Latest / The Paul Barron Crypto Show / $100mil Ethereum Mega-Strategy!🔥$BTCS CEO Charles Allen INTERVIEW

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$100mil Ethereum Mega-Strategy!🔥$BTCS CEO Charles Allen INTERVIEW · The Paul Barron Crypto Show

0:05
Speaker 1: Today we're going to dive into eth treasury companies and
0:08
Speaker 1: a lot around the trends that are starting to shape
0:10
Speaker 1: Wall Street. You guys don't want to miss it. My
0:12
Speaker 1: name is Paul Barren. We'll come back in to the show.
0:14
Speaker 1: Let's get into it today. I do want to thank
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0:55
Speaker 1: Let's get into a little bit about the topic today.
0:57
Speaker 1: And we did a interview almost four years ago with
1:02
Speaker 1: a company called BTCS at that time a bitcoin related
1:06
Speaker 1: company that was looking at starting to trade on guess
1:10
Speaker 1: where the stock exchange. And as we start to see
1:13
Speaker 1: the strategy around Wall Street, we thought, let's get into
1:16
Speaker 1: a little bit more of a detail around this. I
1:18
Speaker 1: want to go to a clip real quick, just to
1:19
Speaker 1: give you an idea of where they were.
1:21
Speaker 3: Take a look Nasdak.
1:22
Speaker 4: BTCS a US based blockchain infrastructure company, quietly leading and
1:26
Speaker 4: building without much recognition. BTCS was the first publicly traded
1:30
Speaker 4: blockchain company in the world, long before institutions took crypto. Seriously,
1:35
Speaker 4: we're not just building tech, we're backing it. BTCS holds
1:38
Speaker 4: over fourteen thousand, six hundred feth In the first quarter
1:42
Speaker 4: of twenty twenty five, our revenue still climbed two hundred
1:45
Speaker 4: and seventy four percent year over year, proving our business
1:47
Speaker 4: scales even in volatility.
1:49
Speaker 1: All right, so I want to bring on Charles Allen,
1:51
Speaker 1: who's CEO over there, And as I said, we've had
1:53
Speaker 1: him on the show before, So welcome back in Charles.
1:55
Speaker 5: How are you. I'm great, Paul, thanks so much for
1:57
Speaker 5: having us back.
1:58
Speaker 1: Yeah, long time since we had a chance really break down.
2:00
Speaker 1: A lot of things have changed for you. Give us
2:03
Speaker 1: a rundown as I'm looking at the digital asset treasury
2:06
Speaker 1: companies in general. If you look at these, of course
2:08
Speaker 1: are all the eth uh companies out there. Obviously btcs
2:12
Speaker 1: setting in right there right now, market caap around forty
2:15
Speaker 1: six mils. So give me a rundown of where you
2:18
Speaker 1: guys are and your strategy right now.
2:20
Speaker 2: For us, the eighth treasury strategy is a byproduct of
2:24
Speaker 2: our operations, and I you know, we're kind of changing
2:27
Speaker 2: a little bit of the marketing around that because it's
2:28
Speaker 2: such a it's such a hot trade. But I think
2:30
Speaker 2: we're the only public company focused on Ethereum that's actually
2:34
Speaker 2: doing operations on Ethereum's infrastructure.
2:37
Speaker 5: And you know, we're doing that.
2:38
Speaker 2: Through running solo nodes, running running nodes for rocket Pool
2:42
Speaker 2: and block building and vertically integrating nose and that's kind
2:45
Speaker 2: of the you know, the fuel that's driving the revenue growth.
2:48
Speaker 2: And I think what really sets us apart in terms
2:51
Speaker 2: of operations.
2:52
Speaker 1: All right, So when you are comparing this to your
2:55
Speaker 1: previous life when you were more in bitcoin, I'm looking
2:58
Speaker 1: at your eth versus bigcoin and the models compared here.
3:02
Speaker 1: One of the things that of course, play into this
3:05
Speaker 1: is the asset breakdown, especially around how bitcoin is being
3:09
Speaker 1: held versus what's happening within the eth ecosystem.
3:12
Speaker 3: Explain to me a little bit more.
3:14
Speaker 1: Is btcs highly undervalued right now because of how you
3:17
Speaker 1: guys have shifted your business model.
3:19
Speaker 2: I think so we shifted this the model back in
3:22
Speaker 2: twenty twenty one right away from bitcoin into ethereum.
