A New Era for U.S. Regulations | Roundup

Transcript

political parties and whoever happens to be in charge chooses by and large who is at the helm of these regulators and the reason for the repeal of the Chevron Doctrine is the the logic held that it was an extension of the executive branch to be able to have additional Powers when you are interpreting the laws that you see fit without any sort of control held by another Branch or any sort of oversight um in checks and balances held by the other branch so that that's where this is a a removal of additional powers and a shift back from executive to judicial and it you know this this has been 40 years in the making but it it was definitely sort of

a loophole I think that built up over the last uh you know a couple of years to decade hey everyone this episode is brought to you by SE the Blazing fast parallelized blockchain which is unlocking salonik performance for the vast ocean of e devs out there now you're going to be hearing all about say and their new V2 upgrade but if you take away one thing evm is here to stay there are some problems with it which we're going to get into later in the episode but say and especially their V2 upgrade is helping solve that so thank you very much say for making this episode possible hey everyone this episode is brought to you by Kinto the safety first L2 which is accelerating the transition to the onchain financial system they've got some very cool features like user owned kyc and Native account abstraction

which solves a bunch of the onboarding and bottom back problems that many l2s suffer from so you're going to be hearing all about them later in the program but if you want to learn more and better if you want to join their launch program engine nen you can click the link at the bottom of this episode go check them out tell them I sent you all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back

to another episode of bell curve you got Michaels one and two Vance little pre Fourth of July episode for everyone how you Fell's doing it's good be back you in a bed right now I am I [Music] am recording from the bedroom recording yeah been a very casual Vibes to I'm actually in a I'm no no I'm in my uh my buddy's place in Martha's Vineyards and there are like seven of us in this house and everyone is confined to their own little like working chamber here so so I'm on the bed you do dude I'm not complaining The Vineyard is great uh for Fourth of July so I'm happy C very very Americana very rich you I know I was

gonna say I heard the WASP come through in my voice there a little bit but what about you are you guys doing any fun uh fun plans for the for the fourth about to go to the buers Michael's going to Tahoe nice um yeah you know grilling chilling all that all that stuff good old American fun um exactly speaking of American fun that's a little segue into we had our first presidential debate last week I don't know if you'd call that American fun but what did I mean I guess the high level to to just give a summary it was about an hour and a half which were in some parts pretty funny in some parts relatively painful but you know at the risk of editorializing I think Joe

Biden came off pretty poorly and what was what was meaningful to me about this debate was that it usually it's the Republicans they're saying hey you know our our guy did great and the Democrats say hey our guy did great but it was crazy like right on a DI the the debate was hosted by CNN and immediately after you had pundits saying hey we might have to make a change here and the president didn't do what he needed to do what was your guys take on the entire thing favorite part um and well first off I think it was um it was over within the first two minutes I know but it I Michael within the first two minutes like holy this is over it didn't get better uh at least for the first 20 minutes I mean look

they're both old but there's an obvious decline in President Biden and I think you just compare contrast the the conversations that were going on with him in 2019 and 2020 I mean it's accelerating at an exponential scale it seems and there's been waxing poetic of oh he's not sharp between you know outside the hours of 10 am. and 4 pm and it's like come on like we have to hold our president to a higher standard and oh he had a cold and his voice was raspy it's like no he totally misspoke multiple times or oh you know I think the biggest part I mean there's there's so many takeaways which I think are interesting um the

first is the gaslighting that has been going on by the mainstream media for the last year year and a half has been found out and completely exposed um you've got uh an about face in terms of the support and you know whether it be the large donor call that apparently happened last night um and or the fundraiser events that were going on uh at the end of the week apparently on Long Island and I think New Jersey it it seems like there is descent among the ranks and there is total panic right now um because what do you do you're stuck between a rock and a hard

place um and it doesn't look like it's G to have a clean solution either way but um I think what is what is patently obvious is that it's a question as to whether or not you know there there is real um energy and aliveness enough to be able to have the role that he's in right now but um it is definitely something that is uh concerning and um yeah it's it's sad to see yeah you throw this poly market up here not looking good for for Joe I mean which Michael this is this is Joe Biden

oh yeah but what what's the I can't see the top of it oh is this just who will be oh presidential winner yeah yeah yeah I mean look the the poly Market I one of the big winners in this entire uh I don't know last four or five days has been poly Market watching watching the Market's trade and expectations around everything from who will be the person that you know steps into the void who what what are the chances that he'll drop out um who will be president all all of these questions are being you know traded and and markets are being made um which has been really fascinating to see I mean part of part of the interest here I think is uh if you just follow the poly Market hour by hour or it was even shorter than that

maybe 15 minute increments over the course of the uh debate within the first 15 minutes there was something like an increase of plus eight or nine spread difference and so th this stuff is trading in real time and and that I think is probably one of the first times that we've seen markets like that for major events like this yeah so you mentioned Michael the the gaslighting that the that the media's been doing and I agree with you but I I think an important Nuance maybe to point out or maybe people don't care about it but just this is what I've always thought about the media is when people criticize it is that there's the implication that this is some topown thing and some head honcho in a shadowy room is taking

orders from someone in the administration and then that ends up being what you see whereas I think the way that it actually happens is that there's just a strong entrenched frankly political bias of the average person that works at these types of that frankly the mainstream media um like liberal there's a liberal bias right obviously at these organizations and I think it ends up bubbling up almost from the bottom up like a lot of the most like the biggest zealots that you see organizations actually aren't the people in charge it's the people Rank and file actually writing a lot of these stories and my interpretation of that is that there's been this wave of do anything we're protecting democracy here anything

