Latest / The Paul Barron Crypto Show / $125 Million ETH Stimulus Check Incoming💸Sharplink CEO INTERVIEW

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$125 Million ETH Stimulus Check Incoming💸Sharplink CEO INTERVIEW · The Paul Barron Crypto Show

0:00
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0:38
Speaker 1: I want to welcome into the show Joseph Shalom, who
0:41
Speaker 1: is the CEO at Sharplink. How are you, Joseph doing great?
0:46
Speaker 2: Paul really happy to be here.
0:47
Speaker 1: We've been covering sharplink for a while and obviously we
0:51
Speaker 1: love the dat exposure on ethereum and it's interesting and
0:56
Speaker 1: for many of you, if you're brand new to what
0:58
Speaker 1: that means, it's digital asset treasury. Sharplink obviously one of
1:02
Speaker 1: the leading ones in the ethereum space. First question I
1:06
Speaker 1: have is How did a guy from Blackrock get into
1:11
Speaker 1: something that is leading digital assets into the future. What
1:15
Speaker 1: was the big shift for you?
1:17
Speaker 2: Well, I had spent the last six of my twenty
1:19
Speaker 2: years at Blackrock leading a digital asset team doing really
1:22
Speaker 2: benevolent things in the stable coin crypto and tookenization space,
1:27
Speaker 2: and what came became really clear is that Ethereum is
1:32
Speaker 2: playing a leading role in the future of capital markets
1:35
Speaker 2: and the new rails. And so after retiring for six weeks,
1:38
Speaker 2: I actually joined Sharplink as its first new CEO to
1:44
Speaker 2: basically run a public company that allows both retail and
1:48
Speaker 2: institutional investors to express their view on that Ethereum opportunity.
1:52
Speaker 2: You can own a public stock, you get access to
1:55
Speaker 2: ether beata, and then we make it really really productive
1:59
Speaker 2: to almost of investors are productivity overlay. So you know,
2:05
Speaker 2: I believe in the future. I'm a futurist and this
2:08
Speaker 2: was a great opportunity to be one of the loudest
2:11
Speaker 2: voices and educators in the theory and community.
2:14
Speaker 1: I'm looking at the tweet right here, four hundred and
2:17
Speaker 1: sixty four Ethan staking rewards this week. So by stakehold,
2:22
Speaker 1: buy and hold, talk to me a little bit about that.
2:25
Speaker 1: How First of all, how are institutions able to beat
2:29
Speaker 1: the current eth staking rewards that are happening.
2:32
Speaker 2: Sure, if you think about it, there's three different ways
2:35
Speaker 2: you can get exposure to ether and its productivity. You
2:38
Speaker 2: can try to buy it yourself, but if you're a
2:40
Speaker 2: large institution or even a retail investor, you often want
2:44
Speaker 2: to own it in a different wrapper, and you can
2:47
Speaker 2: own it by just buying our stock. And then what
2:50
Speaker 2: we do is we stake it. But because we have
2:53
Speaker 2: what we think of as long term or permanent capital,
2:56
Speaker 2: which most of crypto is starved for, we can actual
3:00
Speaker 2: actually make that eat productive on a multi year basis.
3:03
Speaker 2: And we started with simple staking. We participate in liquid
3:07
Speaker 2: staking protocols, but we've also been allocating capital into the
3:12
Speaker 2: DeFi space where we're able to earn a staking premium
3:16
Speaker 2: because we're giving term structure and duration that's just missing
3:20
Speaker 2: in the crypto ecosystem. You could also buy an ets,
3:23
Speaker 2: including the ETF that my team launched when I was
3:26
Speaker 2: at black Rock, but the ETFs have a structural disadvantage.
3:30
Speaker 2: Even when they can steak, they're only staking somewhere between
3:34
Speaker 2: sixty and eighty percent Because ether has a staking and
3:38
Speaker 2: unstaking que and if you have to give investors daily
3:42
Speaker 2: liquidity to redeem from an ETF, you can't wait forty
3:45
Speaker 2: days to do it. So we think we're a smarter
3:48
Speaker 2: way to drive staking yield and productivity than even the
3:52
Speaker 2: really good ETFs out there.
3:54
Speaker 1: So okay, see you say you're getting a premium to
3:58
Speaker 1: be able to get what's involved in that, because that
4:01
Speaker 1: is obviously giving you guys a little bit of a
4:03
Speaker 1: leg up. How does that work?
4:05
Speaker 2: So about seventy plus percent of the Ether we own,
4:09
Speaker 2: and we own about two billion dollars of Ether, isn't
4:12
Speaker 2: simple staking essentially getting the ethereum staking rate whatever the
4:16
Speaker 2: dynamic rate is of the day, call it two point
4:19
Speaker 2: seven two point eight percent, right, But because we have
4:22
Speaker 2: long term capital, we're not a fund with daily redemptions.