3:25
Speaker 5: We became the first public company focused on.
3:28
Speaker 2: Ethereum, and so I don't think anyone really understood what
3:31
Speaker 2: we were doing four years ago. I think now with
3:33
Speaker 2: Tom Lee coming on with Joe Lubin, I think there's
3:36
Speaker 2: a lot more Wall Street recognition around the value of
3:38
Speaker 2: theorium in the public markets and this business model of
3:42
Speaker 2: having productive assets you can put.
3:43
Speaker 5: To work versus just holding.
3:46
Speaker 2: Bitcoin on your balance sheet or you know, if you're
3:48
Speaker 2: a bitcoin minor, and we were the first public bitcoin
3:50
Speaker 2: minor in the world, and so you know, we don't
3:53
Speaker 2: love that model. It's a very capital intensive model. We
3:55
Speaker 2: think this is an asset light model, where your assets
3:58
Speaker 2: are productive, non productive, they're not depreciating, they're appreciating well.
4:03
Speaker 1: And I think that's the key difference between what we've
4:05
Speaker 1: seen in the bitcoin treasury companies versus what we're now
4:08
Speaker 1: starting to discover on the E treasury companies. I want
4:11
Speaker 1: to flip over to a quick clip here from Tom
4:14
Speaker 1: Lee that really explains maybe the strategy going forward.
4:17
Speaker 3: Take a look.
4:18
Speaker 6: Did any of you buy this circle IPO or own Circle?
4:22
Speaker 6: They just went public ten days ago at thirty one
4:25
Speaker 6: dollars it's now two hundred and forty two.
4:28
Speaker 5: What is the ticker code?
4:29
Speaker 6: CrCL cl CEL. Here's the thing. Circle runs on ethereum.
4:36
Speaker 6: Stable coins run on ethereum. So I think Ethereum is
4:40
Speaker 6: going to make a big comeback as well. Circles like
4:42
Speaker 6: the best ip in five years, correct and trains it
4:44
Speaker 6: one hundred times ebitah. For some funds it has made
4:47
Speaker 6: their year. Wow, it's it's what made put people in
4:50
Speaker 6: the top one percent. Circle is like god god level stock.
4:54
Speaker 7: Right.
4:55
Speaker 6: Stable coins are only two hundred fifty billion today. Correct,
4:57
Speaker 6: it's thirty percent of the gas fees on ETHERORYM. A
5:00
Speaker 6: ten times increase in stable coin creations is an exponential
5:04
Speaker 6: growth in gas fece free theoreum. So I think Ethereum
5:08
Speaker 6: is a very direct beneficiary of Wall Street trying to
5:11
Speaker 6: equitize crypto. Correct and crypto tokenizing equity, and then of
5:16
Speaker 6: course we're seeing it that because robin hood is.
5:17
Speaker 5: They just announced using a layer two on ethereum to
5:20
Speaker 5: be able to tokenize equities.
5:21
Speaker 1: When you look at your proposition and what you guys
5:25
Speaker 1: are doing, because you have a lot of revenue generating centers,
5:27
Speaker 1: I was looking at a tweet from you guys in
5:30
Speaker 1: terms of how that's being built, and when you look
5:33
Speaker 1: at that and even over on your website, it kind
5:35
Speaker 1: of breaks it down. Builder plus note ops, chain, q,
5:38
Speaker 1: et cetera. Why not just change the name so people
5:43
Speaker 1: understand that this is an ether play as opposed to
5:46
Speaker 1: a Bitcoin play.
5:48
Speaker 2: Well, you know, it's funny you say that it actually
5:50
Speaker 2: BTCS actually stands for Blockchain Technology Consensus Solutions, So it
5:54
Speaker 2: makes cool complete defense, right, Like, yeah, we are a
5:58
Speaker 2: blockchain technology consensus. The consensus, we run the infrastructure, we
6:01
Speaker 2: build the blocks, so it makes a lot of sense.
6:04
Speaker 5: We've debated changing the name.
