Latest / The Paul Barron Crypto Show / Dollar Debasement Mega Trend!🔥Grayscale INTERVIEW🚨Zach Pandl

Transcript

Dollar Debasement Mega Trend!🔥Grayscale INTERVIEW🚨Zach Pandl · The Paul Barron Crypto Show

• 0:00
  Speaker 1: A great rotation is starting to move into crypto.
• 0:02
  Speaker 2: Today, we're going to be breaking that down and why
• 0:05
  Speaker 2: it is happening and what we're going to do about it.
• 0:07
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• 0:44
  Speaker 1: I want to first start off with a clip.
• 0:47
  Speaker 2: And this will get into where the rotation potentially could
• 0:51
  Speaker 2: be stemming from. why we're seeing the market move and
• 0:55
  Speaker 2: really was this a rally spark or was this maybe
• 0:58
  Speaker 2: a bull market beginning?
• 0:59
  Speaker 1: Take a look.
• 1:01
  Speaker 3: Bitcoin seeing its strongest three-day win since 2023.
• 1:05
  Speaker 1: There's two things behind it, really.
• 1:08
  Speaker 3: The AI trade is starting to lose a little bit
• 1:10
  Speaker 3: of its luster as people become concerned around valuation and
• 1:14
  Speaker 3: ROIs that may not be there on this huge amount
• 1:16
  Speaker 3: of capex. Big liquidity interventions on behalf of governments around
• 1:21
  Speaker 3: the globe to counteract big structural issues. So I think
• 1:26
  Speaker 3: that's what kicked this big liquidation off last week. It
• 1:29
  Speaker 3: was the biggest short liquidation in crypto in the past
• 1:32
  Speaker 3: five years. And the fundamental case is as good as ever, Scott.
• 1:36
  Speaker 3: If you look at the budget deficit this year in
• 1:38
  Speaker 3: the United States at $ 1. 8 trillion, the entire market cap
• 1:43
  Speaker 3: of Bitcoin is smaller than the dollars that have to
• 1:45
  Speaker 3: be invented from just this year's behavior alone. So there's
• 1:48
  Speaker 3: a big structural demand here and a big runway, I think,
• 1:51
  Speaker 3: ahead of us.
• 1:53
  Speaker 1: All right, so big structural demand.
• 1:54
  Speaker 2: You've got many people might be looking at this still
• 1:57
  Speaker 2: as the debasement trade, obviously with what's going on in
• 2:00
  Speaker 2: the Treasury. We'll get into that here in a second
• 2:02
  Speaker 2: with Zach Pannell coming in from Grayscale. But before I
• 2:05
  Speaker 2: do that, take a look at this fear and greed.
• 2:07
  Speaker 2: This is insane, the kind of move that that has
• 2:11
  Speaker 2: had in a very short period of time. Just to
• 2:13
  Speaker 2: give you guys an example, this was the 14th, 10
• 2:16
  Speaker 2: days ago, right there, setting up.
• 2:19
  Speaker 1: At literally 36. And here we are.
• 2:21
  Speaker 2: We have spiked to 81, back up to almost our
• 2:25
  Speaker 2: all-time high points that we saw last in 2024. So
• 2:28
  Speaker 2: very interesting times ahead. So we thought, hey, let's get
• 2:32
  Speaker 2: Grayscale and Zach Pandel on and kind of break it down.
• 2:36
  Speaker 2: So let me ring in Zach. Actually, I'm going to
• 2:38
  Speaker 2: call you We Are So Back Zach. I like this one, Zach.
• 2:43
  Speaker 1: How are you?
• 2:44
  Speaker 4: I like it too. I'm doing great, Paul. Awesome to
• 2:46
  Speaker 4: be back on the show.
• 2:48
  Speaker 2: Hey, listen, let's get into a couple of points I
• 2:50
  Speaker 2: want to lead off with. And first thing I want
• 2:53
  Speaker 2: to jump into is the Treasury dynamics. You look at
• 2:57
  Speaker 2: what's happening right now with Scott Besson's announcement. You put
• 3:02
  Speaker 2: out a post on X. I'll kind of zoom in
• 3:03
  Speaker 2: on that right there. Debasement trade versus de-dollarization trade.
• 3:08
  Speaker 1: Now, explain to me the difference between the two.
• 3:13
  Speaker 5: Well, today the dollar is the world's dominant currency essentially
• 3:18
  Speaker 5: for all the different use cases as a store of
• 3:21
  Speaker 5: value and as.
• 3:23
  Speaker 4: A medium of exchange.
• 3:25
  Speaker 5: And I think one way to think about it, Paul,
• 3:27
  Speaker 5: is that investors and users are questioning their assumptions on
• 3:31
  Speaker 5: whether they want to be using the dollar in all cases.
