Bitcoin to $57K or a new bull market? Ryan and David unpack the wildly conflicting price predictions, Hyperliquid’s Wall Street breakthrough, the fight over tokenized stocks, Robinhood Chain’s revenue collapse, and Zcash’s governance controversy.

TRANSCRIPT

David [0:04]: Bankless Nation, it is the fourth week of October.
David [0:08]: Bitwise, targeted $1.6 million by 2036, with a bear case of $131,000, just a slight deviation between those. The median output came $1.5 million by 2034.
David [0:34]: But the 2028 target is somewhere between $240,000 and $413,000. Mike Nadeau from the DeFi report, he gave a target between $200,000 and $375,000 in a couple years. But Jason Kalkanis, notable crypto investor, says dump it all now because $50,000 is coming. And also the big topic of the week was that Hyperliquid gets buy-in from ICE, the parent company of the New York Stock Exchange, is partnering with TradeXYZ to bring Hyperliquid to America, to US Markets. Stanley Druckenmiller, who is an investor in ICE, tweeted out an endorsement of Hyperliquid. And then also the New York Stock Exchange gets in on the pro-hyperliquid dogpile this week too. Hyperliquid is up like 17%, touching all-time highs, both in dollars and in Bitcoin terms.
Ryan [1:39]: I think it's a big week for tokenizing stocks in general or like crypto having markets for stocks for sure. But there's been some pushback about that that we'll get into as well. Also, Venice is breaking $1 million in VVV per month. David, I want to ask a question to you about token buybacks and what you think about them in the context of Venice and some other assets.
David [2:00]: We're going to debate about buybacks once again.
Ryan [2:02]: I want to get the news from you on that and some news from Athena as well. But, you know, I think we should start today's episode since we're going to get into all of these Bitcoin price predictions. Let's start with the bear case for Bitcoin from none other than, as you said it, Jason Kalkanis.
Ryan [2:36]: I kind of wish I followed that advice at the time.
David [2:38]: Actually, crypto in that moment, Bitcoin in that moment did very, very well because not long thereafter.
Ryan [2:49]: Not quite as well as Anthropic, let's say, or some of the AI stocks.
David [2:56]: You would have done well to not pivot to AI.
Ryan [3:04]: He's doubling down on that take in a big way. So he says this, a brutal year for Bitcoin is just getting started.
Ryan [3:13]: Give me three minutes to explain why you should dump it now. He says we're going to test the 57K Bitcoin low, the June low, in the next 12 months. Why buy Bitcoin when you can have productive, cash-flowing AI assets that actually add value in the real economy and generate productivity, generate cash flow? I think he's been pretty bearish on crypto in general for a while now. But it also reads to me like he's getting a little cocky here, David. And I'm kind of like, I read this and it kind of makes me bullish.
David [4:10]: Yeah, this is coming at the same time Shamath has also pivoted on Bitcoin. For like a decade, you know, he's been, Shamath has been very pro-Bitcoin for a long time. I think Cal Candace might actually kind of be just like echoing Shamath here. Shamath is like, yeah, I actually think it's going to be hacked and go to zero, basically.
Ryan [4:38]: Is he saying like quantum risk and such or like AI math breakthroughs?
David [4:43]: I don't know if he said the Q word, but I think it's implied that just because of just tech vulnerabilities these days, I think he's kind of lumping Bitcoin in with that. And then Jason, who's, you know, is happy to poke at people on Twitter. But like saying that Bitcoin will never break its all time high ever again is kind of like famous last words.

The Fed and inflation

Ryan [5:11]: on Bitcoin, but the bear takes is that it's going to drop below 57K in the months to come. There were two dissenters saying that rates should actually go up. 10 individuals on the FOMC saying, let's keep it the same. One, they said they're going to wait for some more economic indicators. They want to see inflation numbers, which by the way, we have those. They just came out today, but they weren't available for the FOMC meeting. And they reasserted their commitment to deliver on price stability and, So keeping rates the same. Now, we should say that the markets are predicting, the prediction markets, polymarket, a Fed decision in December to increase rates at about 80%, to raise rates at 80%.
David [6:09]: Is that downstream of the inflation numbers that we just got this morning?
Ryan [6:12]: And it's also downstream of the Fed decision to not raise rates at this particular FOMC.
David [6:19]: So the market is- They just kind of punted it out?
David [6:33]: Yeah, so this morning's PCE came in for September going the wrong way. It's just like the direction of PCE inflation is just not going ways that feel comfy. So headline year-over-year inflation went from 3.3 to 3.4 to 3.6. A few dollars off of its recent highs, but still $111 a barrel is as expensive as it's been in recent times since the Iran war conflict. And so the longer that that stays elevated, the even more, even further inflation you can bake in. And I think there's also just been rumors and mumblings about a renewed escalation in the Iran war conflict once the midterms get over. Finally, we can get those behind us for whatever that does to the market, bearish, bullish, or just nothing.
David [7:35]: Finally can get that out of the way. And so are we going to start bombing Iran once the midterms are over? And so that's going to, if that does happen, that'll send oil even higher, which is going to send inflation even higher. So just, like, plenty of worry to climb as we do climb this, like, wall of worry, especially with regards to inflation. Because, you know, you just can't imagine that, like, being an asset investor is going to feel super comfy.
Ryan [8:14]: Yeah, it's been sticky upwards quite a bit. I remember, like earlier this week when we recorded, I guess that was last week, we recorded with Michael Howell. You were like, hey, are these numbers real or do you think it's higher?
Ryan [8:53]: Yeah, since 2020, we had obviously the COVID dip and it stayed low. 2022, we sort of got a recovery and then it sloped downwards. It seems like economists can't really get their arms wrapped around And the reason consumer confidence keeps ebbing down.
David [9:22]: Your basic starter house is something like $600,000.
Ryan [9:25]: I mean, that's got to impact how you feel about buying things.
David [9:32]: So we had the first big consumer confidence jump in, first up for the first time in four months. But I think that's kind of it's just kind of like one tick up on side of a very long, slow descent. I mean, this goes into just inflation is like people feel bad about the economy, which is weird, though, because consumer spending is actually very, very high. Maybe that goes into affordability because like, well, consumers are spending all of their paychecks, but spending is high, which is bolstering the economy.
Ryan [10:07]: Yeah, I guess you'd have to cohort that, you know, spending is high among what like group? Is it sort of the wealthy kind of the top 10% or is it more evenly distributed?

