Latest / The Starting Block / AI agents will score $4T in fees by 2035 - Sharplink

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AI agents will score $4T in fees by 2035 - Sharplink · The Starting Block

0:07
Welcome back to The Starting Block.
0:08
Happy Thursday to you, wherever
0:09
you're joining us this morning.
0:11
It's been an interesting week so
0:12
far. And the last two shows in
0:14
the last few days, we focused a lot
0:16
on the markets, obviously with
0:17
Bitcoin above the $85,000
0:19
mark at the start of the week, that
0:21
got a lot of people talking about
0:22
whether the bear market is well and
0:24
truly over and where we are going
0:26
from here. So if you missed those
0:27
shows, we had Andre Dragos
0:29
from Bitwise on the show on
0:31
Tuesday.
0:32
And yesterday we were joined by
0:34
Alice Lu from CoinMarketCap, their
0:35
head of research, to talk a little
0:37
bit about that.
0:38
And we were also in New York City
0:39
last week covering Avalanche
0:41
Summit. We broadcast the starting
0:43
block live for two days and we had
0:45
some absolutely fantastic
0:46
conversations.
0:47
It was a great pleasure to sit down
0:49
with Kevin O'Leary, Mr. Wonderful,
0:50
as many of you will know him here on
0:52
X or on the internet.
0:54
And we also had some great
0:55
conversations with the likes of
0:57
former CFTC chair,
0:59
Chris Giancarlo.
1:00
And former CFTC commissioner
1:03
and
1:05
a handful of other big name guests
1:07
at the event last week.
1:09
If you wanna catch up on some of
1:10
those conversations you can find
1:12
that on the Blocks
1:14
YouTube channel. Just go and click
1:15
on the live channel and you can
1:16
catch up on those full three to four
1:18
hour live streams that we had there.
1:20
Really enjoyed my conversation with
1:21
Caroline Pham last week as well.
1:23
Too many names to mention, if I'm
1:25
honest. And you can Catch up on some
1:26
of the clips on the blocks social
1:28
media. If you're joining us on X
1:29
this afternoon.
1:30
Or morning wherever you are.
1:32
Please like and retweet the
1:33
broadcast so we can get more people
1:34
joining us for today's conversation.
1:36
It's gonna be great to have Joe
1:37
Challon back in the hot seat to
1:40
talk to us about agentic finance.
1:41
We'll be casting the net pretty
1:43
wide in terms of our conversation,
1:45
but he's been putting out some
1:46
really interesting content on
1:48
agentic, finance, AI agents,
1:50
and what they're gonna do to
1:52
traditional finance in the next
1:54
eight years.
1:55
So I'm looking forward to that
1:56
conversation that's coming up in a
1:57
few minutes time.
1:58
If you are new here.
2:00
Hello, my name is Gareth Jenkinson.
2:01
I'm the head of multimedia at the
2:03
Block. And this is how we do things.
2:04
We start off the show with the Block
2:06
briefing, which is a rundown of the
2:08
top stories you need to know in the
2:09
last 24 hours, curated from
2:11
the Block's newsroom.
2:13
We've got a fantastic group of
2:14
journalists that have been covering
2:15
the industry for many, many years.
2:17
And we like to think that we are
2:19
the definitive voice when it
2:21
comes to accurate news and
2:22
reporting on everything Bitcoin,
2:24
crypto, blockchain.
2:25
So we're gonna dive into the Block
2:27
Briefing. First things first
2:29
this morning and
2:30
our top story of the day is
2:33
a very interesting one.
2:35
We've got quite a few to touch on.
2:37
Galaxy is going big on Sky.
2:39
The digital asset firm has parked
2:41
100 million dollars of
2:42
Sky's yield bearing stablecoin
2:44
SUSDS on
2:46
its corporate balance sheet and it's
2:48
approving that token
2:50
as collateral right across its
2:52
institutional trading desk.
2:53
Galaxy says it's funded the buy from
2:55
its own cash pile.
2:57
Or which sat near two and
2:59
a half billion dollars at the end of
3:00
June, making it one of the first
3:02
public companies to hold SUSDS.
3:05
And there's more, Galaxy also
3:06
scooped up an undisclosed amount of
3:08
the Sky governance token.
3:10
Assign these two are wiring their
3:12
lending businesses together for
3:14
the long haul. So a big
3:16
green tick of approval
3:18
from Galaxy
3:20
to Sky and the DeFi sector.
3:22
Our next headline, Americans want
3:23
stable coins but only if they feel
3:25
safe. A new visa survey
3:27
finds interest in using stable
3:29
coins jumps from 36%
3:31
to 56% the moment
3:33
you add bank level fraud protection
3:35
and deposit insurance.
3:36
The catch here, 56% still
3:38
say they're unfamiliar with the
3:40
asset class entirely.
