Latest / CRYPTO 101 / Ep. 689 Tokenization & How Institutions are Looking at Altcoins with Superstate's Jim Hiltner

Transcript

Ep. 689 Tokenization & How Institutions are Looking at Altcoins with Superstate's Jim Hiltner · CRYPTO 101

0:00
[SPEAKER_02]: Welcome to the Crypto 101 podcast presented by Gemini your bridge to the future of money All right, everybody welcome back to another episode of the crypto 101 podcast you guys know me I'm your co-host Bryce as always join my good buddy my good buddy branded vehemon How are you doing Brendan?
0:27
[SPEAKER_02]: I'm doing good man.
0:28
[SPEAKER_02]: I'm doing good
0:30
[SPEAKER_02]: I've uh, I've got one eye on the charts over here as Bitcoin's dipping below a hundred came in to be like, uh, the guy from, uh, water boy, like eyes on boats, the crazy eyes.
0:40
[SPEAKER_02]: Yeah, yeah.
0:41
[SPEAKER_02]: They're anger management or whatever that movie was because I've got like a lot of tabs open right now.
0:46
[SPEAKER_02]: It's Bitcoin is flirting with a hundred K for the first time.
0:51
[SPEAKER_02]: Let's see, let's go back for, I don't know, Jim, how long has it been since Bitcoin has been a hundred K?
0:57
[SPEAKER_02]: uh... June twenty second June twenty second that's crazy uh... we've got a great guest today uh... mr. Jim hiltoner uh... chief business officer as well as co-founder of super state um... like tevo is kind of teasing before the show thanks for actually showing up uh... on a bloody Tuesday uh... because most people when the markets are crashing they just reschedule the crypto podcast but you're a you're a real one so we appreciate it
1:25
[SPEAKER_00]: All right, man, you know, we've got a couple of funds that are relatively insulated from the markets and, you know, it's been nice as an investor in some of those to kind of sit and wait out a little bit of the volatility.
1:39
[SPEAKER_00]: And so on a personal level, you have and definitely watching the screens, but on a business level, continue to move up into the right.
1:46
[SPEAKER_00]: So, you know, we're not actively trading except for the PA over here.
1:51
[SPEAKER_00]: And, uh,
1:52
[SPEAKER_00]: Well, that's a little bit painful to watch on the sidelines, you know, I take a long-term view on everything, and so don't really necessarily worry about all the noise, and yeah, there's a lot to dig into on that front because it's quite an exciting time in the markets, whether it's on the crypto side, macro side, and what's happening in tokenization, because since the last time that we spoke, there's been a lot of developments that we can dive through.
2:16
[SPEAKER_02]: Yeah, it's been crazy.
2:17
[SPEAKER_02]: Yes, since we last talked, I think Larry think and Trump went on CNBC or CNN, I think Larry think was talking about tokenization, how it's going to be the backbone of the future of finance, Trump was saying he's he's dead set on, you know, crypto in America, you know, being the number one hub here.
2:35
[SPEAKER_02]: And so yeah, a lot of positive regulatory developments and just not maybe the not even developments, but just like psyche shift at the very highest echelons of finance and politics.
2:47
[SPEAKER_02]: People really glob it on to crypto and I definitely want to dive into the U.S. T.B.
2:53
[SPEAKER_02]: fund that you guys run in the U.S. C. C. fund upwards of almost a billion dollars in AUM right now between those two funds if I recall.
3:01
[SPEAKER_02]: higher than a billion dollars is one and a half.
3:03
[SPEAKER_00]: Wow.
3:04
[SPEAKER_02]: Incredible.
3:04
[SPEAKER_02]: So yeah, we definitely want to dive in, but for folks who have just kind of met you for the first time here on the show, let's let's not jip them of your introduction and a little background.
3:14
[SPEAKER_02]: And then we'll kind of dive in, I think, just to the state of the markets here, you know, your markets veteran.
3:18
[SPEAKER_02]: We kind of want to get your view on on, you know, macro, maybe how it's coming to bear on crypto, your long-term views, and then we'll kind of dive into some of the specifics of what you're working on.
3:27
[SPEAKER_02]: Is that sound good?
3:28
[SPEAKER_00]: Yeah, absolutely.
3:29
[SPEAKER_00]: And so my background started, like many of us, probably, in the traditional space, working at City Bank, but way back when I got out of school.
3:36
[SPEAKER_00]: And then, you know, kind of got the small startup, you know, entrepreneurial vibe as I headed into the FinTech space, helped build out a company.
3:45
[SPEAKER_00]: That was in the equity research.
3:48
[SPEAKER_00]: you know analytics field basically you know took a bunch of models from the sell side and helped the buy side kind of understand where forecast were and sentiment was on you know the streets you know revenue models on Tesla or whatever it might be and how did I sit in there but you know was investing in crypto on the side and so took my talents into defy full-time in 21 joined Robert Lusher and the compound team there was a
4:15
[SPEAKER_00]: business called compound treasury that we were running had about 600 million dollars at its peak.
4:19
[SPEAKER_00]: Basically, you know, now that we're going into the rate cutting regime, you know, this was 21 when rates were at zero and you could lend stable coins at like 8% and people were like, hey, how do I do that?
4:30
[SPEAKER_00]: But
4:31
[SPEAKER_00]: You know, people didn't even really know what U.S. D.C. was at that stage, which was kind of crazy.
4:34
[SPEAKER_00]: Now that we have the genius act in place, it's wild to think that they were underwriting the risk of a stable coin as solid as circles U.S. D.C.
4:42
[SPEAKER_00]: But yeah, through that product, we basically gave them 4% yield.
4:45
[SPEAKER_00]: We were actually before micro strategy, we're the first crypto company to get a credit rating, actually.
4:49
[SPEAKER_00]: So, wow.
4:51
[SPEAKER_00]: Also had a B- which was, you know, investment grade, but, you know, because of, you know, the novelty, I guess, of, you know, the credit rating agencies kind of looking at a crypto-related business.
5:05
[SPEAKER_00]: It was a big milestone achievement.
5:06
[SPEAKER_00]: We paid 4% on cash for investors, which, again, at the time was a large Delta versus a,
5:13
[SPEAKER_00]: savings account or a T-Bill at that stage, which was, you know, how to zero or one hand hold on it, and, you know, kind of we just lent those assets into defy, which was largely into compound and earned the market rates and had a little nim, you know, net interest margin business there.
5:30
[SPEAKER_00]: As like rate started to raise, you know, at the same time, obviously we all know that there was a big left hill event in crypto, a lot of delivering, and you know, the yield really came out of the crypto markets.
5:41
[SPEAKER_00]: You know, we decided as we watched the protocol continue to manage risk really efficiently, better than all the spreadsheets and the humans and the centralized deaths that we're doing it at that time, especially in crypto.
5:53
[SPEAKER_00]: We were like, why is this not being applied to traditional securities markets?
5:57
[SPEAKER_00]: You know, the ceiling for DeFi was like five feet tall, and now it's going to be 50 feet, 500 feet, 5,000 feet tall, as more and more Wall Street comes on chain because these systems are great at programmatically allowing users or investors to use their assets as collateral or to be able to trade and do really cool things using smart contracts.
6:18
[SPEAKER_00]: That really you can't do in traditional finance, and so we launch
6:22
[SPEAKER_00]: about three years ago now at this stage to start with an asset management business.
6:26
[SPEAKER_00]: So as you said at the top of the call, we run two different funds.
6:30
[SPEAKER_00]: U.S. TV is a money market fund.
6:31
[SPEAKER_00]: So sitting in T-Bills and then U.S. CC, which is a carry fund that has Bitcoin, ETH, Seoul, and XRP on the long side in the shorting futures on the other side.
6:41
[SPEAKER_00]: You capture the spread.