6:06
Speaker 2: It's it's frankly a lot of work, and when you
6:08
Speaker 2: actually understand what it stands for, it's like, okay, I
6:11
Speaker 2: get it. But yes, a lot of people have said,
6:14
Speaker 2: why don't you put ether in your name? And you know,
6:16
Speaker 2: we're also block building on Finance chain, which is a
6:18
Speaker 2: fork of Ethereum. I kind of look at that, as
6:21
Speaker 2: you know, our block builder was eighty percent of our
6:23
Speaker 2: revenue in UH in Q one. We've already announced that
6:27
Speaker 2: Q two is going to be record revenue, which is
6:30
Speaker 2: above the two point three million we did in Q
6:33
Speaker 2: four last year. And so we basically built this block
6:37
Speaker 2: building machine right now, you know, just to put things
6:39
Speaker 2: in perspective, we peaked it over two point seven percent
6:42
Speaker 2: of all blocks built on Ethereum, so two point seven
6:45
Speaker 2: percent of all transactions that went through Ethereum are block
6:48
Speaker 2: builder built. And so we see, you know, huge scale
6:52
Speaker 2: if we can have our validator nodes, you know, providing
6:56
Speaker 2: that consensus and our block builder.
6:58
Speaker 5: But once we've built that block builder.
7:00
Speaker 2: We could basically take that tech and think of it
7:01
Speaker 2: as a you know, a revenue generating box that runs
7:04
Speaker 2: on one hundred and twenty vaults, and if we can
7:06
Speaker 2: put an adapter and there and plug into another chain,
7:09
Speaker 2: that's scale. But we've done that for Finance, right. I
7:11
Speaker 2: think of it as you know, you've got a box
7:12
Speaker 2: that runs on two hundred and forty vaults. You know,
7:14
Speaker 2: that's why we keep it blockchain technology consensus solutions as
7:17
Speaker 2: opposed to Thereum. With that set, Ethereums our core treasury asset,
7:21
Speaker 2: and our goal is to basically grow the number of
7:25
Speaker 2: eight per share we have as well as driving revenue.
7:28
Speaker 2: And we're doing that. You know, we want to do
7:29
Speaker 2: that through share appreciation and strategic capital raises, you know,
7:33
Speaker 2: leveraging DeFi as well as you know, traditional financial metrics.
7:37
Speaker 1: If you take a look at what you know Sharpling
7:40
Speaker 1: gaming is doing, bitmine, et cetera, they're using some different
7:44
Speaker 1: approaches than what you're proposing.
7:46
Speaker 3: Explain that a little bit further.
7:48
Speaker 5: Well, I think we're very different.
7:49
Speaker 2: I mean, one, in both of those companies, you have
7:52
Speaker 2: high profile chairman's, but they're not actually at the company
7:55
Speaker 2: as a CEO. Right so I sit on the board
7:56
Speaker 2: of another company and I sit on four meetings ear
7:59
Speaker 2: so it's to tbd how involved they'll be on a
8:02
Speaker 2: day to day basis. Those models are pretty much by Ethereum.
8:06
Speaker 2: Have an investment manager, deploy it and stake it via
8:10
Speaker 2: a qualified custodian, whether that's figment, block deam, and you
8:13
Speaker 2: know one of the big players, Kill, et cetera. We
8:15
Speaker 2: actually run our own notes so we're in there doing
8:17
Speaker 2: the tech, we're block building. We're I think a top
8:20
Speaker 2: five block builder right now, so I think that differentiates
8:24
Speaker 2: us hugely from the other players. And then you put
8:27
Speaker 2: on top of that, our strategy to access to capital
8:30
Speaker 2: markets is very different.
8:31
Speaker 5: Right when I was investment banker for ten years prior
8:33
Speaker 5: to getting into crypto.
8:35
Speaker 2: When we went public in twenty fourteen, and so we're
8:37
Speaker 2: now I think the only public company using DeFi as
8:41
Speaker 2: a way to fund the business. So we're borrowing on AVE.
8:44
Speaker 2: We're going up to about forty percent. You know, we've
8:47
Speaker 2: we've recently announced that we intend to raise one hundred
8:49
Speaker 2: million dollars this year and we're going to borrow up
8:52
Speaker 2: to forty percent. So that's going to be through convertible notes.
8:54
Speaker 2: We just did a have an arrangement with ATW where
8:57
Speaker 2: we borrowed about seven point eight million actually participate HIT
9:00
Speaker 2: in that offering as well. So you couple that with
9:02
Speaker 2: AVE and using ATM sales, and I think we should
9:05
Speaker 2: be able to have the least amount of dilution and
9:08
Speaker 2: grow our balance sheet with more eth especially with the
9:12
Speaker 2: actual operations much better than the competitors.