4:26
Speaker 2: We have used that to our comparative advantage. So, for example,
4:30
Speaker 2: earlier this year, we deployed two hundred million dollars to
4:33
Speaker 2: Ether five in a staking protocol that allowed us to
4:38
Speaker 2: collect additional yield an Ether as a reward for parking
4:43
Speaker 2: our capital there for two years. And we did something interesting.
4:46
Speaker 2: We actually did it in a qualified custodian with an
4:49
Speaker 2: anchorage digital as opposed to being out there in smart
4:53
Speaker 2: wallets and defile. And then just last week we announced
4:57
Speaker 2: a fund we launched together with Galaxy Digit, another public company,
5:02
Speaker 2: deploy one hundred and twenty five million dollars of ether
5:06
Speaker 2: into new protocols that meet the institutional diligence standards. The
5:12
Speaker 2: gain slightly higher yield. We're not trying to get triples
5:16
Speaker 2: and home runs. We're aiming for singles and doubles, and
5:19
Speaker 2: the industry is starved for that more permanent, long term capital.
5:23
Speaker 2: So you can be benevolent, help kickstart protocols and at
5:27
Speaker 2: the same time do well for your investors.
5:29
Speaker 1: So this is an on chain yield fund in partnership
5:33
Speaker 1: with Galaxy. And if I look at the article here,
5:36
Speaker 1: I think at what was it one hundred mil from
5:40
Speaker 1: sharplink and then twenty five mil from Galaxy. This starts
5:43
Speaker 1: to roll into this. What are the qualifications to receive
5:47
Speaker 1: some of the stimulus.
5:50
Speaker 2: I would just use two words institutional standards, And I
5:54
Speaker 2: think one of the elements of any startup business, whether
5:57
Speaker 2: it's traditional software or centralized finances, you have a lot
6:01
Speaker 2: of protocols who actually for most of their period they
6:06
Speaker 2: prioritize their token value over security and utility. But if
6:10
Speaker 2: you can be discriminating find those protocols who really button
6:14
Speaker 2: up risks, you can actually help them by giving them
6:18
Speaker 2: capital to deploy as cold start. You know, they have
6:22
Speaker 2: to have the first capital to build a protocol and
6:25
Speaker 2: in return you can get higher yield and incentives. But
6:28
Speaker 2: it has to meet Galaxies and sharp links institutional standards
6:32
Speaker 2: very different than fast gripto money.
6:35
Speaker 1: So are you prioritizing how do you because obviously you've
6:40
Speaker 1: got institutional and retail potentially here, how do you prioritize this?
6:46
Speaker 2: Galaxy is the manager of the fund, It's not a
6:49
Speaker 2: black box. We'll have a lot of input. They will
6:52
Speaker 2: look for protocols that have real utility but are starved
6:57
Speaker 2: for some initial borrowing and lending capital. And it could
7:01
Speaker 2: be in the theoryum space, it could be other on
7:04
Speaker 2: chain protocols. But the intent is to help the smartest,
7:08
Speaker 2: most innovative protocols get off their feet, and that we
7:12
Speaker 2: all know. It takes liquidity to your liquidity, and we're
7:15
Speaker 2: going to be providing that initial liquidity side by side
7:18
Speaker 2: with Galaxy. So you can play a benevolent role in
7:22
Speaker 2: the ecosystem I.
7:24
Speaker 1: Want to play because we're going to break down the categories,
7:28
Speaker 1: the kind of the cold star categories that could be
7:30
Speaker 1: potentially benefiting from all this. I want to go before
7:34
Speaker 1: we do that. I want to go to a clip
7:35
Speaker 1: real quick. This is kind of go in going into
7:38
Speaker 1: AI and what we're dealing with around especially around token advancement,
7:43
Speaker 1: because this is a whole idea around credits and how
7:46
Speaker 1: this is going to work with a token. Let me
7:48
Speaker 1: go to that clip real quick.
7:49
Speaker 3: I understand that tech businesses and startups are already implementing
7:53
Speaker 3: AI tokens to incentivize their employees. Could you explain how.
7:58
Speaker 2: That's working effectively?
8:00
Speaker 4: Having a digital currency, if you like a gift card
8:02
Speaker 4: or any store of value, it becomes a very convenient.
8:06
Speaker 2: Source of exchange.
8:07
Speaker 4: And so I think the interesting part is when these
8:09
Speaker 4: do become more financialized that over time, you know, will
8:12
Speaker 4: people be selling these on a secondary market or arbitraging
8:14
Speaker 4: different times of day?
8:16
Speaker 3: I mean, this is it Is it going to become
8:18
Speaker 3: sort of tradable, you know, we're going to have indices
8:20
Speaker 3: that sort of thing.
8:21
Speaker 2: I think it's very likely.