6:42
[SPEAKER_00]: That market neutral fund yields like 13% just given the dynamics in the spot versus the futures markets.
6:49
[SPEAKER_00]: But we allow investors to tokenize those shares and then use them on blockchains.
6:53
[SPEAKER_00]: And basically, our job is to connect the financial assets of the world with the programmability of blockchains, and the applications that live in the spark contract world.
7:03
[SPEAKER_00]: Fast forward to today, you know, again, a billion and a half in a U.M.
7:07
[SPEAKER_00]: across those two funds, we are going to start, you know, helping other managers that don't have the technical capabilities that we do, use our rails to bring products on sharing, so you'll see in the not-to-disapputure some.
7:19
[SPEAKER_00]: partnerships of large asset managers and and taking companies and the like that are bringing their funds on chain through super state.
7:27
[SPEAKER_00]: And then, you know, we also launched opening bell back in May, which is helping publicly trade companies bring their equity on Solana or on Ethereum, so that you and I that are holding shares in our brokerage account can instead hold them in our
7:46
[SPEAKER_00]: And actually use them in the systems on chain, whether it's trading or lending or doing a couple of really interesting use cases there.
7:55
[SPEAKER_00]: That's really 24-7 markets in self-custody of your assets.
7:59
[SPEAKER_00]: That is totally different than the traditional markets.
8:01
[SPEAKER_00]: And there's a lot that's going to be built off of that.
8:03
[SPEAKER_00]: But yeah, there's a little bit about me in Super State.
8:06
[SPEAKER_00]: And sure we're going to dive into all the things there.
8:08
[SPEAKER_01]: Yeah, absolutely, and we're going to talk more about opening bell because it's a really, really fascinating program and product that you all have built, but a quick reminder for the audience, we've had super stayed on a couple of times and if you want to go back and listen to those and get like the real heavy run down.
8:24
[SPEAKER_01]: of what they are at their core, make sure to go back and watch some of those previous episodes.
8:29
[SPEAKER_01]: We've had Jim on, we've had other members of the team on, but today we're going to spend some time talking about just like the markets, and of course some of the new stuff that you all have been developing, but I just want to make sure that the audience is aware that we do have other episodes that you all can go and watch if you want to hear more from Super State.
8:45
[SPEAKER_01]: But I mean, Jim, let's just talk about the market at the moment.
8:48
[SPEAKER_01]: We're recording this on November 4th, 2025.
8:52
[SPEAKER_01]: And you know, like we said at the beginning of the episode, we're coming back down through 100K for the first time.
8:58
[SPEAKER_01]: And you know, several months, you know, we had this nice breakup.
9:01
[SPEAKER_01]: We held above it for a long time.
9:03
[SPEAKER_01]: Well, now we're coming back down.
9:04
[SPEAKER_01]: There's a lot of volatility.
9:06
[SPEAKER_01]: And there's just a lot going on in crypto right now in general.
9:10
[SPEAKER_01]: My question for you is, what do you make of all this because I think the one thing that stood out to me is that we've seen Bitcoin and crypto alike struggling to break the highs for the last couple of months, but that's not necessarily what we've seen if you look at the M2 money supply or if you look at gold or if you look at equities, all of those have been trailing the kind of consistent new highs for the past couple of months, but we haven't seen that in necessarily crypto.
9:36
[SPEAKER_00]: Yeah, I think really, if you look at it from two perspectives, you look at it from like a top-down macro viewer and then you look at it from a bottoms up fundamental view.
9:44
[SPEAKER_00]: It's kind of two different stories.
9:47
[SPEAKER_00]: But taking a step back, the Fed started a campaign of beginning to lower interest rates, which was signaled
9:56
[SPEAKER_00]: whether it was from the Fed themselves or from the White House.
10:00
[SPEAKER_00]: That campaign was going to get started.
10:02
[SPEAKER_00]: You know, we saw two monthly revisions from the Fed over the last two meetings to reduce rates, which is brought more liquidity to the system and has kind of recognized the fact that inflation is starting to pull back.
10:17
[SPEAKER_00]: Maybe it hasn't gotten back to the levels that we all would like.
10:21
[SPEAKER_00]: you know when we look at our grocery bills on a regular basis, but that campaign I think you know was definitely well known by the market and that you know was what you saw in a lot of the activity heading into those events because you know you look at futures curves that was priced into a large extent.
10:37
[SPEAKER_00]: I think what you know kind of shocked if you will the market for the last like couple of days or weeks has been post the recent meeting
10:46
[SPEAKER_00]: the question mark around whether there's going to be another cut and what the size of that campaign looks like if there's going to be a pause or if there's going to be continued downward pressure on on the front end of the curve and you know that's largely because just the information that's available is not.
11:02
[SPEAKER_00]: as robust as a government shutdown so there's like no information available, right?
11:08
[SPEAKER_00]: Exactly.
11:08
[SPEAKER_00]: I mean, like, I forget the analogy that Paul used in his tribe and through the fog, he's not down or something.
11:15
[SPEAKER_00]: Yeah, exactly.
11:16
[SPEAKER_00]: Which, you know, I think is, you know, pragmatic.
11:19
[SPEAKER_00]: It's also frustrating at the same time because, you know, this does feel somewhat self-adduced as a political maneuver to not be able to provide the public.
11:28
[SPEAKER_00]: And, you know,
11:29
[SPEAKER_00]: markets with information to be able to figure out what goes next.
11:34
[SPEAKER_00]: And so I think that gave a lot of people pause and then, you know, you mentioned, you know, gold has had an unbelievable year.
11:40
[SPEAKER_00]: Yeah.
11:42
[SPEAKER_00]: If, if you take that as a, you know, highly correlated asset to Bitcoin.
11:46
[SPEAKER_00]: You know, you would expect to see similar moves in Bitcoin, but you just haven't seen that and I think, you know, the accumulation that's taking place on, you know, the traditional, you know, stores of value, like, sorry, like gold and maybe even like silver and others, you know, has just been bananas and you know, a lot of that is it's not retail people buying gold, right?
12:05
[SPEAKER_00]: Let me guess it's some partial portion of it, but that's large institutional.
12:10
[SPEAKER_00]: pension funds and downements, sovereigns even that are, you know, maybe moving out of treasuries that are no longer going to yield what they're yielding and also like understanding the political and fiscal monetary situation in the U.S. are like thinking about how do we re-allocate our balance sheet to something like gold, which is, you know, performed really well.
12:27
[SPEAKER_00]: At some point in time, that becomes a bit coin.
12:29
[SPEAKER_00]: That's just not there today.
12:30
[SPEAKER_00]: And, you know, open access to the ETFs has definitely given a conduit for larger, you know, allocators to get into
12:38
[SPEAKER_00]: You know, the volatility and, you know, just the education still isn't quite there for them to really move in and size, but I think that that'll happen at some point.
12:45
[SPEAKER_00]: And on the equity side, it's just, you know, continued Mag7 out performance.
12:50
[SPEAKER_00]: And the breadth in the market is just so ridiculously low that, you know, you've got companies that are 4,000, and 5 trillion, who even knows.
12:57
[SPEAKER_00]: We've got some private market companies that are gonna potentially IPO at a trillion dollars.
13:00
[SPEAKER_00]: Like the amount of concentration of performance is kind of scary.
13:06
[SPEAKER_00]: You know, throughout the early days of this week, maybe a little bit late, but the big strategists are coming out and saying this is probably time for a connection and when you have like just general angst in the momentum of a very volatile asset class, like that's the first thing to like show you that there's going to be, you know, potential for a healthy pull back in the markets, which has just been bananas up into the right.
13:30
[SPEAKER_00]: And I think that'll come back into crypto at some point in time.
