Bitcoin, Ethereum and NEAR: support levels, midterms and Bitwise's NEAR case

Transcript

I think that the intersection of digital assets tokenization artificial intelligence, agentic finance, all of these things come together to form one of the strongest bullish outlooks on any markets that has ever existed, right? So there there's a huge huge opportunity here. What's up everybody? It's LG here and welcome to the Milkro Show, the daily crypto show that celebrated Thanksgiving a little too early because this just how we do it up here. Today is October 13th, 2026. I am back to host the show and we got John in the studio to talk through what is going on with Bitcoin price action, which alts he kind of likes, what's going on at the macro.

Are midterms going to go the way everybody expects or does he have a bit of a different theory on that one? And then at the end of the show, unexpectedly, I actually asked him about crypto security. Is quantum a threat? Is AI a threat after Justin Drake wrote another uh little Twitter post about our cryptographic addresses and and the risk that may come with that. So John is going to give us his take on that at the very end of the show. And if you want to see John's portfolio, we're going to discuss that in Milk Road Pro after hours, which we recorded right after these episodes every single time we do them. And that's only for pro members, which you can join for just a dollar at the link below. And of course, see everything that he's holding, including his very juicy alts and his very big

positions. And a reminder that our podcast today is free and that it wouldn't be possible without our partners at Nexo. The digital asset platform lets you trade, earn, and borrow all in one place. Keep an eye out for more information about them later in the show. John, happy Canadian Thanksgiving. Happy Thanksgiving in advance. It's It's not for another six weeks for you. >> Welcome back, LG. I hope you're full of turkey and ready for a great podcast. >> We don't eat turkey Canadian Thanksgiving. >> Okay. Well, what else is different about you guys? >> We eat polar bear. >> You know, not all Americans. We We finally caught one. We We caught one.

The whole village got to eat >> because we we got our polar bear this year. Sometimes we don't. We just starve for a whole weekend. Let's move on before he does this angry email. >> Speaking of bears, John making fun of the polar bears. >> Hold on. We got this part where I'm dying. >> Yeah. No, we're going to leave this in. This is great. This is quality TV. This is why this is why people Yeah, this is this is what all those views on YouTube are. Um John, speaking of bears, uh I think a lot of people, like I said in the intro, were kind of victory lapping a little bit this past weekend with a few pretty big dips. um coming into almost I guess kind of the middle of the range that we've been in for a little while. But I don't feel like you're I

feel like you're the last person who's panicking about that. >> I'm not panicking. I think that uh what we've seen over the last like couple of weeks here on Bitcoin is Bitcoin just resuming ranging uh which is like ranging price action. If you look back over the last couple of years of Bitcoin's history, there have been several periods where Bitcoin has more or less gone sideways in a tight range for a period of 6 months or or more than that. Sometimes it gets kind of frustrating at at times. Um but that's kind of what we're seeing right now. And I think that it's difficult, you know, especially as somebody who makes content to get all excited about, you know, this, you know, nearly $2 trillion asset that's just chopping in a pretty tight price range. But that really is the exciting opportunity right now is

accumulating on the dips and the fact that the we are holding these levels and finding the support means the bulls are in control. I'll go back to what I started saying, which is in the last like week or so, Bitcoin has u come down and tested 81k as support um twice now. So, the bears have um kind of like flexed on the bulls and like put put them to the test here on this this uh price action we've seen. And the bulls both times have very quickly stepped in to buy by the dip and have reclaimed um the the key point that I've been watching personally is $83,000. The reason that's such a key level for me is that that is the high that Bitcoin set back in May of this year. And so getting back above that price level and holding it seems to imply acceptance of a new

higher high on Bitcoin which is a confirmation of this bullish breakout that we've seen and a confirmation that the bearish market structure has been broken. So holding on to this level is really important. Um and so you know we got a flash crash last night which I attribute mostly to a bunch of people getting liquidated on SanDisk and the the Cosby the Korean stock market exchange um having their circuit breakers thrown and stop trading because of the the sharp um cascading liquidations on longs there. And so because a lot of people use cross margin, you know, they get liquidated on their their Sandex position, they are forced to sell um whatever else is in their account. If that happens to be crypto, they sell the crypto. You get some forced selling pressure. But again, that the takeaway is that the bulls stepped in very quickly to buy that. And

now we've reclaimed that $83,000 level. So even a longtime, you know, not bearish, but like let's say um an analyst who'd been calling for a lower low on Bitcoin, Ben Cowan, uh tweeted out this weekend that the bulls remain in control. And that's the takeaway here is that we haven't broken out past 90K. We've still hit our head on this $87,000 resistance here, but the support is holding. The bears have tested 81k. The bulls have defended it aggressively twice and the bulls, I think, remain in control in this market. So, that's kind of like my overall outlook. But you look, you're seeing this chopping in this range. It's easy to get bored by that. It's easy to get skeptical and think we're going to, you know, run out of steam and crash. I think the RSI on on Bitcoin is resetting. We're kind of building a new base here. And the way I

