Macro Trends, Trump’s Evolving Crypto Strategy, and Aave’s New Proposal | Roundup

Transcript

if the election was the starting gun for all these institutions to look at this industry again and and legitimize it I think the market structure bill will be the starting gun for all of these things to actually come to realization this episode is brought to you by Aries markets to learn more about Aries markets follow the link in the show notes below hey everyone quick disclaimer before we get into today's episode nothing said on bell curve is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and the views expressed by anyone on the show are solely our opinions not Financial advice our guest and I may hold positions in the companies funds or projects discussed all right everyone welcome back to another Roundup edition of bellur you got Michaels one and two

holding down the four today just yeah you know save the best are we gonna make the obligatory cut the fat joke and just every single time no Vance is off fighting the good fight in Switzerland right now and you know maybe at some point in the not so in future we'll be able to share more details but um by fighting good fight you mean eating chocolate and skiing yeah exactly right no I'm I'm sure I'm sure there's been some Heights and some skiing involved but definitely a business trip and uh a lot more to share on that eventually nice um well you wanna do I know we did a live H podcast from E Denver last week which was super fun but do you want to just do another I don't

know maybe just final recap of the conference what your takeaways were having been there for a couple days I know we both just gotten there and basically spent one day um or like half a day um just like what your thoughts were for the rest of the conference and then we can get into just like touching on Market sentiment at the moment for sure well I I think my my take on the conference was very similar to probably what everybody else is feeling with the General market Mala in that um someone on our team um had a had a good line where he said it just felt like everybody was really tired yeah and um and I think you know roll back the tape a couple years and you're looking at 2021 into 2022 that was just like shell shock and 2022 was like putting the

pieces back together trying to make sure everybody was default alive 2023 actually maybe 2023 was more putting the pieces back together and kind of reassessing seeing who was alive and who wasn't um and 2024 was a lot of kind of stuff that was outside of our you know the crypto Industries control it was the election it was you know um it was dealing with Regulators 2023 and 24 were both that um I I think a lot of just anecdotally from institutions that we talk to um the big question for them with 2024 was is crypto going to be around or is crypto going to die and I think in a lot of people's minds there

was an existential threat to the future of crypto at least the future of crypto in the United States and I think that you know with the election results and kind of the sentiment and things that have been talked about and I'm sure we'll get into it but the things that are happening literally like this week in DC um crypto's default alive um crypto is going to be here it's going to be an industry it's going to be big but um a lot of people are patter matching 2021 to 2025 and uh you know when you're trying to pattern match and exuberance maybe o leads faster than people are expecting um and you expect everything's just going to go up and to the right in in this year time frame it's pretty disheartening to have the H1 we've had

um at least so far and um so yeah I think people were just kind of expecting 2025 to be the payoff year after a couple of years of really tough times and it just hasn't proven to be that yet um I I am personally and I think you know us collectively at framework are of the belief that um there is a real question as to whether or not the four-year cycle if we want to call it that is is fundamentally intact um in in the way that I think people are expecting it will happen um and what I mostly mean by this is um macro is driving all markets right now you know tariffs uh gross slowdown things that are kind of out once again outside of our control are are

overriding um you know what's going on inside the industry over two individual trading days in the last five days uh Nvidia has lost more than an ethereum each trading day just just think about that you know it is it is tough out there in general um but crypto historically and is proven to be the case as well uh now is just the fastest horse in this in this process so it's gonna it's GNA go up fastest and it's going to go down fastest um 247 markets and I think people um are kind of you know questioning some of the perspectives and dogma and and Views that they had going into the year and um

it's always tough when you're like we need to get this thing out we need to Launch we need to do X Y or Z because this is the bull market this is our chance and if you're questioning those assumptions now um changes road maps it changes perspectives your sentiment is you know lower if um you know even even some of the more negative perspectives are like did we miss the cycle is it over and do we have another three years before we have another shot like that's just so shortsighted and and frankly it just signifies in my mind that you're probably new here and it uh uh yeah just it it feels I think once people start to really understand that things are going to go slower it's going to be better the outcomes are going to be bigger but it's

going to take longer it probably is just a better time to be building and thing it's a bet this is a better time to be built this is like a Goldilocks if you are yeah uh because the the the downside of those crazy you know it's it's impossible to company build when you're going through one of these crazy Spike up spikes up because there's no filter for quality control there's no oh you have to be building a viable product or a good team or whatever it's just everything's going up and it's like the most irresponsible person wins in the short term so you know exactly it's a different environment and it's a totally different environment and um yeah but you know it also is just I think I think there are a couple things going on right

there's a global story here which is it's been a while since this has been a macro pod but you oh but we still have that muscle yeah yeah we still got it uh and yeah if you've been paying here I'll try to actually find it and pull up these uh you know the Atlanta GDP now but you know it sort of went from projecting 2.5% growth to like negative 3% growth very quickly and now there are multiple successive prints that are backing this up um in a matter of basically a week or so we're now pricing in three rate Cuts uh but if you're excited these are not the good rate Cuts these are the panicky uh save the market oop the bottom is falling out from under us rate cuts and you know it's also very just very funny is so we're we're you

know talking about doing these tariffs and there's sort of a a Slowdown and uh there's uncertainty and uh you know Marcus just don't like that type of uncertainty over in Europe uh Germany which has basically been very austere since World War II um and they right constitutionally you know they don't run a deficit and all this type of thing uh they have amended that and they're going to run you know they're gonna basically start to finance and re remilitarize um because the message from you know uh the Trump Administration has been you need to pay your own way um and so actually it's kind of causing European stocks to go on a tear it's just like so such an interesting I me the the yes they are bad rate Cuts if they do happen because

