How crypto actually becomes part of global finance

Transcript

The main force that's causing buying or selling is what people anticipate others are going to do. It's like a self-referential speculative process. What's up everybody? It's LGD set here and welcome to the Milro Show, the daily crypto show where the holidays slow down but the markets absolutely do not. While most people are sitting around watching prices, some teams, as you know, are quietly redesigning how global finance actually works. We hear so much about this larger adoption from Wall Street, but when is that kind of stuff actually going to go and live on chain and what will those applications be? Today, I'm joined by Nevin Freeman, founder of Reserve Protocol to talk about whether where crypto is in the cycle, why builders are still choosing to build here, and what happens when ETFs actually go on chain through something

that he calls DTFS or decentralized tokenfolios. Reminder that this is one of our holiday episodes and was pre-recorded last week for you guys to continue enjoying as I drown myself in eggnog. Today's episode is brought to you by Chain Link. Links web 3 to Wall Street Bridge sends stablecoin payments instantly simple global friction free and reserved ETFs, the onchain equivalent of ETFs. And I've said that line quite a few times the last few weeks, Nevin. And now you're here to actually explain to us a little bit more about what that means. Welcome to Milk Road. >> Thanks for having me, Elgie. Nice to meet you. And uh yeah, excited to talk about it.

>> So, okay. Well, before we get to it, we need to know, everybody wants to know what your thoughts on the market are at this current time because you reserve has been around since 2017. So, this is not your first second, maybe it's your third rodeo around the time. You are a way back almost OG buyer of Bitcoin as well. I feel like you've seen quite a lot of stuff. Nevin, is this a four-year cycle or not? Is it over for another couple years or are we going to rip back in 2026? Give me your thoughts there. So, I personally think the four-year cycle is alive and well. Um, and I know that's not a popular opinion. Um, but I've thought that this whole year. I just think and and the reason why I think that is because I think with uh Bitcoin and a lot of crypto assets that

don't have fundamentals, um, the the main force that's causing buying or selling is what people anticipate others are going to do. It's like a self-reerential speculative process. Um, and so, uh, I think that, you know, my personal view is just that like, you know, for for a crypto asset that has no fundamentals, it's either going up or going down over over a long enough time span because, um, yeah, if people don't anticipate that it's going to go up more in the short term, they'll start to sell. And that's a self-reinforcing process. And I I think that the four years happens to have matched the Bitcoin having and that's like a little bit of a superstition that maybe anchors it to something like that timeline. But

I think even apart from the having I personally think that that's just kind of about as much time as it takes for uh you know for all of the selling to happen for everyone to conclude okay there's no more selling that's going to happen. I guess the buying's going to happen again. People start buying price starts going up a little bit you know that pulls some more people in. And I I just think that when you subtract all of the cash flows of equities and you just let the pure speculative phenomenon play out on a global scale, I think we've just learned that that's about how long it takes for the sort of spirits to all go up and then top and then all go back down. So maybe I'm wrong. I don't know.

But I personally think that yeah, even though there all are obviously all these other macro forces that end up impacting the crypto markets and that's all very real, I still think that the pure engine is potentially still this speculative force. And so, uh, at least when I'm thinking about like, you know, our treasury planning and so on, I I currently put a pretty high probability on sort of the fouryear four-year pendulum continuing to swing. >> H okay. Interesting. We do we do get a mix of takes on Milk Road. So, it is good to hear uh some of the other side, the the somewhat less popular side, but also the very important side to consider. So, we appreciate that for sure. I think one thing that makes me really wonder about that, Nevin, is that you've got excellent conditions going into 2026, right? You got Clarity Act

coming up. You you've already had the Genius Act that has passed. you have uh obviously large financial institutions that are so interested in this stuff, record inflows to ETFs this past year looking for even more in the new year. Um but there is potentially some truth to what you're saying that it's like all that despite it might still matter for it might still come down to what Bitcoin OG's do with their crypto and they've been selling like crazy in the last little while. So I guess my question for you is all those macro factors, do can they matter? Will 2026 be a down year or do you think it's just going to be kind of another kind of middling year and have have we already hit the bottom?