read this is that we're just kind of like laying the foundation for the next move higher. Uh whenever that comes, I I can't tell you the time and date, but that that seems to be the market structure that we're building here. And this is all just very positive, bullish, and what you want to see at the early stages of a new uh crypto bull market. This pullback on Bitcoin is scaring a lot of people and I am not one of them. So, if you want to see what I'm not selling and why, what's on my watch list and when I'm going to be deploying more capital into these markets, you can join Milkro Pro today. It's just a dollar. The link is in the description. I answer questions day and night in Discord. I'll see you there. >> Do we do we dip down? You were saying

that that around this range like in the kind of like the the low from ever since that big move back in August, which is about 75 on the dot roughly. Um, you were saying earlier before we started recording that like breaking below that level basically uh would would invalidate a lot of what you just said that if we dip all the way down to that that that would be probably bad news and maybe Ben G's prophecy of a lower low does does in in fact come to pass. >> Yeah, that's kind of the level that I've been watching because that would mean that we've broken out of this range, right? And I don't I think this is an important thing to say too and you know Ben talks about this as well. You want to look for acceptance in a range, not just a wick. So, what do I mean by that?

Right? Like the chart can trade um for an hour or four hours, you know, in a certain range, but do we get accepted there for a longer period of time? That's that's kind of the important thing. So, like obviously we move 10K in a given direction, like whatever. I would call that acceptance. However, if you just like kind of like dip your toe over a line and come back, like that that can just be a retest. that can just be um you know a fake out basically a bull trap, a bear trap, whatever the case may be. But if you see one or two weeks of price action above or below a certain key level that you've been watching, that would be market accepting into that new range. And that's like a change in market structure. So what I've been watching for is just like you said,

the 755 $75,500 level on Bitcoin as sort of the bottom of this range, sort of the relative floor that we've put in since August. And this is two months of price action. So, if we went below there for a week or so, I would say that, you know, you could then revisit the the bare case here and say that the bears may be back in control. There may be a case that we go retest the old lows. I still would be skeptical that we would ever see a new low um like a lower low overall for this this bare market here or, you know, early bull market, whichever way you want to look at it. But for me, that's the level I've been watching. So, as long as we're above that, I think we're in a good place. There are other key levels of support above that though that

I've been watching. Obviously, the bulls have defended 81K. So, that I think is now a place you should watch for for support because the bulls have stepped in there twice. Um, another place if you know you're into Fibonacci on this move, you could you could look at 78K. There's a lot of analysis you can do on this, but uh the point is that the bulls have shown support at 81K. Until we lose that long range of two months of price action at 755 though, I think the bulls remain in control and the bare case is something that, you know, keep in mind, but it doesn't seem to be the most likely outcome here. And you know what's what's amazing, John, is that even to what you just said, the two-month range is that it's kind of hard to believe it's already been that long since this

move out of the like the low 60s range, right? Because we dipped into that uh let's see, early June is when we kind of lost lost out on this kind this rally kind of failed, right? This past rally I guess from like May, the spring rally, the Q2 rally, and then we dipped into this kind of final bottom range where we dipped into the 50s. Um and then that popped there. And again, I don't even know what else to call that rally other than when Trump said hyperlquid at a press conference. This is that's just my name for that these couple days of green candles. Um, but it's amazing that we've been up in that level ever since. Uh, and that we actually haven't the last time we saw a price below 80 uh was already almost a month ago was was September 18th, right? So So I agree

with you or at least I I I hear what you're saying that it's like we are holding really well um in this range which is very encouraging. What what is the what are the two paths forward from here besides chop John? So it's so we let's say what's the bullish case that like the bulls are defending 80 81 and that means what that we're going to kind of that they're going to hold it and break out of this range. Are they going to be successful? How do you think that's going to play out? So my strong case right now I mean well look this is what I think is most likely but this is a little bit of like you know reading tea leaves and like don't take this with a grain of salt because nobody can tell you what is going to happen in the

future to me the way I'm looking at this is that it seems like um Bitcoin has made two moves here and if you if you look kind of like on this after the August you know hyperlquid squeeze we chopped a little bit then we went up again and we we tested the top of that range at 87K we came down from there we tested 87k again Now, we've tested twice the bottom of this range of this new range of 81K. It seems like the next thing to do would be maybe to go test the top of the range. Um, but I could be wrong on that. We could retest 81K. Maybe it doesn't hold this time and we go go lower and and keep exploring uh, you know, deeper into that range. But regardless what happens here, it seems to me like the most likely outcome is

