ROLLUP: Memestock Mania | ETH Spot ETF Countdown | $25M Hackers Charged | Crypto's Election Impact

Bankless Nation, it is the third week of May, the uh crime and politics edition of the weekly roll-up, if I might say so.

Entire year. Crime and politics.

God, when are we gonna get out of this, huh?

Ah, yeah. Crime, politics, and meme coins. It's exactly what we love.

Yeah, some sad news to start though, uh, on the week, which is tornado cash developer Alexei Pertsev was actually sentenced this week, uh, five years in jail. We gotta talk about that, David. Yeah, that's in the Netherlands. What what does that mean for crypto? What does that mean for privacy? What does that mean for the Roman storm case? All of that.

Back on the United States soil. You know how we always say uh front run the opportunity in crypto? Well, the Department of Justice said, well, not like that. They charge two brothers for an MEV bot attack. Uh is code law or not really? Uh, we'll unpack that and more. Big win in the Senate as well. What happened with this?

Oh man, there was a vote for pro-crypto legislation. This is a continuation of something we talked about last week. It's called SAB 121. If you don't remember what that is, we'll do a recap. But the big question is, is Biden going to veto this now? And uh, David, I think crypto just got a lot more partisan. We also have the ETHSpot ETF, the approval or denial decision next week. And I kind of wonder how all of the politics is involved or wrapped up in that decision as well.

Yeah, mainly what happens next. And then lastly, time is a flat circle. GameStop short sellers get crushed for a second time. How did it happen twice? All this stuff and more. But first, a message from our friends and sponsors.

All right, let's talk about the markets. What confidence level does the market have on Bitcoin this week, David?

Bitcoin, five percent more confident this week. Started the week at 61,800, ending the week at 65,150.

Good week.

Yeah, five five percent more confident is decently more confident. If we could get a few of those, more and more, that'd be that'd be great.

Yeah, nice week for Bitcoin. And uh how about the ETH price on the week?

Uh less confident, uh, two percent less confident. Uh started the week at three thousand dollars. We are now down to two thousand nine hundred and forty dollars. Uh and then if you just look at the ratio, Ryan, um I

It's I I was wondering if you were gonna you were gonna have to force you to do it, but uh yeah.

The ratio is down a solid 25% in the last 80 days. Uh we are down to point zero four five. That is the lowest it's been in three years. Yeah, the ETH Bitcoin ratio.

This is the lowest it's been in f

Yeah. Even lower than when uh 3R's capital got liquidated and they had to dump all of their ETH collateral to save their positions, which ultimately did nothing. Uh I actually have a take about like why ETH is so weak and specifically why Bitcoin and meme coins are so strong relatively uh in this market. Uh you ready for it?

Yeah. Tell me you tell me why this is a painful chart.

I'll tell you exactly why this is happening. Um, this is just my take. Uh Bitcoin and meme coins are strong, and in contrast, ETH is weak. Uh, why is this happening? Well, the answer with Bitcoin is very obvious. It had the Bitcoin ETF approval. It has gotten the regulatory stamp of approval by the powers that be. It is now accepted in banks. It is now being bought by banks. We're going to talk about that in a second. And overall, it doesn't have a fight with regulators. It doesn't have a fight with the nation state. It's not offending the nation state. Uh, meme coins also, similarly, are not fighting like in regulatory circles. Like the meme coins are being not a security or not even close to being a security, are free to be like minted and distributed, and everyone can go have fun with meme coins. No consequences, no fighting with any sort of like powers that be whatsoever. Ethereum, on the other hand, is like going toe-to-toe with regulators. We have Tornado Cache developer in jail. We have the Ether at risk of being called a security by Gary Gensler. Uh, we have the Department of Justice going after the MEV supply chain. Uh, privacy is now banned, and also privacy is trying to be developed by the Ethereum ecosystem. And so because like ETH is like doing it the most to offend the nation state, uh, it is being weak this cycle because like people are scared. The market is scared because like the power, the ETF approval is not going to happen. And so I think the depression of the ETH price is like a result of like Ethereum trying to go toe to toe with some of the big things that nation states like to have monopolies over.

So you're you're saying that uh Ether is getting whacked by uh regulators this cycle, whereas Bitcoin is basically being embraced by institutions and regulators, and meme coins are just like, you know, Ether just

Just irrelev from the perspective of nation states, they're just meme coins are just irrelevant.

Yeah. I it's interesting. It's an interesting narrative. Um I one one response I I would say to that is okay, explain soul. So uh Solana does not have uh an ETF and it has been

It's not considering the the price of soul in relation to the ETF.

Yeah. And I mean so why has that outperformed would be uh you know part of a rebuttal. I actually have like a deeper take about um sorry, not a deeper take. Let me rephrase that because you know your take was good, David. I I don't wanna uh I don't want to put down your take here, but like um I I think my general take, and I I I want to talk to you about this and maybe a bankless take sometime, we'll we'll save the rest of this content. But Ethereum is really just going through its growing pains because of uh migrating all of its execution to layer twos. And that's what this cycle is. And I think that's the big driver more than regulatory. But I I will concede I think.

Both, yeah.

I think regulatory is a is a portion of this.

Overall, though, total crypto market cap 2.5 trillion almost just below. Uh and so still pretty healthy in the total crypto market cap. Um still looking for that rampaging bull market. We just haven't had any of that. Um but meanwhile, uh we'll talk about some inflation numbers instead while we wait.

