# ROLLUP: Bitcoin’s Confidence Game | Bitmine’s ETH Bet | Token Rotation | U.S. Perps

*Author: David Hoffman*
*Published: Jun 5, 2026*
*Source: https://www.bankless.com/de/podcast/rollup-bitcoins-confidence-game-bitmines-eth-bet-token-rotation-u-s-perps*

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## TRANSCRIPT
David Hoffman:
[0:04] Welcome to the Bankless Weekly Roll-Up. It's the first week of June and we've got Hasib on the show, subbing in for Ryan this week. Hasib, how you doing?

Haseeb Qureshi:
[0:12] Doing okay. It's kind of a rough day, but, you know, hanging in there.

David Hoffman:
[0:15] Rough day because of the markets?

Haseeb Qureshi:
[0:17] Rough day because of the markets. I'm just seeing all the bleeding. I mean, obviously, you know, I think it's okay. I think it's going to be okay, but it sucks to see so many people kind of down and hurting.

David Hoffman:
[0:30] Yes. Is this different than any of the times in the past? I think what you're saying is like, eh, this happens. This is what we go through in crypto. This is par for the course.

Haseeb Qureshi:
[0:41] I mean, look, if you're in crypto, if you've been in this industry for a long time, you know, being down 4% in a day is not catastrophic. Yeah. I think we were feeling a bit of a sentiment reversal. It's like, oh, okay, we're pulling out of this. It seems like we're going to shake it off. And it's like, oh, no, you're not out of it yet. So I think people are feeling that pain.

David Hoffman:
[0:59] That's right. We're going to talk about a handful of things on the podcast today. Is Michael Saylor going to kill Bitcoin? Bitcoin is trading at its 200-week moving average, while Stretch is trading off of its peg. Saylor is in the middle of a confidence game with a market. We'll see whose wins. Tom Lee and BitMine have announced that they're going to issue an equity yield instrument right in the middle of Stretch being distressed. We're going to talk about whether that's a good idea or not.

David Hoffman:
[1:22] Despite the weakness and the majors of crypto, some tokens are still very green on the week. That, to me, is new. So what to make of that? And also the CFTC greenlights the first compliant perps markets inside the United States. Let's start with Michael Saylor. Saylor and Strategy sold 32 Bitcoin for $2.5 million, a very small sale, probably just probing the market, seeing how the market digests it. Coincidentally or not, this is a question that I have for Hasib, is whether this was a coincidence. Coincidentally or not, Bitcoin fell by 17% after the announcement of that sale from $72,000 down to $62,000. It's back up about $63,600. Hasib, coincidence? Bitcoin is kind of just doing the cycle thing, but the timing is special? What do you think?

Haseeb Qureshi:
[2:18] Yeah, I mean, clearly not a coincidence since this was announced. I think this was announced on, what was it, Tuesday? That the sale was announced, but the sale happened last week. Yes. And obviously, this amount of sale is so small that it's obviously it wasn't the sale itself that was absorbed by markets causing this downturn. It was this more symbolism. It's a signaling. It's a signaling. And the signal clearly has accelerated this, but only since Tuesday, right? And the market was coming down before Tuesday. So I think it's quickened the pace of the sentiment turning sour, but it doesn't explain the full drawdown that we've seen since Bitcoin kind of recovering to near 80K.

David Hoffman:
[2:58] Right. Yeah. I'm of two minds. There is no such thing as coincidences. But also I think if you just ignored the sailor thing and just looked at the price chart over cycles, this would look normal. This would look relatively normal. But at the end, you disagree?

Haseeb Qureshi:
[3:15] Well, look, I'm not a TA kind of guy, so I don't know what's a normal or not normal price chart. I'm like, I think it was true that there was a sentiment reversal. People felt like the weekends had been shaken out. A lot of retail had already exited the market. And so it's like, okay, now we've taken our lumps and now it's time to reconsolidate and kind of reestablish, okay, how do we feel about the fair value of Bitcoin? I think it's pretty clear this market is very flows-driven right now and very sentiment-driven. And sentiment, I think, you know, Saylor was probably testing the market, as you mentioned. And I think he got the answer he was not looking for, which is that absolutely not. You are not allowed to sell. Like, you are a big part of the story of why Bitcoin gets to keep going up. And so I think Saylor likely has internalized this lesson of never press that button ever again for as long as it is.

David Hoffman:
[4:02] Really? You think that he is not, his hands are tied and he can't sell?

Haseeb Qureshi:
[4:07] You think this response has told him, okay, yeah, it's fine, go sell some more?

David Hoffman:
[4:12] Okay, so here is a possible path that I kind of think was my base case. So we have to look at Stretch. Stretch is trading at $95, $95.3. That's about 5% off of its peg. The market cap of Stretch is, it's about $500 million off of the market cap. It should be a little over $10 billion. It's trading over at $9.9 billion. We're $561 million below par. I think Saylor just needs to take it on the chin, and he needs to sell enough Bitcoin to fund the stretch dividends for three years, three plus years, to establish confidence in the market. That is a, I can't remember how much that is, that is a sale in the five or six or seven hundreds of millions. And so he needs to sell $500, $600 million.

Haseeb Qureshi:
[5:02] I don't think that gets a multiple years. I believe the stretch dividends are like over a billion a year, and he has $700 million on hand, if I'm not mistaken.

David Hoffman:
[5:10] He needs to puke up enough Bitcoin. To establish confidence in Stretch and the Stretch dividends and make Stretch holders believe in Stretch. So that Stretch returns to trading at $100. To me, Stretch is a canary, and it's telling us that there is a lack of confidence. And this is a positive feedback loop in the bad way, in the negative direction, because people like me are looking at Stretch being 5% off. I'm like, oh, Saylor's going to need to sell Bitcoin in order to close that gap. Then I'm going to sell my Bitcoin because I know Saylor's coming in like a train behind me. So I'm just going to get out of the way and I'm going to sell my Bitcoin. And so it's creating a downward spiral. And I think Saylor just needs to take it on the chin, make a large single cell of Bitcoin, and that's it. And then he just clears it. But I don't know if he can just do nothing here.