9:16
Speaker 3: I'm looking at the strategic ETH Reserve. You guys made
9:19
Speaker 3: the list here.
9:20
Speaker 1: I'm looking obviously at the top right there, the foundation
9:22
Speaker 1: sharplank coming in. Then you've got some of the others
9:26
Speaker 1: that we've started to talk about here recently, and btcs
9:30
Speaker 1: right there.
9:31
Speaker 3: So about to flip the arbitrum dow.
9:33
Speaker 1: Interesting, is there a plan here outside of what you've
9:36
Speaker 1: talked about here initially to start acquisition or really ramping
9:40
Speaker 1: up your acquisition for more ETH to basically claim the
9:44
Speaker 1: chart here.
9:45
Speaker 2: Yeah, as I mentioned before, we've we've we've recently announced
9:49
Speaker 2: that we planned to raise one hundred million dollars to
9:51
Speaker 2: buy additional ETH that would fuel our sneaking operations. We
9:55
Speaker 2: could vertically integrate with our block building and run validators
9:59
Speaker 2: through rocket pools.
10:00
Speaker 5: So unlike some of.
10:01
Speaker 2: The other Treasury strategies that are just simply taking the
10:05
Speaker 2: ETH and giving it to a third party custodian to
10:07
Speaker 2: stake for them and paying fees, we're.
10:09
Speaker 5: Actually doing that work ourselves.
10:10
Speaker 2: So I think we have the ability to, you know,
10:13
Speaker 2: as we raise more money to really ramp up revenue
10:16
Speaker 2: and eat for share.
10:18
Speaker 1: Well, I've got a clip here and I want to
10:20
Speaker 1: kind of get your opinion on this because I see
10:22
Speaker 1: some synergies here, maybe with some other you know ETH
10:25
Speaker 1: companies that especially around the asset holding itself.
10:29
Speaker 3: Let me play a clip roll quick for you guys.
10:31
Speaker 6: The third lever you're pulling is that you have a
10:34
Speaker 6: market price to NAV and you have an equity and
10:37
Speaker 6: then there's other treasury companies outside price to NETSEL. So
10:42
Speaker 6: if something's treating it NAV price net asset value and
10:46
Speaker 6: you trading it three times, you could do mergers and
10:49
Speaker 6: buy other treasury companies like hey, let's create a business
10:52
Speaker 6: that helps the DeFi ecosystem and lend out eth steak
10:55
Speaker 6: evils staking and that you don't really do in bitcoin,
10:58
Speaker 6: but actually on ethereum it's a huge benefit, all right.
11:01
Speaker 1: So tom Lee talking about mergers there with other stakeholders
11:06
Speaker 1: like that, and I'm looking at what you guys bring
11:10
Speaker 1: to the table, which is a lot more of the
11:12
Speaker 1: utility tools to help companies like what many of these
11:17
Speaker 1: companies are dealing with right now, SHARPLYINGK whoever you want
11:20
Speaker 1: a list, what about a merger?
11:22
Speaker 2: I mean it's always a possibility, I think right now,
11:27
Speaker 2: you know we're it all depends on valuation, right, I mean,
11:30
Speaker 2: if someone wanted to buy us, and we're trading close
11:33
Speaker 2: to NAV, we would want a major premium. Right if
11:37
Speaker 2: you know what is Tom Tom Lee's companies. I mean
11:41
Speaker 2: when they're they're up at like eight to ten times NAV.
11:44
Speaker 2: You know, I imagine over time that these navs will collapse
11:48
Speaker 2: and compared to let's say an ETF where they're going
11:52
Speaker 2: to trade at NAV, if you are holding treasury on
11:55
Speaker 2: your balance sheet for an operating company, you can trade
11:59
Speaker 2: at a premium for a few reasons. One, you can
12:02
Speaker 2: add leverage that an ETF cannot do. So we're looking
12:04
Speaker 2: to you know, we have we have been borrowing on
12:07
Speaker 2: AVE and we're looking to expand that you can put
12:10
Speaker 2: on convertible notes.
12:11
Speaker 5: So there's a lot of things you can do to
12:14
Speaker 5: increase the.
12:14
Speaker 2: Value that would justify trading at you know, a premium
12:18
Speaker 2: peer and AD Right.