to keep Trump out of office and it's just led to this gradual like just you're just ignoring the facts that are looking you know looking at you in the face uh which is that this guy can't string two sentences together and he obviously can't do the hardest job in the world I mean he's he's completely like toast like I I think what poly Market basically says is that the election was won or lost last night I think there's a lot of D like you know logistical things into replacing the candidate that You' have to go through I don't think that's really possible six weeks seven weeks out from the convention right and so I think it's time to start planning about 2024 and 2028 like that's a unique take where it's just like you can kind of skip the

story lines of the summer and the early fall like the the DNC will be a disaster also in Chicago maybe it's not quite like 1968 but it's going to be pretty close so I think you can just like price in a trump win um and I think a lot of the I totally agree with Michael's takes I think there's been a lot of takes that are B basically agreeing even the New York Times editorial board is now like pushing him to drop out that would be Unthinkable like a week ago um I do think like Jill Biden is a pretty interesting character um Mo treacherous you know snake whatever you want to what I think you can maybe apply all of those labels there was a Vogue cover that she did today I'm just going

to pull it up man so so ton deaf that this landed today just just look at this just look at this I mean so so M some in my opinion like who who is really running the country like if there's a Vogue cover of Joe Biden the weekend that they're supposed to be deliberating the fate of Joe Biden at Camp DAV I mean look what what I mean by the gaslighting mic is it's it's you know and talk about protecting democracy it's about having common discourse and backing up perspectives with evidence and fact and what we've had over the last year and a half is all of these pundants whether or not it's the mainstream media and the rank and file

employees of these firms who are writing the stories who have you know the the the firsthand experience the firsthand evidence of him you know with Vigor and energy and coherence and but what you've constantly heard from people like Reed Hoffman or or other you know major political perspectives uh you know advisors or or people close to the president you know whatever the whatever the colloquial term is um for those sources is that he is he is at his Peak Joe from uh I can't remember his last name but he's the MSNBC uh oh Scarboro yeah Scarboro says that at his Peak

Performance right now he's the best jo bid we've ever seen it's the best Joe Biden we've ever seen like that's the gaslighting what a bunch of I mean and they were the first people to turn on him you know debate CNN was first to turn on them but it it was all of them it was instant and David Axelrod van Jones David aelod had kind of turned before but I mean now the polling is starting to come out there was one that came out on on Friday for New Jersey which is not a swing state historically that had Trump up one like if that is anywhere close to real pre-debate that implies like a 10-point shift in the electorate like I think what they're playing for right now

the Democrats generally is just they they can't get slaughtered like if they lose by like 20 you got to kind of break up the party maybe you like send the progressives One Direction you know you get the the center left in the other direction but like there's really no ideology ideology tying both wings of the party together and if they lose by a lot I think you risk like this like identity crisis if it's like the DNC is a disaster and then they lose the popular vote by like 15 American politics probably looks quite different in five or 10 years meanwhile you've got The Independents who are actually surging I don't know if you guys saw this but there was a there's a yugov poll it's it's obviously sliced but it's

um it's between the ages of 18 in 34 and the poll came out post election or post debate and it was sort of a snap poll it was only I think 1100 registered voters um but it had uh within that age range it actually had Kennedy in second in front of Biden wow that's crazy yeah Biden currently is not winning a single swing state in any of the AR real real clear politics polling averages yeah so should have included this at the top obviously none of us are political pundits or experts here but do you guys think that the DNC has to use the jcal term do a do a hot swap here like I don't know how I don't know how that can so that in in

Wisconsin and Pennsylvania it's illegal to not have the primary candidate Victor be on the ballot it's over I mean I I genuinely think what you're going to see is like today Monday July 1st is the first day of the second half of the year everyone probably has reset their positioning to some extent you'll probably see different things catch bids also the fall is the most bullish point for for markets generally um I think basically you're going to have the markets pricing the Trump win then price in rate Cuts as a result because like you know first thing Trump's doing is like he's talked about having unilateral control over the central bank or at

least some input I I think you're going to see like because the markets are like you know probably six to 12 mon once forward looking a lot of this stuff get priced in which is good he everyone wanted to give a big shout out to today's title sponsor say now I want to talk to you guys a little bit about why I think say is cool from a design standpoint a big problem that it solves for E theevs out there and then some cool stuff that say has coming up the reason I like say from an architecture perspective is again it's a very fast blockchain parallelization all of that stuff but say has essentially been custom building block space which is for Consumer apps and Dees now they have some very cool features which enable that so twin turbo consensus optimistic parallelization say DB all of this stuff allows you to

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and the link bottom of this episode click it now let's talk about what the what the market impact what the impact on markets could be if there's a trump sort of win so obvious well we should also talk about the Chevron Doctrine which is it it's a super important change to massive a pretty Bedrock uh like legal precedent that just got overturned after 40 years and so there are these Winds of chains that are blowing in terms of like the regulatory um apparatus of what's going on in the US and that has huge implications for crypto and then there's also uh like a Mark like Trump's policies um as well and and how the market is going to react to them let's actually start with the Chevron Doctrine um so the Chevron do Doctrine is it was

a case that uh was in between Chevron the company and the nrdc about 40 years ago and it was a really it it set up this legal precedent which is basically a tie goes to the runner when there's um a a regulatory agency that the US legal system will defer to reasonable interpretation and that's been going on for 40 years and it's given Regulators an enormous amount of autonomy right to interpret different legal doctrines um there was actually a little bit of yeah I I it depends on who you're defining as a runner I would almost say it's like it sets up the situation of like Tai goes to the Umpire because what you're what you're effectively creating is a

situation where the regulator has more power and the ability to interpret and therefore enforce whatever they feel is reasonable and whenever there's any sort of confusion the regulator gets to be able to say hey this is how we are interpreted in the law and therefore this is how we are enforcing it and so enforcement actions can come down from their interpretation of the law and there's another element you know that happened here as well which is uh the SEC um I can't remember the name of of the decision but it was another Supreme Court decision that happened last week where the SEC is not allowed to continue forward forward with his internal tribunal uh of of being able to enforce