• 3:34
  Speaker 5: or they want to diversify to other stores of value,
• 3:38
  Speaker 5: other medium of exchange. And physical gold is one example
• 3:42
  Speaker 5: of that. Digital Bitcoin is one example of that. Maybe
• 3:46
  Speaker 5: some other foreign currencies like the euro or the Chinese
• 3:49
  Speaker 5: yuan could benefit from that. But it's about pressure on
• 3:52
  Speaker 5: the dollar's dominant global role because of policy decisions here
• 3:57
  Speaker 5: in the United States. Big budget deficits and unchecked debt
• 4:01
  Speaker 5: growth driving demand for new stores of value. I think
• 4:05
  Speaker 5: of that as the debasement trade. And then the U.S.
• 4:08
  Speaker 5: using the financial system to apply foreign policy pressure. I
• 4:12
  Speaker 5: think of that as the de-dollarization trade. These are two
• 4:16
  Speaker 5: overlapping concepts. They're both putting pressure on the dollar's central
• 4:20
  Speaker 5: role internationally and motivating investors to look at things like Bitcoin.
• 4:25
  Speaker 4: All right.
• 4:25
  Speaker 1: So let's look at the Treasury bonds.
• 4:28
  Speaker 2: And in general, when you look at what Besant is
• 4:31
  Speaker 2: trying to do, The statement out of The Guardian, U.S.
• 4:35
  Speaker 2: Treasury bond will lose the battle with the bond market
• 4:38
  Speaker 2: or the U.S. Treasury will lose the battle with the
• 4:40
  Speaker 2: bond market. This is coming from Stanley Drunkenmiller, which is
• 4:45
  Speaker 2: a previous mentor of Besson. Why do you think that's
• 4:49
  Speaker 2: going to take place? I mean, Drunkenmiller kind of argues
• 4:52
  Speaker 2: it that we should just let the bond market speak.
• 4:55
  Speaker 2: Would you agree or do you think this is a
• 4:58
  Speaker 2: good correction by the Treasury?
• 4:59
  Speaker 5: Okay. The Treasury buybacks that were announced last week are
• 5:05
  Speaker 5: a classic example of treating the symptoms of the problem
• 5:11
  Speaker 5: rather than trying to find the cure. The symptoms are
• 5:16
  Speaker 5: high interest rates, and the underlying problem is unchecked deficits
• 5:21
  Speaker 5: and debt growth. We can't cure that problem realistically. There
• 5:26
  Speaker 5: is not a political movement in the United States towards
• 5:32
  Speaker 5: cutting spending and or raising taxes. And so we're likely
• 5:35
  Speaker 5: to have high deficits and debt growth for some time.
• 5:40
  Speaker 5: And so the Treasury, therefore, is forced to just treat
• 5:43
  Speaker 5: the symptoms, trying to manage the pressure on interest rates
• 5:47
  Speaker 5: as best they can. Whether that's the right decision or
• 5:51
  Speaker 5: a wrong decision, of course, there's so many different perspectives
• 5:54
  Speaker 5: on that question. What our strong conviction would be is
• 5:59
  Speaker 5: that this really should be motivating for investors. Investors should
• 6:03
  Speaker 5: look at these events as a very clear example that
• 6:08
  Speaker 5: the underlying problem of unchecked deficits and debt growth cannot
• 6:13
  Speaker 5: be solved soon and need to be considering the risks
• 6:17
  Speaker 5: that that creates to fiat currencies and what to do
• 6:19
  Speaker 5: about it in their portfolios. We think it's very sensible
• 6:23
  Speaker 5: to be considering scarce digital assets like Bitcoin and others
• 6:27
  Speaker 5: for exactly that purpose. I think that's why Bitcoin has
• 6:31
  Speaker 5: had such a large move in the last week as
• 6:33
  Speaker 5: investors are revisiting that thesis, motivated by the announcement of
• 6:38
  Speaker 5: Treasury buybacks.
• 6:41
  Speaker 2: Let me go over to altcoins. I'm looking at this
• 6:44
  Speaker 2: one that came in from Woo Blockchain. You guys made
• 6:46
  Speaker 2: a big move. You withdrew applications for Cardano, HBAR, and
• 6:51
  Speaker 2: Polkadot ETFs. Do you think that we're going to see
• 6:55
  Speaker 2: altcoin ETFs start subsiding?
• 6:58
  Speaker 1: You think those days are done? What would be your
• 7:01
  Speaker 1: opinion on this?
• 7:04
  Speaker 4: That's a great question, Paul.
• 7:07
  Speaker 5: I would characterize the crypto asset class as a big
• 7:10
  Speaker 5: and diverse ecosystem with so many different applications of public
• 7:15
  Speaker 5: blockchain technologies. Now, not all of them are going to
• 7:19
  Speaker 5: be equally successful, and Grayscale is constantly evaluating both the
• 7:24
  Speaker 5: market outlook and the outlook for the technology and investor
• 7:27
  Speaker 5: demand for these assets and trying to calibrate our product launches.