8:22
Speaker 4: But I do think given that the producers controlled the
8:25
Speaker 4: supply of the tokens, but through the machines the data centers,
8:29
Speaker 4: they do have the ability to constrain the sale. But
8:31
Speaker 4: I think everything leads to this path that everything tends
8:33
Speaker 4: to everything that can be financially finally broken down turns
8:37
Speaker 4: into a financial instrument.
8:40
Speaker 1: Okay, so there you go, anything that's broken down. I
8:42
Speaker 1: kind of reference this to what's happening in the AI sector.
8:45
Speaker 1: You look at higgs Field. This is a good example
8:48
Speaker 1: right here on their website. If you go into the
8:51
Speaker 1: ultra plan, I can just sit here and rotate, you know,
8:54
Speaker 1: and these credits start becoming I'm just kind of curious
8:57
Speaker 1: with AI integration, especially with something like this one. Do
9:01
Speaker 1: you think that crypto is going to play a role
9:03
Speaker 1: into this if someone like like a higgs Field eventually
9:06
Speaker 1: tokenized their credits.
9:08
Speaker 2: I do think the three biggest drivers right now, besides
9:12
Speaker 2: regulatory or adoption of crypto is stable coins. You know,
9:17
Speaker 2: three hundred and thirty billion dollars of tokenized cash that
9:21
Speaker 2: is going to be growing rapidly, tokenized assets, and DeFi
9:25
Speaker 2: these are converging with a gentic finance. I think you
9:29
Speaker 2: might have seen a report from Brian Armstrong at Pointbase,
9:33
Speaker 2: who said that earlier this year there are about one
9:36
Speaker 2: hundred and sixty million agent to agent payments, very small payments,
9:41
Speaker 2: micro payments. But that is just a caste of what's coming.
9:45
Speaker 2: I think if we fast forward in a year from now,
9:47
Speaker 2: we will be shocked. Almost every one of us will
9:50
Speaker 2: have a smart wallet. It might have a digital twin
9:54
Speaker 2: who's our agent, who understands our investment horizons and preferences
9:59
Speaker 2: and based on our guidelines, and go out and give
10:03
Speaker 2: you what I would call a CFO in your wallet.
10:06
Speaker 2: So things that are relegated to institutional and Wall Street
10:10
Speaker 2: will end up being in the hands of retail, you know,
10:13
Speaker 2: almost having a trigger who will take your idle cash
10:16
Speaker 2: and invest it. Or if you own tokenize Tesla, it'll
10:20
Speaker 2: borrow and lend it for you to give you additional yield,
10:23
Speaker 2: and it will respect your preferences. And they don't sleep
10:27
Speaker 2: at night, they tend not to make mistakes, and they
10:31
Speaker 2: can assess more data than you can imagine. So I
10:33
Speaker 2: think all of these things are converging AI, tokenized assets,
10:38
Speaker 2: table coins for payment, and DeFi where a lot of
10:41
Speaker 2: this activity will take place. These aren't buzzwords. This is
10:44
Speaker 2: the future of finance.
10:46
Speaker 1: Yeah, for sure. I want to get into other areas
10:48
Speaker 1: that are going to be affected by this, potentially stable coins.
10:51
Speaker 1: Do you think rate hikes are going to hurt DeFi
10:55
Speaker 1: if we continuency. I was looking at the yield curves yesterday.
10:59
Speaker 1: We're seeing thirty year in ten year, continuing to climb.
11:02
Speaker 2: Yeah. I think in the short term we're in a
11:04
Speaker 2: risk off environment. And if you look at bitcoin yath Solana,
11:09
Speaker 2: it is highly correlated to two things. One is just liquidity,
11:14
Speaker 2: and you had a giant deleveraging event last October where
11:19
Speaker 2: a lot of DeFi and funds and retail got very
11:23
Speaker 2: very leveraged up and it got wiped out about twenty
11:26
Speaker 2: billion dollars of consolidation. The second thing is expectations of
11:32
Speaker 2: the future rate hyps. We went from starting the year
11:35
Speaker 2: thinking we would have seventy five basis points of cups,
11:39
Speaker 2: but now there's a lean to being hawkish despite a
11:42
Speaker 2: new FED governor. If you look at one statistic that
11:47
Speaker 2: I think is going to be the number one correlation,
11:50
Speaker 2: it's an inverse correlation between WTI crude, WTI crude and
11:56
Speaker 2: the price of bitcoin in eath as the price of
11:59
Speaker 2: WTI go is up, Bitcoin and eth are suffering. Now
12:03
Speaker 2: if you believe there's going to be a resolution in
12:05
Speaker 2: the short term and we're just in a an inflation surge,
12:10
Speaker 2: not a structural inflationary area, now maybe a great time
12:14
Speaker 2: to get into bitcoin, ether and other assets in anticipation
12:19
Speaker 2: of rates coming back down or the price of oil
12:22
Speaker 2: and inflation getting under control. It's very dependent on your
12:26
Speaker 2: view of what's going to happen.