>> I think that those macro factors probably do matter. Um uh but I guess I would still expect you know on on some gut level if if these speculative forces end up dominating then uh I think we'll finish 2026 lower than we started. Uh would be my guess. Maybe maybe lower. Um >> meaningfully lower. Yeah, that that would be that would be my default prediction. Uh and then you know who knows like obviously you know the regulatory clarity that's happening and in the works is very exciting. It's going to bring a whole lot of energy into the space. Yeah. Then there's a question of you know is that enough to shift the narrative? If if everyone

comes to conclude then that the cycle is broken and things are going to go back up. Well that's all it takes you know and uh and so I think you know it's possible. So, you've spent years building in crypto. You've seen a few different cycles. Why at this point are you are you still here clearly with a lot of conviction long-term despite a short-term uh negative outlook? And that's strictly for price action. But why are you still here building after all this time? Well, I mean I think that um the original promise of crypto of these decentralized, you know, monetary systems is to provide something that is a true alternative to the existing not just financial system but monetary systems. And I really do think that in

the long term that's going to happen, but it's it's a complicated process. It's not necessarily straightforward. I mean, maybe Bitcoin is the answer and we didn't need anything else uh to have a true monetary alternative. But in the event that it's not, um there's this big question about how do we use blockchains and uh you know, smart contracts and all these things to build something that is a true alternative that's parallel that works in a different way. And um I just find that pretty captivating and compelling. Uh that's what we're working on. Um and uh and we just we haven't finished it yet, so we have to keep doing it.

This pretty much comes down to that. [laughter] >> This is the biggest year ahead for crypto, AI, and the macro. But the real moves aren't in predictions. Join Milk Road Pro today to see our live portfolio, buy sell signals, and the AI investing portfolio, which launches in January. The link is below. How do you think institutions would balance um like onchain versus offchain? Because obviously, you know, we've seen again a record institutional interest in the last few years. They all want a piece of crypto but naturally want it in like a safer way, right? And I guess I'm talking about the people that you're you're you're somewhat competing with, like even, you know, the everything app in Coinbase that wants to be this safe kind of haven for for businesses to do all their their their crypto stuff. What is the importance to you of a lot of

that stuff moving on chain eventually? I think it's kind of always been clear that, you know, the way people interact with blockchains in the long term has to be um has to be simple. It has to be that um even if you're doing something on chain, it's an experience like what Coinbase offers you with their new sort of integration with all the dexes and so on where uh you don't really think about your wallet or your seed phraser or any of that. Um and yet you have the benefit of access to all these different assets in a self-custody way. So, I think as time goes by, that line will continue to be blurred uh in terms of at least how people think about it. And um yeah, in in even if you're interacting with crypto assets in a custodial way,

there's still just the fact that um a digital asset on a blockchain can be withdrawn from one platform and sent to any other platform that supports that chain anywhere in the world, you know, with a different uh you know, different jurisdiction, different regulatory rules, etc. um which is just so different from the way that ordinary you know database uh architecture works in finance. And so I think just that portability is something that is bound to win uh because of its you know sort of yeah obvious um obvious network effects and benefits over time. So yeah I guess that's that's sort of my broad take on it. And then um I think certainly institutions these days uh have been very reticent to interact with

permissionless DeFi and when it really when you really dig into that it's that they don't want to interact with like a sanctioned party um or do something else that's going to get them in trouble from a compliance perspective. And so to me there's this really big question of how do we get the benefits of DeFi and permissionless systems and smart contracts and so on in such a way where uh we don't just recreate all of the sort of gating mechanisms that block people from you know accessing assets across jurisdiction and so on the way that they do uh in Tradfi. um but still allow you know companies that are worried about compliance to participate in those systems because if you have like a whole financial system that no institution is willing to touch well

