# ROLLUP: Korea Gets Liquidated | The AI Trade Unwinds | Crypto Holds Firm | Warsh Holds Rates

*Author: Ryan Sean Adams, David Hoffman*
*Published: Jul 31, 2026*
*Source: https://www.bankless.com/fr/podcast/rollup-korea-gets-liquidated-the-ai-trade-unwinds-crypto-holds-firm-warsh-holds-rates*

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## TRANSCRIPT
David Hoffman:
[0:04] Welcome, Bank of the Station, to the weekly roll-up. It is the fifth Friday of July, and we have all of Korea getting liquidated. Two trillion dollars a

David Hoffman:
[0:12] race. That's 1.2 million accounts getting margin called. The COPSY, K-O-P-S-Y, this is the Korean stock market, down 40%. Imagine your stock market, Ryan, being down 40% in the month of July. Well, that's what Korea's got going for it. And we also have breaking as of this morning, highly related, highly correlated. The poster child of the AI trade is now a forced seller because he took on a little too much leverage. Wow, this is like your first cycle, bro. It's a learning lesson. A big learning lesson. Had to unwind his entire public book. We'll talk about who the buyer is and why that might be the bottom because that is maybe why stocks are very, very green this morning after a pretty terrible month. But Ryan, in all of that, after all of that mess, the AI trade unwinding, maybe bottoming, who knows, the stock market coming off, yields going up, all of this bearish stuff, crypto did not blink. Crypto is up this week, showing unique strength.

Ryan Sean Adams:
[1:16] That's crazy. You're saying on this week it was actually a good thing to own crypto rather than AI. Yes.

David Hoffman:
[1:22] For sure. If you owned crypto, not actually, not all crypto, But if you own Bitcoin or ETH, crypto blue chips specifically, you are a happy person this week. We'll talk about that.

Ryan Sean Adams:
[1:34] That might be winds changing. Are the winds changing?

David Hoffman:
[1:39] Is AI deflating and crypto just being a hard asset class? That's great.

Ryan Sean Adams:
[1:45] Also, I want to get into the Warsh. So Kevin Warsh, as the Fed chair, his first FOMC meeting, there was a vote. What did they decide to do? What's he going to do as Fed chair? We'll talk about that. Also, Clarity Act feels like it's stalling once again, but Paul Atkins, the chair of the SEC, came in and said he is ready, willing, and able to do it for you guys. He'll just make regulation instead.

David Hoffman:
[2:09] Let's do it himself.

Ryan Sean Adams:
[2:10] I'll take care of clarity. Anyway, we'll talk about that. And also we got to celebrate Ethereum's 11th birthday. But first, let's get to the main story, which is the COPSI, as you said. So C-O-P-S-I, I should say. And I was just laughing, not at people getting liquidated, but you said all of South Korea, all of Korea was getting liquidated, Which feels like a lot, but that's not too far off because there was a lot of retail involved in these recent market moves. And you said they lost about 40%, but that is because they were also up by about what, like double or something like this over the past six months? Talk about this story.

David Hoffman:
[2:48] If you were in the Korean stock market, the Korean indice, before like two months ago, you're actually doing just fine. So it was up like something like two or three hundred percent and then and then it fell down 45 percent. You know, what goes up so fast must come down. I think anyone in the crypto industry is probably pretty familiar with a chart that looks exactly like that. But what is unique here is just the level of liquidations that happen to retail investors. We don't really know. So kind of in the same vein as crypto wallets aren't really one to one mapped with humans. Accounts are not one to one mapped with humans, more so than crypto wallets. It's...

David Hoffman:
[3:25] There was an estimated 320,000 to 360,000 accounts were fully liquidated, zeroed out. Wow. Which if you do map that one-to-one, that is 3.4% of South Koreans' adult population got margin called. To zero. In the month of July. To zero. To be clear, to zero. To zero, yeah. Wow. Yeah, over 500,000 accounts. And that 320,000 to 360 estimate, that was from last week, not even this week. So potentially like over half a million accounts fully liquidated because it went down 40% in 40 days. A very, very important part of this story was that the South Korea stock market recently introduced levered single stock ETFs. So like, hey, Micron, or hey, like memory stonk that you got there. And also, by the way, South Korea has like an unprecedented level of exposure to memory stocks. In their domestic market.

Ryan Sean Adams:
[4:25] That's why.

David Hoffman:
[4:26] In their market, yeah.

Ryan Sean Adams:
[4:27] Markets have been moving on the memory stock trade, downstream of the AI trade, and all of that. A lot of that is located in South Korea.

David Hoffman:
[4:35] Yeah, SK Hynix and Samsung being the two memory stocks that have outperformed massively. And combined at the top, those two companies represented more than 50% of the stock market. And so you put like the epicenter of all markets, which is memory stocks, in the last like month or two. You add single stock leveraged ETFs and then, you know, well, you didn't really go to crypto conferences, Ryan, but like you would go to a crypto conference, hop in an Uber, and then your Uber driver would be talking to you about like XRP or like Cardano. Oh yeah. Apparently that's what it's been like over there in South Korea is like their leveraged single stock memory stock ETFs. Yeah. And so it's just like an absolute bloodbath in Korea over there.

Ryan Sean Adams:
[5:19] So $2 trillion wiped off the books as a result of this. A lot of, I'm sure, margin being called in big trading desks as well. So a lot of people feeling this. I guess with the leverage ETFs, people were like, rather than 5x, I could have 10x if I buy the thing that goes up and I'm just going to buy the thing that goes up.

David Hoffman:
[5:41] Let me buy the leverage ETFs in my margin account on margin.

Ryan Sean Adams:
[5:46] Oh my God. All right. Well, this does look like a crypto chart, and it sounds very much like a crypto story.