internally there has to be a jury uh there has to be a trial by jury uh was another decision that was made basically what this is doing is it's removing the power of what people used to call the fourth branch of government which is the regulators and it's putting it back into the hands of well the people but also the judicial branch and the legislative branch to be able to make laws and then enforce them as the Constitution you know was built to to proceed with and Chevron Doctrine I think is an interesting one and there's a lot of case law built up around it there's a lot of examples of it broadly speaking it provides a lot more deregulation because it will push things to the judicial branch and decisions

will have to be made through a court system as opposed to the interpretation of regulators who as we've seen are at the becking call of political winds every four years do you guys think so here's something I've been thinking about the last uh week or so do you think part of the reason why there's just been such an onslaught of indictments coming out of the SEC is because they had a sense that this might be possible and they sense that this was their window of opportunity to push a lot of this stuff through so obviously there's a potential Changing of the Guard between the Dems and the Republicans and it's very doubtful that g gensley would keep his position with Trump in charge but do you think that they knew that this might be going through and they kind of view this

as a window of opportunity or no unclear who knows it's also like these cases are going to take years if if they even go through so yeah it's not like the agency has a mandate to pursue these cases and it's also unclear as to like I I actually frankly don't know the answer to this this would be a good question um somebody does be curious to hear but like if you start a case and then a Supreme Court decision comes down and says you know in the in the case of removal of the Chevron Doctrine does that negate cases that are started prior to that or how does it does yeah like if it's if it's unconstitutional you know it's backward

looking too you could see a lot of people get a lot of restitution you could also see a blank slate of crypto cases which would be bullish so in that case it wouldn't necessarily hold that if they thought that Chevron was coming down the pike and that this decision was doing I mean the oral arguments I think for this happened in something like April or February maybe it was Jan actually no sorry it was it was in the fall of last year but the the so like this you should have been able to tell that this was coming for a while and so I I don't know if that changes your Calculus as to whether or not you bring things in the meantime yeah it's a good point but the the idea is I guess like the tldr for folks who don't care as as much about

getting into legal weeds is it's a huge shift in power away from Regulators toward Ward the legal system uh the judicial branch of the government and I guess the way that that directly connects to crypto is that we've seen time and time again the uh I mean not obviously 100% but generally the courts have been much more favorable to crypto as an industry than Regulators have at least than the SEC has been so that's actually one of the big things that also happened uh which is the binance case which is the B um the the ruling that found and this is built on top of um a lot of the decisions that were found in the Ripple case as well but that secondary sales of tokens are not in

them in and of themselves investment transa or Securities transactions um because those secondary sales of tokens are not in and of themselves investment contracts and that doubling down of that perspective I think adds to the to the argument that these exchanges are not necessarily trading securities which is massive um so yeah I guess this is just going to be I mean I sort of see this in the I mean Trump put a lot of uh of new members of the Supreme Court in right um and so I guess you could look at this and say this was I me probably a pretty uh politically Savvy move um the other thing that Trump also just got was

like immunity um or there was a uh the Supreme Court came out and said there was going to be essentially an extremely high bar of uh judging past presidents actions when while they were in office but also I think it just means that you know we we tend to talk obviously about things through the lens of crypto but people are pretty sick of the sec's overreach outside of crypto as well this is not just a purely industry opinion like they've just gone you know when they feel like that when they felt like they had WIS at their back and now it's kind of blowing back in their face a little bit um so I once again you know political parties and who whoever happens to be in charge chooses by and large who is at the helm of these

regulators and the reason for the repeal of the Chevron Doctrine is the the logic held that it was an extension of the executive branch to be able to have additional Powers when you are interpreting the laws that you see fit without any sort of control held by another Branch or any sort of oversight um and checks and balances held by the other Branch so that that's where this is a a removal of additional powers and a shift back from executive to judicial and it you know this this has been 40 years in the making but it it was definitely sort of a loophole I think that built up over the last you know couple of years to decade yeah so there should be I think Tailwinds in general

for crypto moving forward if we get the the judicial system making more of these decisions than the SEC being able to unilaterally do more or less whatever they want the other I would love to get your guys interpretations as well of the impact on I guess crypto specifically and then I guess like what a trump presidency could mean for markets in general like one thing I've been just trying to sort of sit and think through is you know I've seen a couple of these are obviously early things that are shaking out like what his tax and um uh you know foreign trade sort of policies would look like but he's seems to be in favor of lowering taxes which obviously some people like uh but he's also talking about uh he actually was briefly talking about the idea of

eliminating an income tax and U collecting income via tariffs which is let's go let's go it's not not gonna happen yeah I know but his but his all these things Trend to be a little bit inflationary right like and just zooming out that makes sense right he is a little protectionist he is speaking to the little guy a little bit of populist sort of rhetoric and generally that stuff tends to be inflationary so one thing I've been trying to think through is if these policies did actually end up turning out inflationary how would you how would you sort of square a Resurgence of inflation against the obvious like kind of growth narrative that Trump represents the deregulation narrative that Trump represents like they're two kind of interesting things

that could Collide I would just be curious do you guys share that idea that some of these policies could be inflationary and if so what do you think it means for markets I I personally don't I'm personally of the belief that the inflation was caused by mostly anomaly supply chain difficulties during Co I think the money printing certainly helps long term but I I view Money printing is less like CPI inflation and more as uh like luxury goods stocks real asset inflation um just because like I think a lot of people were taking that money and buying stocks and pushing them up and this is how pees kind of gen generally rise over time is just a slow inflation of of the

multiple um which I think is is definitely happening in US Stock markets so I don't think like cutting interest rates and um you know like turning QE back on if that's what he does I don't think that's inflationary um I think the economy is probably in a weaker position than it was during the beginning of covid where you need rate cuts to like really stimulate employment and like rate cuts are going to offset slowing of the economy which is already in process so I don't think it'll necessarily be inflationary I think you're going to see see various Industries take advantages from others just under a trump Administration like startups probably get turned back on to some extent with

