ROLLUP: Crypto’s Nasdaq Problem | The CLARITY Act | Saylor Selling? | ETH L1 Scaling

TRANSCRIPT

Ryan Sean Adams:
[0:04] Bankless nation is the first week of may we've got another all-time high week with the s&p 500 and the nasdaq dragging bitcoin ether and the rest of crypto up with it i think the question though is with all the corporate earnings with all the stocks at all-time high is are things getting a little too frothy out there and uh i think the price of crypto might depend on the

Ryan Sean Adams:
[0:25] answer to that question.

David Hoffman:
[0:26] Not just that, though, but also the Clarity Act got over a huge hurdle this

David Hoffman:
[0:30] week, which also caused a bump in the crypto markets. The fight's not quite over yet. There are still some hurdles that we need to get over.

David Hoffman:
[0:36] What is left to get Clarity signed by the new date of July 4th?

Ryan Sean Adams:
[0:41] It's also layoff season, it seems like. Big announcement from Coinbase laying off 14% of its staff. But at the same time, we've got fundraise season, two multi-billion dollar VC raises deployed directly into crypto. What's the counter ballast here? What's going to outweigh the other? Also, David, Michael Saylor, is he selling? Did he say that?

David Hoffman:
[1:02] Speaking of raising funds.

Ryan Sean Adams:
[1:05] We also have an update on the Bitcoin strategic reserve, the US strategic reserve, and David, Ethereum layer one, it might be back, David. Okay. And that's a thing that you wanted to happen. You were talking about scaling the layer.

David Hoffman:
[1:17] One to come back.

Ryan Sean Adams:
[1:18] It looks like it's scaling. There was a meeting of the devs in the Arctic Circle. This is real, actually.

Ryan Sean Adams:
[1:24] And out of that comes more ETH scaling. We'll talk about all that and more. But first... Let's get to crypto prices on the week. They've been okay, a little bit down at the time of recording. What are we looking at?

David Hoffman:
[1:36] Yeah, the morning of recording, but really the week was pretty good for Bitcoin, up 4.5% this week. We cleared $80,000 yesterday with confidence. We got up to like $82,000 at the peak yesterday. A little bit below that at the time of recording, but still overall a good week. ETH up 1.2% on the week, a little bit more of a modest week for ETH. But like Ryan said, the markets are kind of like coming back a little bit off of its euphoric highs yesterday. If you were on Twitter yesterday, there was just green euphoria everywhere.

Ryan Sean Adams:
[2:05] Oh, really? On your timeline?

David Hoffman:
[2:06] In the trad market, not in the crypto. In trad markets, yeah.

David Hoffman:
[2:08] In trad markets, in trad markets.

Ryan Sean Adams:
[2:10] Well, I do think trad markets are really the story here. This chart was really the chart of the week for me. This came from the DeFi report, Michael Nato. And he points out that 2026 is the most correlated Bitcoin has ever been to the NASDAQ. This is correlation by year. You're seeing a chart here. So we are more correlated right now with the NASDAQ on Bitcoin price than we ever have been.

David Hoffman:
[2:36] I have a question for how this chart works. If the NASDAQ goes up 1% and Bitcoin only goes up by like a quarter of a percent, But that relationship is consistent. Is that still strong correlation or is it less correlation if Bitcoin is going up any number that's different than how much the Nasdaq went up by? Does that make sense?

Ryan Sean Adams:
[2:57] No, I'm not sure I understand your question, but a correlation means that obviously Bitcoin price is... It goes up or down related in a correlated way. Yeah. In this case, the correlation.

David Hoffman:
[3:09] Coefficient is- I guess my question is like if the magnitudes are different, because the NASDAQ is going up more aggressively than Bitcoin is, but they are still both going up.

Ryan Sean Adams:
[3:18] Yeah, this chart doesn't measure that. It doesn't measure the magnitude, but it does say when stocks go up, when NASDAQ goes up, Bitcoin follows.

David Hoffman:
[3:27] That is confidently happening.

Ryan Sean Adams:
[3:28] Yes. And by the way, 2024, the correlation coefficient was 0.1, and now it's 0.48.

David Hoffman:
[3:35] Yeah.

Ryan Sean Adams:
[3:35] So this basically means that our destiny is in the stock market's hands right now.

David Hoffman:
[3:41] Does this kind of mean that we're kind of like cocked by AI?

Ryan Sean Adams:
[3:44] A little bit. It feels like buying Bitcoin right now feels like, at least in 2026, a worse play on the NASDAQ at this moment in time. It's not going to stay like that, but that's what the regime, that's the regime we're in.

David Hoffman:
[3:56] You're getting price exposure to the NASDAQ, but you're not getting as much as returns of the NASDAQ. That's right.

Ryan Sean Adams:
[4:01] That's a worse NASDAQ? I don't like saying that. I don't think that will always

Ryan Sean Adams:
[4:04] remain true. There were some crypto assets that outperformed.

David Hoffman:
[4:06] Bitcoin's new framing went from digital gold to a worse NASDAQ.

Ryan Sean Adams:
[4:09] That's a terrible brand. Yeah, you can take that, Michael Saylor. Take that and run with it. Zcash, a better NASDAQ, though, on the week.

David Hoffman:
[4:16] Dude, what are we looking at? Zcash has confidently returned, not breaking all-time highs, but it is up to previous all-time highs. $570 for a Zcash. For some reason, privacy is just catching a bid, catching a narrative. There are some other like down market privacy coins like Railgun that also caught a bid this week. Also in the crypto world, VVV, which is Eric Voorhees Venice project, which is private AI. So it's both AI and privacy is right in the Venn diagram of where you want to be.

Ryan Sean Adams:
[4:46] Oh, yeah. Market loves that right now. Yeah.

David Hoffman:
[4:47] Hitting highs that it hasn't seen since token launch, which I don't even really count as like real price action. So $12, 75 cents for a VVV token. What's the market cap on VVV right now? It's pretty impressive, right?

Ryan Sean Adams:
[4:57] Yeah, the market cap, this is not fully diluted, but almost $600 million market cap.

David Hoffman:
[5:01] Yeah, a billion dollars fully diluted. Wow.

Ryan Sean Adams:
[5:04] Yeah, and the market cap Zcash right now, $9.4 billion. By the way, did you see Multicoin came out and said, we've been buying Zcash for the last couple of months, ever since Kyle left, huh? They're into the store value trade. Okay, let's talk about stocks for a second, because that's the big story. Let's look at it on your screen, David. I'm the chart guy.

David Hoffman:
[5:27] I'm the chart guy. So this chart's going all the way back to like December Q4, 2025. But you can see the bottom of the Iran war. And God, we are just, since the very bottom, the SPY is up 17%. And that's across 39 days, which is just nuts. Last week, we were talking about how strong the SPY was. And it hit a record high, a monthly high of 7,200. And today we are at 7,360. Still strong. and 60, or not today, but yesterday at the all-time highs. NASDAQ's even bigger. NASDAQ gained 24% over that same time. And so, you know, these are indices.

Ryan Sean Adams:
[6:03] That's crazy. Can you just pause? Over, like, what, almost 40 days, not even 40 days, NASDAQ is up 25%?

David Hoffman:
[6:12] Yeah, 26% from peak to trough, trough to peak. Yeah, that's just gnarly. That's gnarly. Like you really have to zoom out pretty far to put it in like perspective. But the Iran war, it is up double that then the Iran war took it down, if that makes sense.

