
You do have something that's backed directly by treasuries that individual retail users are using digitally, maybe with more and more conditions, and this is an anti stablecoin talking point at all. But I do think we're actually kind of going in that direction. Yeah. The reason why stable coins will continue to persist in the US, I think, is just the banking infrastructure in the way that we've tiered out the commercial banks in relation to the Fed. If you introduced a CBDC at a retail level, you just wouldn't need a commercial bank anymore.

Matt Walsh
Deposits would just go to that CBDC and the banks would all go bankrupt. So that's why you won't see it here. But in other countries, that's not really the principal concern. The banks are nationalized. Yeah, this is actually something that people don't talk crypto, people don't talk about this a lot is mass stablecoin adoption would disintermediate commercial banks.

Nic Carter
But commercial banks play this vital role of creating credit, at least theoretically making loans to small business, theoretically giving out mortgages. Again, theoretically, banks kind of do less and less of this, it seems to me. But classically, banks would engage in this maturity transformation, create capital and create credit that goes away if everybody's just holding the equivalent of a central bank token directly with none of the intermediation. You have to rethink the entire commercial banking model? Well, I think banks in general are just getting picked apart product by product.

Matt Walsh
You look at how leveraged buyouts are being financed right now, and banks used to be a huge part of that. And increasingly it's private credit that is being used to finance all of those transactions. You're also seeing a lot of banks get out of things like FX, prime brokerage, and you're starting to see non banks step in to actually fulfill that. So add it to the list, I would say I think the banks are really getting whittled down here. Yeah.

Nic Carter
When was the last time you heard of someone starting a business with a bank loan? Like, I feel like that doesn't happen anymore. No, I mean, in the eighties in the United States, that's how you would start a business a lot of times. I mean, this was really before venture capital became a primary funding source. But, you know, you'd go to your local bank and you take out a loan.

Now we have brave and courageous venture capitalists that, yeah, just lubricating the GDP of the country, you know, funding all these great business, you know, just doing the world a service. VC's, I don't think, you know, tip your vc. They don't get enough credit. Yeah, the ultimately, just look at the value chain of kind of who needs money and who has money, and bank sits in between that. So people will find a way to route more efficiently across really any product, whether it's LBO debt or venture capital financing or foreign exchange.

Matt Walsh
Prime brokerage payments is another great example. The fintechs have really emerged on the payments front and facilitating a lot of the cross border flows. Right now, you don't see banks really playing in that category. Yeah, and also as rates have climbed, you've seen new fintechs that give people direct access to treasuries and things like that. So people, you know, used to buy CDs, I guess, in banks?

Oh, yeah, sure. I used to buy and, you know, just. Or banks would pay high rates and savings accounts. Now people are going outside, they're going direct. That's also disintermediation.

Nic Carter
That's not even a stable coin thing. That's just another secular trend. Bad time? Yeah. Banks, a lot of great buildings, though.

Matt Walsh
You know, I think these restaurants that are popping up in banks, they're great. Great in the bank vault, some in. Boston bank vault restaurants. Yeah, we're on the hunt for an office. So if any of our listeners have a, have a nice hour leases up at the end of the year, I want to be in a bank I.

Nic Carter
Think it would be so cool to. Just be in an old bank.

Matt Walsh
So banks have some utility.

What else happened this week? Did you read this Ray Dalio post? Do you have enough non debt money this week? No, he's. How is this guy not into bitcoin?

This guy just talks about why you need something that is not government issued money to store your wealth in. In the face of inflation. Gold. But everything that Ray Dalio talks about. Oh, he loves gold.

Yeah. The, um. But he ought to love bitcoin. Why does he post on LinkedIn? What's up with that?

Nic Carter
He really surveyed all of the platforms for posting long form content. He settled on LinkedIn. Yeah. It's really strange. LinkedIn is just a really garbage site.

Matt Walsh
I think I have like 700 invitations on LinkedIn people. It's just spam people everywhere. All right, so the 13 f filings dropped. Some of them did. And we are seeing some names of some firms that are holding bitcoin ETF's now.

Nic Carter
But you know the Sherlock Holmes story, which is like the dog that didn't bark. The hound of the Baskervilles, I think. Yes. So the key thing, the information was that the dog didn't bark. Right.

So what's more interesting, I think, is not the names on the list, but it's the names that are not on the list. Because the names on the list are like. Yes. So you're not. I've never heard of any of these funds, basically.