more m&a and IPOs the SEC just like being gutted or being less authoritarian would really help markets as well in terms of like what do they allow to come to public markets um energy probably does pretty well uh and I think crypto does really really well um and I think what you're going to see from crypto is like uh there will be a long-term uh effect of just like lowering the temperature around getting in entrepreneurs into crypto just like there was a chilling effect with the SEC kind of like like a lot of traditional entrepreneurs are still like is this like legal to do um and then I think you're also going to see short-terms some very tactical wins by companies that can get integrated in the banking

system who can get like the lending markets are still dead in crypto like maybe someone can hook up with a prime broker and and get them to finance you know stuff so I think there's a lot of different stuff there'll be crypto IPOs likely um and I think you kind of see this turn turn into a favored trade which is then kind of put on by people who are trading markets around it so more ETF inflows things like that yeah only thing I'd reiterate is um until we actually know what the economic policies are it's hard to comment on them but if we assume that there's going to be a general uh stance of deregulation I think that that will have uh or opening up of markets however you want to look at it but the main things are

and just to like Hammer this point home um there have been there's been zero m& and uh effectively in in the last four years um and in the last primarily two and a half years but what this has led to is a complete standstill of just about every single venture-backed company that is hoping for some sort of liquidity event and keep in mind you know the Assumption here is that the Venture Capital industry is the funding source for just about a almost all of the Innovation economy that exists um you know uh um of the mag 7 every single one of those companies was backed by uh a venture capital firm at at one point and that is

the economic growth for what's been driving the economy forward There's A Tale of Two Cities in terms of the stock market it's also what's driving the stock market to alltime highs um whereas the median stock price has actually been flat the mag 7 is what's driving the all-time highs um so any way you look at it the economic Center for our economy in the US is innovation without an innovation economy you don't have the ability to continue to fund it and as you know Venture investors ourselves we have to deliver value back to our investors for us to be able to continue forward and when we have multiple years or DEC ades of lack of distributions it means that a lot of

these firms or a lot of these funds are just not going to continue forward and so the historical like number one source of distributions for these Venture funds has been m&a sure some companies go public but now the bar for going public I don't know if you listened to this mic I know Vance did but there was a CTO conference talking about I saw what what the new requirements are to go public you have to be a 10 billion doll company doing a billion dollars in Revenue probably having about 20% of that in free cash flow and growing over 20% a year like that hurdle is gargantuan and so let's just assume that maybe one company every one to two years is that is Venture back hits that level out of

the hundreds or thousands or tens of thousands of companies that are started and funded every single year we're not talking about a robust Innovation economy that is able to fund itself for decades going forward so the the major note here is you have and to Vance this point you know entrepreneurship in other Industries like biotech like crypto like energy Capital intensive there's not regulatory Clarity and it's just been prohibitive uh in all different you know types of ways the the point is if we can start the m&a activity that gives lifeblood to the Innovation economy going forward if we can somehow you know make it easier for companies to go public public that also gives lifeblood

to the Innovation economy and if we can give a path forward for crypto entrepreneurship in crypto will continue to stay in the US which is beneficial to The Innovation economy in the US all of these things are things that will happen with things like the Chevron Doctrine and with things like a stance on sensible regulation but in general being able to have the Innovation economy you know regulated in the right way last thing is um I think the Biden collapse on Thursday uh now UPS the odds that it's a sweep Senate I think it's like I I think it's a lock for Republicans to win house there's just so many of these races that it's hard to tell if you're not like a political basically pollster what the aggregate map looks like

but this probably drops your average Democratic candidate two to three points and that is enough to flip enough of these races where Trump could have a clean sweep of all three you know the house the Senate and the presidency and then it's like he could do the thing you know he could do any of these crazy economic policies which could be good I have no idea but the I think there will be some volatility around like what his plans are if he doesn't Telegraph them soon enough where if people think you're getting 10% tariffs that probably changes a lot of like the the average CPI basket that like the tariffs would be the thing that would lead to inflation not not the money printing in my op the tariffs that's the same totally agree with that

and we don't produce anything here for the most part I mean that's not really true but we don't produce a lot of Stu we don't produce anything so maybe maybe economics aside on the tarff point the the one part that I do agree with and I I think it was I can't remember which interview I think it was all in podcast where where he went on and talked about it his point on the Tariff point was like look tariffs is one part of it and you know getting money in the door on tariffs is one point of it the other part is power and and being able to negotiate and use this as leverage with some of our either ad or Partners like there's a lot of there's a lot that's wrapped up in you know how do we onshore how do we reshore how do we

start building things back in the United States again it's not going to flip on a dime it's going to take years if not decades to be able to onshore a lot of these operations if they ever come back in general but there's a lot that I think you know in in terms of just to throw it out there like the chips act you've got the inflation redu inflation reduction act being able to provide subsidies for certain types of Industries like energy to come back on in into Western hands um the chips act obviously onshoring you know a lot of the production of chips we'll see whether or not that can happen but they're going to throw a ton of money at it like there there is definitely an effort to bring it back in and I think that that you know aside from the 10% or

whatever it would be from an economics perspective there is there is a lot that's baked into that that's not just economics but I mean what what you're what you're setting up for is like the the Jimmy Carter to Reagan transition yeah like that that is the closest political analog that you could find where I I feel like more than anything Trump knows that the country is in dire need of a psychological boost which is the same thing that Reagan did and if you get enough people believing that we're back we're back you know what's really funny is that make America great again was actually a Reagan slogan that is true it was you know the m&a point like deeply resonates as well I you can I

