ROLLUP: Is the Bull Market Back? | Treasury QE | Trump Pumps Crypto | SEC Token Rules

TRANSCRIPT

David Hoffman:
[0:04] We just had one of the most legendary days in the crypto markets in a long, long time. Bitcoin has probably the biggest green candle I think I've ever seen since before 1010. Everything in crypto is up and up for a handful of different reasons. It's a double digit week for so many crypto assets. The big question I think I want to ask in this episode is, is the bull market back? Was that it? Was that the starting pistol for the next bull market? But this day, yesterday, at the time of recording, Wednesday, August 19th, do you remember when BlackRock filed for the Bitcoin ETF and Bitcoin popped like 12%? And it was just like a moment that everyone was like, this is it.

Ryan Sean Adams:
[0:43] Yeah, that seems like such a long time ago.

David Hoffman:
[0:47] This, that is, it feels a little reminiscent of that, of just like, this is it. It's a this is it moment. Not completely, but it feels a little bit like that.

Ryan Sean Adams:
[0:56] Well, I think that is the question to ask is like, did that move just break

Ryan Sean Adams:
[1:01] the backs of all the Bears that were still out there and then had such momentum? But first, in order to answer that question, I think we have to ask the question and answer the question, like, why did this even happen on Wednesday? It just seemed like out of the blue, but we did have some...

David Hoffman:
[1:15] Out of the blue, left field.

Ryan Sean Adams:
[1:17] Out of left field, but QE, Treasury QE, may be back this time. Okay, we'll define what that is and what Besant said, what the Treasury is doing. That was a key catalyst to these markets. Also, the White House, Trump gave a speech basically pumping crypto and also...

David Hoffman:
[1:35] Spent all day pumping crypto.

Ryan Sean Adams:
[1:36] Yeah, and also the SEC released a regulation of crypto assets. Here's actually how Matt Hogan put it, which I think was great. In the last 24 hours, he's talking about earlier this week, the SEC released regulation crypto assets. It's a 402-page document that we'll get into. The Treasury launched yield curve control. The White House prepared for a meeting with top crypto executives to discuss tokenization in the Clarity Act. It's hard not to be extremely bullish, both Bitcoin and crypto right now. And indeed, the market was bullish. We got Bitcoin up double digits. I think ETH was up like, was it up like 20% on the week or something crazy?

David Hoffman:
[2:16] Dude, the president said hyperliquid on air, on live TV. You know, Bitcoin goes up because of QE. All of this stuff happened. You know, Venice crosses $100 million in ARR, and the winner on the week is ETH, actually. ETH is up, like, the most.

David Hoffman:
[2:33] So we're going to talk about all of that and more. Because out of the bankless universe, we have the bankless MCP. Do you know how many podcasts we've done, Ryan?

Ryan Sean Adams:
[2:43] We've got to be, I know we're over 1,000. Are we over like 1,100?

David Hoffman:
[2:47] We are over 2,000 podcasts. Wait, we're over 2,000 podcasts?

Ryan Sean Adams:
[2:50] You've been busy.

David Hoffman:
[2:52] We've been doing this for six years. Oh my God.

Ryan Sean Adams:
[2:55] So that's a lot of transcripts, right?

David Hoffman:
[2:57] Lots of transcripts direct from the source. Data that like AI labs don't have. And AI labs famously just haven't trained well on crypto data. So I don't know if you go into, if you notice going into your like your cloud or your Venice or your OpenAI or whatever you use and you ask crypto questions. And usually it's pretty constrained with how good it can answer. It can answer the basics, but you can ask anything beyond the basics and you get pretty poor answers. This is what the bankless MCP is for. And so you can, using your bankless premium account, you can hook in the bankless MCP to your near iron claw agent. And you just have the most crypto capable, crypto ready AI, LLM. Ever. And so this is available for Bankless Premium subscribers. And if you want that, you can go into your account and you can just tell your agent to install it. And then all of a sudden your crypto related prompts will be much better.

Ryan Sean Adams:
[3:49] That's very cool. I want that. I can't wait to ask myself some questions using the Bankless MCP.

David Hoffman:
[3:54] Dude, I put out this tweet about like announcing the Bankless MCP. And then you know what I got? Somebody generated like a fan fiction of you and me debating about ETH.

Ryan Sean Adams:
[4:05] Who won the debate?

David Hoffman:
[4:08] I don't know. It was a Socratic debate. Well, okay. Or answer crypto questions

David Hoffman:
[4:13] if you want or just make bankless fan fiction. Both work.

Ryan Sean Adams:
[4:16] You know what? We might repeat that debate in today's episode, okay? Because I want to get your thoughts on ETH. But before we do, you got prices up. Let's just celebrate what happened last week.

David Hoffman:
[4:26] We have bounced- Look at that gargantuan candle.

Ryan Sean Adams:
[4:28] Oh my God. We have bounced heartily off of the 200-week moving average for Bitcoin, which was something like $63,000, $64,000, if I'm recalling correctly, the 200-week moving average. What are we at the time of recording right now?

David Hoffman:
[4:40] Last week we were recording, Bitcoin was right at the 200-week moving average, $64,000. We were at $72,300. We paused right around $7,000 and we have just had continuation as of this morning. So we had a huge bullish day yesterday and we are continuing that bullish day today. And so firmly away, we are, how much is that we are up

Ryan Sean Adams:
[5:03] That's double digits, right?

David Hoffman:
[5:04] We are up 14% in a day and a half. Yeah, really, really, really great. Really, really great.

Ryan Sean Adams:
[5:10] Incredible.

David Hoffman:
[5:11] Some just absolute winners on the week. EtherFi. EtherFi announced kind of like an evolution. You know, EtherFi, the neobank, I'm calling it a neobrokerage. They're adding in assets and margin into their account. And also they improved their tokenomics. And so EtherFi pumped 38%. Pump.fun is up 28% because usage and revenue on pump.fun. About on the week. And it's been up already. It's been up 50% on the month. So huge continuation from PumpFun just because

David Hoffman:
[5:40] revenues are growing and therefore pump buybacks are growing. Hyperliquid is up 25%. We're going to get into this because Donald Trump said

David Hoffman:
[5:49] Hyperliquid on national TV or just the White House event. So hyperliquid is up. Venice VVV is up 20% on the backs of Open Router getting acquired and also Venice crossing 100 million ARR. And so I think people are reacting to yesterday, the Treasury announcing they're doing QE, which we're going to talk about. And then also Donald Trump just having a day of pumping crypto. It's like, wow, this one single bullish day. No, no. There have been bullish catalysts for the last like eight days. Etherify had its own bullish catalyst. Venice had its own bullish catalyst. And all of this kind of happened. And I think one of the reasons why it was so violent yesterday was the combo of the QE announcement and then the White House just blew out people's shorts, which is why one of the biggest winners on the week is ETH. ETH is the biggest winner on the week because so many people got wrecked shorting ETH.