12:27
Speaker 1: Industry to homos, it's amazing the macro pressure that this
12:32
Speaker 1: is pushing into the risk asset market. Clarity also kind
12:36
Speaker 1: of puts some pressure on this. Do you think the
12:38
Speaker 1: ban on stable coins is going to put a situation
12:42
Speaker 1: where DeFi is going to benefit from this because that's
12:45
Speaker 1: where you can still earn yields.
12:48
Speaker 2: Yeah. I think there are three major things that your
12:51
Speaker 2: viewers should be focused on. One is clearly the Clarity
12:54
Speaker 2: Act that not only provides real rules around market structure,
12:59
Speaker 2: the rule of the CFTC, the role of the SEC,
13:02
Speaker 2: but it actually unburdens real DeFi protocols. If you're a
13:07
Speaker 2: software developer, you build a protocol and it's really decentralized,
13:11
Speaker 2: you're not at risk of being regulated. Now if you're
13:14
Speaker 2: centralized and you control people's assets, you're going to get regulated,
13:18
Speaker 2: and that's really good. I think the second thing that's
13:21
Speaker 2: important is putting aside whether stable coins can or can't
13:24
Speaker 2: pay yield. There was an expected announcement coming later this
13:28
Speaker 2: week from the SEC that is really important. We expect
13:33
Speaker 2: them to release what's called an innovation exemption to allow
13:37
Speaker 2: stocks to be tokenized and be traded off major exchanges.
13:43
Speaker 2: That is a huge boon to tokenization and to crypto companies.
13:48
Speaker 2: You can imagine the likes of coinbase and finance being
13:52
Speaker 2: able to trade in register tokenized stocks. This is huge
13:58
Speaker 2: because if that is happening, you need stable coins to
14:02
Speaker 2: be the pairs for these transactions. And then finally you
14:06
Speaker 2: know this is not happening in isolation. Earlier this year
14:09
Speaker 2: you have the NASDAC and New York Stock Exchange saying
14:12
Speaker 2: they're going to support near twenty four to seven trading
14:15
Speaker 2: of securities right and for the first time in history,
14:19
Speaker 2: you're not going to be locked into one venue. So
14:22
Speaker 2: I think you're seeing the Trump administration view this as
14:24
Speaker 2: an innovation play and to want to be a geopolitical
14:29
Speaker 2: leader in this space. While Europe is way behind and
14:32
Speaker 2: Asia is watching really closely. This will be a boon
14:35
Speaker 2: not just for stable coins and tokenization, but to do
14:39
Speaker 2: these activities in decentralized frameworks. Huge click coming.
14:43
Speaker 1: Yeah, does clarity matter. If it doesn't get through the Senate, it.
14:50
Speaker 2: Doesn't matter, and I think we're optimistic it'll get through
14:53
Speaker 2: the Senate. I hope the Senate Banking Committee Bill is
14:56
Speaker 2: the starting point, not a negotiation point, but there's like
15:00
Speaker 2: over one hundred amendments. It does matter because you have
15:04
Speaker 2: a once in a lifetime opportunity to enshrine this in
15:07
Speaker 2: law as opposed to rule making, which the SEC and
15:11
Speaker 2: CFTC can do. But it could take eighteen months and
15:14
Speaker 2: you'd be having a new administration. So I think it's
15:16
Speaker 2: really important. I think the crypto community is assuming it's
15:20
Speaker 2: going to happen, and I'm cautiously optimistic it'll be really good,
15:24
Speaker 2: not just for crypto, but for the new rails of finance.
15:29
Speaker 1: Let's jump over to social and micropayments, because this is
15:33
Speaker 1: another area that I think benefits from this crypto right
15:36
Speaker 1: now very dependent on Twitter and the ecosystem that Twitter lives.
15:41
Speaker 1: And I was just looking at data right here of
15:44
Speaker 1: what kind of news applications. You'll notice that polym market
15:47
Speaker 1: is in the top fifteen, but it's above Fox News
15:51
Speaker 1: in the White House. Now, granted, I wouldn't say that
15:54
Speaker 1: x is the place that people go for Fox News information,
15:57
Speaker 1: but you know, it does represent a lot. But the
16:00
Speaker 1: fact that we've got something like a polymarket moving in
16:02
Speaker 1: that direction, is this a good thing or a bad thing?
16:06
Speaker 2: I think it's These prediction markets for your viewers started
16:11
Speaker 2: as almost retail betting on events. It could be a game,
16:16
Speaker 2: it could be a sport, it could be an election,
16:18
Speaker 2: it could be you know, is Maduro going to get
16:20
Speaker 2: kidnapped and brought to the US. I think what you're
16:23
Speaker 2: starting to see is almost a financialization of these markets.
