Latest / The Starting Block / Fed holds interest rates – what does it mean for Bitcoin?

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Fed holds interest rates – what does it mean for Bitcoin? · The Starting Block

5:02
Welcome back to The Starting Block.
5:03
Happy Thursday to you wherever you
5:05
are joining us from today.
5:07
If it's your first time here,
5:08
welcome to the show. My name is
5:09
Gareth Jenkinson.
5:10
I am your host and head of
5:11
multimedia here at The Block.
5:13
We've been doing The Starting block
5:15
for just over a month now.
5:17
Really, really enjoying the
5:19
process so far.
5:20
And if you've missed our
5:22
last few episodes this week, we had
5:24
a great conversation with Sergey
5:25
Kunz from One Inch
5:28
yesterday.
5:29
And earlier this week, a couple of
5:31
other really good shows.
5:32
So if you've missed any of that, you
5:34
can go and check out the Blocks X
5:35
account, or you can got to
5:37
the Blox YouTube channel if you'd
5:38
like to watch some of our
5:39
interviews, including that interview
5:41
with CZ when we launched the show
5:43
just over four weeks ago in
5:46
Abu Dhabi. Really, really great
5:47
conversation with him and definitely
5:49
recommend going and checking that
5:50
conversation out. If you haven't
5:51
heard some of CZ's
5:53
backstory and some
5:55
of the law around one of the most
5:57
influential men in crypto.
5:59
If you are joining us for the first
6:01
time, I'll just give you a quick
6:01
rundown of the show as well.
6:03
As you can see above me on
6:05
our overlay, we've got the
6:07
block briefing, which is our news
6:09
update, where I'll basically run
6:10
through the biggest stories of the
6:11
last 24 hours, and we'll jump into
6:13
the market polls.
6:14
Today we've Got Andre Dragos from
6:16
Bitwise Europe joining us to chat
6:18
about all things markets related.
6:20
And then we've got the hot seat
6:22
segment of the Show.
6:24
We're expecting the
6:25
team from Zodal, Josh Schweihart
6:28
to join us today.
6:29
There is a possibility that he might
6:31
not make it, but we'll see how that
6:32
goes.
6:33
Hopefully, we've got him on
6:35
the line a little bit later.
6:36
But first things first, let's jump
6:37
into the top stories of the day in
6:39
the block briefing.
6:41
And starting off with a topic that
6:42
we'll be chatting to Andrea Barton a
6:44
little but, the Federal Reserve kept
6:46
interest rates on hold Wednesday,
6:48
but that was not a unanimous
6:50
call. Three policymakers broke
6:52
ranks and voted for a quarter point
6:54
hike, leaving the committee split
6:56
nine to three.
6:57
With the funds rate holding at 3.5%
6:59
to 3.75%.
7:01
Markets had actually been pricing in
7:03
as much as a 35%
7:05
chance of a hike earlier on
7:07
Wednesday, and the Fed
7:09
pointed to solid growth but flagged
7:11
inflation still running above its 2%
7:13
target. And crypto had barely
7:15
flinched. Prices were little changed
7:17
in the hour after the decision,
7:18
but we'll be taking a closer look
7:21
at how the crypto markets have
7:22
reacted over the past 24 hours when
7:23
we get André on for the market's
7:25
pulse in a few minutes time.
7:27
Our next story today,
7:30
Tether is taking its US regulated
7:32
stable coin beyond Ethereum for the
7:34
first time.
7:35
USAT, the company's genius act
7:37
compliant dollar token is now
7:39
live on Celo, its second
7:40
main net deployment.
7:42
On Celo USAT gets native
7:44
mint and burn functions and
7:46
can even be used to pay gas fees
7:47
thanks to the network's fee
7:49
abstraction upgrade.
7:50
Tether US Chief Bo Heinz
7:52
called the expansion a deliberate
7:54
decision pointing to hundreds of
7:55
thousands of daily users.
7:56
Already transacting on Selo.
7:59
The network has quietly become the
8:00
number one distribution channel for
8:02
Tether's flagship USDT.
8:06
Then our next headline, Binance's
8:07
American arm wants a piece of the
8:09
prediction market boom.
8:11
Binance US says it will apply next
8:13
month for a CFTC designated
8:15
contract market license,
8:17
a move that would let it list
8:18
futures, options, and events
8:20
based contracts for retail traders
8:22
under federal oversight.