12:19
Speaker 5: For us, it's it's.
12:20
Speaker 2: The financing mechanisms as well as the operations. I mean,
12:24
Speaker 2: I think that's something that none of.
12:25
Speaker 5: The other EAT treasury companies are doing today.
12:27
Speaker 2: They're just you know, hey, you know, I want to
12:29
Speaker 2: throw ether on the balance sheet, and we're a biotech company,
12:32
Speaker 2: and let's do that.
12:33
Speaker 5: For us, we've been running validators.
12:34
Speaker 2: We've been in this business since, you know, on the
12:36
Speaker 2: ethereum side since twenty twenty one, in the cryptoside since
12:39
Speaker 2: twenty fourteen. So we're actually looking to you know, build
12:42
Speaker 2: the rails that you know, the financial future that that's
12:45
Speaker 2: going to be built on ethereum. You know that that
12:47
Speaker 2: infrastructure foundation for the future.
12:49
Speaker 1: The key here, of course is, you know, how much
12:51
Speaker 1: bitcoin if you look at all of these different companies
12:54
Speaker 1: that are going to eat treasuries, I mean, how much
12:57
Speaker 1: Bitcoin could be coming out and possibly into eth especially
13:01
Speaker 1: with this new treasury model. Do you what do you
13:04
Speaker 1: think the size of that market could be.
13:06
Speaker 2: Based I think there's probably you know anywhere, and this
13:09
Speaker 2: is a broad range two to ten billion dollars worth
13:11
Speaker 2: of capital that's going to flow into digital asset treasury
13:15
Speaker 2: strategies and public companies. As you start to get more
13:18
Speaker 2: and more players, they start to become me two players.
13:20
Speaker 2: Right for Bitcoin, You've obviously got you know, Michael Salor
13:22
Speaker 2: and Strategy that's doing extremely well. You've got Metaplanet, you
13:25
Speaker 2: had David Bailey come out. But there's a very a
13:29
Speaker 2: very specific recipe if it works in the public markets
13:31
Speaker 2: for these deals, right, it's typically a high profile, you know,
13:34
Speaker 2: individual that comes on as the chairman of the boards.
13:37
Speaker 2: If it's into a new company it's a sub ten
13:39
Speaker 2: million dollar market cap company that's got a you know,
13:42
Speaker 2: kind of a failing business model, and then it jumps
13:45
Speaker 2: and we'll, you know, we'll see what happens. Right for example,
13:47
Speaker 2: with with you know, Sbat Charpling, they had a big
13:51
Speaker 2: a lot of their investors come out of the market
13:53
Speaker 2: when they filed the resale registration statement that basically opened
13:56
Speaker 2: up the pipe shares to be able to be sold.
13:58
Speaker 5: Now it's traded close to NAB.
14:02
Speaker 2: And it started to climb back up. But I think,
14:04
Speaker 2: you know, in my mind, trading it a huge premium
14:08
Speaker 2: to NAB is a trade. It's not a long term business.
14:10
Speaker 2: I think overall, maybe you get a two times like
14:13
Speaker 2: like micro strategy if you're lucky at three, But trading
14:16
Speaker 2: a ten times NAB, I think is a very hard
14:18
Speaker 2: proposition because what's going to happen is smarttheedge funds will
14:21
Speaker 2: come in and say, well, what else do you have,
14:23
Speaker 2: and they will short your stock and you know, either
14:27
Speaker 2: you know, buy e short your stock or if they can't,
14:29
Speaker 2: if that's not a good cover, they'll just buy another
14:31
Speaker 2: equity that it's just different NAV premium and squeeze the arbitrage.
14:37
Speaker 2: So overall, I think if the market's are rational, and
14:40
Speaker 2: they aren't always, you know, Digital Acid Treasury company should
14:44
Speaker 2: trade at some sort of a premium to NAB based
14:46
Speaker 2: on their operations. But it's if they differ too much
14:49
Speaker 2: from company to company, I think the market will realize
14:52
Speaker 2: that and try to bring them back to some sort.
14:55
Speaker 1: Of much more neat, almost commodity driven. It kind of
14:58
Speaker 1: brings up this next point because this is the Schwab network.
15:01
Speaker 3: This is a clip that kind of breaks.
15:03
Speaker 1: Down the possible invasion into ethereum, maybe even coming more
15:09
Speaker 1: from bitcoin.
