The 4 Year Cycle Is Dead - Michael Anderson and Vance Spencer

Transcript

are looking at their their book and they're saying, "Oh, we had one of the best years ever. Go ahead and lock in some gains, lock in the bonus and and kind of reset for January." My my expectation is actually January comes kind of streaming out of out of the gates. >> If it goes above 104K, it's probably invalidating that that entire thesis. So, we won't need to wait for another year to figure out if we're right or wrong. We'll need to wait to see if that bounce clears. But I think people are looking at the alt market and they're attributing this four-year cycle concept and they're saying, you know, this could play out because the altcoin markets are going down. Meanwhile, Bitcoin and ETH are holding up. I actually kind of think that this next run, ETH could break all-time highs before Bitcoin.

>> Welcome back to the rollup. I'm Robbie. >> I'm Andy. Rob and I met at the University of Florida in 2017 where we first found out about digital assets. >> We learned a lot along the way, and we're bringing you face to face with the leaders of our industry. >> Sit back, relax, and enjoy today's episode. Boys, hello. Oh, hello. Welcome to the show, guys. Good to have you. >> What's up? Good to be back. >> We just did two and a half hours of prediction market. Uh, you know, it's not gambling. It's um it's a new form of trading actually. And uh >> yeah, I think I think I lost a couple hundred bucks. Rob lost a couple hundred bucks, but our boy PMT came out on top like 500. So, >> wow.

>> You guys mess around with prediction markets at all? >> Every once in a while. Every once in a while I've dabbled, have some good experiences, but uh yeah, not not anymore. You know, former former times. >> Did you guys do any of the uh any poly market or couchy rounds or anything or >> No, I we're washed, so we didn't do anything, >> but we we do like to partake in them. And um >> yeah, no, big fans of Shane at Poly Market and and uh and kind of just the entire complex.

>> Yeah, it's cool. It's cool to see people are describing as it a super cycle and it really feels like it's what the next uh call it a casino whatever whatever the next one is going to look like that's uh and it but it also is giving news and like more social elements as well. So it is it feels like it's more than a casino. It feels like there is something more there. Um so we'll we'll we'll see how the data shakes out. What have you guys been tracking the last uh the last week since we had you on last? >> Not to bury the lead. 25 bits cut here today guys. Uh people are wondering what's going on if we're going to pump.

Is it enough? Is this QE? Um you know, we've bounced off the lows here. How do you guys read the FOMC? Has your views changed on kind of the general Fed policy at all over the last three months? >> I mean, what 84 85% chance that this is exactly what was going to be what ended up happening. Um I think it was pretty priced in the the rate cut. Also, the descents, I mean, I I think that was one of the interesting ones. three descents. Um Mirren obviously wanted 50 and then, you know, had a couple people who didn't want any. Um so I I think there's we're in the middle of a transition period for the Fed where we're going to find out.

You know, we'll we'll see if we get an announcement who's going to be the next pick by the end of the year as Trump says. I think that has the potential to be pretty bullish depending on who he chooses. I think markets will frontr run expected changes um with with some of the candidates that are being floated around. Um and I think broadly the crypto cycle um you know as we've discussed is is more connected to the macro cycle probably than ever before. Um and what we have described previously is um you know in 2021 you had 90% of capital was retail capital in crypto.

10% of was institutional and then what has happened over the last three years is that 90% that was retail is now down to 10%. And you got 90% of the capital is now institutional capital and that's from the ETFs that's from you know digital asset treasuries back in the summer that's from you know participants who are you know Vanguard is now stepping in like the these are these are real players with you know trillions of AUM and what happened on 1010 was that remaining 10% just got eviscerated. it's now it's down 80 90%. And and I don't I don't really foresee that coming back.

Um or at least in in real size or or very quickly. Um and so I I think we're kind of in like a transition period for crypto as well where the the macro and sort of the institutional perspectives are what's driving market forces. Um and what I think that that actually does is it it officially breaks through the four-year cycle. And and the way that we will know that this has officially happened is in you know maybe it's December 10th a little too early for prediction but but I'll still predict something. I I think next year we break through alltime highs for ETH and BTC and you know things like you know we'll get into it but the staking ETF you know some of the positive movements there on the ETH side. I I think um you know there's going to be a lot of positive

catalysts um in 2026 and so I think that's you know kind of the general read of the market is this was expected today with FOMC. I I agree. I think the you know 40 billion a month uh with threeyear teners is actually pretty pretty doubbish and pretty you know positive surprise. Um but my I think the biggest thing is going to be someone like a Hasset getting announced by the end of the year um by May coming into the into the Fed chair role and and markets are going to front that. >> Oh Michael, I agree with you. I've got my [ __ ] you hire hat on. Um I'm a bull for 2026. I think Andy needs some convincing. Yeah, I got I've been on the I've been bearolding real hard the last couple.