Ryan Sean Adams:
[6:45] All the haters got wrecked?

David Hoffman:
[6:47] What is it? I saw an account like lost $30 million because they had like a huge ETH short open. That's why ETH just pumped so violently. So Bitcoin is up 13% on the week. Ether is up 23% on the week, $2,330.

Ryan Sean Adams:
[7:03] Incredible. Jamie Coote said this. ETH's move yesterday, just to put this in historical context, was the eighth largest single-day move since 2018. ETH's eighth largest single-day move since 2018. And history says the short-term follow-through is close to a coin flip, but the odds skew meaningfully higher over the next three to six months. So when you see that up explosion, usually that precedes like even more explosions.

David Hoffman:
[7:31] Even further up, even further up. Okay. I mean, you can zoom out and you can see this green candle. It's quite notable.

Ryan Sean Adams:
[7:40] It is quite notable. But that blue line there is the 200-week moving average. So we're not there yet.

David Hoffman:
[7:46] Despite having an incredible day, ETH is still about 7% below its 200-week moving average, which if you're bullish and you're looking to the upside underneath, you're like, oh, there's so much more room just to have mean reversion here.

Ryan Sean Adams:
[7:57] But that strength is something we haven't seen in a while. Strength on the ratio too. Strength disproportionate to Bitcoin on this move up. There's some strength in the charts. I think even traders are starting to acknowledge this. I know this is a question bankless fans wanted me to ask, but I was going to ask it anyway, okay? Does this move cause you to be tempted to go back and refill your ETH bag, sir, and retract some of the words that you've said about ETH. Is this it? Did this break the bearish sentiment in David Hoffman?

David Hoffman:
[8:31] Retract my words? No, I put a lot of thought into those words. I don't know if a short squeeze is like the confirmation that I want. Yeah. No, no, okay, is the answer. But like, I don't mean to say like, no, it's therefore bearish. Like, I think you could absolutely justify being bullish ETH here.

Ryan Sean Adams:
[8:57] Listeners, you guys hear that hesitation in his voice. He's not quite certain that his position is correct as he's saying these words.

David Hoffman:
[9:04] I'm not trying to be like too like concrete on either direction, which was also the conclusion of my article. It's like, ah, it's just like somewhat priced in. Like, it's not going to have, it's not going to go too far up. It's not going to go too far down. And I'm going to look for opportunities elsewhere. And so I'm not trying to say, like, give an affirmative, absolutely, I'm buying back my bags or absolutely not. I'm totally bare-ish. It's the same position. It's like, ah, it's, eh, I'm looking for excitement elsewhere.

Ryan Sean Adams:
[9:33] All right, ETH Maxis, we still have some more work to do, but. A way to start into that position of you flipping on your ETH position and refilling your bags is maybe to start with some BMNR, which is Tom Lee's DAT for Ethereum. And I know you spoke to Tom Lee earlier this week on Tuesday, I believe. I actually haven't talked to you about that episode. Tom Lee purchased another, what, 10,000 ETH on the week. So every single week he continues to purchase now has 4.8% of all ETH. Okay, so how about bullish BMNR if you're not bullish ETH?

David Hoffman:
[10:12] Look, okay, so right after that podcast episode, I think Tom Lee and the BitMine team, everyone thinks BitMine is Tom Lee, and partly is, but I think the BitMine team also is kind of like a sleeper about BitMine.

Ryan Sean Adams:
[10:26] Oh, that team is Cracked.

David Hoffman:
[10:28] Cracked team, Cracked team, and Tom Lee's a great just like figurehead. My hot take is that I think Tom Lee is a better Michael Saylor than Michael Saylor is. And like these are apples to oranges, but these are both leaders of the number one and number two DATs. And Saylor is a classic steak eating Bitcoin maxi, laser eyed maxi who's a little bit too aggressive. Tom Lee is a measured, moderate, balanced, reasonable leader of BitMine. And I think Bitmine, I think between Bitmine and MSTR, I think Bitmine wins big. I think Bitmine outperforms MSTR.

Ryan Sean Adams:
[11:09] So you'd rather own BMNR than MSTR? That means you're bullish ETH relative, like those are the assets, you're bullish ETH relative to Bitcoin.

David Hoffman:
[11:19] Yeah, well, I think it's not quite the same. I think Michael Saylor disrespects his equity like none other. And I think Tom Lee respects the fuck out of his equity. And I think that is going to be, I think that is going to be the story between these two assets moving forward. And so like really I came out of that episode with Tom Lee as being like, I think BMNR is quite bullish because to your point, like I do see upside, like a possible upside with Ether, the asset in the future.

Ryan Sean Adams:
[11:55] I know we've said before, Tom Lee is probably the most important person in the Ethereum ecosystem as of right now. Certainly the most important new entrant over the last 18 months. I can't wait to listen to that episode. I think it's coming out on Monday. I just have one question about that episode. Did you ask him the question of, where is he getting all this money to go buy ETH every single week? And did you get a good answer? What did he say?

David Hoffman:
[12:17] I got a partial answer. Yeah, what was it? You got a partial answer. Where's he getting the money? No, you got a listening episode, bro.

Ryan Sean Adams:
[12:25] Always money in the banana stand, right?

David Hoffman:
[12:27] Yeah.

Ryan Sean Adams:
[12:28] Okay, okay. There was also a big day for ETFs, as I understand it. What are we looking at?

David Hoffman:
[12:35] Yeah, this is Hunter Horsley from Bitwise. $300 million of volume today across just the Bitwise ETFs, which are our favorite ETFs here on the podcast. Are they? We have favorites? Is that... Yeah, I like the Bitwise ETFs.

Ryan Sean Adams:
[12:47] Okay.

David Hoffman:
[12:48] Yeah.

Ryan Sean Adams:
[12:49] Crypto native.

David Hoffman:
[12:50] I mean, who are you going to pick, BlackRock?

Ryan Sean Adams:
[12:53] Okay, I'll pick for this week. I'll pick Bitwise ETFs. They're the best.

David Hoffman:
[12:56] Anyway, these are our favorite ETFs. Top five by volume. Bitcoin ETF, Solana ETF, Hyperliquid ETF, Ethereum ETF, and XRP ETF. So these are just volume. There's also just broad inflows into the ETFs as well. Wow. I know I just talked shit about the BlackRock ETF, but here's Alex Thorne talking about Ibit. And Ibit had its biggest retail buy of Ibit in the last two years. Wait, wait, wait, that candle?

Ryan Sean Adams:
[13:23] That's the biggest candle? Yeah, that's the biggest candle in the last two years. That's right.

David Hoffman:
[13:27] That's right. So we got some bullishness out of the ETFs as well.