• 7:32
  Speaker 5: I think it would be a mistake to say that
• 7:34
  Speaker 5: altcoins in some broader sense are dead. I think we
• 7:39
  Speaker 5: are just getting started in all the applications of public
• 7:42
  Speaker 5: blockchain technology beyond Bitcoin. Applications like stable coins, tokenized assets,
• 7:49
  Speaker 5: perpetual futures, many of the topics that we've discussed in
• 7:52
  Speaker 5: the past, and other tokens beyond Bitcoin are going to
• 7:56
  Speaker 5: be an important part of that. Many of those things
• 7:58
  Speaker 5: performing very well recently. But we do need to be selective.
• 8:03
  Speaker 5: Not all of the millions of digital assets are going
• 8:05
  Speaker 5: to be as successful as Bitcoin over time. We try
• 8:09
  Speaker 5: to be thoughtful about those decisions, give targeted recommendations and
• 8:14
  Speaker 5: product launches for our clients. And we continue to do
• 8:17
  Speaker 5: just that.
• 8:18
  Speaker 1: You guys have been busy.
• 8:19
  Speaker 2: You launched a Zcash ETF.
• 8:21
  Speaker 1: This is being built.
• 8:23
  Speaker 2: So it's Z-C-S-H for you guys out there trying to
• 8:27
  Speaker 2: track it down. This is the first Zcash ETF offering.
• 8:30
  Speaker 2: So that in itself, what are you looking to get
• 8:34
  Speaker 2: from this? Obviously, is this something that you feel is
• 8:37
  Speaker 2: more of a long term effort or is this more
• 8:40
  Speaker 2: riding the current wave of what has been happening with
• 8:43
  Speaker 2: Zcash in general?
• 8:46
  Speaker 5: Well, we are thrilled to be able to offer this
• 8:49
  Speaker 5: product as an ETF, but it's absolutely a long-term effort.
• 8:53
  Speaker 5: And I think that the product itself speaks to this.
• 8:56
  Speaker 5: It's new as an ETF, but the product actually is
• 9:00
  Speaker 5: nine years old, launched in 2017.
• 9:02
  Speaker 4: I think that.
• 9:02
  Speaker 5: Underscores the focus that Grayscale brings to the asset class,
• 9:08
  Speaker 5: the conviction that it brings to the products that it
• 9:13
  Speaker 5: expects to be successful over the long term. Look, Bitcoin
• 9:18
  Speaker 5: is almost 18 years old now, turns 18 this October
• 9:23
  Speaker 5: when Satoshi first published the Bitcoin white paper. And Bitcoin
• 9:27
  Speaker 5: benefits from big first mover advantages in digital currencies. Those
• 9:32
  Speaker 5: support Bitcoin's deep network effects in this category. But we
• 9:37
  Speaker 5: believe that Zcash has some important second mover advantages. It
• 9:42
  Speaker 5: has some features that were either not possible or less
• 9:45
  Speaker 5: relevant when Bitcoin first took off. And number one of
• 9:49
  Speaker 5: those is financial privacy. So your listeners can think about
• 9:53
  Speaker 5: Zcash as very similar to Bitcoin, 21 million coin limit,
• 9:57
  Speaker 5: proof of work, a blockchain, but giving users... the option
• 10:00
  Speaker 5: of full financial privacy. We think that will be increasingly
• 10:03
  Speaker 5: important and increasingly valuable in a world of AI. We're
• 10:07
  Speaker 5: thrilled to be able to bring this product to launch
• 10:10
  Speaker 5: as an ETF, and we will definitely be in and
• 10:13
  Speaker 5: around this ecosystem for the long term.
• 10:16
  Speaker 1: Well, I mean, you look at the chart, it's been
• 10:18
  Speaker 1: pretty active.
• 10:19
  Speaker 2: Along with the rest of the market, we have seen
• 10:21
  Speaker 2: this token move just almost equally in comparison to something
• 10:25
  Speaker 2: that we have also seen in the top five. So
• 10:27
  Speaker 2: Bitcoin on a real roar this morning, continuing to spike
• 10:31
  Speaker 2: over 80. So interesting times in general. Just as a whole,
• 10:36
  Speaker 2: are you pretty much on the thesis that the bottom
• 10:40
  Speaker 2: is in on all the market right now?
• 10:43
  Speaker 4: That would be my best judgment.
• 10:46
  Speaker 5: As of now, I've been doing markets analysis for a
• 10:50
  Speaker 5: long time and certainly have been wrong before about these
• 10:54
  Speaker 5: types of things. But our best guess was that the
• 10:57
  Speaker 5: bottom was $ 58K right at the end of June for Bitcoin.
• 11:03
  Speaker 5: We saw some encouraging signs of stabilization, and I think
• 11:07
  Speaker 5: some fundamentals that were pointing to a healthier market. Really
• 11:11
  Speaker 5: the same trends that have been driving us forward for
• 11:14
  Speaker 5: a long time. Fiat currency risks and the need for
• 11:18
  Speaker 5: alternative stores of value, as well as something we've talked
• 11:21
  Speaker 5: a lot about, Paul, which is progress towards regulatory clarity.