mean just as an anecdote for blockworks business you know like the companies that we are set up to serve are not like seed or series a companies like historically we work with like realistically like C C and above right because that's the type of companies that have marketing budget and I don't know you guys would know this better than me uh just from your seat as investors but it seems like a lot of those companies are pretty starved of capital for the time being and you know there haven't been very many successful exits um in crypto I'm sure that's not lost on a lot of folks like it's tough to IPO in general it's extremely difficult to IPO as a crypto company and there hasn't been much m&a at a really high level either so yeah if I was like a late stage private investor I wouldn't

exactly be looking towards crypto companies I mean just just as a couple of examples um plaid was set to be purchased by Visa in 2021 uh for $5.3 billion the deal consummated but it was ultimately blocked and plaid went out and this was 2021 times but the rumor was in 2020 they finished the year with 108 170 million in ARR and they were growing 40% or 35% year-over year what now they are expected to hit is 280 million in revenue and they're growing 20% year-over-year four years later with with interest rates the way that they are and they raised again at a

I think a 15 or 13 billion valuation they raised again and now you have to clear that pref stack to be able to get any liquidity back if they were to sell but you now have slowing growth Revenue multiples coming down to reality and what could have been A5 billion win from an m&a perspective which goes back into the Innovation economy it's going to be hard pressed for them to be able to get back to five like that that type of an opportunity is just completely missed not to mention the time value of you know four to five to six years of money it's massive that's uh hate to see those slip away yeah you hate to see it it's tough

it's tough so when do you guys think if uh I'm in I'm in your guys camp that I think it just feels like I don't really know what moves the Democrats have because I agree with you it's I think it'd be very difficult to swap someone in for forgetting whatever rules specific states have about needing to be on the ballot whatever it would just be very difficult to build cohesion around another candidate at this point I think it would be politically almost impossible to do that no there's no other candidate and and and I don't even know how you could do that in three months time anyway like it takes time to just build you know trust and brand with the American people like I I but anyway so at least it's still maybe I mean it's not but you could convince yourself it's a tossup if

you're in Biden Camp yeah that's what they're going with is my guess yeah I I don't know what yeah it's it's been really hard to see the logic or where they're coming from Recently but that aside when do you guys think this starts to get priced into crypto markets I was actually a little bit surprised that Bitcoin didn't do I I thought honestly watching that debate like everyone walked away with a really similar thought which was like this is like Trump's gonna clean up here and I feel like if you're looking for exposure on that idea like crypto is a pretty good bet um and I was a little bit surprised that Bitcoin didn't react more strongly it's gonna take a while it's G to take a while we're we're like on polym Market looking at the odds these people are like managing trillions of

dollars they will need it will the polls will need to get so bad and I think they will in the coming weeks that that will happen but it makes sense that it didn't happen on on Thursday or whatever and I think the other thing is like we're still getting through all these Mount gaws and German government points like yeah we literally found 15 20 billion of coins last week maybe some of them are spoken for will be in Diamond hands but maybe half of that gets gets sold sold it's crazy that that negates all of the ETF like a lot of the ETF inflows to date is just like that chunk um for the record eth does not have this problem yeah the there so there's a

couple things just talk about Market structure from where we are right now um you've got the the coins that were found which you know they existed we just kind of forgot about them in the form of Mount we found them everyone everyone everyone pushes this off by six months for the past 10 years I mean yeah but it uh it sounds like it's happening at least starting today uh they said early July is when they start Distributing and I think into like directly into people's tracking accounts and um which is kind of interesting you just like wake up one day and you have a bunch of Bitcoin in there um but uh the so it'll be interesting to follow that German government is selling um I mean there there's definitely some selling action

going on in that's sort of like exogenous or um just very specific to those situations the other thing that I would say is going on and you this is more commentary around the fund um ecosystem which is just about every single one of the funds that we've been talking to or that I've been talking to recently is basically gearing up for a either Q3 or a Q4 fundraise for their n Venture fund and what that implies is two things you know everybody's going to be coming back back Market at the same time so get ready um but also you're you're going to start to see you know 6 nine months from now who who performed well and who didn't based off of their fund size um

you know any I've already seen one fund went from 2.5 billion to 850 million and I think that that kind of shows where the market interest is but also where the market interest is for that firm the the other ones that I would you know think about too are as you get to it just like the way the conversations are going right now you have to have DPI to be considered serious and DPI means distributions so means in some of your previous funds you have been able to get liquid and distribute back cash on those assets what I expected with a lot of the firms that are gearing up for fundraises in the next and and launching those fundraises in the next you know month two months three months is that they're looking at the end of Q2 which as of

5:00 pm yesterday ended they were basically selling things that they felt were able to be sold and you know leading up into the end of Q2 that is you know the last marker that you would have to have an accounting package so that if let's say you have an August 1 or or September 1 launch date for your net fund it means that your Q2 numbers are going to be the last numbers that you have to be able to present to people before you go out and fundraise again and and I think that this is sort of an under recognized point point and and maybe it's just Nuance that we think about because you know this is our this is our business and so we can understand the Cycles a little bit more but I think

that there's been a lot of selling of assets leading into the end of Q2 just based off of the fundraising cycle and the market right now um which is requiring a lot more DPI than you previously had in previous Cycles so just just out is something that's Al that's different that is Alpha and Michael and Vance are the are the things that people are selling like selling what they can is that like Bitcoin anything that isn't tied down anything that's liquid any and and this is It's like a sliding scale it's like how much uh how much DPI do you need is based off of how your fund looks in terms of pre- DPI returns and so like

let's say you know a really good Venture fund is you know net 3x and if you can net 3x that's your your top tier and so let's say you're at 3x well maybe you don't really need any DPI because you're sitting on gold but if you're at like a 2X and you got to like build a case for why 2x is going to turn into you know three or fourx over time it might mean that the best way of doing that is to say hey you know what we were at 2x but half of it already been distributed hey also LPS we just distribute you half the fund from your previous fund like do you want to invest our fun just like take the returns and give it back to us like that that type of a process I think will also be playing