that in a couple of weeks here, you know, we're going to get some some CPI data tomorrow. Um, that could be uh bullish or bearish. We'll have to see, but it could be bullish. Um, and then we're in a few weeks, you're going to get through the US midterms. And as we get closer to that, I think once the market feels more certain that like like let's say like like we got the the next Fed Fomc FOMC meeting behind us, which is later this month, and then we get closer enough to midterms that the market feels like they have certainty about that and they're like, you know, kind of looking through that. I think towards the end of October towards early mid November, the the macro backdrop that's been sort of presenting some headwinds to a lot of things in in the risk asset markets um starts to clear

up. Some of them start to flip uh in a more bullish direction. And I think that the next thing to expect is that we retest and break 87K and go to to you know take a shot at 90K and and start to really confirm out of the bare market. Um that seems like the most likely outcome to me. A lot of people are in the other camp who are saying that as long as bond yields keep rising as long as you know the Federal Reserve's monetary policy doesn't remain accommodative uh that's going to present headwinds uh for Bitcoin and and all risk assets and then we could still see um struggles and and chop throughout Q4 or maybe even you know some people are still calling for a lower low and a bare market um or like a re re-entering of a bare market. I just don't think that's

the most likely case here. But I think that you have to weigh all these things and come up with what makes sense for you. I think a lot of these macro headwinds are temporary. I think that a lot of them clear up sooner than later and uh eventually the the bull market momentum here continues. But that's just like, you know, how I see this. I think that right now all we've really seen Bitcoin do is sort of revert to the mean really, right? Like we haven't broken out into wild levels of overvaluation. We've sort of seen it get back to the one-year average price. Um, and it's sort of like rejoined the the the rest of the market at at where it's like average fair value is, but I don't think that there's a lot of capital right now that wants to go chasing risk assets and

speculating because of these macro headwinds and uncertainty. So, that's kind of how I read this. I think the bulls are in control. I think a new bull market has started and I'm expecting us to eventually move higher and continue from here. >> I have a question on kind of risky liquidity that we'll get to in a second. But, uh, if you guys like everything that John just said, he posted something very similar today uh, in Milk Road Pro. I know we always tell you guys about Milk Road Pro, but you can get these uh these updates almost more in real time, John, because you're doing the show 5 days a week. You're usually the host or getting this this analysis from other people, and we only hear your analysis on the show once a week usually, but uh for people in Milk Road Pro, you'll get

John's updates. He posted last night about this kind of pretty much exactly what you just heard, this Bitcoin analysis. You'll also been posting about um your alt picks uh John as well, which we're going to talk about in Milk Road Pro after hours, which comes at the end of the show uh for pro members only. So, we'll get to that in a little bit, but just a reminder that you guys can get all this kind of info um you know, first before hearing it on the show. Uh John, let's let's jump over to to I guess I you already kind of alluded to a lot of the the macro stuff that's coming this week and in the coming weeks. Earlier, I asked you about midterms. Um, and again, one thing that I' I've picked up doing the show in the last year from you and

and some of our favorite guests is that, you know, Bitcoin is just kind of like a an early marker of liquidity, right? That it's something where it's able to sniff out liquidity problems or or or bullish liquidity conditions ahead of time. So, how does how how with the midterms in a few weeks to me something like midterms is something where it's like you whatever Bitcoin is doing now is the reaction to the assumed mid midterm outcome which is still now swings largely Democrat. So, is this and that's that's just my assumption that's just from my learning. How do you think the bulls and bears are kind of pricing that in right now given that you know you look at prediction markets which have been the beacon of truth in this in this era of elections? Um how how

accurate do you think the price is is reacting to that right now? Like is it reacting and is it is it going to have further reactions if those outcomes change or stay the same? >> That's a very complicated question that's not easy to answer. But basically what I would say is my like guess about what happens in midterms is I think I think the Republicans will keep the Senate. I think that the Democrats will get the House. I think we will have a split government. And I think that that is largely bullish uh for Marcus because it means that for the most part we're not going to see a lot of major legislative changes come out of Congress. We're going to see a lot of the executive branch get sued into knots. Um, and then we're probably just going to see a status quo emerge where

investors get a little bit more certainty just from the standpoint that for the next two years it's unlikely that anything is majorly going to change in in the in the landscape um out of out of the governmental side of things regulatory regulatory or legislatively. However, the SEC, the CFTC are very clear, very vocal about their commitment to bringing a clear regulatory framework to market for the digital asset industry and opening that door, giving safe harbor, giving innovation exemptions, making perpetual futures contract platforms like Hyperlquid Lighter and others um able to do business in the United States. That's going to go forward. There will be, I'm sure, legal disputes and conversations about this.