>> Are you Are you like short or how do you >> No, no, no, no. I just, you know, we had a really good run the last two years and like I just I got PTSD bad from 2021 and 2022. So, I I've gotten very cozy and my allocations typically look like 90% crypto. I have this property in Florida and some gold and some and some tiny bit of stocks. Now, it's and like zero cash ever. Now it's like, okay, I got like 40% cash, maybe like 40% crypto, this property, and some stocks and some gold. And so it's like, oh, I can freaking breathe now. Like it feels like I just like, you know so it just feels good to to be cozy. And then we've got a boatload of taxes, but I just don't know how quick we're going

to get back to alltime highs. Like I just I don't know if that's going to be Q1, Q2. I'm bullish like later on next year, but I'd push back and say I I think we could see Bitcoin in the 60s for sure. 60s to 70s. >> Really? I mean, look, what would be a catalyst that drives it down that far other than I I I could see like a a macro exogenous I mean, this is kind of the the way that, you know, we sit around and talk about where the markets are going is like what would be the things that could drive that? And I there are some answers. There are some kind of exogenous factors. Um, but it's hard to point to anything macroeconomic that you see on the on the >> Yeah, I agree. It's really just like charts. It's this really weird dynamic

where the technicals and the technical analysis are all like, oh, distribution's happening and like it looks really really dark and then you go to all the fundamentals and all the liquidity factors and everything that from the macro macro perspective paints a completely different picture. So, it's just a weird a weird dynamic. Look, I'm happy if we go up higher. I'm just I'm very cozy. I'm just >> You say you say that now, but like let's just sit with the fact that you're in 40% cash for a moment, >> dude. I am I crypto podcast. >> It's been six years like tits long, man.

It's It's just It's too much. >> I know. How old are you? >> 26. >> Oh, man. Well, look, I I think there's a uh look, there there's a very important feeling um to experience of just like taking some size off and, you know, taking a step back, maybe enjoying the holidays. I I I don't discount the value in that >> in the slightest. I I do think that what we'll probably see in 2026 is actually something happening faster than something happening later. uh given all of the working through of the Fed chair, giving all of the you know positive I I I I think what has also happened is the the AI capex buildout

uh camp has been very intrinsically tied to the crypto camp and you know this is from remaining vestages of like Bitcoin miners becoming AI data center operators but also just like a lot of the same kind of speculative interest um and and so I think you know as that happened paired with as the tapads kind of blow up happened whatever it was a few weeks ago a month ago paired with a expectation of this being the end of the four fouryear cycle that's why you have this 30% sell off and at least right now it's been contained at a 30% sell-off my expectation is that it maintains that 30% sell off and and then it becomes another you know garden variety 30% selloff on on our way to a new all-time

high >> but I think if we're going to see movement. It's going to happen sooner because in January there's going to be a catch-up trade. There's a lot of people who are probably taking tax losses or they're probably locking in gains. Pod shops are looking at their their book and they're saying, "Oh, we had one of the best years ever." >> Yeah. >> Go ahead and lock in some gains, lock in the bonus and and kind of reset for January. My my expectation is actually January comes kind of streaming out of out of the gates. >> I'd love that. That would be epic for the business, for the bottom line. You know, we've been on an up only trajectory here. We got to keep it up.

I'm a little bit worried about that, too. Uh, guys, I I got a tweet. Coinbase institutional speculative excess has been flushed out. Our systemic leverage ratio, which tracks purely speculative positioning, has stabilized at about four to 5% of the total market cap, down from about 10% this summer. Lower leverage equals healthier market structure, less vulnerability to sharp draw downs heading into year end. I think this also supports your view there. I I think um the thesis remains unchanged.