Ryan Sean Adams:
[5:54] Is there a broader take on AI, though, here? So, like, could this be the beginning of the AI? I'm going to use the B word bubble. I know it's a charged term, but let's say the AI trade, the AI bubble unwinding.

David Hoffman:
[6:10] Unwinding, I think, kind of implies that it's going backwards. I don't necessarily know if that's true, but like I think it is a pretty strong point in the argument that it is the AI trades ceasing to be so dominant in the market. Like maybe the great AI repricing is starting to like be kind of over. Because prices is determined at the margins, I think you would kind of expect to see micro bubbles inflate and then get popped along the way. It could be inside of a larger bubble. But ultimately, I think you would kind of expect something like this to happen regardless. The timing, however, is interesting to talk about a few other things that are also happening in the market. Now, this is my personal speculation. I haven't read anything about this, but I do think that Kimi K3 is...

David Hoffman:
[7:00] Illustrative or indicative of the reshuffling of where the market is perceiving value to be captured in the AI stack, in the AI like vertical. And Noah, one of our favorite writers, Noah Pinion, wrote an article about this actually like back in December of last year. And the title is of the article is the AI bust that no one sees seeing coming. Very easy title. He gives like three scenarios to like the future of the ai industry one is the virtual reality scenario, where kind of like vr we all know vr is a thing but it's just not getting adopted it's just kind of a bust of an industry maybe it'll come in the future but just not really working out and.

David Hoffman:
[7:47] Like noah just kind of quickly moves on from this scenario it was like it's worth thinking about but not really worth discussing because like we know that people on a reoccurring basis come back to AI over and over and over again, unlike their dusty Apple VR helmet that they have left in their closet. So that's the first scenario. The second scenario is a railroad scenario. And railroads were super economically useful. There was a huge financial boom associated with the railroads. Nonetheless, even though railroads created an economic boom downstream of them, and they were massively profitable firms and investors, there was still a huge bust in 1873, because the economic benefits didn't show up before railroad had to like pay their debt. And so there was financial over-speculation on top of something fundamental. And you can kind of see what's going on in the South Korea stock market. It's like over-financialization, over-speculation on top of something fundamental. And so I think there's plenty of evidence to say that that's Definitely something that's also going on. But what could also be happening in addition to that is the third scenario that Noah gives, which is the airline scenario, which I think is where Kimmy K3 comes into the story.

David Hoffman:
[8:59] So that's the idea that AI succeeds massively as a technology, but the companies that make the AI models, open AI, anthropic, just don't capture the value. Kind of in the same way that like farming, massively critical, or airlines, you know, critical to the modern economy.

Ryan Sean Adams:
[9:18] There's like no profit. It's commoditized.

David Hoffman:
[9:19] They just scrape for margins. There's just no profit. Yeah. And right now that if that if the airline scenario is anywhere true, you would see and be very worried about OpenAI and Anthropic taking on a ton of debt, selling a ton of stock. But then in this scenario, that stock is not valuable. And how are they ever going to repay their debt? And so it's just a reshuffling of the economics of like the AI investment cycle. And even if we are inside of a larger bubble, the South Korea memory stock bubble just popped. Still memory prices are up. You know, still the AI trade might be on, but we just need to kind of reorient value in the chain.

Ryan Sean Adams:
[9:59] We've priced a lot of success into AI, right? And so the AI capex that's going through now is about, it would require AI income revenues per year of about 2.5 trillion to match the capex that we're spending. What we're doing right now with all of those frontier labs you talked about, Claude and ChatGPT capturing the bulk of this is about $150 billion per year. We got to be $2.5 billion to cover the CapEx. We're at $150 billion. So there's a delta here. And it felt like very much last year, we had sort of the chat revolution on AI. And that was kind of the run-up for all of 2025. The beginning of this year, it's felt like the run-up has been much more on the clawed code side of things, co-work side of things, the agentic narrative. That's like two rabbits out of the hat.

Ryan Sean Adams:
[10:47] Is there a third? Is there a third rabbit in the hat? I think it's part of the question. And also a story this week that is breaking. As we talked about, you mentioned it, Leo Ashenbrenner. He's been called the AI wonder kid because he has created a hedge fund and front run all of the AI supply opportunities over the past three years. Saw it coming before anybody and run his fund up to like $20 billion from like under a billion.

David Hoffman:
[11:16] Saw it coming and allocated correctly.

Ryan Sean Adams:
[11:19] Yes. But there's word now that he is being forced, has been forced to sell all his stock positions. I think this story is still developing. This is a headline CNBC. This is also reported in the Financial Times. AI investor Leopold Ashenbrenner forced to unwind all public stock positions after steep losses. We know he likes a little bit of margin. So he does short some assets. He does long some assets as well. And now there's word of other investors stepping in to buy some of his damaged assets. What's the latest on this at the time of recording?

David Hoffman:
[11:54] I think we're still waiting for precise numbers. There are people speculating that he was on some margin. There were other people saying that he was 4X leveraged. And that's from Amit investing.

Ryan Sean Adams:
[12:05] Some of those Korean leveraged ETFs, huh?

David Hoffman:
[12:07] Yeah, exactly. And like Leopold, how old is Leopold?

Ryan Sean Adams:
[12:11] He's 24. He's in his early 20s.

David Hoffman:
[12:14] It's an appropriate age to get over leveraged.

Ryan Sean Adams:
[12:17] You got to learn.

David Hoffman:
[12:18] You got to take your legs. I remember being over leveraged at 24, dude. Like, that's the thing to do in your 20s. The big news coming out of this is that Citadel, Ken Griffin, bought the public book. And so that's a big deal. So classic story of this guy, I think, flying a little bit too close to the sun was very correct.

Ryan Sean Adams:
[12:40] He got all the calls right. But then he just dialed into the margin a little too much, it seems like.