then that's like obviously a major barrier to to capital and capital markets so that's something that the space hasn't really figured out yet something that's being worked on in the background by a number of different groups right now >> right okay in is that including what reserve is doing >> yeah so we um we started a project called the digital securities initiative um which has been trying to sort out a path on that front um and we've been uh in collaboration with the tokenized asset coalition recently and uh chainlink and a bunch of other companies who are working on this to try to figure out is there some you know a lot of people are familiar with the fact that you can sort of go through a KYC process and then use a zero knowledge proof uh to prove certain properties about

yourself without revealing all of your identity info. I think the space is kind of metabolized that that is possible. But then there's like there's still the question of like okay but how do you use that or other tools like that to actually satisfy all of the regulations that come into play when you have say tokenized securities in the United States. Um and that's not exactly a fully solved problem. So there's a lot of kind of like going through the actual I mean the number of pages of regulations that apply here is like thousands and thousands of pages of regulations and then also thinking about you know it would be kind of sad if we end up with a hundred different micro ecosystems each on like these walled garden blockchains or like each different sort of compliance tech solution has its own little ecosystem

that's blocked off from all the others. we could sort of accidentally recreate this the traditional financial system on chain where we have all these different things and and our attitude has been like no no no no hold on hold on let's try to have some sort of open standard where lots of different companies and projects who are competing with each other can still nevertheless speak the same language so that users can freely move their assets across all these different platforms and everything can be integrated into DeFi in a totally open and permissionless way while still satisfying the regulations which is a little bit it's easier said than done.

But uh we do think that we've figured out a way to do that. >> Sorry, can you repeat to me? So is that what the DTF is designed to do is to I guess not that's more of a product versus what you guys are doing with I forget what you called it. You're trying to create that standard where everybody can kind of share that rather than having it be all over the place. But everybody can still build their own projects independently, which is good for competition and good for the end users, but still have the same common language to make it easier for other others to build and people to adopt. >> And I think I think I can explain it a little more clearly. So like >> yeah, >> when so a decentralized token folio is basically it's like an ETF but onchain, a DTF and uh you have a token that's

redeemable for some basket of other tokens that are all held in a smart contract for you. It's pretty straightforward. The thing is, we want there to be DTFS that include tokenized securities and other regulated assets, but and and and so this is what caused us to realize that this is going to be a problem not just for us, but for a bunch of DeFi apps. So, >> if you imagine that you're a a tokenized security issuer and you have obligations to know currently, you have obligations to know who every single one of your token holders is. And so that leads to this whitelisting process that we see with a lot of the tokenized security products or all of them in the United States where in order for you to buy um a a tokenized security, you have to go to the issuer or the transfer agent who

who put that out there and sign up with them, create an account, go through KYC, and then whitelist a particular wallet address and then that wallet address and only that wallet address can receive that token. So you have to do all that before you can even just go buy the token on a DEX. But then once you've done that, you can just go buy it on a DEEX and their token contract will check the receiving address before it approves the transfer. That's it's it's embedded into the transfer method for that token. Okay. But if you take this one step further now, if you want to go deposit that token into a lending protocol or you want to deposit it into an index protocol like reserve, um you that contract address the smart the token contract is going to check well can we

transfer this token to this address? >> And so that cont that smart contract now itself has to be whitelisted just like every single individual user has to be whitelisted. But now, if you're the token issuer, you're going to think to yourself, well, wait a minute. If this is like a a DTF, and if that DTF token itself doesn't adhere to our white list, if it can just be transferred to anyone, and we don't know who it is, well, then we can't whitelist that token contract because we would basically be allowing a backdoor into our system that would cause us to end up, you know, being in violation of our our own KYC and compliance needs. And so that would require then uh so so now if you're the if you're the DTF uh contract you know project like us we would then have to

inherit that white list uh and and impose that same restriction on any DTF token holder but if let's say that index has 50 different tokens in it now we might have to impose like the intersection of like 50 different whitelists right so now as a user you have to go through KYC 50 times just to get this single token because you have exposure to all these underlying tokens and we realize that is never going to happen. Um and the same thing applies if you have like a lending protocol where you have to go through KYC for all the different you know collateral assets etc. So we realized that basically this this KYC requirement that's causing these whitelists essentially breaks the you know open composability of DeFi. It makes it so that every single DeFi

