Latest / The Paul Barron Crypto Show / Microsoft Wants 100% Staked ETH🚀100X Potential🔥$ETHM The Ether Machine INTERVIEW

Transcript

Microsoft Wants 100% Staked ETH🚀100X Potential🔥$ETHM The Ether Machine INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Today we'll be diving into Ethereum and we're going to
• 0:03
  Speaker 1: look at this through treasury companies. And today's going to
• 0:05
  Speaker 1: be a good one because we'll have a special treasury
• 0:07
  Speaker 1: company on the show.
• 0:08
  Speaker 2: You don't want to miss up. My name is Paul Barren.
• 0:10
  Speaker 1: Welcome back in let's get started. I do want to
• 0:12
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  Speaker 1: You guys can't go wrong. Let's get into a couple
• 0:37
  Speaker 1: of points I want to hit on. And as everybody
• 0:40
  Speaker 1: is tracking this, the amount of companies that are starting
• 0:43
  Speaker 1: to move into strategic reserves treasury companies, dat's digital ashet
• 0:48
  Speaker 1: treasuries is growing and Ethereum, of course is one of
• 0:52
  Speaker 1: the biggest one out there. Bitmine, you guys will all
• 0:55
  Speaker 1: recognize some of these top few, and that is Tom
• 0:58
  Speaker 1: Lee's number one right there, Sharp Blink Gaming.
• 1:01
  Speaker 2: Of course, that's.
• 1:01
  Speaker 1: Joseph Lubin, and then you have the ether Machine also
• 1:04
  Speaker 1: coming right there at number three. So we thought let's
• 1:07
  Speaker 1: get them on the show and take a little bit
• 1:09
  Speaker 1: of a closer look under the hood. And if you've
• 1:11
  Speaker 1: never been over and learned a little bit about the
• 1:13
  Speaker 1: ether Machine, you can just go over to their website
• 1:15
  Speaker 1: just ethermachine dot com learn a little bit more about
• 1:18
  Speaker 1: what they're doing, but their team, their investors, and the
• 1:20
  Speaker 1: strategy going forward. I wanted to bring on their co
• 1:24
  Speaker 1: founder today, which is Andrew Keyes, who's the chairman at
• 1:28
  Speaker 1: the Ether Machine. Great to have you, Andrew, Thanks for
• 1:30
  Speaker 1: having me, Paul. Yeah, so let's get into the ether Machine.
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  Speaker 1: First of all, great name. I mean, we have to
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  Speaker 1: go and give you your flowers on that one. You
• 1:38
  Speaker 1: can't miss with this one. Tell us a little bit
• 1:41
  Speaker 1: about what you guys are doing, what makes you guys
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  Speaker 1: different than what Tom Lee is out there spinning all
• 1:45
  Speaker 1: that good stuff.
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  Speaker 3: Sure?
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  Speaker 4: Sure, So maybe by way of background, I could just
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  Speaker 4: give you one second on how I got to the
• 1:53
  Speaker 4: Ether Machine. I hoped Joe Lubine of Shark Clink build
• 1:59
  Speaker 4: a company called Census, which is the most well known
• 2:04
  Speaker 4: Ethereum ecosystem builder created three of the implementations of Ethereum
• 2:09
  Speaker 4: and also built a commodity pool operator for institutional staking
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  Speaker 4: called DHARMA, which is an acronym for digital Asset risk
• 2:17
  Speaker 4: Management Advisors. And I got here a bit differently than
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  Speaker 4: I would say most of the treasury companies. One of
• 2:25
  Speaker 4: the large institutional ETFs reached out to me about six
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  Speaker 4: months ago and asked me to be a market maker
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  Speaker 4: for them, because the ETFs are going to enable staking soon.
• 2:40
  Speaker 4: And if you followed the ETPs, so their equivalents in
• 2:45
  Speaker 4: let's say Canada or Europe, they're staking at what I
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  Speaker 4: call fifty percent capacity. So if you have a billion
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  Speaker 4: dollars in a European ETP that is holding ether they're
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  Speaker 4: only taking five hundred million euros worth of that worth
• 3:03
  Speaker 4: of that billion, and so they're only earning a yield
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  Speaker 4: on fifty percent of the assets. And the reason why
• 3:12
  Speaker 4: that's happening is due to a technical nuance within Ethereum
• 3:15
  Speaker 4: called the withdrawal queue. And the withdrawal queue essentially means
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  Speaker 4: that if you were to unstake today, you would get
• 3:22
  Speaker 4: your ether back and let's call it a week.
• 3:25
  Speaker 3: But if God.