what we're talking about because it potentially means recessionary uh growth Trends but uh keep in mind any rate Cuts uh while even if they are for recessionary reasons are typically positive for assets and you know once again crypto is the fastest horce I I ultimately think Great Cuts are good uh in the short term so long as we don't go into anything you know yeah deeply deeply cutting deeply austere um and I don't think that it's possible really for that to happen I I think these are just like the structural changes like this is the friction that happens when you come in with a a new policy regime especially something that's so different from what we've previously seen and also just cut all of

that excess waste like there's going to be stuff that gets left on The Cutting Room Flor and that is part of the process of cleaning things up um and and and so I I think that there's ultimately good coming from this but for anybody who's a builder out there I think the sentiment needs to shift from I need to do this in the next two to three quarters to I have the next two to three years this episode is brought to you by Aries markets Aries markets deployed on apos in 2022 and is now the largest lending protocol with 280 million in tvl to learn more about AR's markets follow the link in the show notes below this episode is brought to you by marinade marinade is a high performance staking delegation platform that brings both liquidity and security to the salana

network by connecting Soul holders with the best staking rates on salana follow the link in today's show notes to learn more yeah okay let me um can I try a theory out on you here because it's something I've been and it's going to sound like insane cope and I actually don't but but just listen to this I'm going to back it up with some amount of facts here so one thing that I was just sort of uh the react crypto's reaction to uh the recent macro developments makes a lot of sense like one interesting way to look at Doge maybe and I think Steve Cohen was the one there was a really interesting clip of him saying he was a little bit bearish is doge is a form of austerity and that actually is a huge part of the the platform and the campaign that Donald

Trump is running on now which is we got to get our budget back intact and it is funny because that kind of should be bearish to bitcoin like the whole uh you know the whole driving Narrative of why Bitcoin should be doing well is that government are debasing their currency so if you know the largest economy in the world is getting their together from a budget standpoint maybe that isn't actually super Ben beneficial for Bitcoin at least in the short term um the other thing that's been pretty interesting is listening to Scott Besson the treasury secretary come out and say that it's possible that the stock market correlation stock basically uh stocks might be a little bit stocks and asset prices like real estate might be too high uh and we might want to create you know an opportunity for I think the exact quote that he said was wall Street

has won for a long time they're still going to do okay but it might be time for Main Street to win implying that asset prices are too high and we have to get uh we want to let basically the Next Generation the new generation get a get a entry price um and then at the same time he's they're also aggressively kind of trying to pump crypto right like they announced this crypto strategic Reserve um they are doing a bunch of very favorable things they're trying to make it the crypto capital of the world they're talking about potentially eliminating capital gains tax on crypto I mean they're doing a whole bunch of yeah would love to see it but never G happen but it's but I mean okay so put all of these things together right like Trump is a guy who understands who his con constituency is um you know he

actually does well you know better with younger people uh there was a there was a really interesting clip of him like coming on at a sports game and all these like young people are cheering which is super interesting the Super Bowl yeah the Super Bowl and and you know in my mind actually uh or in in his mind like the crypto was a huge uh portion of why he won the election right not to make ourselves too self-important here and so if you kind of put all of these things together you know he's there's a wealth there could be a wealth transfer going on right in this administration's mind to shore up his popularity from you know more traditional asset owners into crypto holders like I know that's I only I only barely believe that I'm not even but I'm just you know it's kind of an

interesting thing to Think Through it's not totally look I I I think it would be um I I think smart and fast moving perspectives but probably still Limited in terms of the global amount of dollars moving into Bitcoin have the perspective of let's buy Bitcoin because it's digital gold and it's a protection against you know basically governments I I think that that's a small portion of why a lot of people hold or are buying Bitcoin I think a lot of people just recognize this is a new asset and a new category and and frankly probably also Tech uh connected or aligned um and look the correlation between Bitcoin and and the NASDAQ is extremely strong and I think

that that kind of tells you everything as to how most people view this risk assets go up crypto goes up risk assets go down crypto goes down um maybe eventually it's a debasement hedge but I don't think that that's really kind of the bulk of it and you know when you got bessent I I think he said that on CNBC or or one of the major you know business Publications I I think you really have to take a step back and say well well who's the audience of all of those bessent is talking to very particularly the the business class on you know Wall Street has done pretty well time for Main Street to win um you've got obviously you know the crypto uh side of it with you know let's let's bring them

in let's have a conversation let's hear what they want let's make some of the regulatory changes those are structural changes those will ultimately be what matters the markets are short-term the the policy and Regulatory changes or long term um and so I think broadly like when you hear these differing messages or potentially like counter perspectives you kind of have to take a step back and say okay well well who's the audience for that um for that message to be delivered um and and so yeah I I think broadly speaking it is they're able to say multiple things at the same time because they're just trying to win Collective support because the biggest hurdles for them are still ahead of them getting elected was number one but getting what they expect will be

probably the largest either uh collectively tax cut immigration reform and potentially spending cut uh perspective it it still has to be done like that's going to be a massive Bill even Elon Musk yesterday after you know the the State of the Union was like I think we can get 60 like that's top of mind for them right now is to how they can get the things that they want to get actually done and implemented and so if it's you know 50 and they've got the 51 in the Senate that's reconciliation but it comes with a bunch of controls as to what you can put into that bill if it's 60 you can put a lot more into it and it doesn't have to be budgetary in nature and it doesn't have all the controls in place and so it's kind of like they're they're still playing the political game