application, there's sort of this gating process and it it it it really limits like a lot of the cool stuff that you can do with assets once they're tokenized. If all you can do with a tokenized asset is just hold it, then it becomes less interesting if you can't freely trade it and borrow against it and index it and so on and so forth. So, um, so yeah, so that's the problem that we're trying to solve. Um, and we think everyone kind of collectively is going to need to solve it in DeFi. Um, and the solution is a little bit more complicated. Uh, but effectively, you know, to simplify, uh, there's we have a plan where basically you'd be able to go through KYC once and get a credential.

Um, and then sort of prove with a ZK proof in any one of these different transactions that you have that credential and uh, we're seeking permission to basically absolve the issuers from needing to know your KYC info uh, for people who are part of that system. So it makes it so that now DeFi apps can freely just join the system without getting whitelisted. Users don't need to get whitelisted etc because there's this like single open standard where people can prove that someone uh these particular kinds of entities have their KYC info in order to deal with like a criminal act should it occur.

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>> Right. Right. Right. Okay. So, you're basically giving people the ability to not have to KYC like a hundred different times to get access to these tokenized securities. just just go through once and then you have this >> once and then you can go go into the DeFi playground for and then allow the issuers to have the same set of regulations for these tokens but where you don't have to add all this insane amount of extra work to the end user that would pretty much defeat the purpose of doing it that way, right? Because then there's going to be no point to KYC all the time. It's like, okay, just forget it. Like just just go buy the security on whatever app, you know, that'd be so annoying. But this in this case, you get all the benefits of DeFi without really having any of the

extra work other than you would using a more like a centralized just uh you know portfolio app or whatever like a Robin Hood or something, right? It's like you can just do all the fun stuff that they can't do but without any of the extra work that you would need to do it in this way. >> Yep. That's right. That's right. >> Okay. So, so if if we can get the, you know, the space and the regulators to accept that and we've gotten positive feedback from the IC and the Department of the Treasury and so on, um, then, uh, then, yeah, we think we can pave the way for all sorts of regulated assets to flow freely throughout DeFi on on across different blockchains. This is not specific to anyone blockchain either.

>> Okay. So, if I'm a if I'm a user right now, uh, Nevin, what would I do on reserve? Like, what is what what can I currently do? because I know you guys have a coin market cap like top 20 index that you have out there that I think we we feature in the newsletter sometimes as well. Tell me if I'm just starting now and I want to check this out, what would be the first thing I do on the site? >> Yeah, so if you if you if you're listening to this and you want to try it out as we talk, you can go to app.reserve.org and um there you can see the list of DTFs that people have created on the platform. There's index DTFS uh and yield DTFS. Yeah, if you hit discover DTFS on the top left.

>> There we Yeah. >> Um so um yeah this is great. So if you scroll down then you can see the different categories um of ETFs. Index ETFs are the ones that are visible now. So coin market cap 20 that's basically your market weighted kind of S&P 500 type uh asset but just the top 20 crypto assets weighted by market cap. >> Uh LCAP is a similar similar uh concept. and then the open stable coin index exposure to all the different sort of decentralized stablecoin protocols if you're interested in that thesis. And generally speaking, you know, this works a little bit like ETFs. It's just that they're decentralized. So each of these um you know is a an index or um you know a group of tokens that's governed in

some decentralized way that has some mandate, some idea of like what is this supposed to give you exposure to. So you could you could do the broad market index. Um or you know there's there's one for virtuals. There's one for you know there's one called the alphabase index that's like uh you know interesting new small tokens on the on the base blockchain >> and now [laughter] >> right >> that one's it started off as a smaller percentage but it went pretty well. So that one gain more >> share. That's the big wink wink token for uh gents out there.