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  Speaker 4: Forbid, there was some type of black swan event that
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  Speaker 4: occurred and fifty percent of stakers or seventy percent of
• 3:32
  Speaker 4: stakers wanted to unstake at the same time, that withdrawal
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  Speaker 4: queue would grow from a couple of days to six
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  Speaker 4: months or even a year. So there's no way to
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  Speaker 4: really underwrite this issue. And the ETFs the only thing
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  Speaker 4: that they can do is basically just stake less than
• 3:50
  Speaker 4: full capacity. And we're already seeing this in Europe and
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  Speaker 4: that's what's going to happen in the US. So I
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  Speaker 4: started thinking about, well, if we could create an opera
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  Speaker 4: raiding company that could stake at full capacity, and the
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  Speaker 4: ETFs are only going to do what I call vanilla staking,
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  Speaker 4: They're not going to be able to do restaking or
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  Speaker 4: participate in DeFi. I believe that in the example where
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  Speaker 4: the ETFs are earning three percent yield on only half
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  Speaker 4: of their money, so a net one and a half percent,
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  Speaker 4: we'd be able to earn that same yield on all
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  Speaker 4: of the capital, plus we'd be able to engage in
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  Speaker 4: DeFi and restaking, and then Furthermore, we'd be able to
• 4:35
  Speaker 4: employ some of the financial engineering that micro Strategy pioneered,
• 4:40
  Speaker 4: such as issuing convertible bonds or preferred shares, basically debt
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  Speaker 4: that's inflating to buy digital assets where you're paying back
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  Speaker 4: cheaper dollars years from now, and you're essentially acquiring the
• 4:57
  Speaker 4: underlying asset for shareholders that want to exposure in this
• 5:01
  Speaker 4: case to ethereum. So basically, we SOT set out to
• 5:07
  Speaker 4: actually deploy capital in this space, and we came across
• 5:12
  Speaker 4: kind of a paths, two paths, and one thing that
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  Speaker 4: I think is materially different from us, and let's call
• 5:20
  Speaker 4: it the shell companies, is I was going to deploy
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  Speaker 4: a material amount of my own capital in this. So
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  Speaker 4: I've put one hundred and seventy thousand ether personally into
• 5:32
  Speaker 4: this vehicle. And when I started looking at this, there
• 5:36
  Speaker 4: were there were basically two paths you could go. You
• 5:38
  Speaker 4: could reverse takeover a dying microcap so you're failing biotech company,
• 5:45
  Speaker 4: you're failing bitcoin minor, you know, pick your poison of
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  Speaker 4: some company that's not doing.
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  Speaker 3: Well and in it.
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  Speaker 4: Or you could create a denovo entity, so a brand
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  Speaker 4: new entity that doesn't have a pre existing operating busines,
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  Speaker 4: this pre existing cap table, pre existing governance issues.
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  Speaker 3: Uh and and.
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  Speaker 4: Basically I started looking at this and and and I
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  Speaker 4: had three calls with three different shell companies. One was
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  Speaker 4: a biotech where the where the CEO wanted to be
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  Speaker 4: paid five million dollars a year to stay on the
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  Speaker 4: board and he didn't know how to spell ethereum. Another
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  Speaker 4: one was a bitcoin minor that was in year four
• 6:28
  Speaker 4: of a ten year lease of a data center, and
• 6:31
  Speaker 4: it was ten million dollars a year, you know, for
• 6:34
  Speaker 4: the next six years.
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  Speaker 2: And I basically, Yeah, these are.
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  Speaker 3: Failing companies with all these liabilities.
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  Speaker 4: And I was like, there's no way I want this
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  Speaker 4: for myself, as you know, one of the larger shareholders
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  Speaker 4: in the vehicle. And and I got very clear that
• 6:50
  Speaker 4: doing a special purpose acquisition company a SPAC with the
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  Speaker 4: Genovo merger of a clean LLC was the right way
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  Speaker 4: to go for institutional investors. And so where we've kind
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  Speaker 4: of differed off the bat is basically, we've created a
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  Speaker 4: pristine entity that we find to be extremely important to
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  Speaker 4: institutional investors. And so the Devil's advocation to that is
• 7:19
  Speaker 4: we're going through what's called the S four registration process,
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  Speaker 4: and S one is the process for an IPO, and
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  Speaker 4: S four is the process of a merger. And basically
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  Speaker 4: that's going to take us sixty days with the SEC's blessing, approximately,
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  Speaker 4: and so basically once that happens, we'll be kind of
• 7:42
  Speaker 4: full steam ahead. And with that, I think a core
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  Speaker 4: difference is what brought MSTR from a single billion dollar
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  Speaker 4: vehicle to a cent to billion dollar vehicle was not
• 7:56
  Speaker 4: what's called at the money equity issuance or a t M,
• 8:00
  Speaker 4: which you may have heard of when when when discussing
• 8:02
  Speaker 4: these these treasury companies. What actually drove that was the
• 8:07
  Speaker 4: usage of convertible bonds and UH preferred shares, which are
• 8:13
  Speaker 4: credit instruments exactly, and and basically hedge funds are that
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  Speaker 4: want volatility and want to acquire volatility. They're not necessarily
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  Speaker 4: interested in buying the common equity of these these vehicles, right,
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  Speaker 4: but they'll essentially acquire a convertible bond. And the good news, UH,
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  Speaker 4: you know, versus bitcoin, Ether has double the volatility of
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  Speaker 4: bitcoin and generates this yield.