You know, Bitcoin is is digital gold whether you like it or not. It has the flows and institutional backing to support it. It's IBIT's number one revenue product. Do you think Larry Frink is going to let that go to 60? I would probably doubt that. Trump also has put a lot of his reputation on the line for Bitcoin and there is some sort of Trump put and and I don't think he can let it really go to 50 or 60K and remain with the movement intact as well as with midterms coming up and you see similar things with ETH and and and frankly like it's been interesting to see how quiet the timeline has been as ETH has outperformed Bitcoin since the bottom you know whenever that was probably two months ago. Um, it just speaks to a lack of cryp cryptonative

participation in this rally and the fact that most of these people are irrelevant. And I think, you know, you see kind of like people bickering um, you know, uh, on on crypto Twitter about our L1's overvalued, or L1's undervalued, all this sort of stuff. I think they're doing that because they know that the stakes are so low and they know that they're just like not really building anything. They're just kind of like [ __ ] around trying to get attention. And I think you should couch all of your consumption of media with like the the idea of like why are you reading this? Like why is this being put to you for consumption? And I think once you understand that you'll be able to interpret a lot of what the internet throws at you in a better context. But the context if you are frankly like a

boomer is almost more valuable. Gold is cool. Bitcoin looks like that. ETH is number two seems to be outperforming. There's a catch-up trade there. And then I think for the rest of the alt complex um you know they have been shot in the head one by one and and it kind of like you can think of it in terms of you know the market goes one by one they pick people off there's bad unlocks there's bad narratives there's been a regime change and what crypto deems as valuable and hype kind of getting it in the face over the past week has been kind of the final nail in that coffin where nothing can defy gravity, nothing can defy the unlocks. Um and so you have had a wholesale resetting of sentiment within the alt complex as well. And crypto is

really only possible or the only sort of rallies that crypto can produce are these hyperconentrated two to three assets per year going 10 to 50x. Um and it's usually different assets each year. And so Salana had the big year in 2023 and 2024. Hyperlquid obviously I think was the coin of the year in 2025. And you know, if you're still spending time in crypto in your retail at this point, the the game is not going to be made or won on just ETH uh or or Bitcoin. Um I think the game is going to be won or loss for the most part in terms of what alts you allocate to. And alt season is not pick a random cryptocurrency and go 100% allin and see what happens. Alt season is like just

just think about it. Like did you think about it? And a lot of the decisions that I see being made with crypto retail, they really haven't thought about it. Um, and it's not just like what founder is like a Chad, you know, it's that's not what it's about. It's about like do they have revenue, do they have fees, can you open up the hood and understand are those incentivized fees? And I think a lot of people are going to make a lot of money if they do the work. But um, I think constitutionally Gen Z and millennials are just allergic to doing that sort of deep work. Um, which is really unfortunate. Thanks, Vince.

No, really appreciate you guys coming on today. Just absolutely just >> as a whole. As a whole, I'm not saying you guys, but I'm trying to people I'm trying to pull people out of the ditch. >> No, I hear you. And I mean, look, I So, so I, you know, I've been selling over the last couple weeks to I kind of started in August in chunks because I basically took zero profits up until like August of this year. I was just so long. And I see this tweet. It's Ethereum, Whales, and Sharks accumulated 934,000 ETH, which is about $3 billion over the last three weeks, while retail dumped a,000 ETH, pushing ETH up 8 and a half%.

So, is the thesis here on this kind of ex like breaking the cycle? Retail selling into this four-year cycle idea. Institutions don't really care about it at all, and they will just buy whatever you you sell to them because to them, it's a 15ear cycle, not a four. >> Precisely. But here's the other thing that I will say. Retail matters a whole heck of a lot less now in terms of assets versus institutions. But institutions are very slow. And and think of institution the institutional phenomenon is basically just like a global T-wap. And it's a global T-W on assets that frankly you could probably say are are whatever the spot the Black Rockck spot ETFs are. And you know,

right now that's that's basically Bitcoin, Ethereum, then staked Ethereum, you know, whatever that ultimately ends up becoming. But if if you're not in that, it's hard to get that institutional kind of check or or vote of confidence where you've got this slow but pretty huge T-W that's on. And so when you see dips like a 30% drop that we've seen, that's basically just like all the people who thought that were in a four-year cycle try to rush for the exits as soon as they possibly could, which supersedes the amount of inflows that institutions are going to be able to pick up over that period of time.