13:34
[SPEAKER_00]: But it makes sense when you see the original or the initial move going on the most liquid in 24-7 asset class.
13:43
[SPEAKER_00]: Well, that might also be taking place in other markets in parallel as well, too.
13:48
[SPEAKER_02]: Yeah, and like on that point, you mentioned like, you know, the next fed meeting, I think, you know, that'll come up in December or something.
13:55
[SPEAKER_02]: But there was also another really big meeting.
13:56
[SPEAKER_02]: It was like the Trump president, G sort of meeting that they had, I think, in November first or something to try and figure out sort of the, had a tamper down the flames of a trade war.
14:10
[SPEAKER_02]: And it seems like that's really what kicked things off in crypto to the downside was
14:14
[SPEAKER_02]: You know, on the 1010 October 10th sort of crash, it was then, you know, China starting to ban or curb these exports of like, you know, rare earths and magnets and all these kind of things that America's supply chain for their military and for their pharmaceuticals like we're all super dependent on China.
14:32
[SPEAKER_02]: And so then, you know, they kind of had that leverage over us, then Trump was like, you know, all right, fine, 100% tears back on you and everybody's like, all right, sell it all.
14:40
[SPEAKER_02]: You know, and the markets crash with, you know, 20 billion was liquidated, um, do you think like?
14:47
[SPEAKER_02]: Is any of that kind of coming to bear still on the market?
14:50
[SPEAKER_02]: Like, are people still trying to sus that out?
14:52
[SPEAKER_02]: Because what seemed like, you know, this month they said, hey, we've got a good deal.
14:57
[SPEAKER_02]: You know, this is great.
14:58
[SPEAKER_02]: Everybody's on good terms.
15:00
[SPEAKER_02]: I think that's kind of like BS, right?
15:02
[SPEAKER_02]: The markets may be calling BS on it.
15:05
[SPEAKER_00]: Yeah, I think so.
15:06
[SPEAKER_00]: I mean, so what's interesting about that move is the announcement about 100% check tariffs was put on everybody's radar after markets were closed in the US.
15:16
[SPEAKER_00]: which maybe is actually a good at some point in time segue into the tokenization of why we're doing what we're doing on the equity side.
15:22
[SPEAKER_00]: But the markets that were open were digital asset markets.
15:27
[SPEAKER_00]: And so the largest drawdowns that could be executed were in Bitcoin, ETH, Seoul, like you name it, and every asset.
15:36
[SPEAKER_00]: And because of the last few months,
15:39
[SPEAKER_00]: of increased leverage that was built in the system with purps and you know all these various like hyper liquid competitors that have come to market I think people really started to like farm points and like build up leverage and then every all of a sudden on that Saturday on the 11th everybody was Googling what is ADL mean and like all of the work that became like a topic and you know my original view after that happened was the fact that we didn't crash further.
16:06
[SPEAKER_00]: And that we snap back was actually a really bullish signal.
16:09
[SPEAKER_00]: I've actually been convinced otherwise, over the last couple of days, that maybe wasn't as bullish as I thought it was B, it would be because typically in a shake out like that, if you snap back, then you flush out a lot of leverage and then you can start to build back positions going forward.
16:23
[SPEAKER_00]: I don't think the market is ready to do that quite yet.
16:25
[SPEAKER_00]: And that's clear in the performance of the assets as we stand today.
16:29
[SPEAKER_00]: And yeah, I mean, like the meeting with she was like all
16:35
[SPEAKER_00]: At the same time, we kind of forgot about terrorists for a couple of months or a couple of weeks.
16:40
[SPEAKER_00]: And then you had that just kind of drop on your plate on our Friday night.
16:44
[SPEAKER_00]: And then I think now people are realizing that that can happen again.
16:47
[SPEAKER_00]: And our little bit hesitant to put on some more risk.
16:50
[SPEAKER_00]: And crypto is so narrative driven.
16:53
[SPEAKER_00]: Like all the chats that I'm in and all the people I speak to, that's at a dinner last night with a bunch of investors.
16:58
[SPEAKER_00]: And like, what are you excited about right now?
17:00
[SPEAKER_00]: And there's like one or two themes that everybody is kind of like rallying around.
17:04
[SPEAKER_00]: broad, broadly speaking, at least in the near term, there wasn't that major narrative that's really pushing things forward.
17:12
[SPEAKER_00]: People can get exposure to prediction markets, maybe.
17:15
[SPEAKER_00]: But there's no token to trade on that, at least at the stage.
17:18
[SPEAKER_00]: Purpose protocols continue to get more and more adoption, but has Hyperliquid Warne is the question, right?
17:25
[SPEAKER_00]: And when it comes to Bitcoin,
17:35
[SPEAKER_00]: that people are still very obviously interested in from a long-term perspective, but like the near-term flows aren't, you know, big institutions moving a ton away.
17:42
[SPEAKER_00]: You've seen outflows from a lot of the ETFs, and you know part of that is because, you know, what I see is that the basis trade is also compressed a little bit as well, too.
17:49
[SPEAKER_00]: So, you know, that also does add buying pressure or the more that the spreads that are in the futures market, the more, you know, your larger hedge funds that don't
17:58
[SPEAKER_00]: trade spot will buy the ETFs and they'll go short futures against it and capture a spread.
18:03
[SPEAKER_00]: It's a nice trade for them.
18:04
[SPEAKER_00]: When that collapses, they're less interested in holding this spot because they just unwind the pear trade.
18:08
[SPEAKER_00]: So yeah, I think this is kind of temporary.
18:11
[SPEAKER_00]: We'll have to see our way through the holidays and then 2026 might be a better.
18:15
[SPEAKER_00]: We might have more clarity less fog as Powell put it, but we're all waiting for the shutdown to end so that we kind of figure out what the heck is going on in this country.
18:24
[SPEAKER_02]: totally and like this this government shut down that's a whole other thing like you know we could talk about it if you have any insights there uh i'm curious if you know that people are talking about the the treasury general account or the repo accounts and all this kind of stuff which um you know maybe if you want to unpack you can but i'm also curious on your thoughts like
18:44
[SPEAKER_02]: You know, this four-year cycle, historically Bitcoin has topped out, you know, 18 months or so after every having and here we are 18 months after the most recent having and Bitcoin topped out at 125 was that the top is the four-year cycle kind of still still the dominant force.
19:06
[SPEAKER_00]: I don't think so, but I'm neither am I an expert, so I won't apply to far into that.
19:10
[SPEAKER_00]: I'll just say I don't think bit the four-year cycle matters anymore.
19:14
[SPEAKER_00]: There's really a long-term structural bid for this asset, it's just a matter of when the flows continue to get put back on again.
19:22
[SPEAKER_00]: But I think like from the shutdown perspective, our business is now where our year into the administration, super bullish on the long-term trajectory of crypto and America as you alluded to at the top of the call.
19:34
[SPEAKER_00]: You know, you've got Trump.
19:35
[SPEAKER_00]: You've got best sense.
19:36
[SPEAKER_00]: You've got.
19:37
[SPEAKER_00]: Right.
19:37
[SPEAKER_02]: Best just tweeted out like happy birthday Bitcoin.
19:40
[SPEAKER_00]: You know, it's like, it's a great thing.
19:42
[SPEAKER_00]: So I'm like, wow, great.
19:44
[SPEAKER_00]: Yeah.
19:44
[SPEAKER_00]: I mean, well, they, you know, they have bags too.
19:46
[SPEAKER_00]: So don't forget that.
19:47
[SPEAKER_00]: But, you know, the, you know, stable coins, you know, clarity getting, you know, some momentum.
19:53
[SPEAKER_00]: I think the challenge is like, you know,
19:56
[SPEAKER_00]: The regulatory clarity that needs to come out of the SEC, especially on the equity or just securities capital markets, is really hit really impacted by the shutdown.