16:27
Speaker 2: You can now bet on the price of stocks and bonds.
16:31
Speaker 2: There was an announcement today where you know, you can
16:34
Speaker 2: bet on how a private company will perform. You can
16:37
Speaker 2: bet on oil futures. Guess what that sounds a lot
16:41
Speaker 2: like what the CMEA is doing. These sound like perpetual
16:45
Speaker 2: options where you can express your view on financial outcomes.
16:50
Speaker 2: These are just different words for products that exist today
16:53
Speaker 2: in traditional finance. But I think it will be a
16:57
Speaker 2: larger part of how people want to get economic exposure.
17:01
Speaker 2: They think of it almost like investing in a decision.
17:05
Speaker 2: And I think a younger generation understands this much better
17:09
Speaker 2: than my generation. It'll be embedded in your wallets, It'll
17:12
Speaker 2: be embedded in your socials. These things are just going
17:15
Speaker 2: to converge.
17:16
Speaker 1: Yeah, well, Kalshi has already done it. I mean, they've
17:20
Speaker 1: integrated social right here, as I'm showing on screen, you
17:22
Speaker 1: can kind of see their social feed. Granted it's not
17:25
Speaker 1: the X model yet, but it's very early within this
17:30
Speaker 1: Do you think that, I mean, this seems to be
17:32
Speaker 1: like one of the biggest opportunities that this fund could
17:35
Speaker 1: go after is a decentralized social platform that lies within crypto.
17:40
Speaker 1: Is there anything out there brewing right now?
17:43
Speaker 2: I think there are two really important things that are
17:45
Speaker 2: going to be really optimistic for both crypto. The velocity
17:50
Speaker 2: of capital that can be traded DeFi, and that is
17:54
Speaker 2: this idea of moving identity. You know, we're really good
17:58
Speaker 2: with passports, we're really bad when people want to maintain
18:01
Speaker 2: their privacy to prove their identity, either to prove, for example,
18:06
Speaker 2: in socials at they're over the age of sixteen, or
18:10
Speaker 2: to prove that they're a US based investor. You're going
18:13
Speaker 2: to start seeing new technologies around both legal entity identity
18:17
Speaker 2: and retail identity that will allow people to prove who
18:22
Speaker 2: they are without disclosing their identity. Right that's going to
18:25
Speaker 2: be huge for both of these prediction markets and socials,
18:32
Speaker 2: and it's going to be done through zero knowledge proofs. Yep,
18:34
Speaker 2: it's the way of the future. All of this is
18:37
Speaker 2: going to run on the blockchain, and you're not even
18:39
Speaker 2: going to know you're on the blockchain. The user experience
18:42
Speaker 2: will just see the apps on top.
18:45
Speaker 1: Well, and you look at this kind of the transition
18:48
Speaker 1: that could come out of social is moving into financial services.
18:53
Speaker 1: You've got mister Beese going out there buying a platform
18:56
Speaker 1: for this right now with the app step if this
19:00
Speaker 1: is now partnered with your competitor. If you think about it,
19:03
Speaker 1: what BM and R and TOM is doing around this,
19:05
Speaker 1: they're sliding into what the focus is. Do you feel
19:08
Speaker 1: like there is an opportunity for something like that, especially
19:12
Speaker 1: if you look at micropayments, because then you kind of
19:15
Speaker 1: lean into pos systems and we'll talk about ether five,
19:18
Speaker 1: But what's your take on that.
19:19
Speaker 2: There are opportunities to provide funding to prediction markets who
19:23
Speaker 2: need that capital to crypto insurance markets do protocols who
19:29
Speaker 2: might be building that identity layer or zero knowledge proof layer.
19:33
Speaker 2: So I don't think we're constrained. There are more opportunities
19:36
Speaker 2: in the pipeline than you can imagine. You just need
19:39
Speaker 2: to make sure that they meet the institutional standards. Public
19:43
Speaker 2: companies should be in the business of raising standards for
19:46
Speaker 2: an industry, not lowering standards. Because we're the stewards of
19:50
Speaker 2: billions of dollars of people's capital, We're not here to
19:53
Speaker 2: lower standards. But we have a competitive advantage, which is
19:56
Speaker 2: this permanent, long term capital that can fund great ideas
20:00
Speaker 2: and great protocols. It's exciting. Actually it's going to.
20:03
Speaker 1: Be It's next frontier.
20:04
Speaker 2: Man.
20:04
Speaker 1: This is like the wild West right now, and you're
20:08
Speaker 1: dealing with I think the two areas for me. When
20:11
Speaker 1: we look at retail, we think about point of sale,
20:14
Speaker 1: my background coming from retail and the technology behind it.
20:19
Speaker 1: And you think about what etherfi is doing and the
20:23
Speaker 1: potential to maybe include point of sale systems or merchants
20:28
Speaker 1: down the road that could tie this in. Now you're
20:30
Speaker 1: opening up to an end, an entire new market opportunity.