3:42
So it kind of debunks that
3:43
notion that everyone knows what
3:45
stable coins are.
3:46
The report that Money Travels 2026
3:48
surveyed more than 2000 US
3:50
adults and trust hinges on the
3:52
brand, not the tech.
3:53
64% of
3:55
respondents say the payment provider
3:57
matters more than the blockchain
3:58
underneath.
3:59
The most trusted names here, no
4:01
surprise really, traditional banks
4:02
and global payment networks like
4:04
Visa, MasterCard, and
4:06
a number of big banks around the
4:08
world. On to our next story, Wall
4:09
Street and crypto keep inching
4:11
closer. Blockchain.com and the New
4:12
York Stock Exchange have signed a
4:15
memorandum of understanding to give
4:16
blockchain. Com's global users
4:18
access to tokenize US stocks
4:20
and ETFs.
4:23
NYSEE's planned digital platform.
4:25
Now, the fine print here, this is
4:26
not yet live.
4:27
It hinges on NYSEA actually
4:28
launching its digital alternative
4:30
trading system plus regulatory
4:32
sign-off in the United States.
4:34
But if that happens, blockchain.com
4:36
users could trade tokenized versions
4:38
of American shares outside
4:40
regular market hours.
4:42
NYSE first floated that ATS
4:44
platform back in January,
4:46
pitching 24-7 trading fractional
4:48
shares and stable coin settlement.
4:50
This is the next brick in the wall
4:52
to making that happen.
4:54
Moving on, prediction markets just
4:55
became a partisan flashpoint
4:57
on Capitol Hill, another issue for
4:59
the crypto market in general in the
5:00
US. Every Democrat on the
5:02
Senate Banking Committee is pressing
5:04
Chairman Tim Scott to hold a public
5:06
hearing on the sector.
5:07
And the timing here is pointed.
5:09
They later landed the very same day
5:11
that Scott and other Republicans
5:13
met privately with Kalshi.
5:15
The Democrats, including Elizabeth
5:17
Warren and Catherine Cortez
5:18
Masto, wrote that Congress
5:20
must examine prediction markets on
5:23
a bipartisan basis in public,
5:25
quote, not behind closed doors
5:27
in a Republican only industry
5:29
friendly round table.
5:31
Translation, they want the debate
5:33
on the record, not in a back room.
5:35
And we can expect this fight over
5:37
oversight to keep escalating,
5:39
especially as it pertains to
5:40
prediction markets in the US.
5:42
Then onto some mining news, Hut 8
5:44
just up muscled the field for a pair
5:45
of Texas data centers.
5:47
A Wednesday court filing reveals the
5:49
minor one bankrupt poolins,
5:51
piodes, and tarbush sites with
5:53
a $140 million cash
5:56
in consideration offer.
5:57
That's nearly triple the $52 million
5:59
combined stalking horse
6:01
bid on the table.
6:03
Backup offers came in from
6:04
DigiPowerX and notably a
6:06
designee of AI infrastructure firm,
6:09
Fluidstack, a reminder that everyone
6:11
wants power hungry Texas real
6:13
estate right now.
6:14
The deal still needs sign off from
6:16
a New Jersey bankruptcy court.
6:18
With a sale hearing set for
6:19
September 25th, if approved,
6:21
Hut 8 adds serious Texas
6:23
capacity.
6:25
Then a cautionary tale to close out
6:27
the block briefing today.
6:28
A Brooklyn man, Ronald Spector,
6:30
has been sentenced to four to 12
6:32
years in prison for running a
6:34
year-long phishing operation that
6:35
drained nearly $16 million from
6:38
100 Coinbase users.
6:40
Prosecutors say he posed as a
6:41
Coinbase rep, told victims their
6:43
assets were under attack from a
6:44
hacker. And talk them into moving
6:46
funds to a wallet he secretly
6:47
controlled.
6:48
It's a case of classic social
6:50
engineering.
6:51
He pleaded guilty this month to a 31
6:52
counts indictment, including first
6:55
degree money laundering and grand
6:56
larceny.
6:58
Prosecutors wanted up to 21 years,
7:00
the plea deal capped at 12.
7:02
The lesson for listeners here never
7:03
changes.
7:04
Coinbase will not call you.
7:06
In fact, most custodians will
7:07
not ask you for login details or
7:09
anything like that. So just be
7:10
careful of phishing emails,
7:13
uh, various.
7:15
Different messages coming across
7:16
different platforms. I get at
7:18
least five every week
7:20
on email, on
7:22
X, on telegram from
7:24
various services that I've signed up
7:26
to over the years, claiming that my
7:28
account might be closed, et cetera.
7:30
So just be on guard, make
7:32
sure that you verify whoever it is
7:33
that is in communication with you
7:35
and don't give up any information
7:36
without knowing that it is
7:38
legit. That's it for the block
7:40
briefing today.