20:08
[SPEAKER_00]: We were supposed to have a meeting with the SEC a few weeks ago that got canceled and we're waiting for them to open back up so we can revisit that conversation and.
20:15
[SPEAKER_00]: You know, 30 days of the government being shut down the last thing that really matters to the country at the stage.
20:23
[SPEAKER_00]: Like immediately is super state having a meeting with the SEC, but like, you know, from a business standpoint, from like an innovation and like growth for the capital markets on chain, it matters.
20:33
[SPEAKER_00]: And so, I think you're seeing a little bit of slow down in the progress that can be made for anything legislative or regulatory.
20:42
[SPEAKER_00]: That is at least the first time in my life really seeing on a personal level like tangible impact from a shutdown to, you know, a business that is looking to make change and so.
20:56
[SPEAKER_00]: You know, I think that the concern that everybody has is, you know, hey, we're here into the administration.
21:00
[SPEAKER_00]: We've done a lot of really great things.
21:01
[SPEAKER_00]: But have we done all the things that we really wanted to do?
21:04
[SPEAKER_00]: Probably not.
21:05
[SPEAKER_00]: And that's OK.
21:06
[SPEAKER_00]: But, you know, there's still a lot of runway between now and the end of the administration to continue to make progress.
21:14
[SPEAKER_00]: And, you know, you see that you can feel it.
21:18
[SPEAKER_00]: But, you know, you still need rules and relief and clarity
21:25
[SPEAKER_01]: uh... everybody to do a little bit more than what's going on now yeah i mean it is fascinating and i think people are quick to forget everything that we have done and everything that has gone on and you even look back a year from where we are today uh... and we've come a long way i think the real question that i see from from people is what about the state of altcoins because similar to your combat or similar to your thought that you had earlier were you
21:55
[SPEAKER_01]: Um, to a degree kind of look at the crypto market and it feels like the large caps were the big winners here over the last maybe year or last several months.
22:05
[SPEAKER_01]: You look at Bitcoin, you look at eat, you look at BNB, you look at like a lot of these.
22:10
[SPEAKER_01]: that have been at least been able to get back to all-time highs, and I think for the average altcoin you haven't seen as much of that and altcoins have been at least so far a little bit weaker than I think the public was expecting.
22:23
[SPEAKER_01]: So what do you think about just like the state of altcoins?
22:26
[SPEAKER_00]: Well I think the majors moved because of institutional flows and institutional like every single day on CNBC they say Bitcoin they say Ethereum they say Salana and whether it's
22:40
[SPEAKER_00]: Michael Sailor, Tom Lee, Kalsamani, you name it, going on, talking about these assets.
22:47
[SPEAKER_00]: It just resonates with investors.
22:49
[SPEAKER_00]: And it's clearly where a lot of the activity is happening today.
22:52
[SPEAKER_00]: You know, stable coins, if you look at the growth in stable coins, 300 billion dollars in stable coins, which is largely on the chains that I just mentioned, excluding Bitcoin.
23:03
[SPEAKER_00]: But like,
23:04
[SPEAKER_00]: that has from an institutional standpoint, then become an awareness factor for them to say, okay, I now I know what a stable coin is, like how do you use it and where does it trade and like where does it get issued and what's the use case?
23:17
[SPEAKER_00]: So I think that's, you know, the mainstream wise brought a lot of attention and the deaths, I think, have also, you know, been great voices for the networks that they represent.
23:26
[SPEAKER_00]: On the altcoin side, I don't think you've seen an explosion in TVL and D5, we're still below our all-time highs in total TVL across D5.
23:36
[SPEAKER_00]: And that really hasn't onboarded the masses yet.
23:40
[SPEAKER_00]: And I think the unlock for that, you know, biased, of course, in the way that in this statement I'm about to make is like, you got to bring assets that people actually care about onto these systems.
23:49
[SPEAKER_00]: And then you bring the fundamentals and the revenue and the buybacks and all that kind of stuff
23:55
[SPEAKER_00]: You know, a lot of the activity has been, you know, meme coins and, you know, the same, you know, assets that we all know, trading in probably the systems that we all know.
24:04
[SPEAKER_00]: And it hasn't really, you know, expanded into the longer tail of projects that, you know, will see a tailwind at some point in time.
24:13
[SPEAKER_00]: So I just think it's a matter of the moment that we're in and, you know, we're, we're definitely not seeing what we normally see.
24:21
[SPEAKER_00]: in in past cycles, which is, you know, a movement in Bitcoin and eat and soul, then turns into a rotation into the long tail of assets.
24:29
[SPEAKER_00]: And it's been more of like going to majors back to cash, going to majors back to cash, which has been frustrating, I think, for folks that pay a lot of attention to the really great.
24:39
[SPEAKER_00]: You know, opportunities that are going to exist in all coins, but the flows haven't been there.
24:44
[SPEAKER_00]: And, you know, if you're an institutional allocator and you've got two proposals in front of you.
24:47
[SPEAKER_00]: One is from BlackRock to put some money in Bitcoin, which has been up, you know, what is it?
24:52
[SPEAKER_00]: You know, 50% this year.
24:54
[SPEAKER_00]: And then you have another proposal from a two and twenty hedge fund that has, you know,
24:59
[SPEAKER_00]: who knows what kind of performance for the last couple of years, or maybe doesn't even have a big track record.
25:04
[SPEAKER_00]: It's pretty easy to say I'm going to write a $20 million check to Bitcoin versus the hedge fund until that space matures.
25:10
[SPEAKER_00]: And I think a lot of the deployment that goes in some size to the altcoin market are those types of funds that right now are struggling to pick up capital, to be able to move the needle in those markets.
25:23
[SPEAKER_02]: Yeah, I mean, you couldn't be more spot on it's it's certainly been a tough altcoin market.
25:30
[SPEAKER_02]: You know, there's there's some obviously some great ones that are out there that have, you know, real revenues and growing TVL and all that kind of stuff, but there's, you know, more than just a smattering of coins that are, you know,
25:41
[SPEAKER_02]: are fugazzy right and that don't have any value backing them and that are just pure speculation and so feels like we're we're just in the middle of like a rinse like the towel getting squeezed your your drop in you know all these drops of just you know people you know altcoin traders tears essentially you know things are things you know it's always darkest before the dawns I know a lot of people out there are we're listening to crypto 101 consistently are altcoin
26:09
[SPEAKER_02]: uh... and are probably looking their wounds right now and so uh... you know you got to get this is why risk management is always so important and like you know having your trades and having your invalidation points kind of set up before hand and like if if you've kind of got this trade uh... that you think is going to go right well
26:27
[SPEAKER_02]: at what point is it wrong right and when can you kind of get out of that trade and so that's something I definitely want people to be thinking with is have your mental stop loss has been hit have your actual stop loss has been hit I know I know some stop losses on October 10th
26:42
[SPEAKER_02]: You know, people had those stop losses, but they actually didn't get hit.
26:45
[SPEAKER_02]: Like there was just no liquidity to fill that stop loss.
26:47
[SPEAKER_02]: And so even if you had a physical stop loss, you couldn't get out of the market.
26:51
[SPEAKER_02]: So a lot of crazy things going on in the market.
26:53
[SPEAKER_02]: But I think, you know, to kind of like put a punctuation on it, you know, risk management is key, especially during times of like heightened volatility.
27:01
[SPEAKER_02]: And, uh,
27:02
[SPEAKER_02]: You know what goes up goes down, what goes down goes up.
27:04
[SPEAKER_02]: I mean, we've seen this, you know, crypto has had, what is it?
27:08
[SPEAKER_02]: 500 obituaries or something written about it from, from zero dollars to all the way up to 125,000 dollars.
27:15
[SPEAKER_02]: So, you know, I don't think this is the end of crypto's story.