Haseeb Qureshi:
[6:09] So, I would take the opposite view. I think what he's learned is that, look, I sold nothing. I sold 25 Bitcoin, and this is the reaction of the market, right? He lost so much more money in his nav because of how much Bitcoin went down from that sale relative to the amount of cash you would need to raise to pay dividend holders, which tells you the way that you raise this money is not by selling. That breaks the whole system. You have lost more than you would have conceivably have gained. So now I think the lesson that the market is telling him is, no, no, no, no, no, no, no. You got to die with the ship. You do not get to be a prudent financial manager. You are Mr. Bitcoin. Mr. Bitcoin doesn't get to sell. So if you want to be Mr. Bitcoin, like either one, you got to throw the stretch holders under the bus and say, okay, you guys are going to have to sit on your dividends for a while. I'm not paying any dividends. And, you know, they have the ability to skip paying out dividends. The dividends accrue over time that you actually eventually get paid. But you can miss a dividend and, you know, they have the discretion to do that. The second option, of course, is dilute the stock, right? It's just go do some ATMs, sell some more stock, dilute the common shareholders so that you can pay the dividend.

Haseeb Qureshi:
[7:20] Now, in each of those cases, somebody gets screwed. Either the common shareholders get screwed or the preferred shareholders get screwed. But one way or another, one of them has to lose because the third category of Bitcoin gets screwed does not work. That does not work. You cannot sell Bitcoin. If you are selling Bitcoin, the whole system breaks. So I think that's the lesson he's learned. And he's ultimately going to have to choose one of two bad options. Now, at the end of the day, Bitcoin is largely fine which of those two he chooses, right? So the whole industry is large, like, you know, if he screws over the stretch holders, then okay, that removes part of your financing. You can't really, you know, lever up and go use it to buy more Bitcoin. But at least you're not selling any Bitcoin. And so, okay, you're solid. We can count on you. You're not marginal sell pressure.

Haseeb Qureshi:
[8:09] But if he, now if he dilutes the common shareholders, then okay, the premium goes down, the NAV goes down. And then that really screws over a much larger holder base, but also is harder for him to be able to, you know, justify going back above NAV in the future and getting the whole system running. So it's genuinely a difficult situation. And when you have multiple categories of shareholders who are not completely aligned with each other, which you have here because he's issued so many different instruments over the years, you're going to naturally have these kind of conflicts where it's kind of zero sum. Do the common shareholders get screwed or do the preferred shareholders get screwed? But I think he's learned you can't screw Bitcoin. You screw Bitcoin, you're screwing yourself.

David Hoffman:
[8:50] I suppose what I'm kind of advocating for is Saylor taking like a pretty drastic move to sell Bitcoin, to like shore up the finances, establish confidence. And what you're doing, what you're saying is take an equally hardcore move and just like stare the decreasing Bitcoin price and the decreasing stretch price in the face and don't blink and just don't blink and be like, whatever, we're just not selling Bitcoin.

Haseeb Qureshi:
[9:16] Look, I think the reality is that he has constructed a fantastic financial machine around him such that he actually does not really have pressure to do anything, right? Like, these assets are so favorable to Saylor. The reason why you have these favorable structures is that you don't have to sell in times of distress. Now, this looks to me like a time of distress, right? Like, Bitcoin is down. It's about to go below its 200-day monthly average. this is the time when that runs in your favor is that you can say nope screw you everybody be quiet bitcoin is going to go back up because i'm mr bitcoin and i believe if instead you say oh well i have to be a prudent you know i'm actually and i have to yeah exactly i have to i have to take care of my stretch holders then okay well the the why why did you even set this whole system up to be so favorable and so just so much to give yourself so much discretion to not have to sell Bitcoin in a time of distress. If he's selling Bitcoin at 120, whatever you're selling bitcoin at 60 and now you're below your average price you're realizing losses i i think the market is very very clear here you don't get to do that try one of the other two or just sit on it for a while and let's hope the market goes back up and recovers so.

David Hoffman:
[10:28] You think do you think he resumes his never tell your bitcoin rhetoric in that case i like also i'm sorry forever ever wavering from that

Haseeb Qureshi:
[10:37] I i don't think he's gonna say i'm sorry but i do think that he has been chastened by the market and he's learned, look, microstrategy now is so much bigger than they were in the past. It's important to understand that. They have sold Bitcoin before. I believe in, what was it, 22 or something, they sold some Bitcoin. But they are at such a bigger scale now than they were at that time. It's such a bigger portion of the Bitcoin market. And this is kind of the end game for DATS is like, once you become big enough, you are the market. Right now, sailor is the market. And if the market itself is voluntarily capitulating, I think you see what the response is from market participants. They just say, look, I'm getting the hell out of the way. I don't want any part of this. So now look, it's possible that he does one big fat sale. I don't know that the liquidity is like, it's going to be ugly to try to raise a couple billion dollars in this environment. But maybe he does one big fat sale and then says, I'm cooling it. No more sales for a long time. That's the least bad way to do it if you're going to do that but I think it's more likely that he is just going to take the lesson of don't screw the golden goose which is don't sell Bitcoin it ruins the whole story.

David Hoffman:
[11:46] I do take that argument. I did not consider that. I do like that argument. You can also look at the ETFs. The ETFs, this is from Galaxy Research. Bitcoin spot ETF outflows are on a record-setting 13-day streak of consecutive outflows. It's one of the most red times in Bitcoin ETF land. I think the ETFs are probably just right there with it. Why do you think this is? Because this is just separate from strategy. Obviously, it's correlated with Bitcoin price. But ETF holders, whether they're institutions or retail, why do you see so much outflows happening from the ETFs?

Haseeb Qureshi:
[12:21] I mean, look, I have no idea. So, I mean, I want to preface with like, look, I'm not a public markets guy, so I'm speaking a little bit, you know, out of my depth. But I sort of think a little bit of looking at the ETFs is kind of like looking for a signal where like the signal is actually backwards looking, not forwards looking. But almost by definition, if Bitcoin went down, it's because more people sold. And so then people look at the ETFs and say, oh, my God, the ETFs are sold. People are moving out of the ETFs. It's like, okay, well, yeah, well, yeah, they sold. We know that. We already know people sold. So, looking at ETFs and saying, well, here, this explains the selling. No, this memorializes the selling. This is a record of the selling. Asking why did they sell, like, this chart cannot answer that for you. So, like, I think the answer largely is that they sold because the price wasn't going up.

David Hoffman:
[13:07] Because everyone else sold, too. Yeah, and they are.