20:35
Speaker 1: How could that happened? Could you guys be behind this?
20:38
Speaker 1: Could you maybe try to go in that direction?
20:41
Speaker 2: So I think we need to separate a thesis of
20:44
Speaker 2: where financial services and payments are going from an operating business.
20:48
Speaker 2: So the thesis Paull is exactly what you're describing, which
20:51
Speaker 2: is more and more payments micro payments running on a
20:56
Speaker 2: standard called X four oh two.
20:58
Speaker 1: Yep.
20:58
Speaker 2: Like, there's going to be billions and billions of agent
21:01
Speaker 2: to agent micro payments, peer to peer micro payments, paying
21:05
Speaker 2: via your social paying, via meta paying, via whatever platform
21:10
Speaker 2: you're using for predictions, for investments, that is going to
21:14
Speaker 2: require stable coin payments. A lot of people think bitcoin
21:17
Speaker 2: is going to become a payment method. I'm very bearish
21:20
Speaker 2: on that stable coins will be the new means and
21:23
Speaker 2: it'll be happening on chain. You just won't even know it.
21:27
Speaker 2: That said, there are opportunities to build operating businesses that
21:31
Speaker 2: are Ethereum aligned. Most stable coin transactions and are being
21:36
Speaker 2: secured on ethereum, most tokenized assets are being secured on ethereum.
21:41
Speaker 2: It's a leading chain. But I won't divulge what our
21:43
Speaker 2: next operating business is. But you can support this by
21:47
Speaker 2: either funding the protocols, or you can invest in these
21:50
Speaker 2: type of businesses yourself. To date, we've tried to be
21:53
Speaker 2: that exposure vehicle. You can get exposure to this opportunity
21:58
Speaker 2: by investing in our stock having yet started building operating businesses.
22:02
Speaker 2: But they're right to be built. The future is being
22:04
Speaker 2: built right in front of us.
22:06
Speaker 1: Yeah. Well you look at what Japan is doing now.
22:08
Speaker 1: They are officially recognizing foreign issued crypto stable coins. Basically
22:13
Speaker 1: they mean US stable coins as legal electronic payments. This
22:17
Speaker 1: is starting literally in what ten days, So just around
22:21
Speaker 1: the corner here June first, we're going to have stable coins.
22:26
Speaker 1: I mean, do you think we'll see that here in
22:27
Speaker 1: the US or in other g seven countries.
22:31
Speaker 2: I love to look at history and when stable coins.
22:34
Speaker 2: For example, take tether and circle. The first use case
22:38
Speaker 2: and only use case for stable coins, Paul was the
22:41
Speaker 2: on ramp, onto and off of crypto because it never
22:44
Speaker 2: accepted the out dollars, Like that's a very limited market.
22:48
Speaker 2: Now you're seeing it being used for cross border remittances,
22:52
Speaker 2: move money in an instant for no costs. You're seeing
22:55
Speaker 2: corporate treasures move billions of dollars between subsidiaries and affiliate
23:00
Speaker 2: it's instantly using stable coins. You're starting to see it
23:03
Speaker 2: being used in global commerce, and I think over time, Paul,
23:08
Speaker 2: you know, our payroll providers, our socials are going to
23:13
Speaker 2: be just using that as a means of instantly moving
23:16
Speaker 2: money in micro payments. It's going to go from a
23:19
Speaker 2: single use case financial infrastructure. It's the future of how
23:24
Speaker 2: money is going to be moved. This is very bullish
23:26
Speaker 2: for stable coins, and it's bullish for Ethereum because Ethereum
23:30
Speaker 2: Secure is over fifty two percent of those transactions.
23:34
Speaker 1: Well, I'm bullish on this because you look at the
23:38
Speaker 1: opportunity here that this represents the thesis behind it. You know,
23:42
Speaker 1: especially if you get into merchant spending, because now you're talking,
23:45
Speaker 1: you know, tens of trillions that are moved around for
23:48
Speaker 1: just retails, just if you think about the US market,
23:51
Speaker 1: much less some of the bigger G seven markets out there.
23:53
Speaker 1: So I'm definitely in agreement with you.
23:55
Speaker 2: There also one data point in the first sporter there
24:00
Speaker 2: are more stable coin transactions than visa and MasterCards exactly.
24:05
Speaker 1: Yeah, to for sure. So now you're looking at I
24:10
Speaker 1: also want to kind of look at private markets, and
24:13
Speaker 1: this is something that has been challenged a little bit here.
24:17
Speaker 1: Recently you got pre stocks tweet right here talking about
24:20
Speaker 1: recent headlines and not change the reality of the pre
24:23
Speaker 1: ipo markets. They're a little twisted on how this turned
24:26
Speaker 1: out with Anthropic, but you can kind of see their
24:28
Speaker 1: statement here. As long as secondary markets exist, pre stocks exist.