Matt Walsh
Yeah. So it's a lot of RIA shops, you know, a lot of home offices of registered investment advisors, a bunch of, like, boutique ones. The fidelity one, I recognized a bunch of the names that are kind of multifamily offices and in the Boston area. But you didn't see, like Druckenmiller or any of these big macro funds on there. It's definitely possible that they're holding it through a brokerage platform, though.

So I don't. It's really hard to disentangle who holds the underlying. But if your point is that it seems like this is mostly retail flows into these ETF's, so far, I think. That'S exactly what I. So it seems to me that the quote, unquote real institutional flows have not yet materialized, whether that's because they haven't been greenlit yet, they're still in diligence, or because there's no desire to hold bitcoin.

Nic Carter
So it could be a good thing that it's mainly retail or high net worths or multifamily offices.

Matt Walsh
If you just look at the performance of the Fidelity ETF and how big their retail distribution channel is. And obviously iras and things like that in tax advantaged accounts. I mean, I bet that most of their flow is coming from that channel. So, you know, with Blackrock, a little bit harder to tell. The 13 fs were a little bit more.

There are more of them, I'd say, on the Blackrock side. Right. Like there were probably twice as many 13 fs filed on Ibit than there were on FBTC. But, yeah, I think it's mostly retail. It's mostly these, you know, platforms like Schwab and Fidelity that seem to be capturing most of the share.

But early days, in terms of the big macro funds getting involved, I think you probably just wait for rates. Right. Like they will get involved when they see the rates environment shifting. Yeah, the rates have been terrifying lately. Like, the ten year is very high, which indicates not to get into macro talk or anything that suggests that traders expect strong growth, high inflation, higher for longer.

Nic Carter
We look at commodities, that's indicative of inflation picking up. It could be a cycle like the seventies where you had high and variable inflation. We had a trough, and then it climbs again. Well, that's an accumulation zone, I guess, for bitcoin, because high rates is not good for risk assets. Yeah.

But ultimately, you know, the government solvency is challenged by sustained high rates. So something has to break, basically, well before the election. Just count on seeing something. Right? I found it.

Yeah, you can bet on that. So we got chirped on warpcast for not including any shoutouts last week on the FARC Astra section. So we want to make sure that we do. A lot of people saying they need to see the video. So we'll try to get a video up.

Okay. We're trying to. We're trying to figure this out. Marie says, I don't need video. Just put an audio file on YouTube and add an animated background.

But what I think we can do animate. What? Do one better than that. Like what visual?

Matt Walsh
I don't know. We're going to need more details on that comment. We also have a comment from Adam, who said that it's great to hear Cynthia Lobasette and Matt Horn talk about self ownership with smart contracts. So basically what I was talking about at the end of that episode was, I want to live in a world where I hold my bitcoin with fidelity as a custodian, but I have a key. And so something like a Casa, for instance, in this case, Adam is suggesting that safe would be a good way to do this.

You're going to need the regulation to support this. So fidelity can't do it now. But imagine a world where fidelity has a key and you have a key yourself, and maybe you have a, you know, a lawyer has a key, or maybe there's a signing company. Antonopoulos actually had a company. I don't know if it's still around.

That was, I think it was called third key signing or something. And that would be a really cool. Yeah, that'd be super interesting. If you just make custody very safe and resistant to hacks of centralized institutions. That's pretty cool that fidelity would even acknowledge that concept.

Yeah. So Cynthia and Matt talked about that and basically they called out CAsA actually as being a really cool setup for something like that. But you need the laws to change in order to do that. So we talked about that a little bit. What do we have?

A lot of people talking about the SEC. In the warpcast, someone says Yeho Scheele. That's very difficult to pronounce. Would love to see an episode on crypto themes that we think will move the needle. Things like infra ZK, meme coins restaking what's next.

We've never done a meme coin one, except I did one back in the day with Alex Thorne about. Here's my prediction. Runes will become the meta for meme coins. Runes? Runes, huh?

Nic Carter
I don't have any picks cuz I don't. I have no idea what meme coins are slated for runes. But if I to guess, I'd say that meta will no longer be solana meme coins. It won't be BRC twenties or anything. It won't be base.

Okay. I don't believe the meme points on base. I think that's astroturfed. I think it's gonna be runes. I don't know.

