Joe Lubin on Ethereum as the backbone of global finance

Transcript

And just to give a bit of context, so when you guys first launched, you raised I think it was 425 million. You basically bought all that with ETH. You've staked 100% of it. You've raised a bunch week over week. >> Buying and staking right away pretty much. >> Yeah. Yeah. And you guys have now raised I don't know, it's getting close to a billion dollars. You guys have raised at least the value of what you guys hold. 280,000 at your last um release. Uh 280,000 ETH worth a little over a billion dollars. Uh so congrats. That's uh wild in such a short period of time. >> Congrats.

>> Exactly. >> Yeah, absolutely. Congrats to Ethereum. Congrats to everyone involved. Um so a question for you here. So obviously I mean the stock has done well. There's been a lot of um noise around ESP and what you guys are doing. And I'm just curious on the the appetite for ESP on the more like institutional side. So those that when you do the ATMs um who is it that's buying this stuff, are they interested? Are they is everyone super excited? Why are they super excited? Like tell me a little bit about the kind of behind the scenes discussions that you guys are having. Is this like crypto specific people, people that already have ETH or is this a whole new world of people that like otherwise maybe couldn't be buying or weren't buying for whatever reason? Um, walk me through that uh behind the scenes a little bit.

>> Might be easier to answer who isn't buying this stuff. Um because it's pretty compelling. So it's obviously retail, it's obviously institutional on on the open market. in terms of the investors that uh that we spoke directly with their financial crypto financial sovereign so so we as I said we had to race to market uh so we talked to some groups that uh it just no matter what can't make decisions um by tomorrow and so uh there were uh some major major investors that said yeah we really like this but uh there's just no way that our organization can move that quickly and So we continue to speak to lots of different call it major investors uh and

uh that will go well that's already going well. Stepping way back the big picture is that this is all based on a a structural shift in the shape of society in the shape of the global economy. it. You know, as you may have heard me say somewhere in the past, um I believe we're at the end of a super cycle, a debt and generational super cycle that lasted about 80 years from the end of World War II. Um you can read about it in Strauss and how or Ray Dalio or lots of other uh people who describe it in in different terms. I think Peter Turin does the same. And the next super cycle will be based on our technology decentralized protocols plus AI at least

for the first couple of decades. And if you think about what happened at the end of World War II, uh America effectively won that war in the sense that it had uh a much stronger industrial base than any others. And so it was able to set the uh the monetary system for the world. That happened in the form of Breton Woods. And that created a a structural structural way that the world worked um which ended up leading to structural imbalances. effectively the US was able to trade goods and services to countries around the world uh in exchange for paper uh dollars and treasuries and that created um for decades um including uh very clearly in the last three decades

it created a trade or a trend of US treasuries uh going higher in price and lower in yield. Um and so structural structural trade uh based on the way the world works. Uh something similar happened based on the boom and bust in Japan. Uh extreme deflation uh enabled uh lots of traders around the world to to borrow and yen. The the yen carry trade and and buy uh different assets that were higher yielding. That has lasted for about 30 years. So the new structural trade I believe is based on the idea that the world is decentralizing. Uh that decentralized protocols are going to get more and more

important um in the global economy. Uh and for the next years and probably decades uh the major assets undergurting uh these decentralized protocols in particular uh for now Ether and Bitcoin are going to continually grow in value. Uh and so if you believe that uh and if you believe that uh ESBET and Michael Sailor and 21 Capital and and our our friends uh Tom Lee and Sam Tabar and Charles Charles Allen and others, we are all in this structural trade um that will probably last for a long time and we should all work as hard as we can to accumulate as much ether as possible as as quickly as we can. you know it trades

just don't go in straight lines for very long. Um unless there's a paradigm shift underway uh in which case uh u you got to move so fast um or so far uh sorry that uh uh certainly there'll be pullbacks but uh I think this thing will last for a long time. >> How much are um so obviously the big picture makes sense and I'm curious like I don't know if all institutions they see it the same or the sovereigns are seeing it the same. Do they understand that there's this kind of like new super cycle, this new paradigm? I don't know.

I'd be interested to know. I know you guys are talking to them all, but stable coin seems something that's extremely relevant. It's grown like crazy over the last little bit here, and it seems to be catching the eye of of of Wall Street, let's call it. Um, and at least what Tom Leah said as well is like stable coins is the thing that's gaining a lot of interest here and why people want exposure to to ETH the asset. Um because obviously Ethereum uh has I forget what the percentage is, but a large the largest market share of of of stable coins. So curious is um when you're having these conversations and you're pitching to Wall Street, maybe it's not you, it's it's probably your team doing this. Is stable coins a big part of that and a big reason why there's been this kind of like rejuvenated energy back

into into ETH? >> Yeah, stable coins are a big part of it, but just one part. Uh I think there is uh recognition amongst uh nation states in major institutions that uh something is changing. It's changing quite dramatically. There are skirmishes all around the world. Uh there are nation states that are trying to reformat their trade relationships and their military relationships and uh uh etc. Uh so the US is uh is driving that pretty hard and one of the ways the US is driving that is reformat those two things. There was interest in uh in reducing budget deficits in the US, but um the legislators uh just stated the obvious that uh um austerity is unamerican. Uh

and uh we're not going to do that. Uh so uh Scott Bessant uh essentially took that and pivoted and said, "Okay, that's fine. We're going to grow our way out of this mess, this debt mess, and uh uh we will deregulate in many different ways and and grow the economy that way." And uh one of the ways is to regulate or deregulate by regulation. And if you enable the US economy, the US uh monetary systems uh to move on to decentralized rails, um it will accelerate things quite dramatically. So stable coins enable the whole world uh to help fund the US government if uh

other nation states pull back. uh so more decentralized funding and it enables the US dollar uh to effectively dollarize the world which is incredibly valuable for a lot of people around the world uh that don't have good access to stable stores of value. It's not good for the tyrants in in the countries that they live in uh who prefer to financially repress and exploit uh their citizenry. Uh so I think there's a decent chance that uh uh there will be better human rights or even access to American law if you're transacting in American dollars potentially. Maybe a bit of a stretch and uh for the US dollar the world is moving onchain as

much as it is online and u stables are going to be uh the way that uh people conduct commerce uh on chain. Uh so the US dollar needs to weaken in terms of exchange rates uh to reformat trade relationships but uh stable uh you know dollarization of the world is going to enable the dollar to be politically very strong uh even as it gets cheaper. >> Thanks for watching. Make sure you subscribe to the Milkro Daily YouTube channel. And if you enjoyed this clip, you can watch the full episode here. [Music]