Ryan Sean Adams:
[6:29] Okay, so are there sectors that are winning? I remember we were talking about the SaaSpocalypse. That's still getting blown away. I saw in the Mag 7, like Google just crushed it in terms of earnings.

David Hoffman:
[6:38] Yeah, Google briefly took over NVIDIA as the world's most valuable company. That is no longer true at the moment of recording. NVIDIA is back on top, but Google had a big day yesterday. So, like, the sector that is really leading the market is semiconductors. It's like semiconductors are up 12.5% over the last two weeks, which is nuts. And so who is that? That's NVIDIA. That's Intel. Intel's up 60% over the last two months. AMD is up big. so anything that's chip related SanDisk is putting in a record it was the best performing stock over the last 12 months and it's all AI related. The second best performing sector, Ryan, is infrastructure, industrials and that is a combo of conflict defense companies but also AI CapEx build out companies so also the correct Venn diagram to be in in this particular moment and those two sectors are just leading the market and so really what's happening is AI is dragging the whole entire market up in a very big way. Industrials is also contributing. Financials is a wash. Like a lot of other stuff is a wash. And then things like utilities and energy, which is down on the week, which we'll talk about when we get to the Iran war section, that's dragging the rest of the market down, but it's just like not in any way that overshines AI.

Ryan Sean Adams:
[7:53] Well, thanks, AI, for bringing Bitcoin above 80K. Corporate earnings were part of the story here, right? I mean, what's the, like, overperformance? Was it 84% of all corporate earnings this quarter beat analyst estimates?

David Hoffman:
[8:10] So we're in earnings seasons at the moment. 63% of S&P 500 companies have reported earnings so far this quarter. Like you said, 85% of them have beaten earnings. And this isn't like they eked out a earnings beat. No, they crushed. Broadly, they crushed. Companies are reporting 20% earnings above estimates on average. And also, this marks the sixth consecutive quarter of double-digit earnings growth for the S&P 500. So corporate returns, corporate earnings, strong. Strong.

Ryan Sean Adams:
[8:45] You know why? It's all in the back of AI, right? Anthropic is a huge company in this. Anthropic locked a deal with SpaceX to get more compute, so compute was a limiter. Part of this story is I can tell you that my demand for AI tokens is insatiable.

David Hoffman:
[9:00] I'm consuming more tokens than I ever have. I ran out yesterday for like this fourth or fifth time.

Ryan Sean Adams:
[9:06] Fourth or fifth time over what period of time?

David Hoffman:
[9:09] This year, like last month.

Ryan Sean Adams:
[9:12] Okay. I am now running out. So I do $50 increments. Yeah. Okay. I'm running out two to three times a day.

David Hoffman:
[9:20] You're just pulling out the credit cards, like swiping it again.

Ryan Sean Adams:
[9:23] Well, I did my first $250 purchase today.

David Hoffman:
[9:26] Yeah, because on a thrombic, you get a bigger discount the larger you pay.

Ryan Sean Adams:
[9:29] Yeah. So I was like, oh, no, I'm going to use it. But I don't know if it's becoming a problem. It's just so damn useful. I think I'm channeling it into something that's productive. I absolutely do. But my demand is insatiable. And I got to think, like, if the rest of the market is doing this as well, it's kind of dawning on everyone that this can make them more productive, that this can save them time, that this can drive revenue and efficiency. Everyone's demand is insatiable. That's what's causing all of the overperformance in the AI boom here.

David Hoffman:
[9:59] So there's been a ton of conversation of just like, it's the AI bubble,

David Hoffman:
[10:02] the AI bubble. It's all a bubble. It's going to come crashing down. So anthropic earnings are growth, revenue growth is up 80x in Q1.

Ryan Sean Adams:
[10:12] That's never happened. That was not the dot-com boom.

David Hoffman:
[10:14] What the F, dude? 80x earnings and year-over-year growth in revenue and usage in Q1 2026.

Ryan Sean Adams:
[10:21] Can you say the words this time is different? Like, I don't want to say those words, but, like, this is a different story. I've never seen this before in markets.

David Hoffman:
[10:29] I mean, this goes back to the debate of, like, we did this debate on Bankless. Is AI normal technology or is it a fundamental paradigm shift?

Ryan Sean Adams:
[10:39] The thing is.

David Hoffman:
[10:40] Like- 80X earnings year over year, wild.

Ryan Sean Adams:
[10:43] All I can say is just, it's not about reading headlines. I think that the closest thing any investor can do is look at how they're actually using it. And my demand, my use, the utility to me has only gone up and to the right. And so until that stops happening- That's.

David Hoffman:
[10:58] Not a narrative. This is my lived experience.

Ryan Sean Adams:
[11:01] You agree, right? I'm not crazy. Yes, totally. And you see some of the output of like that, some of the ways I'm using it with AI. I'm not in some kind of AI psychosis.

Ryan Sean Adams:
[11:09] it's useful? Is it useful?

David Hoffman:
[11:11] Yeah.

Ryan Sean Adams:
[11:12] All right.

David Hoffman:
[11:13] Yeah. I mean, so we can actually kind of take a look at Anthropik's valuation in the market from various derivatives. This is on Hyperliquid. Anthropik's coming in just shy of $1.2 trillion in the private market. This is all implied. He's not actually trading shares. This is his derivative, but it's useful. It's directionally useful. $1.2 trillion as a pre-IPO valuation. Bitcoin is $1.6 trillion. What? And Anthropik is almost a Bitcoin, dude. What?

Ryan Sean Adams:
[11:42] And is Bitcoin cheap or is Anthropic just that damn good?

David Hoffman:
[11:48] Bitcoin is definitely cheap.

Ryan Sean Adams:
[11:50] What would you buy at this price? What would you rather own at this price? Would you rather own at the same price, Bitcoin and Anthropic, which seems like total market cap is about the same, which would you rather buy right now?

David Hoffman:
[12:01] That is a really good question. I don't really like, I like buying Bitcoin in trillions because of just what it is.

Ryan Sean Adams:
[12:10] Yeah.

David Hoffman:
[12:10] I don't like buying any equity in trillions, unless it's like in a retirement savings context, like Google, for example, whatever that is, like $4 trillion. But I feel safe with that.

Ryan Sean Adams:
[12:21] Well, good news, David. You can't actually buy it, right? You can own a little perp.

David Hoffman:
[12:24] Why are you even bothering me with this question?

Ryan Sean Adams:
[12:27] But it's private. You get none of this until they go public and they IPO on retail, dump on retail.

Ryan Sean Adams:
[12:32] So the question is, is all of this getting a little bit too frothy? There are definitely some people who say yes. So this is a tweet from Jason Gopfert. Is that how you say his name? Gopfert? Sure. Okay. He said, Today will be the second consecutive day the S&P 500 closes at a record high with more than 4% of its stocks hitting 52-week lows. Okay. So two data points here. Second day the S&P closes record high with more than 4% of its stocks hitting 52-week lows. And he says, Anyone want to guess the only other time in 100 years this has happened? And there's a book called 1929 by Andrew Ross Sorkin in the tweet.

David Hoffman:
[13:13] What's the point he's making? I think I would be more scared if all equities were going up and to the right. But if some equities are going up and to the right and up or going down, to me, that's like, yes, that's how the market ought to work. Somebody is clearly being rational somewhere.

Ryan Sean Adams:
[13:30] I feel like this is just maybe two data points that he found on 1929 that are mapped to today.

