Latest / The Paul Barron Crypto Show / CLARITY Bearish for Crypto?🚨Grayscale Backs Coinbase!🔥Zach Pandle INTERVIEW

Transcript

CLARITY Bearish for Crypto?🚨Grayscale Backs Coinbase!🔥Zach Pandle INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Could the Clarity Act actually be bearish for the markets?
• 0:03
  Speaker 1: Today we're going to break all that down for you.
• 0:05
  Speaker 1: It's going to be a fantastic show. I do want
• 0:08
  Speaker 1: to thank our sponsor today and that is Uphold. Speaking
• 0:10
  Speaker 1: of Clarity, this is one of the things you need
• 0:12
  Speaker 1: to protect and that is your staking rewards. Also, some
• 0:16
  Speaker 1: of the assets that you can earn yield on all
• 0:19
  Speaker 1: is available over on Uphold. One of the other things
• 0:22
  Speaker 1: that I really like is you can actually earn yield
• 0:25
  Speaker 1: on your US dollars inside Uphold, so very easy to
• 0:29
  Speaker 1: set up over there as well, doesn't require a lock up.
• 0:32
  Speaker 1: And the last thing is you always need a debit card,
• 0:35
  Speaker 1: Well there it is. You can get the debit card
• 0:37
  Speaker 1: right here with XRP rewards, no credit check, set it
• 0:40
  Speaker 1: up just like any other debit card. Works almost like
• 0:43
  Speaker 1: a bank. Guys, imagine that having a platform that's going
• 0:47
  Speaker 1: to do the things that banks could do.
• 0:49
  Speaker 2: Well.
• 0:49
  Speaker 1: We're going to be talking about that and much more
• 0:51
  Speaker 1: today before we get started and bring in Zach Pandel,
• 0:55
  Speaker 1: who's coming in from Grayscale. I want to show you
• 0:58
  Speaker 1: guys a clip because this is a little bit striking
• 1:02
  Speaker 1: to me and I want to get your opinion, take
• 1:03
  Speaker 1: a look, and.
• 1:04
  Speaker 3: We want everyone to be able to do that and
• 1:06
  Speaker 3: make our capital markets more efficient.
• 1:08
  Speaker 2: Is it takes a moat away from everybody's business. If
• 1:11
  Speaker 2: everybody can do the same thing, what happens in the end?
• 1:15
  Speaker 2: Customers win with competition. I mean.
• 1:20
  Speaker 1: I was a little taken back by that. If everybody
• 1:22
  Speaker 1: can do the same thing, what happens in the end.
• 1:24
  Speaker 2: That's Andrew.
• 1:25
  Speaker 1: That's how competition is created, is when everybody has a
• 1:29
  Speaker 1: level playing field. And I think that's what crypto is
• 1:32
  Speaker 1: asking for. So joining me now is Zach Pandele coming
• 1:35
  Speaker 1: in from Grayscale. How are you, Zach?
• 1:38
  Speaker 2: I'm great, Paul, great to see you, looking forward to
• 1:40
  Speaker 2: this discussion.
• 1:41
  Speaker 1: Have you been watching these clips coming out of we F.
• 1:44
  Speaker 2: I absolutely have.
• 1:45
  Speaker 3: You know, everyone very zoomed in on everything that Brian
• 1:48
  Speaker 3: Armstrong has to say on this topic.
• 1:51
  Speaker 2: Right at the center of these issues at the moment a.
• 1:53
  Speaker 1: Rock star there at we F right now. So I
• 1:56
  Speaker 1: don't know if it's a good thing or a bad thing,
• 1:58
  Speaker 1: but he's definitely getting a lot of notice. Hey, I
• 2:01
  Speaker 1: want to talk a little bit about the point of
• 2:03
  Speaker 1: ETFs obviously with you guys very bullish on ETFs. Do
• 2:08
  Speaker 1: you feel that ETFs would essentially be dead without the
• 2:12
  Speaker 1: Clarity Act?