out okay let me ask you guys this the I don't know you guys have probably seen this a little bit on Twitter but first of all I would I would say crypto TR is always an interesting place but the Vibes have been a little bit less than Immaculate over the course of the last couple weeks and I've you've probably seen a lot of people say hey just you know leave the computer for July um and I've seen I've seen a bunch of different people say at this point and I don't know that's it's it's sort of funny that that they're going to leave then it's going to rip then they're going to come it's like yeah how it always works it is it is and it's and it's coinciding around kind of a local low it looks like I I've been just checking the uh the

total crypto market cap like we bought them around 2.3 trillion we're up a little bit I don't know I could just uh obviously not investment advice and I'm not a Trader at all but it does feel like we're at some sort of local bottom in sentiment you've got people telling you to step away from the computer feels kind of primed for a little bit of a re and I agree with you there's been a lot of like the gax distributions the Germany the US they've all been selling Bitcoin I think that's what's been weighing on the price I mean crypto Twitter is just like built to desensitize you to crypto and kind of like underappreciate it in some ways uh so time off is always a decent idea um but like it's it's like people are like God why aren't we why aren't we new

alltime highs like all it's like okay well we found all these coins like I told you five minutes ago like it's literally just and it's like well this sucks and like why it's like we literally just gave you an explanation like we we just relax and the fact that it's like at 63 or what's it at right now somewhere 64k you know 635 like I don't know I feel like people just need to take a step back sometimes and like even with all these unlocks like ARB I think is probably a third or half of the way through its unlock schedule still an8 billion doll token like that's an incredible outcome for everyone that was early to the community The Venture investors you know and and like okay Celestia is getting beaten down it's

like well it opened up at at one billion and it's at six now like sure it dropped from 20 but like that's always going to happen I I don't know what people want you know it's like it's I think they want up only Vince that will come back it's like all like it always comes back it all like you know we're right below alltime highs the ETFs the interest rate Cuts Like the Donald Trump stuff the setup is there this the last thing I'll say is like um you if you lived another hundred years you'd never live through another ray cut cycle like this like this is what we play for you know yeah the the exactly what I was well not exactly but generally what

I was going to say which which is the way we know that we're in a bull market is because we have 20% 25% draw Downs 20 to 25% draw Downs don't happen in bare markets you're just flat bare markets are marked with flat non-existent volume non-existent interest and just like staying there for months or years on end like the the way that you know that you're in a bull market is that you have these massive pullbacks and those are great opportunities to be buying and these pullbacks last weeks sometimes months but the bull trend is unaffected I think people are disgusted with the alt price action I think disgust is basically how it would characterize it I think I mean that has to be close

to a stimate low definitely I mean but but think about but okay so so let's pair that like alss have been getting SCH slacked the most over the last two months more than any other category within crypto and let's pair that with okay the last two months is the last two months that these funds have to be able to take anything that isn't bolted down all of the unlocked tokens that they're sitting on and slowly sell them over the course of the next couple of weeks couple of months to be able to get in before June 30th so that they can say say to their future potential LPS or existing LPS here's some money do you want to give it back to us okay that's some good Alpha also wonky stuff always happen like even

in Trad fight quarter ends like people are you know locking in tax losses because you have to pay taxes quarterly or they're locking in tax gains or whatever um also all the 13 FS are due at the quarter close so everyone gets to see what you're holding in in Securities World um so like I think the other thing is um Nvidia has kind of been getting hit like this is kind of like a softer period for equities RIT large like it's up today but there's this uh I told Michael about this there's this Nvidia this levered Nvidia product called nvdl which is uh I think it's like two or 3x levered Nidia 2x it's 2x lever Nvidia and you know there was a point during the last week where it was down

like 33% I think it's back to like 25% down but a lot a lot of retail is not having fun right now but well the big point on that one is that it had it I think it still has six billion of AUM so so like when it's down I did not know it had six billion I thought it was a lot I thought it was like a bill I mean no it's big there's just so much money that's in fixed income products right now that's looking for something do and it it feels like I personally I think my my unique take right now is I think there's going to be a lot of weak data and they're going to cut earlier they're going to cut faster or it's just going to be more severe of a rate

cutting cycle like how long has it been now with with since it started what was it like two years and change since they started hiking rates yeah think that we've been we've been at this for for two plus years totally Bitcoin and that bitcoin's at 63 and the Bitcoin is at 63 and like look like the psychological boost I wish it wasn't the simple a lot of it is just the price of money yeah like people are like The Vibes are off and like this these industries don't know if they're going to survive and sure some of them won't survive like I'm pretty bearish on the entertainment industry other than like Netflix but for everybody else the cost of money is going

down the uh the other central banks by the way are front running us and Bank of Canada is already cut ECB is already cut one of the uh one of the ECB guys I'll get um simus uh said that two more 2024 cuts are possible if the data comes in as expected send it yeah there there's another there's one other Dynamic which might uh send that and also they they they cannot cut they cannot cut too much before we cut because you look at the end it's down 14 1 days they're getting smoked like once the US is like we're cutting it's going to be like in unison it's like every week will just be rate Cuts

there'll be some Australian rate Cuts Bank of Canada if anybody cares about that European Central Bank like it's gonna they care about it but yeah it's that that's what's also been you know you've also mentioned like why are The Vibes off it's like look at the M2 chart which is just that's been straight down um and then look at the dollar the dollar is really strong M2 is down it's like and and the the more we keep rates up as other central banks cut it's going to draw more Capital into Bonds in the dollar and that just can't hold forever it's already the Yen the dollar Yen cross is at like 160 that's a that's a that's a level that it's been topping out at and you know you never know from yeah we are I mean that chart is