Right now, a lot of these prediction markets, it looks like, are going to end up in front of the Supreme Court. there's disagreements between them and you know the gaming industry and all all kinds of things are going on. So there's going to be a lot of that that happens. But while all that is playing out in the courts that kind of does give a little bit of of clarity it'll give us um some sort of certainty about where we are and then I think investors can allocate accordingly. And you know the thing about these innovation exemptions is that while all this is getting settled in the courts and whatever else uh people can still do business they can bring new products and services to market and they can keep doing a lot of very bullish things and and bringing tradi and defi together integrating them

so it's just fi um and AI is not going to slow down or stop either. The Trump administration made it very clear that they're not going to pump the brakes on that. So the bullish momentum that we have seen there I expect will continue or will return. And I think that the intersection of digital assets, tokenization, artificial intelligence, agentic finance, all of these things come together to form one of the strongest bullish uh outlooks on any markets that has ever existed. Right? So there there's a huge huge opportunity here and I think whatever happens with this election, we'll get some certainty about it and the markets will move forward and allocators and investors will start to bring their capital back.

Um, and so it's just I think it's going to be bullish no matter really what comes out of this as long as the the Democrats don't win both houses and like impeach Trump and like you know try to run him out of the country or something because that I think would be disruptive for markets but I don't think that's what's going to happen here. I mean that's kind of what Poly Market's saying though John and not to not to flip totally into politics but how do you I I mean I I definitely want to hear your opinion right because we've been looking at the same very similar chart here on poly market and I'm sure it's it's it's similar on Keli and uh a lot of the other markets where you've got a 64% chance Democrats take the Senate 91% chance they take the House. So, um,

we'll let's take it let's do a little political geopolitical pit stop here. Like what in what situation do you think that these that this would result differently? >> I think that a very large number of the Senate races are well within the margin of error and the polling data isn't that accurate on some of this stuff. So, people see a lot of these things with the Democrats in a slight lead. They think the Democrats are going to win. I think it's much more of a tossup than people realize. And I just I just don't think that the Democrats are going to win the Senate. Um that's just my read of a lot of these races. It could go other ways. Like if Michigan and Texas both go blue, okay, you know, cool. But like we'll we'll we'll just kind of have to see how this plays out. But I really

do think this is the important thing about this. That is too close to call right now. I don't know. The pollers don't know. Poly market doesn't know, right? So um it is too close to call. And I think that you just have to kind of wait and see. But I I think that the Democrats get the House. I don't think they get the Senate. Um but we'll see what happens with all of this. they're not going to have like a super super majority of these things either. Um, so we'll we'll we'll kind of see how it plays out, but I'm not I just don't put a lot of confidence in that right now because all that is within the margin of error and people are, you know, kind of getting confident about things that are very very much still uncertain.

>> Are you usually right or wrong about these things? >> I uh I grew up in DC. I worked in Washington on Capitol Hill for a few years. >> That doesn't mean anything. That doesn't mean anything. the last couple major elections, were you a couple weeks out, were you right or wrong with your assumption? >> I was right. I'm I'm guess better than average on these things. Let's put it that way. >> Better than average. Okay, that's uh that's very encouraging. U John, I mean, there's a lot of other kind of random uh crypto news we could discuss, but I think um one thing that I really wanted to ask you about uh was near and again we're going to save we're going to save some of your portfolio talk for after hours. So, so I don't want to give everything away. Um, but you did talk to

Bitwise last week about Near. Uh, you had them on the show. They launched their ETF uh, I think two weeks ago that's supposed to be it's a very trendy pick at the at the moment. Of course, uh, Near being kind of one of the trendy trendy alts in the basket of alts. Um, and and you did post a Milk Road Pro update about it, I think yesterday or in the past couple days. I I mean I guess I just want to kind of hear your thesis on it or at least like what you if you learned anything new from Bitwise and the interview if there's anything that that surprised you and also do you think like like is that is that for you something where the broader market is going to catch on that more retail is going to come into that through an ETF uh or is this something

that's going to remain like just a crypto crypto person kind of thing? >> I think that the way I'm going to answer this question is just with what's on top of mind for me right now. So, first, um, NE, I think right now is trading around $5. It's been swinging around quite violently, a little bit actually, but in a pretty tight range, just like a lot of other alts that have performed very strongly. Um, so it's not breaking down. It's just consolidating, and there's going to be volatility. When you have a a start of a new bull market in a lot of midcap cryptocurrencies that are are bullish and performing well, there's going to be people taking profits because they've been bag holding for a long time and are just finally happy to be, you know, above water again. So, that volatility is to be expected. That