8:24
CEO Steven Gregory revealed
8:26
the plan at the Rare Evo conference
8:28
in Las Vegas.
8:29
It sets up a direct clash with
8:32
established players like Kalshi and
8:33
PolyMarket US, and Binance
8:35
US is late to the party here.
8:37
Gemini already secured its licenses
8:39
here, and Coinbase teamed up with
8:40
Kalsh to offer events,
8:42
contracts on its platforms.
8:44
Our next story on Chain Perpetual's
8:46
exchange, Ostium now says
8:48
the $24 million hack that drained
8:50
its vault this month was an inside
8:51
the plumbing job, not a flaw in
8:53
its code.
8:54
In a post-mortem published
8:55
yesterday, Ostium said the attacker
8:57
gained unauthorized access to
8:59
its off-chain infrastructure and
9:00
used it to submit fake Bitcoin price
9:02
reports, generating artificial
9:04
trading profits from the public OLP
9:06
vault.
9:07
Crucially, the team stresses there's
9:09
no evidence it's smart contracts or
9:11
governance multi-cigs were
9:12
compromised, and the attacker used
9:14
forward to pass the protocol
9:16
already trusted, testing the waters
9:17
before draining nearly 24 million
9:20
in USDC.
9:22
Then a big story for DeFi.
9:24
Aave has been doing some spring
9:25
cleaning.
9:26
The lending giant has proposed
9:28
deprecating dozens of
9:29
low usage asset reserves and
9:32
winding down six entire blockchain
9:34
deployments.
9:35
A shakeup touching roughly $98
9:37
million in supplied assets and
9:39
15 and a half million in outstanding
9:41
debt.
9:42
Founder Stanley Kulikov unveiled the
9:43
plan earlier today prepared by
9:45
risk firm LamaRisk under Aave's new
9:47
risk framework.
9:48
It would off board.
9:49
50 low adoption reserves and
9:51
21 matured Pendle tokens
9:53
and fully retired deployments
9:55
on Sonic, Scroll, ZK
9:57
Sync, Matus, Ponyum,
10:00
and the big one, Aptos.
10:01
It's less about any single asset
10:03
and more about trimming the
10:04
protocols, sprawling a footprint.
10:06
I think we'll have to get Stanny
10:07
back on the show to chat a little
10:09
bit more about this in the
10:11
next couple of weeks.
10:12
Onto our next story, the founder of
10:13
Russia's largest crypto mining
10:15
company is heading to jail while
10:17
he awaits trial.
10:18
A Moscow court has moved BitRiver's
10:20
Igor Runets from house arrest into
10:22
pre-trial detention, ordering
10:24
him held for at least two months.
10:26
Runets faces fraud charges
10:28
on an especially large scale
10:31
tied to a mining equipment deal
10:33
with energy conglomerate EN
10:35
Plus that investigators say
10:37
caused 1 billion rubles,
10:39
about 12 and a half million dollars
10:40
in damages.
10:41
It's the latest chapter in a
10:43
mounting legal saga for BitRivers,
10:45
which has faced financial and legal
10:47
trouble stretching back.
10:48
To earlier this year.
10:50
A final story this morning or
10:52
afternoon, wherever you are, Cathy
10:53
Wood is trimming her crypto bets.
10:56
ARK Invest sold shares of Bitmine,
10:57
Block, Bullish, and Robinhood
10:59
on Wednesday as those stocks slid.
11:02
The biggest cut was Bitmime, around
11:03
$2 million worth offloaded
11:06
from the flagship ARKK
11:08
fund after Tom Lee's Ethereum
11:10
treasury company dropped nearly 6%
11:12
on the day.
11:13
ARK also shared a million each of
11:15
Block and Robin hood.
11:16
Where's the money going?
11:17
It's going into space.
11:18
The firm scooped up roughly $14.5
11:20
million of Elon
11:22
Musk's SpaceX, even
11:24
as those shares slipped below
11:27
their IPO price.
11:28
So a very interesting investment
11:29
decision there from Cathy Wood,
11:32
shifting a fair amount of money into
11:34
SpaceX. What does she know that we
11:36
don't?
11:37
Maybe we can ask Andre Dragos.