7:40
You can catch up on more news
7:42
on theblock.co
7:44
if you're looking for the latest and
7:47
top headlines across the industry.
7:49
We're gonna move on to the hot seat
7:50
now. It's a great pleasure to
7:52
welcome back Joseph Chalom.
7:53
Of course, he's the CEO of Sharp
7:55
Link Gaming.
7:56
We've had him on the show a couple
7:57
of times, once in person
7:59
in Miami during consensus and
8:01
in the first month of the starting
8:03
blocks launch.
8:04
So Joe, first things first, it's
8:06
great to have you back. How are you
8:07
doing?
8:08
Gareth, I'm doing great.
8:10
Congratulations on the new addition
8:12
to your family.
8:13
Thank you. I am in a soulless room
8:15
wearing a suit in the
8:17
city of brotherly love, that's
8:18
Philadelphia, at the Federal
8:20
Reserve.
8:21
So I'm really excited to chat.
8:23
Beautiful. I don't know if you can
8:24
talk to us a little bit about what
8:25
you're doing today.
8:26
I'm, you know, at the at the seat of
8:28
the Federal Reserve.
8:29
It must be important.
8:30
There is a great
8:32
fintech conversation happening
8:34
among the Federal Reserve,
8:37
bankers, the Bank of International
8:38
Settlements.
8:39
Today is going to be talking about
8:41
stable coins tokenization,
8:43
less from a crypto perspective, but
8:45
what is the macro
8:47
economic impact on the
8:49
traditional banking system and how
8:51
money moves today.
8:52
And I think it's going to
8:53
fascinating. It is TradFi
8:56
meeting crypto, but we have
8:57
very, very strong and spicy views.
9:00
Of what we're going to see over the
9:01
next several years and the impact on
9:04
regulators as well.
9:06
Joe, I've been taking a look down
9:07
your timeline, and I
9:09
know a lot of people in the industry
9:10
have been expecting you to be
9:11
talking about DATS, but you've
9:14
changed TAC.
9:15
You've been talking a lot about AI
9:17
agents, rewiring traditional
9:19
finance, and really taking over a
9:21
lot of the activity and fees that'll
9:23
be generated in the next
9:24
eight years or so.
9:26
I need to ask you first and
9:27
foremost, why now?
9:28
Why are you talking about this so
9:30
fervently?
9:32
So two reasons.
9:33
One is, for the first time in
9:35
financial history, we
9:37
have four elements that are
9:39
colliding.
9:40
And I'll use a great analogy.
9:42
Universes start with big bangs when
9:44
elements collide.
9:45
And the four that are converging for
9:46
the first time, in history, are
9:48
stable coins, essentially
9:50
programmable money,
9:51
tokenized assets, the exposure
9:53
layer, DeFi and on-chain
9:56
activity, where a lot of the
9:58
atomic trading, swapping and
9:59
settlements gonna happen.
10:01
But now we have a fourth element,
10:02
which are AI agents who are gonna be
10:04
the automation layer of this.
10:06
And it is gonna rewire finance.
10:09
And every time we have technology
10:11
revolution, the goal should
10:13
be to favor
10:15
consumers.
10:16
And there is a really optimistic
10:18
outcome here, but we need to
10:20
avoid the outcome of every other
10:22
technology revolution where a
10:24
handful of centralized players
10:26
end up winning.
10:28
We have a thesis that decentralized,
10:30
credibly neutral rails can help
10:32
us avoid history repeating itself.
10:35
And Ethereum, along with other
10:36
chains, can be the largest
10:38
winner, and that's bullish for
10:40
ETH and it's bullish for our
10:42
investors who have that same
10:44
conviction. But it is
10:46
going to go slow and then
10:48
incredibly fast.
10:50
I have to ask you, I mean, this kind
10:52
of prediction that you made in your
10:53
article that you published on X and
10:55
anyone who's watching the show, you
10:56
can go and find that article and
10:58
tweet at Joe Chalom on
11:01
X. You said that people save $1.4
11:03
trillion a year by 2035
11:06
thanks to AI agents.
11:07
Where does that money come from?
11:10
So if you look at the financial
11:11
system globally, just I'll
11:13
use rough numbers, think of it as
11:15
$10 trillion of fees
11:17
across many, many different
11:19
industry segments.
11:20
Some of that money and the fees will
11:22
never move.
11:23
They have a deep moat.
11:25
These are banks and other
11:26
institutions that provide liquidity.
11:28
They have balance sheets.
11:29
They do complex transactions.
11:32
Where we're focused and where the
11:33
money will be saved are where
11:35
there is limited tension span.
11:38
And virtually no moat.
11:39
And I'll give you three or four
11:40
examples.
