Latest / The Paul Barron Crypto Show / Crypto DECOUPLES Trump Tariffs🔥 l Banks vs Tether👀
Transcript
- 0:06Speaker 1: Will this pump hold up to President Trump's strategies around
- 0:09Speaker 1: tariffs and much more? The markets are not responding like
- 0:12Speaker 1: you might think. My name is Paul Baron. Welcome back
- 0:14Speaker 1: in the tech path. Let's get going. I do want
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- 0:53Speaker 1: I want to hit on a couple of big points,
- 0:55Speaker 1: and that is is the trade war back on. Of course,
- 0:59Speaker 1: this is coming after a brief pause after a market hits,
- 1:02Speaker 1: Bitcoin hitting an all time high. Trump just threatened fifty
- 1:05Speaker 1: percent tariffs on the EU beginning June first, twenty five
- 1:08Speaker 1: percent tariffs on Apple, and I'll get that in a second.
- 1:12Speaker 1: But in five days, the S and P five hundred
- 1:14Speaker 1: erased one and a half trill, and of course we'll
- 1:17Speaker 1: see how the bond market reacts. You look at that
- 1:20Speaker 1: in comparison to US recession numbers, and we've started to
- 1:24Speaker 1: clip up a little bit, because we were down around
- 1:26Speaker 1: thirty seven percent, And if you consider that comparison to
- 1:30Speaker 1: all the way back here in February where it was
- 1:32Speaker 1: pretty much non existent, to the spike that we saw
- 1:35Speaker 1: back here in early April, and then again right here
- 1:38Speaker 1: on May first when those tariffts went into action. But
- 1:41Speaker 1: I think what's happening is the market is starting to
- 1:44Speaker 1: realize that Trump is negotiating and this is just his
- 1:48Speaker 1: model of negotiating. That's why I don't think we have
- 1:50Speaker 1: seen much movement on the crypto market.
- 1:53Speaker 2: Now.
- 1:53Speaker 1: Will we have movement, Yes, There's always going to be volatility,
- 1:56Speaker 1: and that only creates opportunity because you can understand if
- 2:00Speaker 1: we continue to see the cycle going forward. And I
- 2:03Speaker 1: just had Sergey Nazarev on and we had a chance
- 2:06Speaker 1: to kind of talk about this is that the snowball effect,
- 2:10Speaker 1: as long as we don't get a macro event globally,
- 2:13Speaker 1: the snowball effect is almost unstoppable. Let's go to French Hill.
- 2:16Speaker 1: He's going to give us kind of a rundown of
- 2:18Speaker 1: where he thinks these EU tariffs could play into it.
- 2:21Speaker 1: Take a look.
- 2:22Speaker 2: I think all the big picture issues that the Trump
- 2:25Speaker 2: has raised about moving more production back to the country
- 2:28Speaker 2: are good, and we should try to do that where
- 2:30Speaker 2: we have a comparative advantage, but it takes time. In
- 2:33Speaker 2: the meantime, something like the EU discussion is about, come on,
- 2:37Speaker 2: let's have a discussion. We've tried to have a trade
- 2:40Speaker 2: progress under two or three presidencies with the EU, and
- 2:43Speaker 2: we've not made much progress.
- 2:45Speaker 3: Speak to this though, if you could, which is and
- 2:46Speaker 3: we were talking to David Rubenstein about this. The President
- 2:49Speaker 3: has been very public about his want for folks like
- 2:53Speaker 3: the EU to treat companies like Apple and Facebook and
- 2:56Speaker 3: American companies properly right right, And he has been very vocific.
- 3:00Speaker 3: Is in the idea that when they go after our
- 3:02Speaker 3: companies that that's a problem. And so how do you
- 3:06Speaker 3: sort of square the idea that he goes after our companies,
- 3:10Speaker 3: if you will in this kind of regard, and then
- 3:12Speaker 3: what you have is the use says, well, if he's
- 3:14Speaker 3: doing it, you know what do you what are you
- 3:16Speaker 3: even talking about?