David Hoffman:
[12:46] Yeah. I mean, it's also very three arrows capitally in that you got a lot of things right early. And then and then what did you do? You got super confident and then you just hit the leverage button at the top and honestly kind of created the top. I think this is one of the reasons why, like if you go to the indices and if you go and look at the memory stocks right now, this morning, today, Thursday, July 30th, they're very, very green because he had such a big book that he was the fourth seller that marketed that called the bottom. The fact that Citadel, Ken Griffin, bought the book, is drawing a bunch of speculation. A little bit of conspiracy theory that Citadel called for and Ken Griffin called for a surprise rate hike earlier this year or earlier this week. And then basically tried to spook the market into doing exactly this so that they could intentionally buy Leopold's book. So now Ken Griffin and Citadel are exposed to a lot of the same stocks that Leopold had, but at way more favorable prices, because of like the conspiracy of Ken Griffin, like working in the market, which like Ken Griffin and Citadel, they're sharks. That's kind of like what they do. If that's real, we don't really know. But like it's kind of fun to like speculate about.

Ryan Sean Adams:
[14:04] And we don't really know. We also don't know how big the damage was. I mean, you compared this to Three Hours Capital, who, you know, went completely defunct.

David Hoffman:
[14:11] Yeah, exactly. Went negative.

Ryan Sean Adams:
[14:13] It doesn't have to mean that at all. This could be more of a flesh wound that Leo pulled.

David Hoffman:
[14:20] Just a flesh wound. Just a flesh wound.

Ryan Sean Adams:
[14:22] You can just recover from this. I mean, this is part of the risk reward that his LPs, his investors have signed up for, right? It's just like, if you're going to accept incredible gains, sometimes it's going to countertrade.

David Hoffman:
[14:33] So I wouldn't count them out yet. Yeah, they were up 2,000% and now they're

David Hoffman:
[14:37] only up 400%. Sorry, guys.

Ryan Sean Adams:
[14:39] But this has been part of the story. So the S&P is down about three and a half percent over the last 15 days or so. June has been, or July, I should say, has been quite the month. NASDAQ is down 10% from its highs. And crypto, though, on the week and on the month, holding steady? What's our crypto prices on the week?

David Hoffman:
[15:00] So even in the middle of this bloodbath, Bitcoin held flat this week. ETH is up this week. On the month, the numbers are even better. Bitcoin in 30 days, up 11%. ETH in 30 days, up 22%. So if you were invested in AI, you are licking your wounds right now. If you were invested in crypto blue chips, you're doing great. You're happy.

Ryan Sean Adams:
[15:20] You got this one month.

David Hoffman:
[15:22] When has that ever happened since the inception of like chat GPT in 2023.

Ryan Sean Adams:
[15:27] Not that I can remember. I can barely remember those days.

David Hoffman:
[15:30] Yeah. July of 2026 was a victory for crypto and a loss for the AI trade.

Ryan Sean Adams:
[15:37] Well, we keep wanting to use the word bottom on the week.

Ryan Sean Adams:
[15:41] Has crypto bottomed? I don't know if we have enough data to make that call. We've talked about it a lot, but let's talk in particular about the Ethereum ecosystem. So you put a chart in here, which is the UNI token. This is a DeFi Ethereum protocol catching a bid lately. It is up 36%,

David Hoffman:
[16:02] 37% on three months. Up the highest that it's been in like a year really okay like year yearly highs something in a very long time and like uni uni's relationship with ethereum and eth specifically i would say it's very very positively correlated yeah because like, uniswap is the exchange of ethereum maybe this is because of activity on the robin hood chain but i don't know i think it's kind of all one basket of correlation and so like when eth price does well i associate that with health of the Ethereum economy.

Ryan Sean Adams:
[16:35] When Unitoken does well, you mean? Or when ETH price?

David Hoffman:
[16:38] Yes. When Uniprice does well, I associate that with Ethereum economy health. And you can also kind of see that in the ETH dollar price. What did I just say? ETH was up 2x versus Bitcoin in this month. Bitcoin was up 11% versus dollars and ETH was up 2x versus Bitcoin. And there are some charters. And I've been looking at this as well. The ETH-BTC ratio has been on a four-year downtrend, a four-year of terrible vibes.

Ryan Sean Adams:
[17:06] Look at this chart. This is a whole...

David Hoffman:
[17:09] This is a terrible chart. This is the world's most depressing chart. There's so many bad vibes contained in this chart.

Ryan Sean Adams:
[17:14] But if you zoom in, you can see it. You can see it.

David Hoffman:
[17:16] At the very end, ETH-BTC is poking through this four-year downtrend. And so it's just kind of significant. There's just this four years of bullying, of battering for any ETH holders, which i felt you are still still feeling ryan at some point i was like i just don't want to feel this anymore uh but like you're it's poking out it's poking out and so then, the next question is like okay if it's going to stop going down versus bitcoin the next question is like where does it go to, next yeah and i think you can you can see like sentiment shift in the eth like traders otherwise in different traders are piling into eth you can kind of see it on the um, You can just see that in Block Explorers and just like news aggregators. But just like the sentiment around ETH is kind of positive right now.

Ryan Sean Adams:
[18:03] That poke on the ratio is kind of small for me. I would like to see that poke get a lot larger.

David Hoffman:
[18:08] It's very early. Very early.

Ryan Sean Adams:
[18:09] But what are your feelings? Like, you know, some people have said, hey, David's sentiment was the bottom. And the reason is because you're kind of like an ETH bull, have been for a very long time. So if David is selling, well, that is the last capitulation of seller exhaustion before this whole thing reverses. And maybe we're starting to see a bit of that reversal. Maybe David starts to look at ETH again. He's like, ah, I remember. I remember the love, the excitement that kindled in me when I bought my first ETH. Is anything like that sparking in you? Are you still waiting for this to become a bit more durable?