right now because they haven't they haven't done anything yet all the stuff is still in Flight it's unclear to me yeah I mean you hear all these headlines coming out about Doge some people really love it some people hate it different numbers it's still unclear right what the ultimate impact of this is going to be and uh you know it's so in addition to the spending cuts there's also the tax cuts and the tariffs and it's unclear how all of these things are going to interact one to one right I actually didn't know this that the the US didn't have any form of income tax until the late 1800s um and it was all tariff driven at the time which is yeah obviously an extremely different Global uh economy and very different market and um very different uh in terms of how the US was playing in

that global economy uh but it true yeah but actually you know in different periods of times this is actually re relatively persistent throughout history where you have like large uh you know Empires or governments that actually didn't have income tax they had a totally different Revenue system uh Roman Empire had the same thing they didn't have uh any form of income tax for a very long time maybe maybe the through line there is that if you're a larger part of the global economy or something like that you might not need it um and maybe we're just too Global today Etc but I think that this Administration has signaled that they're going to try very different things right less um Orthodox economic policies social policies whatever it is so ultimately I guess we're going to have to see how successful these tariffs are and whether

or not they can offset the um you know the tax cuts right to for the deficit right like those are all the three kind of options that you have right and because it is such a New Perspective a new policy regime that's what's giving everybody including and especially the institutions pause yeah and I I had dinner last night with um you know someone who works at a large Prime in the crypto space who interacts with many institutions and many governments all over the world and the perspective that we were both kind of sharing that we were both seeing is is essentially like government governments and institutions if you just think about kind of like the timeline of when all this started to happen the the like starting gun was the

election results and the election results being done and settled and you know in histo in previous election Cycles we had recounts and so maybe we didn't know exactly what was going to happen in terms of who was going to be in the Senate who's going to be in the house Etc that all got cleared up by the end of the year but by the end of the year you know institutions are taking December off for the holidays and then it's like okay in January we're g to have a bunch of meetings and we're going to sit down and be like okay who's doing what what's can be our strategy let's go off and build a committee to decide what our crypto strategy is and you're starting to see that with things like Vlad for Robin Hood coming out and talking about tokenized assets and how

crypto is going to be the back end for Robin Hood They just added arbitr a day or two ago like they're they're making moves but you know we're in March now um stripe in their letter that just came out had a huge section on stable coins we talked about this last week but obviously they are focused on this category as well but the institutions who are potentially looking at this from a buying perspective we're probably ready to go in February maybe a couple weeks ago but with everything selling off they're just hands off the wheel let's wait and see let's take a couple weeks maybe a couple months and we'll we'll jump back in when we're ready to go and and so I think that's broadly where we are in the market and the market structure but it doesn't mean that

they're not coming it's just a question of when and I think moving some of this uncertainty away and getting rid of some of the uncertainty is going to be part of that Catalyst the other part of it is just like you know these institutions aren't going to go chasing price down they're also not going to go chasing price up but they're going to wait things to settle before they start to make moves obviously once they start making moves price may go up and that may drive further moves but that's that's kind of generally where my understanding is of where we are in the market all this stuff is really positive but the other thing I'll say is um and part of the reason why I think 2025 if people are trying to pattern match will look very very different from 2021 is the once again the most positive

potential thing to happen are the two Market structure bills one's the stable coin Bill and one's just called the market structure bill stablecoin is probably a couple of months away from you know realization and maybe we'll see a draft sooner than that and we'll see how it goes through committee and goes through voting Market structure which is in my mind much bigger and stablecoin really just provides Market structure for what stable coin assets and stable coin issuers are going to be able to do Market structure is going to basically be for every other asset this is the fit bill that passed the house in May of last year what's a commodity what's a security who's the regulator in charge what's decentralized what's not decentralized what are the disclosure requirements etc etc all of that is probably going to be in the second half

but once that happens that's like if the election was the starting gun for all these institutions to look at this industry again and and legitimize it I think the market structure bill will be the starting gun for all of these things to actually come to realization yeah and and if we're just getting started in the second half of this year 2025 is not going to look like 2021 yeah I agree the other the other way that it's not going to look like 2021 I think is I think that the era of everything go up together is probably and like the easy money right all you have to do is be there for the shitty times and then hold literally anything I think it's done because even even in an environment where you have you know really good transparency into what's a security and what's a commodity Etc at some point

more sophisticated investors are going to come into this space and they just valuation is going to be a problem for a lot of these protocols right like so what does that mean well my base case is that that means retail is probably going to look very very different this time around it's not it's not going to be your average person or friend or family member who's like I just went and bought you know X Y and Z on my coinbase app and I just made $10,000 congrats uh it is it's going to be for a more prosumer or professional audience who actually understands these protocols is spending 247 looking at them just in the same way that people who you know you know I I can't remember the exact stat but like day Traders I

think make money like 20% of day Traders actually make money and L I think maybe even less but like a a very uh insignificant percentage of people who actually day trade actually make money and I think the the market structure will ultimately end up in that direction as well which is you got to be like really on the spot with your understanding of this you got to be reading the governance forms you got to be talking to the team fortunately all this stuff happens open uh in the open because it's all open source but it's it's a full-time job if you want to do it um and and maybe some whiz kid uh in college who's you know spending all the excess hours being able to actually go