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  Speaker 3: So basically we can we can.
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  Speaker 4: Pay the coupon of a bond, and so furthermore, UH
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  Speaker 4: we're going to be uniquely positioned. If if you've seen
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  Speaker 4: the other shell companies, none of them have actually done
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  Speaker 4: any of those convertible bond instruments or preferred share instruments
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  Speaker 4: because they are shell companies that have to clean up
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  Speaker 4: their books and all these messes. And so while we're
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  Speaker 4: doing very well because basically in private we've been able
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  Speaker 4: to raise nearly two and a half billion dollars not
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  Speaker 4: being a public vehicle yet, So I think that alone
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  Speaker 4: is a testament. And basically, once we're out the gates
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  Speaker 4: of RS four registration process, we're going to be uniquely
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  Speaker 4: positioned as the cleanest vehicle with a Big four auditor
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  Speaker 4: to issue this convertible debt paper. And so basically what
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  Speaker 4: we're optimizing for is kind of larger institutional scale using
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  Speaker 4: the debt instruments rather than what we think could be
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  Speaker 4: dilutive to shareholders rather than a creative to shareholders, which
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  Speaker 4: are the ATMs.
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  Speaker 1: Yeah, well, and it's unique because first to a lot
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  Speaker 1: of questions here on that, but I think it's unique
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  Speaker 1: because what we have seen on a lot of the
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  Speaker 1: companies that have gone with the process of acquiring these
• 10:10
  Speaker 1: kind of these dead on the Vine companies is that
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  Speaker 1: it's mostly more of a retail play versus what you know.
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  Speaker 1: I think your strategy is going to be considerably different.
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  Speaker 1: It's a cleaner product for institutions. Wall Street's going to
• 10:22
  Speaker 1: recognize it better. That's going to be, you know, kind
• 10:24
  Speaker 1: of the upside for it. And even if you look
• 10:26
  Speaker 1: at stuff that we just did a show on this
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  Speaker 1: topic with Peter Thiel and him looking at the value
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  Speaker 1: of what Ethereum is going to be doing more on
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  Speaker 1: a broader basis, you guys are in the right place
• 10:36
  Speaker 1: at the right time. I'm looking at your corporate strategy
• 10:39
  Speaker 1: here on X obviously acquire e capitalize on additional capital
• 10:44
  Speaker 1: markets and opportunities, manage the eth holdings, which you know
• 10:47
  Speaker 1: you explained perfectly, which is very unique.
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  Speaker 2: I was not aware of this issue.
• 10:52
  Speaker 1: Well, we've seen a little bit of nuance in the
• 10:55
  Speaker 1: market about this slowdown of unstaking and now I understand
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  Speaker 1: what you're talking about. But steak and restake, I think
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  Speaker 1: that's going to be a huge capacity to really compound
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  Speaker 1: what you guys are doing.
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  Speaker 2: So kudos to you.
• 11:08
  Speaker 1: Is there anything in here that in terms of the
• 11:10
  Speaker 1: growth side on that ecosystem and kind of zoom in
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  Speaker 1: on that for you. That is going to really dial
• 11:16
  Speaker 1: in for future for you.
• 11:18
  Speaker 4: Yes, so I think we've already hit the three on
• 11:23
  Speaker 4: chain yield generation. So our north star is growing our
• 11:27
  Speaker 4: ether concentration per share. So if you add a thousand
• 11:30
  Speaker 4: shares of our company, let's call it for round numbers,
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  Speaker 4: that would equal one ether. Our goal is a year
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  Speaker 4: from now that should equal one and a quarter one
• 11:40
  Speaker 4: and a half two ether something larger. And so we're
• 11:43
  Speaker 4: constantly trying to grow our ether concentration for share. So
• 11:48
  Speaker 4: on chain we can do that with staking, restaking, and
• 11:52
  Speaker 4: defive participation. Traditionally we can issue convertible bonds and preferred shares.