Retail moves fast, institutions move slow. And so what you're starting to see now is basically just like the pick back up that institutions have because there's no more retail to sell or or at least people are not as afraid as afraid as they were. And it wasn't two months ago. It was literally two weeks ago that we hit the bottom, but you know that that I think is you know it's past us now. And and I think we've seen kind of the the negative market fervor in that one day where it hit 81k. Vanguard, you know, one of the largest asset managers in the entire world who's been so anti-crypto waits till literally like 5% off of the the pico bottom for Bitcoin to say, "Okay, we're blessing this. It's now open. we're open for

business and I I think that there's just so many positive catalysts not only on like the macroeconomic side but just like the institutionalists who are who are adopting this front. Um like we're we're we still haven't even seen just like here here's other things that we haven't talked about in a while. We haven't seen any of the ETH dats basically Sharplank and Bitmine raise any debt. Like they haven't gone off and done any of that. What if they come out with a $2.5 billion debt offering and you got like great we're just going to go spend $2 and half billion dollars to buy ETH tomorrow? Like all of that type of stuff could happen on a Wednesday. I I think we also don't know exactly what I mean we kind of get bits and pieces and it's political for sure, but what

people are completely discounting is what the clarity act or the market structure bill will be. Like our expectation is that that passes in January. There's too many people that have like career writing, I guess, momentum on on that, you know, hap happening in general. But once that happens, in the same way that the Genius Act basically paved the way for everybody and anybody who's a regulated financial institution to like do any sort of stable coin, you know, operation or business or or, you know, discovery, proof of concept, that same thing's going to happen with any asset in crypto that's not a stable coin. And I think what we're missing as we talk about fundamentals and and we talk about this, you know, with our investors all the time, but what we're missing is like

market participants who are liquid, who understand what they're buying, understand what they're selling, but what they really need is a valuation heristic to know whether or not something is overvalued or undervalued. We haven't had this ever in crypto other than value acral, revenue, cost, profit, token, token, you know, buybacks or whatever value acrruel mechanism exists. And now that we have that and it's built in and it's scaling, if we were to systematize that and normalize that, you're going to start to see like the major hedge funds of the world trade this stuff and make markets efficient so that everybody who you know is trading this stuff or looking at this stuff and and owning this stuff will know, okay, well, if I make a hundred million dollars of revenue and most of that's going into token buybacks, I should

probably worth a couple billion dollars. Like that's just how this will work. And and so I think, you know, that's kind of the element that we're looking forward to as well. Whether or not that fully, you know, that vision gets fully realized in 2026 or it takes longer, it probably will take a little bit longer, but I think we start to see some of that movement in 2026. >> Take control of your coins with Treasure, militarygrade security for your digital assets. Go to treasure.io for the new Treasure Safe 7. Trade on anything economics weather sports crypto, and more. All on couchy.com 247 for the world's biggest prediction market. Holiday is unified crypto payments. Give your users more wherever they are. Go to holiday.xyz

to never write a smart contract again. So, the the four-year cycle is a is a bit reductive. It it was born out of the Bitcoin habiting and and block reward schedule, and that's becoming a less significant part of Bitcoin. But I think people are looking at the alt market and they're attributing this four-year cycle concept and they're saying, you know, this could play out because the altcoin markets are going down. Meanwhile, Bitcoin and ETH are holding up and that is breaking the four-year cycle. And I think you're right. People are looking at what what is going to make everything go up all at once. And there isn't a macro complex. There isn't Bitcoin dragging everything up. This is very secular and becoming uh where the winners are separated from the losers unless it's clarity. and clarity gives us some market structure, Bill, that

could basically boost everything up all at once. I I'm curious if you guys have a little bit more of a nuanced perspective on the winners and losers of clarity. The timeline is helpful thinking that it could come in Q1, maybe even January, but where do you think clarity draws the line? Which projects or types of projects are most positioned to benefit and and which ones aren't positioned to benefit from clarity? >> Do not say sky, please. like just I I just disagree with the idea that this is going to be a rising tide that lifts all boats. So like let's throw that idea out just basically immediately.

>> Um and it's very easy to tell who the winners and losers are losers are. And there's so many more losers than there are winners. It's not even possible to describe it. Maybe it's a thousand or one to a thousand winner to loser. and you know the skies of the world, the hypes of the world, uh maybe the unis swaps of the world, um that there's the deflows of the world. Like there's there's like you can count them on one maybe two hands. >> What what is it about those projects that make them winners versus >> they have revenue and they have earnings. It's it's like it's not like this like unknowable feature of the universe where we just can't tell like we don't have the knowledge or technology. It's it's

onchain. It updates every 13 seconds. It's very easy to tell who the winners or losers are going to be. But there is kind of these value traps that have been a historic feature of crypto that it's going to be important not to fall into. So like one value trap is um something that has fees but is not growing. Another one is something that has fees but is extremely small. So that's not going to be of interest to an institution. The holy trinity is revenue that's growing. earnings that are real and able to get what's called operating leverage as revenues grow so you have better gross margins and something that is defensible. Um, and I think there's basically three or four of those