Bitcoin bull and bear price forecasts

Ryan [10:17]: Let's get to Bitcoin price, though. I don't know if everyone looked at the market and said, okay, we're in early bull.
David [10:34]: Willy Woo is a pretty notable Bitcoin on-chain data analyst and price predictor. He tweeted out a 10,000 possible Bitcoin futures, a random walk simulation trained on Bitcoin accounting for power lot degradations of return. And so in the 28th to 50th percentile, so that means like the bottom 28 to the median 50 percentile, The return, the predicted return is between $240,000 and $413,000 for the 2028 top in December of 2028. So that's a little bit more than two years from now, $240,000 to $413,000. What this does not include is if you believe that there has been just like a structural regime change in crypto that happened maybe one to three years ago,
David [11:35]: And crypto is just more pessimistic and not going to return to its previous levels of acceleration and momentum, which is what Jason Kalkanis is saying. If you believe that there has been a structural rewriting of crypto to the downside, then that would be too bullish. But if you don't believe that, and maybe that was just an anomaly, and the non-sovereign store of value 21 million hard cap digital gold thesis is actually as strong as it's ever been, then this would actually be conservative. And it's actually that $413,000 2028 December top that would be the normative thing to hypothesize.
Ryan [12:10]: Yeah, Willie was quick to say these are not his price predictions. And what you just quoted was kind of the 28th to 50th percentile, sort of the base case between these simulations. At the same time, just at the beginning of 2029, Bitcoin could be $1.4 million.
David [12:47]: Like no one's going to be like shooting off fireworks about that.
Ryan [13:02]: We have some ranges for Monte Carlo simulations from Willy Woo. We also have Galaxy, Alex Thorne, Galaxy Digital effectively calling the bottom. So I don't think Alex put out price predictions from Galaxy here. But he did say now is the time to add and hold Bitcoin because his tweet was all about confirming the bottom. There's a chart maybe to pull up where, let's see, we are... 916 days into the halving cycle and past the window where every other prior cycle has bottomed. So if we still need, as Calcanus believes, to go below 57k Bitcoin and have a deeper bottom than June 2026, that would be the first time this has ever happened this late into the season with respect to the halving.
David [13:59]: I think the theme between the Willy Woo data, this data from Alex and kind of what people are talking about is like, I do think like there's something to say that like the regime, the structure, the market structure around Bitcoin and crypto broadly has changed. Is it drastic and massive and needs to we need to completely revisit our priors about all assumptions about Bitcoin price? Not maybe that crazy, but the identical four year cycles is probably not going to work out. So something between those two ends of just like, it's not going to be as it was, but it's not going to be too far away from what it was either is probably kind of where I'm landing. And so like, sure, the four-year cycle, like the window has always been, the bottom has always been in the past. Not necessarily, because we didn't really get one last cycle either.
Ryan [14:52]: One bit of confirmation is, So Galaxy's tweets and them saying that this is the early bull market that we have, the bottom has already been confirmed, also meshes with Michael Nadeau's takes, which is if we can keep below, he thinks we'll keep below the 50-week, excuse me, above the 50-week moving average, which right now is 76K Bitcoin price. If we stay above that, we've never at this stage in the market in the early bull cycle fallen below that in the past. If we don't now, that's the number to really look at is the 50-week moving average. Now, his targets are a bit more conservative than the Willy Woo Monte Carlo simulation, but his bear zone target for a top for this cycle is 200k Bitcoin, which seems like, relatively not exciting to me.
David [15:57]: It's at 80,000 now, 200k Bitcoin doesn't sound exciting.
Ryan [16:00]: But his bull bull take is about 375k. So he generally leans to the more conservative side of things, I would say.
David [16:16]: All of this happens at the same time Jason Kalkanis is saying Bitcoin will never reach all-time highs ever again. And kind of like how I alluded to, Jason Kalkanis likes to drag people on Twitter when they're down.
Ryan [16:42]: Can I give you the fourth and final Bitcoin price prediction?
Ryan [16:49]: So you want their bull case number by the year 2036?
Ryan [16:56]: Their bull case or their base case?
David [16:58]: Give me the fucking, give me the bull case.
Ryan [17:03]: Bull case for Bitcoin 2036, $3.6 million per Bitcoin, David.
Ryan [17:20]: I think that's roughly like 70 trillion or something like this.
David [17:42]: Could you imagine crypto Twitter in 2036 and Bitcoin is $130,000?
Ryan [17:50]: No, there'd be very bleak times, dark times here.
Ryan [17:54]: This is based on the base case, an annual growth rate of about 34%. And it's based on if you take emerging market currencies, if you take, gold, the store of value, offshore wealth, all of these different wealth reserves, sovereign assets, all of these things, and just assign a percent of Bitcoin penetration to that, that's how these numbers shake out. And so if you are more optimistic and bullish on those assumptions, you get a bigger number.
David [18:27]: To me, those kind of feel like these older crypto cycle assumptions in which like Bitcoin was going from like 0.01% market penetration to like 0.1% market penetration. And like, I don't know where we ended up, but it was like maybe between one and 2% is where we are right now. And so that's part of like the whole structural re-rating of crypto is like, what is the market penetration of Bitcoin? Part of it is a price is the best advertisement for Bitcoin and price is not doing any advertising for Bitcoin. And right now, like some of the news of the month, I would say is that sailors, Michael Saylor, the biggest buyer of Bitcoin is not buying Bitcoin at least this week from October 19th to today. A, Michael Saylor has bought zero Bitcoin, and the trend is also down. So September, like the last week of September, he bought $140 million of Bitcoin. This is the biggest buyer of Bitcoin out there.
David [19:52]: He is not the main character, But this goes back to the same like blue chip curse that we've been talking about. How do you take Bitcoin from a single digit trillion dollar asset to a double digit trillion dollar asset? And so that's probably also one of the reasons why like the structural re-rating of the crypto market regime is like potentially different now.
Ryan [20:25]: Maybe it's all of kind of the gold buyers once we have fusion reactors that can turn all of our power plants into gold binding facilities.