Ryan Sean Adams:
[13:30] Well, somebody had to say it. Somebody did say it. If you're in AI, pivot to crypto, the capital rotation of the year, that's what you got to do. Crypto outperformed basically everything on the week, including, of course, AI in a big way. And this seemed to come out of nowhere. I think we need to talk about why after the break, David. Was it the Besson Treasury QE thing? Was it the White House remark? We're going to discuss that and then talk about whether this bullish sentiment has changed things, whether it can be sustained. So all that and more.

Ryan Sean Adams:
[14:06] But before we do, we want to thank the sponsors that made this episode possible. Trump giving a speech at the White Here's one of the things he said.

David Hoffman:
[14:14] I understand that Mike is also working to bring hyperliquid into the United States in a fully compliant and legal fashion. He's working very hard on that.

Ryan Sean Adams:
[14:24] He said the words. He said hyperliquid.

David Hoffman:
[14:28] He said them in all caps. Did you hear that?

Ryan Sean Adams:
[14:32] I think that's what the hype believers want people to believe.

David Hoffman:
[14:35] Do you see Mike Selig's absolute shit-eating grin? Because he knows the hyperliquid people are going to be over the moon about this. He is so happy with himself.

Ryan Sean Adams:
[14:48] Yeah, that is somebody who is very excited that he said the thing that crypto Twitter wanted him to say, I suppose, in this moment.

David Hoffman:
[14:56] The hyperliquid people are going to love this one.

Ryan Sean Adams:
[14:57] This is not the only thing he said. This is from Bloomberg Business Daily. Trump speaks alongside crypto leaders at the White House. It was part of a longer speech. This is about, I don't know, a 30-minute, 45-minute speech. Not just – I think it was.

David Hoffman:
[15:10] Almost an hour. Yeah. 45 minutes, yeah.

Ryan Sean Adams:
[15:13] Not just Donald Trump. Other leaders in his administration also spoke, including, I think, Mike Selig, and surrounded by – actually, you know what? So let's hear some clips from that, just a highlight reel.

David Hoffman:
[15:27] I want to thank the chairman of the Commodity Futures Trading Commission, Mike Selig, for his tremendous leadership. Thank you, Mike. And thanks as well to a very special man, a man that everybody respected for a long time, Chairman Paul Atkins, who's also doing an outstanding job and everything else he touches. He's doing a lot of things for the country, so I want to thank you very much. And many of the top industry leaders, including Coinbase, Brian Armstrong, CEO. He's one of the greats. CEO of Robin Hood, Vlad Tenev. Thank you. And CEO of Kraken, Arjun Sethi. And thank you very much, wherever you are. Brad Garlinghouse, CEO of Ripple. Brad. Thank you very much, Brad. Sergey Nazarov, co-founder of Chainlink Labs. Thank you very much. Good, Sergey. And Tyler and Cameron Winklevoss have tremendous people, tremendous investors, brilliant people. Chris Dixon is here.

Ryan Sean Adams:
[16:29] I mean, OK, that was just like a who's who of people in crypto just standing around Donald Trump for this speech.

David Hoffman:
[16:38] Yeah. Yeah, I just love it. Cameron and Tyler Winklevoss. Everyone just lumps them together.

Ryan Sean Adams:
[16:44] He also said this. Day one, we fired Joe Biden's rogue Gary Gensler. We like Paul better. He said that. There's like a lot of Trump classic quotes coming out in this speech. But this was really for the crypto people. You know, part of this struck me as like maybe Trump realizing that the clarity bill may not pass And that he had, I guess, promises that he had made and campaigned about for the crypto industry. And this was a speech like on how to keep his promises through proposed rulings and through the executive branch if Clarity Act is not going through. That's partially how I interpreted this.

David Hoffman:
[17:30] This also came at the same time as announcements from the SEC, which we're going to get into later in the show, which is basically the SEC doing their part of Clarity. And then we also kind of just got another verbal announcement from the CFTC saying, hey, we're going to do a similar thing. So to your point, like, yeah, it's like, OK, Clarity is not looking great. So what do we need to do to like follow through on promises? Let's do a little pump in the bags of the crypto industry. Let's pat everyone on the back. Thank everyone. And then also, we're just going to round about our way back into, we're going to back our way into clarity.

Ryan Sean Adams:
[18:04] Yeah, very much. This is how Chair Selig put it. The United States has a choice. We can either write the rules that define the next generation of financial markets, or we can let other countries write them for us. Under the President of the United States' leadership, we've made our choice. America will lead. Executive branch taking action to continue crypto. The U.S. is the crypto capital of the world. This is a Trump campaign promise.

David Hoffman:
[18:29] Can you play the clip with Donald Trump talking about him signing the Genius Act?

Ryan Sean Adams:
[18:33] Yeah, this is this is Donald Trump talking about himself signing the Genius Act.

David Hoffman:
[18:36] One year ago, this summer, I signed landmark legislation known as the Genius Act. I named it after myself. I didn't want anyone to. I didn't want to use my name, so I just called the Genius Act. That's so unnecessary

Ryan Sean Adams:
[18:54] So unnecessary at least no meme coins were mentioned i mean i guess that era is over um, now i would like trump so much better in this position as kind of like political leader of crypto if he didn't do all the grifting shit.

David Hoffman:
[19:10] If he didn't if he didn't

Ryan Sean Adams:
[19:11] Pocket like.

David Hoffman:
[19:12] How much did he pocket billions tens of billions of

Ryan Sean Adams:
[19:16] Dollars it's like a moving target at this point right But because like this was not just a speech. I mean, this is the executive branch moving on things. The SEC and CFTC standing right beside him, moving on some things.

Ryan Sean Adams:
[19:29] So there's some substance to this that we'll get into later in the episode. But that happened Wednesday, right? The same day that Treasury came out with some major announcements. There's almost a question. Did the White House speech move crypto markets or, did the Treasury QE news move crypto markets more?

David Hoffman:
[19:49] That's kind of what I was saying. Even other than those two things, which definitely moved crypto markets, we also just had fundamental growth in some of our like big crypto assets. Like I talked about them before, like Venice, a bunch of revenue. FOMO is making a bunch of revenue. I know that's on a crypto asset. EtherFi revamping is tokenomics. And so, like, the lead up to these very big announcements was underscored by revenue, buybacks and revenue in some of, like, the fundamentals of our crypto industry. And then we just got hit with this wallop of news from the Treasury, Treasury announcing the increased size of nominal, long-end liquidity support buybacks, which is just words for, like, hey, we're going to buy bonds. We're buying bonds. We're buying long-dated bonds. starting September 9th. And so this isn't QE in the traditional sense, because QE must come from the Federal Reserve region of the United States. This is coming from the Treasury region of the United States. It's the same thing, though. We're creating dollars to buy back long-dated bonds to increase the value of bonds and lower yields. I'm sorry, isn't that QE?