crazy but I think I think honestly like if you're holding crypto and you're like man this thesis or this isn't playing out I think first of all sell it uh and go do something else but if you don't do that like I think like the next six months the back half of this year I I I I I don't know I'm just feeling good about it I feel good too yeah I like there is no alternative to crypto where where else are you going to go so then so I totally agree with all this but maybe like the back half of this year I agree with what what are going to be the first catalysts because I I don't know if there's really anything that happens and I know that you have this like price going up price

going up will be the Catalyst right but what's the Catalyst to getting there not for crypto particularly I'm talking about like Global macro I think just like more of 2024 to 2028 starting to take shape in a real way it's like are you serious about 10% tariffs or is that just like opening Gambit and then if you get more visibility on the house race I think you kind of like like it feels like you'll have basically perfect visibility into what he wants to do for the next four years and I think his White House is going to be staffed by a lot more talented people which gives it more believability who's VP who's VP I mean I I personally like JD Vance I kind

of think it'll be Doug bergham poly Market say d yeah I I believe the poly Market autis I don't think it's gonna be I mean I wish it was going to be Tulsi that'd be such a cool ticket but doesn't feel like that's in the cards po Market's a super interesting business uh like it's I agree Michael it's been the winner of of all of this stuff so here because we've been talking you guys gave a I can't remember which of you Michael I think this might have been you but you just said telling about meme coins about how they remind you of those like early viral videos on the internet I was listening to I was listening to tun say so he was talking

about the way that ads get delivered on networks like Facebook and making the comparison that there you can sort of squint at meme coins and see them as a as something like an attention algorithm and if you were to you know build some kind of there's something there right it wouldn't work perfectly like this but you could see meme coins representing something about basically being like a market-based um like attention director um and it it sort of feels like poly Market is zeroing in on something like that because that's the that's the challenge to their business is that that's the sort of unattractive part about betting on Poley market for me that's why I don't do it it's just you know you're kind of taking a punt and the best you can do is 100% but the mem coins have

more upside but you know you can kind of squint at all of these things and see something that looks media is um but I agree I I think we haven't figured out I mean broadly well until we have massive platforms and even if we have massive platforms of the likes of Facebook Snapchat Google what have you there will be adtech that exists eventually for web 3 but it won't look and feel the same and I I I spent three years building you know ads at Snapchat so I I know a little bit about this Tech stack but generally I'd say it's not going to look and feel the same yeah okay let me last last question for you guys here do you agree that there's

a I mean where do you I would be curious where you guys fall on this whole argument that I was referring to a little bit like the big VCS are value extractive here and like early in the ra like we're I think this was Arthur from Defiance you know he came on Empire to talk about this but um yeah where do you guys fall on that on that whole spectrum and I actually see it as there is a there's a there's a Gap in like later stage privates and liquids I think but I I think that's I mean to editorialize my own opinion I don't think that's the fault of funds for raising and allocating but it does feel like there's I'm just asking selfishly here frankly because a lot of blockworks customers are like later stage companies and it doesn't feel like there's a lot of capital available to

them is that incorrect um or what's your guys thought about where's where capital is finding its way into crypto startups Mo mostly incorrect I think um I do think there's a difference between investing in products which you think will work and become real businesses versus investing in products that the market wants but like you know I think at the end of the day it's a free market and as long as there's disclosures and people are adequately notified which is a lot of what the new crypto bills want I think that's fair um like I certainly think there's a cynical take you can have where you're like invest in in

things to invest in things so that people will buy them from you which like we we don't do um and also like if you're a liquid hedge fund manager which Arthur is like I get it um you'd like to see more efficient markets but like go do that yourself go buy these to like if you think these tokens are expensive short them if you want to think they're valuable you know buy them it's a free market that's what crypto is I guess I'm not understand like what what was his point exactly or what was his tweet I didn't see it's like you know like people are VCS are dumping on retail and like all this stuff and like I think there certainly has been projects which have not worked which people have sold into retail obviously that's happened there's also been people who've had

their lives change by VC funded projects um so there's that's the other side of the coin where they net out I have no idea but um my sense is the big outcomes in crypto have been far larger than the losers yeah I mean I I I think a lot of this comes down to sort of incentive modeling where you know to advance this point if if you have an open-ended hedge fund and you're and you're trying to make Venture Investments out of it like yeah it's going to get weird and it's going to get wonky like you you have to take a long-term perspective with any of these Investments and I mean that's obviously what we do but that's also what I think is the dominant investing strategy in this industry just as it is in any Innovation economy you know

outside of crypto as well it's like you have to take a very perspective for the outcomes to worth be worthwhile and so I think that's number one and and number two is like it goes back to this question and we've seen this thing pop up every like two years it's like what's the value like is it just capital or is there any sort of like additional things that you know VCS or Venture investors or Angels bring to the table and like why are they the ones who get access it's like nobody else is writing $5 million checks at seed stage to build these things also nobody else is like answering the phone when shits hitting the fan and like you need help with things or like nobody else is giving advice who's seen hundreds of token launches and token models and you know knows who to talk to and who can help

when you know all all these questions are being asked like I think going back to the like in 2020 one of my favorite themes was like the anti-c launches and it would be like great we're not going to do we're just going to launch it it's like great congratulations your univers of opportunity is anything that exists on chain already because if you need to spend any time let's say writing code or like getting an audit done like you're going to have to raise some money to be able to do that and so it's just the same perspective over and over again in in different way shapes and forms and I and I think um I can't remember the word you use manance to describe the alt season right now um but it's just like a lot of displaced anger like alter down like oh VCS are bad