- 3:18Speaker 2: Well, look, my best advice to the president is stick
- 3:20Speaker 2: with the macros. Regardless of all the noise we've had,
- 3:23Speaker 2: all the uncertainty at the spring, the number one place
- 3:26Speaker 2: for foreign direct investment is the US.
- 3:29Speaker 1: All right. I don't know that that was necessarily a
- 3:32Speaker 1: fair question, because I you know, I think Frenchhill was
- 3:34Speaker 1: political in answering that. But I think the point is
- 3:36Speaker 1: is the different kind because what Trump is looking at
- 3:40Speaker 1: when he goes after our companies, it's just to get
- 3:42Speaker 1: them to build in the United States. That's fairly harmless, now,
- 3:45Speaker 1: I get it, Yes, Paul, there's always the potential of
- 3:48Speaker 1: building outside the countries to be able to do better
- 3:51Speaker 1: in terms of trade and get cheaper labor, et cetera.
- 3:54Speaker 1: But when you look at supporting the United States, I
- 3:57Speaker 1: think his approach is right. Now when you get the
- 4:00Speaker 1: it's not necessarily the same scenario. These are more much
- 4:03Speaker 1: more overbearing laws on companies that are trying to operate
- 4:07Speaker 1: in those countries without really regulation that we do the
- 4:11Speaker 1: same thing with companies in Europe that are trying to
- 4:13Speaker 1: operate here. So that I think is what they're getting
- 4:16Speaker 1: at is they want more of a fair trade situation.
- 4:19Speaker 1: And of course right now Apple fell slightly four percent.
- 4:22Speaker 1: This was on the statement that he said, hey, listen,
- 4:25Speaker 1: you need to bring your US manufacturing back here to
- 4:27Speaker 1: the United States, and they most likely will do that.
- 4:30Speaker 1: I think Tim Cook has even gone on records saying
- 4:32Speaker 1: that by twenty thirty we'll have a lot more of
- 4:34Speaker 1: our manufacturing here in the US. That is a seismic
- 4:38Speaker 1: shift for Apple in general, and I think it makes
- 4:41Speaker 1: a huge difference to the next level. Here is how
- 4:45Speaker 1: Apple and Trump could meet in the middle. Take a look.
- 4:48Speaker 4: Well, it's hard to believe that this comes to pass.
- 4:51Speaker 4: I mean, this tariff asking them to do something that
- 4:55Speaker 4: is pretty well nigh impossible to do to make iPhones
- 4:59Speaker 4: a skin in this country is not going to happen
- 5:02Speaker 4: in an investable time frame. It's certainly not while Trump
- 5:04Speaker 4: is president.
- 5:05Speaker 1: What do you see as the off ramp on both sides.
- 5:07Speaker 4: I think if they can, you know, put a facility
- 5:09Speaker 4: somewhere that makes you know, a few thousand iPhones and
- 5:14Speaker 4: put some R and D into robotics so that you
- 5:17Speaker 4: can spin a story that at some point in the future, yeah,
- 5:21Speaker 4: maybe we can make iPhones. That's not going to happen
- 5:23Speaker 4: while Trump is president, but they can put something in
- 5:26Speaker 4: the ground that, you know, creates a future path that
- 5:28Speaker 4: they can talk to. That would be the off ramp.
- 5:30Speaker 1: In my view, Again, this goes back to the whole
- 5:34Speaker 1: concept of how Trump negotiates. He always throws out these random,
- 5:38Speaker 1: you know, big, huge, bombastic statements knowing that he's going
- 5:43Speaker 1: to backtrack. And I agree with that analyst right there
- 5:45Speaker 1: is that I think there will be a middle ground
- 5:47Speaker 1: and it will be an easy win. A robotics manufacturing
- 5:51Speaker 1: that we're going to do parts of it here in
- 5:52Speaker 1: the US, those kind of things more advanced that maybe
- 5:56Speaker 1: Apple could do to help appease President Trump, and that
- 5:59Speaker 1: I think is really all he's looking for. He's looking
- 6:01Speaker 1: for the optics of how this looks going forward. Now.