Haseeb Qureshi:
[13:09] Yeah, I mean, I don't have some brilliant explanation. Like, there is a story about, oh, well, you know, the AI trade is soaking up everything. But that's been true for a while, right? So, I don't think that's uniquely true right now. I think it's that things started going down. And so people sold and, you know, anything that would not have been explained by the price chart doesn't get more explained by looking at this.

David Hoffman:
[13:27] Not to be too bear hold, but we just got to look at the stats. Tom Lee is down $8.9 billion on $10 billion of ETH. They have currently $10 billion of ETH. Michael Taylor is down $7.6 billion.

David Hoffman:
[13:40] He has $56 billion of Bitcoin. And while Stretch is undergoing a confidence test in the market, while it's trading 5% off of its highs, we got an announcement that Bitmine has filed for a preferred stock offering, offering a yield of 9.5%. Interesting timing. I did not know. I was unsure if Bitmine was going to do this. We once talked to Tom Lee, and he was like, I like to keep my options open to do whatever I want to do. Seems like he's chosen a door He's going through this door Some doors are going to close as a result of this But he is doing the stretch style Of a yield offering for 9.5% What was your reaction to Z when you saw this?

Haseeb Qureshi:
[14:26] Um, I don't feel like we know enough. So one, you know, filing to be able to make an offering does not mean that you have to actually do the offering. So he may have, again, kept his options open, want to test the market, talk to actual buyers, and then he may decide go, no go, depending on what the appetite is. Now, that said, I think actually BitMind is situated pretty differently from strategy because of the fact that Ether has a yield. And because Ether has a yield, you can actually pay the yield here by just selling the yield and not selling the principal. And so he doesn't actually have to sell any net new ETH in order to be able to fund this in principle, depending on how big it is. But this is the end game, right? This is why you run a DAT and get to scale is that you can have these very favorable financing mechanisms that are a lot better than what, you know, what you and I could get if we wanted to get some leverage on something. Like, you know, we can't offer preferred stock on our crypto buys, but but, you know, maybe Tom Lee can at scale.

David Hoffman:
[15:27] This was one of my conditions for being bullish ETH. The first one is let's increase the ETH burn because if you increase the ETH burn, the yield that Bitmine is going to get is even stronger that way. Without any ETH burn, the yield is actually just issuance. It's really just Ethereum taking from one pocket and giving it to another. That second pocket is where Bitmine has all their ETH, but with the burn, that yield goes from nominal to real. and that is the strength theory that I see happening and The fact that this product can be stronger than strategies is a huge bull case to me, especially bolstered if we get layer one burn up. But also another bull case is that Tom Lee can just learn from Saylor's mistakes. I think Saylor, I don't know, he knows more than me, but he really just issued the crap out of stretch aggressively. And now we are starting to look at some of those consequences. I think there's potentially a second mover advantage that Tom Lee has, in addition to the yield mechanism.

Haseeb Qureshi:
[16:34] Um, I think it's plausible. I buy that story in part. I think, look, the reality is whether you're funding this out of staking yield or whether you're funding it out of Bitcoin, you know, sales of the underlying, the difference is really one of narrative as opposed to the underlying mechanics, right? Because, look, if Saylor is funding through Bitcoin sales, which I think, like we said, I think he's going to learn that you cannot do that. You have to dilute common stock if you want to pay these dividends. But if you're doing it by selling Bitcoin, the reason why markets revolted is the story, right? The story is supposed to be buying more Bitcoin instead of selling Bitcoin. In this case, okay, you know, they bought, let's say, you know, 100,000 ETH. And then they get some sinking ETH and they sell that, right? That sort of sounds like, oh, you're still accumulating more ETH. that's great. In reality, they're still selling ETH, right? They're selling, you know, there's still somebody else who has to have cash to buy ETH in order to, you know, make the whole system work. But it sounds better.

David Hoffman:
[17:31] It does sound better.

Haseeb Qureshi:
[17:32] It does sound better. Exactly. It sounds like, oh, we're still accumulating. The number has not gone down. It's only going to go up. And so I think that is a narrative transformation, not an actual economic transformation per se, because of course that's, you know, inflation to the total ETH supply. But, you know, ETH does not have a real yield, quote unquote, meaning that it doesn't have a yield paid in external assets. It's not like you're getting dollars by staking ETH. You have to get ETH and you have to sell the ETH. And so at the end of the day, I think these are similar from an economic perspective, but for the DATS, it's very clear so much of the flows depend on the narrative. And the narrative is Tom Lee's going to keep buying this stuff and therefore it's always going to have a bid. It doesn't matter how bearish the market is, Tom Lee's going to be in there buying ETH. And the same thing is true for Sailor. Sailor is always going to be in there buying Bitcoin. It's clear now the ETFs are not up only. They are not a one-way ratchet of just, you know, accumulating more and more Bitcoin or more and more ETH. These debts are that. So I think the story matters. And I do think the story is better for Tom Lee, but it's not impregnable.

David Hoffman:
[18:35] There is something funky about Tom Lee issuing the yield offering and then financing that with ETH staking yield. The reason why you would issue a yield offering is that so you can hammer the ATM, generate revenue to buy ETH, but you're selling ETH on the other side to pay for the yield. So like it just seems I guess the answer here is like, well, doing this thing gives Tom optionality and he can sell ETH when it's beneficial. He can hold ETH when it's beneficial, he can sell at the ATM when it's beneficial, and he has those options and he will load balance accordingly. I guess that's the answer. It just feels weird to be selling out of one pocket and buying from another.

Haseeb Qureshi:
[19:15] Yeah, I mean, obviously it is. Like, why would you do this? Why are any of the dads doing this? The answer is because they think number go up. If you don't think number go up, don't do this. This is not a good strategy. You will not make money in the long run doing this for random things. You will only make money doing this if number go up. So this is a number-go-up game. If number-go-up, they win. If number-go-down, they lose. It's really that simple. These guys are taking on leverage. It's very favorable terms to take on leverage. It's not a lot of leverage in percentage terms, but this is leverage. So getting levered only works when number-go-up.

David Hoffman:
[19:51] I think Tom Lee needs to rescind his 5% target. Because he says, like, we're going to earn, we're going to buy 5% of the total ETH supply, and then we're going to call it good. To me, that takes some of the energy out of the whole system. If you say, you're like, I'm just going to not buy more than 5%, I think you kind of have to say, I'm going to literally buy as much as the market will give me.

Haseeb Qureshi:
[20:14] What's he at now? Is it like three something?