was the big thing I was trying to communicate to the pro community last night in my update was just that the volatility is expected. The volatility is the price you pay for performance. It's not a bad thing. Nothing is broken. Things are going to go up and down on you 15% in a day or in a week. Um sometimes first up 15% then down 50%. It's just going to be like that. But that's part of an early bull market and it's not something to to like get too keyed in on or to react emotionally to. Um near protocol. So the the way that the Bitwise guys framed their thesis on near is that if it got from where it is today to be roughly parody uh in market cap with uh Ethereum um right now which is like you know in just coming out of a

bare market uh then that price is near at around $155 $160 per near um which is like a 30 40x whatever it was I can't remember exactly. You got to watch the episode it's pretty good. Um but their bullcase on that was much higher. They said $500 was their bullcase on near and where does that come from is the thing that's interesting. So, the way I'll I'll kind of explain this, if you look, this is something I saw on on Twitter this week that was really interesting, which is that D call center volume is dropping a lot. Um, and the reason that people are not calling call centers so much anymore, and that volume is coming down for the first time in maybe ever, is um that now people are interacting with their AI agents to get questions answered, to get things solved that otherwise they couldn't use the UI on a

website or whatever. They would have to call in to get support. Now, they're just having their AI agent figure it out for them. So you're starting to see the impacts of these things. Meta launched uh MetaMuse which is a personal AI agent and they're they launched a new suite of models specifically targeted at personal agentic use cases. What does that mean? So a lot of what Open AI and Enthropic have been focused on has been on what we would call knowledge work and trying to help people who do knowledge work jobs like coding and software and and Excel spreadsheets and stuff like that. They have focused their models on training to that and doing that really well. Meta has focused on how can I be the most intuitive and easy to use personal agent um on the market and that's what their new set of models that they released

this week are about. That's what Metamuse is about. And so MetaMuse has gotten millions of downloads um millions of new users and millions of people using MetaMuse to help solve some of these things that they would ordinarily be calling in for. Why do I think this relates to Near? because it shows the strengthening thesis that Bitwise has that many other people have on Near, which is Near is trying to be um a sort of interoperability solution, chain agnostic solution. They have something called Near intents. And what it is is that rather than having to figure out which chain, which protocol to use to get the best price to accomplish whatever it is that you want, you kind of express an intention and then Near Protocol uses all these different, you know, abstracted um backend things to arrive at that outcome and achieve that

goal. and they're doing like huge amounts of volume. So the the product market fit they found on this has been very strong. And it seems like as more people start to use agents, you know, you're going to verbally speak in plain text like, "Hey, I want to do this." Right? So, it's kind of like the the way I would describe this for people to think about this idea is it's kind of like getting into a car or like a taxi. And instead of saying, I want you to take, you know, Fifth Avenue up to Central Park and then go over to the west side and go up from there and then turn and like describing the exact route, it's saying like, hey, take me to uh, you know, John Rockefeller's Cathedral on the upper west side, right?

And then the taxi driver figures out how to get you there, but you don't have to think about that. This is a long rambling answer, but it is basically saying that near is very well fit for this intersection of AI and crypto and it has found product market fit and it is kind of like really staked out a lot of the market here. So the thesis on that is strong. If they continue to maintain this market dominance, they continue to generate revenue and volume and and perform well. The the upside on year is is pretty strong. That's sort of the bitwise thesis. That's kind of the thesis for me and a lot of other people. But the fact that we are seeing in a real meaningful way after Meta's move, right? Like these new models and new products specifically for just personal agentic assistant use. Um that sort of

strengthens a lot of what the future that Near is building for. And their founder Ilia wrote this paper all you needed attention is all you need which is sort of like the foundational one of the foundational papers on this whole movement towards agentic finance. So they they've been seeing this future coming for a while. They've been building products for it and seems to finally be starting to materialize. So that's been a big driver of a lot of attention on Near and there's a lot more you could say about this, but that's sort of like some general thoughts on this and takeaways. I really recommend watching the whole episode because the conversation was great. Um, but yeah, that's that's sort of uh some some thoughts on near. You know, one of the weird things about crypto is that the longer you're in it, the more accounts

you seem to end up with. You buy in one place, trade somewhere else, earn yield somewhere else, and if you actually need capital, you end up having to sell something that you probably wanted to keep. That's why we at Milkroad are partnering with Nexo. These guys keep the whole thing under one account. You can buy, trade crypto, earn interest on what you already hold and even borrow against your capital without having to sell it. All in one spot, all in one account, all on Nexo. So, if you need liquidity, but you don't want to give up your position, or you're already holding crypto and you want to be able to do more with it, I think Nexo is worth your time. We love working with them. I think you will, too. Telemilk Road sent you. What is the moat for near like what makes them unique? Why why why them?