Bitcoin buyers and ETF flows

Ryan [20:43]: I think your point about where the big buyers definitely has a, like, there's a question mark for Bitcoin. Another crypto asset where there's a question mark, of course, is Ether and Ethereum. There's been a big divergence, you tweeted this out, in Bitcoin versus ETF flows over the past two weeks. Actually, you've seen these before since you tweeted this, right?
David [21:13]: Usually these things have some amount of correlation to them. So when they don't correlate with each other, it's pretty notable. So Bitcoin ETFs grew about half a percent in total AUM over the last two weeks. ETH ETFs lost 6% in total AUM over the last two weeks, which is like a pretty notable divergence.
Ryan [21:33]: This could be just a rotation, you know.
David [21:37]: It could just be noise, but it's pretty far on the far side of noise.
Ryan [21:42]: Yeah, Ether is definitely looking for its narrative story once again, this cycle, in order to kind of punch through this ratio trend line that we talked about last week.

Hyperliquid, ICE and Wall Street

David [21:53]: The owner of the New York Stock Exchange, ICE, just partnered with TradeXYZ to launch a CFTC-regulated US Venue with Hyperliquid. And then also we have a full-page newspaper ad begging CEOs to keep their stocks off the blockchain.
David [22:14]: But first, we're going to talk to some of these fantastic sponsors that make this show possible. Trade XYZ, which is the biggest HIP3 deployer on hyperliquid, which, what does that mean?
David [22:33]: Stocks, real-world assets, commodities. They've done the pre-IPO markets on hyperliquid.
David [22:44]: So Trade XYZ and the Intercontinental Exchange, which is the parent company of the New York Stock Exchange, are partnering together to build a CFTC-regulated US Venue for 24-7, 365 perps built on hyperliquid. I think the way to think about this is like kind of a competitor to... Well, I guess it's a competitor to the New York Stock Exchange or to NASDAQ. So you can go to the NASDAQ and you can buy assets, or you can go to this new exchange to do perps, oriented towards retail investors, actually, interestingly enough. And so pending CFTC approval, this is going to become a new major onshore US exchange with KYC. All the things that you would expect to have where you would trade on the New York Stock Exchange or the NASDAQ. This is how Hyperliquid is, in theory, coming into the United States market. Hyperliquid is up like 17% on the news, basically touching all-time highs right now.
Ryan [23:45]: I mean, is this not, this is a huge endorsement for a number of things. First of all, it's a huge endorsement for Perps, which again is a product, a financial product, pioneered in the crypto world. I know Joe Weisenthal, sort of like two weeks ago, He had Jeff from Hyperliquid on and sort of, I was wrong about crypto. Secondly, it's an endorsement for real world asset price discovery on crypto rails. So this long tail of assets, again, this is different than the NASDAQ. This is 24 seven, but this is price discovery on real world assets. I won't call them tokenized real world assets and they're like synthetic perps, but it is like you can get price exposure to these things on this platform.
David [24:40]: The tokenized element is like the next step down the tech tree. You start with synthetics and then you unlock tokenized like perps later. But this is absolutely the for what you would expect to get down that path.
Ryan [24:53]: And I guess the third thing, it's all on chain, right?
David [25:15]: Heath Price up 2% on news that the Intercontinental Exchange is building on the EVM.
David [25:25]: Yeah, apparently this is actually Stanley Druckenmiller.
David [25:39]: Tweeted out five hours ago, I'm excited to be an investor in Trade XYZ as they partner with ICE to bring 24-7 perpetual futures on hyperliquity to the United States. As a market participant, I'm looking forward to using their innovative product to enhance my investment process. I'm going to go ahead and get out on a limb here and say Stanley Druckenmiller did not write that.
Ryan [26:04]: I might say he didn't even press the send button on this.
David [26:07]: Yeah, I think Ansem's reply here, I think, says it all. Stan, copy and paste this and go recover your Twitter password to log into Twitter for the first time in eight years and tweet this.
Ryan [26:26]: And not the only Big Bro to cover this. So Elon Musk retweeted Stan Druckenmiller with his character. like interesting tweet on this tweet.
Ryan [26:42]: I mean, you could zoom out and say he's got a lot of supply to sell between SpaceX and whatever he's doing with Tesla.
Ryan [26:58]: There's a lot of issuance, a lot of kind of like a real world asset for him to want to sell to the market. So maybe he's interested in this as a potential market for net new buyers.
David [27:12]: So Shoku, who takes his lead at TradeXYZ, he follows up on the Elon tweet and goes, Hi, Elon. I would love to find a way to get our perpetual futures integrated into X. And you know X is trying to go after Robinhood and try to be like the money app that Elon founded PayPal trying to build in the first place. So you could imagine an X money integration with this US compliant version of Hyperliquid inside of X. Just like adding money into the most degenerate corner of the internet.
Ryan [27:45]: And you said, as you said, hype at all-time highs here in terms of the Bitcoin ratio.
David [27:52]: It is a dollar shy of dollar all-time highs.
David [27:58]: Yeah, it hit $97 back in September of 2026. You know how you've always tipped the hat to Bitcoiners who have just massively memed Bitcoin into existence in a very big way to the point of getting a United States strategic reserve? Like, hyperliquid people got the president of the United States to say hyperliquid on air.