11:42
AI agents are gonna bring unlimited
11:44
attention span and financial
11:46
literacy. And the first thing
11:47
they're gonna do is attack
11:49
areas of the financial system
11:51
where we're not paying attention.
11:53
For example, idle cash.
11:56
Each of us has checking accounts
11:57
that pay seven basis points, or
11:59
maybe even savings accounts that pay
12:01
30 basis points.
12:02
And we leave it idle, not because
12:04
we're educated, we don't have an
12:06
attention span.
12:07
Agents will give us unlimited
12:09
attention.
12:10
They will move your idle cash to
12:11
something that's yield-bearing.
12:13
In the U.S. Alone, there's $15
12:14
trillion of assets
12:16
sitting in low-interest accounts.
12:19
That will save $180 billion
12:21
a year and put it
12:23
back in the hands of investors.
12:25
I think if you take a look in the
12:27
next several years,
12:28
certain industries, the fees
12:30
will go to zero.
12:32
I'll give you two examples.
12:34
Cross-border payments charged
12:36
six percent.
12:37
To move money, that will go
12:39
to zero.
12:40
FX transactions take three to four
12:42
percent in hidden fees.
12:44
That will go zero.
12:45
Similar to how in the 1970s,
12:48
80s, and 90s, stock brokerage
12:50
fees went to zero, now you trade,
12:52
you don't even think about it.
12:53
How Skype came out in the early
12:55
2000s and made telecommunications
12:57
free. That is what we're going to
12:59
see. Where there's no moat and moat,
13:01
no value, the agents will
13:03
basically compete away those fees
13:05
for banks and other institutions.
13:07
And consumers need to be the biggest
13:09
winners here.
13:11
Joe, it does kind of beg the
13:12
question in my mind,
13:14
surely a lot of the incumbents here
13:16
don't want to give up the
13:18
fees. I mean, that's, you know, for
13:19
some of them, that's their entire
13:20
business is this, you whatever,
13:23
three to 6% that they're making in
13:25
fees on, you international
13:27
transfers, these kind of things.
13:29
Is it just one of those inevitable,
13:31
inevitable, you
13:33
causes of having agentic finance
13:35
come to fruition?
13:36
And are they going to fight like
13:38
hell to stop it or are they going to
13:39
move very quickly to B?
13:41
Control of that because I mean once
13:42
once the spread goes to zero
13:44
everyone's lost it right but I'm
13:46
sure no one wants to lose out on
13:48
money that that is
13:50
the you know the core part of their
13:52
business.
13:53
They are going to fight like heck
13:55
to protect that moat.
13:57
And they're at the same time going
13:59
to try to co-opt some of the
14:00
capabilities. But let me paint a
14:02
vision.
14:03
Today, traditional banks and
14:05
financial rails separate cash,
14:08
deposits, payments,
14:10
investments, borrowing, lending.
14:12
These are different apps that
14:14
don't converge.
14:16
I think the net winners are going to
14:17
be disruptors from the digital
14:19
asset and crypto space.
14:21
Who natively know how to
14:22
deliver a super app that gives you
14:25
all of those things in the same
14:26
place and have
14:28
agenda capabilities intertwined.
14:30
Why do I say that?
14:32
These agents are gonna move your
14:33
idle cash to something productive.
14:35
They're gonna understand your
14:37
preferences, Gareth, your
14:38
short-term, your long-term your
14:40
midterm goals.
14:41
They'll build you better portfolios.
14:43
They'll rebalance them.
14:44
They'll tax lost harvest.
14:46
And Gareth that's just the asset
14:47
side of your balance sheet.
14:49
How many of us have insurance
14:50
policies and mortgages that we never
14:52
look at?
14:53
These agents every year at renewal
14:55
are gonna bid it out, get lower
14:57
fees with better returns.
14:59
And when mortgage rates drop,
15:00
they're gonna teach you how to
15:02
refinance your mortgage, prepay and
15:04
move on.
15:05
So I think the integration that the
15:07
blockchain and these rails provide,
15:09
having all the data recommendations
15:11
and actions in one place are
15:13
gonna be an inevitable place that
15:15
users are gonna migrate to.
15:17
And if you're a bank sitting behind
15:19
a moat and 12 different apps that
15:20
keep this distinct.
15:22
Good luck!
15:24
Definitely.
15:25
Good luck to them because it's
15:27
happening fast and it's going to be
15:29
inevitable.
15:31
In your mind, would you say that
15:32
banks in particular are
15:34
the most vulnerable to this
15:36
movement?
15:37
How do you see this kind of playing
15:38
out? Do you think that there will be
15:40
a lot of big TradFi players that
15:42
go out there and try to acquire
15:44
some of these infrastructure
15:46
providers or make
15:48
deals with the
15:49
likes of various Ethereum
15:52
layer 2 companies?