Like, why isn't this something that somebody else could replicate? And even and even one of the hyperscalers could replicate as well or hyperscalers like one of the agentic producers right like a like a meta why couldn't they just build this whole stack if they needed it or or build this kind of service or have an app store where people can build something similar without using blockchain or without with using a blockchain but not using near >> so I think that this is a really interesting question moes themselves are becoming really difficult to define or defend or in many cases like project out 3 to 5 years in the future the mo that they have right now is that they are uh first to market with something. They saw this coming for a long time. They built for it and they got situated and set up

well for it and so they're capturing it right now. I don't know how they continue to defend that mo 3 five years into the future. They don't know but one thing near I think has done very very well is adapt and pivot. They started as an L1 blockchain. They pivoted to something called Near OS. Then they pivoted to this you know different kind of strategy here. Um but they they've adapted many times. That is the thing I would point to as their moat and I think that is the only moat that's left because of the rapidity at which the advancement of technology and finance um is just increasing and it's going to keep going because it's gotten so like breaknet pace at all these things all levels of the stack and all products and services that that competition is always going to be there. They're always going

to have to continue to iterate to improve to adjust to move with the market but they have like I said for the moment locked in pretty good product market fit. That's the moat that they have at the moment. If that thesis changes for them, you know, you have to either bet that the team will adapt and evolve to continue to find ways to adapt their product to fit the market and continue to maintain that their market share dominance or someone else will come and eat their lunch. But this is true of almost everybody in the business right now. Like Adobe had like this lock on that that niche of the software market of like the their creative suite and then last week somebody reverse engineered all of Adobe's products and then open sourced them and now what is Adobe's mode, right? Like anyway, I I

just think that this is a question that the answer to this is going to change. But the thing I think is appealing about Near is that they have seen this coming, built for it, and captured it well for the moment, and they've proven that they're able to pivot and adapt, which I think is the only actual mode because everything is going to be adaptive at this point because the the changes are going to come faster and faster, and the the the prize to play for is going to get bigger and bigger. >> Right. So you're basically saying that the only defensible moat in this new agentic AI world whether it's crypto or other companies is adaptability. Basically it's a big there are very few products you can build that cannot be replicated uh in this kind of advanced you know because they don't you don't

need as much money or scale to build products now as you used to. Um, and it's easy to kind of pick apart what how a product's been built and how to recreate it. And that agents and other users of the internet will be looking for cheaper alternatives forever. And that, you know, it's going to be a race to to race to the bottom for a lot of products in terms of their cost because it's getting so much easier to build them >> and that adapting and continuing to build new products for your customers is the only way to kind of stay stay afloat. >> Exactly. Right. because what the market wants the product the market wants is going to change much more quickly now too I think is the other part of that right it's not just that other people can come to market and compete with you

it's that because so much is changing so fast and things are are different week to week or day to day in some cases the product that has market fit is going to change very rapidly so it's not enough for near to just like build what they have and say okay here's intense and just like set it and forget it that that doesn't work anymore you have to keep evolving and your product does too and that I think is a is just like the the the nature of of being in business these days. >> So what's Ethereum's moat in that world? >> Ethereum is presenting. So all value I I've said this before, I'll say it again. I think that this is something that sounds silly when you say it, but it is extremely important. Ethereum's moat, Ethereum's value is the crops acronym. It it's credibly uh credibly

neutral, censorship resistant, open, permissionless, secure. Um and it's it's a a framework that you can build monetary, financial, economic and governmental infrastructure on top of for anybody in the world. The all of value is downstream of faith. So everything is faith. Near is not private. It is confidential. Um so there's trust that you are placing in near and that is not a perfectly distributed trustless system. Ethereum is striving for that trustless state. a trustless system that is I think the big differentiator the special property of Ethereum and the value driver of it and I think that is something that everybody who is in finance particularly institutional finance understands they understand the language of risk they think in the language of risk that was

like the whole business that I was engaged in when I worked at Black Rockck was around this language of risk so they think in those terms they understand that those terms dens who are trading meme coins for 15 seconds at a time back and forth don't really care so much about who's running the platform that they're transacting over. But if you're managing trillions of dollars, you need to understand your counterparty risk intimately and intricately. And I think it matters a lot more when you're talking about um assets and and infrastructure of that scale. You need to have that censorship resistance and that permissionlessness um and the that that's the value proposition is Ethereum's most important financial product is truth, not trust. It is truth. And that is the difference. And

nobody else can offer you that. everybody else can offer you trust me but Ethereum can offer you the truth and that's uh I think the the big differentiator of Ethereum of ETH the asset and a big value driver that is still misunderstood and underappreciated but um people are are beginning to catch on to this and Ethereum is going to gain a lot of economic and capital gravity. My last question that's kind of topical these days for you, John, is about AI security and blockchain. And I feel like we could do a whole episode about this and maybe this this I'd love to see and maybe you've had guests um recently have some lined up about this, but that definitely seems to be kind of the creeping narrative. We talked earlier in this earlier this year there was the quantum risk um that was heavily discussed after I forgot who I think it