• 11:26
  Speaker 5: Even without the Clarity Act, we've been getting some moves
• 11:28
  Speaker 5: towards rulemaking from the SEC. Both of these trends are
• 11:32
  Speaker 5: pushing Bitcoin forward. I'm increasingly comfortable saying that the bottom
• 11:37
  Speaker 5: was likely in back at the end of June. We'll
• 11:40
  Speaker 5: see where we go from here, but it feels like
• 11:42
  Speaker 5: a healthy bottoming process, new capital coming to the asset class.
• 11:47
  Speaker 5: That's what's gotten Bitcoin over $ 80, 000. I think investors can
• 11:51
  Speaker 5: be encouraged to reenter if they've been away for a
• 11:54
  Speaker 5: little while.
• 11:56
  Speaker 2: There are some other activities that are happening in the
• 11:59
  Speaker 2: space right now.
• 12:00
  Speaker 1: Bitwise is busy.
• 12:02
  Speaker 2: They're launching a thing they call automated token portfolios. This
• 12:06
  Speaker 2: is going to be done on Coinbase and Glider.
• 12:10
  Speaker 1: Here's my question.
• 12:11
  Speaker 2: Why doesn't Grayscale just launch something exactly like this, but
• 12:14
  Speaker 2: now using Robinhood Chain?
• 12:18
  Speaker 5: Well, Grayscale has a long history of firsts in the
• 12:22
  Speaker 5: crypto asset class around Bitcoin, around Ethereum, around Zcash and
• 12:27
  Speaker 5: other things. And I think you can expect Grayscale to
• 12:29
  Speaker 5: be very involved in the tokenization business and on-chain finance.
• 12:35
  Speaker 5: I think it is fair to say, though, that as
• 12:37
  Speaker 5: much as many of us already use DeFi tools or stablecoins,
• 12:43
  Speaker 5: institutional investors are not quite there yet. We are building
• 12:48
  Speaker 5: our business to meet our clients' needs, and they're only
• 12:52
  Speaker 5: just starting to approach the on-chain ecosystem. To be sure,
• 12:58
  Speaker 5: Grayscale will be there when they are ready. We are
• 13:01
  Speaker 5: not ready to share all of those plans here today,
• 13:04
  Speaker 5: but actively investing in this technology and in this space.
• 13:09
  Speaker 5: And we will be there to meet our clients' needs on-chain,
• 13:12
  Speaker 5: just as we do off-chain through the ETFs.
• 13:17
  Speaker 1: I like how you dodged that question there, Zach. That
• 13:19
  Speaker 1: was a good one. That was a good dodge.
• 13:22
  Speaker 2: We have something maybe, but I can't talk about it.
• 13:25
  Speaker 2: But we see this all moving in the right direction.
• 13:28
  Speaker 4: It is moving in the right direction.
• 13:30
  Speaker 5: And we listen to our clients' feedback, build the tools
• 13:36
  Speaker 5: that we think they are most interested. I'd say staking
• 13:39
  Speaker 5: has been very important. I think Zcash exposure has been
• 13:42
  Speaker 5: very important. Tokenized assets will be important over time. We're
• 13:46
  Speaker 5: looking forward to working closely with our investors on building
• 13:50
  Speaker 5: those tools as needed.
• 13:52
  Speaker 2: Speaking of that, Grace Giles' decentralized finance fund right there, DeFi.
• 13:57
  Speaker 2: You guys have something that when I track this, I
• 14:00
  Speaker 2: am even surprised at this mix right here. And that
• 14:05
  Speaker 2: is the weighting on Uniswap exposure.
• 14:09
  Speaker 1: Why go?
• 14:10
  Speaker 2: Because this seems like a fairly significant weight in comparison
• 14:15
  Speaker 2: to DeFi in general. What do you see and what
• 14:17
  Speaker 2: are you guys looking at when you compare Uniswap with
• 14:20
  Speaker 2: some of the rest of DeFi that's out there?
• 14:25
  Speaker 5: Well, the great thing about products like this is that
• 14:28
  Speaker 5: they give investors an index-like exposure to the DeFi ecosystem.
• 14:32
  Speaker 5: Investors don't need to choose individual tokens. They get access
• 14:38
  Speaker 5: to that on-chain economy through automatically rebalancing a portfolio that
• 14:44
  Speaker 5: gives exposure to the largest assets in the ecosystem. Uniswap,
• 14:47
  Speaker 5: of course, today, the leading spot DEX, decentralized exchange for
• 14:52
  Speaker 5: spot assets. And I would say it's been a leading
• 14:55
  Speaker 5: indicator in signaling a bottom in the market, both on
• 14:59
  Speaker 5: price performance as well as a volume and a fee activity. Uniswap,
• 15:05
  Speaker 5: I think, also is one of the projects that That
• 15:08
  Speaker 5: will benefit from regulatory clarity. You know, one of the
• 15:11
  Speaker 5: things that was held back most acutely from regulatory ambiguity
• 15:17
  Speaker 5: in the past, as we bring more clarity to on-chain finance,
• 15:21
  Speaker 5: we allow tokenized stocks, traditional crypto assets to trade up.