Ryan [28:25]: Well, who got Stan to tweet that, right?
David [28:29]: Yeah, they got Stanley Druckenmiller to tweet.
Ryan [28:36]: On the ICE stuff, and whenever I say ICE, I have to specify this is the parent company of the New York Stock Exchange, which people may be more familiar with that term.

The tokenized stocks conflict

Ryan [28:47]: So earlier this month, it wasn't just the hyperliquid perps kind of deal. Earlier this month, I don't know if you recall, David, but they partnered with the crypto exchange OKX to list a whole bunch of tokenized stocks. So this is not perps, but these would be tokenized stocks, some of the major stocks, NVIDIA, Apple, SpaceX, available 24-7. It was a joint venture, 50% owned by OKEx, 50% owned by ICE, putting the stocks in a Uniswap V4 pool on something called the X-layer, KYC'd wallets only. So this is part of the tokenization story, and parent company, New York Stock Exchange, was involved in this as well. Well, a bunch of the issuers I just named, so Microsoft, Elphabet, Goldman, Coca-Cola, they're not too happy about being listed in this way. And this was listed not in the Perfs way, which is CFTC, but under the SEC exemption rule.
Ryan [29:48]: So that's how they had permission to list this from the SEC. And as part of that rule, apparently, these issuing companies can complain to the SEC. They have 30 days to do this, to write a complaint to the SEC and get themselves delisted from this. So of the 63 or so companies that were listed by ICE slash OKX, 30 of them, over 30 of them asked to be delisted. I don't know if you get the, Wall Street Journal delivered to your house.
David [30:24]: Yeah, I get it mailed to me every single day.
Ryan [30:27]: So you must have seen this in your mailbox. Attention, public company CEOs, your stock, their tokens, your problem. Crypto will soon tokenize, in air quotes, your shares on unregulated venues. You got to contact the SEC and ask them to delist your company from exchanges like OKEx slash ICE.
David [31:11]: So it gave companies who are going to get their stock tokenized the ability to veto that, but they have to do it with inside of 30 days. So if they don't do it inside of 30 days, then there's no going back on that. And so there's a little bit of urgency and it's the option to veto it is free. And if they want to un-veto it in the future, I guess they could. But like it's kind of a weird, weird quirk in that like maybe they do want their stock tokenized.
David [32:11]: Like all of the FBI and the NSA and the CIA and all of them, but whatever.
Ryan [32:22]: It's always all the PAC money, all the political PAC money.
David [32:25]: Oh, yeah, sure, sure, sure, sure, sure. But yeah, it's not something that you would expect to be anti this specifically. So you kind of have to wonder who is doing this and where is the motivation coming from.
Ryan [32:36]: Yeah, I mean, there's a take where maybe the motivation, like the fight here in Wall Street, it seems like ICE and New York Stock Exchange is all over this. They want to do this, of course. but maybe there's other venues who are running some of the rails that stand to lose like the NASDAQ, maybe the DTC. They want things tokenized but in a different form where they could still win, they could still profit and this doesn't quite check the boxes so they're looking to slow things down in order to give them some time to kind of react and come up with their own competitive approach. It does seem to me though that you would get a large enough contingent of Wall Street and even issuers to defect from this because, you're not losing anything as an issuer, provided these are regulated venues, which they are under the SEC exemption.
Ryan [33:35]: More holders, more investors, more saturation, higher, like you would assume, higher share price because you have more exposure and more liquidity and more markets. So this feels like it's just a battle, but it feels like the war to me has already been won.
David [34:00]: Yeah, it feels very much like the same energy of the big banks who are building in crypto at the same time that they are like in Elizabeth Warren's pocket trying to get her to slow down crypto and hire Gary Gensler because they're like, yo, we know this is the future, just we are slow and we need time. This feels very much of the same thing because on the ad, it says like unregulated venues where you don't know who your investors are. I mean, no, it's on Uniswap, but it is with whitelisted KYC wallets. And the only threat there would be is like, okay, your stock is trading on the blockchain.
Ryan [34:45]: It's people that want some time to catch up. This is Anatoly tweeting in response to this about the 33 companies opposing having their stocks listing. If they want to be publicly traded, then they should allow the public to trade them at the venue of their choosing.
David [35:09]: What was super funny was Robinhood listed a JPMorgan token on the Robinhood chain that J after JPM objected to this. And again, the reason why this is okay is because JP Morgan objected to the SEC exemption, which is about putting tokenized stocks onshore, but the Robinhood entity is offshore. And so Robinhood was like, oh, this goes back to my take when I was listening to the whole SEC exemption thing. I was like, No one cares about the onshore versions of these because they're white listed, they're KYC white listed. And so it's the offshore versions that are going to dominate in terms of the investor base in the market and the liquidity and everything. And this is exactly my point is like the objections on the offshore versions.