David Hoffman:
[18:51] Mm-hmm. I definitely see that. People are like poking at me. It's like, ha ha, David sold the bottom. David sold the bottom. I would like to remind people that I sold at $2,300.

Ryan Sean Adams:
[19:01] Yeah.

David Hoffman:
[19:02] Hold on. Hold on. But like directionally, I understand what they're saying. In the grand scheme of things, it will look and feel like a bottom sell. Fundamentally, the economics of ETH and the fundamentals of Ethereum, I don't feel are answered or solved. I would also hold plenty of space for the fact that like ETH can go up regardless of just that. It doesn't matter actually. Like the fundamentals of ETH can continue to be unresolved or unsatisfied to my concerns about value capture and ETH. And ETH can go up anyways despite that. And that's kind of like what I am thinking about when I am looking at the breakout of the ETH-BTC ratio. Is like maybe I'm like technically correct on like the value capture, but like incorrect on the actual price trajectory, that is totally possible.

Ryan Sean Adams:
[19:58] Yeah, and I think a good summary of the month was this chart from Ansem actually, which we're looking at some crypto assets. We're comparing that to the memory stocks, Micron and SanDisk. The SanDisk down 50% for the month of July, whereas ETH up 20%, as we said, Bitcoin at 10%, PumpFun up 32%. So crypto assets outperforming for the month of July.

David Hoffman:
[20:21] Let's lock it in. Onchain took a big dub this month, especially towards the end of the month.

Ryan Sean Adams:
[20:28] We got more to discuss. Actually, I want to get into the best article I read this week. It was from Michael Howell outside the industry talking about cryptocurrency. Also, we got to talk about Kevin Warsh and the FOMC meeting. This is the first time he's done one of these. What did he say about rates? What about inflation? What does this portend for the future of the crypto industry, David? A big subject to cover. We'll talk about all that and more. But before we do, we got to get to the sponsors that made this possible.

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Ryan Sean Adams:
[22:30] This is the new chair of the Fed, Kevin Warsh. He's talking about his first family fight in the context of the FOMC meeting. So you're right. I asked for a good family fight and I got one. That's the purpose. That's the design feature. I come into this meeting, even this press conference, heartened by what I've experienced the last two days. There you go. He is heartened by what he experienced the last two days, the FOMC meeting, the first family fight. What's he talking about? A family fight? Is it FOMC commuting? Are they just like one big family and they just, you know, fight at the dinner table?

David Hoffman:
[23:07] A family of 12 white dudes behind closed doors. So it was a split 9-3 vote. So 9 voted to hold, 3 voted to raise, I think? Yes, raise. Yeah. So ended up holding rate steady at 3.5% to 3.75%.

Ryan Sean Adams:
[23:26] I think the big question going into this meeting was like, you know, there's a 33% or so odds that actually the Fed would raise because of inflation, basically. So not the majority of the market, but a substantial percentage. Portion, minority of the market, thought that this was the case. So what is Warsh's perspective on inflation? So if he's not raising raise, then does he think inflation is defeated? Here's a direct quote. Let me reiterate, he said, there is no soft inflation target. There is no soft implicit target, not on this committee's watch. There's only a target and it's 2%. The inflation target for this Fed chair, David, is 2%, which is kind of curious because we're at like what, 3.6%.

Ryan Sean Adams:
[24:11] We're in the high threes, maybe heading towards 4%. A follow-up question asked him, well, what about the rates? Could you see adjusting those upwards to fight inflation? He said this, if inflation continues to be elevated through the forecast period, interest rates could well be part of the solution. So he's keeping interest rate heights on the table in order to fight inflation into the future. Indeed, I talked to Michael Nadeau on the week, the TDR, he still thinks there's two rate hikes that could be in store for this year because of the inflation issue. Doesn't think it's going away. There's another meeting in September. There's another in December. He would place the odds as pretty high that both of those have rate hikes. So it's not over yet. But the first meeting, Warsh and the committee decided to keep rates as they were, which is just kind of, does it feel like he's talking about through both sides of his mouth? Like inflation's a problem. We're going to get it back to 2%. It's overly high right now. And yet he's not increasing the Fed funds rate to manage that, right? Like what's going on here?

David Hoffman:
[25:21] So reading through the Fed tea leaves, this is my interpretation. This is an interpretation that I found that I really, really liked, is that the Fed is going to manage inflation through balance sheet reduction rather than through rate hikes. And both of these two things change the yield curve, Rate hikes impact the yield curve on the short term. That's like what the market needs to pay for borrowing right now. And then balance sheet reduction is more towards the long-term structural end of the yield curve through like actual monetary destruction, like calling back money.

David Hoffman:
[25:58] Back into the Fed. And so instead of just increasing rates, what they're going to do is they're just going to allow bonds to expire and not buy any new ones. And instead, who's going to have to buy the new ones? The private market. The private market is going to have to buy the bonds rather than slapping down the money printer and doing it inside of the Fed, who's price insensitive. We're allowing the private market to buy the auctions. And the private market is way more price sensitive.

David Hoffman:
[26:29] And they are demanding more returns on their yields than the Federal Reserve is. And at the same time that FOMC happened this week, we are seeing 10-year yields threatening to break through into new highs. It's at 4.7%. That is the highest that it's been in a long time. And the 30-year Treasury yield is at 5.2%. And that is the highest yield on the 30-year, Ryan, in nearly 19 years, the highest since 2008. And so this is a contraction of the money supply because instead of the Fed buying the treasury's bonds, the private market is buying the treasury's bonds. And instead of the private market taking that capital and pushing it down the risk spectrum because the Fed is buying all the safe stuff, the private market has to buy all the safe stuff. And so that is pulling money out of the system instead of the Fed kind of just like doing, buying bonds. And so that is effectively quantitative tightening. And so the answer to your question is how are we managing inflation if we're not hiking rates? It's QT, we're doing QT.