27:19
[SPEAKER_02]: You know, on my crypto Twitter timeline, people are depressed as all heck.
27:23
[SPEAKER_02]: And so that's typically a good sign that, you know, we're about to turn the corner.
27:27
[SPEAKER_02]: We're kind of at that
27:29
[SPEAKER_02]: the jury's still out hopefully by the time folks are listening to this on Friday.
27:34
[SPEAKER_02]: We've we've cleared some of the air, but we'll see.
27:37
[SPEAKER_02]: But I want to talk about, oh yeah, go for it.
27:39
[SPEAKER_00]: Yeah, before you jump in on there's one indicator that I follow, which, you know, I have the very, um, I've an eagle live view on because I sit on top of it every day.
27:50
[SPEAKER_00]: The interesting I haven't done this, and I probably should, is the correlation between the flows into U.S. TV or Monty Market Fund versus the total market cap of crypto or performance in crypto.
28:02
[SPEAKER_00]: Because it's probably not a surprise to you, but a lot of the really sophisticated managers that perform really well on the liquid or venture side.
28:13
[SPEAKER_00]: They actually use U.S. TV as their cash.
28:16
[SPEAKER_00]: and USCC as their cash position.
28:19
[SPEAKER_00]: So as I see a lot of inflows coming in from really, really smart customers into those funds, it's actually kind of a good indicator for me that they know something about the market that feels like it might be topping out.
28:31
[SPEAKER_00]: And so,
28:32
[SPEAKER_00]: Maybe it's something to throw on the 101 dashboard at some point in time of like, you know, what's the, what's the flow of the momentum into U.S. TV?
28:40
[SPEAKER_00]: Because like, the more people who are putting me in cash, the less that they're, you know, out buying in the market.
28:44
[SPEAKER_00]: And then as you start to see that on wine, that means that buyers are starting to take cash off the table and put it back to work.
28:49
[SPEAKER_00]: So, um, yeah, anyways, that's a personal favorite indicator of mine.
28:53
[SPEAKER_02]: Yeah, that could be, uh, yeah, supreme alpha there.
28:57
[SPEAKER_00]: Yeah.
28:58
[SPEAKER_02]: Oh, okay.
28:59
[SPEAKER_02]: And so nothing, nothing to hide there.
29:02
[SPEAKER_02]: Yeah, no, I love it.
29:03
[SPEAKER_02]: Um, super cool.
29:04
[SPEAKER_02]: Well, like, let's, let's talk about these funds, the U.S. TV fund, U.S. C. C. Um, just at a high level, you know, what, what are they doing?
29:11
[SPEAKER_02]: And how can folks at home potentially even get involved with them?
29:15
[SPEAKER_00]: Yeah, so we run two funds.
29:17
[SPEAKER_00]: I run an RIA, SEC registered, registered and investment advisor.
29:23
[SPEAKER_00]: Basically, is the manager to two different funds.
29:25
[SPEAKER_00]: One of them is called USTB.
29:27
[SPEAKER_00]: It's the US Treasury Bill Fund that we run.
29:30
[SPEAKER_00]: And it literally is short duration T-Bills sitting in Bank of New York, Maryland.
29:34
[SPEAKER_00]: So what's great about it though is that you can get 24-7 interest on it.
29:39
[SPEAKER_00]: We calculate, literally, buys the second.
29:41
[SPEAKER_00]: How much has a crew to the nav?
29:43
[SPEAKER_00]: based off of the underlying holding.
29:46
[SPEAKER_00]: So for people that want to like earn interest on the weekend, cool, park your cash into U.S. TV and then take it out on Monday, you've earned forty-and-a-hours of interest, right?
29:54
[SPEAKER_00]: It is very buttoned up, like I mentioned, the T-Bills are sitting in Banking, New York, Mellon, and it's a Delaware Trust.
30:01
[SPEAKER_00]: So it is Bankruptcy remote.
30:02
[SPEAKER_00]: It's as institutional of a product, as you can imagine.
30:06
[SPEAKER_00]: But the bells and whistles that super-state belt, because we've got amazing engineers,
30:10
[SPEAKER_00]: And product folks is that we can take stablecoins, we can do redemptions instantly with available liquidity.
30:18
[SPEAKER_00]: And yeah, like I said, you can earn interest 24-7.
30:20
[SPEAKER_00]: So it's earning Fed funds rate.
30:23
[SPEAKER_00]: So it's got a three-handle on it now.
30:25
[SPEAKER_00]: But that's a very safe liquid asset.
30:29
[SPEAKER_00]: On the carry fund that we run, which has like $600 million in AUM now, that one is still a cash.
30:37
[SPEAKER_00]: vehicle for folks at one apart idle USDC or Fiat.
30:42
[SPEAKER_00]: But instead of us buying T-Bills and just owning that in the fund, we have a market neutral higher yield strategy.
30:50
[SPEAKER_00]: And the way that that works is we're basically trading basis.
30:54
[SPEAKER_00]: It is, you know, a long spot short future.
30:57
[SPEAKER_00]: And a very simple
30:59
[SPEAKER_00]: Example is, let's say you can buy Bitcoin for 100K and short a future that expires in November for 110K.
31:06
[SPEAKER_00]: So that's a $10,000 spread.
31:09
[SPEAKER_00]: And because you're long one unit on one side and short one unit on the other side, you basically like capture the delta between those two, which turns into yield for for investors.
31:20
[SPEAKER_00]: That is, you know, historically been low double digits in CME markets because there's a lot of demand for buying futures.
31:28
[SPEAKER_00]: And so it kind of.
31:30
[SPEAKER_00]: creeps up the price of the futures and so like we're taking advantage of that.
31:33
[SPEAKER_00]: As like an arbitrage trade, we do that for Bitcoin, ETH, Seoul, XRP, and we're actually staking the like Seoul and ETH underneath the hood so that we can earn more yield.
31:43
[SPEAKER_00]: But same kind of institutional structure, we actually partner with Anchorage as our custodian on that for all of the spot assets that we keep, which is an OCC chartered bank.
31:52
[SPEAKER_00]: And, you know, great bells and whistles on that, too.
31:54
[SPEAKER_00]: We want to mention redeemed shares with USDC or with Fiat, you can.
31:58
[SPEAKER_00]: And then hold your assets as collateral.
32:00
[SPEAKER_00]: And what's really, or sorry, hold your shares as tokens.
32:05
[SPEAKER_00]: What's really cool about that is in Ave. Ave is one of the largest or the largest defy-learning protocol in every ecosystem.
32:14
[SPEAKER_00]: And they spun up a specific market for real-world assets.
32:22
[SPEAKER_00]: In the market, you can take U.S.C.
32:24
[SPEAKER_00]: which yield again, like 13%.
32:27
[SPEAKER_00]: Posted as collateral in Afe and then borrow stablecoins against it.
32:30
[SPEAKER_00]: So really high quality low volatility collateral.
32:35
[SPEAKER_00]: that you can then use in D-Fi, because there's a token that you hold in your wallet, which is compatible with Avay, and then you borrow stable coins, you either buy more USCCs, so you can leverage your returns up to like 20, you know, 25% or you are borrowing against the collateral to go, maybe buy Bitcoin today if you want to, because it's dipped.
32:55
[SPEAKER_00]: So that intersection between like a very traditional instrument, we didn't,
33:00
[SPEAKER_00]: build any technology.
33:01
[SPEAKER_00]: We could offer that fund to investors and it'd be very successful.
33:05
[SPEAKER_00]: But the added benefit to it by having a token means that it's compatible with systems like AVA where you can, you know, do the things that I described.
33:12
[SPEAKER_00]: And that's the, like, the secret sauce infrastructure that superstates built as a, as a tech powerhouse.