Onchain stock price discovery

Ryan [35:56]: Well, and one win here, and this is Hayden Adams highlighting this, is price discovery that happens after hours and during times when the stock market is not has not yet woken up and is not active. Google, this Alphabet stock, just dropped 10% on-chain across the board. More and more, Dave, this could become the case where price discovery actually happens on-chain, and then the off-chain markets have to follow up with this. It was sort of this niche, just like only crypto user type thing. And then you just saw prediction markets everywhere across media and podcasts. Now it's like commonly cited if you want to get the price of something. If you're on a Sunday, you want to get the price of whatever in the stock market, and you're in media or your finance or anything, you're probably going to start, looking on chain, looking on hyperliquid, looking on Uniswap for where price is actually getting set during the after hours time.
David [37:10]: I think Hayden's embellishing a bit here just because the Google Alphabet stock, when it posted its earnings and the market didn't like it, and so it traded down 10%, the price discovery was not happening on chain. So the stock market is officially open from 9.30 a.m. to 4.30 p.m. or whenever it is.
Ryan [37:37]: But then they have the after hours extended, right?
David [37:39]: They have extended after hours being extended even further in both directions. So this was the tokens on on chain catching up with normal after hours trading, which is just getting more and more liquid over time.
Ryan [37:51]: I still think that like price of Google was reflected on chain like before it found its way in sort of the off chain traditional markets.
David [38:01]: You think the on chain Google trade? Price-led the trad after-hours market, I think that is a very big take.
Ryan [38:12]: I don't think that liquidity, I don't think that like, yeah, maybe saying price discovery is sort of too much. Maybe what I'm saying is sort of, well, but maybe what I'm saying is price discovery. I don't think on-chain markets are like big enough to move off-chain markets, if that's what you mean.
David [38:36]: And also the very large firms doing Google price discovery based off of its earnings are not pushing markets around on-chain.
Ryan [38:44]: And you're looking for the price of the stock market because Trump has just bombed Iran, then you're going to be looking on-chain or on hyperliquid.
David [39:02]: Do you see when Hayden is typing in Google into Uniswap, I think?
David [39:14]: And there are different prices on different chains.