deep on this stuff will be able to build interesting perspectives and investment thesis around it frankly just like you had in the early days of the hedge fund World which would be you know you find these little pockets of of people who uh are really talented and uh analysts and and they can understand it they can you know build a defensive strategy but I think that that's where you're going to start to see this industry move it's not going to be like gone hopefully gone are the days of the cab driver you know talking about crypto um and uh and all the things that you know they're trading yeah I was listening to I can't remember was one of these more Web Two focused podcasts where they were describing they were talking about crypto and you know they brought up the point where you know

even some of the most sophisticated investors based out of Silicon Valley have trouble outperforming the S&P 500 and just it turns out that investing in early stage startups even if you are really intelligent is really really difficult and most people can't do it successfully and so you know at the base of crypto has always been this sort of philosophical question for me is Imagine two scenarios one which you have a little bit more nny state where you police what people can invest in which leads to better outcomes for the average person or one where you let people invest in whatever they want and it leads to worse outcomes for people which would you choose and like ultimately right this is this is a question that governments and Regulators have to wrestle with across any different number of sectors do you let everyone eat

whatever they want mostly we do we do let people eat whatever they want at least in the US you know people are allowed to put more stuff in the food than in Europe but I mean that's kind of what it is I think it actually is just a philosophical question where it's it it is pretty likely to me that if you let people invest in liquid early stage startups most people won't do well in that environment I still think you should be allowed to do it but I can see the argument at least on the other i i i fundamentally and philosophically agree that we need to be able to give access people access to people who want to be able to do this and look it's not like people are gonna and part of the fit 21 bill was a limitation on how much

money you could invest so there are you know ostensibly going to be limitations so you're not GNA be you know refinancing your house and putting it into you know some random token um or you you shouldn't be and I think you'll be prevented from doing that but um look what has happened over the last 25 years in traditional markets is that because of sa Barnes Oxley which was a recognition of all the accounting fraud that was going on in the the 1990s and 2000s it made the the requirements to go public so high that it pushed basically the public offering threshold in order of magnitude higher and you know there's the famous stories of like Yahoo or sorry uh Amazon going public I think

with like a $300 million fully diluted market cap like you don't have those opportunities in the public markets anymore and so retail investors just haven't had access and it's meant that you know this entire industry around called growth Equity became uh an industry because of this because companies were going public later they need more Capital to get off the ground and it's just pushed it further and further to an Institutional basis that has prevented individuals from having access to it and I think that that is fundamentally unamerican and broadly I think crypto is a recognition of that it's it's why people get excited about these token offerings and and abilities to participate in them because they get

access to things that have real upside especially if they have the time or the resources or the understanding to be able to participate in them that's how it should work and yes we need rules we need controls we need regulations to know you know that there aren't abject frauds going on but once you have that clarified it's sort of like a you know eat what you kill type of opportunity um and that's what you had in the 90s and there are so many hedge fund managers because that was the typical format for investing in these assets because they'd be you know 10020 400 million doll companies where a hedge fund would be able to go in and invest in it because they actually read the technology and understand what it is the hedge fund World blossomed in the in the 90s and 2000s because of this fact and I

think that so once again I I I think it it will become more of a prosumer model where retail will still be participating and still be a major factor it's just going be it's not going to be your average person who's spending you know an hour a week doing this and kind of like putting around or or they will and they'll just do it in the major assets where they know a Buy and Hold strategy is going to do just as well um so I I I kind of see the market shifting in that direction which ultimately that'll be a good thing um but this is going to be the place where crypto is going to be the place where if you want access to early stage liquid technology investing this is the place to do it yeah you know what's funny um there's a little bit of an irony here

because you know everyone complains so much about public markets that it's just the mag seven and the like the big you know the big guys just keep winning and that you haven't been able to be an active manager for such a long time and it's these structural reasons they point to something like you know passive and ETFs and they just gobble up you know all these assets and they're not Discerning y yada um but it's funny because you know in bit in crypto which is one of the less regulated markets you know in the world there certainly there aren't these like structural ties like there are or these structural factors like there are in more uh traditional uh traditional markets it's kind of the same thing right like it's also even though it it might in theory be like a stock picker's uh Dream It's been

actually really hard to outperform the big guys right like Bitcoin and you know ethereum so there is some kind of irony in that as well right where it it's in some ways a really great environment in other ways like a wickedly difficult environment and you know you hear all of these actually I'd be curious to get your take on this too because every once in a while someone comes out and says we need liquid funds like as if it's like someone was trying to shame coinbase for not being a liquid fund it's like guys come on what well Co coinbase is not a liquid fund yeah coin coinbase is a is a platform where you can trade these liquidly um they were mentioning their Venture fund I think this was who was saying you basically invested early stage in 500 companies that you could

just dump on investors later and it's like come on guys you have to actually create assets no one no one is onor bound to support the prices of assets that they don't think are worth it and right that's that's a crazy perspective to me and and this is what happens when you have early stage technology meets Public Market liquidity it is it's going to get wonky and there's going to be feelings hurt but I I think um look a couple of thoughts the um the famous bet that Warren Buffett had and I can't remember who he made it with which was like whoever wants to take this million doll bet donated to charity if if your hedge fund uh with who Ted yeah yeah um will will a

basket of hedge funds be able to outperform the S&P 500 over a 10year period turns out they couldn't and I look there's a lot of time variability in when this bet was made and how this bet was made I think if you did to the 90s maybe it'd be different but that's once again Market structure dictates kind of like Global asset performance uh over a period of time and but at the same time in the 90s you had you know the the tiger uh fund and then all the tiger cubs basically build their capabilities as you know kotu tiger like Maverick there's so many examples of those funds that are still impressively performing right now that got their start in that market and so I think if you're yes there needs to be