David Hoffman:
[20:16] No, 4.5%. He's pretty close. And they also said that they are going to slow down their ETH purchases as they approach 5%. And so to me, I was like, okay, like this is a different game than what strategy was playing. Michael Saylor, Michael Strategies, like I'm going to give, I'm going to buy as much Bitcoin as humanly possible. And Tom Lee was saying, yeah, we're going to get 5%, we're going to call it good. And we're slowing our way there because we're at 4.5%. And so there's something dislocated to me about the issuing of the yield offering and also capping at 5%. Like I think he needs to say like, ah, we're going for 15%. We're going for 15%.

Haseeb Qureshi:
[20:53] Yeah, you're not wrong. I do think that it's very likely that, you know, Tom Lee is probably going to reevaluate that 5% number when he gets the spinning distance of it. And this, you know, this offering doesn't make a lot of sense if you're slowing down, right? This is a speed-up kind of offering.

David Hoffman:
[21:09] This is a speed-up thing, yeah.

Haseeb Qureshi:
[21:10] This is a speed-up thing. So I think that you are right. I think this is maybe a signal of that is that, you know, look, Tom Lee gets paid the bigger this thing becomes. If he becomes really big, he makes more money. So his incentive is very obvious. Now, that being said, it is also true that ETH is actually different from Bitcoin in that owning a lot of Bitcoin doesn't really impair Bitcoin's properties because, you know, the consensus of Bitcoin is around proof of work. It's not around ownership. Whereas for Ethereum, the, you know, the governance power of Ethereum is actually in staking. And so if you own a lot of ETH and you're staking it, you actually do exert more control and more power over the network in a way that is potentially somewhat sus. Yeah. And so I think, yeah, I don't know if this is playing into that equation, but he might be mindful of that. You know, the total ETH stake supply is, what is it, like 30-something, 40%?

David Hoffman:
[22:00] 30, 35%, 30, 45%.

Haseeb Qureshi:
[22:03] 35%, okay.

David Hoffman:
[22:03] No, it's higher than that. It's higher than that. It's like 40%.

Haseeb Qureshi:
[22:06] Okay, 40%. Let's assume that's right, okay? Yeah. So if he has five, then he's one-eighth of the total staked ETH, right? Yeah. So you have to get to 33% of total staked ETH in order to basically be able to cause a major failure in consensus. And so that takes you to, what is that, 13%? So that's not a lot of headroom before basically he's breaking the security model of Ethereum.

David Hoffman:
[22:30] Right.

Haseeb Qureshi:
[22:31] Which tells you this thing cannot get arbitrarily big. And ETH is not as big as Bitcoin, right? So, you know, Bitcoin's one and a half trillion. ETH is 250 billion, roughly.

David Hoffman:
[22:41] So, yeah, strategy doesn't have 1% of Bitcoin. And Tom Lee has 4.5% of ETH.

Haseeb Qureshi:
[22:49] Right. There's effectively no ceiling on strategy. Strategy could own 5% of Bitcoin and still doesn't matter. It doesn't really change anything about Bitcoin itself. But if Tom Lee goes to 13%, that's like a two and a half times where he currently is. Tom Lee's about 10 billion. So if he gets to 25 billion at current prices, then he is now basically kind of in control of consensus. That's weird. That's very weird.

David Hoffman:
[23:17] That is weird. There is a silver lining to that, that maybe you'll agree with me. You had me on the chopping block and we talked a lot about this, that there needs to be an institution, a new institution that fills the vacuum that the EF is intentionally leaving behind. That is pro ETH the asset, pro the financialization of ETH the asset, pro number go up, pro leading Ethereum to be market competitive with other blockchains. And I see increasingly Bitmine being positioned to take that torch. Maybe they don't even want it, but they kind of have to because they have so much ETH. So I'm actually of the opinion that it's actually a good thing to have an entity that is existentially tied to Ether, the asset, and its price performance, and also can be aligned with some of the Ethereum foundation members that have left, the brain drain out of the EF. I think there's optionality there. I don't quite know what's cooking over there, but I could see that actually being quite a good thing for Ethereum despite all the risks that you identified where if one holder has too much ETH, that's kind of sus for the network.

Haseeb Qureshi:
[24:37] Yeah, so I completely agree with you. I very much think that they are in pole position to be that economic advocate for ETH, the asset. That said, it does put them in this kind of uncomfortable governance position where now they have disproportionate power over the network. A lot of Ethereum's story is that it's credibly neutral, is that it's whatever, World War III resistant, blah, blah, blah. If you have one public company.

Haseeb Qureshi:
[25:03] That is the major, like the largest steward of Ethereum and has the ability to kind of stop the show if they want to. They say, hey, you know, Ethereum is, you know, not enforcing OFAC compliance. Well, that's not good for us because we're a public company and we're getting subpoenas. So, you know, like there's in principle, I mean, again, I'm kind of scaremongering a little bit. I don't think this is likely. And I think it's also possible that BitMind, if they get into that position, let's say that they start to own a third of the overall stage supply of ETH. One can imagine that maybe, okay, we're going to move some of that ETH into DeFi to get yield instead of putting it into staking.

Haseeb Qureshi:
[25:38] Maybe instead we're also going to move it into other stakers. Instead of the staker that we own, we're going to move some of it into Lido, you know, whatever, so that we're not actually directly in control. And maybe even we put it into blind trusts. And those trusts are responsible for staking. And those, you know, the governance over those are done by third parties or, you know, somebody else entirely that has some kind of nonprofit type structure around it. And we pledge our ETH there, and we don't have corporate governance control over it. Therefore, we are not in control of ETH. I think this is a problem that if they get to strategy levels of success, and they blow past the 5% threshold, they do probably have to start thinking about this, about what does it mean when you are now, with the EF stepping back, with consensus not really being anywhere near the scale now of what Bitmine is, and all the other DATs being quite a bit smaller than Bitmine. And BitMind now having access to, you know, the bigger levers within capital markets, like being able to issue preferreds that are stretch style, that may mean that, you know, they just rocket their way to becoming by far the largest single holder of ETH. And when that happens, things might get trickier relative to what it is today, where it's a pure financial play.

David Hoffman:
[26:52] I think the jury is still out on whether these equity yield instruments are Ponzi's or not. Cammy Russo tweeted out, are these things Ponzi's or not? And my answer was they are not Ponzi's if they are appropriately risk managed and they are Ponzi's if they are not. I don't know if you have an opinion on this. I think this is actually kind of being one of the major stories of the next few years is like, what are these things and how does the market treat them over time? What do you think they are?