David Hoffman:
[13:36] You can do a lot with two data points.

Ryan Sean Adams:
[13:38] But, okay, there are other better, let's say, bear cases. One is just like, we know what's happening with U.S. federal debt, don't we? Like, this has got to hit us. I saw last week, David, that this is the first time since 1946. You remember what happened in 1946?

David Hoffman:
[13:57] Yeah, I was there.

Ryan Sean Adams:
[13:58] Yeah, okay. in one of David's previous lives. We just, the U.S. had just fought a war. Yeah. And so all the war bonds, all the debt, we just passed the federal debt held by the public as a percent of GDP, 100%. And the only time we've ever been higher was 1946.

David Hoffman:
[14:14] So that just means that the government owes the public a lot of money?

Ryan Sean Adams:
[14:18] Mm-hmm. That's right. Our government debt has never been higher is what that means. We're at wartime level debts. The level of debt that it took to go defeat Hitler and the Nazis. That's the level of debt we're in right now. And look, look at this. We did this in 2000, the year 2000, which is in our lifetimes. We were at 31%. Okay, so since the year 2000, we went to 100% of federal debt held by the public as a percent of GDP.

David Hoffman:
[14:47] What did we spend it all on? What did we do with all that money? What did we get out of that?

Ryan Sean Adams:
[14:51] I mean, there were some wars. It wasn't a World War II, but where else did it go?

David Hoffman:
[14:56] Yeah, I don't know, man. Okay. That's a good question.

Ryan Sean Adams:
[14:59] That's the debt story. You also have firms like Berkshire Hathaway. They have announced their cash balance is now up to a record, almost $400 billion.

David Hoffman:
[15:08] They are aggressively selling into the market, which is what they do when markets go up. Markets go up, Berkshire sells. Markets go up even more, they sell even more. but like there is an acceleration here

Ryan Sean Adams:
[15:18] Look this is the 14th consecutive net quarterly sale, 14 consecutive sales they've been selling into this market for a while and the cash on reserve they have is above 30 this is uh warren buffett this is what he says about the market i want to play this for you david what does this feel like to you is does it feel expensive does it feel like there are opportunities in some places feels like, You know, I've compared the markets to a church with a casino attached.

Ryan Sean Adams:
[15:49] And people can move between the church and casino. And I would say there are more people in the church and more people in the casino. But the casino has gotten very attractive to people. The casino has gotten very attractive to people, is what Buffett says. This is the reason for their cash position. Stocks are not cheap. He said in his 60 years of investing, there's only been about five years that felt inexpensive to him and cheap. So he is absolutely playing the long game, does not like the price of stocks right now.

David Hoffman:
[16:17] Does he have time left to play a long game?

Ryan Sean Adams:
[16:20] He's a legend, dude. Warren Buffett is 95 years old. Imagine being as coherent as that in 95. Look, he's built a legacy. Berkshire, I'd say, is playing the long game.

Ryan Sean Adams:
[16:34] Legendary investor. So, I mean, what do you think? Are we frothy or like, is the AI token demand insatiable? Is that going to pull everything else up?

David Hoffman:
[16:44] I'm not one to play the long game. I'm one to be in the market.

Ryan Sean Adams:
[16:49] That is the long game. What are you talking about?

David Hoffman:
[16:52] But he's selling because he's like, these are expensive and I'm going to wait for these things to be cheap. And I'm in, we are in unprecedented times. AI is novel and unique.

Ryan Sean Adams:
[17:04] You're scared to be out.

David Hoffman:
[17:05] I'm scared to be out. I'm always scared to be out. I don't want cash. I want company. Why would you want cash?

Ryan Sean Adams:
[17:12] Look at the cash chart. Look at the debt to GDP.

David Hoffman:
[17:15] Yeah, man.

Ryan Sean Adams:
[17:16] I understand that. I understand that too. All right. Well, we'll have to see how this all plays out. But what about Iran? What's going on there?

David Hoffman:
[17:23] Yeah, both not a lot and something at least somewhat notable. And so Monday, Trump announced Project Freedom, which is basically an attempt to open the Strait of Hormuz by brute force. He said that the U.S. will just manually guide and protect ships to assist them in crossing the strait. Iran, of course, didn't like that. They really depend on the strait being closed. So they sent missiles and drones towards the U.S. Navy, which the Navy intercepted. Iran also sent missiles and drones to strike a UAE oil facility. One actually did land and caused a fire, which I think is what might have caused Trump to put a pause on Project Freedom just less than 48 hours later. He said that we are now back to talking in Pakistan to get a deal done with Iran, which is basically where we stand now. After a quick skirmish in the straight, we are now back to pausing while a deal is potentially being formulated and discussed. And so... It seems nothing has really changed this week in Iran's trade over move is still closed. We are still talking about a deal. The deal is being dangled in front of investors by Trump as it is every single week. Okay. I'll kind of propose that even though nothing's really changed, something kind of has fundamentally changed.

Ryan Sean Adams:
[18:34] What's that?

David Hoffman:
[18:35] And that is oil is down big this week.

Ryan Sean Adams:
[18:37] Sure.

David Hoffman:
[18:38] Oil is down 15%, 15% to 18%, depending on where you look.

Ryan Sean Adams:
[18:42] Why?

David Hoffman:
[18:43] Because it is. I don't know. I don't know. I don't know why. It just is. And that's important. And so if oil is down 15% and 18% respectively between WTI and Brent, that's really good for the global economy. So pain is being felt less. 10-year yields down 2.7% over the week. Also great for the United States not experiencing as much pain. And so where did we leave things off last week? It's like, oh, this is a pain tolerance game. It's a pain tolerance. And with the equities at all time high yields down and oil down, all of a sudden, Iran is still feeling all of the same pain that it was prior because they're isolated and cut off. And the rest of the world is feeling less pain. And so that's what's changed.

Ryan Sean Adams:
[19:26] Well, I guess we'll check in on the pain pendulum.

David Hoffman:
[19:30] Shifts next week.

Ryan Sean Adams:
[19:31] And just checking in on the poly market that we usually do. So the odds of a permanent peace deal between the U.S. and Iran by June 30th, which, man, that's coming right up. We're almost there. It's 53%, so it's still pretty high. By the end of the year, 74% on Polymarket.

David Hoffman:
[19:48] Notably, the June 30th date, 55%, as you said, is up 14% week over week. So a big green jump in that over the week.

Ryan Sean Adams:
[19:56] Okay. Well, I mean, Polymarket knows things that we don't somehow. So I'm sure that's a good sign for this being ended a little bit sooner. David, we got more to talk about, which is when will the Clarity Act actually

Ryan Sean Adams:
[20:08] happen? We have a date of July 4th. What's the probability that we hit that? Also, did the banks win that deal or did we get what we wanted out of it? Coinbase layoffs, we'll talk about that. And Saylor on the record, he said this. He intends possibly to sell Bitcoin in order to pay a dividend, but he used.

David Hoffman:
[20:27] To ask for A sentence never uttered before by Mike Saylor.

Ryan Sean Adams:
[20:30] Yes, what does it all mean? We'll get to all that more. But before we do, we want to thank the sponsors that made this episode possible.

David Hoffman:
[20:36] The Clarity Act got over a big hurdle this last week. We had a tweet from Senator Tom Tillis, who is one of the main senators pushing this forward. He tweeted out, We have worked in good faith on all sides. The result is a substantially improved consensus-based product. Our compromise prohibits stablecoin rewards from resembling interest on bank deposits. Our core concern over deposit flight. Some in the banking industry may not want either of these things to happen. And we respectfully agree to disagree. But nonetheless, there seems to have been a compromise. We'll talk about the nuances there. But then we also have a date, a target date for signing by July 4th.