33:19
[SPEAKER_00]: Um, but yeah, they're great, they're great vehicles.
33:21
[SPEAKER_00]: And as a super state, you know, tech powerhouse that I mentioned, you know, there's many other ETFs and private funds and other types of securities that can also be compatible with.
33:46
[SPEAKER_00]: Sorry, no offense to any of the projects there.
33:48
[SPEAKER_00]: Other.
33:52
[SPEAKER_00]: Like we make it compatible so that like securities can be accessed as collateral or to be swapped and whatnot in these various systems.
34:01
[SPEAKER_00]: It's a really unique position that we're in and to your point about Larry think talking about tokenization like tokenization to me is the stable coin moment for.
34:09
[SPEAKER_00]: finance.
34:10
[SPEAKER_00]: And it's, you know, taking what exists off-chain, traditionally, and making it something that can move around in the internet, 24, 7, 365, and interact with these systems, which is what makes a dollar more interesting as a stablecoin than it is in your bank account.
34:25
[SPEAKER_00]: So yeah, there's those two funds have gotten us to 100, one in half billion in AUM across the board.
34:32
[SPEAKER_00]: And for folks that are accredited investors that are looking for that type of exposure, go to superstate and get set up.
34:39
[SPEAKER_00]: It takes you no time at all to register and you can become a client and would be happy to have you.
34:47
[SPEAKER_02]: Yeah, it's incredible.
34:48
[SPEAKER_02]: I mean, I remember when it just started off and, you know, it certainly didn't start off at a billion, billion five.
34:54
[SPEAKER_02]: So congratulations.
34:56
[SPEAKER_02]: And I think I owe you a beer or something to celebrate because that is a huge number.
35:01
[SPEAKER_02]: So how's it feel like, you know, how's the team morale, how's everybody, you know, is everybody still heads down or you guys kind of taking a little celebratory, you know, president's club vacation to Bermuda.
35:12
[SPEAKER_00]: I never, no, and you and I, Bryce, we both had kids, so yeah, we don't sleep at all, no, I think
35:22
[SPEAKER_00]: You know, we're more hungry than ever.
35:23
[SPEAKER_00]: And it's partly because of the tailwinds that we described earlier in terms of the embrace from the US markets, regulators, legislators to allow tokenization to thrive.
35:36
[SPEAKER_00]: You know what I mean?
35:37
[SPEAKER_00]: When we started the business to your point, Bryce, I think there was like $100 million.
35:40
[SPEAKER_00]: Yeah.
35:42
[SPEAKER_00]: Like in the first like six months of those funds.
35:44
[SPEAKER_00]: And so to see the growth has really been a testament to the growth of the overall ecosystem plus like additional,
35:51
[SPEAKER_00]: You know, demand for these types of products, whether it's like a so in the U.S. T.B.
35:57
[SPEAKER_00]: found what's really cool there is like bridge who was bought by strike for a billion dollars.
36:01
[SPEAKER_00]: We back where it was in their press release when they announced the product called Open Access.
36:07
[SPEAKER_00]: Um, that they have their reserves managed by black rock, fidelity, and superstate.
36:13
[SPEAKER_00]: And because we have really great technology that interacts with bridge, you know, we, we also have like over a hundred million dollars in from Spark.
36:21
[SPEAKER_00]: So like two stablecoin businesses that have like, you know, tons of assets that are looking for really high quality collateral or reserves, they come to superstate.
36:28
[SPEAKER_00]: So like that's been a great tailwind for us to grow.
36:32
[SPEAKER_00]: But there's always new things that you can do.
36:33
[SPEAKER_00]: New protocols, you can integrate with new chains that you can launch on, new products that you can launch.
36:39
[SPEAKER_00]: So it's quite the opposite.
36:41
[SPEAKER_00]: I'm actually here in our office in New York for the week, because we are growing.
36:47
[SPEAKER_00]: We've added a number of members to the team.
36:50
[SPEAKER_00]: We're seeing clients in person.
36:51
[SPEAKER_00]: And it's an exciting time because aside from the funds business, the opening bell equity side of our,
36:58
[SPEAKER_00]: of our product suite is really starting to take off.
37:02
[SPEAKER_00]: It's been a lot of attention from the public capital markets.
37:05
[SPEAKER_00]: I'm getting calls from like large cell side banks asking what the heck we're doing because they're seeing their issuers do tokenization.
37:12
[SPEAKER_00]: When the headlines are tokenization is coming, they're like, where?
37:18
[SPEAKER_00]: And then they all of a sudden see Galaxy digital tokenizes their stock through Super State.
37:22
[SPEAKER_00]: And they're like holy crap.
37:22
[SPEAKER_00]: It's a $15 billion market cap company that's working with,
37:28
[SPEAKER_00]: tokenization firm that really knows the regulatory side and the technology side.
37:34
[SPEAKER_00]: And the trying to figure out where does this go next?
37:36
[SPEAKER_00]: And that's what we're really excited about.
37:38
[SPEAKER_00]: It is so nascent today.
37:40
[SPEAKER_00]: It is like very cliche.
37:42
[SPEAKER_00]: We're just getting started.
37:44
[SPEAKER_00]: But it's true.
37:45
[SPEAKER_00]: Like we have the regulatory license as a transfer agent to be able to record a ownership.
37:51
[SPEAKER_00]: on chain and that's pretty unique compared to the legacy transfer agents that don't know what blockchains are.
37:59
[SPEAKER_00]: And so we're going to try to unlock as many of the 6,000 publicly traded companies as possible to get on chain and to really help
38:08
[SPEAKER_00]: DeFi, not from a completely permissionless standpoint, but from a securities trading, sec lending, you know, like you call it that, like collateral markets that can interact with all the assets that right now sit in people's fidelity and Robin Hood and Schwab accounts, and instead give them access to that through their wallets.
38:30
[SPEAKER_00]: In some point in time, all of those
38:32
[SPEAKER_00]: platforms that I just mentioned will also give you access to defy markets through a fidelity, right?
38:38
[SPEAKER_00]: They built their own money market fund, but it's just getting started in terms of unlocking the composability or the integrations with those assets into various markets so that people get more of a reason and utility to hold their assets on chain than just holding in their brokerage account.
38:57
[SPEAKER_01]: Yeah, I mean, it's fascinating, man.
38:59
[SPEAKER_01]: And we've seen this talk of tokenization go on for, you know, feels like the last year or two now.
39:05
[SPEAKER_01]: And it just continues to grow and grow and grow.
39:08
[SPEAKER_01]: And it's like you said, you know, these bigger names continue to kind of pile into it, which brings even more attention and it turns even more heads.
39:16
[SPEAKER_01]: And so the idea of this opening bell,
39:19
[SPEAKER_01]: What I really kind of take as the important takeaways is that it lets real companies, both private and public, tokenize their actual shares and not in a synthetic version, and make them tradable on blockchains.
39:33
[SPEAKER_01]: And I believe it's supported on both
39:37
[SPEAKER_01]: Um, which is fascinating, right?
39:39
[SPEAKER_01]: And it seems like that kind of the direction that the ball is headed and people are trying to be forward looking, especially the traffic sector, they're trying to be forward looking and saying, okay, well, it looks like the ball is going in that direction, let's see what we can do right now.
39:54
[SPEAKER_01]: And I think it's important to phrase it like that, and again, you're going to, I want to, I want to, I want to have you talk about this, but I think it's important to phrase it like that because it shows that we're not in the end game of this yet, and I think that we're still in the process of like the ball has maybe just been kicked off, and people are still like looking down the field saying, you know, that is where it can be, and it's not already there.
40:17
[SPEAKER_02]: Yeah, just added that real quick, just like, you know, what is it about, you know, all of these asset issuers or asset managers like BlackRock and like why are they getting into tokenization?