Yeah, so inflation has cooled a little bit uh on the week. So we got we got the April numbers in uh prices climbed 3.4%, a bit lower than people expected. Um also lower than uh March, which was 3.5%, and the lowest annual increase in core inflation since uh 2021. So David, the markets like that because when inflation goes down, you know, Powell gets happier, apparently. And uh, you know, like the easy money, uh the probability of him reducing rates at some point in the future increases and the easy money train uh like continues. You know, this is in contrast to the Lynn Alden episode we put out earlier this week, which which is is kind of making the case that what Powell does doesn't matter as much. It still matters, but doesn't matter as much uh because we're in a fiscally uh dominated world. But you know, for for the time being, the markets react to this. It low inflation is is good for risk on assets.

Speaking of risk on assets, uh Ryan, were you paying attention to uh the Trad stock market this week? Did you hear about this news?

I was paying a little bit of attention to it. Like I know something with meme stocks, maybe they're back and uh we we've got this tweet that you put in the agenda. I'm I'm kind of confused why this is relevant. Somebody Roaring Kitty while looking at is a picture of uh a person sort of like uh i you know, flash animation style, like just sitting up in their chair, in their desk chair.

Yeah, so the the well the meme is being tweeted out by Roaring Kitty, and it's a man of who's like leaning forward in his destroyers, like, okay, I'm paying attention now.

Oh, I see.

This but Roaring Kitty is uh an account, a Twitter account that went dormant in in 2021. This is the Roaring Kitty.

Yes, this is the Roaring Kitty who led the short squeeze on GME back in 2021 that started the whole meme stonk revolution.

Do we do we know who this person is?

Yeah, yeah, yeah. This is the guy with the bandana who like did some streaming about like the GME. That's this guy. And he hasn't tweeted in like three years or something. He's the guy who testified in Congress. This is the guy who's just like, Congress, I swear I just like the stock. This is this is the guy who like led the GME short squeeze.

Okay.

And so like caused the whole like 2021 like short like uh stalk move.

Implies he's now paying attention.

Yes, but also hasn't tweeted in three years. And so this is his first tweet in three years. And he's like, it's like, okay, now I'm now I'm paying attention. As a result of this tweet,

the GME stock price pumped from $10 to $65,

Shut up.

liquidating $838 million of GME short interest, which is the exact same thing that happened three years ago in 2021.

We just did it all over again. Go look at the chart. Do you have the chart?

This is the chart.

This is the chart. Okay, so these are monthly candles. So that big chart is the chart of 2021. That big ass, excuse me, uh green candle that liquidated all the short hedge funds in 2021 and caused the whole Robin Hood thing, caused all of that. And then that last green candle that you see is the thing that just happened this last week, which is just like a smaller version of the same thing that already happened.

Okay. I mean, but we've been since that GME, I haven't looked at this these charts almost ever. Like, we've been on a steady trajectory downward, right? And this is just like a

Yeah, because like GameStop is not worth like the market cap that it was giving it. It was just an anomaly because so much short interest was on GameStop.

So before the initial short squeeze in 2021, GameStop was trading at $3. It then went up to $120. It fell down to $10, where it started its second short squeeze last week, $10 to $68. So it's still up from its like initial initial short squeeze. Robinhood printed $5 billion in equity trading volume yesterday because again, all of the uh GameStop short uh squeezers are on uh Robinhood. Uh and so Vlad, the CEO of Robinhood, says one of the biggest A's in the last 12 months.

So is this um you like what does this mean? What's the interpretation here? Are meme stocks back? Are we gonna have another meme stock cycle?

I I don't know. I don't know what the impact is. Like we've already experienced this in the markets once. Uh and I I don't I don't know if it's like do we do it? The AMC thing all over again. I don't I don't know. Uh but the fact that this happened twice is pretty hilarious.

Can can I just be like, um, I feel like meme stocks, um, again, I'm not a meme trader, so this is a like could be a totally just like old man take or whatever, but like I feel like they're kind of boring compared to meme coins.

Coins.

Like, why do a meme stock when you can with with cash flows, when you can do a complete meme coin that basically just like like ha has that has the GME community discovered meme coins yet? Do you think that crypto has sucked some of that meme uh like animal spirit out of the out the oxygen out of the room?

Well the thing is with with meme coins, there's like a much smaller circle of people who trade meme coins than the the GME like army of people.

It's so easy. It's so easy.

Well, yeah, but the meme coin market caps just can't fit very many people, whereas the GameStop market cap can fit like an entire subreddit of people.

Hmm. Okay. Well, I yeah, I guess we'll have to monitor to see if that lasts or if it's just a week uh type thing. But you know it's something that's long-lasting, I think, David, is institutions buying the Bitcoin spot ETF. So a whole bunch of uh things were disclosed this week with with SEC filings. Apparently, a whole bunch of the banks actually have some Bitcoin ETF on their balance sheet. So this was um an uh filing from JP Morgan. They actually own some Bitcoin, David. You know, almost a million dollars worth of the Bitcoin spot ETF, which is kind of funny because Jamie Diamond like publicly seems to hate it. Um I don't know if they're like you know stacking to hold Michael Saylor style or if this is some like uh administrative technicality, but the fact of the matter is JP Morgan holds Bitcoin. So does Wells Fargo, by the way, which is uh kind of interesting. And also, um, there there are five big Canadian banks because like the Canadian banking system is all uh consolidated.

Thanks big fundamental