- 6:05Speaker 1: The good thing is is that right now the US
- 6:07Speaker 1: and India are very close to a trade deal, and
- 6:10Speaker 1: if this gets announced and it's done, this will start
- 6:14Speaker 1: to put a little bit more pressure on the EU
- 6:16Speaker 1: and definitely into other Baltic stakes. As well as Middle
- 6:19Speaker 1: Eastern areas that I think will start to see some
- 6:22Speaker 1: good positive movement. And again the point being is that
- 6:25Speaker 1: we are still in a position right now that I
- 6:28Speaker 1: think now the globe as well as markets are starting
- 6:32Speaker 1: to understand this is how Trump negotiates. So that is
- 6:35Speaker 1: why I don't think we saw an immediate reaction just
- 6:38Speaker 1: to the EU situation. I do think that even a
- 6:41Speaker 1: big deal with the EU will give us a little
- 6:43Speaker 1: bit of a rise in the market, but it may
- 6:45Speaker 1: not be as big as everybody thinks. What you can't
- 6:47Speaker 1: expect is going to be a rise in the market
- 6:49Speaker 1: around what Kraken is doing. And they've just now set
- 6:53Speaker 1: up to tokenize stocks. This is a big deal because
- 6:56Speaker 1: this is going to open up stocks to the world.
- 6:58Speaker 1: And think about this too. Now you could leverage US
- 7:01Speaker 1: stocks around the world China, you know, Russia, the Middle East,
- 7:07Speaker 1: South America, all of those types of people just like
- 7:11Speaker 1: stable coins who want to get access to the US
- 7:14Speaker 1: dollar could get access to US companies through something like this.
- 7:18Speaker 1: So that is a big deal. And if this goes
- 7:20Speaker 1: into a DeFi model going forward, that could get to
- 7:24Speaker 1: become a pretty big deal. Cracking previously analysis rollout on
- 7:28Speaker 1: this exchange, there's eleven thousands listed stocks and etfsays of
- 7:33Speaker 1: April this year, fifty of the popular stocks are going
- 7:36Speaker 1: to be available outside the US, including Europe and Asia.
- 7:39Speaker 1: And then Cracking of course, and I think this is
- 7:41Speaker 1: going to be global before long. Cracking also is in
- 7:43Speaker 1: direct competition with platforms like Robinhoods. That is the one
- 7:47Speaker 1: I'm more concerned. I think robinhood will most likely do
- 7:50Speaker 1: a very similar model. I can't imagine that Vlad will
- 7:52Speaker 1: not go this direction because it is kind of the
- 7:54Speaker 1: future of where securities are going, without a doubt. Other
- 7:58Speaker 1: things you have to look at at is what's happening
- 8:01Speaker 1: on the idea of futures. This is of course perpetuals,
- 8:05Speaker 1: and this to me is good news for the industry
- 8:07Speaker 1: because we're starting to see this coming in from of course,
- 8:10Speaker 1: the CFTC Commissioner. She basically confirmed it cryptocurrency perfessional futures
- 8:15Speaker 1: are allowed for trading in the US, another bullish signal. Now,
- 8:20Speaker 1: this is the bigger part of this episode, and it
- 8:24Speaker 1: really is looking at how stable coins might move forward.
- 8:27Speaker 1: We are going to get a genius act in the
- 8:29Speaker 1: next few days, and it's timing is kind of interesting
- 8:33Speaker 1: because now you have JP Morrigan, Bank of America wells
- 8:35Speaker 1: Fargo City, as you can see there, saying let's band
- 8:38Speaker 1: together and create a coin, a token to compete against tether. Now,
- 8:44Speaker 1: if you consider this and some of the points that
- 8:47Speaker 1: are made in this tweet, and I agree with some
- 8:49Speaker 1: of them and some of them do not, and I'll explain,
- 8:51Speaker 1: but what you're witnessing is not necessarily innovation, it's institutional survival.