15:53
Or alternative layer ones
15:55
that are driving forward with
15:57
RWA tokenization,
15:59
stablecoin integrations.
16:01
How does this play out in real time?
16:02
Do these banks die or do they
16:04
acquire the companies that have
16:05
built the financial rails of the
16:07
future?
16:07
Well, first is just because fees
16:09
go to zero doesn't mean there's
16:11
not economic value in the ecosystem.
16:14
When stock trading fees literally
16:16
went to zero, Charles Schwab did
16:18
not stop existing.
16:19
They found different ways to add
16:21
value, get subscription-based
16:22
revenue.
16:23
I believe very strongly cross-border
16:25
remittances, a massive
16:27
industry, is going to go to near
16:29
zero. You don't need a local
16:31
bank, a correspondent bank, an FX
16:33
converter, another correspondent
16:35
bank and a receiving bank.
16:36
Stablecoin to stablecoin instant
16:38
free.
16:40
I think FX conversions,
16:42
stablecoin in one currency to
16:44
another instant free,
16:46
I think if you're in the brokerage
16:48
space, you're helping people find
16:50
a mortgage or an insurance policy,
16:52
but you only work in a closed
16:53
ecosystem, agents will do
16:55
that better, cheaper, faster and
16:57
they'll have access to everything.
16:59
I think banks still
17:01
want to own the customer.
17:03
I I think at a certain point, they
17:05
will either...
17:06
Really embrace stablecoins
17:08
or use tokenized deposits
17:10
in a way they never have.
17:11
But I think even if you acquire
17:13
every capability out there,
17:15
if you separate these different
17:17
elements of a financial life and
17:19
they don't run on the same rails,
17:21
they cannot compete with a better
17:22
experience that a crypto
17:24
company or a digital asset company
17:26
can give a user with the entire
17:28
life, their entire
17:30
history, their preferences,
17:32
their predictions.
17:33
Are all in one place and agents
17:35
natively integrate.
17:36
I think when banks talk about AI
17:38
and agents, they think of it as
17:40
internal efficiency and maybe a chat
17:42
bot. They actually don't wanna open
17:45
their moat to agents.
17:46
And you've seen that recently, they
17:48
don't want fintech companies and
17:50
aggregators to see the data.
17:51
And I think it'll be a struggle for
17:53
them.
17:54
Yeah, for sure.
17:55
I definitely think it will be a
17:56
struggle, and it kind of makes me
17:58
wonder, you know, that final part is
18:00
at what point do people just start
18:01
trusting, you know, AI agents to
18:03
handle all of their, you know,
18:05
their finance, because it's
18:07
taken this long for people to trust
18:09
the DeFi sector, you
18:11
know, to lock in a load of
18:13
capital and, you know, take
18:14
advantage of, you know,
18:16
preferable interest rates.
18:17
And now we're going to start, you
18:19
know, just allowing an AI agent to
18:21
take control of our entire financial
18:23
life.
18:25
Knowing that AI
18:27
is prone to making mistakes
18:29
here and there.
18:30
Do you think that there will be some
18:31
sort of a barrier to entry here?
18:33
And to the story that
18:35
I had in today's block briefing,
18:37
that visa survey with
18:40
a lot of customers in the US from
18:42
that 2000 strong people
18:44
survey kind of saying,
18:46
the winners here are going to be the
18:47
trusted brands, the trusted
18:48
financial institutions that offer
18:50
these services.
18:51
Will people still be leaning towards
18:52
a traditional bank over going to,
18:54
say, for example, Coinbase or
18:56
Metamask or something like that to
18:58
handle all of their on-chain
18:59
finance?
19:00
I think the adoption curve
19:02
will be faster than you think.
19:04
Think about e-commerce.
19:05
How many of us in our 20s
19:08
embraced it, but our parents did
19:09
not, and now my parents spend more
19:11
time on Amazon.com than I do.
19:14
Think about social media and giving
19:15
up your data.
19:16
People embraced it.
19:18
Think of generative AI.
19:19
It took six months before generative
19:21
A.I. Was part of everyone's life,
19:23
and you just trust it.
19:24
You use it. You monitor it.
19:26
I'm not suggesting that agents will
19:28
immediately take...
19:29
Over control of your life.
19:30
You'll start with things you trust.
19:32
Fine, take my idle cash,
19:34
put it in a higher earning account.
19:36
I trusted to do that.
19:38
Rebook my flights, I trusted it
19:40
to do. Do I trust it to
19:41
take out debt or lend money to
19:43
people? I don't today, but
19:45
over time I will if it can
19:47
generate better outcomes.
19:49
I think the more important question
19:51
is how do we avoid
19:53
history repeating itself
19:55
like every technology revolution?
19:57
And Gareth, I'm going to go old
19:58
school here.