40:28
[SPEAKER_02]: Yeah.
40:28
[SPEAKER_02]: What does it do for their business?
40:30
[SPEAKER_02]: You know, in the same way the ETFs reinvented the mutual fund or whatever, like what are some of those really key advantages?
40:38
[SPEAKER_02]: What gets a guy like Larry Finke to go on to, you know, the world stage and say, we're completely rearchitecting our business
40:47
[SPEAKER_00]: Yeah, I mean, I can see it firsthand.
40:49
[SPEAKER_00]: So good anecdote is like, our Carrie Fund has
40:56
[SPEAKER_00]: a cash component to it when investors put dollars into that vehicle, and it normally in traditional finance would take a middle office person to send a wire to a money market fund or to do a trade, and you have processing delays in times of reconciliation and people involved.
41:18
[SPEAKER_00]: That's because it's, and that by the way, that's only like Monday through Friday, nine to five.
41:22
[SPEAKER_00]: So you can't be doing that 365.
41:24
[SPEAKER_00]: You know, when we get $10 million comes into U.S.C.
41:28
[SPEAKER_00]: instantly, we take that U.S. D.C. and we subscribe to U.S. T.B.
41:32
[SPEAKER_00]: our money market fund.
41:34
[SPEAKER_00]: So that we're earning interest that second.
41:36
[SPEAKER_00]: So like,
41:36
[SPEAKER_00]: P and L lies for the fund, it's advantageous because you don't even lose any time from the fund's landing in your bank account or in your fund until they actually get deployed and it's instant.
41:47
[SPEAKER_00]: That's what the great, that's the super powers of blockchains, right?
41:50
[SPEAKER_00]: You have instance settlement 24 7365.
41:51
[SPEAKER_00]: So it doesn't matter if that subscription comes in at Saturday at 3 o'clock in the morning.
41:56
[SPEAKER_00]: We're going to start earning interest at 301 a.m. on Saturday and typically you can't do any wires on the weekends in traffic.
42:03
[SPEAKER_00]: So I think, you know, I use that example because
42:05
[SPEAKER_00]: it to me is a operational and also a financial improvement than the traditional business.
42:14
[SPEAKER_00]: And like if you run 10 trillion dollars and you have thousands and thousands of middle office and back office people that are just doing root work, it's kind of similar to how AI is going to disrupt and just enhance the human experience in the workplace.
42:30
[SPEAKER_02]: Honestly, I haven't heard anybody on it like that, but it's spot on.
42:33
[SPEAKER_00]: I mean, tokenization is going to do the same thing, right?
42:35
[SPEAKER_00]: It's just like, why do you need a human being to go and say, I got $10,000 in.
42:40
[SPEAKER_00]: Let me write this down.
42:41
[SPEAKER_00]: And then let me take that $10,000 and send it over to something else.
42:43
[SPEAKER_00]: And then, oh, let me confirm that that was settled over there.
42:46
[SPEAKER_00]: And then come back and write it bound.
42:47
[SPEAKER_00]: And oh, by the way, now it's two days later, I got to reverse the same thing I just did.
42:50
[SPEAKER_00]: It's like,
42:51
[SPEAKER_00]: Well, you just forgot a decimal point or I added a comma and you know things just what the heck you know there's human error just what the keyboard Yeah, no, it's insane and like as a guy who started like I said at city bank like I saw the black and green mainframe screens at like these guys use in the back office to you know reconciled billions of dollars of transactions and you know having and just losing it
43:12
[SPEAKER_00]: Honestly, where the heck did that money go and you got to like set a bunch of emails and find somebody who can say that they that they know how the break happened, but But yeah, so I think automation, you know, same thing is striped buying bridge, right?
43:23
[SPEAKER_00]: Like they have a real opportunity to increase the gross margin of that business by automating a lot of the financial workflows that they had behind the scenes on chain instead of
43:33
[SPEAKER_00]: on fiat.
43:35
[SPEAKER_00]: So I think that's like the main area.
43:37
[SPEAKER_00]: And like to to Brennan's point, what's been really great has been the institutional, um,
43:45
[SPEAKER_00]: agreement that this is the future for capital markets and it's going to not happen like everybody crypto so short term instant gratification, jenzy you know millennial maybe you know minded where it's like we need this to happen tomorrow like it you know it doesn't and especially when you do it the right way it takes time and I think there's a three stage journey to this we have look at it like the
44:10
[SPEAKER_00]: legitimate companies and technology providers, regulated businesses that are merging these two worlds from an issuance standpoint.
44:21
[SPEAKER_00]: The second phase to that is taking the issuance and making it and integrating it.
44:26
[SPEAKER_00]: So you've got issuance, integration, and then the next stage of that is capital formation.
44:30
[SPEAKER_00]: And like, to me, that's going to be a huge unlock to really spin the flywheel of capital markets because now you have assets that exist,
44:40
[SPEAKER_00]: an integration in between where people can buy cell trade and and interact like they do on, you know, the brokerage accounts today.
44:48
[SPEAKER_00]: But do that all on one platform.
44:50
[SPEAKER_00]: Like that issuance formation and integration, it to me is as a classic nostic, you know, you could do that for equities, fixing come funds, real estate, like you name it, private equity, private credit.
45:05
[SPEAKER_00]: That's the beauty of a
45:09
[SPEAKER_00]: different asset classes that can interact and settle instantly and reach a global audience without needing a bunch of human beings in between to make that happen and and it's a phased approach to get there but I think we're going to turn the corner in you know the next couple of months where all of a sudden you're going to see what the treasury bill chart looks like if you go to RWA.xyz
45:30
[SPEAKER_00]: It was like this and asymptotic for so long and that all of a sudden it took a hockey stick up to the right.
45:35
[SPEAKER_00]: Securitizes done with great work, circles, USYC has done great work, wisdom, trees, super state.
45:40
[SPEAKER_00]: Like all these early adopters are now sitting at like eight billion dollars a value.
45:45
[SPEAKER_00]: It is going to be hilarious when you look at that chart in 10 years and you realize that's still the asymptote.
45:49
[SPEAKER_00]: Because $8 billion is so small compared to the total pie.
45:54
[SPEAKER_00]: And I think the equity side is going to look very similar.
45:58
[SPEAKER_00]: And catch up to that in the next couple of months as well, too.
46:02
[SPEAKER_02]: Yeah, I love it.
46:03
[SPEAKER_02]: There's a lot running through my mind.
46:05
[SPEAKER_02]: But one of the things that kind of just comes to the forefront is that, like, with all of this institutional adoption, regulatory clarity, all that kind of stuff, it kind of feels like, in a sense,
46:19
[SPEAKER_02]: revolutionary spirit.
46:21
[SPEAKER_02]: And I don't know if you feel that and Brendan, if you felt something like that, but when we all started back in, you know, nine, 10 years ago or whatever, like, it was all about like, let's stick it to the banks.
46:31
[SPEAKER_02]: Let's take money back, you know, control of it, you know, the governments, you know, debasing things.
46:37
[SPEAKER_02]: And so let's have this sort of non-dilutive, super secure, you know, crypto system like,
46:44
[SPEAKER_02]: Bitcoin and then let's have this level playing ground on a theorem where everybody could do whatever they want and like now it feels a little co-opted by the banks and just from our crypto and one community I've heard people say like price how you know why are you all excited about Larry think like you know all these bad things you know he does or whatever not like you know again these are just here saying all that kind of stuff, but I'm like where do you kind of fall gym like
47:06
[SPEAKER_02]: is this the path forward?
47:08
[SPEAKER_02]: Is it just going to be institutionalization and, you know, the crypto revolution?
47:11
[SPEAKER_02]: I wrote the book, crypto revolution is like, it's no longer revolution to the revolution when are we in the middle of it?