Ryan Sean Adams:
[21:00] It is kind of like QE. It's not QE in the Fed sense. So some people are calling this QE light. Other people are calling this treasury QE. And it's not a lot right now. It's a trickling, but it is a doubling. So what they're actually doing is they're doubling the, and this was announced on Wednesday, the maximum size of purchases of a longer dated debt, longer dated bonds from $2 billion to $4 billion. So a $2 billion increase. It's more the direction of travel that is the thing that investors have observed. And this brings into the question of, well, is the debasement trade back on? And the market, thinks yes. I mean, you could see gold prices. You could see the Bitcoin price. You'd see the ETH price. These are debasement hedge assets that really pumped on this news. I was trying to understand exactly what Treasury was doing here. And it's not so much that they're printing new money. Here's the nuance. They are buying long bonds. So these are 30-year bonds, that sort of with T-bills, with short duration bonds. So they're swapping out the duration, okay? So in a sense, that's not... Printing new dollars.

David Hoffman:
[22:12] It's not pure QE. It's soft QE. It's a little bit softer, but it's directionally QE nonetheless.

Ryan Sean Adams:
[22:18] It's directionally QE and it's directionally also money printing, even though no net new units got printed because you're moving that like a T-bill is money like, okay? A 30-year bond is not. A 30-year bond has volatility. A T-bill does not have volatility. So you're knocking duration out. And it's also the Treasury saying, hey, we're going to work in conjunction with the Fed to set a top on yields, on long-term yields. So we'll pull up the long-term yield chart in a second, but it's like it was floating upwards. You know, 5.3%, we've remarked on this last two roll-ups, like 20-year highs. And they're saying it's not going to go higher because if it starts going higher, we're going to buy the long duration with short duration. And if you recall, Yellen was doing this as Treasury Secretary. Now Besson is kind of like doubling down on it, tripling down on it. But the initial effect was yield started to fall from the 5.3% range on down. I think it was like 5.1%. And also the dollar falls too. Okay, the reason the dollar falls is because there's more dollars in circulation on.

David Hoffman:
[23:31] The short end.

Ryan Sean Adams:
[23:32] So this is at a time, of course, when we have, you know, debt, U.S. debt. This was another tweet I saw you threw into the agenda. $40 trillion. This week, David, we just passed nominal debt exceeding $40 trillion that the U.S. has right now. So this is moving some of those debt payments from a 30-year problem to like a three-month type problem by moving it to the short end. And there were some updates you threw into the agenda this morning is that price chart that we're seeing, right? Where we see yields on 30-year government bonds heading towards excess of 5.3%. The Treasury stepping in and saying, we're going to buy the long end of bonds. Immediately, yields dropped to like 5.1%. And then they started popping back up. That was early Thursday morning, popping up to 5.24%. So I liken this to like the Treasury trying to keep a beach ball underwater here. They're like, okay, we're just going to push it down. But the beach ball wants to keep popping back up, popping back up. And so they made another announcement this morning. What, that they were doing even more?

David Hoffman:
[24:44] They're doing it again. They're just doing it more. They're just going to, they have an infinite money printer. These are the words that I'm familiar with. But Besant said buybacks could soon be bigger than the $4 billion that we announced. Whether or not he's going to follow through on that, I don't know. It kind of is, this is what he's telling the market. It's like, yo, we can buy back as much bonds as we want. So the market better fall in line anyways.

Ryan Sean Adams:
[25:11] So he said that this morning, right? Like that buybacks could continue. And you're sort of seeing the top that the Treasury is willing to sustain. Like once it starts getting the 5.3% zone, that's the beach ball surfacing. They want to push that thing down.

David Hoffman:
[25:25] This is a taco moment. Like Besson is just tacoing on Trump's behalf. Like Trump tacoed at 5% with the Liberation Day tariffs. He taco'd at 5% with the Iran war. We got there organically anyways. And so now Fed is just once again, or excuse me, the Treasury is once again doing this. You asked me the question at the start of the section. It was like, why did we pop so aggressively? It's like, is this the Treasury? Was this like the White House pumping the crypto assets? This is for Bitcoin and ETH. Like Bitcoin and ETH pumped the most because of this, which obviously sets a floor for the whole rest of the industry because those two things are like 70% of the entire market cap of crypto. But like it was all of these things all at once. I agree. This is the big one because the White House doing a big press thing and shaking Brian Armstrong's hand and Vlad's hand and all that kind of stuff, that's a nice shot in the arm. Especially for Hyperliquid and like the other Perp coins, like shot in the arm for that.

Ryan Sean Adams:
[26:21] And tokenization and all of that.

David Hoffman:
[26:23] Yeah. This is structural.

Ryan Sean Adams:
[26:25] This is store of value asset, you know, debasement stuff.

David Hoffman:
[26:29] This is putting the tailwinds in our industry's sales. And so it's nice to get the shot in the arms, but this is like the big one, but it really just all happened at once.

Ryan Sean Adams:
[26:39] Yeah, kind of incredible. It almost seemed coordinated that it all happened the same day, but I don't think it was. And then the reason you see this as the debasement trade as well as other debasement asset, gold and silver added $1.3 trillion after the Treasury's announcement that happened on Wednesday morning, right? So the debasement trade has been pretty dormant. The AI trade has kind of taken all of the attention, all of the glory, superseded it. AI stock's flat on this news, basically flat.

David Hoffman:
[27:08] AI stock's down, no. Down a little bit? They're down a little bit? In video was down 2%, Intel was down 6%. Like chips and AI stocks were down.

Ryan Sean Adams:
[27:15] Because AI stocks are going to trade based on AI token demand. That's how they're going to trade, the forecasted demand and all of this. And this is some issues in the credit markets. And this seems to indicate that the Treasury is going to step in and fix things. When yields get high enough. And that is a debasement type trade. So the market is really sniffing this out at this point in time. Raoul Paul calls this the Besset put, okay? So it's like the treasury put, similar to the Fed put.

David Hoffman:
[27:44] Yes, that's what this is.

Ryan Sean Adams:
[27:45] That's what they're going to be doing.

David Hoffman:
[27:46] The 5% put, just can't touch 5%. 5% is lava.

Ryan Sean Adams:
[27:50] Yeah, I think a great summary here. The dovish signals keep firing. Marginal macro policy is moving towards the treasury. So now the treasury is more important than the Fed to watch what they do. The government will ensure the AI buildout goes off without a hitch. This is the U.S. government doing that. And since the new marginal buildout is being funded debt, we've seen that with the NVIDIA, BlackRock, etc. deals that happened last week. The long end must be kept in check through that. So this is Felix from Ford Guidance saying, because of all this, I'm liking debasement trades again like gold and Bitcoin. He thinks Bitcoin will do well in this type of environment. So this is an environment shift.