11:38
That's it for the block briefing
11:40
today. We're gonna move very swiftly
11:41
into the market pulse.
11:43
And as I mentioned, and we're joined
11:45
by.
11:46
Bitwise Europe Head of Research,
11:48
André Dragache, who was on
11:50
our stream in person at
11:52
BTC Prague, and he joined us a few
11:54
weeks ago on the show
11:56
before he took a well-earned break.
11:57
So firstly, Andrée, welcome back to
11:59
the show. I hope your summer holiday
12:00
was good. How are you doing?
12:02
Thank you so much, yes, thanks again
12:03
for the invitation.
12:05
I'm very happy to be
12:06
here.
12:08
It's good to have you back.
12:09
I think let's talk first and
12:11
foremost about the big news
12:12
yesterday.
12:15
Washer's announcement on
12:18
rates staying fixed.
12:19
How have you seen the last 24 hours
12:21
and how has that impacted the crypto
12:23
markets in particular?
12:24
I mean, the good news is that
12:27
Bitcoin and the major crypto assets
12:28
have remained relatively
12:30
resilient, right, despite this
12:32
kind of increased volatility.
12:35
And I do think
12:37
Bitcoin will and
12:39
other major cryptoassets will
12:40
continue to consolidate because
12:43
the fat still has this
12:45
tightening bias despite the fact
12:46
that they didn't.
12:48
Raise rates, right,
12:49
this time.
12:50
But I do expect them to
12:52
raise rates in September, because
12:56
if you look at, for
12:58
instance, three-month T-bill yields,
13:00
they're already more than 25
13:02
basis points away from the midpoint
13:04
target rate.
13:05
And if you looked across the whole
13:07
treasury yield curve,
13:09
right, you've seen substantial
13:12
increases at the long end,
13:13
especially in 30-year yield to
13:15
to essentially highest level since
13:17
27, almost 20 years.
13:20
And so, yeah,
13:22
I think the bond market's already
13:23
pricing in, anticipating
13:25
rate hikes.
13:27
And I think, the
13:30
most important bit of that
13:32
FMC meeting wasn't the press
13:34
conference by Wash itself, but the
13:36
fine print. If you look at
13:38
the number of descents, and you just
13:40
mentioned it, was
13:42
among the highest in two
13:44
decades, I think.
13:46
And so I think
13:48
below the surface,
13:51
there is pressure, upside pressure
13:52
building for more rate hikes
13:55
within the FOMC.
13:58
And so, I think it
14:00
speaks volumes in terms of this kind
14:02
of tightening bias.
14:03
And as long as this tightening bias
14:05
remains unresolved,
14:07
right, I think Bitcoin will continue
14:08
to consolidate.
14:09
That being said, and speaking
14:11
about resilience of Bitcoin crypto
14:13
assets, What is very remarkable
14:16
is essentially since the
14:18
whole semiconductor AI
14:20
trade peaked in late June.
14:23
I just put out a tweet today,
14:25
this morning.
14:27
If you look at the relative
14:28
performance, Bitcoin essentially
14:29
flats since Semi's peaked,
14:31
while the SOX, the semiconductor
14:32
index, is down 28%.
14:34
We've seen the crash in the
14:36
COSPI literally crash.
14:38
It's more than 40% down.
14:39
The government wants to intervene,
14:41
the Korean government.
14:43
And so there's been a lot of
14:45
pain and tread fire, but at the same
14:46
time, yeah, Bitcoin was pretty
14:49
much unaffected by this, right?
14:51
And I think in terms of
14:53
the overall macro view,
14:56
actually, one of our long held views
14:58
was spin
15:00
for some time, essentially, that
15:02
Bitcoin is this kind of canary in
15:04
the macro coal mine.
15:06
It tends to anticipate tighter
15:08
monetary policy, tightening
15:09
financial conditions.
15:10
Well in advance, both to
15:12
the downside, right,
15:15
but also the upside.
15:16
And I think although there might be
15:18
more downside risk
15:22
left for Bitcoin in absolute terms,
15:25
right.
15:26
I think in relative terms, Bitcoin
15:28
is already, I mean, there's a higher
15:30
chance that Bitcoin will
15:32
start outperforming
15:34
tech stocks, right?
15:35
And in fact, if you look at
15:37
the relative performance between
15:38
Bitcoin and the NASDAQ.