• 15:26
  Speaker 5: more freely in decentralized finance. Uniswap is going to be
• 15:30
  Speaker 5: one of the projects right at the heart of that.
• 15:33
  Speaker 5: It's great to see it being seeing a bit of
• 15:36
  Speaker 5: a revival recently. I personally think that's just the beginning.
• 15:39
  Speaker 5: I'm very enthusiastic about what Uniswap can do over time.
• 15:44
  Speaker 5: Many of us have been watching it for a long time,
• 15:45
  Speaker 5: I think, waiting for this moment. In my view, we
• 15:48
  Speaker 5: are at that moment. It's time for the decentralized trading
• 15:51
  Speaker 5: ecosystem to really start taking off.
• 15:54
  Speaker 2: Well, a lot of this has come from the element
• 15:58
  Speaker 2: of fee switch. Once you turn a fee switch on,
• 16:01
  Speaker 2: you see these kinds of projects that really accelerate. There's
• 16:04
  Speaker 2: a couple of projects that we're watching and I wanted
• 16:07
  Speaker 2: to get your opinion. Morpho is one of them that
• 16:10
  Speaker 2: could be going into this and you can kind of
• 16:12
  Speaker 2: see the fees starting to roll up here and they
• 16:15
  Speaker 2: are accelerating as well. This could be another one of
• 16:17
  Speaker 2: those to keep an eye on in terms of fee switch.
• 16:20
  Speaker 2: You also have Collector Crypt, which is another project we've
• 16:23
  Speaker 2: had on the show, their DEX volume is kind of
• 16:26
  Speaker 2: driving this. So again, fee switch tokens seem to be
• 16:31
  Speaker 2: something that a lot of investors are now starting to understand.
• 16:35
  Speaker 2: Is this something that you think is going to grow
• 16:38
  Speaker 2: in popularity by traditional investors of kind of putting this
• 16:42
  Speaker 2: as a checkmark of saying, yeah, we need a fee
• 16:45
  Speaker 2: switch on with some of these investments that we're going into?
• 16:50
  Speaker 4: Absolutely.
• 16:51
  Speaker 5: Traditional investors, when they're looking at the asset class beyond Bitcoin,
• 16:56
  Speaker 5: they're looking for revenue. They're looking for sustainable activity. They're
• 17:02
  Speaker 5: looking value accrual back to the token. These are great
• 17:06
  Speaker 5: examples of projects that are leaning into that hyperliquid. One
• 17:10
  Speaker 5: of the things that we've talked about in the past,
• 17:12
  Speaker 5: Paul has been a leader, I think, showing the way
• 17:15
  Speaker 5: for what's possible on the blockchain with activity, revenue, and
• 17:20
  Speaker 5: value accrual for the token. We'll see many other projects
• 17:24
  Speaker 5: go in that direction. I think you will see traditional
• 17:26
  Speaker 5: investors evaluate these assets much like they do traditional equities,
• 17:31
  Speaker 5: looking at cash flow, looking at value delivered back to
• 17:35
  Speaker 5: the assets. A great sign of maturity and health of
• 17:37
  Speaker 5: the crypto ecosystem, I think, just the beginning. And it's
• 17:40
  Speaker 5: great to see you highlight that stuff. I think it's
• 17:42
  Speaker 5: a very important story for our ecosystem.
• 17:45
  Speaker 1: Yeah, for sure.
• 17:46
  Speaker 2: Well, you do have other tokens out there that have
• 17:49
  Speaker 2: kind of taken it on the chin here a little bit.
• 17:52
  Speaker 1: SWE is one of those. You had Sam leaving Mistin Labs.
• 17:55
  Speaker 2: Who is kind of the mothership of SWE.
• 17:59
  Speaker 1: You also had a phantom ending support for SWE as well.
• 18:02
  Speaker 1: Do you feel like SWE is just.
• 18:04
  Speaker 2: Another fallen token and just one that will kind of
• 18:07
  Speaker 2: subside into the annals of crypto?
• 18:12
  Speaker 5: I'm more optimistic here. I think of this as a category,
• 18:16
  Speaker 5: smart contract platforms. Today, Ethereum is the leader of that category,
• 18:21
  Speaker 5: followed by Solana, followed by BNB Chain. Those are the
• 18:25
  Speaker 5: three big ones in the category. And then there's lots
• 18:27
  Speaker 5: of others. So Grayscale has product that offer exposure to
• 18:32
  Speaker 5: both Avalanche and SWE as sort of the next set
• 18:36
  Speaker 5: of smart contract platforms. But there's about 40 or 50
• 18:40
  Speaker 5: different networks and tokens in this space. It is an
• 18:42
  Speaker 5: open question on which ones will be the most successful
• 18:45
  Speaker 5: over time. We think that SWE offers some unique features,
• 18:49
  Speaker 5: the move programming language, a scale that can potentially power
• 18:53
  Speaker 5: a consumer grade application. So I'm optimistic that SWE will
• 18:57
  Speaker 5: be a long term winner, but it's a competitive category.