15:10
Speaker 3: Take a look at this clip.
15:11
Speaker 5: Look, this is all the rape.
15:12
Speaker 7: They're going to be tokenizing private security, specifically SpaceX, and
15:16
Speaker 7: they're looking to more additional companies AI companies that retail
15:21
Speaker 7: investors do not have access to right now. You have
15:24
Speaker 7: to be an accredited investor. I can only imagine though,
15:27
Speaker 7: that we're going to see more and more of these
15:29
Speaker 7: announcements and does that take away any demand from bitcoin?
15:35
Speaker 7: That's kind of a.
15:36
Speaker 5: Question I have.
15:37
Speaker 7: Do we see some of the demand that would have
15:39
Speaker 7: gone to bitcoin go towards some of these other products.
15:43
Speaker 8: I mean, once and finally, I think celebrated so many
15:45
Speaker 8: different ways to invest in this space where for so
15:48
Speaker 8: long it was like Bitcoin and various Bitcoin entities were
15:51
Speaker 8: somewhat of our only vehicle. But that's no longer the case.
15:54
Speaker 8: I think the latest craze of tokenization is going to
15:57
Speaker 8: be a fun one to follow every single week. We
15:59
Speaker 8: have so many great things to talk about.
16:01
Speaker 3: All right.
16:01
Speaker 1: So obviously Bitcoin being possibly the one that would take
16:05
Speaker 1: a little bit of a hit here, and shab is
16:07
Speaker 1: getting into the idea of an ether hype that could
16:10
Speaker 1: be incoming. Do you feel like the hype is incoming
16:13
Speaker 1: and how will that affect you?
16:15
Speaker 3: Guys?
16:16
Speaker 5: Oh, I think it's going to be great.
16:17
Speaker 2: I mean, we have, you know, a healthy balance sheet
16:20
Speaker 2: of Ethereum. If you look at it, Ethereum's at like
16:23
Speaker 2: twenty twenty one prices now right like like four years later,
16:27
Speaker 2: it's training where it was versus Bitcoin.
16:30
Speaker 5: It's like all time high.
16:31
Speaker 2: So to me, I think that there's the biggest opportunity
16:35
Speaker 2: and potential upside from Ethereum because it hasn't had a
16:38
Speaker 2: big run, but there's so much that's getting built on it.
16:40
Speaker 5: You've got.
16:41
Speaker 2: You know, as you touched on circle, all the stable
16:43
Speaker 2: coins are built on Etheroreum, all the institutions are piling
16:46
Speaker 2: into ethereum. Tokenization's happening on ethereum. And so with all
16:49
Speaker 2: of these things happening on it, and with that, you know,
16:53
Speaker 2: thesis in the market changing and leaning towards ethereum.
16:56
Speaker 5: I think it's just it's just bubble.
16:57
Speaker 2: It's like a spring that's getting you know, just waiting
17:01
Speaker 2: to explode. You know, it's not even hype, like there
17:03
Speaker 2: are real world assets that are getting tokenized. This is
17:05
Speaker 2: not a meandpoint height. This is you know, Ethereum, in
17:08
Speaker 2: my mind, is going to be the financial rails that
17:10
Speaker 2: makes the digital economy work. And if you believe that thesis,
17:13
Speaker 2: it still ground zero for ethereum when you're at twenty
17:15
Speaker 2: twenty one prices.
17:16
Speaker 5: I mean, that's why this money's flowing in.
17:18
Speaker 2: That's why we just announced that we intend to raise
17:20
Speaker 2: you know, one hundred million dollars to buy more ethereum.
17:22
Speaker 1: How do you see Wall Street playing this angle? Tom
17:25
Speaker 1: Lee talks a little bit about this. Let me run
17:27
Speaker 1: a clip on this, and I want to get your
17:29
Speaker 1: opinion on that.
17:29
Speaker 6: Take a Look, you create what it calls a structural put.
17:32
Speaker 6: The US government might say, my strategy is six hundred
17:35
Speaker 6: thousand of this already. Yeah, I'll pay two hundred percent premium,
17:38
Speaker 6: and it was cheaper than paying a million bucks per bitcoin.
17:42
Speaker 6: So that's called a sovereign put.
17:44
Speaker 5: Right.