20:01
Railroads, telegraph,
20:03
telecommunications, internet
20:05
browsers, social media,
20:07
cloud, and AI.
20:08
You had massive innovation,
20:10
then competition, then a
20:12
little bit of chaos.
20:13
And then consumers were the huge
20:15
beneficiaries.
20:16
And in every one of those cycles,
20:18
two or three winners emerged.
20:20
And they ended up monetizing.
20:22
Their business model was monetizing
20:24
users.
20:25
We're early in this next agentic
20:27
revolution. It's early enough to
20:29
actually change the outcome of
20:30
history so it doesn't repeat itself.
20:32
We believe very strongly we can't
20:34
have gatekeepers again who
20:36
keep your agents in or out, who
20:38
don't allow them to move freely, who
20:40
don't allow them persist identity,
20:43
who override the user and
20:45
make recommendations.
20:46
I think we're gonna be done with the
20:48
banks having sponsored results
20:50
and sponsored recommendations and
20:52
users being tricked by Super
20:54
Bowl ads.
20:55
Your agent doesn't care
20:57
about that attention economy, it
20:59
can focus on what's in your best
21:00
interest. So I feel very strongly
21:02
now is the time to have the debate
21:04
and it favors neutral
21:06
rails who can't change
21:08
the rules, who can censor your
21:10
agent, who won't promote a
21:12
product with hidden incentives.
21:14
And that's why Ethereum and other
21:16
chains are gonna play a leading
21:18
role here.
21:19
The question is, can we avoid
21:20
history and do this in a
21:22
decentralized manner?
21:23
And if we do...
21:25
Agents will create agency.
21:28
Here what I just said, the agents
21:30
will create agency and autonomy
21:32
and prosperity like we've never
21:34
seen. We just need to learn from
21:35
history and not wait two, three
21:37
years until the gatekeepers have
21:39
put up their walls.
21:40
Yeah, well, I would
21:42
say that
21:45
the cryptocurrency industry
21:47
has a major advantage and having
21:49
had the privilege of speaking to
21:51
people like Ilya Polisukin,
21:53
who's in charge of Nier and
21:55
was working at Google on artificial
21:57
intelligence and then went on to
21:59
create Nier.
22:00
And they've worked very hard
22:02
on the AI
22:04
tooling. You know crypto
22:06
companies building for AI
22:08
We didn't realize, but we were
22:10
building the infrastructure that is
22:11
actually perfect for agentic
22:13
finance.
22:14
It does make me wonder
22:15
if the coinbases
22:18
of the world will have the advantage
22:20
over traditional banks here,
22:22
and those that create the super apps
22:24
that allow you to do this will
22:25
eventually become the big
22:27
banks of the future.
22:28
Do you see that playing out?
22:30
I do. I think the battle has begun.
22:32
Everyone is trying to capture the
22:34
flag from the traditional incumbents
22:36
who are going to struggle to do that
22:37
because their systems are not
22:39
seamless and integrated to the
22:41
likes of Coinbase, Binance,
22:44
Kraken, Circle,
22:46
Tether, Robinhood.
22:48
And if you look outside the US,
22:50
FUTU in Hong Kong,
22:52
TOS in Korea, these
22:54
super apps have a structural
22:56
advantage.
22:57
Um, and if they can own more of your
22:59
financial life and actually make it
23:01
more productive at lower fees,
23:03
I think the generation that's going
23:05
to be inheriting 80 to
23:07
a hundred trillion dollars of wealth
23:08
transfer from our boomer parents and
23:10
grandparents trust code
23:12
and their phones more than
23:14
they trust institutions.
23:15
So you talked earlier about trusted
23:17
institutions.
23:19
Most people don't want to go into a
23:21
bank and most people don t think
23:22
their financial end at four
23:24
o'clock on a Friday.
23:25
So I think the trust is going to be
23:27
encoded in your own agents at some
23:29
point over the financial
23:30
institutions who might have hidden
23:32
incentives.
23:33
So I thin the trust element flips
23:34
and this becomes a generational
23:36
change.
23:37
Yep, definitely.
23:39
Look, I think we've spoken at length
23:41
about AI agents and we'll both be
23:43
heading across the world
23:45
to Korea slash Singapore.
23:47
So I think we can probably carry
23:48
that conversation on in
23:50
Singapore when we have you down
23:51
joining the starting block live.
23:53
I did want to move on the
23:54
conversation and just pick your
23:55
brain a little bit about this week
23:57
and the turnaround in the markets,
23:58
Bitcoin trading above 85,000.
24:00
I think Ethereum is also up
24:02
in tandem.
24:03
What are your general thoughts on
24:05
this uptick and perhaps
24:07
the general causes and
24:09
if you think all
24:11
the bad times are behind us?
24:12
Are we out of the bear market?