more liquid funds and and I think that once the opportunity is becoming more clear they will exist because the incentive structure will be there and I don't know when we started framework one of the things that we thought about was it's exceedingly difficult if not impossible to start a traditional Venture fund from the from the start you you kind of have to find a niche or perspective or a market where you're the expert and there is a a gap and it is like you got to have luck and you know performance and all those things just time up perfectly for you to be able to break through and if I'm looking at the market right now and I'm looking at the opportunity set as someone who you know understands technology understands

crypto understands financial markets I'm looking at this and I'm saying I have an opportunity to go and start the next kotu or tiger or Maverick in the next five years and that opportunity doesn't exist very often but it does exist now uh or will exist I think by the end of the year once this you know Market structure Bild goes through and and so I I think you know the liquid funds will come just to touch on what we talked about a bit last week you know liquid funds typically people say we need more liquid funds because basically they want you know them to buy their bags the the biggest buyers of these assets are not going to be liquid funds guys the biggest asset buyers are going to be the protocols themselves that are generating Revenue that buy back their

own token and so that's I think what everybody needs to be playing for and once that happens it becomes clear you can use this fundamentals basis like there's so many opportunities to to look at these assets differently once you have that in place you know all of this stuff will call less uh I think it's just taking time quick shout out to today's sponsor Aries markets Aries markets deployed on apts in 2022 and is now among the top 10 lending protocols across all blockchains with $280 million of tvl Aries markets has expanded its product Suite to become a fully integrated defi Hub combining lending borrowing and More in 2024 alone Aries introduced several new features to better meet the needs of its users including native usdt support and incentive program and more click the

link at the bottom of the show notes head over to Aries markets and tell them that I sent you hey everyone quick shout out to today's sponsor marinade since launching in 2021 marinade has expanded their Suite of products to provide solutions for both defi users and trafi including liquid and Native staking as well as direct Enterprise Integrations marinade platform is optimized for institutions to securely expand their exposure to salana whether through the provisioning of custodial or non-custodial yield integrating staking rewards into salana Financial products or leveraging marinade best and Market rewards rate for revenue and treasury management whether you're in defi trafi or somewhere in between marinade has something for you to learn more about marinade follow the link in today's show

notes okay let's talk about um BuyBacks here for a second so one of the uh we talked about this a little bit last week um when we did our live podcast recording and uh since we talked uh I think ACI the a Chan initiative um run by Mark Zeller over an a land has come up with a new a nomics proposal um and this was part of a larger overhaul um but the part that I wanted to get your and we'll link it in the show notes here as well but uh a prices or the a token price jumped a little bit um and part of it my hope would be there's a very cool design actually called umbrella which is like an overhaul of um how they account for risk essentially

within their protocol which is very cool um and I think makes a lot of sense uh which you're basically isolating different pockets of of risk and uh paying stakers in more granulated way or granular way but the the big thing that the price was the buyback announcement um so they announced that at least for six months um there's going to be a $1 million per week buyback right so you can add that up and that's relatively substantial and after that there's the creation of a new Financial committee with I believe uh the ACI uh llama risk um chaos labs and one other entity and then they're to provide quarterly recommendations for uh token BuyBacks so you know one thing that I was I was

curious to get your opinion on here is you know if you look at you know the analog of public markets you kind of have a a a longer term sort of a look through into either dividends or share BuyBacks and you know i' would be curious how investors might underwrite okay they're doing a buyback but it's for six months so is this going to be a sustained pump we've got really good visibility into six month and then we know there's going to be some on a quarterly basis but I don't really know how to value that quite as much um and then you know how would an investor kind of think about or underwrite okay ultimately it's a startup so you know the confidence that the Quantum of buyback here is going to continue to go up or it could just go into nothing so maybe I think this

buyback is worth it or maybe I think it's not worth it yeah look I think the best corollary example here is with traditional equities and the the two formats of delivering value back to share shareholders is either historically through a dividend or through a buyback program the dividend is an interesting one and I think it's it's moved pretty significantly I don't know what the numbers are but I would imagine it's very much significantly shifted um in terms of the amount of companies doing a dividend versus building a buyback program towards BuyBacks and there's a number of reasons why but I I broadly um think that that shift is is for the best for a couple of reasons one um I think there's a tax

element to it whenever you're delivering value back to shareholders um in the form of dividend there's immediate tax hit um versus a buyback um and we'll see you know exactly how the tax policy changes but but there's a much limited much more limited tax effect and it's not paid by the shareholders it's paid by the company um the other element is um once you start a dividend and and just because of the way the stock market Works um dividend stocks are valued uh or looked at and evaluated separately from traditional stocks because they're yield generative and people start to look at dividend stocks as yielding assets which means that it's a very negative signal if you start a dividend

and then stop it at any point because people are owning these assets they're holding on to them and you know the opportunity cost of them buying some other asset like an actual fixed income yielding asset is high if there's the potential of that dividend being stopped so once you start it's very hard to get off that merry go around whereas BuyBacks have typically and historically been structured as programs on a periodic basis typically the board of directors will sit down and be like okay we're going to do a billion dollars of BuyBacks this year and they'll have to report it they'll announce it and you know what people will follow or what what investors will track is what is that program um ultimately uh building in terms of the

aggregate size and the period um and obviously very positive when a company starts to do a buyback the company also is literally buying back the shares and holding on to those shares and so there's an element of the company thinks the V the stock is undervalued um ver versus the psychological effect of the company doesn't know what to do with all this ex excess cash and it's just giving it back to shareholders in the case of a dividend so like there's a psychological effect as well as to like what what are you doing with this um but the company holds on to the shares and they can use them for stock based compens they can use them for Acquisitions like it's an asset that sits on their balance sheet um and so it's much better to I think be in the buyback world but the the corer I