• 12:00
  Speaker 4: And then lastly to your point about growth, Uh, we
• 12:05
  Speaker 4: we hired for our CEO a gentleman by the name
• 12:08
  Speaker 4: of Dave Merrin, which was the person in charge of
• 12:11
  Speaker 4: M and A at consensus. And basically what we have
• 12:16
  Speaker 4: to think about are things that are ether accretive, where
• 12:20
  Speaker 4: we could basically acquire a firm that is generating ether,
• 12:26
  Speaker 4: so things like staking facilities, custodians.
• 12:30
  Speaker 3: Uh.
• 12:31
  Speaker 4: You know, anything that we could think about is cash
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  Speaker 4: flow a positive positive ether a creative positions. There are
• 12:38
  Speaker 4: also treasury companies that are trading at a discount to
• 12:42
  Speaker 4: nav that we could potentially acquire, you know, via a
• 12:46
  Speaker 4: tender offer. So so we're we're structuring this to be
• 12:50
  Speaker 4: kind of the cleanest vehicle for institutional adoption.
• 12:55
  Speaker 1: All right, So you hit on a lot of good
• 12:56
  Speaker 1: points there, and I think it right now, it's a
• 12:58
  Speaker 1: huge race on these digital asset treasury companies to kind
• 13:02
  Speaker 1: of get to that micro strategy level to where we're
• 13:05
  Speaker 1: starting to see the adoption curve start to take place.
• 13:08
  Speaker 1: And to the point that you're hitting on it really
• 13:11
  Speaker 1: kind of zones in on one area that I know
• 13:13
  Speaker 1: you have expertise on, and that is the idea of
• 13:17
  Speaker 1: pitching the concept of ethereum for treasuries inside major corporations.
• 13:22
  Speaker 1: We did a show on this very topic around Microsoft,
• 13:26
  Speaker 1: looking at where they would potentially play into the ecosystem
• 13:31
  Speaker 1: and get exposure. Do you see companies like Microsoft and
• 13:35
  Speaker 1: Amazon and others saying hey, this is where we need
• 13:37
  Speaker 1: to go right here, this would be a vehicle and
• 13:40
  Speaker 1: being able to get direct exposure.
• 13:42
  Speaker 4: So I have a very soft spot in my heart
• 13:45
  Speaker 4: in particular for Microsoft.
• 13:47
  Speaker 2: Okay, all that tell you a quick.
• 13:49
  Speaker 4: One minute detour twenty fifteen was the first year of
• 13:55
  Speaker 4: Ethereum's inception, and I met with the team at Microsoft
• 14:02
  Speaker 4: that was to become the blockchain team because there wasn't
• 14:06
  Speaker 4: a blockchain team yet, And basically I pitched them to
• 14:11
  Speaker 4: put the Java implementation onto Azure so that they could
• 14:16
  Speaker 4: basically have a permission version of Ethereum, so every fortune
• 14:21
  Speaker 4: five hundred could could tokenize an asset and send it
• 14:25
  Speaker 4: around to counterparties. And we created blockchain as a service
• 14:29
  Speaker 4: on Azure. We put a two hundred word article in
• 14:34
  Speaker 4: the Wall Street Journal and basically gave birth to the concept,
• 14:38
  Speaker 4: consensus and Microsoft to blockchain as a service. And that
• 14:42
  Speaker 4: was the first time Ether crossed one dollar.
• 14:45
  Speaker 5: Beautiful beautiful and so yes, so this is a natural
• 14:51
  Speaker 5: So now to this question, and it was it was
• 14:55
  Speaker 5: a slightly different question.
• 14:57
  Speaker 4: Was basically Ether four corporate treasuries, you know, and and
• 15:01
  Speaker 4: we're talking about let's just not we're we're bifurcating the
• 15:05
  Speaker 4: ones that are just solely purposed uh treasuries here. So
• 15:08
  Speaker 4: I mean, I think there are two considerations. One is,
• 15:12
  Speaker 4: as we actually see smart contract functionality come to life,
• 15:19
  Speaker 4: and and we've really kind of seen the first iteration
• 15:22
  Speaker 4: of product market fit with stable coins, Uh, we're going
• 15:27
  Speaker 4: to require a micro payment of this commodity of ether,
• 15:33
  Speaker 4: uh to to to adjudicate and compute smart contracts.
• 15:38
  Speaker 3: So so basically corporates.
• 15:40
  Speaker 4: Are gonna need the micro payment of this fuel just
• 15:43
  Speaker 4: like they need Azure credits or a WS credits. So
• 15:46
  Speaker 4: that's going to be a small I would say, a
• 15:49
  Speaker 4: small bucket, just like you know, a corporation is going
• 15:52
  Speaker 4: to need gasoline in their cars.