15:40
Like Bitcoin has been outperforming
15:42
the Nasdaq essentially since June,
15:44
essentially since the whole
15:45
semiconductor complex has peaked.
15:48
And so I think that
15:50
will likely continue.
15:54
And I mean, the absolute
15:56
bottom in Bitcoin is probably not
15:58
yet in, right, because of this
16:00
tightening bias by the Fed.
16:02
But as there's more
16:04
pain in traditional
16:06
financial markets, and
16:08
the probability for rate cuts
16:10
and easing, right, a
16:12
reversal of this kind of tightening
16:13
bias increases,
16:15
I think you should already,
16:16
especially you should already see
16:18
Bitcoin sniffing out this kind of
16:20
easing bias and
16:22
continue to outperform like the
16:23
whole traditional stock
16:26
complex.
16:28
I think when we spoke at BTC
16:30
Prague, you made the
16:32
prediction to me that we might see
16:34
the sort of market bottom out around
16:36
October.
16:38
I stand to be corrected.
16:39
I can't remember if it was you or
16:40
someone else that said that, but
16:41
what are your general thoughts now
16:43
on the price of Bitcoin, where
16:45
it's been trading?
16:46
Do you think there is potentially
16:47
more deeper downside
16:50
before we
16:52
kind of move on from depths of the
16:54
spare market.
16:55
Yeah, I think it probably wasn't me,
16:57
but I think the consensus expects
16:59
the bottom around October
17:01
because of the harbing cycle,
17:04
because I think, the average
17:06
drawdown duration for
17:09
any kind of Bitcoin bear markets
17:10
around 360 days.
17:12
I think that the median is around
17:14
320 days, which would imply a
17:15
bottom around September, so a bit
17:17
earlier. But I think the means
17:18
around October.
17:20
And also key influencers like
17:23
Ben Cowan, they've been calling for
17:24
this kind of October bottom and
17:26
also based on the midterm cycle and
17:28
so on.
17:30
But I do think because Bitcoin
17:32
has already anticipated
17:34
a lot of this downside,
17:37
a lot for the bad news, a a lot
17:38
financial tightening,
17:40
macro weakness, I think
17:42
there's a high chance that we'll
17:44
front run this kind flow.
17:47
Because if you look at the macro,
17:49
it's, I mean, it is unanimously
17:53
bearish, right?
17:55
For instance, straight off of most
17:56
situations, increasing oil prices,
17:58
which is pressuring yields, which
18:00
has tightened the market policy,
18:01
right.
18:02
If you look a FAT policy, they
18:04
still have this tightening bias,
18:06
it probably will increase rates in
18:08
September and so on.
18:10
Macro is deteriorating across
18:12
the board, but if you look at
18:14
the fundamentals, especially like
18:16
Bitcoin, crypto-specific
18:17
fundamentals,
18:19
I mean, long-term holder supply is
18:21
at new all-time highest.
18:22
It's never been higher.
18:24
There have never been more
18:25
high conviction buyers,
18:28
investors of Bitcoin.
18:29
If you look an institutional demand
18:31
growth, it has been at rock
18:33
bottom, it's been at lowest level.
18:36
Since FTX collapse, right,
18:38
and it's now re-accelerating,
18:40
because we had, I think, two
18:41
consecutive weeks of global ETP
18:43
inflows.
18:45
Strategy appears to be stabilizing
18:47
from low levels, right.
18:49
It looks like they're getting their
18:50
digital credit engine back online,
18:52
right? Stresh is pulling back to
18:54
par, MSCR is
18:56
recovering and so on.
18:58
So I think institutional demand
18:59
growth is re-accelerating, right
19:01
but from very low levels which means
19:03
it's very asymmetric.
19:05
Very unlikely that it will continue
19:07
to decelerate at these very
19:09
depressed levels.
19:10
I think we've seen some kind of
19:12
sell-exhaustion, but while it's
19:14
very likely, that will
19:16
continue to re-accelerate, right?
19:18
And so I think,
19:20
yeah, you have this kind of
19:22
dichotomy, right, which is
19:24
probably the reason why Bitcoin's
19:25
rage-bound, right, continues to
19:27
go sideways.
19:29
But I think the moment you
19:31
see a resolve of these kind of
19:33
macro risks, especially
19:35
This tightening bias by the Fed,
19:38
I think that's when you see the
19:39
final bottom Bitcoin.