the um and then the yield DTF category has actually been around longer um and that's why there's more TVL there. You can get uh you know sort of um yield on your dollars or or ETH if you you scroll up a little bit >> and there you go. >> Oh, right here. Oh, okay. Oh, you have an entire separate section. Okay. >> Yeah. Yeah. So, ETH plus is like an index of liquid staked ETH tokens. So, you could get you know uh ETH yield um you know sort of diversified across the different staking providers. USD3. Uh you can just sort of get the DeFi rate on a token without having to do anything. Um so so these are some of the early products on the reserve protocol and we you know we built this because we ultimately think it'd be really cool to

have an index of the way we think about it kind of like all the assets in the world like some crypto but also a bunch of RWAs. Um you know uh kind of even broader exposure than just the S&P 500. um because we think that that is kind of maybe the optimal worldwide consensus store of value. Some people think it's Bitcoin. Um I think Bitcoin should be part of it. I think gold should be part of it. But if you think about it, it's it's based on really kind of a simplistic almost stupid idea, which is just if you look at anyone who stores any large amount of wealth, they do it by holding a diversified portfolio, not any single asset. And so we thought in the world of smart contracts and being able to bundle all these things, if everything's going to be a token and we

can bundle all these things in an automated way, why not have there be a token that is just kind of an index of everything? So that's where we're hoping to ultimately get and that's what we think could serve this purpose of asset back currency. But we realized that the way to get there is not necessarily to just build that one token. It's to build this platform and let people explore and create all sorts of different, you know, what we call DTFS. And so that's what you see happening today with with crypto assets. And uh like I talked about, you know, pretty soon as that regulator regulatory stuff gets worked out, we'll start to see RWAS as part of that. >> So what's what's the roadmap there? Like do you do you need some of those acts to pass through Congress to be able to do

that or what's the what's what's going on? >> We don't think so. Um there's um uh you know probably be able to say more publicly about this early next year. um but had you know conversations with the SEC about this and we think that there's a path via exemptive relief uh where the SEC has the authority to look at um this plan and say like okay we'll allow this at least to a certain extent um you know to do it experimentally and as I'm sure you're aware the current SEC is very in favor of that kind of approach to innovation and trying to figure out the right way to do this. So, um, so yeah, we've had favorable conversations, but the devil's in the details, you know, because there are just so many rules and regulations, and so we need to make sure

that there's a way to do this that doesn't, you know, violate some principle that that we haven't thought about as DeFi builders that the regulators have to protect. >> So, was this something that was pretty much impossible in the last administration like after everything that happened, four years ago? >> I would say yes. You know, I we started the digital securities initiative during the last administration and we were in the midst of studying and trying to figure out like, okay, what are we going to have to ask for? And it was daunting. It was like, how are we ever going to have this conversation? Uh we were going to try. We were going to try, but certainly um as the as the tides turned, um it seemed like, okay, this is like going to be a lot more feasible, uh you know, working with the Hester purses and

so on of the world. So, yeah. >> Yeah, I bet. Totally. Well, congrats. I mean, I'm happy for you that you're you're in a good you're in a good environment now for this to happen. I'm curious actually, you know, as a as a somewhat reformed degenerate um for onchain tokens. I have seen I know that you can now leverage trade securities which is completely different and way less safe than what you're offer you're going to offer soon. But is that how I'm just curious how is that possible? How can I how how can how are they able to offer that product but then you can't do this part yet or are they just kind of winging it hoping and asking for forgiveness later?

>> Which uh which platform are you referring to? >> Uh I'm thinking about like Hyperlquid and Avantis on base like they I could swear that you I'm pretty sure you can leverage trade like Google at a 20x or something like that on those platforms. And if you'd rather not say or go into that that's totally fine. But I just something that I've noticed I'm like that's available but I don't there's something I'm not quite sure how that works. >> Yeah. I mean, perpetual futures are sort of a novel uh type of derivative instrument, right? Where uh you don't even need those assets to be tokenized to to create those perpetual contracts because it's just referring to the price feed um from traditional markets.

>> I actually don't know if those services allow users from the US to touch them. I think a lot of perpetuals platforms tend to exclude the US, although I think Coinbase recently announced regulated perpetuals for US users, which is pretty exciting. So, um, it it's yeah, I don't know the details there. Uh, I think historically the answer has been, you know, do it all and exclude the US. And that's been true even for a lot of like token. There's a lot of tokenized stocks that exist on chain that don't even have any technical restrictions blocking US users. But if you go to their website, they say, you know, they block you v via your IP address and they say this product is not intended for US users.