David Hoffman:
[21:18] And so we're not there yet.

Ryan Sean Adams:
[21:19] But that is kind of this. The 4th of July, really?

David Hoffman:
[21:21] Yeah, the 4th of July. Yeah, that is the date being projected and like, hey guys, everyone rally, get the troops, get the last bits of things debated on because we want this signed by July 4th. And so... We're over this one potential hurdle.

Ryan Sean Adams:
[21:36] Well, where we left things, it was all about yield, right? And the banks wanted their yield back. They realized that they forgot to negotiate harder over the Genius Bill last week. And so they wanted kind of a do-over. And they didn't like the fact that Coinbase and other crypto exchanges could essentially give their users deposit or stablecoin yield.

David Hoffman:
[21:56] Yeah, in a roundabout way. In our mind. Yeah.

Ryan Sean Adams:
[21:59] The bankless stake here has always been, look, guys, the banks are just taking the yield. They're trying to protect their monopoly interest.

David Hoffman:
[22:08] They don't have any good reason for keeping monopoly over that yield.

Ryan Sean Adams:
[22:11] And that remains true. This is why previously Coinbase backed out of the negotiation. Still, they are a powerful lobby group in D.C. And in order to get things done, apparently, you have to appease the banks in some way. So there was a compromise that seemed to have been reached over this stablecoin yield issue. It's somewhat nuanced, though. We'll have to talk about who really won the issue, but what are the details here?

David Hoffman:
[22:38] So Faryar, the chief policy officer over at Coinbase, he tweeted out, in the end, the banks were able to get more restrictions on rewards, but we protected what matters, the ability for Americans to earn rewards based on real usage of crypto platforms and networks. And so big asterisks there, big, like, that's the compromise here.

Ryan Sean Adams:
[22:57] Wait, what is that? Can you go over that again? So if the stablecoins are just sitting there, they can't provide rewards. But if the stablecoins are being used in some way, then possibly there's a backdoor to provide rewards to users?

David Hoffman:
[23:13] Yeah, so Alex Thorne, the tweet from Alex Thorne is probably most helpful here. He's the one who drilled right into the actual verbiage. He said stablecoin yield cannot be paid solely in connection with holding is the words. So idle balances or in a manner economically or functionally equivalent to bank deposits. And so I think that that wording is like, if it looks like a bank deposit, you can't pay yield.

Ryan Sean Adams:
[23:41] I wonder what that means. So if it's probably if it's just on Coinbase sitting in a custody custodial Coinbase account.

David Hoffman:
[23:47] If you are doing set and forget behavior, I think the banks will then argue that that is like a bank deposit and you cannot pay yield on that.

Ryan Sean Adams:
[23:56] What if the stable coins are on base in DeFi or something like that? That does not look like bank deposits. Yeah, that doesn't look like bank deposits.

David Hoffman:
[24:03] Yeah. Right? Yeah. I mean, I think this is where it gets very squishy. And so what is banned in Section 404, this is the section we're talking about, covered parties paying interest or yield to U.S. customers solely for holding stable coins. What's allowed is, these are the words, activity-based or transaction-based rewards, payments, transfers, market-making, staking, governance, or loyalty programs. And this will get updated within one year by the SEC, CFTC, or Treasury joint rulemaking about more clarity around that.

Ryan Sean Adams:
[24:37] Oh, the SEC and CFTC and Treasury get to jointly rule make.

David Hoffman:
[24:41] Yes. And so this issue is kind in some way kind of being punted, but with a pretty clear like flag planting by the banks saying if it looks like a bank and it quacks like a bank, you guys don't get to pay yields. But then there are these words, activity-based, transaction-based rewards, payment transfers, market-making, staking, governance, loyalty programs. And then within one year, the SEC and CFTC and Treasury will do joint rulemaking. Which, by the way, those are our guys. Those are our guys.

Ryan Sean Adams:
[25:11] Right now, they're very crypto-friendly, right? Yeah. Okay, so that's why Coinbase must have thought that this is a compromise that they could somewhat deal with. Yes. Okay, so my understanding, though, is that this issue is kind of closed, but not all the way closed. There was a report from Eleanor Tarrant that banking trade groups plan to actually revamp and ramp up outreach to additional members in the coming days. And so they're not quite sure that this is.

David Hoffman:
[25:39] Enough of a closure. Yeah, because I think what they're doing is they're kind of just like drawing the lines, but then also punting the fight.

David Hoffman:
[25:46] Okay. And so there's like, yeah, no idle yield. If it looks like a bank deposit, you can't do it. But then also we're going to give this up for interpretation later, which is why it feels like we kind of got over the hurdle by simply moving the hurdle to a different place.

Ryan Sean Adams:
[26:02] I see. Now regulators get to decide if you have crypto friendly, they might do that. If you have anti-crypto, they might do that. Wow. That's fun. Okay. So did the banks win in your mind?

David Hoffman:
[26:11] It's TBD, dude. It is TBD. Partially because they got their line in the sand. As in, like, you can't just have naive bank deposits, which is kind of what I was excited about. Like, going bankless, doing, like, taking banking away from the banks, like, all this kind of stuff. The simple path to get there seems to be closed.

Ryan Sean Adams:
[26:30] Well, maybe it's still there for you, David.

David Hoffman:
[26:32] The creative, complex, a little bit convoluted path definitely still open.

Ryan Sean Adams:
[26:37] Yeah, like if it's on base, for instance. Yeah, it's like, what does loyalty participation look like? I mean, you look pretty loyal. You're a pretty loyal guy. Yeah, I look loyal.

David Hoffman:
[26:47] I'll press a button every now and then. Remember to claim your rewards. I'll be as loyal as you want and press the claim button. And also vote on something, you know?

Ryan Sean Adams:
[26:55] That's right. That's right. Okay, there's still some stuff left to do here, though. You remember the developer in DeFi protections that was kind of baked into earlier versions? It was called the Blockchain Regulatory Certainty Act. Care a lot about this. Coin Center has talked about this. That is still a little TBD. They're going to have some negotiations about it this week. It doesn't seem so contentious, but if we got that in Clarity Bill, that's a huge win. So still crossing our fingers on that. And also, this might actually be the thing that derails the entire Clarity Bill.

David Hoffman:
[27:25] All of this might be just for nothing.

Ryan Sean Adams:
[27:26] The ethics provision, David. What's the ethics provision, Ryan? There are some senators that are hardlining on the Trump family crypto activity. And the White House is basically saying, hey, like there can't be conflict of interest here. You have to tone down the world liberty finance, probably all of these things. Right. And the White House says it's not going to accept any language like this because, of course, the president doesn't want to be individually singled out. So this is another thing that requires a different type of compromise in order for the Clarity Act to go through. It might derail the whole thing. Poly market, David, has shot up, though, to a probability of, at the time of recording, mid-60s. So it got as high as almost 70% in terms of a clarity acting side.

David Hoffman:
[28:14] It was down like 45% not terribly long ago.

Ryan Sean Adams:
[28:16] It was. I mean, just last week it was down in that.

David Hoffman:
[28:19] So we went from 46% to 66%.