was Google that warned that they might be able to basically like break Bitcoin within a couple years. Um, and now I I haven't heard about that in a while, but I definitely see regularly on the timeline that we're seeing more hacks. Um, and there was a scare last week, remind me what it was, that basically um, EVM addresses weren't weren't as safe as they were previously thought because because of AI. What's your take there? This seems this this this to me more than anything seems like a legit threat. And I'll also tell you why is is that again, I'll go back to one of our favorite guests, Matt Hogan. a long time ago, one of the last episodes I had done with him, I asked him like, "What do you think is actually like if you had to single out one major threat or risk to

crypto and Bitcoin, what would it be?" And he was like, "Quant. That's that's the one that would worry me the most, if any." Um, so I want to get your take on this, John, and and I feel like we should revisit this pretty often because it is depending on how risky you think it is, but it definitely seems to be something that a lot of professionals in the industry um are starting to get worried about. >> All right. Well, you just opened a very large can of worms here, so I'll try to take just one step at a time. So, >> big breath in. This is we always you think just when you think the podcast is over, John is like, >> that's I'm just going to start talking.

>> Yep. That's that's what's going to happen now. So the paper that you referenced from Google and the scare on the timeline that you saw last week about bunker mode, crypto going into bunker mode are both from the same guy and his name is Justin Drake and he is a cryptographer, a researcher um and a very smart person. I don't say this with any shade of of like you know I don't know disparagement at all. Justin is a very smart and very important researcher and when people when he talks people listen and they should. He is somebody who is uh somebody who you should pay attention to and what he is saying things like this you should take him seriously. However, I think he doesn't have the best track record of predicting the future or the timeline of some of these things and so I think that's

something to take into account too. He's doing his best and that's important but he's not perfect. He's not Nostradamus and that's you know he admisses himself I'm sure. So okay what what what do you need to know about this? So um quantum computing uh is all right I got to I got to organize some things here. Uh so in the history of cryptography uh there is always a contest between the power of computers and the strength of algorithms and it's sort of like a cat-and- mouse game as the algorithm as the computer gets stronger and computational power gets stronger and and Moore's law um comes into effect and like these um computers get stronger more faster processing power smaller chips you know stronger computers the ability to break the

algorithms that we're using for encryption against them um gets more viable and so they could keep having to move the algorithm and make the algorithm stronger, more complicated so that the computers can't uh break them. The thing about quantum computing is that it is much worse than classical computing, linear computing on many different sorts of computational problems like merge sorts or bubble sorts or just like any kind of like generic um use case for computation. Um however on certain kinds of computation quantum computing is able to beat classical computing over a long enough time horizon. And so from a business perspective and applications perspective quantum computing is is pretty limited in its applications and it's not really

better or more useful than highowered powerful classical computing. However, there are certain things that quantum computing can do better in certain times in certain ways. And one of those things is potentially breaking what they call lattice or or elliptic curve encryption. Um and so elliptic curve encryption is a lot of what um the signatures of digital assets ecosystem wallets rely on for their cryptographic security. So what Justin drink was saying was we need to go into bunker mode because not only is quantum a potential risk on the horizon, but now swarms of AI agents are also a potential risk because they solved a millennium problem called Navier Stokes.

um which is a hundred-year-old problem about fluid dynamics. Um and anyway, they they took like 10,000 agents and applied them to this problem and they were able to solve it. And then OpenAI also said that they had solved a hundred I think other different frontier mathematical problems and proofs. So the point that Justin was making was like hey AI is kind of like finished math and because a lot of our industry relies on encryption and mathematics that makes a lot of this at risk. So his proposal of bunker mode was to just move your crypto from an address that has a visible or an exposed public key to a new address and not spend out of it. And the reason for this is that if you move it to a new address and you don't spend out of the address, then you don't expose your

public key and your private key stays private. And that's much harder for quantum computers or for a swarm of AI agents to break that encryption than it is if you have spent out of your wallet and your public key is view visible. This is something he said before. This is not a new recommendation from him. It was just sort of a reminder of him saying like, "Hey, I think this risk is real and people should start start to do this." Vitalik tweeted back right away saying like, "I don't think we need to panic about this." And you I kind of agree with Vitalic on this. And Justin has said this before, so it's not like new from him necessarily, but I I just think it's a very scary time because we haven't seen frontier mathematics get conquered so quickly by anything ever.