• 15:54
  Speaker 3: To to to to to ship via you know, goods now.
• 16:01
  Speaker 4: Now, secondarily, I think what we're seeing now is, uh,
• 16:07
  Speaker 4: bitcoin has been the opening act, but uh, there is
• 16:12
  Speaker 4: room for hedges against the US dollar with digital asset
• 16:17
  Speaker 4: commodities and and and kind of how bitcoin has been
• 16:21
  Speaker 4: deemed kind of digital gold, either being deemed digital oil
• 16:25
  Speaker 4: and and and basically it's sitting on balance sheets as
• 16:29
  Speaker 4: an inflationary hedge or potentially even speculative play.
• 16:34
  Speaker 3: Mmm.
• 16:35
  Speaker 1: Well, it's going to be intriguing because as we start
• 16:38
  Speaker 1: to see major corporations, I think the key here is
• 16:40
  Speaker 1: going to be staking component. You guys have kind of
• 16:42
  Speaker 1: solved that with one hundred percent staking option, which is
• 16:45
  Speaker 1: really different than what we're seeing in the other dats,
• 16:47
  Speaker 1: so that's a big one. I'm further, I'm intrigued with
• 16:52
  Speaker 1: the Microsoft connection here because if again we hit on
• 16:55
  Speaker 1: this very topic and we were talking about maybe being
• 16:58
  Speaker 1: a crypto strategies specifically to Xbox, we anticipate that's going
• 17:02
  Speaker 1: to be another play and Ethereum most likely could go
• 17:06
  Speaker 1: into that, and I'll explain that in a second. But
• 17:08
  Speaker 1: when you look at all of this kind of coming
• 17:12
  Speaker 1: to the market all at once, stable coins, the digital asset, treasury, companies,
• 17:17
  Speaker 1: regulatory framework, everything's lining up. Do you think we're going
• 17:21
  Speaker 1: to see major companies like a Microsoft and others start
• 17:24
  Speaker 1: to make their move into these areas hundred percent.
• 17:28
  Speaker 4: You know, one hundred percent and like to your Xbox
• 17:31
  Speaker 4: like notion, what we've seen children teenagers flock to is
• 17:38
  Speaker 4: like the gamification of assets and really like we see
• 17:43
  Speaker 4: this with things like roadblocks, but but they're basically not
• 17:47
  Speaker 4: keeping the value. If you basically pay the dollar for
• 17:51
  Speaker 4: the sword and then you kind of lose the sword
• 17:53
  Speaker 4: or you don't you don't earn the dollar. But now
• 17:56
  Speaker 4: you have these digital tokens that actually represent a dollar,
• 18:00
  Speaker 4: and there is a secondary market for trading my sword
• 18:04
  Speaker 4: for your sword and my shield for your shield, and
• 18:07
  Speaker 4: and there's actually true value that subscribed to this because
• 18:11
  Speaker 4: basically they've been it's been a one way street where
• 18:14
  Speaker 4: you know, we as the consumers buy the video game,
• 18:18
  Speaker 4: but we don't get to kind of necessarily keep the
• 18:20
  Speaker 4: assets that we earn within the gaming contours. And as
• 18:25
  Speaker 4: soon as you know, the first movers start sharing that
• 18:30
  Speaker 4: value with the consumers and it blurs the line where
• 18:34
  Speaker 4: the consumer actually could could basically own the assets within
• 18:39
  Speaker 4: their game and they could appreciate in value. That's what's
• 18:43
  Speaker 4: never happened, is like the asset actually appreciating in value.
• 18:48
  Speaker 4: And I think as soon as that happens, kind of
• 18:50
  Speaker 4: kind of behavioral economics and game theory will kick in
• 18:54
  Speaker 4: that it's a one way street that you know, once
• 18:57
  Speaker 4: you own the assets and see them appreciate it, and
• 19:01
  Speaker 4: then you have the ability to sell the assets. Uh,
• 19:04
  Speaker 4: that's one way street. And I don't think there'll be
• 19:06
  Speaker 4: any going back to, you know, the video games of yesteryear,
• 19:10
  Speaker 4: where all we do is pay for them and never
• 19:12
  Speaker 4: own the asset.
• 19:13
  Speaker 1: And I think we're we're in that phase right now.
• 19:16
  Speaker 1: The game companies are starting to realize it.
• 19:17
  Speaker 5: Now.
• 19:18
  Speaker 1: The framework you know, the highways are being built literally
• 19:20
  Speaker 1: as we speak, so that in.