Ryan Sean Adams:
[27:37] I think that's a good theory, reading between the lines of like what he's saying, what he's doing. However, there is a problem there, which is these rates. I mean, 30-year treasury just hit the highest in 19 years. As you said, how high can it go before something in the economy actually breaks? I think that's a big question. We've got like federal deficit spending. Right now, there's, you know, Trump has requested 44% in increased military budget. That all goes into kind of the debt. And the U.S. government's debt repayment increases every time the 10-year and 30-year goes up. And so how high can it go up before something breaks and he's actually going to have to reverse some of these decisions? I guess the good thing about this, though, is he's letting the market kind of push him into a solution and they're kind of leading the way and then maybe he's just going to follow it.

Ryan Sean Adams:
[28:33] But at the end of the day, hey, this has to result in some level of monetary inflation and debasement. You know, however he wants to run things, I think he's going to be forced by the market into that type of a position. It just might take some time. So, but yeah, like I got to say on reflection, like hearing Warsh speak is very different than Powell in tone, in like timbre, in the way he communicates things. So there's still a lot that we just like don't know about how he intends to run things. And I'll give you another explanation for where he might be thinking about inflation, which is he's talked before earlier this year a lot about the deflationary power of AI. He actually might be a believer in that, David, which is like AI, productivity boom, the next industrial revolution, that could be secular deflation into the US economy. And maybe he's trying to cash some of those checks too, and hope that that begins to happen. So... It could be that he's basing at least some of this policy on the AI trade as well.

David Hoffman:
[29:42] I don't like that at all. I don't like that one bit. Because as the Fed governor, aren't you supposed to wait for just hard data to come in? And what hard data do we have about AI? We don't. Very little.

Ryan Sean Adams:
[29:58] Look, that's some speculation on my part. Maybe that's just kind of a hopeful thing he's got in his back pocket. Maybe the main way he intends to impact inflation is through quantitative tightening, as you say. But, you know, I don't know. It's like this role is balancing a lot of different like factors. And yeah, you got to thread the needle here very carefully.

David Hoffman:
[30:19] For some reason, watching this FOMC and kind of just seeing the rhetoric come out of the Fed, and like now we kind of are starting to have a decent amount of data about the Fed. I am kind of reminded of the structural change of the Fed's stance that happened in 2022, where we went from ZERP to very high interest rates very, very quickly. And what happened in 2022 was there was just a complete sea change. Investors were not positioned for it. The interest rates went way higher, way faster than anyone kind of expected. And we all kind of learned, investors in that moment kind of learned what really, interest rates are because it had been Zerpey for so long. I'm not saying that that's happening, but it does feel like there's a structural change.

Ryan Sean Adams:
[31:04] At the Fed.

David Hoffman:
[31:06] And Warsh is just looking inflation, staring it down and being like, I'm going to eliminate you and I don't care what breaks. And as a, as a, there's some parts of this, I'm not a Fed governor. I will never be a Fed governor. Nope. But like some parts, some parts of this, I do appreciate Warsh is like allowing the market to come to real rates. The market is determining the rates. That feels normal. I don't, like, conceptually, we don't like top-down determined rates because the only thing that can determine what the fair rate of interest is, is the market. And it seems like Warsh is doing that. And in some sense, that's good. As a risk investor who's exposed to tech and crypto assets, I am scared because, he's like, oh, yeah, I don't care. Something is going to break. And that's like, we're good with that. And we're doing the hard thing of having responsible monetary policy, which means austerity, which means like lower capital into the stock market. It's just all of the hard stuff. We're doing the hard money thing. And like tech and risk is not into that.

Ryan Sean Adams:
[32:12] I don't know that he's going to be hard money. Like, I think that that could be possible. You're saying another explanation for all of this is he's just like he's talking BS a little bit, right? It's like he's not he says 2%, but it's actually never going to be 2%. Like, we just don't know enough in order to understand, you know, what his signals actually mean to the market. I will give some hope to you for crypto assets. And this comes from a fantastic article I read from Michael Howell. You know, Michael, he is the global liquidity index guy. All right. And he put, what I appreciate about Howell is he's outside of scripto. So he's coming at crypto from a completely different vantage point. It's sobriety. It's from the perspective of macro and looking at crypto as an asset class and saying, what does this do for me? And he's very, he's kind of the author of the Global Liquidity Index. So he studies global liquidity, has done so for like many, many decades. And here's the bottom line take from his article this week. Again, it's probably the best thing I read.

Ryan Sean Adams:
[33:18] A 1% move up in global liquidity, that's how he measures monetary inflation and debasement is global liquidity. A 1% move up yields an 11% up move in crypto. Okay? So that's historically, that's like 15 years. He goes through a basket of mainly Bitcoin, but then Ether and Eslana and some other assets. And he measures this correlation. 1% up in global liquidity equals 11%. So crypto is a fantastic hedge against monetary inflation, monetary debasement. So if you believe monetary inflation is destiny, maybe not now, but like in the long arc, right? Because right now global liquidity has actually been on a downtrend. This is what Michael Howell is reporting. But if you believe there's more monetary debasement ahead, then crypto is an asset class that should appreciate 11% for every 1% in global liquidity that we get. And by the way, I should say this, that is 4x the performance of gold.

Ryan Sean Adams:
[34:26] Okay? So as a monetary debasement trade, it's about 4x. And he goes to the charts, he correlates this, about 30% of all crypto move, either up or down, is related to global liquidity. So this whole story here, the whole thing, like all of the, you know, the weekly coverage we do and all of the stuff on crypto Twitter is... The whole thing is sort of, it's just the simple message of if monetary debasement, then crypto appreciates in value. And the reason it's gone down is global liquidity is down right now as part of the cycle. And it will return when global liquidity enters the upcycle once again.