Haseeb Qureshi:
[27:19] I mean, I think it's hard to describe these as Ponzi's. A Ponzi is guaranteed to fail, right? That's why we call it, that's why it's a crime to run a Ponzi scheme. These are clearly not guaranteed to fail. They might fail, but they're not guaranteed to fail. You know, even over a very long time horizon, you know, if Bitcoin, like Bitcoin would probably never be worth $1,000 ever again, right? So if you take a very small amount of leverage on Bitcoin, so that you will get margin call if it goes below $1,000, there's a very good chance that that just continues forever. You have now perpetually taken on leverage and you will never get margin called and the Ponzi will never collapse. Now, if you take on the Ponzi, quote unquote, if you take on 300% leverage and if Bitcoin ever goes below 65, it's over, then okay, that's very, very likely to collapse. And if you just look at the historical vol of Bitcoin, like that's a risky proposition. But if you took that thing when Bitcoin was at 5K, Bitcoin never visited 1,000 again.

Haseeb Qureshi:
[28:14] So I think Ponzi, not Ponzi, is just the wrong frame to be thinking about this, like it's kind of too binary or too simplistic. These are risky bets. The risk is dependent on how you think about the future, volatility as well as the future progression of these assets and where the demand floor is going to be on them. I think if you look at, you know, if you look right now at Bitmine, Bitmine has no structure. There's no debt. There's no anything, right? This would be the first structure that gets added onto Bitmine's cap table. Yeah. So clearly, as is, BitMine is not a Ponzi. It cannot be a Ponzi. There's no way to stop them out. There's no way to margin call them. There's no debt. So it's just like a trust, you know. Was GBTC a Ponzi? Obviously not. It's just a big pile of Bitcoin that's trading on, you know, public markets. So I think the reality is that these things are still mostly just trusts that are trading on public markets. That's like mainly what you're buying, even when you buy strategy, right? There's some leverage, but the leverage is very small relative to the balance sheet. So, mostly it's a Bitcoin trust that just moves up and down, you know, relative to NAV. So, that's why I think calling it a Ponzi is just kind of too simplistic.

David Hoffman:
[29:22] Yeah. I think she's kind of going for the spirit of the question, which is basically, will these things collapse or not? And I do think if you want to balance risk and be efficient at risk and be on some sort of efficient frontier, then for sailor and strategy, there needs to be some of these moments where confidence is not at 100% and some of the market actually does think that this is going to fail, and then it doesn't fail. And if you never have these moments where part of the market shrugs off and be like, I don't want this risk, then actually you're not taking enough risk. There's a Goldilocks zone and if Saylor can find that spot, I think that's actually the efficient frontier of leverage and risk.

Haseeb Qureshi:
[30:08] I like this argument, although I was not expecting it from you, David. I do like this argument. It's sort of like if your girl is never a little bit nervous, you're not putting yourself out there enough. It's like to keep a good relationship, there's got to be a little bit of fear. If Michael Saylor's never scared.

David Hoffman:
[30:23] He's not buying enough Bitcoin.

Haseeb Qureshi:
[30:25] Okay. Okay. Wow. I, I, I don't reject this theory. I don't reject this theory.

David Hoffman:
[30:33] You're right. Which does, one of my big questions that I think will get answered by the end of 2027 is like, what is the nature of these products? These like stretch like products with that's appended to them. And to some degree, the answer is that is going to depend on the risk management of the team behind them. because like if you are overly cautious, well, then you're not a very good DAT and you've left margins on the table. And if you're too risky, well, then you collapse the whole entire thing. But like finding how to find the correct equilibrium and stay there indefinitely is going to be a little bit of an art that I think that question will get answered over the next 26, 26.

Haseeb Qureshi:
[31:16] We like the bad boy DATs. You know, we got to feel a little nervous. You know, we got to feel our heart race every once in a while.

Haseeb Qureshi:
[31:21] Otherwise, you know, it's too boring.

David Hoffman:
[31:23] Yeah, that's right. That's right. All right. Okay, so Hasib, the market this week has just been the story of majors being pretty weak. So Bitcoin is down 13% this week. Ether is down 12% this week. XRP and Solana are saying the same thing. But if you go down market, there are some good tokens. There are tokens that have done exceptionally well. I don't know what humanity is, but it is up 120%. WorldCoin is up 94% this week.

Haseeb Qureshi:
[31:49] Humanity is very similar to WorldCoin. It's like a proof of humanness through using your palm reading. I see.

David Hoffman:
[31:55] I see. Okay, so then the AI human identity tokens are the winners of the week. Congrats to them. We got Lighter up 30%, Athena up 11%, Hyperliquid up 10%, Venice up 9%, Jupiter up 6%. And so there is never before, if we go back last cycle or the cycle before that, when Bitcoin and Ether were puking, Bitcoin is at its 200-week moving average after falling 12%. You know, Ether is 30% below its 200-week moving average. Never before have I seen tokens reaching all-time highs and having strength in that same week what do you make of this what does this tell you about the state of crypto

Haseeb Qureshi:
[32:34] Uh well it says a few things so one i i think you did sometimes see this but mostly in scam coins and what's notable is that actually these are pretty legit projects that have been around for a while and so there's there's there's a some real price discovery happening here um the second thing of course is that there are more and more tokens that are not that exposed to the bitcoin price, which is, you know, in some sense is kind of surprising, right? So, you know, take Hyperliquid. Hyperliquid recently hit all-time highs, although it's pulled back a little bit. It was in the 70s, mid-70s earlier this week. And for Hyperliquid, no, Hyperliquid is exposed to the Bitcoin price because, you know, they make money trading crypto. But more and more of their volume is actually coming from TradeXYZ, which is trading RWAs. And so if more of your narrative, the reason why people are bullish on you is RWA trading, then who cares if Bitcoin's down? Everything else is volatile and everything else is going up. And so, you know, it's kind of like you're not that exposed to the underlying Bitcoin price. Same thing is true for Venice, for example. So Venice is a crypto AI project, more AI than crypto, let's say. And for Venice, you know, their price largely moves in comparison to demand for tokens on their platform. Tokens not being crypto tokens, but AI tokens.

David Hoffman:
[33:46] AI tokens, the other token.