Matt Walsh
There's a lot of meme coins. Yeah, I think it's Astroturf. There's a lot of meme coins everywhere. So. Well, runes drops on the block of the having, apparently.

Nic Carter
I'm sure there's gonna be shenanigans around the block of the having, don't you think? Oh, for sure. In terms of people racing to be the miner that blocking me. We might even see Reorg or something, or maverick like. Everybody wants to be the having block deliverer.

Matt Walsh
Oh yeah. You want a satoshi from that coin? Yeah, I think even foundry mentioned something about that. Yeah, yeah, you'll see something like that. So when.

When exactly is the having? I think it's slated for early Saturday morning.

Is this going to be like the Ethereum merge where you have to, like, stay up and. That's pretty anticlimactic refresher breath, right? Yeah. I mean, the bitcoin having. I'm quite confident I'm going to be sleeping.

Nic Carter
Not soundly unbothered. Yes. Moisturized. Yes. Yeah.

Matt Walsh
Good for you. That's good. You got get your rest. Well, I destroyed my motorcycle. That's a fun thing that happened to me.

So how did this happen? Well, it was knocked over. It was blown over, and the handlebar went at a 90 degree angle from where it should be. Well, you weren't on it. I wasn't on it.

Nic Carter
And so then I had to drive it home with a 90 degree angle handlebar. And then also halfway back, I realized the tire was flat somehow. Have you thought about just not having a motorized vehicle? I think it's. You've proven to be really poor at.

Well, this wasn't my fault. This is just something that happened to me. So I was riding a motorcycle with a flat tire, which is possible, by the way, as it turns out, very precarious. It's not at all stable, and the handlebar is the wrong way around. It's quite a scene.

That's not safe, but I made it. That's. You don't want. So now. And so.

Matt Walsh
And you. You have that, and you have a leak in your bathroom. Yeah. This is a crazy. I mean, my.

Nic Carter
My blow neighbor said that the water coming through their ceiling. It's not my fault. Again, it's not my fault. This is the fault of the previous owner that set up the bathroom in a leaky configuration. As a homeowner, the buck stops with me.

I have to fix this. Of course. Yeah, you're on the hook for that. I might have told this story on the podcast in the past, but when I lived in south Boston, that happened to me. It was my hot water heater.

Matt Walsh
One note, and it went all over the unit below us. And it was a store that I lived over. And there was probably a 50 year old woman, native from south Boston that ran the store, and she came upstairs. I was not home, but when I came home from work, I was getting the calls. I was actually at the circle offices.

This was way back in the day, and I was getting nonstop calls. I finally picked it up and went over, and I thought, this woman might have killed me. So I've never been so physically intimidated by that. Did you ruin all her inventory? Yes.

It was bad. There was a. It was a consignment shop or something, but I don't think I've ever felt as physically threatened. So did they maybe buy out? Like, it's like you break it, you own it?

There was a. It was. It was a whole thing. There was an insurance claim. It was.

Nic Carter
Yeah, it was a bad, bad situation. Maybe that'll happen to me. I don't know. I don't know what I did to my below neighbors. Well, my previous owners of this.

Of this place did because it wasn't my fault stuff at all. But now I'm on the tough for tough week. I know it's. Things are not going good. All right, well, they'll.

Matt Walsh
They'll look better next week. We'll have a bitcoin having between now and the next time we talk to folks. We're cranking out podcasts these days, so we. Did we release one today? We were slated to, but it's not out, but it's very good.

Nic Carter
So you should listen to it when it does come out. Okay. So there's. I think there's two episodes coming out next week. We have a bunch that are in the can already.

Matt Walsh
We're recording episodes left and right here. Podcast never sleeps. And maybe this ends up being. Yeah, technically, we did record video. It's just.

Nic Carter
I don't think we should publish it. I look tired when neither. We're not looking our best. I mean. What?

Matt Walsh
You don't think I look good? Yeah, actually, you look fine. All right, thanks. Yeah. I mean, yeah, you look a little bit tired.

Nic Carter
Yeah. I don't think we should release video as a matter of course, actually. I just. I think it subtracts, if anything, from the experience. From the experience.

Matt Walsh
All right, well, we'll see what the people on Farcaster think about this. Get in on our channel and let us know if you want the video or not. All right. All right. That's it for the week.

Have a safe and healthy weekend, and we will see you on Monday.