projects and the rest of the industry will gradually trend to zero. Um, and I think that will be basically the antidote to so many tokens being launched over the past few years where everyone that is in crypto has been burned on this idea of there being any sort of breadth to the market and that's what produces these hyperconentrated rallies in in individual coins once people get comfortable with the entire narrative story and fundamentals. So I I think clarity will really, you know, kind of continue to produce even more concentrated rallies. Um, and then after that happens, you will have probably newer projects that come out that comport to clarity that are uh eligible to be bid. I I would also say like

stepping back, you have to understand how different the macro is from the last time that we discussed the idea of the four-year cycle, which was in 2022. Um, and that is basically, one sec, let me turn off my alerts. Um, so like a war starting, um, you know, versus wars ending. QT starting versus today QE starting. Um, you have a new Fed chair versus J. Powell. >> I mean, the the biggest one is in October you had inflation bump up October 2021 and >> and then, you know, that gets hypercharged with, you know, the oil price shock of the Ukraine conflict.

>> Yeah. So, there there's just it's just it could not be more different. Um, and I think like even when you think about historical ideas, and I would call the four-year cycle a historical idea, we also used to have alt seasons. And I think the alt seasons of this cycle have been cannibalized by prediction markets. They've been cannibalized by memecoins. They've been cannibalized by flows going elsewhere. And if you think about what is driving like a four-year cycle, it's flows. and and flows are derivatives of a lot of things, but they are kind of the end- all beall determinant of price.

Um, and so just to Michael's point, this global T-wap on the majors means that they are not going to be as fragile. The alt complex, it's going to continue to be really fragile um and only able to produce hyperconentrated rallies because there's only a few things that really work. And I think you can have some sort of degree of freedom with the L1 valuations given that if this tech is supposed to live forever, then kind of by definition a lot of the free cash flow will be in the super super super far dated future. Uh I I think that of the assets that we hold and we hold nine figures of Bitcoin. Um I'm most worried about BTC >> and I think ETH is our hedge to BTC.

It's a smaller asset. It's proofofstake based. It has technology tailwinds. It's able to respond to computing platform shifts like AI or quantum. Um, and just a lot of the behavior that I see about, you know, like even like the Santiago discourse where it's like, okay, BTC, first of all, like let's put that in a different camp. Let's address everything separately. That's exactly how people thought about ETH in uh, you know, 2021. >> Yeah. >> That same sort of herd behavior that has very thin logic that causes that sort of you know, potential draw down. So if there is a case for 60k BTC, it's based solely on the fact that everyone is so complacent about it, but I still think it does well.

>> Look, so I Yeah. So I've been kind of trying to work out a thesis for like let's let's not say like the next cycle, but the next run up here, like how that kind of shifts. >> It's time to stop thinking about >> cycles. Sure. Let's just think about like the next leg up higher in the broader macro cycle. So, if we zoom back to 2022, um I think you guys can recall we had this idea that Bitcoin was like this kind of a pet rock. It was all about ETH as you as you're saying, Vance, right? It was it was L1 trade. It was a soul Luna AVAC thing. It was ETH. It was DeFi, NFTts, but Bitcoin was like it was almost irrelevant and it underperformed towards the end there. Um compared to everything else, everybody wrote it off. It went down to 15K then

proceeded to outperform nearly every asset in the entire crypto complex except for you know a handful over the last two-ish years. So I guess my question let's let's just unpack that. So the first thing that was happening was Sailor there was no ETFs during the 2022 bare market. He traded it below NAV very briefly and then turned the ATM and started buying and then came the ETFs. The ETFs were like the turbo booster. We didn't know how large a TAM would be. It just lit it on fire. And then you had Trump.