David Hoffman:
[35:10] Isn't what's happening right now with yields going up 30 year 10 year yields going up and the fed is like yeah that's we want the market to tell us that we're cool with that we're you know contracting the monetary supply, or if you're saying that like you are bullish because of global liquidity doesn't that mean that warsh and the fed has to do, whatever they're doing right now and then they have to capitulate and then there will be more monetary expansion because, we're like priming we're loading up the engine, we're putting fuel you know in the gas tank and that's actually hard, that's bad for risk, bad for tech while that's happening but then something breaks and then it all hell breaks loose, is that what you're saying?

Ryan Sean Adams:
[35:55] That's definitely a way this whole scenario could play out, it's not the only way this scenario could play out but that is definitely a way this scenario could play out And that's kind of the scenario and base case that Michael Nato went through this week. That's basically how he thinks it's going to happen. It doesn't have to, but the only destiny is just like, do you think there's going to be more debasement in the future?

David Hoffman:
[36:19] Of, you know, it's a, it's a certainty. Yeah. It's just not, it's just a matter of not getting rattled out of the market between now and then. Granted, if you're a believer in four-year cycles, you have a whole like quarter and a month or two ahead before like the theory is bottom. Yeah. So like I think Ben Cowan is like, it's October, bottom in October. So maybe, maybe Warsh just like beats us around trying to get down to 2% and

David Hoffman:
[36:46] then like capitulates in October.

Ryan Sean Adams:
[36:48] Yeah. We'll have to see how this all plays out. David, let's talk about clarity. So that is, I think the clarity act seems like it's stalled on the week, right? So they were going to have a vote in the Senate, a culture vote. Is that what this is called? Where they kind of vote on whether they bring it to the house. A cloture vote, excuse me. It's a cloture vote on the clarity act. The potential for this to happen this week has faded. Polymarket of whether this gets signed into law, the Clarity Act on the week, down to 26%. Last week, we had some hope. It was up to 40%. Now it's down to 26%. This prompted, some of this, I think, prompted SEC Chair Paul Atkins to come out and basically say, well, if Congress doesn't do it, I could do it. I could do some of this through regulation. Let me play a clip. We are ready, willing, and able to come out with rules, you know, that address the same issues in clarity and other aspects of the crypto market. Ultimately, we need the certainty of a statute.

David Hoffman:
[37:54] I suppose what he's saying is that anything and everything under the SEC's purview that's in clarity, we can just do manually. And the point of clarity is to like lock it into law, but we can still do it. But it's just like under threat of like Democrat unwinding if they ever choose to, which they might not or they might. It doesn't feel great.

Ryan Sean Adams:
[38:17] It's not great, but it's a nice consolation prize, I guess.

David Hoffman:
[38:21] Yes, it is a consolation prize. It is something. It is something.

David Hoffman:
[38:25] All right, coming up next, Ethereum turns 11, and we have a new individual joining the board of the Ethereum Foundation. That is something different than the executive director position. That is a position that elects the executive director. So actually a pretty, big development in terms of Ethereum governance. And then also, Ron, I want to tell you about Shenan. I would like to raise a slight alarm bell about shenanigans happening in New York City. And I want to get your reaction to what's going on in my neck of the woods. All right. So we're going to get to all of that and more. But first, we're going to talk to some of these fantastic sponsors that make the show possible.

Ryan Sean Adams:
[39:00] Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the DeFi Report. This is the guy that sent me a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes, they're short, they're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together. Go subscribe to this podcast, search The DeFi Report wherever you get your podcasts, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now.

David Hoffman:
[39:48] Hey, Bankless Nation, it's David. If you're hearing this, that's because you are listening to the free Bankless podcast feed. Did you know that there is a premium Bankless RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry, questions that I want to answer so I can be more informed as an investor, both at Bankless Ventures and also just in my own personal portfolio too. Also, there are no ads, which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So if you're interested in getting extra content all while skipping the ads, or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for Bankless Premium. And there is a link in the show notes to get started. Cheers to a good 2026.

Ryan Sean Adams:
[40:30] We're recording on July 30th. It's the 11th birthday of Ethereum. This is a tweet. It's hard to believe it's already been 11 years. On July 30th, 2015, we launched Ethereum from a small scrappy office in Berlin. So much has changed since then. Ethereum is the world computer. This is the original crew that launched the Ethereum chain. We are 11 years into this experiment. Gone from a price of what for ETH? Like 33 cents or so?

David Hoffman:
[40:59] Yeah, 33 cents, yeah, to where it is now is just shy of $2,000.

Ryan Sean Adams:
[41:04] Yeah, and so it's been a rough five years for ETH, but it's been a pretty good 11 years if you zoom out.

David Hoffman:
[41:10] Yeah, it's been a phenomenal 11 years, yeah.

Ryan Sean Adams:
[41:14] Also, you mentioned it, but a new EF board member was elected, and this was someone new. The name is Pascal Cavasacchio, I believe. This is a pseudonymous name. If I get the pronunciation wrong, it's probably no big deal because this is a pseudonym. This is not a real name. Privacy and Security Maximalist, he is called. That is from the Ethereum Foundation. This is Aya Mayaguchi, who is also a member of the board. What he brings isn't just security and privacy expertise. He's a living example of what 100% crops alignment looks like in practice. Crops, of course. Censorship resistance, open source, privacy, and security. So notably, Pascal is part of SEAL 911. That is crypto's emergency security hotline. If you get hacked, if something really bad happens, this is the group that comes and helps you and saves you. They are doing fantastic work. So what's your take on this? This would be, I guess, the third person on the board?