• 19:01
  Speaker 4: We will see.
• 19:02
  Speaker 5: I think investors that are just getting started should probably
• 19:04
  Speaker 5: focus on the category leaders like Ethereum and Solana. If
• 19:08
  Speaker 5: you're building a more diversified exposure, SWE Avalanche would be
• 19:13
  Speaker 5: our next steps. But there's a lot of great projects
• 19:16
  Speaker 5: in this space. We keep an eye on all of them.
• 19:18
  Speaker 5: I think the move programming language is SWE's unique feature.
• 19:23
  Speaker 5: We think it will be successful, but something we're keeping
• 19:25
  Speaker 5: a close eye on.
• 19:27
  Speaker 1: Let's look at perps for a second.
• 19:29
  Speaker 2: You and I have talked about this before. And perp volume,
• 19:32
  Speaker 2: if you look at it, hyperliquid has slowly been bleeding.
• 19:36
  Speaker 2: So what would happen if Solana or let's say Phantom
• 19:40
  Speaker 2: and FOMO just removed, you know, perps, hyperliquid perps? Wouldn't
• 19:45
  Speaker 2: you think you'd see a major shift in this market?
• 19:50
  Speaker 5: The question, of course, is always about the depth of
• 19:53
  Speaker 5: the liquidity and what that means for network effects. There
• 19:57
  Speaker 5: will be competitors, and we will see. I don't know
• 19:59
  Speaker 5: exactly how this will play out. But right now, it
• 20:02
  Speaker 5: is very difficult to compete with the liquidity offered on
• 20:06
  Speaker 5: hyperliquid in perps. I personally think of hyperliquid as comparable
• 20:10
  Speaker 5: to the centralized exchanges. You have Binance, OKX and you
• 20:14
  Speaker 5: have Hyperliquid. I think that that is more of its
• 20:17
  Speaker 5: competitor set rather than the on-chain ecosystem.
• 20:20
  Speaker 4: It's a fair question.
• 20:23
  Speaker 5: I think Hyperliquid has achieved a kind of escape velocity
• 20:26
  Speaker 5: that it's supposed to be compared to the centralized exchanges
• 20:29
  Speaker 5: first and the on-chain ecosystem second.
• 20:32
  Speaker 1: That's interesting.
• 20:34
  Speaker 2: I'm looking at a piece you did, Ethereum and Solana Tokenomics.
• 20:38
  Speaker 2: This was a breakdown here on the token supply inflation.
• 20:44
  Speaker 2: You know, obviously, we're going to most likely get this approved.
• 20:47
  Speaker 2: I'm looking at the double disinflation here just in, what
• 20:50
  Speaker 2: is that, three days, five hours, okay, that this current
• 20:54
  Speaker 2: voting could actually happen. If that does occur, Zach, and
• 20:59
  Speaker 2: you look at Solana and what the projections might look like,
• 21:02
  Speaker 2: do you feel like the $ 100 floor is pretty much
• 21:06
  Speaker 2: that's it for Solana?
• 21:07
  Speaker 1: We won't ever see a.
• 21:09
  Speaker 2: Below $ 100 Solana again if this goes, most likely this
• 21:12
  Speaker 2: is going through it.
• 21:14
  Speaker 4: Well, as you know, I can't make those promises.
• 21:17
  Speaker 5: But what I would say is, I think we did
• 21:20
  Speaker 5: go through a long bottoming process on the price of
• 21:23
  Speaker 5: the SOL token. It's been very encouraging to see the
• 21:26
  Speaker 5: strength recently and the breakback above 100. I think there's
• 21:30
  Speaker 5: a lot of great things happening in that ecosystem. And
• 21:33
  Speaker 5: then specifically on this topic, I would just emphasize that
• 21:37
  Speaker 5: scarcity is good when it comes to commodities. These are
• 21:40
  Speaker 5: digital commodities, and there are priced by supply and demand.
• 21:46
  Speaker 5: Demand comes from use of that on-chain ecosystem, but we're
• 21:49
  Speaker 5: talking about the supply side, and more scarcity means more value.
• 21:53
  Speaker 5: And so these recent Solata improvement ideas, SIMDs, are about
• 21:59
  Speaker 5: increasing the scarcity of the token. I think that will
• 22:02
  Speaker 5: be positive for price, and I think it could have
• 22:05
  Speaker 5: been one of the catalysts that gave us a little
• 22:08
  Speaker 5: bit of the accelerated performance recently.
• 22:10
  Speaker 4: So I'm optimistic that if these.
• 22:13
  Speaker 5: Two proposals do go through, that it'll be supportive for
• 22:16
  Speaker 5: price on the margin by underscoring the scarcity of the
• 22:20
  Speaker 5: ZOL token.
• 22:21
  Speaker 2: Do you think there'd be a premium on this once
• 22:24
  Speaker 2: that we see disinflation really kind of play out.
• 22:26
  Speaker 1: Here for Solana?