think is um you know the best example is in traditional equities got it okay so you kind of just answered my question right at the end there but why it maybe it's just psychological but the I'm I'm struggling to see a little bit the difference in between because if a dividend and a stock buy back are basically the same thing one is just tax advantage versus the other why is it worse to discontinue a a stock dividend like a dividend versus just like end your share buyback program isn't that effectively the same thing so why is it worse to end a stock buyback program oh why is it worse to if you were to have like a dividend um why is it worse to end that versus having like a share buyback program which you can just end at any period yeah I mean um I I think the biggest reason is

because people hold dividend stocks like like uh yield generative assets yeah and if suddenly that yield goes from 4% or 2% to zero uh people are going to sell your stock because it's not giving them any yield they're they're holding it for that specific purpose and so that's why I say there's like a category of dividend yielding stocks that's very different um and that market structure is very different from how crypto works but I think you can think about it in in similar ways which is if people are looking at this asset like if let's say ethereum went to you know from 4% on average to 0 4% you know tomorrow in terms of State y there probably be a lot of people that stop staking and and so we can maybe think about it in a similar way um the div the buyback program though is um there's

just a very different Financial equation that goes on in that you're buying back your stock which means you're increasing the ownership of everyone else who's holding that stock you're having a positive Market interact interaction by buying that stock and you're holding on to that stock in the treasury stock of the balance sheet to be able to be used for growth opportunities in the future and so it becomes a productive asset as opposed to we're going to you know give this cash out because we don't know what to do with it and so it's it's sort of like you view it undervalued we want to buy this undervalued asset that we think we'll appreciate in value so maybe our billion dollars of stock BuyBacks is

actually going to turn into like 1.5 billion of value that we can use productively in the future got it okay that makes sense desk is the leading per deex built for both dgen Traders and AI agents offering up to 50x leverage with a sexlike experience to celebrate their launch on base desk is running a trading campaign with three major highlights 38% of their token Supply will be allocated to airdrops lowest trading fees on Earth with minus one BPS maker fee and 1.75 BPS taker fee desk referral program the more people you invite the bigger your rewards to get started click the link in the show notes below and make sure to follow at trade ones on X to stay updated this episode is brought to you by Moro Moro is the first and only defi protocol coinbase has integrated

directly into their main app giving millions of users access to borrow against their Bitcoin on coinbase just as web 2 companies like Google Amazon and meta were built on internet protocols the largest financial companies of the future such as coinbase will build on decentralized protocols like Moro whether you're an individual fund fintech or institution Moro is for you follow the link in today's show notes to try Moro today all right I want to get your opinion here on so we're recording this on Thursday uh Friday is going to be the first one of these policy Summits it's actually called digital asset Summit which I talked to Jason I was like dude they literally called it digital asset Summit which is the name of Das dash part two in uh in two weeks yeah actually this is a good

this a good uh plug yeah Bell 10 uh me and Michael and Vance all going to be there uh March 18th to the 20th the real deaths in New York uh but we've got uh yeah we've got this policy Summit that's happening in which I guess is sort of a small round table of Industry leaders and Y um I checked the list it's it's a lot of people that you might think there are sort of some of the more uh like you know Brad Garling house is going to be there um you know some of the custodians I think uh Nathan Diogo from Anchorage uh the CEO of Exodus um I did see that SG nazro a friend of the Pod from chain link will be there um and Shane Copan uh just announced that he's going to be there of uh poly Market Fame uh but more more on

the centralized side of things like more on the the sort of companies in crypto and you know they're going to be talking about different things and uh the the three kind of big announcements that we've had from the last week is there's the Strategic crypto Reserve which we haven't talked about but that's uh the they named three tickers salana xrp and cardano which everyone already knows what the reactions to to that was um well he he said that first but then he walked it back and said and of course of course Bitcoin and ethereum are going to be the core of this crypto Reserve right and and he especially went and called out that I think Howard lutnick then went and clarified even that Bitcoin is going to be treated specially or maybe Bitcoin and ethereum or something right some some amount of this was walked back

but um but initially at least that's that was definitely very headline grabbing a fun fun Sunday headline to wake up to fun Sunday headline to wake up to and yeah the entire move was given back I think it was like three 350 billion that got you know given and then uh taken away uh rela short period of time um also not grabbing headlines here but there was a they're looking at uh that IRS rule uh which would classify um you know wallets as Brooker dealers um so that's definitely very important um yeah I'm just curious like well we haven't really talked about the crypto strategic Reserve like I just love to get your quick thoughts when have to spend an enormous amount of time on it but what you're expecting I guess from this uh to be to be honest not expecting

much I I think this just goes in my bucket of like things that don't matter as much as everybody else thinks they do yeah um I every the the perspectives of like every single asset that's on that list or in that tweet is just immediately going to have a teawap turned on and it'll be permanent by pressure like no that's not that's not how this works and and if you're expecting that to happen you're in for a rote Awakening but um I I do think that this is following through from c campaign promises this is is signaling to the market that they're serious um this is uh structurally good if it at a minimum is a limitation on government-owned crypto that then is not