17:44
Speaker 6: Well, guess what in the ethereum world, because it's a
17:46
Speaker 6: staked token, if one of these treasury asset companies gets
17:50
Speaker 6: to five percent of ether, they are hugely important to
17:53
Speaker 6: the eth ecosystem one hundred percent, so then their multiple
17:56
Speaker 6: should go up. If they do a Goldman dollar and
17:59
Speaker 6: it run on ethereum, they want to make sure the
18:02
Speaker 6: ethereum network is secured, so eventually they're going to be
18:06
Speaker 6: buying a lot of ethereum, right, But then the state
18:08
Speaker 6: dentity already has it, so maybe they'll just buy the
18:10
Speaker 6: stake identity. Right, so the state dentity has a Wall
18:14
Speaker 6: Street put.
18:14
Speaker 5: Right.
18:15
Speaker 3: What do you think about that, Charles.
18:17
Speaker 5: I, to some extent agree.
18:19
Speaker 2: I think the piece that miss that's missing from that
18:22
Speaker 2: analogy is really, you know, the devil's in the details.
18:25
Speaker 2: Most of the institutions buying eth and staking it are
18:28
Speaker 2: not staking it themselves. You know, there's this kind of
18:31
Speaker 2: oligopoly of smaller players that control all of the stake,
18:34
Speaker 2: even though you can move it from one to another.
18:36
Speaker 2: So I don't think just owning the crypto unless you're
18:40
Speaker 2: staking it yourself, really is doing that. If you're just
18:43
Speaker 2: passively holding it and let someone letting someone else manage
18:46
Speaker 2: it and stake it for you, So it's kind of correct.
18:49
Speaker 2: It's almost like the pooling of bitcoin minors. So I
18:52
Speaker 2: get that point, but I think unless you're actually going
18:55
Speaker 2: to operate your own validator nodes and be a part
18:57
Speaker 2: of the consensus mechanism yourself, you really just handing that
19:00
Speaker 2: off to somebody else, and that the person who handled
19:02
Speaker 2: it off to has that control, and then if you
19:04
Speaker 2: go down another layer, who controls what transactions end up
19:08
Speaker 2: on chain? Ye, that's the business we're in block building
19:11
Speaker 2: like Titan and you know Beaver are I think north
19:15
Speaker 2: of if you include.
19:16
Speaker 5: Beaver build or excuse me a build a net.
19:19
Speaker 2: They're over ninety percent of all blocks that get built
19:21
Speaker 2: go through two players.
19:23
Speaker 5: And that's what we're for like three percent of that
19:25
Speaker 5: market right now.
19:26
Speaker 1: Why wouldn't they go into note operations? I mean it
19:29
Speaker 1: would seem like the natural evolution of maybe these treasury companies.
19:33
Speaker 2: Because you need technical expertise, so they're just outsourcing it
19:36
Speaker 2: to people that know what they're doing.
19:37
Speaker 3: Interesting.
19:38
Speaker 5: I mean, that's what we've been doing.
19:39
Speaker 2: It since twenty twenty one, and it's you know, it
19:42
Speaker 2: took us a while to get in to do that. Well,
19:45
Speaker 2: the block building, we've been doing that for you know,
19:48
Speaker 2: coming up on you know, almost two years, and so
19:51
Speaker 2: it's something that it's an easy lift to say, Hey,
19:53
Speaker 2: I want to I want to take a failing nasdat
19:56
Speaker 2: company with a sub ten million dollar market gap and
19:58
Speaker 2: put two and fifty million dollars in it, and we
19:59
Speaker 2: want turnkey in a month.
20:01
Speaker 5: That's easy.
20:02
Speaker 2: You know, you get the best manager, you go, you
20:05
Speaker 2: get a while provider, you go get you know, you
20:07
Speaker 2: get an infrastructure provider and races and you pay your fees. Right,
20:12
Speaker 2: there's a cost to do that. We don't pay those
20:13
Speaker 2: fees because we do it ourselves. But I agree, like
20:16
Speaker 2: as more institutions come in, like that's what we want
20:19
Speaker 2: to do. We want to control block space. We want
20:20
Speaker 2: to control we want to control a piece of the network.
20:25
Speaker 2: We're just doing it at you know, a couple of
20:26
Speaker 2: layers deeper.