• 22:28
  Speaker 5: I think that people do not appreciate how much Solana
• 22:32
  Speaker 5: inflation is going to fall over time. It had a
• 22:35
  Speaker 5: fair amount of inflation early on, just like Bitcoin, just
• 22:38
  Speaker 5: like Ethereum. It had higher inflation in its early years.
• 22:41
  Speaker 5: Solana is still fairly young. But especially with these proposals,
• 22:46
  Speaker 5: that inflation rate is going to decline quite sharply. I
• 22:49
  Speaker 5: don't think that that is appreciated to the market. I
• 22:51
  Speaker 5: think it will surprise people and potentially be supportive of price.
• 22:55
  Speaker 1: There you go. I'm going to go to the lightning
• 22:57
  Speaker 1: round real quick. We're going to do a quick one
• 22:59
  Speaker 1: with you.
• 23:00
  Speaker 2: Mainstream media won't abandon the AI and chip shiny objects
• 23:04
  Speaker 2: until Bitcoin and EtherSol hit an all-time high.
• 23:07
  Speaker 1: Do you think that will happen? Mainstream media. Mainstream media.
• 23:10
  Speaker 1: Not us. We've already rotated.
• 23:14
  Speaker 4: I'm going true. I don't know that the mainstream media
• 23:17
  Speaker 4: will ever.
• 23:17
  Speaker 5: Come around to digital assets no matter what at this point.
• 23:23
  Speaker 4: So I'm saying that's true.
• 23:25
  Speaker 1: We're going to get them there.
• 23:26
  Speaker 2: Tokenized gold is now being adopted at a faster and
• 23:29
  Speaker 2: more productive keyword, productive rate than Bitcoin wallets right now.
• 23:38
  Speaker 4: I would say true on the margin.
• 23:41
  Speaker 5: I don't have the data in front of me, but
• 23:43
  Speaker 5: I would say tokenized gold activity is definitely picking up.
• 23:47
  Speaker 5: And we've had a period of flatter activity on chain
• 23:51
  Speaker 5: very recently for Bitcoin.
• 23:52
  Speaker 4: So maybe that's true.
• 23:54
  Speaker 1: Let's go to this one.
• 23:55
  Speaker 2: Solana, double the disinflation votes passes in the coming week.
• 23:59
  Speaker 2: I asked you this earlier, but it becomes the new floor.
• 24:01
  Speaker 1: I'm going to vote on that. I know you can't,
• 24:04
  Speaker 1: but you seemed positive on that.
• 24:06
  Speaker 2: But I think, yes, Solana, the $ 100 becomes the new
• 24:10
  Speaker 2: floor for it. Aave, best single exposure to coin and
• 24:15
  Speaker 2: hood tokenized stocks.
• 24:17
  Speaker 1: And would it be worth the added risk.
• 24:20
  Speaker 2: Of being blamed periodically for every DeFi exploit out there.
• 24:24
  Speaker 1: Obviously Aave gets a lot of that heat. What do
• 24:27
  Speaker 1: you think?
• 24:29
  Speaker 5: Well, we love Aave as well as some of these
• 24:31
  Speaker 5: other leading DeFi projects. I think it is excellent exposure
• 24:36
  Speaker 5: for tokenized assets, just like a Uniswap and a couple
• 24:40
  Speaker 5: of the other things that we've already talked about. So
• 24:43
  Speaker 5: I would say Aave does look like a compelling risk reward.
• 24:48
  Speaker 5: We have some thoughtful research on valuing the Aave token
• 24:51
  Speaker 5: with cash flows that people really want to go down
• 24:54
  Speaker 5: the rabbit hole, apply equity valuation tools to Aave token.
• 24:57
  Speaker 5: Please check out research.grayscale.com for that detailed report.
• 25:02
  Speaker 1: Here we go.
• 25:03
  Speaker 2: Zcash trading as a squeezed float, not as a used product.
• 25:09
  Speaker 1: What do you think?
• 25:10
  Speaker 4: I'm going to disagree here.
• 25:12
  Speaker 5: It's clear that use of the shielding technologies has picked up.
• 25:18
  Speaker 5: And so I think clearly this is an example of
• 25:21
  Speaker 5: use of privacy technologies in demand. That's what's been powering
• 25:27
  Speaker 5: the return to growth. I do think that that has
• 25:29
  Speaker 5: something to say about price performance. The more assets that
• 25:32
  Speaker 5: we see go into shielded pools, the less transparent float
• 25:36
  Speaker 5: there is that could be marginally helpful for price.
• 25:42
  Speaker 2: FOMO and Phantom Apps replacing the hyperliquid, we asked you
• 25:45
  Speaker 2: this earlier, hyperliquid perps with Solana's native perps would be
• 25:49
  Speaker 2: apocalyptic for the price of hype if they are successful
• 25:53
  Speaker 2: in doing something like that.
• 25:56
  Speaker 5: I'm going to disagree here, but I think competition for
• 25:59
  Speaker 5: perps is likely given how important this product innovation is. Yeah.