>> Yep. >> And you had Trump proclaiming Bitcoin. And now a lot of those dynamics are working in reverse. So Sailor is no longer buying a ton of Bitcoin. He has, you know, in fact raised cash to pay pay his debt payments. You have the ETF flows which are still very real, but ETH has more of them. >> Yep. >> You know, yesterday was a good example was basically parody for an asset that's, you know, one/4 the size. So you have to interrogate your thesis based on flows and then work backwards from like are those flows repeatable? Are those flows idiosyncratic? Where do they come from? Where do they go to? Are there OGs that are selling? And I think that's now the prevailing flow dynamic and and the big trillion dollar question for the market is are the OGs done selling or

are they going to reappear back at 104 105K? And like if you're Benjamin Cowan, who I think you probably listen to, you be too. Like look, like here's the thing about TA. >> On the money, Vance on the money. >> That is so good, man. >> TA is only useful in so far as the rest of the market believing it's useful, right? So if you got a market that's entirely based on TA, you better probably look at the TA. But the script that he's laid forth is it's going to hit 104K, bounce to that moving average, get rejected, and turned down. So like that is kind of the go forward scenario that you should be evaluating. If it goes above 104K, it's probably invalidating that that entire thesis. So

we won't need to wait for another year. No >> to figure out if we're right or wrong. >> We'll need to wait to see if that bounce clears. >> So then just to be clear, Ben Kalen has been at least up until about August was more right than wrong and has been far more wrong than right. Um so just kind of to so thank you for explaining the dynamics there. So looking ahead, the question was kind of around Bitcoin dominance and thinking about how uh generally to think about that market and that that kind of dynamic because basically what I'm coming to in my you know kind of idea here and I think it's built off of guys like Cohen and others is that we had such a Bitcoin dominated uh run previously because of these

factors such that you know you've got guys like Santi just putting it in that bucket of almost like untouchableness. You've got this concept that Bitcoin will always lead and that you always need to hold Bitcoin and it's going to lead every rally. So, I actually kind of think that this next run, ETH could break all-time highs before Bitcoin. I think the market could rally in other kind of sectors whether it's Hype or Sky or the or a handful of tokens that we would see a lot of outperformance from from these types against Bitcoin. What I can't really understand or not really trying or I can't really kind of wrap my head around is are we ever going to see like a Bitcoin dominance in the 30s or 40s again because if if if we're just talking about alt seasons as handful of names really performing well due to

their fundamentals then you would think that as long as ETH you know as long as ETH doesn't just go pure nuclear then we'll have a Bitcoin dominance in the 50s or 60s for a while. How do you guys think about this Bitcoin dominance construct uh with regards to institutional TWOP? Um will we see this down in the 30s 40s ever again or kind of how do you think about that? >> Bitcoin dominance is such a troubled stat for a number of reasons, but I'd say the main one is just like the survivorship of of assets relative to Bitcoin is so difficult to kind of maintain across, you know, historical cycles. And and look, I I agree like we shouldn't maintain the fact that we

shouldn't continue to call there being cycles going forward, but we can talk about them in terms of 2017 and 2021 and and now this, but generally I would say like you can't compare 2021 and and 2025 for many reasons, but number one is we pumped five trillion dollars into the economy. like that that is just like it was an everything bubble which is why we had alt season in the first place which is why we had inflation which is why we had the macro you know negative cycle so like there there really isn't a comparison I would say my default reaction is Bitcoin dominance goes down what would be more interesting is to compare apples to apples so like ETH versus BTC or or BTC versus ETH uh but

like you have to maintain the same kind of asset across the board because there there are things that like ICP was worth $10 billion, you know, last cycle. It's just you you can't factor that you can't recreate that value in this cycle because now we're thinking about things in terms of fundamentals and and obviously there were none with ICP and that's it's basically wrong. But the the point is like you can't say Bitcoin dominance across because it just isn't the same denominator. >> Havachi is fast and private per trading secured by ZK with Celestia underneath.

Go to habachi.xyz XYZ to start trading today. >> Looking for yield that stands out? Infinify gives you just that. Deposit stable coins and earn far more than the current savings rate. Infinify is a battle tested, reliable DeFi platform that is ready to go. Head to infinifi.xyz. Yeet is built for big moments. The most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. Got it. Yeah, I I don't think much about Bitcoin dominance um at all. It's not like there's like an Nvidia dominance marker for the stock market and people don't invest against that. I think in a world of institutional flows, ETH is as good as Bitcoin, probably better. Um but the real meat of like

where things are going and where the money is to be made is the altcoin complex. And I know it's just been left for dead and it's terrible and whatever, but like the Clarity Act is a catalyst. the likes of which we have never seen before. Um, and so if you're spending time in crypto, you you should be spending time in DeFi. That's basically your only hope at this point. A >> and I'd say the reason why is because that's where the most obvious business models can originate from. And if we're talking about fundamentals, it's all about building a business. And I I think, you know, how do we get to that point where like ETH breaks through?