- 8:55Speaker 1: I agree with that. I think banks are at a
- 8:58Speaker 1: very unique position right now because they see the on
- 9:00Speaker 1: the wall. The amount of liquidity going into stable coins
- 9:03Speaker 1: will drain regional banks that I agree with. I think
- 9:08Speaker 1: we will see a large amount of banks that will
- 9:10Speaker 1: get hit on this, and unless they've got something in play,
- 9:14Speaker 1: it could change the landscape of American finance. They're also
- 9:19Speaker 1: at war right now with the decentralized dollar. This is
- 9:21Speaker 1: where I do not think the banks can win unless
- 9:26Speaker 1: they can alter their model now. And there's two reasons why.
- 9:31Speaker 1: The first reason is that the demographic that is starting
- 9:34Speaker 1: to move into a decentralized finance model is a different
- 9:38Speaker 1: demographic than they've dealt with for the last thirty years.
- 9:41Speaker 1: They've been dealing with boomers and gen X, which is
- 9:45Speaker 1: pretty much where all the money is. That money is
- 9:47Speaker 1: now transitioning not only through markets but also through just
- 9:50Speaker 1: passing down within families. We're going to see a different
- 9:54Speaker 1: kind of investor and also I think a different kind
- 9:56Speaker 1: of person out there in terms of where things like
- 9:59Speaker 1: stable coins are going to be held. This is a
- 10:01Speaker 1: joint venture. Is It's basically like cartel defense if you
- 10:04Speaker 1: think about, you know, cartel families teaming up together just
- 10:08Speaker 1: to defend against the new, more powerful family coming in.
- 10:12Speaker 1: This isn't a stable coin project, it's a dollar cartel reformation.
- 10:15Speaker 1: And I do agree that that could create some very
- 10:18Speaker 1: interesting things. Now, there will be some and I agree
- 10:20Speaker 1: this there will be some shelter. This is the concern
- 10:23Speaker 1: I have is that the banks, because of their positioning
- 10:27Speaker 1: both in the lobby side of it in DC and
- 10:30Speaker 1: also through the FED, is that they could start to
- 10:33Speaker 1: put a little bit of pressure on what we will
- 10:36Speaker 1: know as stable coins. Which is why I think Ripple
- 10:39Speaker 1: is the better choice for acquiring Circle, because if Ripple
- 10:42Speaker 1: were to acquire Circle cross border payments, they will strengthen
- 10:46Speaker 1: Circle and it will strengthen the ability for a free
- 10:48Speaker 1: stable coin going forward. Timing's a big giveaway Tether. Of course,
- 10:53Speaker 1: flip Us Bank deposits in velocity and adjusted volume. That
- 10:57Speaker 1: got their attention, and of course if they have, I've
- 11:00Speaker 1: been paying attention till now. Most of these guys need
- 11:02Speaker 1: to be fired. Anyway. Bitcoin is decoupling from its traditional
- 11:05Speaker 1: risk asset and is now moving into I think will
- 11:08Speaker 1: be a new monetary stack. I talked about this earlier
- 11:11Speaker 1: in the week. Many of my money management or friends
- 11:14Speaker 1: are already starting to amp up their crypto holding percentage
- 11:18Speaker 1: to as much as ten percent of portfolios of traditional investors.
- 11:24Speaker 1: That is unheard of. One year ago, they were struggling
- 11:27Speaker 1: with one percent. In one year, that has moved to
- 11:31Speaker 1: real money managers asking the question, I think I'm going
- 11:35Speaker 1: to go with ten percent recommendations on holdings of things
- 11:39Speaker 1: like bitcoin eight and some of the other all coins
- 11:41Speaker 1: out there. So this is a big deal and this
- 11:44Speaker 1: is the beginning of it. Now, what you have to
- 11:46Speaker 1: really concern yourself with is this right here KYC by
- 11:50Speaker 1: default for wallet usage, that'll be a question mark going forward.
- 11:53Speaker 1: You can expect that from the banks. The other thing
- 11:56Speaker 1: is you'll probably see some geo fancy. Yeah, I would
- 11:59Speaker 1: agree with that. Transaction action censorship hooks most likely will
- 12:02Speaker 1: be written into it, and then we'll have yield incentives
- 12:06Speaker 1: to bait adoption. And this is going to track your flow. Guys.
- 12:10Speaker 1: I think the banks think you're going to fall for it.