47:16
[SPEAKER_02]: Like, what's going on?
47:17
[SPEAKER_02]: Just like, that sentiment.
47:19
[SPEAKER_00]: I mean, look at the chart of Z Cash.
47:21
[SPEAKER_00]: The revolution is still happening, guys.
47:24
[SPEAKER_00]: I think, like, honestly, and I've been actually saying this for a while, even, like, from my compound days, like, there, I think is going to be parallel.
47:31
[SPEAKER_00]: activity happening in crypto.
47:34
[SPEAKER_00]: One side of which is very much the revolution that you described, which is to eat as a, and I think, you know, there's a fantastic element of, you know, seizure, resistant assets, privacy, and transactions, self-custody.
47:51
[SPEAKER_00]: But in the reality is that
47:55
[SPEAKER_00]: It was a $4 trillion market cap, I don't know what it is after today's moves and it got three and a half, but like, you know, it pells and comparison.
48:04
[SPEAKER_00]: to the activity and size of traditional assets.
48:07
[SPEAKER_00]: And so I think there's a world where both exist, which is a great benefit to crypto.
48:11
[SPEAKER_00]: And I think the one thing that people don't appreciate about tokenization is it actually does kind of stick it to the banks and sorry to all my bank partners and friends out there.
48:21
[SPEAKER_00]: But I own Galaxy digital as a share and fidelity
48:27
[SPEAKER_00]: I have like very limited options in what I can do with that.
48:31
[SPEAKER_00]: Meaning I go to fidelity and say, I want margin against this.
48:34
[SPEAKER_00]: They're going to quote me a certain LTV in a certain low.
48:37
[SPEAKER_00]: That's because I'm stuck in their world.
48:41
[SPEAKER_00]: If I move my assets to my Phantom or my Meta mask, and I am now on Solana, and let's say that I could lend it out on Camino, I could put it as collateral
48:56
[SPEAKER_00]: on drift to trade perps and do the basis.
48:59
[SPEAKER_00]: I could LP in a workout pool.
49:02
[SPEAKER_00]: I could do a whole host of things that I choose to do 24, 7, 365 based off of my own preferences.
49:09
[SPEAKER_00]: And I surveyed a landscape on where my risk tolerance is and like you give me the best ray in the best LTV, like that's where I'm gonna deploy my assets.
49:16
[SPEAKER_00]: So that is still very much a revolution because you're bringing power back to the people.
49:21
[SPEAKER_03]: Yeah.
49:21
[SPEAKER_00]: And they're now self-directing where their assets are held and used and that to me is very much in line with the ethos of crypto.
49:30
[SPEAKER_00]: And I think the other thing too that is going to be really interesting to see is the, you know, I tweeted about this a couple months ago, but like banks became so big because they had great technology and global distribution.
49:43
[SPEAKER_00]: Well, guess what has great technology and global distribution, Solana, Ethereum, you name it.
49:49
[SPEAKER_00]: And so the other way to bring power back to the people also is give them the ability to go and deploy their assets into the investable opportunities and allow companies on the other side to reach audiences and loyal investors all over the planet.
50:02
[SPEAKER_00]: Like imagine you drive your favorite car in,
50:07
[SPEAKER_00]: some jurisdiction where you can't buy the stock of that company.
50:10
[SPEAKER_00]: Well, like, I've been, you know, a loyal call at GM driver for a number of years, if I'm in a region that doesn't have a brokerage account where I can buy GM stock.
50:19
[SPEAKER_00]: Like, I don't get to benefit on the upside of what I think is a great company.
50:23
[SPEAKER_00]: You can do that with a token.
50:26
[SPEAKER_00]: That's why that's my, that's my soap box on that tokenization is not killing the revolution.
50:35
[SPEAKER_01]: Now, yeah, I think we would all agree, you know, tokenization is a net good for crypto and it's super innovative and it's just innovative out its core and so we're excited to kind of see the direction that it continues to go.
50:46
[SPEAKER_01]: We're big fans of tokenization over here.
50:49
[SPEAKER_01]: But to wrap things up, looking forward, we see Trump packing the Fed with those, right?
50:56
[SPEAKER_01]: We're gonna probably get a new chair who wants more cuts and I'm curious in a lowering rate environment
51:03
[SPEAKER_01]: what happens to U.S.T.B and U.S. D.C. or U.S. C.C.
51:08
[SPEAKER_01]: Excuse me.
51:08
[SPEAKER_00]: Yeah, good question.
51:09
[SPEAKER_00]: So I actually think that they might be opposite.
51:13
[SPEAKER_00]: And so U.S.T.B clearly is going to follow headphones, right?
51:15
[SPEAKER_00]: Like the mandate of that fund is to actually
51:18
[SPEAKER_00]: perform in line with what Fed funds is.
51:20
[SPEAKER_00]: So I think you'll you'll see a reduction in yield, but I don't think you'll see a reduction in assets under management, because stablecoins have a mandate in genius to put their assets in the short duration treasury bills.
51:33
[SPEAKER_00]: So that's a big client segment of ours.
51:36
[SPEAKER_00]: And even for the liquid inventor funds that I mentioned to the extent that they want to move back to cash, getting 1% to percent, 3%, 3%.
51:43
[SPEAKER_00]: on T-Bills is still better than getting zero percent on a stable point.
51:48
[SPEAKER_00]: So while it might be less attractive from a collateral in D5 perspective because the rates are going to be higher on USDC or your borrow rates are going to be higher, I still think there's just structural demand and I don't see the $7 trillion in money market funds getting on
52:09
[SPEAKER_00]: On the carry fund, depending on the risk appetite of the market, if the Fed lowers rates and you see Bitcoin ripped to 250K, you're going to see spreads in basis blow out to 2030 percent, especially in the Perfs market.
52:23
[SPEAKER_00]: And so I actually think that that'll be a really healthy rate environment for superstate on the carry fund, because we'll take advantage of the spreads in those yields.
52:31
[SPEAKER_00]: So, you know, kind of like,
52:34
[SPEAKER_00]: I'm bullish on both sides and maybe I'm just a, you know, internal optimist, but but I do think, you know, structurally just the demand on a relatively low base at the beginning.
52:43
[SPEAKER_00]: Well, one and a half billion is great.
52:45
[SPEAKER_00]: This still just so much more structural demand behind that.
52:49
[SPEAKER_02]: No, I love it.
52:50
[SPEAKER_02]: I'm an optimist too, despite the propaganda that Big Short had.
52:55
[SPEAKER_02]: Well, the pessimists always sound smart, but the optimists make the money in the longer.
52:59
[SPEAKER_02]: So I hope everybody at home watching and enjoyed this conversation.
53:04
[SPEAKER_02]: I know you did.
53:05
[SPEAKER_02]: It was super timely.
53:07
[SPEAKER_02]: Wanted to get you in here to kind of comment on the market action and all the.
53:10
[SPEAKER_02]: exciting things that you're doing Jim so we'll let you go until next time but just you know things will be down in the show notes for where to find you but in case people don't want to click into the show notes where could people kind of follow along on X or any blogs or websites.
53:24
[SPEAKER_00]: Yeah, go to superstate.com.
53:26
[SPEAKER_00]: You'll see all the great things that I walk through here today and then, you know, I'm at Helpner Gym in Twitter.
53:33
[SPEAKER_00]: I'm not the most prolific social media guy, but everyone's in a while.
53:38
[SPEAKER_00]: I like to surprise folks, so stay tuned.
53:41
[SPEAKER_02]: Love it.
53:41
[SPEAKER_02]: Well, hey, Jim, have some safe travels there in New York, stay toasty warm.
53:45
[SPEAKER_02]: I heard it's gonna be a really cold fall and winters.
53:49
[SPEAKER_02]: So, until next time, we'll see you soon.