Ryan Sean Adams:
[28:23] Yep. So this is pretty good. I like these odds. It's much better. It's better than a coin flip. And I think it's pretty accurate. So we'll hope for that.

David Hoffman:
[28:31] Dude, the real question is, what are the odds that Donald Trump refuses to budge? He's like, no, I like my grifting. Don't take my grifting away from me.

Ryan Sean Adams:
[28:41] I don't know. Maybe he'll have some sort of grift loophole still, you know, just if he's actively grifting.

David Hoffman:
[28:47] Based on loyalty rewards.

Ryan Sean Adams:
[28:48] Yeah, based on loyalty. There were some layoffs this week from Coinbase as well.

Ryan Sean Adams:
[28:53] They let go of 14% of their staff. At the same time, we have two pretty large multi-billion dollar VC raises. Tell us about this.

David Hoffman:
[29:03] Yeah, so this is actually kind of a market cycle rite of passage. Coinbase has laid off employees at the bottom of every single cycle. I remember this happening in 2018. This happened in 2022. And now this is happening again in 2026. As you said, 14% workforce reduction. Talked about AI saying like we're rebuilding the company to be less layered. So five maximum layers from Brian down to... the bottom, whatever you call it, the bottom of the org chart, five layers max, and also no peer managers. So there are no peer managers at Coinbase, according to Brian. Everyone is at least somewhat of an individual contributor.

Ryan Sean Adams:
[29:41] I don't think this was AI, though. I mean, I think it was like...

David Hoffman:
[29:44] I think AI is a useful scapegoat. It makes everything more tolerable.

Ryan Sean Adams:
[29:49] Yeah, and I don't even know if it's a scapegoat, really. He didn't say that this was the reason, necessarily. He just said, we're going to take this opportunity for efficiencies, right? Sure, sure. To your point, they've done this every single cycle. There have been 1,200 layoffs in crypto in the past five months. So Coinbase 700. Coinbase being the big one. Yeah, that's the big one. And to your point, fun fact, these layoffs previously from Coinbase have marked the bottom. So June 2022, 18% of the workforce, they laid off.

David Hoffman:
[30:22] Wasn't quite the bottom, but pretty close.

Ryan Sean Adams:
[30:24] Yeah, pretty close, pretty close. So this happens.

David Hoffman:
[30:25] I won't call it a bottom ticker, but it is a bottom signal.

Ryan Sean Adams:
[30:29] I agree. I agree. Now, let's talk about the raises, though, because this is the other side of that. So if that's the bearish news, layoffs, there were some pretty big VC raises. A16Z and Han Ventures, is that right?

David Hoffman:
[30:42] Yeah.

Ryan Sean Adams:
[30:43] And the total between them, $3.2 billion. Yeah.

David Hoffman:
[30:46] The timing of this was actually kind of funny. Han Ventures announced their $1 billion raise on Monday. And then Tuesday, A16Z comes in and says, we raised $2.2 billion.

Ryan Sean Adams:
[30:57] Chris Dixon just like dropping it.

David Hoffman:
[30:59] $3.2 billion is not a small amount of money by any standards. These are crypto funds. And they're not the only one. So Dragonfly previously raised $650. Parify raised $125. Blockchain Capital is raising $700 million. paradigm, which is not just crypto. It's also AI and robotics, $1.5 billion. So closing it on $6 billion. Crypto and now crypto adjacent funds. And so you can't really be bearish. This is healthy for the industry.

Ryan Sean Adams:
[31:30] New capital.

David Hoffman:
[31:31] New capital, new round of startups, refreshed for what it takes in 2026. I think kind of the big question is, what are these people deploying into?

Ryan Sean Adams:
[31:40] Well, did you read it? So it was new financial infrastructure, a lot of stable coins mentioned, new assets and markets, agentic economy, that kind of thing mentioned. Things not mentioned, I didn't hear much DeFi, for instance. Now, Hasib reminded everyone that all of these funds, including, by the way, Dragonfly, their mandate is broad, so they can totally deploy into Bitcoin and Ether and Zcash and any other liquid crypto token out there as well. But that was not the stated reason for the fundraise this time.

David Hoffman:
[32:13] No layer ones, no DeFi apps, no NFT platforms.

Ryan Sean Adams:
[32:16] Notably missing.

David Hoffman:
[32:17] What else? Yeah. Yeah. Lots of tokenization, lots of Wall Street stuff, lots of neobanks, lots of payment stuff.

Ryan Sean Adams:
[32:24] As you'd expect in 2026. David, Michael Saylor said the words out loud, the thing he should never say, that he was thinking about maybe at some point selling some Bitcoin. This was all over my feed this week.

David Hoffman:
[32:39] Why would he sell Bitcoin? What would he need to sell Bitcoin for.

Ryan Sean Adams:
[32:40] I think he's got to pay some of the people that are lending him funds.

David Hoffman:
[32:45] Lending him funds to buy Bitcoin. Yeah, that's right. So he's Being lent funds to buy Bitcoin, and then he's selling Bitcoin to pay the dividends for the capital requirements for the people who he sold the equities to.

Ryan Sean Adams:
[32:58] He's selling a little bit in order to raise kind of the interest payment dividend type fund. I don't believe it.

David Hoffman:
[33:03] It's fake. He never said it.

Ryan Sean Adams:
[33:05] It's not fake. Let's play the clip so people can hear it. You buy Bitcoin with credit, you let it appreciate, and then you sell Bitcoin to pay the dividend. And as long as you're issuing credit and access of the breakeven point, then this business works and grows forever.

David Hoffman:
[33:25] So you know what I love about this, Ryan?

Ryan Sean Adams:
[33:27] Yeah.

David Hoffman:
[33:27] You and I would debate with Bitcoiners as a pastime in years past. One of our most fundamental arguments against Bitcoiners is that they always have this fundamental assumption that Bitcoin just goes up forever. It's in the Bitcoin security budget arguments, and it's now in Saylor's quarterly earnings report of you buy Bitcoin, you wait for it to appreciate, you sell a little bit of Bitcoin to pay back the dividends.

Ryan Sean Adams:
[33:54] Yeah.

David Hoffman:
[33:56] All Bitcoin has to do is appreciate.

Ryan Sean Adams:
[33:58] I mean, I think it works, though, honestly. I just don't hate it. I think it all works. It's not a lot of Bitcoin that he would sell, but this is him opening the door in order to do that. And I think this is, he needs to do that with products like Stretch, right? You need to have this option. The structure of strategy this time around is much different than it was previously. And the only way you're going to entice more stretch buyers is to actually open the possibility that you may have to sell some of the underlying Bitcoin as collateral in order to pay them back. Or they're not going to continue buying your stretch product and your other preferred shares products.

David Hoffman:
[34:37] I think that's totally right. I think you and I, I bought a little bit of stretch, like $500 of stretch just because. And the reason why I'm not doing more is because like, oh, what if Sailor wipes me out? Like, what if he goes like, oh, I ran out of money, but I'm definitely not selling my Bitcoin. So Stretch is going to zero. So that's why it can't be a savings account. But if Saylor is publicly saying, I will sell Bitcoin to fund the yields, it probably opens up the TAM for the

David Hoffman:
[35:05] interested buyer of Stretch, which opens up his ability to buy more Bitcoin now. And really, I actually don't think there's anything fundamentally wrong with this.

Ryan Sean Adams:
[35:14] Of course, there's nothing wrong.