Ryan Sean Adams:
[28:30] It's a Fed, Treasury, macro type shift that happened. And that all happened on Wednesday too. I think the question for us is, these enormous moves in crypto, Did that break the bear markets back, David, right? So again, you had stocks flat-ish, maybe down-ish a little bit. And we have Bitcoin and ETH moving double digits on the week. Shorts getting absolutely liquidated in the process. Shorts getting wrecked. You know, a lot of people have said that the bear market will end with a massive capitulation, a lot of volatility, right? Or a lot of volume, I should say, okay? Well, this was a lot of volume, but it was to the upside. Is this kind of a market ender? I think there's a case for yes. What would you say is the case for yes?

David Hoffman:
[29:17] I think there's a very big case for yes, mainly just because, again, it goes to the fundamentals of this industry. We are a debasement industry. Bitcoin and ETH are fundamentally scarce assets. They are non-sovereign stores of value. When we are doing money printing, I don't care if it's not technically QE, we're creating more money. And so scarce assets do well. This is and maybe you could you could be bearish and be like, oh, but like, look at gold. Gold's doing just fine. And gold will take all the oxygen out of crypto sales because people are just tired about crypto. Gold is doing fine. You're totally right about that. On top of that, we have what we're going to talk about next with the SEC providing basically the SEC sides of clarity and the CFTC doing the CFTC's job and doing the CFTC side of clarity. So fuck clarity. We're getting it anyways. And so it's just there's momentum here. And I don't know, dude, like I should have looked at the numbers before doing this podcast, but it's actually notable how bad shorts just got blown out in the last two days. And so people aren't going to be touching shorts for a while.

Ryan Sean Adams:
[30:25] Yeah.

David Hoffman:
[30:25] Maybe that's bearish because now people are going to like lever long and maybe they get blown out. But I think this is a it's a very reasonable claim to make that there is enough energy and momentum here that that defines the bottom.

Ryan Sean Adams:
[30:41] Are you ready for the opposite case? The case for maybe no, we didn't break the back of the bear market here?

David Hoffman:
[30:48] Do you believe it? Or is it real? Is it a real argument?

Ryan Sean Adams:
[30:52] I think it's real. Yeah, I think it's a real argument. And I think the argument is this. So, okay, what Treasury is doing is, yeah, maybe hinting towards debasement. They're also using all of the credit facilities and kind of like protecting the long end to protect credit markets so that credit markets can continue funding AI tokens. And so the entire U.S. market, at some level, like almost the entire world market, is now like dependent on AI token demand itself. We keep, you push, inflating that bubble. And now that bubble is starting to increasingly be filled with, and the reason I call it a bubble, by the way, it may not be a bubble. It all depends on what you think AI demand goes in the future. But now we're doing it on credit, not just profits and retained earnings of these companies. And so if you get one demand blip, right? Oh my God.

Ryan Sean Adams:
[31:43] AI tokens, we have more supply than we have demand. Just like we saw when we had a period of time in 2021 where we didn't have enough block space. And, you know, ETH gas price, we're going to $200. And then that suddenly changed and we had like too much block space. No one is buying it, okay? Same thing could happen with AI token demand. If that happens, that could cause a massive cascade, risk off sell that will just pull crypto down with it. And in that context, you could see new lows for crypto. Out of that, the good news is more debasement is probably the answer, right? Treasury and Fed stepping in, print money, get us out of this, more debasement. But before that happens, you could see a pretty massive blip down because-

Ryan Sean Adams:
[32:26] This is a lot of credit being injected into the AI speculation. I asked Mike Nato about what he thought about this because it was funny. We just finished recording a podcast and gave basically this exact case. And then crypto prices went crazy. And he said he's fading this bull run in crypto right now because Nasdaq weakness and the 30-year moving back up is pretty telling. Is he's saying the base case is that crypto makes a idiosyncratic move up based on short positioning on Bitcoin, that the short's getting blown out based on... Well, that happened.

David Hoffman:
[33:02] The Trump comments. That then just happened. Yeah.

Ryan Sean Adams:
[33:04] But he said that might be what's needed before then we go down. So he's watching for signs of durability. Okay. This was kicked off, he says, by a massive short squeeze. And you got to see if that squeeze is durable, ETF flows, spot volumes. Until it's durable, he's staying a bit skeptical. So that's the bear take. I give it kind of equal weight, honestly. I'm like 50-50 on whether this is a sign of we've broken the back and debasement is back on or we still have more to go.

David Hoffman:
[33:36] I do think about, like, people are making fun of all the people who said, like, oh, I'm going to wait for the capitulation wick in October, and then, like, 10,000 people are saying that, and, like, so therefore we're not getting it. But now people aren't saying it anymore. Now that's non-consensus. Yeah. I don't know. I think maybe I'll invite Ben Cohen back on and see what he thinks.

Ryan Sean Adams:
[33:57] I think you could always take the position of just always be a bit long, dollar cost average in.

David Hoffman:
[34:02] You don't have to worry about these wicks. I'm always exposed.

Ryan Sean Adams:
[34:06] Always exposed. Always exposing yourself, aren't you?

Ryan Sean Adams:
[34:10] Also on the week, David, Iran shifting from kinetic to economic. What is this about?

David Hoffman:
[34:17] Yeah, this is a truth social that got tweeted out by the White House. Basically, Donald Trump is communicating that we are shifting our strategy with Iran. We're not really doing kinetic stuff. We are just going to continue the economic chokehold on them, which is pretty, pretty, it was working. It's working.

Ryan Sean Adams:
[34:33] And kinetic is not? Is that what this implies? Kinetic has kind of stopped working?

David Hoffman:
[34:36] Yeah, I think kinetic is firmly not working, yeah. Or at least it's not working as much as it once did. The takeaway here is that this is going to be months, like three-plus months for the chokehold to really actually have a capitulation moment for Iran. The Iran economic situation is dire, but the whole point of the Islamic regime is they're cockroaches. They can just hold on. They can just hold. That's what they do.

Ryan Sean Adams:
[35:01] Been economically sanctioned in the past. Is this like a de-escalation in your mind of just like, you know, because.

David Hoffman:
[35:07] It's a kinetic de-escalation for a, in trading for an economic escalation.

Ryan Sean Adams:
[35:12] Okay, Trump has these words. It's going to be the most crushing economic operation ever taken against any country. But the fact that he's moving from kinetic to just purely economic seems to be a de-escalation. But it also seems to indicate this whole thing is going to continue to grind on.

David Hoffman:
[35:29] This whole thing is going to continue to grind on. I bet you we go through the midterms.