And people are very uncertain as to what this means for a lot of different disciplines and and crypto cryptography and encryption is one of them. I'm not super concerned about this right now because like I said throughout the history of the last century of computational complexity and development. The algorithms have always been at risk of getting broken by improving computational power and they always just keep making the algorithm harder and more complicated and you just keep the mouse ahead of the cat basically. So I feel like that is what's going to happen here too. I'm not super worried about that. I think it's a valid concern for Justin to be voicing. It's something we need to take seriously and to solve, but I do think it is a solvable problem. I do think it will get solved and I don't think people should panic or start shuffling around all

their wallets um just because I don't think it's a a real and serious threat yet. And I think that you are seeing a number of hacks happen like Japan has had a bunch of these happen recently. I I heard reports that like a bunch of refrigerators and restaurants were hacked into by hackers and their their food thawed and rotted and stuff like this. Just all kinds of stuff is going to start happening. But yeah, I don't think anybody's going to be like, "Oh, let's go steal the $200 that so- and so has in their MetaMask wallet, right?" Like, there are a lot of other things you could point that powerful level of cryptographic power at or computational power at before you wanted to just start breaking somebody's hot wallet on on Phantom or something. Anyway, I don't know those are some thoughts on that. I

don't know if that was an answer to your question, but that's I kind of blacked out there and started going into public and private keys, but that that's something of what's going on. >> You put some shade on the pores in crypto, man. like you and your $200 your MetaMask. No one gives a about that. >> Or Phantom, whatever crap you use in your browser. Nobody cares. Don't worry, your $200 is safe. LG, that's what you're saying. That's what you're trying to tell me. I mean, it wasn't $200, but the last couple weeks have it turned into $200. Put it that way. Um, so, so, but what I've really taken away is that we should just buy gold bars and hide them in the backyard.

>> Uh, that's the only safe. That's not my perspective. I'll hide them in my septic tank. >> I think that you're going to see an increasing need. Look, the real thing I think is a thing that people miss about all of this is that digital assets, blockchain technology has been spending decades, like many, many decades, working on the problem of how do you create alignment between separate, uncontrolled, and untrusted users and counterparties in a network. The whole problem we're trying to solve with AI is what do we do when we have trillions of agents acting without human supervision and how do we make sure that they don't act in malicious ways? How do we make sure that they are properly incentivized and constrained by code, by law, by incentives in um the networks in which they operate to behave in ways that are

mutually beneficial and uh constructive and collaborative. The whole purpose of blockchain technology is to provide the the structures and rules and frameworks and technologies and uh assets necessary for that kind of an economy to exist where you don't have to trust other people but you can and other agents human or agentic actors but you do trust the system because you don't have to trust it right that's the whole truth not trust this is uh Charles Hoskins has said about something about this at the UN just last week the week before but he's been saying this for a long time he's saying Google used to say don't be evil. Blockchain and crypto is about can't be evil. And that means can't be evil applies to nation states, individuals, AI agents. It doesn't

matter who wants to use these systems. If you can't be evil, then you can be trusted. And it doesn't matter if you're AI or human. Now, there's other things that we have to figure out to to deal with like, you know, reputation, so forth, etc., but just laying down that as a base foundation solves a lot of these concerns and should put a lot of this to rest. So, bringing these two major major um drivers of value in the market and themes that are happening of AI and crypto. Bringing them together is a natural partnership and marriage and I think it solves a lot of the problems that both of them are facing right now. That's what's happening. People know this. They they started to figure this out. Investors are starting to figure this out. Companies are starting to figure this out. So I think those

technologies will come together and help each other both a lot. And the beneficiaries of all this is going to be everybody else who is, you know, benefiting from the fringe benefits of all this advancement that's happening. And that's I think the thing not to get lost in this is they're not going to destroy each other. They're going to help each other. They're going to unlock a lot of the potential that each other has and they're going to solve a lot of the problems that each other has. And the benefit is going to be to everybody who is a user and everybody who's in these markets. Um, and so it's just that it's a very bullish time. I know this is a little bit complicated, so if you have questions, let me know. But, um, that's kind of what I see happening here. And I I just think all of this is bullish.

It's not a time to get afraid or to, you know, sell your bags or go bunker mode, but it is a time to lock in and educate yourself because all this is going to move quickly and there's a huge opportunity here and you shouldn't miss it. Wow. I think you just summed up the whole Milk Road thesis right there about having a crypto and a stocks channel and with the stocks channel largely being focused on AI stuff. Anyways, uh John, uh excellent rant to end it. I I didn't even think I was asking you this total whole black hole question, but that's where you went. Anyways, um let's jump into after hours and actually look at your portfolio. Otherwise, uh thank you for the great chat, man. Thanks for listening to Milk Road. If you enjoyed the show, make sure you like and subscribe. And if you're struggling to

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