Haseeb Qureshi:
[33:47] So as demand for AI tokens goes up, Venice's revenues increase and Venice goes up. So I think there's a, what you're seeing is that there's more and more tokens that are actually materially diversified out of the crypto market itself, which means that, you know, it's not just that, oh, well, these are all memes and they go up and down together because it's all part of the big crypto meme. What you see instead is that, no, no, no, this market really is quite variegated with respect to what these things have exposure to. Now, WorldCoin, I don't know that I can explain to you what's going on there. It seems like OpenAI IPO anticipation, that seems to be what people are claiming is causing this. So maybe there's a little bit of meme coin-ness going on with the WorldCoin rally. Obviously, it's been very violent over the last couple of weeks as WorldCoin, or sorry, not WorldCoin, as OpenAI has announced that they're trying to go public and obviously Anthropik and SpaceX. So there seems to be a bit of an affinity trade going on there and maybe humanity alongside WorldCoin. And then, of course, these Binance Life, which is the number four there, is literally a Binance meme coin. So beyond that, I can't tell you what else is going on in this list.

David Hoffman:
[34:53] It is nice to see that, at least the tokens that I'm focused on, which is Hyperliquid, Venice, Near, Lighter, and Zcash. Zcash, I think, has pulled back perhaps the most out of all of those. And that is the one that is not revenue-driven. That is more of just medically paired with Bitcoin because it's the same thing, 21 million units. But all the other ones are revenue-driven. And so to some degree, I'm seeing the industry is just being mature. We have tokens that make money. And if you are making money, revenue, even dollar denominated, or in Nier's case, near denominated, if you are making money, you get to be not dragged down by Bitcoin and the rest of the market. To me, it's a sign of maturity.

Haseeb Qureshi:
[35:38] I agree with that in part. I mean, DeFi is getting hammered if it's not a perpdex, right? So it's not true across the board that, okay, well, revenue will save you. A lot of things in DeFi make revenue, but the multiples are getting compressed. And of course, their revenues are denominated in crypto. So as crypto goes down, their revenues are expected to go down in the future, even if they haven't gone down yet.

Haseeb Qureshi:
[36:02] So I think the story is a little bit complicated. And, you know, Nier got hammered today. So Nier is down. it's like I think one of the most down assets today. So it is a more complicated story. I think part of it is also that AI tokens are doing well because the entire market is captivated by what's happening in the AI world. But I largely agree with you and I should also note we're investors in most of the assets that you mentioned. So I'm grateful to see that there are some good projects that are weathering the storm and are able to have decent price expansion during times when a broader crypto market is under threat. But what that may well mean also, it's too early to say, but what it may well mean is that they don't necessarily share the same velocity on the upside. So I've seen a lot of people saying like, oh, well, this is how Hyperliquid is doing now. Just imagine how they're going to do when Bitcoin is at 100K plus. Right. And it may well be that actually people are pricing Hyperliquid on revenues. And if they're pricing Hyperliquid on revenues, if the revenues don't, I mean, you know, it's not that likely that revenues are going to double just because the Bitcoin price goes up because so much of their revenue is coming from RWAs.

Haseeb Qureshi:
[37:10] So if that is true, may not be true, you know, TBD, let's see. But if that is true, then what you may see is that actually the crypto beta really is actually, you know, sort of cordoned off to these assets that are more crypto native and the less crypto native assets that really have identifiable revenues and sort of growth engines that aren't tied to the fundamental Bitcoin. Price, they just don't capture as much crypto bait on the way up either.

David Hoffman:
[37:37] Did you just call a hype BTC top, Haseep?

Haseeb Qureshi:
[37:40] I did not. I did not call a hype BTC top. Just pointing out that markets are complicated. Just pointing out that markets are complicated.

David Hoffman:
[37:50] All right. Let's get into U.S. perps. The CFTC this last week announced two pretty big things. First, it gave a license to CalSHI for the first Bitcoin perpetual futures contract inside the United States. At the same time, the agency also gave a no-action letter to Coinbase, allowing them to connect to their customers to a perp platform, a different perp platform, so they get to be the pipes. And this kind of signals the opening of the gates, the cutting of the ribbon to onshore U.S. perps. And this is partly why I think Hype did so well this week. Same thing with Leiter is like people are just getting really excited about the perps market broadly. And especially when so many platforms, Polymarket, Kalshi, Coinbase, Robinhood, Leiter, or just to name the handful that come to mind, are all just like chomping at the bit to get access to the United States perps market. I think in addition to the stories that I'm collecting, what are the equity yield instruments of the DATS? I think the next big story is what happens with the U.S. Perp market for the rest of this year and for 2027. What was your reaction, Hazib, when you saw this?

Haseeb Qureshi:
[39:07] Um, I might be in the minority here. I'm actually somewhat skeptical on the domestic perp story. Um, I, so a few things, I think one retail is not here. And when retail is not here, it's kind of like, okay, well, if retail is not trading this stuff, then what does it really matter that we offer perps domestically? It's not like people are like dying to find leverage ways to trade crypto right now. So it sort of feels like it's real world assets. Yes, yes. And so if you're talking about perps on real-world assets, so one, CFTC has explicitly said that they are not encouraging people to apply with perps for equity instruments or for securities. So they say particularly perps are really appropriate for crypto, works great. Not appropriate for equities, not appropriate for ag products. Why not? I mean, presumably ag products, because, you know, the ag industry kind of controls everything behind the scenes. And then for, there are all these rules around, you know, there was a story that I tweeted about where Kalshi, they restricted their agriculture-related markets to not be tradable on weekends and after 8 p.m., unlike every other contract on Kalshi, just because the ag industry complained so much. So I don't totally understand why ag hates weekends or, you know, price discovery or whatever, But it's very important to them that, you know, Onion Futures have no price discovery after 8 p.m.

Haseeb Qureshi:
[40:28] But for equities, I think for the CFTC, it's like very obvious is that they have really, really large stakeholders of a very strong vested interest that they get to go first. So if you're the CME, if you're CBO, you do not want some, you know, some crypto bros going in and saying, great, I get to create totally new financial instruments that trade 24-7 and on the weekends and give arbitrary amounts of leverage to retail traders. That is not happening.