Robinhood Chain

David [39:29]: Okay, coming up next, we're going to talk about the Robinhood chain. Also, the Zcash or DevFund is at the heart of a Dow drama debate. So put on your 2021 caps because we're doing Dow drama this week. And also this week, Athena releases a 12% yield on your dollar product. We're going to talk about all that and more, but for some of these fantastic sponsors that makes the show possible. Crypto revenue, $120 million, up 20% quarter over quarter. And you would think that that gain would be the Robinhood chain, and you would be right. A lot of people are very stoked about how much money Robinhood is making from the Robinhood chain. I think this is the first quarter that they reported earnings, yes, with the Robinhood chain, which came in at about $50 million of revenue, which boosted Robinhood's crypto P&L line item way more than expected. Robinhood is basically not making any money anymore from Robinhood chain. About $30,000 a day, but that's a 99.6% decline from its peak when it was making something like almost tens of millions of dollars a day.
Ryan [40:57]: So an analyst looking at quarterly earnings, you know, typical Trad5 financial analysts, they see things retrospectively and they're like, oh my God, a $50 million a quarter, let me extrapolate that further. What they're going to have to do in order to extrapolate that is just look on chain where you can actually see the revenue coming in.
David [41:13]: Yeah, you can extrapolate it right now.
Ryan [41:15]: This is sort of a flash in the pan.
David [41:23]: So this is a clip from Vlad talking about the Robinhood chain, saying they're going to try and bring it back. And so now we're spending a lot of time, you know, investing in how to make that even bigger, how to support the community. We know we've been hearing from a lot of builders that, you know, we could be doing more to support the community. And I think you should expect to see us really ramp that up because, you know, we want to make it the best developer ecosystem as well as the best sort of global on-chain community. So, yeah, you should expect to see us ramping the investment because you just don't see growth of a new ecosystem like this.
Ryan [42:07]: He said earlier in that conversation, too, that they were pretty blown away by how much revenue and traction they actually had and Dex volumes and all of these things.
David [42:19]: The level of flurry that happened when Robinhood chain opened up was like pretty big. It kind of like pushed, created the bottom and crypto prices rose, including Bitcoin. There was a tweet that the Robinhood chain ecosystem, the people holding a lot of the meme coins on Robinhood chain, they didn't really like this tweet. And so if you traded specific assets, so like Sui, Graham, which is Telegram, HBAR, which is Hedera, Hashgraph, Ondo, Plasma, Injective.
David [43:05]: And so, like, you trade these assets on Robinhood crypto, and then you get entered into winning potentially $700,000. And so this is them, like, yeah, we're bolstering the Robinhood crypto offering with this incentivized trading sweepstakes thing. And then, like, all of the people holding meme coins on Robinhood is like, this is not what we want.
Ryan [43:27]: Wait, why were they so angry about that?
David [43:30]: Because it's out of alignment with what the actual activity is on Robinhood chain that generated the $50 million of revenue. None of this activity generates any sort of revenue, chain revenue. It's trading fee revenue inside of the Robinhood app, but it is not chain revenue or chain-related activities, which just came from how they made money in the first place. So Eric Conner, spicy as ever, tweets out, Robinhood actually had the nerve to tease this lol lam out even no public support at all for the chain for weeks now and promoting absolute garbage then apparently they reached out Robinhood Crypto reached out to Eric and he tweeted out okay they reached out and want to chat good sign no one has hit the perfect combo of corp chain plus on-chain vibes yet. And so this is what I think the people holding the meme coins are really hopeful for, is that Robinhood, the main Robinhood core app with all of its massive distribution supports the Robinhood ecosystem in ways that are more aligned. I think they're kind of hoping for a new hero out of big after base, fumbled, which I don't even think base fumbled. These are all tokens, were added to Robinhood crypto, added to the Robinhood exchange, just 15 minutes within each other. So they're starting to list some assets on the Robinhood exchange.
Ryan [44:59]: So the crypto Twitter, meme coin bag holders, basically, want Robinhood to list and pump their bags and they're saying that this is also good for Robinhood because that's where the 50 million in MEV revenue, this is how Robinhood chain makes money on MEV. That's where it came from and we're your real community and so you should support meme coins and quote unquote our bags.
David [45:24]: I don't know if it's specifically support meme coins,
Ryan [45:27]: But it's- The activity that we want.
David [45:29]: Which is- Yeah, support activity at the very least, trading activity on Robinhood chain. And so I think you can go back to that Robinhood chain revenue chart And if that goes up, then the trenchers are happy. But the people on Robinhood Chain want money to be flying around Robinhood Chain because...
Ryan [45:56]: It's like Robinhood was blown away by the quarter of revenue that they had. And I think that's going to fuel further investment into Robinhood chain in the future. So I think for the next 12 months, they are going to be ramping up to capture more of this move forward.
David [46:18]: Yeah, it's how they do it, I think, is going to be interesting in matters because the trenchers are just very temperamental and sensitive. And you can't you can't do it in like the silly, stupid way, which is you take the meme coins that have done well on Robinhood chain and you list them on Robinhood crypto. And then you try and get the Robinhood retail people who don't know what they're buying to buy these new flashy meme coins.
Ryan [46:43]: It's like meme coin bag holders saying like, hey, like do the right thing.
David [46:50]: Let us dump on your retail users, which is like a terrible way to do this. My take on this whole thing is like we've seen this movie before of you have the on-chain trencher like meme coin people like asking the leadership of a chain for support. So like my take on the whole thing is that Robinhood chain opened up, you know, the casino opened, everyone rushed in. Other people are left holding the bag, and that's the way that it was. But there's nothing broken about the fact that some people on meme coins just lose.
Ryan [47:59]: Whenever you drop an airdrop, people are pissed because they got free money because it wasn't enough money.