So, um, but the good news is that I think we're pretty close to sorting out the details and just being able to have it all be above board and, uh, and get permission to do these things. So, you know, certainly, you know, some people are sort of pushing the limits here and there to try to sort of be first to market right as these things are coming out or right before. Um, but before long, we won't have to play that game so much anymore. It definitely feels like you guys are are doing it like properly, checking every box along the way and and deploying when when everything is done. So kudos to you guys. Who's who's your ideal end user for this, Nevin? Like who who what what kind of person would be using Reserve?

>> Well, you know, we ask ourselves that question pretty frequently as we see different DTFS get deployed. And it's a little hard because it's like, you know, you could sort of go back in time and ask the question, well, who's the ideal user for ETFs? It's like, well, there's a lot of different kinds of ETFs and a lot of, you know, from ordinary, you know, 401k participants all the way to like hedge funds who want to sort of have like a long short, you know, actually ETFs get used by virtually all the different market participants in some way or other. And so, in the long term, we think that that's going to be true for DTFS as well. You're going to see uh the entire spectrum. And in a way, that makes it a little hard to focus and figure out who we should be

targeting. Right now though, I would say for like CMC 20 and LCAP, those two broad market index products, we think that um people who are new to crypto, maybe they've signed up and they have a centralized exchange account, but they've literally never actually bought anything because they don't know what to buy. Um you know, maybe they're a little bit older, um and they don't have someone to explain to them, you know, which coin is which. We think that um you know there's a lot of people out there who you know they put their retirement in a broad market index because that's kind of a rational thing to do and we think that there's an analogy to like okay if you want you know 5% exposure in your portfolio to crypto this is a pretty logical way to do so. So that's a a target that we're

pursuing in the next few months. Um and but at the same time you know if you look at the alphab index um that's obviously not not the target demographic there. someone who wants exposure to Tibber and whatever the altcoinist crew who governs that picks. Obviously, that's going to be someone who's sort of DGEN literate, but maybe doesn't want to spend the time to try to pick those tokens themselves. So, it's a pretty broad spectrum. >> You've got a good mix in that base one of like some of the meme coins, but also some of the infra that's been deployed this year on base. So, it's good to see and I I agree. I think that that's nice to have if you are bullish on Bass, right? And you watch like the Coinbase announcement from the other day and you're like, "Okay, like it's called the

Bass app. Now they've teased a token like they really they're number five or six in TVL like I just want to like one click >> just give me exposure to the best tokens here of that chain I'm good that's it otherwise it's going to hold my ETH you know wherever right it's so I think that that's that's a great solution for that and you know especially as people listen to milk road and we talk about a lot of different sectors right like where's the you know people want to get a little bit more in depth is a great place to look even just just just to look at these indexes and see maybe what's right for them or where they want some exposure >> what's the most common question you guys get from the Milk Road readership or listenership >> in general.

>> Yeah. >> Uh I mean should I buy or should I sell? [laughter] >> Yeah, people want some trading advice, man. Uh I mean that's a great question. Like we have a we have a pro member Discord, right? And we chat with them every single day like our macro and crypto and AI experts are there answering every question. So um and we do have AMAs where people ask stuff. I think I think what really impresses me about our Milk Road audience is that people are both p people manage to be patient, curious and in-depth all at the same time, right? So naturally like people do want to listen to Milk Road every day and have almost every guest talk about the cycle, talk about liquidity, talk about what's going to happen in 2026 and why Q4 2025 didn't work out the right way. they I think I

think when we are so heavily invested maybe personally financially but also just generally emotionally in the crypto life cycle it's something we believe in we're okay with hearing about that every day so I think people are always keen to hear more perspectives there but they also want reassurance that it's like hey we're still building here right so I think that's why we're exciting you know to partner with you guys and also have you here is that it's like well you're a legit company you're trying to do things really well you're trying to create a new product on chain that isn't really possible right now um that'll be really accessible and really great for a lot people and I think um people want to know that that's happening because it reassures them that it's the the future is bright even if the price action sucks right now.