• 19:22
  Speaker 2: Itself is big. Are you guys buying any L two tokens?
• 19:27
  Speaker 3: We're not right now.
• 19:29
  Speaker 4: So so basically what we what we've learned in our
• 19:32
  Speaker 4: journey is that institutional investors are very interested in single
• 19:39
  Speaker 4: play exposure. Okay, they want a vehicle that is not diluted,
• 19:45
  Speaker 4: you know, with five different uh you know, digital assets
• 19:48
  Speaker 4: like a basket. They want specific exposure to ethereum, more
• 19:53
  Speaker 4: specific exposure to bitcoin, and and like that's simpler for
• 19:56
  Speaker 4: their investment committee UH to to allocate.
• 19:59
  Speaker 1: According Yeah, for sure, why not create your own L
• 20:02
  Speaker 1: two Then it would so essentially play right into it, So.
• 20:07
  Speaker 3: We could create our own L two.
• 20:08
  Speaker 4: I mean, this is a let's just call it operating
• 20:12
  Speaker 4: stock company that UH is solely purposed and maniacally focused
• 20:18
  Speaker 4: on increasing ether concentration per share. We have other vehicles
• 20:25
  Speaker 4: that are that that would benefit from the usage of
• 20:28
  Speaker 4: an L two, UH, but but not for this particular
• 20:31
  Speaker 4: vehicle that is really kind of bearing the flag of
• 20:35
  Speaker 4: ether concentration per share.
• 20:38
  Speaker 1: I'm going to go back to a statement you made earlier,
• 20:42
  Speaker 1: and that and that is you know how you're going
• 20:44
  Speaker 1: to grow. Some of that will be through acquiring you know,
• 20:48
  Speaker 1: strategic ether assets in general. If you look at the
• 20:52
  Speaker 1: current landscape of Digital Asset Treasury Company, some of which
• 20:55
  Speaker 1: are trading below nav mnav would they be would you
• 20:59
  Speaker 1: be able to go in and look at a possible
• 21:01
  Speaker 1: tender offer on some.
• 21:02
  Speaker 2: Of these before you guys go live? Okay, so that's on.
• 21:05
  Speaker 3: That, well, not before we go live.
• 21:08
  Speaker 4: I think that that would happen after there's this kind
• 21:12
  Speaker 4: of finite point in time, which is this S four
• 21:14
  Speaker 4: registration process. Once we're through the S four registration process,
• 21:19
  Speaker 4: so basically, we have two and a half billion dollars
• 21:21
  Speaker 4: of committed capital, which is you know, five hundred thousand
• 21:26
  Speaker 4: ether plus another around three hundred and seventy million dollars
• 21:30
  Speaker 4: of cash, and currently the ETHM stock is just trading
• 21:37
  Speaker 4: at the book value of the cash.
• 21:40
  Speaker 3: And trust, which is two hundred million dollars. Right.
• 21:43
  Speaker 4: We will be issuing shares for that additional ether accordingly,
• 21:49
  Speaker 4: and once that happens upon our S four registration, this
• 21:54
  Speaker 4: will be trading at a two and a half billion
• 21:56
  Speaker 4: dollar market cap. And due to the fact that we
• 21:59
  Speaker 4: believe that we're going to be able to have a
• 22:03
  Speaker 4: multiple of yield generation over the ETFs, we're going to
• 22:07
  Speaker 4: be able to issue convertible debt, which we believe is
• 22:13
  Speaker 4: very important in terms of generating ether concentration for share.
• 22:18
  Speaker 4: We believe that both of those factors are necessary for
• 22:23
  Speaker 4: commanding a multiple two NAB in perpetuity. Right, And we've
• 22:28
  Speaker 4: seen probably lower lift I would just call it lower
• 22:34
  Speaker 4: lift efforts where you know, maybe it's there's liability in
• 22:37
  Speaker 4: these shell companies that have been found out. Maybe they
• 22:40
  Speaker 4: just don't know how to run ether strategies properly. Maybe
• 22:45
  Speaker 4: they have a basket approach where they're not commanding a
• 22:49
  Speaker 4: premium multiple to NAB, and that would be where we
• 22:53
  Speaker 4: could potentially issue tender offers.
• 22:56
  Speaker 1: Yeah, okay, I'm looking at Kathy Wood's recent move with
• 23:00
  Speaker 1: BM and R. Here it was one hundred and sixteen
• 23:02
  Speaker 1: mil of Tom Lee's at their treasuring play BM and R.