Zcash dev-fund controversy

Ryan [48:10]: I think, to this type of user class if you're Robin Hood and you're thinking about the long game. But speaking of long game, tell me how Zcash is long game when it comes to their treasury because their treasury has blown up. Maybe you should explain the mechanic because Zcash, with respect to its like dev treasury, maybe that's what you call it, public goods, it works differently than Bitcoin and certainly differently than Ethereum.
David [48:38]: So Zcash has a block rewards function. So 20% of the ZEC that's minted every single block gets siphoned off. And then that 20% gets split into 8% and 12%. 8% goes to the ZCG, the Zcash community grants. So, you know, a council of five people that gets to point 8% of Zcash block rewards towards grants. 12% goes to a lockbox that also gets paid out to grants but those grants get allocated based on Zcash coin holder vote and so 20% of Zcash block rewards goes to grants 8% is from a 5 person committee 12% is from Zcash coin holder vote I just
Ryan [49:22]: Say that in itself is surprising if you're coming from the Bitcoin community which, any kind of like block reward subsidy going to anyone besides miners that's heresy and same also in the Ethereum world which had its initial kind of ICO, but has always said no to block reward whenever that's been proposed in the past.
David [49:41]: Like the Ethereum, the different proposals came along on Ethereum and like the community is like, no, no, no, no, this is a bad idea. Don't make political decisions about the nature of the money of the asset.
Ryan [49:56]: And in my mind, like thank God, at least for Ethereum and certainly for Bitcoin too.
David [50:01]: So the drama this week got started when there was a grant given to an organization called Zexy. So Z-E-C-S-Y, but it's like sexy, but Zcash for a booth at an adult, an adult like, like conference convention. Crypto twitter did not like it at all they were like what is this why i don't want my zcash being spent on this like i'm a zcash holder and we're spending money to do adult porn conventions uh there was like it was like a 550 000 grant to this organization to do a bunch of events uh five of them were adult themed industry events it's like
Ryan [50:50]: You're spending my taxpayer money on stupid things.
David [50:53]: Yeah yeah whether or not it was stupid i think there's a very good case that this grant was actually like a valuable grant. But like the fact that there's political fighting about it at all is indicative of the point. It's just like the Zcash fund got so big because Zcash did a 50x now that there's such a big pile of money that people are fighting over what to do with that money.
David [51:22]: So it used to be smaller, obviously, but then Zcash had its incredible price performance. But Q1 spending is spending about $6 million a year on grants because that's just the size that they've grown accustomed to. Because of the Zcash depreciation, the Treasury has 20 years of runway, but that is being added to by that 8% stream. So that's like $68 million a year going into the fund, and they are only spending $6 million a year. 11x what it's been so it's growing so much larger than it's spending uh and so people are like okay the the different critiques are coming out as to or different like options are coming out as to like what to do about this uh sean bowe tweeted out just like it's just too big like the the zcash fund the grants was never supposed to be at this size and so there's sean bowe is is advocating to end the 8% and redirect that to the network sustainability mechanism, which is like the solution to long-term block rewards. So there is this network sustainability mechanism to add ZEC to the long-term tail emissions of Zcash.
Ryan [52:39]: That would be like an annual issuance or something of like, some have argued Bitcoin should have a 1% annual issuance instead of cap at $21 million, right?
David [52:48]: Josh Swihart from Zotel wants to end both the 8% grant committee, but also the 12% coin holder vote. And then the Zekhub, which is the pro grants, has advocated for a soft landing. There's broadly directional support to shutting this whole thing down. How it gets shut down still needs to be the subject of even further Dow drama. Whether or not this was right in the first place, I think, could be debated. I think at smaller sizes, grants like this actually do feel appropriate, but when Zcash is in a tens of billions of dollars size all of a sudden, like, no, no, no, like there's too much of a liability.
Ryan [53:53]: Yeah, but without the public reward, like the block rewards to public goods, do you think Zcash would be where it is?
David [54:04]: So that ended, the founder, the 20% founder's reward ended and was replaced by this.
Ryan [54:18]: I know some people in Ethereum have wanted to see it play out in Ethereum. I'm glad it didn't, but I guess we get to see how it plays out in Zcash.
David [54:28]: I think it works at small sizes, not at big sizes, is my take.