Ryan Sean Adams:
[35:36] When we come back, let's talk about the SEC's new 402-page document. Is this the SEC version of the Clarity Act? David read it, and he can give us the details on that. A few other things in crypto, including FOMO, BaseApp, and Hyperliquid Compound, Rebirth, and Hayden Adams' first blog post since 2019 that I thought was really good. We'll talk about all that more, but before we do, we want to thank the

Ryan Sean Adams:
[35:59] sponsors that made this possible.

David Hoffman:
[36:00] The SEC has a new proposed rule titled regulation crypto assets. This is what we were talking about earlier in the show, which is basically this is the SEC just doing their half of clarity, whatever they can do to clarity. I'm going to say some things. I'm going to tell you what's going on in here. And you're going to feel like, oh, we've talked about this for all of our time in crypto. This has always been what has been discussed about what we want out of the crypto industry. And we're just getting it from the SEC as rulemaking, not laws, but rulemaking, which is the second best thing is to a law. And so the first one is how startups and crypto can raise money with a token that doesn't make the token a security. And so there is exemptions, three different exemptions that have been produced in this rulemaking that allows for this to happen. One is a startup exemption allowing token issuers to raise up to $5 million in a one-time event that allows the team to launch and release a network token. No financial statements are required, no accredited investor limits, no resale restrictions on the token. General solicitation is allowed. The issuer can be an entity, an individual, or a loose group of people each signing on. But there's a $5 million raise cap on the raise amount. And so this would kind of like token sales, airdrops, like that general kind of like token issuance behavior can be applied here.

David Hoffman:
[37:28] That's the first exemption. The second exemption is a fundraising exemption. If you speak TRAB, this is just Reg A for tokens. So issuers can raise a constrained amount of money every 12 months. You have to do a filing with the SEC. You have to tell them that you're doing this. And there's two different tiers. So tier one with unaudited financials, issuers can raise $20 million every 12 months. And then tier two, if you submit audited financials, that unlocks the ability to raise $75 million every 12 months. So reg A for tokens. And then the third, the third exemption is an investment contract safe harbor. This is kind of the big one. Rule 400. A crypto asset is deemed no longer subject to be an investment contract and therefore not a security if the issuer has completed or permanently ceased all essential managerial efforts it promised and isn't making any new promises. Again, it has a file of form with the SEC saying that it is doing this with a certification and supporting analysis. But nonetheless, you get to say, hey, we are no longer managing this token. This is a decentralized network and it's not a security. So this is the new pathways for tokens to be issued, funds to be raised, but those security words just never be invoked.

Ryan Sean Adams:
[38:45] Why are you saying this is all we've ever wanted? Like, this is kind of what, like, I guess what this is doing, if I understand it, is it's saying that all of the kind of the ICOs for decentralized networks, the Ethereum ICO, for instance, which was under the crosshairs of the Gensler administration, that is all okay in this new regime, in this new paradigm. And also, that last one you talked about, the Rule 400, the investment contract safe harbor, that is explicitly... Painting a path, providing clarity to, the crypto industry of how something that is an investment contract, something that is a security becomes a commodity, becomes a decentralized network if it no longer has essential managerial efforts. So it's essentially providing a pathway for networks like Ethereum or say Solana or other crypto networks that launched in that way to become decentralized and no longer securities. That's kind of all we've ever wanted from the SEC, right? Just like stop coming after tokens and give us some clarity. Like this is the SEC's portion of the Clarity Act, is it not? Through rulemaking.

David Hoffman:
[39:54] Yeah, yeah. And you remember when the XRP versus the SEC versus Gary Gensler case, Ripple won that case. And really what that was about was not about XRP being a security, but it was determined that some investment contracts. These are the investment contracts that creates the token. So A, it's even more defended that tokens are not securities. And now, in addition to that, the investment contracts, these are about the ways that you can create an investment contract that is also itself not a security. So these are legal investment contracts to create a token, and both of these things are not securities. That's what's very, very exciting. It's very generalizable. It's very scalable. You know what this does away with, Ryan? Airdrops, points programs, healed farming, any other stupid convoluted way to issue and distribute tokens to the general public.

Ryan Sean Adams:
[40:46] Interesting.

David Hoffman:
[40:47] That is just inefficient, gameable, poor, like all that mess that we went through time and time and time again because we needed to find like creative ways to get around securities laws. Yeah. Now we have the paths to doing that that's direct and efficient that is confirmed to be not securities.

Ryan Sean Adams:
[41:07] And the requirements are light and there's somewhat of kind of a sandbox, right? So as you get bigger, as it's more funding at stake, like from $20 million to $75 million, you have to do various things, but you don't have to file, you know, 10K filings and the whole SEC and all of the overhead.

David Hoffman:
[41:23] The burdens of compliance.

Ryan Sean Adams:
[41:24] That comes with that. Okay. I guess a couple of reactions. First of all, that's great. And that means that all of these things that were in this ambiguous area in the past we did, particularly our blockchains to centralized networks, like we don't have to worry about that being under the crosshairs anymore. And I don't even think, David, a future administration can really reverse this. If the SEC in this administration, 2026 comes out with this rulemaking, right? Let's say you have AOC's administration or something like this, and it's Gary Gensler V2, and they try to reverse this, the court's got to laugh them out at the court, Right. Because just like, guys, guys, hold on. There is some precedent that your institution has to uphold. If you say something is OK in 2026, there has to be continuity. You can't reverse everything in 2029.

David Hoffman:
[42:12] You have to have legal rationale for reversing it, not just a vibe rationale.

Ryan Sean Adams:
[42:16] Exactly. So even if we don't have a bill out there in the clarity, I just think this is really hard, given the precedent that's being set by an institution that has to have continuity from one administration to the other. To like reverse this. Maybe some things can be reversed around the edges. So that's one thought. I guess my other thought is like, how much do we really need this anymore? Because like, I mean, for existing assets, we do. But like, how many more decentralized crypto networks are we actually going to launch? Like we have Bitcoin, we have Ethereum, we have kind of the long tail of blockchain. Are there more that we have to launch?

David Hoffman:
[42:55] Are we done? It is a little bit ironic that the appetite for issuing a decentralized network to the general public and doing a token distribution program is a thing of the past now that we have the clarity and the regulation that we need to do it. Like no investor wants to invest in any of the stuff that this like regulation actually protects, at least in this current form of crypto. Well, it's kind of no one wants new L1s. No one wants middleware. It's like that's that's the appetite is gone. Right.

Ryan Sean Adams:
[43:26] The question is how many more decentralized networks without managerial efforts do we actually like want or need?

David Hoffman:
[43:32] Yeah, people are really into managerial efforts these days.

Ryan Sean Adams:
[43:35] I'm like, I want them for some things. I don't want them for Bitcoin. I don't want them for Ether. But like, I do want them for like a lot of other things in crypto. And I wish I had them for those things.

David Hoffman:
[43:44] Yeah, actually, we need more managerial efforts in crypto.