Andy, to your to your your thesis on what could it it's actually really simple. You start with a catalyst of a staking ETF. Like right now, Black Rockck is expected to launch their their staking ETF maybe by the end of this year, but probably early January. >> Yep. >> And they have 11 billion in the ETH that earns zero yield and charges a fee. What do you think the interest will be from a staking ETF uh that that gives you two and a half to 3% in kind in terms of yield? probably going to be much larger than 11 billion. Now, does that totally cannibalize the existing 11 billion? It probably cannibalizes a fair amount, but I'd say net net more than 50% of it is net new. And and so that's number one.

You got billions of inflows. Number two is you have the the clarity after the market structure, whatever that is. The reason why I think ETH and BTC have the institutional perspective that they do is because there's regulatory clarity on what these assets are, which means that institutions feel comfortable adding them and providing support and and you know, institutional adoption for them. But if we have regulatory clarity on what most of these assets are, at least in understanding, it opens the fuel for basically every asset from an institutional perspective. So, you know, bring on the buying and more T- Wops for more assets.

But but what this also does is it very particularly like if there was to be one index on if you could buy one index asset for what the clarity act or market structure bill will provide I think it's very clearly also ETH. >> Yeah >> because basically everything that we're talking about is going to be built on top of it. That's where all the the business generation is. Maybe it's a little bit of Salana but that's kind of relative to the DeFi size that they have. And so if you're if you're someone who's wanting to make a bet on clarity happening, I think ETH is basically the best, you know, best play.

>> Yeah, it's still very much the home of DeFi. Um, and I think you're you're echoing a lot of the things that we talk a lot about on this show, which is uh return to fundamentals. It's like real businesses. Those are the ones that separate uh from the rest. And it's the revenue meta. And that's the revenue meta is a pretty good indication of return of fundamentals. Um, and something that has a a foundation. And you guys have have invested in quite a few companies that I think are starting from a foundational business model, a real fundamental business model. Like we had Daylight, right, on the show the other day.

>> Yep. >> Um, pure solar power energy business like solid, right? Would exist even if crypto wasn't a thing. But then you've gone and launched or they they've gone and la and put DeFi on top of it and they launched Defi and that's why we had them on the show the other day. And so I it sorts of it it seems to me that this new category is emerging and and so we we used to talk about this barbell in terms of web two and web 3 and it was like the evolution of the internet. It feels like we're on a different barbell now. Now it's it's somewhere between AI and Silicon Valley which you get too far in that direction it's AI slop. And then if you get too far in the financial direction, it's Wall Street and the incumbent legacy banks and slot

machine of >> financial engineering. And so it feels like this neoank cambrian explosion, this neo fintech category is where a lot of these these foundational business models emerge with DeFi on top. So could you guys just elaborate is this the idea? Is this the right direction? and like kind of expand upon this concept of defyifying some traditional business. >> I mean look, I think tokenization is a real phenomenon in terms of business model um new business models that can uh be brought you know through blockchain technology um brought to bear. I I think daylight is a perfect example of this.

You can have a decentralized utility that uses the blockchain to adjudicate basically like energy flow as a tokenized asset with value as a payment mechanism and have it be houseto house and and completely decentralized. There are companies that literally tried to do this back in the you know late 90s early 2000s that never ended up going anywhere because it was just really difficult to do when you're putting all of that trust into a centralized intermediary. And so tokenization I think is you know creating new asset classes or assets that then you can build businesses around. But I think there's also an element that blockchains provide which is distribution and cost cutting for existing businesses. And this is basically exchanges, lending markets, credit markets. Um that's another angle

to it that I think is extremely fundamental. You know another portfolio company of ours is USDA AI. They're they're providing GPUbacked financing that typically would go through a JP Morgan or some institutional bank and only sold to qualified purchasers. You have to be accredited. You have to have, you know, KYC to to participate in these loans. But you can get access to them in in a way that you weren't able to previously. And you can actually cut the cost of capital down because it's all onchain and you don't have to go through, you know, the the the process of a regulated, you know, bond offering basically. So I I think that there's multiple ways to slice it. DeFi is just the most obvious, you know, way to look at it because if you think about from first principles, what is a blockchain

useful for? What is the blockchain technology concept most applicable to, it's for value transfer? And historically, when you had, you know, client server architecture or, you know, basically what the internet provided, it was for data transfer. But now that we have digital scarcity, you can use blockchains for value transfer. And anything that's built around value will will probably have some connection to blockchains in the fullness of time. So that that's kind of the core thesis. I think it's also frankly what we started framework going after. You know, we got Typcast as the DeFi fund in 2019 because nobody else was looking at DeFi and and we kind of you know coined that term in a lot of ways. But I think generally like we're going back to basics and and back to fundamentals both in DeFi but