- 12:13Speaker 1: I do. I think they think you are going to
- 12:15Speaker 1: fall for it. I don't think you will. And I
- 12:18Speaker 1: think that people who are in crypto today and the
- 12:20Speaker 1: ones who are coming in are starting to wake up
- 12:24Speaker 1: to a new frontier of financial freedom. And I think
- 12:27Speaker 1: it's going to go without the banks. Now, some banks,
- 12:30Speaker 1: like I said, could change and could create something that
- 12:34Speaker 1: is a little bit more alure. I think the neo
- 12:36Speaker 1: banks will be the ones that do it, not necessarily traditional.
- 12:40Speaker 1: But this is survival now for sure. And here's the
- 12:44Speaker 1: reason it's for survival. Tether announced they brought in that's
- 12:47Speaker 1: a billion of profit in Q one of twenty twenty five.
- 12:51Speaker 1: Let's just look at this for a second. They made
- 12:54Speaker 1: more profit than Blackrock with one one hundred and fiftieth
- 12:59Speaker 1: of the staff size. Step back and just think about
- 13:03Speaker 1: that for a second.
- 13:03Speaker 4: Guys.
- 13:04Speaker 1: This is the next revolution in innovation. It's something I
- 13:07Speaker 1: talk about that we're going to see individual creators, designers, engineers,
- 13:12Speaker 1: individuals become trillion dollar companies in the next decade. That's right.
- 13:18Speaker 1: You're going to see a company that is going to
- 13:20Speaker 1: have a five man team at a trillion dollars. So
- 13:23Speaker 1: that's the kind of thing that's happening within crypto going forward.
- 13:26Speaker 1: I want to go to this last clip here because
- 13:28Speaker 1: this is where stable coin demand and also standards are
- 13:34Speaker 1: going to get a little bit sketchy coming out of DC.
- 13:37Speaker 1: But here's french Hill talking about this.
- 13:39Speaker 2: Take a look to create a dollar bag stable coin
- 13:42Speaker 2: is an important strategic acum world global Well, they would
- 13:45Speaker 2: have to comply with the new federal law, right and
- 13:48Speaker 2: no one right now complies with the work that we've
- 13:50Speaker 2: done in the House or send it on a stable
- 13:52Speaker 2: coin act. Circle doesn't fully comply. Tethers, not even in
- 13:56Speaker 2: the United States. It's outside the US, it wouldn't comply.
- 13:59Speaker 2: So if we have a standard, the world will come
- 14:02Speaker 2: to that high standard for enforcement and for definition. And
- 14:06Speaker 2: you know, if the trump coin can meet that definition,
- 14:09Speaker 2: so be it. There'll be multiple competing stable coins. In
- 14:12Speaker 2: my view, you see the headlines today that the large
- 14:15Speaker 2: banks are thinking about collectively having a stable coin. It's
- 14:19Speaker 2: a new payment rail in Web three on a blockchain
- 14:23Speaker 2: to compete with other payment methodologies. I don't view it
- 14:26Speaker 2: as a store of value. I view it as debit,
- 14:29Speaker 2: cash credit, stable coin buy something institutionally or as a consumer, you.
- 14:35Speaker 3: See as hopefully disinflationary, meaning that it should take cost
- 14:38Speaker 3: out of the system.
- 14:39Speaker 2: Oh my gosh. Yeah, well blockchain generally, what attracts me
- 14:42Speaker 2: to crypto is not crypto, not bitcoin, but the operating
- 14:46Speaker 2: system benefits of blockchain. I think it takes costs out
- 14:50Speaker 2: of the system. I think for consumers it creates accessibility.
- 14:53Speaker 2: Look at the BINGI, which is Franklin Templeton's money market
- 14:57Speaker 2: account that's been tokenized. I can offer that at a
- 15:01Speaker 2: higher rate and a lower dollar amount to customers because
- 15:04Speaker 2: the costs been taken out of the system.
- 15:06Speaker 1: All right, So Frendchill has been well coached on crypto.
- 15:12Speaker 1: But I will say this, guys, and I want you
- 15:14Speaker 1: to be cautious right now, because we are approaching an
- 15:19Speaker 1: era in which it feels like crypto is becoming mainstream.