Ryan Sean Adams:
[43:51] But anyway, it's great. We have a path. And this is, I think, the CFTC's portion of the Clarity Act.

David Hoffman:
[43:57] Let me round up this one part that I think is worthwhile. In addition to the startup extensions I talked about, in order to have those startup exemptions be applied to you, you need to take part in standardized disclosures. Again, if you speak trad, this is basically S1 filings for tokens, but it's much easier.

David Hoffman:
[44:15] There are a couple of rules for how you do this. It must be in plain language and stage appropriate. So what this means is plain language. You can't obfuscate details with overly technical terminology and stage appropriate means that forward looking plans must be clearly delineated from what actually exists. Again, this is like a reminiscent of the 2017 ICO era where like you would read a white paper and there were some stupid fucking white papers back then with incredibly complicated math that promised the world. And retail investors would look at this and be like, wow, geniuses wrote this white paper. I understand nothing. The team is amazing when in fact the team is intentionally writing ridiculous, ridiculously complicated white papers that don't actually make sense. And the team's actually scammers. And so you write these disclosures and then there's 10 specific subjects of the disclosure requirements. You have to disclose what you promise and how far you've gotten, what you're selling and what you'll do with the money, who's behind it and what they hold. So management, conflicts of interest, related party transactions, like market making stuff, like insider holdings, like all of that, like the BlockWorks token transparency report type stuff. All of that must be disclosed. And then how the code works and who controls it. So in addition to all this, we're getting kind of the disclosures that the industry has also wanted for a very long time.

Ryan Sean Adams:
[45:33] That's great. And it fulfills what Hester Peirce's vision has been for the SEC of don't be a merit-based regulator, okay? Just like emphasize disclosures, but it's up to investors what they invest in. You're not trying to protect investors from making bad decisions.

Ryan Sean Adams:
[45:46] People can always still make bad decisions. So I think this is a good path for the SEC to take. Dave, there was a big win for stablecoins actually. It kind of went under the radar with all of this other good news this week, but you picked up on it. What happened?

David Hoffman:
[46:01] Yeah. So this is the FASB. What is the FASB? Financial Accounting Services Board, Sanders Board, Sanders Board. They are creating a comment period. This is like the first step. This is probably going to happen. That will allow stable coins to be considered cash equivalent on corporate balance sheets. And so right now, stable coins are not considered corporate cash equivalents. The issue that they're fixing is like before this, they're trying to fix this. Right now some companies will report stable coins as like yes this counts as cash some will say no and also the auditors don't agree with the interpretation so FASB is just standardizing everything and so according to this rule the answer can be yes stable coins are cash or cash equivalent if the following things are true you can cash out whenever you want which means you need a direct relationship with circle basically or paxos you can you must cash out with the issuer itself not a middleman so you can't use coinbase you have to go straight to circle and also the issuer itself backs every coin with real cash or short-term t-bills which is just genius compliant which means not tether so this is i think is uniquely bullish for circle

Ryan Sean Adams:
[47:11] Oh for genius compliance stable.

David Hoffman:
[47:13] Coins for genius compliance stable coins probably paxos too but like i think circle is the big winner here i think maybe the not the middleman is probably going to be argued out in the comment period just because it constrains things. But it Yeah, this is going through a common period. This is probably going to happen.

Ryan Sean Adams:
[47:32] You asked if this is a big deal, like publicly. Austin Campbell says, yeah, it's a big deal. David, you're correct.

David Hoffman:
[47:38] Granted, Austin Campbell is the stablecoin risk guy,

Ryan Sean Adams:
[47:41] So he would think it's a big deal. I agree with this. I mean, FASB's GAAP standards for accounting, right? That is all corporate balance sheets. That's everything in the U.S. That's the largest capital market standards body setting thing in existence. And they're saying this is now stablecoins are cash and cash equivalents. So I do think it's a big deal for adoption and probably went under the radar.

Ryan Sean Adams:
[48:04] Some other things we should cover in crypto. Venice just crossed $100 million in annualized revenue, David. That's a pretty big deal.

David Hoffman:
[48:14] Very big deal, very big deal. Over 4 million users and Venice also had seven days of consecutive all-time highs of VVV burn. So there's a lot of energy in the Venice ecosystem right now. At the same time, Stripe acquired OpenRouter this week, which is very comparable to Venice itself. It's very different at the same time, but also very similar in that it is both model aggregators. And then also Ramp bought Router. OpenRouter is not Router. That's a different company, but it's also very similar. It's just like there's a bunch of models out there. Router, like OpenRouter. Way too similar of a name, aggregate all the models. So the other two model aggregators out there just got bought this week. Open Router for 7 billion. Open Router has 8 million users, got bought for 7 billion. Venice has 4 million users, currently at a 1 point something billion dollar FDB token.

Ryan Sean Adams:
[49:05] And they're kind of like aggregators, right? They're almost like a one-inch, you know, for purchasing AI tokens. They just like route it to various models.

David Hoffman:
[49:15] One-inch, yeah, this is, I was trying to learn about the details about how to actually compare the thing. I would take the one-inch comparison and actually apply it closer to Venice in the sense that it is user-forward. Like users go to one-inch and users go to Venice. Open Router is a little bit more like Google AdSense in that it is a marketplace and an auction mechanism for models.

Ryan Sean Adams:
[49:36] Okay.

David Hoffman:
[49:36] And so it's slightly different.

Ryan Sean Adams:
[49:39] It's fascinating because Open Router doesn't use stablecoins right now. So if you want to purchase something, it just does the old-fashioned way where it'll take like, you know... I don't know, $1,000 or whatever, aggregate all these transactions and kind of settle it later. So you sort of wonder if Stripe is going to integrate them into the stablecoin ecosystem.

David Hoffman:
[49:56] Micropayments, tempo, all of that.

Ryan Sean Adams:
[49:59] A lot of possibility there. I think the theme really has been energy on the week. Some energy also in FOMO crossing 150 AR. We talked about FOMO last week. I learned, David, that you're actually, I don't know if you're a daily active at this point for FOMO, but you enjoy the app, do you not?

David Hoffman:
[50:16] I enjoy the app. But I mean, in terms of like just a casual gambling trading app to throw pocket change into, it's a great app. It's a great app. I don't know if the $100 million annualized revenue, I think that's like a high watermark because trading volumes are so volatile. But there's at least a day where they had $100 million, $150 million annualized revenue. But the growth around FOMO has been just pretty crazy. And so, again, we had, you know, the Fed's pumping our bags, excuse me, the Treasury's pumping our bags. The White House is pumping our bags, which is great. Companies in crypto, startups in crypto are making money, are making bank. And so there's just like fundamental strength in the industry.