David Hoffman:
[35:14] What is his whole deal is he is arbitraging timeframes. And so if people want 11% now and Michael Saylor wants 30% later because he thinks that's what Bitcoin is going to appreciate by over the long term, he will give you that arbitrage opportunity.

Ryan Sean Adams:
[35:33] That's right. What's wrong with it, if there's anything wrong, is it's off script. Michael Saylor, at every point, never sell your Bitcoin. Never, ever sell your Bitcoin.

David Hoffman:
[35:43] He literally tweeted out, sell your kidney if you have to. So is he going to sell his kidney before he starts to sell Bitcoin to pay back?

Ryan Sean Adams:
[35:51] No, I think he's got to pay some preferred shareholders.

David Hoffman:
[35:52] I think he should do it as a bit. Sell his actual kidney? Before he sells any Bitcoin to pay stretch dividends, he should sell his kidney first.

Ryan Sean Adams:
[36:02] Yeah, that's right. How convicted is he? If he's not willing to sell his... Come on. He's got two. He said it. How many chairs are you sitting on? How many kidneys do you have, Michael Saylor?

David Hoffman:
[36:12] How many kidneys do you need?

Ryan Sean Adams:
[36:12] How many do you need? That's a great idea. I hope he's listening. David, coming up next, we got to talk about Ethereum. It is scaling. There was a meeting of the devs in the Arctic Circle. I want to tell you about that.

David Hoffman:
[36:25] The high summit.

Ryan Sean Adams:
[36:26] Yeah, a summit. Also, the Strategic Bitcoin Reserve, an announcement that within weeks, there's going to be something to announce.

Ryan Sean Adams:
[36:33] I actually have a bullish take on this. We'll get to all this and more. But before we do, let's thank the sponsors that made this episode possible.

David Hoffman:
[36:40] Ryan, let's get back into the Arbitrum DAO Layer Zero kelp hack story. Do you remember where things left off with that? Arbitrum had frozen some funds on its chain that they were just kind of waiting for Aave and the rest of the ecosystem to figure out what they want to do.

Ryan Sean Adams:
[36:55] They were part of DeFi United, right? And so those frozen funds were going to contribute towards the restoration of the RS ETH collateral.

David Hoffman:
[37:03] Yeah, there's like 116 Ether hole from the exploit. Arbushram was able to recapture 31,000 ETH that it yoinked from North Korea.

Ryan Sean Adams:
[37:13] Is that like 60 million, 70 million?

David Hoffman:
[37:15] Yeah, 70 million, I think. There's a small little hiccup that happened, which is kind of posing a big question about DAOs and DeFi. There was a court order from the U.S. District Court of the Southern District of UNORC issuing a restraining order on Arbitrum Dow from moving the 31,000 Ether that it froze from North Korea. Why and how and what happens next? The order introducing a competing legal claim from a completely unrelated case. Unrelated people who also have damages, damage claims against North Korea for unpaid terrorism judgments against the DPRK. With claims totaling over almost a billion dollars.

Ryan Sean Adams:
[38:01] Nothing related to crypto. Nothing related to crypto.

David Hoffman:
[38:04] But there are these people who have legal claims against North Korean assets.

Ryan Sean Adams:
[38:10] Okay, there's some U.S. court that said, okay, yes, Kim Jong-un and North Korea owes you guys $877 million. And that claim has just been outstanding somewhere.

David Hoffman:
[38:19] Yes. And so these people's lawyers argue that the frozen ether constitutes North Korean property.

Ryan Sean Adams:
[38:26] Oh, oh.

David Hoffman:
[38:28] Because Layer Zero attributed the April 18th hack to the North Korea Lazarus Group, because the hack was done by the Lazarus Group. And so therefore, it's North Korean property. And there are these people who have claims on North Korean property. Okay. And so the New York court said, Arbitrum, don't move that ether. That ether is contested.

Ryan Sean Adams:
[38:47] It's contested. Contested. Okay, they didn't make a ruling on it. There's no way this holds up. There's no way you can say if.

David Hoffman:
[38:53] A thief steals something. I mean, I'm not a lawyer, but like, holy hell, no way, dude.

Ryan Sean Adams:
[38:58] That's what Aave is essentially saying. I did see this tweet. Aave LLC has filed an emergency motion to vacate a restraining notice served to the Arbitrum Dow. So Aave getting involved here about the 71 million in ETH. And he said this. This should be pretty obvious, I think. A thief does not gain lawful ownership of stolen property simply by taking it. And the law is clear on this. All right. So if the law is clear, what's up with this hold order? Or how did like why is the court doing this? And what's the legal team behind this?

David Hoffman:
[39:31] Yeah, I think it's really who is the legal team is the very big question. Because this is the same lawyers that in 2021 sued Compound and Aave in frivolous lawsuits and also pooled together. Okay. This was there was this Elizabeth Warren staffer or ex-staffer.

Ryan Sean Adams:
[39:46] They were involved in that?

David Hoffman:
[39:47] Yeah, who put like $26 into pool together a prize linked no loss lottery. And then lost the money because of gas. It was like gas payments or something. Right. Like lost because of gas payments. They go to this same law firm and they file a frivolous lawsuit, which Pool Together had to fight for years. Right. And won, but completely sucked Pool Together drive funds fighting the legal case. So the intent- And these are the same lawyers.

Ryan Sean Adams:
[40:14] The same lawyers. Okay. The intent there in that case, in the Pool Together case, seemed to be just to cause a ruckus in DeFi. Cause a ruckus. Right. Just sow some chaos. Yeah. Is that the same intent here? or are they actually more like because you know obviously the ambulance chaser type of lawyers with frivolous lawsuits their incentive is generally to get you know some commission on the the legal payout there there's a profit incentive there are you saying this is more of a like we hate defi when so some chaos or is there a profit incentive here for this law firm i.

David Hoffman:
[40:43] Don't know how else not to interpret it as these people just hate crypto and they keep doing frivolous lawsuits that always lose, but they just cause a ruckus in the meantime and they just drain legal funds.

Ryan Sean Adams:
[40:56] All right. Well, so this probably, there's no way this holds up in U.S. courts, of course, but it does open the nexus for the Security Council, right? It's 12 multi-sig signers and they don't get paid a lot in order to be a multi-sig signer. In fact, I thought it was something like 5K a month or something like this.

David Hoffman:
[41:15] I guarantee you when the people who signed on to be an Arbitrum Security Council multi-sig signer. When they agreed to do this, they did not think about how the Southern District Court of New York might potentially hold them liable if they violated a court order. And that's why it's a real story.

Ryan Sean Adams:
[41:33] Yeah. So when I saw some of this, I'm like, okay, these layer twos, they want to throw away the keys and get rid of their security councils and get to stage two as soon as possible. Because- If this vector does exist, you're going to get more of these types of cases. And they don't want that.

David Hoffman:
[41:49] It's kind of interesting that this has happened so quickly post the recovery of the assets where like the big question was like, oh, is this going to put more liability on the Security Council? And now here we are just a couple weeks later with a court case.

Ryan Sean Adams:
[42:03] Yeah, it's exactly like as, you know, as we predicted, as we expected it to play. Do you say Taylor Monaghan? She was having a meltdown. I'm not even going to read this tweet, dude. It's hilarious. You have to read it. Yes, little effing who can't do the work, so they come chase after people who did the work. Bite me worse than effing ambulance chasers. STG? What's STG?

David Hoffman:
[42:24] Swear to God? I think.

Ryan Sean Adams:
[42:27] This is part of a series of tweets. Little can go eff themselves. You want some money? Go effing do the work. Wow.