24:15
I think we're out of the bear
24:16
market, and the data says we
24:17
are.
24:19
ETH, for example, is up 70%
24:22
since the end of June.
24:23
When we had historic lows,
24:26
Bitcoin is up.
24:27
I think I've been saying for a long
24:29
time, focus on the majors.
24:31
And it's not just Bitcoin and ETH
24:33
and those who are actually going
24:35
to be providing utility to
24:37
the new world order and the new
24:39
financial rails. And I think that
24:40
we're seeing that play out.
24:41
I've said to you in the past at some
24:43
point Bitcoin and ETH
24:45
will decouple.
24:46
ETH, over the last six months,
24:48
has been outperforming Bitcoin, not
24:50
because it's a better asset, but it
24:51
has a different narrative.
24:53
It has a narrative that it will be a
24:55
settlement layer for the future
24:57
economy.
24:58
I think September 16th, when
25:00
the Fed raised rates,
25:02
after the Clarity Act failed,
25:05
you would have thought we would have
25:06
seen a very big sell-off.
25:08
We actually saw a sell-off
25:09
in the stock market.
25:11
I think it's actually positioning
25:13
crypto very well,
25:15
especially assets that
25:17
will allow you to gain yield
25:19
by just holding the asset.
25:21
Just think about it.
25:22
The Fed rate is about 4%.
25:25
Real inflation is
25:27
3.4%.
25:28
You're earning almost nothing
25:30
sitting in cash.
25:32
If you have an asset like ETH
25:34
or Solana or others,
25:36
I think you can earn yield and
25:38
play into the tokenization
25:40
narrative.
25:41
That said, I do think
25:43
we need to figure out really, really
25:45
quickly, will
25:47
the SEC and CFTC
25:49
really quickly provide rulemaking?
25:51
And the answer is encouraging.
25:53
You saw the SEC come out with
25:56
an innovation exemption to support
25:58
trading of tokenized stocks.
26:00
I think that is what
26:02
is going to be the propulsion, the
26:04
jet engine, for what has been a very
26:06
slow and small tokenization.
26:08
Process. There's only 30 billion of
26:10
tokenized assets.
26:11
Wait till most public equities are
26:13
tokenized. So I think the backdrop
26:15
is we're out of the
26:16
bear.
26:18
A lot of the shorts got
26:20
ripped out.
26:21
You now have a belief that the
26:23
Fed is going to actually act in
26:24
control inflation, and you're
26:26
seeing stablecoins, tokenized,
26:28
assets, not just crypto,
26:30
be part of the future narrative.
26:32
The fact that the Federal Reserve of
26:33
Philadelphia has a full day talking
26:35
about it, tells us it's going
26:37
mainstream.
26:37
And it's a great setup for
26:39
the high quality crypto assets,
26:42
not for all of crypto, but for
26:44
the majors who are providing utility
26:45
in the space.
26:47
Yeah I definitely
26:49
agree with you there and it kind of
26:50
echoes the sentiments of Chris
26:51
Giancarlo last week who was telling
26:53
us that despite the
26:56
Senate floor not letting
26:58
the Clarity Act move any further,
27:01
the SEC and the CFTC have said
27:03
hold my beer, we'll take care of
27:04
this and they're going
27:06
to be the ones providing proper
27:08
rules of the road and let the
27:09
innovation continue so it's very
27:11
positive for the industry and I
27:12
think most of us are kind of feeling
27:14
quite optimistic after a
27:16
very long time of feeling not so.
27:18
Optimistic. I did want to quickly
27:19
touch on the DAT sector, maybe
27:21
you can give us a brief update of
27:23
goings on at SharpLink.
27:25
Obviously, a turn up in the market
27:26
is good for SharpLink as well as
27:28
a significant holder of ETH
27:30
alongside Tom Lee's Bitmine.
27:33
Has your thesis changed at all?
27:35
How are you feeling at the moment?
27:37
The conviction has never been
27:38
stronger. And if you have conviction
27:40
in a bull market like we did when we
27:42
launched last summer, you need to
27:44
do the things to prepare yourself
27:46
for a down market.
27:47
And we did.
27:48
We're the second largest public
27:49
holder of ETH in the world.
27:51
We've done it in a really
27:52
institutional way.
27:54
Fidelity and BlackRock are our
27:56
largest shareholders.
27:57
It tells you that the largest
27:59
institutions believe that they can
28:01
get exposure through It also
28:03
taught us that in down periods...
28:06
Our MNAV or our
28:07
stock price will actually
28:09
underperform ETH.
28:12
But when the sentiment turns like
28:14
it has since June,
28:16
we were up about 90%
28:18
in only two months and
28:20
our multiple TNAV has expanded.
28:23
So there is a convexity
28:25
to this trade, but most
28:27
of the other ETH debts are gone
28:29
and out of business.