• 23:06
  Speaker 1: And you know, Kathy has been a very innovative investor
• 23:09
  Speaker 1: in Wall Street. Why do you think she was I
• 23:11
  Speaker 1: won't say late to the game, maybe just so she
• 23:13
  Speaker 1: didn't have the vehicle on to Ethan. Do you think
• 23:16
  Speaker 1: we'll see more investors kind of following her lead?
• 23:19
  Speaker 3: Now? Yeah?
• 23:21
  Speaker 4: So what I would say, is I don't know if
• 23:25
  Speaker 4: she's been late to the game. She did create an
• 23:28
  Speaker 4: Ether ETF, and I would say, broadly speaking, the ETFs
• 23:32
  Speaker 4: have not done as well as let's call it the
• 23:34
  Speaker 4: bitcoiny tfs, and I think a big reason of it
• 23:37
  Speaker 4: is because they haven't enabled staking.
• 23:39
  Speaker 3: So she did do that.
• 23:42
  Speaker 4: I think Tom has done a remarkable job of acquiring Ether.
• 23:48
  Speaker 4: I wouldn't have deployed my capital or others investors capital
• 23:53
  Speaker 4: in a shell company.
• 23:55
  Speaker 3: I just don't think it's the right structure.
• 23:58
  Speaker 4: And so I would say that she has chosen to
• 24:03
  Speaker 4: do so, and you know that's her prerogative. But what
• 24:07
  Speaker 4: we've seen with respect to institutional investors is the Investment
• 24:12
  Speaker 4: Committee cares about these types of contingent liabilities and skeletons
• 24:16
  Speaker 4: in the closets of of I would just say, broader speaking,
• 24:19
  Speaker 4: these dying shells.
• 24:22
  Speaker 1: Yeah, I think that's that's something that everybody's got to
• 24:25
  Speaker 1: pay attention to because it's gonna it's gonna be a
• 24:27
  Speaker 1: little bit of a battle I think on Wall Street
• 24:29
  Speaker 1: as to which asset is the best to go with,
• 24:33
  Speaker 1: so intriguing that you guys have gone, you know, kind
• 24:36
  Speaker 1: of gone that direction. In terms of uh, if you
• 24:39
  Speaker 1: think about what percent on I'm just looking at the
• 24:43
  Speaker 1: eight reserve historical data right now. At what percent do
• 24:46
  Speaker 1: you feel that we're going to be at before we
• 24:49
  Speaker 1: would potentially see an eath supply shock.
• 24:52
  Speaker 4: Well, I mean, I think we're already seeing it, right,
• 24:54
  Speaker 4: I mean, the we've gone from twenty five hundred, you know,
• 24:59
  Speaker 4: three months ago to forty five hundred you know, back
• 25:01
  Speaker 4: of the napkin, So that's nearly a you know, a
• 25:04
  Speaker 4: forty percent increase in the price. And I think we're
• 25:07
  Speaker 4: going to continue to see this. I don't think we're
• 25:11
  Speaker 4: going to see a slowing and acquisition because you know,
• 25:18
  Speaker 4: vehicles like mine are just getting started and are going
• 25:21
  Speaker 4: to be able to acquire via converts.
• 25:24
  Speaker 3: I do think it'll be very interesting.
• 25:26
  Speaker 4: As you've seen, the m nabs that are primarily equity
• 25:31
  Speaker 4: based ATM issuances are starting. What I think we're seeing
• 25:37
  Speaker 4: is a little bit of exhaustion. Is that people are
• 25:40
  Speaker 4: starting to think that the next additional ATM offering could
• 25:45
  Speaker 4: be dilutive to shareholders rather than a creative and and
• 25:50
  Speaker 4: and basically that's why I believe we're starting to see
• 25:55
  Speaker 4: some m NAV compressions.
• 25:57
  Speaker 1: When you look at Okay, so last question to you,
• 25:59
  Speaker 1: and I'm looking at just what's going on in the
• 26:01
  Speaker 1: eth development ecosystem. You're very familiar with this for soccer
• 26:05
  Speaker 1: right now, Vittallics talking about this maybe late this year.
• 26:08
  Speaker 1: Are people sleeping on this right now because FUCACA will
• 26:11
  Speaker 1: really changed things around a bit?
• 26:13
  Speaker 2: What are your thoughts?