going to be sold and held on to into perpetuity David saaks actually had a really interesting tweet which was um out of all the Bitcoin that's been sold by the government there is it was like I don't know a couple hundred million dollars of proceeds but if they would have held on to it now it's like 15 billion dollars of value yeah yeah so like case in point you know that could have gone to much better uses had you not you know desired to sell immediately and I'm sure when they sold there were prices that were lower so they could make the argument well we sold at a higher price than they would have been otherwise but look if you just hold on to this forever it's going to be an asset that you have on on the government's balance sheet forever um so at a minimum I'd expect that at a

maximum I'd expect you know inclusion and participation from other assets outside the ones that are included I think the reason why all three of those were ini listed is that I think those are the three biggest US originated assets um so it does look like there's a focus on you know making us the crypto Capital as they've talked about and um I I think that's probably the biggest signal that we can glean from all this you know what um I uh I was thinking this the other because there's been a pretty big allergic reaction uh to some of these policies from crypto Twitter and look some of the I completely understand right like we should not be putting you know X RP or cardano or salana I don't even think in a strategic

Reser honestly I'm probably in the camp that we don't need a strategic Reserve whether it be Bitcoin um if anything even then I'm still not really on board with it but either way um I think that's not great policy but you know when I look at like these these people don't know the crypto ecosystem and a lot of the ethos and the globality and all of this stuff there it seems to me like they're approaching it at least in good faith in the same way that you might approach an industry right it's like hey uh you know to everyone in crypto where the ethos is this is global and permissionless from day one you know people kind of scoff at like American protocols but like that's such a typical Playbook right in any other industry it's like we want this american made and uh you know there there is some amount

of that that I think does make sense right if they want like let's just put yourself in the position of this Administration you want people to come and start these protocols from the United States what would you do I mean this is part of the Playbook so right you know they might be approaching it in a way that's a little grandfather for your taste if you're listening to this but I think the logic is decently sound you know yeah I I also understand the other side too which is like the the same government over the last five years has done everything in its power to drive all of these people outside the US and and so it's kind of like oh well now you like us but so look I see both sides of the coin um but I do think that um yeah the

biggest thing they could possibly do which is both on the policy and the regulatory front is make the US the crypto capital of the world and I think that that's you know what they're aiming for yeah so you know just to clarify like I'm not a fan of this uh strategic Reserve I think it's silly but I do think some of the policies that they're trying are look hearts in the right place like I love the US I would love to live here and you know have the freedom to uh you know just like we'd be operating from any other part of the world so I feel like exactly okay uh maybe the last story I would love to just get your take on so the ethereum found there were a couple of big uh switch ups at the ethereum foundation or general let's call it that yeah so

we've got two new executive directors so um I Amaya Gucci who's been the long-standing executive director of the ethereum foundation step down she's now the president um and now we've got two new co-executive directors uh Shia we Wang I think I'm pronouncing that I'm sorry if I butchered that and Tomas Stak uh gez um sorry these are tough names but anyway uh Tomas I think has been getting a lot of the uh a lot of the energy is maybe a little bit more wellknown you know he's a pretty well-known operator from the nethermind side of things so very steeped in the technicals of ethereum but also you know I'm everything that I hear like kind of a Workhorse and a great executor as well which is awesome to see um and they're going to be splitting responsibilities

so I think I saw this get outlined in a tweet from Tomas sort of clarifying A little bit about the leadership structure which is that the vision is still going to come from a combination of vitalik and ya so I guess she still has a significant role to playf um and then the strategy is going to come from kind of the board and executive team and actually Tomas and Shia is going to be more on the uh executing side of things which I thought was interesting um and then in terms of their direct reports there would be freedom to you know based on your management style or whatever direct reports kind of choose who to roll up into um and the other big piece of information here is that Danny Ryan uh who I think there was a like kind of a Grassroots push around to take over as

the executive director of ethereum has gone over to etherealized which is more of this maybe institutional sort of marketing arm for ethereum so yeah look I think um ethereal eyes and I'm sorry I can't remember the guy uh who started its name the right um so uh I think etherealized is maybe a realization of what I would say is the like multi-year too early ideals of the ethereum the Enterprise ethereum Alliance if everybody remembers that yeah yeah and it's going to be the BD the Partnerships and the institutional

uh connection to the ethereum chain that I think has been lacking um and so the realization and there was also this talk of is Danny gonna become the new executive director of the EF um is he gonna move over there and take over for a and I I think what I am most excited about of these changes is the separation of concerns of what seems to be basically like the business side and like the technology side and historically these have been completely connected as soon as the EA went away it was kind of like all right EF is doing everything and that obviously has come under flak in in recent months um with I I'd say uh not as strong of a

perspective on the business side or the institutional side so I look I think this is a great move I I think I still have questions as to the the like move to president and like co-executive directors just sounds comp licated from a governance perspective um but it's an open source foundation and maybe this is the right model of governance that they feel they need I I have no insight into the inner workings of how they think things are working and and how this would be an improvement but in a way it kind of feels like you know like red flags in my mind are uh when we see a company that has co-ceos never works and when you have um a CEO who then becomes like the

executive chairman but still has like things that're in the day-to-day operations role like that also never works um so you usually have to have one person at the helm and I'm I'm sure they'll be able to figure it out and it's a different structure than their company um but it was kind of interesting to see that on the EF side yeah I have the same opinion there and you know I'm saying that from the perspective of essentially a co-ceo relationship with Jason it works to a certain scale right and then it just doesn't um so it depends on how the ethereum foundation sees its scope I think uh you know every organization is completely different every leader is completely different in the relationship but I I agree with you that I actually just didn't think the Optics almost it's like what people really want is honestly