Venice token burns and buybacks

Ryan [54:32]: Venice, throwing up some numbers again.
David [54:36]: Venice breaks $1 million of VVV burn in October. Venice crosses $1 million of on-chain VVV getting burnt. Did you know, Ryan, that Venice burns, VVV burns, are increasing at a rate of about 1% a day? 1% a day.
Ryan [55:05]: And the burns are coming from a few different places, right?
David [55:14]: And so when somebody comes to Venice and they do a paid subscription, there's three different tiers. So depending on the tier, you'd sign up for Venice and you burn $1 for the bottom tier, $2 for the middle tier, or $5 for the max tier. So if you buy $1,000 of API credits, $50 goes to buying and burning VVV on-chain. And then once a month there is a discretionary burn which is the P&L, the founders, the exec team of Venice just look at their P&L for the month being like, well, we have made this much profit. Let's take this amount of cash and buy VVV and burn it, TWOP it and then the remainder of the cash that we have goes to like a buffer for the company but then also can invest it, reinvest it into hiring more and growth.
Ryan [56:10]: However, I still feel like there are some flaws with buyback and burn. It's like right now, the token meta, there's two types of tokens. There's tokens that have no revenue, which are basically uninvestable at this point in time, or they're store value assets or meme coins or whatever. And then there's tokens that have some revenue attached to them, right? Most of the tokens that have revenue attached to them are doing some form of a buyback and burn, which is good because that's value accrual directly to shareholders. It's almost similar to issuing a dividend, but in a more tax efficient way. But I'm somewhat divided on that too, because like the buyback and burn amount, you know number one it's not contractual it's just very arbitrary there's not like a set of laws that um you know delaware laws or something that are like fiduciarily.
Ryan [57:06]: Venice token holders and venice management team has to return, a certain amount of value to token holders so token holders have kind of this squishy guarantee and like management or the project you know maybe there's some norms for this, but they can change their mind on how much they burn and why. And in fact, this is the other argument, you kind of want them to change their mind. Because if the company, if the entity has some sort of capital expenditure to invest in, I would rather them invest and generate returns their capital the way other companies have done in the past, like Amazon, right? I don't want them to return their capital back to me as an Amazon shareholder. I want them to reinvest that so that we can compound together and we can grow. And so particularly at an early stage, you don't necessarily want a company to return funds, buy back and burn its revenue and give that directly to shareholders. So I'm somewhat divided on it and I don't really know where I fall. At the same time, like, um, Tokens are still in this weird place.
David [58:16]: I think the market would be more accepting of companies, tokenized companies, not doing token buybacks if the token was equity. But if the token was not equity, then the market is like, okay, if it's not equity, then what is it?
Ryan [58:40]: Because of our history with shitty tokens that didn't return anything to token holders?
David [58:45]: But also, even outside of that, if it's not equity, then the typical investor would then ask, okay, well, then what is it? And then the only way that you can really prove to the market what it is is by proving that you value it. And so like you could imagine that like if venice for example did not do any burns but it still had its token then all then the market would would regurgitate it it would just throw it up and being like get this token out of here like you don't value it why should i value it but in theory they could be in this world where like well we're just reinvesting in growth right we're gonna like save all this money and we're gonna buy a data center and then we're gonna have like free compute and then we're going to buy back our token. But like because it's not equity, then you don't really have any insurances. You need some on-chain proof that the equity actually does value the token.

Ethena Earn+

Ryan [59:46]: Dude, you had some good news on Athena that they were offering 12% yield on stable coins. But where is the yield coming from?
David [59:58]: Yeah, okay, so this is inside of Athena Pay. I haven't actually poked my head too far down into this, but I would assume it's safe enough for them to offer this inside of like a retail app.
Ryan [1:00:31]: We've already been Alex Mashinsky'd out of you know enough funds in crypto let's make sure this is good risk adjusted return here.

Anthropic IPO and AI valuation

Ryan [1:00:43]: As we close this out I wanted to get your take on the Anthropic IPO so that's coming out and 1.5 to 2 trillion dollars is probably somewhere in the lines of what the market cap will be. And the financials came out for the S1 filings, looked pretty good, actually, better than a lot of people expected.
Ryan [1:01:06]: And then there's the other take, which is, can you afford not to be an AI? For the first time ever, Google search as a percent of revenue is now below 50%. Okay, so this is like the killer business of the past 25, 30 years of the internet has been Google search.
David [1:01:58]: I wish this Google chart went further back in time. It would be percent of revenue from search and is down below 50%. The reason why this is significant is like, you know, you and I and listeners were raised in a particular era. Like search revenue has defined the topology of the internet, how the internet looks and feels as a user.
Ryan [1:02:28]: There were links, there were websites, there was advertising, and then there was Google to sort it all out and, you know, match you with where you wanted to go in advertising.
David [1:02:37]: Do you remember in like, I don't know, elementary school, middle school, when you were doing like research for some essay and you would go down to like the third page of Google sometimes? And then, you know, in the 10s, you stopped ever going to the second page. And then in like, you know, the late 20 teens and early 2020s, you would never go below the first three links ever.
David [1:02:59]: Do I want to own the thing that is making this most resilient revenue chart of all time dead below 50% for the first time ever?
Ryan [1:03:20]: It's because it's Jason Kalkanis' bags and you don't want to support him.
David [1:03:23]: So not just OpenAI or Anthropic, but DeepSea, you know, Quinn, there's like, it reminds me of the L1 trade, where there's just too many. It's just like, it's coming in at a two plus trillion dollar thing.
David [1:03:58]: And also B, we don't even know if the revenues are durable because...
Ryan [1:04:20]: We're taking like last quarter, you know, whatever it was, like was it 16, 17 billion in revenue and we're just like extrapolating that. And we're just being like, this forever plus, you know, 50% gains every quarter.
David [1:04:32]: It feels like 2021 when Ethereum block space was being sold for $70 a Uniswap trade and there was so much infinite money to spawn the new layer one and the new layer one was like owning the world and that ended up actually not being the case at all.
David [1:04:51]: And Anthropic and ChatGPT and OpenAI and like DeepSeq, they're going to have to answer that question. And right now is, if you are selling tokens, like it's a great business model now, I don't know if that's going to be a great business model in 2030.
Ryan [1:05:14]: I think you're right, but it might take a reset for that to happen, as it did in crypto, which is like, this could still run for a while.
Ryan [1:05:29]: Not a buy or an, there you go, on the week.
David [1:05:32]: It's not for everyone, and we're glad you're with us on the Bankless journey.