19:42
I saw a very interesting tweet from
19:44
Elizabeth Warren.
19:44
I think it was in the last 12 hours
19:46
saying that she supports Donald
19:48
Trump in
19:49
removing the
19:51
debt limit ceiling.
19:53
And I mean, it's hilarious to go
19:55
through the comments on that post
19:56
because all the people in crypto
19:58
are like, please make it happen
20:00
because if you do that, it means
20:02
more liquidity for the markets and
20:04
more upside. But generally,
20:06
it kind of feels like a sign of the
20:07
times and Jordan,
20:09
my producer, and I were talking
20:10
about this earlier today and looking
20:12
at S&P 500 being
20:14
the chart looks like this.
20:16
It's crazy. And it's kind of like,
20:17
when does this all pop and
20:20
explode? And even just the
20:22
debt bubble itself.
20:24
Since Bitcoin,
20:26
the genesis block in 2009,
20:30
the US debt has 10x,
20:32
basically. I remember it being like.
20:34
Something like three trillion back
20:35
then in 2009 and now it's, you know,
20:37
close to 40 trillion.
20:40
It's crazy to see politicians saying
20:42
like, let's remove the debt ceiling,
20:44
but what are your general thoughts
20:45
if something like that happens and
20:47
how does it kind of tie into
20:49
monetary policy as you see
20:51
it.
20:52
Yeah, in general, I agree with
20:53
Lin-O, nothing stops the train.
20:58
I think one analyst,
21:00
I can't remember who it was exactly,
21:02
but he said something like,
21:04
I'll remain bullish
21:06
on Bitcoin until
21:08
they reverse
21:10
this kind of chart, the debt chart,
21:13
but we know it's just up only,
21:15
it's been up only.
21:17
It's probably part of the fiat-based
21:19
system that this is up only
21:21
because of interest rates and money
21:23
printing, essentially.
21:24
But I think the overarching theme
21:26
and why there's always consensus on
21:28
this. And it's funny, if you
21:30
look at past debt ceilings,
21:32
they've always managed to
21:34
reach consensus across the aisle
21:36
and increase the debt limit,
21:38
judicial debt limit.
21:39
But eventually, it's just a show, I
21:41
think, in some kind
21:43
of theater. There's some kind
21:44
political theater around it.
21:46
But they have no other choice.
21:47
Right, they need to keep
21:49
the.
21:50
The government going,
21:52
else you have government shutdowns
21:54
and all that stuff, which is
21:55
detrimental to probably both
21:57
parties.
22:00
And so, yeah, nothing stops the
22:02
strain. And I think in terms
22:04
of monetary policy and what it means
22:05
for Bitcoin and fiscal policy,
22:08
I mean, the Fed is essentially,
22:10
especially wash.
22:11
It's like between a rock and a hard
22:13
place, right?
22:14
He needs to fight inflation,
22:17
right.
22:18
And the way the Fed does
22:20
this is via tightening monetary
22:22
policy, increasing interest rates,
22:24
tightening liquidity.
22:26
But of course,
22:28
especially what changed between
22:30
COVID and now is the deficit.
22:32
I think Powell
22:34
was able to ramp
22:36
up interest rates and tighten
22:38
monetary policy in of the COVID
22:39
spike. Post-COVID spike in inflation
22:41
because like the deficit was like
22:44
half a trillion per year,
22:46
but now a 3x again right at 1.5
22:48
trillion per year and
22:50
counting right every year it's
22:52
getting bigger because the debt
22:53
load's getting bigger because
22:54
interest rates are rising.
22:56
And so I think now Washington is
22:58
kind of a rock and hard place
22:59
situation where he can't really
23:01
tighten monetary policy that much.
23:03
That means at some point he
23:05
needs to
23:09
tighten less than is warranted
23:12
by inflation and
23:14
let inflation run.
23:16
And so I think that's ultra bullish
23:17
for Bitcoin and scarce assets in
23:19
general, because at
23:22
the end of the day, you need to have
23:23
some kind of inflation protection.
23:25
Investors will move out of
23:27
treasury bonds.
23:28
And that's probably one of the
23:29
reactions you've seen.
23:31
You've seen capital outflows from
23:33
treasury bonds, especially
23:34
yesterday.