the market it feels like the market is just crying out for like make some decisions you know it just it just felt so incisive it just it probably wasn't the best Optics here to do a co- uh executive director relationship um that's a better that's a better way of describing what I was saying yeah it's like it's just that's not what the market wanted to see so um we'll have to see I think I think also that we're we're probably at a point um where what is required to Shepherd the ethereum ecosystem to success today is maybe not what it was five years ago um and I just want on ran about this but there's there's an analogy here to maybe like aell Labs or Google in its early days where the challenge for Google was

just making sure the internet worked and there were all these like just same way there were five years ago we didn't know how to scale blockchains right like it was still very theoretical and research oriented at this point so it was a really good high Roi use case for ethereum which essentially was crypto at that point it was like nine out of 10 devs were in the ethereum ecosystem to just solve these big scaling challenges so research was very high Roi now it's like you kind of have the broad Strokes right we know how we're going to scale blockchains it's uh zero knowledge it's rollups it's some combo of ibrl uh data availability sample like whatever the big paths are kind of laid there and now maybe it doesn't make as much sense um you know to be investing quite as much in research and the ethereum ecosystem

is a smaller overall portion of a much larger industry and so the challenge now is like how do you do G Market how do you you know educate the institutional audience about um ethereum how do you go out and compete and win for different app developers it's like just like any organization right that the challenges from a leadership level change and evolve as the organization uh changes and evolves and so extremely well said I I think the um yeah I I have the like sneaky suspicion or or kind of like the spidey sense that like the power or or sort of like the gravity of the ethereum ecosystem is much less on the EF side as uh compared to the etherealized side now it's like that's where things need to be going I'm

very excited that Danny's heading there I'm very excited about all the stuff that they're doing and I think there was there I don't know if this came to reality or or fruition but like there was some talk that he was going to go to the uh event tomorrow at the White House that' be great yeah but you know like it doesn't matter to me as much you know the open source technology side and the governance structure and what they want to do there they they know what's best but I don't think that that's the priority for ethereum at this point I think the priority is on the Ethereal side yeah so it's great to see like an an organization that's completely dedicated towards that I mean I I don't know Danny I don't know VC actually I've heard great things about about both so you know I'm really hopeful that it's a

successful Endeavor and and also you know we have to remember I know we've talked about on this podcast but Joe Luben uh the role that he's historically played within ethereum and and you know maybe one way to think about this as you know we're moving on to the commercialization of the technology part of this industry um the EA was just seven years too early yeah yeah they were like so many things in crypto right like there were so many things that were just a little bit too early and to bring this maybe full circle and back to uh eth Denver actually I think it felt to me like people were a little bit lost um like there was a feeling of okay we're still kind of talking about the same stuff that we were talking about last year there have been some incremental improvements but it hasn't really

translated into as many users as we might have wanted and you know I think people like one of the great Parts about this industry is that it was you know founded around this very libertarian sort of you know ideological bent and you got to kind of get nerd sniped and deal with these very he very interesting infrastructure challenges and I think we're around an inflection point here I don't know if it's today or if it was six months ago or if it's in two years where those challenges have largely been solved and what's required now to take this industry to the next step is the commercialization you know the operators the more the less of the tinkerer founders more of the like growth scale go to market type Founders and so I think that's necessarily left maybe some people feeling a little bit I don't know lost or uh you know

like they're not really sure what comes next but I I think that this I think that actually the very beginning of the really exciting buildout of this industry is just beginning to happen like I'm wildly optimistic about where we're going 100% agree I I also think just like as a thought thought piece uh what what do you think the sentiment would be like in the industry right now if one of two were were possibly the case either prices were were two to 3x higher than they were right now or two this was all private companies and there were no prices and like imagine the sentiment difference in in either of those two cases and and so I think there's just the sentiment and like the the

vacillations of sentiment are are probably like overdrawn just because of the way that the the public liquidity and token price uh factors into all of this but I I do kind of Wonder like any other industry that's having an eth Denver equivalent conference is probably much happier than we are just based off of where the market is because you don't have that day-to-day feedback and it's like nobody would everybody would be so excited about the the progress and the changes and the regulatory stuff and like everything that's going on everywhere if we didn't have you know the price tracker on our phones 247 dude that's so true because it's so easy to imagine right what it would be like if prices were just higher obviously everyone would be really happy but I

think if no one could see the prices then you would be probably much more happy too and there's a great like Cliff Asis quote about this he runs uh we started aqr and you know he used to because he got Mark to Mark at every hedge fund and you know he used to rail at the private Equity guys and then I forget I'm paraphrasing here but eventually realized it's a feature not a bug right 100% yeah so yeah it's so I don't know I um I also think that maybe to end on a a positive note here as well is that whenever there's one of these you're at some sort of inflection point or there's change or people are feeling like there are a lot of people that have been kind of like ogs that are burning out and leaving the industry and feeling uninspired and that if you are younger

kind of on the come up here that's room for you right to have a and if there are pockets of people like I ran into a lot of the people that I ran into at e were like little burnt out little hred but there were a couple people who were really excited and had fresh perspectives and you know that Alpha's just find those people or try to become one of those people that's really excited about something and just double down and put your head down for five years 100% agree and I I would just tack on that uh you know delete the price tracking apps on your phone and don't check price and don't think about price because progress is happening and you know price will catch up eventually um but uh yeah it's exciting times it is all right man this is a good one uh just

lean and mean you know just the uh top of just top [Laughter] only all right but well I'll see you soon actually we'll see you soon in person for a d that'll be fun I know I'm excited it's gonna be great all right partner cheers see you soon later