• 26:04
  Speaker 2: All right, let's go here with this one. See me,
• 26:07
  Speaker 2: Terry Duffy, getting rattled. This was in reference to hyperliquid
• 26:11
  Speaker 2: and calci during the CFTC meeting. Proves that maybe lawfare
• 26:17
  Speaker 2: is their only hope now.
• 26:18
  Speaker 1: What do you think?
• 26:21
  Speaker 5: Well, on this topic, I just want to say that
• 26:24
  Speaker 5: Grayscale works cooperatively with regulators and with our industry partners
• 26:30
  Speaker 5: on improving clarity for assets. We're grateful to be a
• 26:33
  Speaker 5: part of the new CFTC advisory board and are delighted
• 26:38
  Speaker 5: to see some of the rulemaking coming out of the
• 26:41
  Speaker 5: SEC and the CFTC on these topics.
• 26:43
  Speaker 4: I think things are pointing in a very good direction.
• 26:46
  Speaker 2: How long do you think It will take the CFTC. Well,
• 26:50
  Speaker 2: I should ask it this way. Do you feel like
• 26:52
  Speaker 2: the CFTC is primed right now with rulemaking in place
• 26:58
  Speaker 2: if in September clarity doesn't go through? Or do you
• 27:01
  Speaker 2: think it's going to take a few more months after that?
• 27:05
  Speaker 5: I think we will see the proposed rulemaking ASAP if
• 27:08
  Speaker 5: clarity does not happen. There will be public comment periods,
• 27:12
  Speaker 5: and so it will take a little while to implement
• 27:14
  Speaker 5: those rules, but I would not expect any delay between
• 27:20
  Speaker 5: a failure of the clarity of vote and rulemaking from
• 27:22
  Speaker 5: the key agencies.
• 27:24
  Speaker 1: Okay, this is one a little closer.
• 27:26
  Speaker 2: DTCC and Canton launch in October.
• 27:30
  Speaker 1: Will the market finally shift.
• 27:32
  Speaker 2: Away to more important narratives versus the 24-7 and settlement
• 27:36
  Speaker 2: speed and move on to things like.
• 27:40
  Speaker 1: Cross-utilization, et cetera? What do you think?
• 27:44
  Speaker 4: I'm going to agree.
• 27:45
  Speaker 5: I think these are helpful innovations for the financial system,
• 27:48
  Speaker 5: but there are bigger narratives.
• 27:50
  Speaker 4: I think scarcity..
• 27:56
  Speaker 5: Privacy are becoming a bit more important and probably will
• 28:00
  Speaker 5: be for a few months at least. Yeah.
• 28:03
  Speaker 1: Last couple of questions.
• 28:04
  Speaker 2: Clearly, government, this administration has chosen Tether over Circle.
• 28:10
  Speaker 1: Big moves at Tether.
• 28:16
  Speaker 5: I think the market is going to decide, and I
• 28:20
  Speaker 5: think both USDC and USDT have a role to play today.
• 28:27
  Speaker 4: USDT is dominant.
• 28:29
  Speaker 5: So I think you have to say that Tether is
• 28:31
  Speaker 5: still in a leadership position, but obviously they have different
• 28:34
  Speaker 5: market positions. And fortunately, the government doesn't get to decide
• 28:39
  Speaker 5: these things. The individuals get to decide what kind of
• 28:42
  Speaker 5: stable coin they want to use. And it's exciting to
• 28:45
  Speaker 5: see how that space is going to evolve.
• 28:48
  Speaker 1: I love it, Zach. You're so political out there.
• 28:52
  Speaker 2: So Grayscale should launch an index called the Graystack Coins,
• 28:56
  Speaker 2: which would consist of only DeFi tech stack coins that
• 29:01
  Speaker 2: Grayscale actually uses for your own vaults and your company.
• 29:05
  Speaker 1: So your own group.
• 29:08
  Speaker 5: It's a novel idea. I think we're about meeting our
• 29:13
  Speaker 5: needs of our clients. If there were a demand for
• 29:15
  Speaker 5: those types of things, we wouldn't hesitate to do it.
• 29:19
  Speaker 5: So I would say yes, conditional on the clients having
• 29:24
  Speaker 5: a need for a product like that.
• 29:25
  Speaker 1: If Graystack launches, make sure, you know, credit PBN on
• 29:29
  Speaker 1: that one. Okay.
• 29:30
  Speaker 4: Credit fault, no doubt.
• 29:32
  Speaker 2: Hey, listen, Zach, it's been good having you on the
• 29:34
  Speaker 2: show today. Thank you so much for coming in. We
• 29:36
  Speaker 2: appreciate it.
• 29:37
  Speaker 4: My great pleasure as always. We'll talk soon, Paul.
• 29:46
  Speaker 2: If you like this video, hit like and subscribe, drop
• 29:48
  Speaker 2: a comment down below and also join our free private
• 29:52
  Speaker 2: member group.
• 29:52
  Speaker 1: The link is in the description.