23:35
While the dollar was plummeting,
23:38
like yields were spiking, the dollar
23:39
is plummeted.
23:40
It tells you there's some kind of
23:41
capital flight, right?
23:43
Especially from foreign investors
23:44
who sell the bonds
23:46
and move out of the currency.
23:48
And so I think you'll see
23:51
probably some kind of Japanification
23:53
of the US, right,
23:55
that treasury bonds become
23:57
more and more like JGBs,
24:00
Japanese government bonds.
24:03
We've seen this kind of phenomenon
24:05
of rising the yields
24:07
and also plummeting currency.
24:10
I mean, it tends to be good for the
24:12
stock market because it tends be
24:14
inflationary.
24:17
And yeah, I think we'll see this
24:18
kind Japanification of the astrology
24:20
market, but that it's
24:22
definitely a macro tailwind
24:24
for Bitcoin. I'm fine.
24:25
Yeah, I've got two more questions
24:27
for you, Andre.
24:28
My first one is just about
24:31
Bitcoin specifically and some of the
24:32
questions that folks
24:34
at Bitwise get from investors.
24:36
Has there been any real focus or
24:38
question marks around BIP 110
24:40
and what might actually happen to
24:41
Bitcoin? We haven't gone into it
24:43
in depth on the show as of
24:45
yet, but we will in the next week or
24:47
two. But all
24:49
the BIP 110 proponents will tell
24:51
you that.
24:52
It's, you know, all the miners are
24:54
going to be forced on to, you know,
24:56
to support Bitcoin 10.
24:58
And are there question marks from
24:59
investors about what this actually
25:00
means for Bitcoin?
25:01
Or is the large majority of people
25:03
completely oblivious?
25:04
So, I mean, for us, right?
25:06
For us that spend a lot of time
25:08
on Bitcoin Twitter and crypto
25:09
Twitter, right, it's
25:12
all the talk right now.
25:14
But I think it's
25:16
somewhat striking that many
25:17
traditional investors actually don't
25:19
have this on their radar.
25:20
And I do think it is a risk, right.
25:23
Probably just a short term risk, but
25:25
I think the key risk is replay
25:28
protection and replay risks, right
25:30
that transactions
25:32
are being reversed
25:34
right after a certain period of
25:35
time. I think that could cause some
25:37
volatility because then
25:40
major crypto service providers,
25:42
major exchanges and so on,
25:44
they might halt processing
25:46
transactions for a certain period of
25:48
times because there's just too much
25:49
uncertainty and that could
25:51
create some volatility.
25:54
But I think the
25:55
probability that Bit110
25:58
will reach any kind of majority
26:00
is very low.
26:01
I think if you look at
26:03
prediction odds, it's like around
26:05
10%.
26:07
And so I don't think it's a
26:09
major game changer for Bitcoin.
26:12
At some point, I would
26:14
expect that they do
26:16
a hard fork even at
26:18
some point and trade a new token,
26:20
essentially.
26:23
But it could create some volatility.
26:25
It won't be a game changer for
26:27
Bitcoin itself.
26:29
Yeah, my final question to
26:31
you just on Michael Saylor and how
26:33
things have changed over the last
26:34
month, we spoke at length at
26:37
BTC Prague a little bit about this,
26:39
but your general take on
26:41
them kind of suspending
26:43
both MSTR stock
26:45
dilution, selling of those shares,
26:48
and then just beefing up
26:50
their reserves to pay off dividends
26:52
and giving themselves like more than
26:53
a two-year sort of runway to
26:55
meet dividend obligations.
26:57
It seems like he's being pretty
26:58
pragmatic in the depths of this bear
27:00
market right now.
27:01
Absolutely.
27:03
I think what was the game changer
27:04
for strategy was
27:07
not only that they managed to
27:08
increase the dividend coverage from
27:10
I think was initially seven months
27:12
only, which is why there was some
27:14
kind of route right in the preferred
27:16
stocks.
27:18
But so he increased it to I think
27:19
the latest number was 22 months or
27:21
so. So almost two years of dividend
27:23
coverage.