>> Yeah. On the cycle, you know, when I when I first decided to build in crypto, I I I bought some Bitcoin in 2011. I sold it in 2012, so I didn't make any money on it. Um in 2017, I was not planning to build in crypto. uh I was doing a different startup uh in the Bay Area and I just noticed that this bubble was happening around me and I decided to try to understand what is the nature of speculation like why is this happening? So I started going to meetups of uh crypto in San Francisco and just sort of talking to people and understanding it.

But at that time I picked up a book that was about the very first stock market or the very first publicly traded stock in the world which is in I think it was in the 1500s in Amsterdam. It was the Dutch East India Company, I believe. >> Yeah. >> That's right. [snorts] >> And what's so fascinating is it had a massive bubble. The very first time we had a publicly traded asset like that, it had a very it had a massive bubble. And and it literally like the the the stock market at that time was like a bridge in Amsterdam that everyone sort of learned you could go to if you wanted to find other people to buy or sell pieces of stock in this company. That's that's literally the transaction

mechanism. And then when you wanted to buy or sell, you would go with your your trading partner to this building and there would be a guy sitting there with a book who would record these trades. >> Ledger. >> Yeah. And the guy with the book and some other person who was part of this process realized they could collaborate and sort of cheat the process and basically like buy or sell shares that didn't exist. So they did that. So there was a massive amount of fraud and there was a massive price bubble [laughter] in the very first, you know, publicly traded stock that ever existed even in that simple analog form. And I think that that sort of shows you sort of how strong those forces are if people see, oh wow, the value of this thing's going up. I I should buy so that I can benefit

from that, you know, and then a crash did occur because, you know, you can't go up forever. Um and uh you know people in crypto like to push back on uh regulations and complain about them but it's like we can see how sort of predisposed to fraud uh humans seem to be given that it happened on on the very first try. Um so you know obviously like joint stock corporations incredibly powerful great for capital formation has created you know our whole economy in some sense but also uh kind of this double-edged dangerous sword. So that's a little bit about my intuition of why I think the four-year cycle might still be alive is just uh sort of seeing that that sort of strong speculative force uh occurring right right at the very beginning even

>> a lot of opportunists out there both good and bad uh since since the dawn of modern finance let's put it that way why did they make a stock for the Dutch East Indian trading company >> um because they they needed to basically raise money raise capital to to I I don't know if they'd had to build or just buy these boats to go to India and get, you know, tea and other things. And I think that um I think when they came back, I don't think you even got paid out in money. I think you got paid out in like the stuff that they went and got in these missions like tea and stuff.

[laughter] Um and so yeah, that that was that was the proceeds. But but yeah, then you know the the value of the shares ended up far exceeding the the value of the proceeds at least at the height of the bubble. You know, same as the tulip bubble, I guess. I guess both of those were in uh the Netherlands now that I think about it. >> Yeah. Oh, yeah. The Dutch. Yeah. They've always they they've they know what's up, man. That's where that's where these things start. That's funny. >> Right. Well, Nevin, I mean, this has been a great convo. Thanks for coming on. Uh thanks for telling us about Reserve that people hear about on almost every show. So, now you guys have it. Now you know what this thing's all about. Really exciting, man. I I'm excited for you and um I think 2026

seems like it'll be a big year for you guys, especially as as these things continue to develop. And always better probably to build when things are a little bit quiet. So, uh, I feel like that that's a better builder environment than when, you know, things are blasting off a little too hard. >> It certainly can be. [laughter] >> Thanks for having us. Nice to meet you. >> Want insights on what's moving crypto markets [music] and how we're trading each event? Subscribe to our channel and join the Milk Road Daily and Pro Newsletters and start investing [music] like the top 1%. This show is for educational purposes only. Nothing we say is financial advice. Investing is risky. Never invest more than you can afford to lose.