• 26:14
  Speaker 4: Yes, I think that Fusaco will happen this year, and
• 26:20
  Speaker 4: I think that, you know, broadly speaking, we've seen an
• 26:24
  Speaker 4: expedition of the upgrades to the consensus layer and the
• 26:29
  Speaker 4: execution layer of ethereum, and I don't necessarily know if
• 26:34
  Speaker 4: any more like the big one was the transition from
• 26:37
  Speaker 4: proof of work to proof of steak, you were literally
• 26:40
  Speaker 4: having like pick your metaphor, where you were having open
• 26:42
  Speaker 4: heart surgery and or you were, you know, changing the
• 26:45
  Speaker 4: engine of the plane while it was flying. I think
• 26:48
  Speaker 4: that these subsequent increments, incremental upgrades are not as you know,
• 26:55
  Speaker 4: foundational or you know, as as something like the train
• 27:00
  Speaker 4: xsition for the proof of work to proof of steak,
• 27:01
  Speaker 4: which really de risked ethereum. So I don't necessarily think
• 27:05
  Speaker 4: that that is going to be let's call it a
• 27:09
  Speaker 4: catalyst for price rise I think much more important to
• 27:14
  Speaker 4: price rise is you saw Genius Act occurred, which was
• 27:19
  Speaker 4: stable coins, and so eighty percent of stable coins are
• 27:23
  Speaker 4: settled to Ethereum layer one. So Ethereum was the largest
• 27:27
  Speaker 4: beneficiary of Genius. And then furthermore in November you have
• 27:31
  Speaker 4: Clarity which is market structure, so equities, derivatives, bonds all
• 27:39
  Speaker 4: being tokenized, and basically the largest beneficiary of that will
• 27:44
  Speaker 4: also be Ethereum because high quality liquid assets. They are
• 27:47
  Speaker 4: about two hundred and fifty billion dollars of high quality
• 27:49
  Speaker 4: liquid assets on blockchains.
• 27:51
  Speaker 3: Ninety percent of those are on Ethereum.
• 27:53
  Speaker 4: So both of these tailwinds, I would just say, in
• 28:00
  Speaker 4: and the Genius Act and Clarity Act are going to
• 28:03
  Speaker 4: hugely benefit Ethereum at the application layer. And then the
• 28:07
  Speaker 4: more applications that are built, the more gas that's used.
• 28:10
  Speaker 3: It's kind of its own virtuous cycle.
• 28:12
  Speaker 1: Yeah, all right, So one just kind of a follow
• 28:15
  Speaker 1: up question here is the idea of tokenizing ether machine itself.
• 28:19
  Speaker 1: I mean, you're mentioning Clarity Act. Obviously this will be
• 28:21
  Speaker 1: the big one live here.
• 28:22
  Speaker 2: Sure, so that's that's gonna happen.
• 28:25
  Speaker 4: Yeah, So absolutely, we are in conversations right now about
• 28:33
  Speaker 4: tokenizing the equity it will be on ethereum, and that
• 28:39
  Speaker 4: is something to stay tuned for.
• 28:41
  Speaker 3: But undoubtedly we will be tokenizing the shares.
• 28:44
  Speaker 4: We are proponents of dog fooding our own assets and
• 28:50
  Speaker 4: people do so.
• 28:51
  Speaker 2: Excellent. Good for you, Andrew.
• 28:54
  Speaker 1: I mean, with all this good news, we're going to
• 28:56
  Speaker 1: get clarity act. Obviously we're going to see I think
• 28:59
  Speaker 1: we have just seen the gates unlocked for what we're
• 29:01
  Speaker 1: going to see in stable coins. That's going to just
• 29:03
  Speaker 1: be a no brainer, multi trillions coming in. What do
• 29:06
  Speaker 1: you think Ethereum's price is going to be by this
• 29:09
  Speaker 1: time next year?
• 29:10
  Speaker 2: What's the theory?
• 29:12
  Speaker 4: I easily think within five years the price of ether
• 29:17
  Speaker 4: should eclipse the price of bitcoin the market cap, So
• 29:21
  Speaker 4: first and foremost, the market cap of bitcoin will be
• 29:24
  Speaker 4: less than the market cap of ethereum within five years,
• 29:28
  Speaker 4: and I think that we easily have twenty two one
• 29:32
  Speaker 4: hundred x in the price of ether.
• 29:34
  Speaker 2: Interesting, all right, well, listen.
• 29:36
  Speaker 3: What's the tam of the internet?
• 29:38
  Speaker 1: Yeah, well exactly, you can't put it on there. That
• 29:41
  Speaker 1: is a very good point, and I think a lot
• 29:42
  Speaker 1: of people sleep on that in the sense of where
• 29:44
  Speaker 1: eth is right now? For sure, So anyway, we are
• 29:48
  Speaker 1: here with Andrew Keys coming in from the Ether machine.
• 29:50
  Speaker 1: Thank you, thanks again for coming in. We appreciate you
• 29:52
  Speaker 1: you dropping in.
• 29:54
  Speaker 2: You bet all right.
• 29:55
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• 29:57
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• 30:03
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• 30:09
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• 30:19
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