Haseeb Qureshi:
[40:54] Despite how crypto-friendly this administration is, you are playing the biggest game with the biggest boys when you enter into, okay, I'm going to offer derivatives on equities. So we've seen some products being contemplated right now, but most of these products are not available to U.S. customers. The BTC perp, which was offered here, is obviously very vanilla because the CFTC is kind of like, look, if you want to offer perps on Bitcoin, whatever. What's the worst that could happen? It's already Bitcoin. It's crypto. It goes up and down, whatever. But the reason why they do not want these these derivatives to be issued willy nilly on real world assets is the argument that the ag industry always makes is that, look, what if the prices get manipulated and then it breaks my business, that oil future or onion futures are now priced at blah, blah, blah. And it breaks my yield. And now I can't plant the season and whatever. I don't know all sorts of stuff like this that I probably don't understand. These prices are very important inputs into how all these systems work. And if these prices are just yielded arbitrary amounts of speculation, then there's much more volatility in the underlying markets, and that's bad for real world businesses. So that's the claim that I presume the CFTC would be making if they reject somebody who says, hey, I want to offer, you know, 50x SpaceX perps. It's just like, well, SpaceX is a real business and like, no, you can't do that. Maybe eventually they will offer guidance about how to do equity perps, but it's very clear right now they're not ready to do that yet. Right now they're only offering crypto perps.

David Hoffman:
[42:23] I'm talking to Mike Seelig from the CFTC on Monday, so I will be asking him exactly some of these questions. This is a great,

Haseeb Qureshi:
[42:30] Great fact for me. I'm not a lawyer. I might be totally off on this, but this is my understanding from what I've read.

David Hoffman:
[42:34] It checks out. What I'm hearing you say is there are people who are just fundamentally bullish the perpetual, as in the instrument. And I don't think you are perhaps also thumbs up on that. That's not what you're saying. What you are saying is something very akin to the banks versus crypto with regards to stablecoin yields, where the incumbents just want to make sure that they retain their biggest piece of the pie. Maybe it's the CME. Maybe it's the existing incumbents that actually offer perps. Maybe they go 24-7, 365 with perpetuals because the perpetuals are such a fantastic instrument. But they're just going to be the ones to do it and the status quo is the status quo and we're not going to see like coinbase coming in and trading oil futures on perpetuals and that dominate the market there

Haseeb Qureshi:
[43:24] Is no way that coinbase goes first or that some startup goes first right or the hyper liquid us goes first like there's just absolutely no way that that's how it happens.

David Hoffman:
[43:33] Just because of incumbency powers.

Haseeb Qureshi:
[43:37] Absolutely, absolutely. I mean, we talk about, oh, you know, crypto is such an organized lobby and so on, but like you're, again, this is a different scale than what we, you know, the scale of the equity markets and the scale of the commodities markets are much, much, much, much, much larger than the scale of the crypto markets. So letting crypto bros go and beat up on each other and, you know, go get levered long and kind of go crazy, it's a great sandbox from the perspective of the CFTC to say, hey, let's offer these products domestically. Let's surveil them. Let's manage them. Of course, these are fully KYC'd. CFTC surveils all these markets and can basically pull records on people if they see weird stuff happening. Like these are not hyperliquid style, you know, load up a privy wallet and just go ham. These are US regulated, you know, DCM, DCO platforms that are going to be very closely monitored by the CFTC for malfeasance. That's why they want these markets is they want to bring this activity onshore and under the watchful eye of U.S. regulators. So I think on an absolute basis in terms of where I expect the trading volume and where I expect the revenues to be, I think in a world where you see Coinbase and Kalshi and Polymarket and all these guys, to the extent they do launch onshore products, I expect that actually most of the volume will still remain offshore.

David Hoffman:
[44:54] Hmm. Wait, go into that a little bit more. So, like, imagine Kalshi, Polymarket, Lighter, they launch onshore Bitcoin, Ether, VVV, all of the crypto tokens that crypto people love to trade. You still think that the dominant trading venues will be offshore?

Haseeb Qureshi:
[45:13] I do. So let me just give you a thought experiment, okay? There are today some exchanges that will take Americans that are like sort of no to low KYC exchanges, right? They're kind of shady. They're not the, you know, they're not the really biggest ones, but you can sort of, you know, you can put up my mind, you know, go to the exchange list, go to like number 10, number 12, and go try to make an account there and decent chance you can figure out how to do it as an American, right? And these are mostly, you know, Chinese or whatever. They're somewhere overseas and they're in, you know, Seychelles or something. And these exchanges will take your money.

Haseeb Qureshi:
[45:46] Um you go on these exchanges you can you can go buy perps as an american um they are not big exchanges there's not an enormous amount of demand for people to just go and sling around perps on all these products and to the extent that if people on coinbase can get access to perps the reality is that the you know part of the reason why coinbase stock is down and robin hood stock is down is that people just aren't buying as much crypto and i think there's probably a large part of displacement from the spot markets into the derivatives markets because look people at a certain extent, they're only buying, you know, they're only depositing so much money. Now, with perps, you can take on the more leverage, but these products are U.S. Regulated, which means they're not offering 50x leverage. They're probably not even offering 20x leverage, right? Most products in the U.S. offer very low amounts of leverage to retail traders. So, I think the fantasy that we have that, you know, what you see on Hyperliquid is going to become available to every American is probably not the experience that we're going to get. Now, look, I could be wrong. And I think this changes as the market evolves and as these products become better understood and they get better marketed, and especially if they start being offered to institutions. I think there's an argument that institutions might be drawn to the perps market and that this displaces some of the demand for futures and for options and so on. But I think at the end of the day, the idea that launching domestic perps is going to result in this renaissance of demand for altcoins or for crypto, I think is a bit of a fantasy. So, look, we're going to see these products soon, if not already.

Haseeb Qureshi:
[47:14] You know, these products have already been approved. I don't actually know if they're live and trading. Do you know that?

David Hoffman:
[47:17] They're not. They're not.

Haseeb Qureshi:
[47:18] They're not, yeah.

David Hoffman:
[47:19] Yeah, there's a waiting list for Kalshi.

Haseeb Qureshi:
[47:22] I would predict that you don't actually see the Bitcoin price move very much once these perps launch domestically. Now, if I'm wrong, that's how you'll know. You'll know that I'm wrong about this thesis because, wow, Bitcoin, so much incremental demand, so much buying pressure that we're seeing now from Americans. But my guess is that we're actually not going to see much movement once U.S. perps go live.