David Hoffman:
[42:21] Yeah, the third person, yeah, is Aya Vitalik, this individual, and then there's a Swedish lawyer, Patrick Stormbigger, but like, I think that's more just like admin and bureaucracy stuff. The significance is that it's the first new person in addition to Aya and Vitalik. And so like this person has an equivalent amount of governance over the Ethereum Foundation as Vitalik. On paper, on paper, as like Aya and Vitalik. Like Vitalik, I think, was occupying two board seats, and I think maybe this is now one of them. And so he's giving up one of his two board seats to this individual. So in terms of just like EF lore, it's kind of a big deal.

Ryan Sean Adams:
[43:03] You think this is Vitalik's alt account? So, you know, Pascal, he's... Probably not.

David Hoffman:
[43:10] Is this Sybil attacking at the EF governance? No.

Ryan Sean Adams:
[43:13] But I do think this is another like-minded individual for sure. For sure. So we'll see if that manifests in any big decisions.

David Hoffman:
[43:21] Can I tell you, this is not on the agenda. Can I tell you a fun fact, Ryan?

Ryan Sean Adams:
[43:24] Yeah.

David Hoffman:
[43:26] Does the name John Perry Barlow ring any bells to you?

Ryan Sean Adams:
[43:30] No. That's a great name, though. It sounds like a founding father or something. Who's this?

David Hoffman:
[43:35] Okay. Who or what is my favorite band ever?

Ryan Sean Adams:
[43:40] Oh, the Sheepdogs, right?

David Hoffman:
[43:44] Oh, actually, they're pretty good clothes. I was looking for The Grateful Dead. Yeah, okay. The Grateful Dead.

Ryan Sean Adams:
[43:49] That'd be my second thing.

David Hoffman:
[43:51] John Perry Barlow is a lyricist for The Grateful Dead.

Ryan Sean Adams:
[43:55] Okay.

David Hoffman:
[43:56] He also wrote the Declaration of Independence for Cyberspace.

Ryan Sean Adams:
[44:00] What?

David Hoffman:
[44:01] Yeah. Yeah. You know that document?

Ryan Sean Adams:
[44:03] Yeah. The Grateful Dead band member wrote that?

David Hoffman:
[44:07] The lyricist. He didn't play any of the music, but he wrote the lyrics for a lot of Grateful Dead songs. No way. And he wrote, I didn't know this until this week. And I'm a huge fan of the Grateful Dead. And I'm also a huge fan of the Declaration of Independence of Cyberspace. And it's the same guy.

Ryan Sean Adams:
[44:21] How crazy is that? Did they publish that in the early 90s? Or was that the 80s or something? When did that come out?

David Hoffman:
[44:26] That was 96.

Ryan Sean Adams:
[44:28] Okay. Yeah. Yeah, so true, like, cypherpunk lore.

David Hoffman:
[44:31] Yeah, and it's Grateful Dead, like, lyricists. I thought that was crazy.

Ryan Sean Adams:
[44:35] Yeah, it is crazy. Tell me about Robin Hood earnings.

David Hoffman:
[44:39] Robin Hood earnings. Okay, so Robin Hood reported quarterly earnings, and so I pulled out some of the, what I thought was useful. Revenue, $1.3 billion in revenue, up 32% year over year, which was a slight beat. Event contracts is $156 million.

Ryan Sean Adams:
[44:57] That's been a good one.

David Hoffman:
[44:58] That has been a very good one. Yeah, I think now, I think we have four quarters of event contract data. So it's up 10x year over year, but like at the quarter one, it was like starting at zero. Crypto revenue, $100 million of crypto revenue, down 38% year over year. And that is the third straight quarter of decline. And so crypto is down to just 7.6% of total revenue for Robinhood.

Ryan Sean Adams:
[45:23] Yeah, that's from 16% a year ago. But I mean, that's the story of a bear market and a bear market exchanges make less money, right? One would expect that lower volumes, lower fees, lower revenue.

David Hoffman:
[45:36] Yeah, you're right. You're right. Still, it's not exciting to see. Robinhood revenue chain, however, I don't think that made it into this quarterly earnings report because it's just one month old, but made $3.1 million of chain fees for Robinhood in the last one month.

Ryan Sean Adams:
[45:51] That's really good.

David Hoffman:
[45:53] Not bad.

Ryan Sean Adams:
[45:53] So you scale that out and we're at like, you know, 25, 30 million or so. And that starts to, you know, move some of that revenue on chain rather than on the exchange. Mm-hmm.

David Hoffman:
[46:04] So still early days in the Robinhood chain, but there's still a ton of activity going on there.

Ryan Sean Adams:
[46:08] I did see the big question is whether tokenized assets will actually take off on Robinhood. And I did see the DEX volume, at least on the week, for tokenized real world assets surpass Solana. So maybe that is a sign of things to come. It would make sense for Robinhood chain to have the world's largest volume for real world assets,

Ryan Sean Adams:
[46:29] considering that's Robinhood's bread and butter. We'll see if they can build on that momentum. Are you about to throw some cold water on that idea, though?

David Hoffman:
[46:38] No, no, no, no. Do you want to know what's going on at the frontier of innovation of both meme coins and tokenized stocks?

Ryan Sean Adams:
[46:45] Oh, do I ever.

David Hoffman:
[46:47] Okay, so in an AMM, Ryan, and you want to buy a meme coin, what is that meme coin typically paired with?

Ryan Sean Adams:
[46:55] Well, it depends on the chain, doesn't it? I mean, USDC, I guess ETH in some cases.

David Hoffman:
[47:02] Usually ETH, right? So it's always paired with something. The pinnacle of innovation in meme coins is that you can pair a meme coin with a stock, a stock token. And so people are trading like meme coins, but like the base pair is like NVIDIA, or like, I don't know, some stock token. That's new.

Ryan Sean Adams:
[47:23] We haven't been able to do that in TradFi. You can't do that in TradFi.