David Hoffman:
[42:33] If you don't know who Taylor Monaghan is, that's kind of important context for understanding why Ryan is laughing.

Ryan Sean Adams:
[42:38] We should say this. Taylor, by the way, she is a fantastic person. And I think.

David Hoffman:
[42:42] She's really stood up for the space. She's just unhinged on Twitter. And usually it's pretty entertaining. Sometimes it's accidentally pointed at you, but usually it's just entertaining for everyone involved.

Ryan Sean Adams:
[42:53] Exactly, exactly. So I'm enjoying the entertainment of this. She's part of the SEAL team. She's done so much for the crypto space. She's angry, expressing some anger against these lawyers who are just trying to sow some chaos here.

Ryan Sean Adams:
[43:05] David, you want to hear about Ethereum and what they're doing with L1 scaling? Not L2, L1 scaling?

David Hoffman:
[43:11] I have always wanted to hear that.

Ryan Sean Adams:
[43:14] I know you have. I know this has been a passion project of yours around scaling the L1. Well, do you remember that thing that came out last year? It was an EIP, kind of a Donkrad EIP. And he said, wouldn't it be great if we could 3X L1 scale every single year from here on out? Right. Yep. You remember that? I got really excited. It looked like this. And then there was a slide that Justin Drake put together. It looked like this. And it had different mega gas targets, gas limit targets for 2025, 2026, all the way to 2030. And if you do accomplish the 3X per year, you get to one giga gas by 2030. Well, there is another hard fork coming, the Glamsterdam hard fork. EPBS is in that. The BAL, what is that? The block access list update was in that. Some kind of esoteric updates. One of the other things, though, is the increase of max block space from, I think, 60 million to 200 million.

David Hoffman:
[44:17] 200.

Ryan Sean Adams:
[44:18] Yeah. And so I charted this out. I had my quant chart this out.

David Hoffman:
[44:22] Oh, this is a Rantron Adams chart? Oh, this is where all your tokens are going.

Ryan Sean Adams:
[44:25] I was spending some of those Claude tokens, dude. This chart probably costs 20 bucks, okay? And this is like showing TPS and block space of Ethereum and projecting that based on the 3X per year line. And David, with this Glamsterdam upgrade, we will be right on track, right on the 3X trend line.

David Hoffman:
[44:45] We are lagging behind the original prediction, but this catches us right back up.

Ryan Sean Adams:
[44:49] This catches us right back up. So it catches us back to the trend line. So this would be a 3X, sorry, excuse me, a 7X in transactions per second and block space availability on the L1 in 12 months.

David Hoffman:
[45:02] Yeah.

Ryan Sean Adams:
[45:03] Which is pretty astounding because we went to, you remember this, we went to 30 million. We were at 30 million for like four years. And then just last year,

Ryan Sean Adams:
[45:11] we went from 30 to 45 to 60. And now we go from 60 to 200. and that results in something close to 80 to 100 transactions per second. So, L1 is actually scaling, like they're actually doing it. I think this means that we're not going to see any L1 fees anytime soon.

David Hoffman:
[45:33] I think blockchain fees as a concept are kind of just gone.

Ryan Sean Adams:
[45:38] Oh my God, I've been saying this.

David Hoffman:
[45:40] Yeah, I've been saying this. Like no chain has fees anymore. What's one chain that has fees?

Ryan Sean Adams:
[45:44] Why would they?

David Hoffman:
[45:45] Bitcoin has no demand, so they have no fees. Of course. Ethereum scaling also has much less demand than in the past. and then what other chains are left like

Ryan Sean Adams:
[45:55] Mega brand.

David Hoffman:
[45:56] New chain is like negative fees because it's the theoretical limit of throughput solana solana is going even faster

Ryan Sean Adams:
[46:02] You only get you are.

David Hoffman:
[46:04] Right tron has fees

Ryan Sean Adams:
[46:05] You only get fees on a blockchain if there's block space contention if demand exceeds supply and if you're creating more supply and supply exceeds demand you don't at feeds fees and so you know like if your bull case on ether is just about fees then you also have to not care about scaling right, Anyway, this is why for decentralized blockchains, my thesis on like how they accrue value is all about store of value. It's all about money. Bitcoin's always been right. Ether is a store of value. My opinion is always right. There will be times where we'll oscillate and we will generate some fees and that will go into the burn and that will slightly reduce issuance. But Ether is either a store of value asset and a money or it's not worth very much because it's not worth much on fees alone. This is a whole separate rant. You guys know my position on this.

David Hoffman:
[47:00] Basically, Ryan is saying that as Ethereum's throughput increases, ETH becomes more and more money-like rather than revenue-like.

Ryan Sean Adams:
[47:09] That's right. That's right. I believe that. David, you want to hear about the

Ryan Sean Adams:
[47:13] strategic Bitcoin reserve?

David Hoffman:
[47:16] Yeah, there was something out of Consensus Miami, which is happening right now.

Ryan Sean Adams:
[47:18] Oh, yeah, yeah. Actually, I forgot to tell you, by the way, because we talked about the Arctic Circle meeting. The Glamsterdam upgrade was all the devs met somewhere in the Arctic Circle. Can you pronounce that? Can you pronounce this place?

David Hoffman:
[47:31] Solvbard?

Ryan Sean Adams:
[47:32] Solvbard for the Solugan Interrupt?

David Hoffman:
[47:35] What country is that? Is that like Finland?

Ryan Sean Adams:
[47:38] It's somewhere very cold. All right. Anyway, the devs met there and that's where they grew.

David Hoffman:
[47:43] Everyone's in Miami and they're in solid bar with a weird line through the O.

Ryan Sean Adams:
[47:48] It doesn't seem real.

David Hoffman:
[47:49] While everyone else is in Miami.

Ryan Sean Adams:
[47:50] Yeah, the ETH devs go to the Arctic Circle. Like, why, guys? You don't have to go there.

David Hoffman:
[47:54] I mean, they definitely don't want to go to Miami. So, yeah.

Ryan Sean Adams:
[47:56] Anyway. All right. So, back to the Bitcoin, the strategic Bitcoin reserve. So, this is the third tease we've had and the biggest tease over the past three weeks. So you remember last week we talked about Pete Hegsus, the Secretary of War, talking about Bitcoin as a matter of security, saying there could be an announcement in the future. Eric Trump was in Miami. He said, big things are coming that the U.S. government has 300,000 Bitcoin. It won't sell it, he said. Now we have Patrick Witt, who is actually the guy at the White House who is responsible for crypto and implementing the policy. And he said this, the strategic Bitcoin reserve is coming. An announcement is coming in the next few weeks. All right? So what could he be announcing?

David Hoffman:
[48:42] An announcement of an announcement?

Ryan Sean Adams:
[48:44] Yeah. And it's going to be a big deal. There could be all sorts of possibilities here. What do you think the possibilities are?

David Hoffman:
[48:52] Oh, God, I have no clue.

Ryan Sean Adams:
[48:54] Really? Like, no clue at all?

David Hoffman:
[48:58] Um... I mean, yeah, I have no idea, actually.