24:32
Speaker 1: Go read this tweet because this gets into SPB fund
24:35
Speaker 1: managers and you know, basically saying, hey, we own the stock,
24:38
Speaker 1: we can do what we want with it. What do
24:40
Speaker 1: you take about this?
24:41
Speaker 2: What do you make I think private companies, there are
24:45
Speaker 2: thousands of unicorns who want to go public who haven't
24:48
Speaker 2: been able to. Some of these are over ten years old.
24:51
Speaker 2: They have employees and management who want liquidity, but they're
24:54
Speaker 2: not going public. I think the tokenization of private shares
25:00
Speaker 2: is going to be a future means. And there's a
25:03
Speaker 2: dirty little secret here, which is there are many jurisdictions
25:06
Speaker 2: where you cannot buy SpaceX. It'll be listed on a
25:10
Speaker 2: US exchange. There are hundreds of millions of investors in
25:15
Speaker 2: Asia who want exposure to them, and the only way
25:19
Speaker 2: they can get it is on chain through almost a
25:22
Speaker 2: synthetic version. You could tomorrow go onto a platform called
25:26
Speaker 2: Jupiter and buy twenty dollars of SpaceX. You just don't
25:30
Speaker 2: own SpaceX, you own an exposure. So I think this
25:34
Speaker 2: is going to play out. I don't believe if there's
25:37
Speaker 2: a better technology mousetrap, it can be stopped and this
25:41
Speaker 2: is a better way to give people access to private companies.
25:46
Speaker 2: The hardest thing is going to be how to value
25:48
Speaker 2: them and do you have liquidity to trade them on
25:50
Speaker 2: a secondary secondary market.
25:54
Speaker 1: Well, though you think the markets themsel themselves will kind
25:57
Speaker 1: of preset valuation based on demand, it will.
26:02
Speaker 2: Again you have a cold start problem, which is you
26:05
Speaker 2: can buy Tesla tokenized on Robinhood. It might just be
26:09
Speaker 2: hard to get price discovery on a Saturday at three am,
26:13
Speaker 2: and so liquidity that gets more liquidity. We just need
26:18
Speaker 2: to get started. And once that happens, I think the
26:22
Speaker 2: unicorns will end up having price discovery and it'll be
26:26
Speaker 2: a lot fairer to investors. And what happens today where
26:29
Speaker 2: employees of private companies, if they want to sell their
26:32
Speaker 2: stock some broker rips their face off by forty percent,
26:36
Speaker 2: they'll have actually a market clearing price, but maybe not
26:39
Speaker 2: twenty four to seven on the weekends.
26:41
Speaker 1: That's going to be interesting to watch. I think these
26:43
Speaker 1: private markets are going to get very very intriguing and
26:46
Speaker 1: also creative of how traders will go to market with
26:49
Speaker 1: these so yep, interesting stuff. Let's get into the last
26:52
Speaker 1: few questions here clarity in terms of a price breakout,
26:57
Speaker 1: especially on ETH, because I think ETH is one of
26:59
Speaker 1: the big winners on clarity. What do you think do
27:02
Speaker 1: you think there will be a price breakout on Eth?
27:04
Speaker 2: I think some of it is already passing, some of
27:08
Speaker 2: it is already baked into the price of the crypto industry.
27:12
Speaker 2: I think that the winners here are going to be
27:15
Speaker 2: those blockchains and protocols that have real economic activity. I
27:20
Speaker 2: think some of the central exchanges like coinbase and binance
27:23
Speaker 2: will be big winners. I think DeFi projects that are
27:27
Speaker 2: truly decentralized and meet the definition of non custodial will
27:33
Speaker 2: be big winners. But I think, taking two steps back,
27:37
Speaker 2: I think stable coins and tokenization are the two things
27:41
Speaker 2: to watch which will be the biggest beneficiaries. Because the
27:46
Speaker 2: largest institutions in the world who couldn't touch crypto, couldn't interact,
27:51
Speaker 2: are now having fomo that they've just lost five years
27:54
Speaker 2: of a head start, and you'll see these banks and
27:57
Speaker 2: financial institutions leaning in and not doing press releases and experimentation.
28:02
Speaker 2: They're going to deploy trillions of dollars of capital into
28:06
Speaker 2: tokenized formats.
28:07
Speaker 1: Yeah, well that's going to perform some within the eth
28:10
Speaker 1: ecosystem just because of your strength behind some of these
28:13
Speaker 1: stable coins. So to your point, do you okay if
28:17
Speaker 1: you look at what's going out there with these issuance
28:21
Speaker 1: of preferred stock and credit instruments, like what micro Strategy
28:24
Speaker 1: is doing with Stretch. We had their team on talking
28:27
Speaker 1: about this is sharplink looking at ever issuing something like this.