20:27
Speaker 1: Well, listen, there's a lot happening around ETH right now
20:30
Speaker 1: that I think still people are missing. I want to
20:32
Speaker 1: play a clip because this gets into poly market and
20:36
Speaker 1: really kind of the structure around how politics are playing
20:38
Speaker 1: out might play this, And then I want to hit
20:40
Speaker 1: to the gaming part of this, because I think all
20:42
Speaker 1: this is relative to the growth of ETH as a whole.
20:45
Speaker 3: Take a look. We're all trying to figure out where
20:47
Speaker 3: this is all headed.
20:48
Speaker 2: You know, we all saw him come on, but really
20:50
Speaker 2: only come on hot seventy two hours out.
20:53
Speaker 9: Yeah, and remember the polymarkets also days out it had
20:59
Speaker 9: Andrew above him. And went back to my team, I said,
21:04
Speaker 9: zoehann is going to win this race, and we strategically
21:07
Speaker 9: knew that we should not be in the crowded Democratic primary.
21:11
Speaker 9: And then I decided I was going to run on
21:13
Speaker 9: the independent line. And everyone thought it was hilarious. They said,
21:16
Speaker 9: what are you doing? Who's laughing now? I said, Andrew,
21:22
Speaker 9: are you that level of arrogance? I'm the city mayor,
21:25
Speaker 9: I'm the city of mayor of the City of New York,
21:28
Speaker 9: and you expect for me to set aside when you
21:31
Speaker 9: just lost to Johan by twelve points. And that's the
21:36
Speaker 9: highest level of arrogance.
21:38
Speaker 5: Well, look at polymarket. He is still up relative to you.
21:42
Speaker 1: All right, so you've got poly market now, and we'll
21:45
Speaker 1: call it eth directing politics. You could take a look
21:49
Speaker 1: at this tweet here's Ferguson over immutable. He's talking about
21:51
Speaker 1: if GTA this is grand theft auto, if they launch
21:54
Speaker 1: a gaming token.
21:55
Speaker 3: You know what would that look like?
21:57
Speaker 1: How long before you start to we start to see
22:00
Speaker 1: the main bitcoiners starting to move in this direction, like
22:03
Speaker 1: Michael Sailor and micro Strategy. Do you think they'll start
22:07
Speaker 1: to actually come into the ETH ecosystem.
22:09
Speaker 2: The Bitcoin maximalists probably will never come into the ecosystem,
22:15
Speaker 2: you know, primarily because you know bitcoin has twenty one
22:18
Speaker 2: million tokens that that's the cap. Ethereum's a more flexible uh,
22:24
Speaker 2: you know, issue in structures actually can be deflationary. So
22:28
Speaker 2: I would be surprised if you see, you know, Michael
22:30
Speaker 2: Sailor come over given.
22:33
Speaker 5: His kind of view on ethereum. I think he's mentioned
22:36
Speaker 5: it maybe once.
22:38
Speaker 2: It's you know, I think he like for the big
22:40
Speaker 2: I put him in the bitcoin maximalists category.
22:42
Speaker 5: I don't think a lot of them move over.
22:45
Speaker 2: I think for people that are more, you know, pragmatic
22:48
Speaker 2: and look at the utility that Ethereum brings. Are going
22:50
Speaker 2: to look at it and be like, oh my god,
22:51
Speaker 2: this is really amazing. This is this is going to
22:54
Speaker 2: be the technology that changes the way assets are moved globally.
23:00
Speaker 2: And that could be token I securities, it could be
23:03
Speaker 2: concert tickets, it can be I mean stable coins. There's
23:06
Speaker 2: a great example. I think it's going to be the
23:07
Speaker 2: way assets move around the world. I think most of them,
23:10
Speaker 2: the maximists, will probably never come.
23:12
Speaker 1: Over interesting well, I mean, the the key here, I
23:15
Speaker 1: think as we start to see maybe crypto in general,
23:19
Speaker 1: especially if Bitcoin and Ethereum lead out the market, you
23:22
Speaker 1: know when it comes to Wall Street, which I feel
23:24
Speaker 1: like is going to be the case right now with
23:26
Speaker 1: the way that everything's going, eth has still got a
23:29
Speaker 1: very powerful position. So I anticipate you guys are going
23:32
Speaker 1: to have some great success. Charles has been great having
23:35
Speaker 1: you on today. Thank you so much for coming in.
23:37
Speaker 2: We appreciate it, all right, thank you so much for
23:39
Speaker 2: having me, Paul, I appreciate it.
23:40
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