David Hoffman:
[47:31] Wow. But I think that's actually one of the reasons why Robinhood chain stock volume is up so big is because meme coin traders are using them as like base pair. So you can have an underlying exposure to stocks while your meme coin runs up or down.

Ryan Sean Adams:
[47:44] Well, I guess there's a hopeful view on that is that's just how we bootstrap things, right? Maybe there's a more cynical view too. We don't have to get into that.

Ryan Sean Adams:
[47:53] David, I saw this on the week and you titled this under what is happening in New York City. This is Hayden Adams saying, this is the worst mass doxing I've ever seen. Just personally searched several high-end apartment buildings that include people I personally know, their primary reverent residents, not only were their units listed, but nearly every unit in the entire building was listed. F, absolutely everyone involved in this. This is incredibly dangerous. That is Hayden Adams, founder of Uniswap, talking about something that just hit New York, which is they published the names and addresses in a searchable public database of all properties, people with properties over a million dollars or more. I think the The average or something like property in New York City is like 800,000. So it's a lot of people, right? It's like.

David Hoffman:
[48:45] Yeah, it's the majority, not the majority, but just like a fat chunk of people. Yeah.

Ryan Sean Adams:
[48:50] This is almost a million properties in ownership reference publicly doxed. And so that's why Hayden is calling this the worst mass doxing I've ever seen. Of course, this touches on something in crypto, right? Which is like we believe in privacy and there have been wrench attacks in our industry. And they have happened in some ways in countries that have publicly listed asset ownership and public address information. It's just like not a good thing to see this trend, to see the New York State or sorry, New York City publish this type of material because it can lead to people getting hurt.

David Hoffman:
[49:30] Yeah. Yeah. If you tell me like there was a mass doxing that happened, like my first reaction is like, oh, some tech company got hacked and they had their data stolen from them. This is the city of New York voluntarily just publishing people's names and addresses above a certain wealth amount for people that have a second home in New York. They're just publishing it. And that's just fucking wild, dude.

Ryan Sean Adams:
[49:57] It's a bad idea.

David Hoffman:
[49:58] That's just crazy that we're doing that. Don't do that.

Ryan Sean Adams:
[50:01] Yeah. Their stated reason was state law. So there's a statue on the books apparently creating a surcharge requiring the DOF to publish property rule for public inspection so owners can check the status. So they said they were just following state law here. I mean, if they were, if they weren't, this is a bad state law.

David Hoffman:
[50:21] It's a bad idea either way. Yeah. Yeah. And then, like, on top of that, did you see the five incoming New York City-ran grocery stores that are going to, like, charge 30% under retail prices on, like, essential, like, food? I did, yes.

Ryan Sean Adams:
[50:38] I know this gets under your skin, David.

David Hoffman:
[50:41] This gets under my skin. The fact that this is happening all at once. We have state, city-ran grocery stores intentionally undercutting the, like, private market prices. And then also we're doxing rich people in New York. It's just like, it's all happening at once. And I think that we should just note that it's sus.

Ryan Sean Adams:
[51:02] David is not an enjoyer of the things going on in New York City.

David Hoffman:
[51:04] I am not an enjoyer of what's going on in New York. You stay in there.

Ryan Sean Adams:
[51:06] Though, or are you going to flee? Can you stay here?

David Hoffman:
[51:11] People, not me, are indeed actually fleeing. There are people going to Miami, either for tax reasons or... Oppression reasons. I have no intention on leaving, but I mean, I rent. It's still a great town. I can get up and go whenever I want.

Ryan Sean Adams:
[51:26] Yeah, I've always been following that, kind of like the right to exit. Like the exemplar of the right to exit for me is like Balaji Srinivasan, who I don't know if you saw his post this week. Um, he, there was a, I don't know, some kerfuffle, a journalist, uh, hit piece about him and he responded to this. But anyway, he's now a Singaporean citizen. Do you know that? So right to exit, he exited his U.S. citizenship and is now a resident.

David Hoffman:
[51:52] He abandoned his U.S. citizenship?

Ryan Sean Adams:
[51:55] Yes. Uh, which of course is a big step.

David Hoffman:
[51:58] He paid so much in taxes to do that.

Ryan Sean Adams:
[52:00] Well, for context on that, for something like Balaji, right? It's when you exit the U.S., not only do they publish your name to a list, by the way, a Senate-maintained list, and there's about like 4,000, 5,000 people that do this every year, but they also, not quite an exit tax, but you may as well call it that, which is they take the realized value at the current price of all your unrealized assets and then do the capital gains tax on that. So it's like 25%. For someone like Balgy, who's got like angel investments, VC type stuff, you have to market value all of that and then pay taxes, things where you don't have cash. Like it's not insignificant, I would imagine. It's very painful.

David Hoffman:
[52:41] Yeah, it's a very, I mean, it's very on brand for Balgy to do this. Yes. But it's in terms of just like the level of bureaucratic and financial like pain and cost, that's huge.

Ryan Sean Adams:
[52:53] Yeah. So, I mean, a different way is you just like kind of move around in the country that you have. And in the U.S., of course, there's all sorts of, what, 50 different experiments happening at any one time, including all the cities in those experiments. So you got a lot of options, David, if you don't like the grocery stores. But I think you should go shop in one first before you make a judgment.

David Hoffman:
[53:15] And you can see if you like it or not. Buy all the cheap groceries. I just don't want to stand in line for...

Ryan Sean Adams:
[53:21] Buy them, tokenize them, and then arb opportunity, my friend. That's what you could do.

David Hoffman:
[53:26] All right, Bankless Nation, that is it for this week. Fifth week of July, one of the few months I have five weeks and then we'll be back and it's going to be the first week of August next week. Crypto is risky, but that's why we're here. The institutions have landed, so we are leaving and going even more west. This is the frontier. It's not for everyone, but we are glad you're with us on the Bankless Journey. Thanks a lot.
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