28:31
Speaker 2: So let me answer it by taking a step back.
28:33
Speaker 2: Bitcoin is an amazing asset to own. Everyone should have
28:37
Speaker 2: some of it in their portfolio, but it's actually not
28:40
Speaker 2: yield bearing. It doesn't have any NAT productivity. So what
28:44
Speaker 2: Michael Sailor did was he financialized the stock by by
28:49
Speaker 2: first convertible bonds. Then you know, preferred stock and Stretch.
28:53
Speaker 2: These are great products for investors. They have tremendous liquidity.
28:58
Speaker 2: Ethereum needs that a little bit less because there's a
29:01
Speaker 2: native yield you can generate just by staking your ethereum
29:04
Speaker 2: nearly three percent. But Paul have a really strongly held belief.
29:08
Speaker 2: When you have a brand new business model. We were
29:11
Speaker 2: the first Ethereum digital Asset treasury last June. You don't
29:14
Speaker 2: immediately rush and issue a bunch of complicated capital structure.
29:19
Speaker 2: You season, You get your sea legs. We grew from
29:23
Speaker 2: being five percent institutionally held to forty seven percent. You
29:27
Speaker 2: get the trust of your industry, then you could start
29:30
Speaker 2: looking at capital structures to target individual investors. So convertible bonds,
29:35
Speaker 2: preferred sock are things in the future, but you need
29:40
Speaker 2: to do it when you're experienced, you have the right
29:42
Speaker 2: team and your seasoned. There were a bunch of digital
29:44
Speaker 2: asset treasuries who immediately went out and took on some
29:48
Speaker 2: of that capital leverage and they're selling their ething going away.
29:53
Speaker 2: So you need to do it at the right time.
29:55
Speaker 2: Once you build trust with investors, you have to season
29:59
Speaker 2: as a public company. So yeah, that is on the horizon.
30:02
Speaker 1: It is uh okay. So answer is it's on the horizon.
30:05
Speaker 1: And I like your answer in the sense that you
30:07
Speaker 1: know there's a there's a step process, especially around you know, investors.
30:12
Speaker 1: I've been surprised a little bit with the success of Stretch.
30:17
Speaker 1: I also think that Sailor has seen the I mean
30:20
Speaker 1: because essentially this is running now on eth and he's
30:24
Speaker 1: seen maybe he's seen the light, which has maybe upset
30:28
Speaker 1: the bitcoin community a little bit. Speaking of evolution of
30:32
Speaker 1: an asset, you have to think about Ethereum and Glamsterdam.
30:35
Speaker 1: That's the next update. What could this possibly unleash into
30:40
Speaker 1: the market. What do you think were.
30:42
Speaker 2: So the two main things coming in the next release
30:45
Speaker 2: of Blamsterdam they have funny names, are reducing the transaction
30:51
Speaker 2: fees and significantly increasing the throughput of what we call
30:56
Speaker 2: the Ethereum Layer one. Main net is Ethereum for a
31:00
Speaker 2: long time has prioritized security over throughput. That was actually
31:05
Speaker 2: the right decision, and because of that, you had a
31:08
Speaker 2: layer two phenomenon who took on the mantle of having
31:13
Speaker 2: cheap throughtput but benefiting from Ethereum security regime. And I
31:18
Speaker 2: think you're going to see a shift back to the
31:21
Speaker 2: layer one may net as it has both security, liquidity,
31:26
Speaker 2: and also we'll have the throughput and transaction value, especially
31:30
Speaker 2: for what's coming, which is more stable coins, more tokenized assets,
31:34
Speaker 2: more DeFi and agentic micro payment. So I think you're
31:37
Speaker 2: going to see may net really provide that platform for
31:40
Speaker 2: the transaction throughput you need, and Solana has had that
31:46
Speaker 2: early lead in low quality, low fees, low economic security transactions,
31:53
Speaker 2: and you know, I think a lot of that is
31:55
Speaker 2: going to come back to the ethereum layer one.
31:58
Speaker 1: Well, that'll be interesting to now. Granted, EITH has had
32:02
Speaker 1: very good and successful updates so far all the way.
32:08
Speaker 1: You know, if you look at now, what the future
32:10
Speaker 1: is is trying to get somewhat you know, QDA resistant,
32:14
Speaker 1: which is this Glamsterdam is part of that trying to
32:17
Speaker 1: achieve that. So this is definitely some great opportunities. I
32:21
Speaker 1: think EITH is still one of the premium assets out there. Joseph,
32:24
Speaker 1: it's been good breaking this down with you. Thank you
32:27
Speaker 1: so much for giving us some insights here today. We
32:29
Speaker 1: appreciate you stopping in.
32:31
Speaker 2: Paul, thanks for having me and I look forward to
32:32
Speaker 2: being back soon.
32:40
Speaker 1: If you like this video, like and subscribe, drop a
32:42
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32:46
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