Ryan Sean Adams:
[49:04] Okay, so Patrick Witt. Do you remember Bo Hines? He used to be in Patrick Witt's situation. He used to be the Crypto Council Executive Director. He's now at Tether. Patrick Witt is the guy who replaced him. I think what they're going to do here is, I don't think they're going to announce a program for purchasing Bitcoin. What I think they're going to do is actually announce the execution and implementation of Trump's executive order, his strategic Bitcoin reserve executive order that really hasn't been implemented. And I think what they're going to do is go down the process of creating a Fort Knox for crypto. I think that's the part of it. So if you recall, there was an executive order of March of last year that called for a few things. One, centralized cold storage of all of the Bitcoin that the US government had, you recall all the Bitcoin, were scattered across the doj you know cold wallets and desk drawers like there was remember that u.s marshals case where yeah right somehow 30 million of there was like a seed.

David Hoffman:
[50:09] Phrase in the evidence room and then the associated bitcoin magically disappeared

Ryan Sean Adams:
[50:13] Because that's right the police.

David Hoffman:
[50:15] Officers stole it or that's right

Ryan Sean Adams:
[50:16] So you need something centralized some cold storage some fort knox type of infrastructure in order to do this i think also an audit framework will be part of this. I think they'll formalize that we're not selling Bitcoin, the teeth behind this. And I think they will do this. They will give Bitcoin, maybe some other crypto assets, a reserve asset designation. So that puts it in kind of the class on the Fed balance sheet alongside gold, alongside other fiat currencies that they might hold and SDRs. So I think that's what they're really going to do. And the U.S. government does have about 300 to 328,000 Bitcoin. Although a chunk of this is court bound, is tied up in courts, is victims have claim over it.

David Hoffman:
[51:03] Not necessarily the government's owed to people.

Ryan Sean Adams:
[51:06] So the Fort Knox pile, the part they would put in the strategic Bitcoin reserves, probably like closer to like 150 to 200K Bitcoin. That's what I think they're going to roll out. And that is, in my opinion, very bullish. Now, it might not be as bullish.

David Hoffman:
[51:21] Yeah. Like the reason why I kind of thought this was a nothing burger is because like there's no way that they're announcing that they're buying Bitcoin and that's really what people want. And that's just not so unfeasible. Yeah. I think what you're saying is that like this is just an increasing legitimization of Bitcoin because we're creating process and structure and commitment to holding Bitcoin. Yeah.

Ryan Sean Adams:
[51:41] A giant government vault for it.

David Hoffman:
[51:43] Yeah.

Ryan Sean Adams:
[51:44] Like, if you told, if you're not, you're not excited about this.

David Hoffman:
[51:47] You don't think this is bull? Yeah, thumbs up. Thumbs up.

Ryan Sean Adams:
[51:49] Dude, five years ago, if you were to tell me that the US government was going to create a Fort Knox for digital bear instruments, I would be blown away. I'd be like, okay, well, we won. It's over.

David Hoffman:
[52:03] Yeah, you're right. But like, we already had the announcement. It's just like, hey, we're doing the thing that we said that we're going to do. Yeah. And it's 2026 and it's 42 years later. But like, yeah, okay,

Ryan Sean Adams:
[52:12] You're right.

David Hoffman:
[52:12] You're like, we got there.

Ryan Sean Adams:
[52:14] Yay!

Ryan Sean Adams:
[52:17] You're right, though. I mean, they're not going to announce that they're going. I don't think they're going to announce that they're going to be purchasing Bitcoin. There is a way that the Treasury could do that, by the way. It's called an ESF, Exchange Stabilization Fund. They could. So Besant could, outside of Congress, actually start purchasing Bitcoin. There's no way he's going to do that. And then you remember Senator Lummis. She had a proposal called the Bitcoin Act, which was to actually buy one million in Bitcoin. Yeah, right, right. That's a congressional act. That's not going to happen either.

David Hoffman:
[52:43] Yeah, that's not going to happen. Not in the same time where our debt-to-GDP ratio just passed 100 or whatever.

Ryan Sean Adams:
[52:50] I mean, it's probably the right time, though. It's probably the right time. Yeah, right.

David Hoffman:
[52:54] Actually, that's bullish.

Ryan Sean Adams:
[52:55] So the probability, according to Polymarket, of a U.S. national Bitcoin reserve as defined, you know, in the way I defined it, is 33% right now, but rising. But a rose on the week. So there you go. You don't seem excited about it.

David Hoffman:
[53:11] I guess it's just remarkable in the sense that like I kind of forgot that they didn't do it. They just announced that they did it.

Ryan Sean Adams:
[53:17] That's right. They did.

David Hoffman:
[53:18] And now we're actually doing it. But I just don't want to like applaud for them for just being late.

Ryan Sean Adams:
[53:24] It's so exciting to me to think about what a crypt of Fort Knox would actually look like. Sure. Like how are they locking that down? Is the government doing this? Like, oh my God, that's kind of scary. I mean, does.

David Hoffman:
[53:36] Because that means, like, the government will have a Ethereum wallet and a Bitcoin wallet. It will be a Bitcoin wallet.

Ryan Sean Adams:
[53:42] Well, they already do, of course, right?

David Hoffman:
[53:44] I wish they had an Ethereum wallet because then we could send meme coins there and, like, other shenanigans like that. Like, yeah, isn't it cool to just, like, this is a government's Bitcoin wallet. It's this. And also here is the Ethereum wallet.

Ryan Sean Adams:
[54:00] I mean, will it be protected physically, like, the way Fort Knox is? I can only imagine.

David Hoffman:
[54:04] But you can still expose the publicies.

Ryan Sean Adams:
[54:08] Yeah.

David Hoffman:
[54:08] And we can send meme coins.

Ryan Sean Adams:
[54:10] I mean, will foreign adversaries be trying to attack it, for instance, trying to infiltrate it, trying to break in?

David Hoffman:
[54:16] Why wouldn't you? Like, if you're North Korea, why wouldn't you go after that?

Ryan Sean Adams:
[54:20] Of course, that would be an incredible prize for them. And, like, is the U.S. government actually competent enough to pull this off? Or do they really, like, I don't think I trust the U.S.

David Hoffman:
[54:30] Government more than say Coinbase. No, they should just hire Fireblocks or Anchorage or something.

Ryan Sean Adams:
[54:34] But then that's, like, a nation-state target. Anyway, I find it very interesting.

David Hoffman:
[54:38] Yeah. Yeah. Can the United States government self-custody this Bitcoin?

Ryan Sean Adams:
[54:43] Well, is Trump going to just have it on his.

David Hoffman:
[54:45] You know, inside the nuclear launch codes? Didn't Trump steal a bunch of files and hide them in his bathroom after?

Ryan Sean Adams:
[54:50] It's going to end up in Mar-a-Lago.

David Hoffman:
[54:52] Dude, Trump's just going to take the private keys with him when he goes.

Ryan Sean Adams:
[54:55] It's on a ledger somewhere in Mar-a-Lago. That's the, you know, the Bitcoin strategic reserve.

David Hoffman:
[55:01] I'm just picturing, you know how there's like the drawer in the desk of the president is a i don't know if this is still true but it's a drawer full of gifts that like uh i remember this old story like nixon when elvis visited the uh the white house nixon needed to get a gift for him so he pulls open the drawer and was like here's a watch i just imagine just like a gold ledger just being in that drawer it's just where it is i

Ryan Sean Adams:
[55:28] Think you could give that to trump but not actually have the private keys on there just say they're on there and he would be pretty happy with that you'd hold it up, oh my god all right guys gotta end it there you know crypto is risky you could lose what you put in but we are headed west this is the frontier not for everyone but we're glad you're with us on the bankless journey thanks a lot.