- 15:24Speaker 1: Government is in on it, everybody's for it. But don't
- 15:28Speaker 1: for one second believe that the US government is in
- 15:31Speaker 1: a position where they are going to look at crypto
- 15:34Speaker 1: the way that you and I look at crypto, and
- 15:35Speaker 1: that is a true decentralized future because control will always
- 15:40Speaker 1: be the key component. And notice that he said something
- 15:44Speaker 1: there that is very important, and that is that no
- 15:46Speaker 1: crypto stablecoiin issuers are in compliance right now, which means
- 15:51Speaker 1: they're putting those rules into place. The one rule I
- 15:54Speaker 1: hope is into place. And though the way we read
- 15:57Speaker 1: the Genius Act, it is which is going to be
- 16:00Speaker 1: interesting for banks is that fractional reserve banking won't exist
- 16:04Speaker 1: in digital currency such as stable coins. Where it will
- 16:09Speaker 1: fall apart is here KYC. It's that simple. If you
- 16:12Speaker 1: start to see KYC implementation in anything that you're fraction
- 16:17Speaker 1: that you're using within crypto, you can understand that that
- 16:21Speaker 1: is the beginning of the end. That's the problem and
- 16:24Speaker 1: the concern that I have, which is why I believe
- 16:26Speaker 1: Teather will still be a huge part of this ecosystem
- 16:30Speaker 1: globally going forward. Now, if you look at bitcoin's bull
- 16:34Speaker 1: market and how it's redefining bitcoin's role in modern portfolios,
- 16:37Speaker 1: this gets back to my point earlier, which is that
- 16:40Speaker 1: we are going to see a lot more moving into
- 16:45Speaker 1: this area. And I think it's just a matter because
- 16:48Speaker 1: the idea is once that people start to really understand
- 16:51Speaker 1: digital assets and they see the difference in performance because
- 16:55Speaker 1: it's a global market, it may change the thought process
- 17:00Speaker 1: of how investing is done. And if it does, I'm
- 17:03Speaker 1: not sure that even our traditional investing houses today, whether
- 17:07Speaker 1: you're a fidelity investor, you're someone at buying ETFs at
- 17:10Speaker 1: ibit with black Rock, or you're going out there on
- 17:14Speaker 1: the open market and you're figuring it out for yourself
- 17:17Speaker 1: and getting the best yields, that I think is the
- 17:20Speaker 1: market that has yet to be discovered by mainstream and
- 17:24Speaker 1: when it is, that'll be the real question going forward.
- 17:27Speaker 1: Just to give you an example of this, this is
- 17:29Speaker 1: a taste of mainstream, but the taste is coming from
- 17:32Speaker 1: institutional and this is a good example. Ibit number one,
- 17:37Speaker 1: all ETIF and flow yesterday as a first I believe
- 17:41Speaker 1: the mighty vous took a rare day off. And also
- 17:45Speaker 1: the byproduct of these all time high induced feeding frenzies
- 17:48Speaker 1: that Balshunis is talking about is that this is traditional
- 17:53Speaker 1: finance just playing ketchup. All right, traditional finance just playing ketchup.
- 17:59Speaker 1: Get ready for when we see a new mindset going forward.
- 18:04Speaker 1: I call it the crypto mindset, and it changes the
- 18:07Speaker 1: game dramatically. Everybody else is running for the doors right now,
- 18:11Speaker 1: and they're hoping that DC has got a safety net
- 18:14Speaker 1: to catch them. We'll get more on this for you guys.
- 18:16Speaker 1: If you're not in the Diamond Circle, get in right now.
- 18:19Speaker 1: It's a great place to get additional content, and you
- 18:22Speaker 1: can also reach out to me directly over on my
- 18:24Speaker 1: Telegram group. I usually leave a link down below, so
- 18:27Speaker 1: use that only one. It's the only link that we
- 18:30Speaker 1: have directly to me. And of course, if you're not
- 18:32Speaker 1: following me an X, do that it's at Paul Barrett.
- 18:34Speaker 1: We'll catch you next time right here on Techpath