Ryan Sean Adams:
[50:58] Yeah, it's really I guess social crypto was meme coins all along, wasn't it? I mean, you can kind of think of Farcaster tried at this for five years, you know, and before throwing the towel.

David Hoffman:
[51:09] And then they pivoted to becoming a wallet because they realized that people just wanted a wallet to trade meme coins.

Ryan Sean Adams:
[51:13] Sure, and now they're gone. And it was just Farcaster flavored meme coins. Yeah, and now FOMO is having the success there. Maybe that was the product market

Ryan Sean Adams:
[51:18] fit all along, the revealed preference. Also, base app integrating Hyperliquid. This has got to be the Kobe effect of not prioritizing the base blockchain.

David Hoffman:
[51:28] This is the work of Kobe.

Ryan Sean Adams:
[51:30] Do you think that's a sign of things to come? The base app is just going to be much more agnostic with respect to Coinbase? Yeah, it's just user-centric. It's like, we're going to get you the thing that you want. We don't care what chain it's on. We're not going to prioritize base over anything else. And so we'll just bring Hyperliquid in here.

David Hoffman:
[51:49] Yeah, yeah. I do kind of wonder how far that will go. Like, will Hyperliquid try to be the back end for Coinbase or will Coinbase try and build out their own native perp products? You know, if it's Kobe's way, it's like the former.

Ryan Sean Adams:
[52:02] Why? You think Kobe's way is just user-centric, like Degen, trader-focused?

David Hoffman:
[52:07] No, Kobe's way is he's very bullish on Hyperliquid. He owns a ton of hype.

Ryan Sean Adams:
[52:11] Oh, okay. So it's hype-specific. Interesting. That is interesting.

Ryan Sean Adams:
[52:15] I wonder if that comes out in the disclosures. Anyway, moving on. Uh, compound, are they having a little bit of a rebirth? I don't know if I see that yet, but I see something. They have announced new leadership in, I mean, one of the first DeFi protocols that really took off. It was like kind of like second to make your DAO back in the day. And it had a lull where Aave took over, Robert Leshner and leadership kind of like faded. Just almost felt like kind of like, not abandoned it, but it just didn't have any leadership.

David Hoffman:
[52:46] Well, it was supposed to be very constrained, and so it was like anti-adding new assets to be conservative, but then they also just got straight out-competed by Abe. But they've been printing money for a very long time. I don't know how much TVL is left in compounds, but they held on to TVL for a very long time just because of how safe it was.

Ryan Sean Adams:
[53:06] So what's happening now?

David Hoffman:
[53:09] New leadership, as you said, $52 million approved from the DAO for a development program aimed at institutional credit and real world assets. And so like, yeah, let's see if we can kind of like restart this thing.

Ryan Sean Adams:
[53:20] I think that'd be nice.

David Hoffman:
[53:21] TBD. I think that'd be nice. I think that'd be nice.

Ryan Sean Adams:
[53:23] But there is some energy coming back to OG DeFi protocols.

Ryan Sean Adams:
[53:28] In fact, I would almost feel like saying that OG DeFi protocols are back. And here's the thing that really crystallized that for me is, did you read this Hayden Adams post? It's his first blog post, founder of Uniswap since 2019. 19.

David Hoffman:
[53:42] I have not read it. It's on my to-do list, but I know you read it. So maybe you can explain it to me.

Ryan Sean Adams:
[53:46] It's worth the read, man. I read it this morning and he's basically saying AMMs could actually eat the world. Okay. And he compares them to index funds. The frame he puts on it is, you know, index funds in 1976, you know, John Bogle, the index fund guy, people are saying it's un-American, couldn't ever compete against more actively managed funds. And now passive index funds are the way most Americans hold their capital. Okay, it's passive funds rule. He's equating that to passive LPing, basically. Passive AMMs are going to eat the trading market the way passive index funds ate traditional finance. And it gives a lot of reasons why.

Ryan Sean Adams:
[54:33] First, we came for the long tail in AMMs. You know, I had the long tail of tokens and better trading experience to do that. The second thing AMMs went and conquered was sort of paired assets, you know, like USDC and USDT, those types of pairs. The next thing they're going to start doing is give you options for correlated pairs. So he sees a world where it's actually something like NVIDIA and SPY that are the correlated pairs. And they become much more liquid than, say, just NVIDIA and USDC or U.S. dollars or something like that. So he provides a whole, I guess, theoretical basis for how AMMs can start really competing against traditional market makers, against siloed TradFi, and just really like start to dominate the market. It's a compelling article. Yeah.

Ryan Sean Adams:
[55:29] It just feels like Hayden, Uniswap is back and the DeFi energy is starting to come back. And they're like, no, like DeFi is actually better. And here's how. And this is after a decade of doing this. So, I don't know, second wind, energy, rational points made. I'm excited to see what AMMs and Uniswap and Hayden do in the future.

David Hoffman:
[55:53] The word that comes to mind is creativity. Yeah. And I think that that's something that this industry has really been missing. And I think something that we all saw in DeFi and we don't, we haven't had that as much lately. And so if Hayden, you're telling me that we can get really creative with our asset structure in the back end, then I can get bullish again.

Ryan Sean Adams:
[56:13] Well, can you get bullish again? Is that the end of today's, this week's episode? Are you bullish again officially, David?

David Hoffman:
[56:20] Well, I mean, since we started recording an hour ago, Ryan, ETH is up 8 more percent. What? It's at $2,350. Bitcoin is almost at $73,000. I'm going to go watch the CFTC innovation talk that Mike Selig is giving right now and Vlad from Lighter is talking about it right now. There is a lot to be bullish about. Can I just say that?

Ryan Sean Adams:
[56:44] You could definitely say that. That's a good way to end this episode. And I guess we'll check in next week to see if this is sustained.

David Hoffman:
[56:51] All right. I'll see you. Oh, you will not be checking in with me next week because I will be at Burning Man. Enjoy. So bye. I'm gone for two weeks. Hasib's taken over. So I will see you in three weeks, Ryan.

Ryan Sean Adams:
[57:02] All right. Time to get bullish then. David's gone. Time to get bullish. You better buy your ETH before you leave.

David Hoffman:
[57:06] My friend. Did you know, Ryan, that ETH hit all-time high while I was at Burning Man one year ago?

Ryan Sean Adams:
[57:12] I think you should give that some serious...

David Hoffman:
[57:14] That's when ETH hit all-time high. It was a year ago. You need to consider that. I thought it was so much longer.

Ryan Sean Adams:
[57:17] You need to get your buys on before you leave. That's what that means to me.

David Hoffman:
[57:24] All right. I'll see you in three weeks. Bankless Nation, you guys know the deal. Crypto is risky, but not risky enough. The institutions are here. So we are leaving and going even further west. This is the frontier. It's not for everyone, but we're glad you were with us on the Bankless Journey. Thanks a lot.