28:30
Tom Lee has done a great job
28:31
gathering assets, telling the
28:33
story. We are doing the same.
28:35
But we've also been collaborating in
28:38
funding ecosystem spin-offs.
28:40
And we believe that we
28:42
have more conviction today on
28:44
ETH as a story than we did a
28:46
year ago and the agentic
28:48
use case is just reinforcing
28:50
that conviction.
28:51
So we have conviction, we hold
28:53
it. We have ETH, we held it.
28:55
And we're a great exposure vehicle.
28:57
Even though the DAT craze is
28:59
done, those who've survived and
29:01
have built durable businesses, I
29:03
think are really well positioned.
29:05
Both SharpLink and Bitmine for
29:07
this coming bull market.
29:09
And I've never been more excited.
29:10
It's always good to do the right
29:12
things, even in down markets,
29:15
because it positions you well when
29:16
the recovery happens.
29:17
And we've seen it happen.
29:18
ETH is up 70% since
29:20
June.
29:21
Yeah, yeah a big turnaround There's
29:24
no doubt about it and it does make
29:25
me you know think of the likes of
29:27
Robin Hood in the launch of Robin
29:29
Hood chain in the last two months
29:30
You know the amount of fees that
29:32
they've been earning on the launch
29:34
if that, you know, it's an Ethereum
29:35
all to you So it's a it's great
29:37
for the Ethereum ecosystem that
29:39
there is a big major player
29:41
That is planting a flag in the
29:43
ground in terms of RWA tokenization,
29:45
you don't bring tokenized stocks on
29:46
chain I know that there
29:48
was a fair amount of activity
29:50
around. Memes on Robinhood
29:52
chain as well, but Solana saw the
29:54
same thing. It's just part and
29:55
parcel of the industry.
29:57
But the overarching narrative here
29:59
is there are a handful of
30:01
layer one chains that are
30:03
big winners as
30:05
more and more real world assets
30:07
come on chain.
30:08
And I just wanted to get your
30:09
thoughts on that in general.
30:11
If you see that as a
30:13
welcome sort
30:15
of wind in the sails for the
30:17
ecosystem in general that Robin had
30:19
chained has seen such success.
30:21
I think it's really important, not
30:22
only for Robinhood, for Arbitrum
30:24
and off-chain labs, you've seen
30:26
their token appreciate 100%
30:28
over the last several months from
30:30
Lowe's. You see other DeFi players,
30:33
like take a look at what Uniswap is
30:35
doing. The automated market
30:37
making volumes have gone through
30:39
the roof.
30:40
And now that you have an innovation
30:41
exemption, you're going to see a lot
30:43
more players enter this space
30:45
to allow buying,
30:47
selling, swapping, borrow and
30:49
lending of tokenized equities.
30:51
That will be a boom.
30:52
And then you start seeing the likes
30:54
of Metamask and EtherFi.
30:56
They're trying to become a bank in
30:58
your wallet.
30:59
And I think this is the beginning
31:01
of a turning point.
31:02
It favors Ethereum, it favors
31:04
credibly neutral rails, but
31:07
I don't think it needs to be a
31:08
blockchain versus Bitcoin story
31:10
or a blockchain versus crypto story.
31:12
These things are just converging.
31:14
And I'm excited.
31:15
I talk a lot about being an
31:17
optimist. The consumer should
31:19
be the biggest winner.
31:21
Not just because fees are going to
31:22
be saved, they're going to be able
31:24
to have better access to tooling
31:26
and outcomes the way the largest
31:28
institutions in the world have had
31:30
for many, many generations.
31:32
So I'm an optimist.
31:33
This bodes well, not just
31:35
for the crypto industry and
31:36
protocols, but for consumers.
31:38
And I think the regulators are
31:40
all on board.
31:42
Beautiful, Joe, we've taken a lot of
31:43
your time this morning and I know
31:44
that you've got a busy day ahead.
31:46
You're wearing a suit, although you
31:47
do look great in a suit and tie and
31:49
you've, as the
31:51
millennials or the Gen Zers will
31:52
say, you've mugged me.
31:54
So I will let you go and enjoy your
31:55
day.
31:57
We will catch up with you in
31:58
Singapore.
31:59
Thank you for a great conversation,
32:02
safe travels, and congratulations
32:03
again on the personal side.
32:05
Thank you so much, Joe.
32:06
Joe Challon, Sharp Link Gaming
32:08
CEO.
32:09
You can follow him on X at
32:11
Joe Challan.
32:12
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32:14
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32:15
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We've got a busy schedule ahead in
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the next few months.
32:25
The big one, we're going to Token
32:27
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32:30
Got lots of exciting things planned
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there, including the starting block
32:33
live on day one from Token 2049.
32:35
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we get closer to it.
32:39
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32:40
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32:42
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32:43
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