David Hoffman:
[47:41] Yeah, I would agree that actually there's not really much that will move Bitcoin price right now. Like we kind of just need to get through some pain. But that is a separate topic and a separate issue. I think the more bull case is that like perps, they grow, they penetrate, they get adopted like marginally at the margins. And then in like 2028, people think Bitcoin is cool again. People think ETH is cool again. And then they go back to Coinbase and there's this sick slider mechanism that they've never seen before. And they're like, what can I do here? And then it's a little bit off to the races. And that's how you get euphoria because it's going to work when people do that early in the cycle rather than late. And then a lot of people are going to make money and it's going to go viral. And then that's how you get the blow off top. That seems to kind of fit the pattern match, the cycles that we've seen in the past.

Haseeb Qureshi:
[48:32] Yes, I think that's an accurate, not accurate, it's a plausible picture of how it might go. The other thing to remember too is like, why did we invent perps at all? Perps were not needed for other markets before crypto, right? So why were perps basically created the way that they are? There's kind of two answers for it. One, perps are very simple for retail and that's one big advantage. But the second thing is that we had to create an instrument that works in a system without any credit and without any ability to claw back from people who lost money, right? In the traditional financial system, we know who you are. There's no randos. We're not, you know, going across multiple jurisdictions where there's no way that we're going to be able to get your money back. In the traditional financial system, if you go negative, okay, we send you a bill and then we send you to collections and we get the money back from you, even if you go negative. So part of why perps evolved and became so popular in crypto was because of the particular market structure of crypto being global and unregulated. So bringing perps domestically, now I do agree that perps are a simple product, easy for retail to understand. That's great.

Haseeb Qureshi:
[49:42] But part of why perps thrived is in this environment of being offshore and not having the ability to basically claw back money from people who are deeply red. and the U.S. Domestic exchanges just don't actually have that set of problems. Otherwise, look, perps have been around for more than 10 years and yet they're not adopted for almost any other market besides crypto, even still, except for the perps that we now have on RWAs.

David Hoffman:
[50:11] That's a very good point. That's a very good point. Maybe, maybe, as you might be alluding to, perps are just an offshore thing. They just resonate with being offshore.

Haseeb Qureshi:
[50:21] Look, I do think it's true that they're very simple for retail. And I think that's the real virtue of perps is that it's so simple to just be like, yeah, buy the thing and lever up this much, the end. You know, doing that through options, doing that through futures, having to roll, you know, blah, blah, blah, you know, CFDs, okay. There is just a virtue of the simplicity of perps. And I agree that that's a real thing, but it's really only true for retail. It's much less true for institutions.

David Hoffman:
[50:48] Last thing, Haseed, before I let you go, Coinbase bought ENA, that's the token of Athena, on the open market this week and also flagged a new partnership. It sounds like they are going to put in an Athena yield product into their front end, kind of as they did with Morpho. What does Morpho do? They just offer Bitcoin-backed loans. You put up your Bitcoin, you can get a loan. Sounds like they are doing the same thing with Athena. What does Athena do? It provides yield with dollars, actually via perps, by going delta neutral. And then they collect something between like 4% and 7%. I don't think we know what the yields will be in Coinbase in the front end, but pretty cool to see another implementation of the DeFi mullet. So Coinbase in the front, Athena in the back, giving yield accounts. What was your reaction, Hasib, when you saw this?

Haseeb Qureshi:
[51:34] Very excited. So we're big investors in Athena. We let their seed round. So we've known this team for a long time and we had a small role to play in kind of bringing the relationship between Coinbase and Athena together. And so it's very exciting to see this actually come to fruition because not everything like this actually does. And Coinbase obviously has been super supportive of things in DeFi. They've always been very forward in adopting things and offering stuff and kind of going to the C-DeFi type construct like they did with Morpho. So I think that's awesome. It's important to call out that Athena has evolved quite a bit from the early days. You know, it used to be that almost all their yields came from the carry trade or the basis trade.

Haseeb Qureshi:
[52:12] And that has evolved as the carry trade has really kind of weakened because you know just the basis is not as strong as it once was while crypto markets are pretty bearish, I think this is also part of the evolution of Athena and its strategy. And on some level, also part of the evolution of Coinbase, presumably. So there may be something in here. We don't know the details yet, and I don't know the details. But there may be something in here that is responsive to the constraints placed on Coinbase via the Genius Act. Or sorry, not the Genius Act, but the Clarity Act, right? So Clarity kind of revises the Genius Act by restricting your ability to pay yield. But if it's not you paying the yield, you know, not being the issuer, if they're getting yield through some other product, technically that allows them to get yield even if it's not directly through, okay, the issuer of the stablecoin paid them yield. So there's a sort of economically equivalent transaction such that they're getting yield, but the yield is being shared between Coinbase and Athena, one can imagine. And so economically, it's not that dissimilar from what it would look like for a stablecoin to pay yield. Now, I don't know if that's what's happening. I'm kind of speculating, But I think there's probably an interesting story on both sides of this partnership.

David Hoffman:
[53:21] My reaction was the same. There's specific language that we cannot pass the yield from treasury yield, treasury yield specifically. And that's not what's happening here. The yield is completely generative of a net new source, which is inspired by the treasury yield, but it is not the same thing. And so one of the things, one of the stories of the Clarity Act, as I understand it, is that there is some creativity with how Coinbase can pass back the yield. And this seems like a potentially creative solution.

Haseeb Qureshi:
[53:55] Yeah, it's also possible. I mean, so Athena does have some USDTB, which holds BlackRock, a middle money market on the back end, I believe. But it's also possible that this is being offered to non-Americans or there's different versions of this for if you're American versus not American. Because remember the Genius Act or Android the Clarity revision to Genius only applies to Americans and Coinbase has a lot of non-American users so you can still pay yield to non-Americans that's totally fine.

David Hoffman:
[54:20] Just the americans can't get the yield from their own government bonds thank

Haseeb Qureshi:
[54:24] God for our government protecting us from the yield.

David Hoffman:
[54:26] I see uh this was the first week of june thank you for coming in and stepping in for ryan ron will be back next week uh and that is the bankless weekly roll-up i see appreciate you coming on and giving us all of your your thoughts i really appreciate you cheers

Haseeb Qureshi:
[54:38] Thanks for having me sir.

David Hoffman:
[54:39] Bankless you guys know the deal crypto is risky you can lose what you put in but nonetheless we are headed west it's not for everyone but we are glad you are with us on the bankless journey thanks a lot