27:25
But I think what was even more
27:27
important was this kind of pledge,
27:28
right, to maintain at
27:30
least 12 months of dividend
27:32
coverage in terms of dollar
27:33
liquidity and even
27:35
the pledge to be willing to
27:38
sell bitcoins, to to maintain this
27:41
buffer. Right. And so,
27:43
yeah, I think that that was a
27:45
game changer. And that's why that's
27:47
when you saw like stretch bottoming
27:48
out and pulling back to par.
27:50
I think he averted
27:52
a forced liquidation of
27:54
Bitcoin. And the
27:56
funny thing is, although he kept
27:58
diluting common stockholders,
28:01
right, over the past couple of
28:03
weeks, in order to increase this
28:05
dollar liquidity buffer,
28:07
right? MSC was going up as
28:09
well. The common stock was going out
28:11
as well despite this dilution.
28:13
But I think it's ultimately the
28:15
case that common stock
28:17
holders are actually happy
28:19
that he's increasing this liquidity
28:20
because he's averting
28:23
forced liquidations of Bitcoin,
28:25
he might get this kind of digital
28:27
credit engine back online.
28:29
He might pull back a
28:31
stretch to par or to a level where
28:35
investors are comfortable with
28:36
more stretch supply and you can
28:38
buy more Bitcoin, which is also
28:40
beneficial for common stockholders
28:41
at the end of the day.
28:43
And therefore, I think you saw
28:45
both a preferred equity
28:47
and common equity rally after this
28:49
kind of move.
28:51
Beautiful.
28:52
Andre, thanks so much for for
28:53
joining us once again. It's always
28:54
great to talk markets with you.
28:56
And I still, you know, hold you in
28:58
high regard as one of the big brains
29:00
in the industry when it comes to,
29:01
you know, breaking everything down,
29:03
especially from a macro perspective.
29:04
So we look forward to having you
29:06
back on the show quite soon.
29:07
And shout out to the Bitwise team,
29:09
some of the goats in the industry,
29:11
we're going to take a break.
29:12
We are thanks, Andre.
29:13
We are still waiting for Joshua to
29:15
to come on the line.
29:17
And there is every chance that he
29:18
might not be with us here today.
29:20
So we will take a short break.
29:22
Stay with us.
29:23
If he doesn't join us, we'll give
29:24
you a quick recap of what's coming
29:25
up in the next few days I've got
29:27
big name guests tomorrow that I want
29:29
to tell you about and we can also
29:31
talk a little bit about who we've
29:32
got coming next week because Lots
29:34
and lots of big guests coming on to
29:36
the starting block.
29:37
Stay with that. We'll be right back
29:39
in a few moments time
33:48
Welcome back to The Starting Block.
33:50
Thank you so much for staying with
33:51
us this afternoon.
33:53
We are going to be wrapping up the
33:54
show right now.
33:55
We'll have to reschedule with Josh
33:56
and catch up with him and the
33:58
Zottel team and talk about Zcash
34:00
Ironwood upgrade in
34:02
a couple of days' time.
34:03
We've got a few exciting shows
34:05
coming up over the next week or so,
34:07
and I'll give you a brief rundown.
34:08
We got Jack Mallers coming on
34:09
tomorrow to talk for the first time
34:11
on the record about his exit from
34:13
21.
34:14
We will dive into things happening
34:15
at strike and
34:17
Bitcoin space in general.
34:19
Next week, we've got loads of
34:20
big names.
34:21
Really, really excited to be
34:22
chatting to Yoshi
34:25
Yokokawa from Alpaca.
34:28
They recently raised $430 million
34:30
in their
34:32
second raise of 2026.
34:34
We've got Ophelia Snyder, who is one
34:36
of the co-founders of 21 shares.
34:38
She recently stepped away from the
34:40
business after a very successful
34:41
exit, so I'm looking forward to
34:42
picking her brain.
34:43
On Wednesday, we got Ellie Ben
34:45
Sasson and Nathan Jaffay
34:47
from Starkware.
34:48
To chat about Eli's new
34:50
book and the
34:52
general ecosystem for Ethereum
34:54
and scaling when it comes to
34:57
stockware, as well as
34:59
Bit of Zcash.
35:00
Eli Ben-Sasson is one of the
35:01
co-founders of the Zcache protocol.
35:03
And then on Thursday, really excited
35:05
to have Jesse Pollack from BASE.
35:07
So we've got a stacked lineup of
35:09
shows coming up over the next five
35:10
days.
35:11
If you don't know already,
35:13
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