disgust disgust also also I do think like if we want to find out if tokens are valuable we should just be launching more tokens like is Da valuable I don't know let's launch 50 more da layers we will figure it out if if we do that um the alternative is like this like we should we should regulate VCS from investing in private Market startups because there's too many it's like which which one of those logical paths makes more sense to you I I 100% agree with that and I I actually just think this isn't even a problem because this will solve itself right if there's like too much Capital being injected at one stage then a bunch of those companies are going to end up being worthless and then money's going to enter at a different stage I I think

there were a couple different arguments getting in like inflated or conflated there rather I but I I I guess uh maybe to to close the loop on that do you guys think there is a this is my own observation aside from that is it does feel like there are a couple of parts of the um like a couple of uh Parts in the stack which get less Capital than others and it does feel like there are a lot of folks that want to invest in like seed in early stage but not that many funds that are investing in later stage stuff um do you guys agree with that opinion or not agree with that opinion I I I actually I mean disagree um mostly because look the there are a lot of funds I think and and just like the the

number of funds not necessarily dollars but like the number of funds we're looking at the like very early stages and and let's Call These funds anywhere from like 25 to like $75 million funds and they're writing you know2 to3 million checks that's great and that you know serves that side of the market or that kind of part of the spectrum of opportunity but what it doesn't do is it doesn't mean that you have a Capital Partner who can be with you over the course of 10 to20 million and that Capital Partner if you don't have that capability it's like you got to pass it off to a whole new set of people who you haven't spent time with they haven't seen you operate they haven't seen you you got to like build a relationship from from scratch and so I think if you're at the like 50 to $75 million

Mark you got to find Partners who are at the like 250 to$ 500 million fund size that you can partner with so that they can be the next people to step in and help and and like that kind of separation is a is a big divide and I think that you're G to start to see you know people opt you know Founders opt for partners who can write the $2 million check as well as the $12 million check because they just want to know that if they start working with someone they don't have to go outside and like roll the dice again that they're bigger round at a later stage is going to be something that you know may or may not happen they want to know that the partner that they're working with and they can show progress with is going to be the one who can follow them at the

next stage yeah crypto Venture is also like this big like this big so globally I just looked this up but 150 to 200 billion that gets deployed from Venture funds into private Market startups wow crypto Venture I would say that is one to two maybe it's more it's it's more than that it's probably like four three to three two to four every year two to four okay so it's 1% of all other Venture right and you and and people want to have like Venture capitalists need like licenses to invest in crypto startups because like there's some imbalances that which stage like I think it's it's not like a disingenuous take I think there's some truth to it but I

think it's like point pointless launch more tokens and there will be incentives for things that work and if those are apps there will be incentives there we think there will be we've bet on a lot of games like other people should follow us we obviously support that let's go baby I no I agree with that entirely I'm literally asking purely out of selfish selfish interest here because I want to see these we want people to buy our bags too I know we want that but that's what we have a lot of these ETFs for like we should be rooting for more of those the other the other thing I will say is um so in sort of Theology of startup fundraising within the crypto space there's like two or three rounds that are done before the

token launches before like you scale right and one of the things that we've been talking about is like who's going to be the buyer in the liquid markets like who's going to step in like there's no tiger this round there's no like hedge funds like 72 was a big factor you know last go around all that the biggest buyer these tokens is going to be the tokens themselves as they generate revenue and buy these tokens on Market they're going to be the biggest buyer and they're going to be the biggest owner of these tokens over time and that's the mindset that you should have you know look at the maker ecosystem it owns over 10% based off of the buyback over the last year like if you can own 10% of your tokens because the the revenue that you're generating is being used to purchase that token on Market

that's a huge Advantage but like that also solves a huge kind of question as to like who's buying this on net net also guess what Facebook has like 30 40 50 billion yearly annual stock buyback programs this is what trafi does this is what we need to do and then after we do it then other people will buy alongside those flows the the path is very clear to Michael and I and I think you as well EO I think um I guess if you're like at the ground floor scrapping it out in meme coins it can be hard to see like the larger vision of like how this all works towards creating large outcomes but this is a Time honor tradition like there were hundreds of

public companies in the 2000s that were tech companies that you know went way up way down and there was like a few that were you know had staying power this is capitalism last point on the the VC side that you guys are made on the value ad I've I've never understood this point I I think people have this like oh VCS get special private access or whatever people talk about from the standpoint of how they think it should work from their perspective of what would be fair but the other perspective that matters a lot here is the founder perspective and who do you want to take money from and like good Founders want to take money from good VCS that are going to help them and not a thousand degens on the internet they're going to scream at random this this is the classic thing in

companies too it's like your smallest customers are your worst customers like your smallest investor you know they gave you like a $10,000 check and it's half their life savings going to be calling you every day to ask how things are going it there are just there are Market forces here that shape this also it's not everyone not everything is a conspiracy to to dump on you and I've never loved that perspective the the best Founders are the ones who want to win the most and the best way to dictate that outcome is to find the best Capital partners and and Venture investors that also win the most yes yeah we can we can give you like a like a 20% Edge to make a lot of money that's worth it in most like we talk on the phone EO like you call me

you know we talk whatever whatever um like it's not like I'm changing your life no but but like it helps it's super helpful it's super it's crazy helpful because also uh I'm just Jason and I just did a little podcast with David Hoffman's putting this like Builder thing it is like uh you know sometimes you have like doubts about things you're like should I go this way or that way and just like being able to hop on the phone and call you guys and ask for your opinion is m helpful so that is literally all venture is there is no other magic behind it it's just people it's very helpful fellas this has been a really fun one um I gotta run here but uh enjoy the fourth everyone everyone out there drink some beers eat some

burgers have have some Bru Amer TCH some grass happy birthday America tell some stories yeah later all right see you guys hey everyone want to give a final shout out to this episode's title sponsor answer say now there are a whole bunch of really exciting reasons to be building on say V2 outside of just parallelization I want you to head over to say. to looking into building on their public devet again click the link at the bottom of this episode and head over to say. start building something today