also in you know revenue and profit. >> Vince Vince anything to add? >> I mean I think perfectly said by Michael. Um you know if you're still shilling attention tokens or XRP you really should be flipping burgers and good luck. >> Appreciate that man. Shout out the XRP >> Rob. Actually, building on your point, there was this tweet that kind of had like this tokenization stack laid out. I'm just curious if you guys see it like this. So, there's a there's a base layer of stable coins, there's asset issuance, there's a risk layer, then there's tokenization, capital allocation, and then distribution layer. Um, you got like the likes of MZ Circle, Apollo,

Daylight USDA Cork Centrafuge Ono Securitize, Maker Sky, and then centralized exchanges and fintech. Um, I think Rob, what what you're kind of getting at is like there's this new it's like tokenization, stable coins, fintech kind of combining here and and yeah, I guess lads, like from your perspective, is this the is this the stack to pay attention to for uh 2026? Like is this where um value is going to be actually created at scale? Um why why not just kind of generally how you think about this stack? I I would say and I got to hop after this, but um so the daylight and and USDA products I think are incredible from a yield perspective and

credit quality perspective. The things that everyone will struggle with is duration. And I think um for a lot of the new stable coin projects that are coming out, they can use Sky as you know a buffer for duration. And what I mean by that is Sky can be the really sticky capital that is patient that doesn't withdraw. Um that can help you build out a book of business that can sustain a two to three to fouryear type loan arrangement. Um I I am very doubtful that a lot of these will be able to do it on their own. And so in many ways um just like Sky wants to create good sources of yield, I think a lot of these yield coin want to create sources of duration that are outside of them. Um, and you've seen Athena draw down from

like 15 billion to six billion. I think it's, you know, going further down. Um, if that happens and you are like financing a solar panel with that money or or a GPU, you've got a really serious issue and you need to sell those GPUs at fractions of the cost and and take bad debt hits. And so, like the duration idea is a very important one as we go into 2026. And so I think a lot of these yield coins will be really solid so long as they can partner with Sky to kind of build that base of very sticky capital. Um I think if it's all consumer money and it's easy come easy go uh it's going to be really difficult and prone to to failure. So um you know very very bullish on both daylight USDA trade finance people who are building home

loans onchain duration is really the product of 2026 to be figured out and I think a lot of it comes with having a partner that is larger scale more patient scale can make your yields liquid um and maybe not pass through all of it but pass through enough where they're able to build consistent duration in their book and pass it down to you. So, I know that's a pretty esoteric concept, but just something worth the audience understanding as these yield products become more and more uh distributed in the marketplace. >> Yeah, meanwhile uh was another one that came on the show recently and and duration is the name of the game when it comes to life insurance. So, I think they're they're providing that as well.

Um and I take a clarity act is probably going to be pretty friendly to this concept of yield coins. Maybe this we can is there any insight you guys have on on how clarity >> let you go Vince? >> Yeah. Yeah, thanks guys. >> Thanks F. >> Um, in terms of clarity, I I think um, it remains to be seen. There's still a lot of nuts and bolts that need to get figured out with clarity. I think the base understanding is is that, you know, there will be some sort of offering for a yield coin. um whether that is you know some rate D type offering where you have an exemption for a securities offering as you would you know with many you know fundraises for for equity based companies um or there's something that's

new that's created I think both Paul Atkins at the SEC has kind of signaled that they want to build some sort of sandbox or or kind of regulatory program that allows for experimentation um or it's clarity that defines this um and pushes it into law immediately I I think either way would be great. Um but generally people understand that we need to have some sort of cryptonative uh security exemption. Um but that these are going to be valuable assets and I think the the element that is going to be really interesting to watch in clarity is whether or not yield can get passed back. I I think that they're going to officially kill that um in in clarity which even further pushes you know these Yieldcoin uh DeFi native opportunities you know out. Um, so it a

lot of lot of moving pieces on on the periphery, but just going back to it, I think getting this done um substantiates a lot of the future growth of this industry and um it's all going to happen probably pretty quickly in 2026. >> Yeah. Awesome, Mike. Thanks so much, man. Appreciate you coming on. Uh and Vance, >> you guys are on the um nominees for best hair award here for uh Rollup TV uh holiday season. So stay tuned. Yeah.