• 2:13
  Speaker 3: Now, the Clarity Act or what they're working on at
• 2:16
  Speaker 3: the moment, will touch on all kinds of aspects of
• 2:18
  Speaker 3: the industry, but we think that ETFs will still have
• 2:21
  Speaker 3: a pretty clear regulator path provided by the SEC even
• 2:26
  Speaker 3: without the market structure build. The SEC made some changes
• 2:29
  Speaker 3: late last year called generic Listing Standards that should allow
• 2:33
  Speaker 3: us to continue to move ahead, move forward with ald
• 2:36
  Speaker 3: coin ETFs, with staking in our ETFs products, even without
• 2:40
  Speaker 3: that piece of legislation in Congress. So we want to
• 2:42
  Speaker 3: see that happen, but certainly the ETF business can move
• 2:45
  Speaker 3: ahead without it.
• 2:46
  Speaker 1: Who do you hold more accountable right now? When you
• 2:48
  Speaker 1: look at the Clarity Act, the failure, let's just call
• 2:51
  Speaker 1: it what it is. It's a failure. Right now coming
• 2:54
  Speaker 1: out of DC, there's really only a handful of people
• 2:57
  Speaker 1: you can look to. You're either going to look to
• 2:59
  Speaker 1: Trump and you're going to look to David Sachs, the
• 3:02
  Speaker 1: Digital Zar, or you're going to look to maybe Patrick Witt,
• 3:06
  Speaker 1: who is the guy who was charged at going and
• 3:08
  Speaker 1: getting this done, or maybe you could go ahead and
• 3:11
  Speaker 1: look at coinbase. Who would you say, is the culprit
• 3:14
  Speaker 1: here in terms of its failure for gray scale.
• 3:17
  Speaker 3: Really the sort of title one of this bill, which
• 3:19
  Speaker 3: clarifies assets as securities, commodities, this sort of thing, that's
• 3:24
  Speaker 3: the most important piece for our business.
• 3:26
  Speaker 2: We hope we can get this thing over the line.
• 3:28
  Speaker 3: Look, Paul, I'm not crazy about putting blame on any
• 3:31
  Speaker 3: one person, but I think really the core issue is
• 3:33
  Speaker 3: about competition. It's about competition from banks for the yield.
• 3:37
  Speaker 3: Banks in our society get a subsidy, they get a
• 3:40
  Speaker 3: subsidy from the public for providing digital money. I need
• 3:44
  Speaker 3: a checking account balance to pay my bills, that's my
• 3:46
  Speaker 3: digital money. Today we're talking about introducing a new type
• 3:49
  Speaker 3: of digital money, which has lots of different benefits, including
• 3:52
  Speaker 3: potentially the ability to own earn more interest. And that
• 3:55
  Speaker 3: is competition for banks. And so I think if there's
• 3:59
  Speaker 3: one part that deserves blame for this bill not getting
• 4:04
  Speaker 3: over the line, it's the bank lobby and their resistance
• 4:07
  Speaker 3: to competition. But you know, like it or not, this
• 4:10
  Speaker 3: competition is coming, whether it happens this year or the
• 4:13
  Speaker 3: coming years. It's a better piece of technology for digital money,
• 4:17
  Speaker 3: for making payments, for earning interest on my savings.
• 4:20
  Speaker 2: So stable coins are going to win.
• 4:22
  Speaker 3: It's just a matter of time, and maybe we are
• 4:24
  Speaker 3: hitting a meaningful roadblock on this piece of legislation, but
• 4:28
  Speaker 3: I'm very optimistic on the outlook for this competition over time.
• 4:32
  Speaker 1: Well, I'm glad you're optimistic. The more I look at
• 4:34
  Speaker 1: what's coming out of DC, the more dystopian it feels,
• 4:39
  Speaker 1: and that concerns me.
• 4:41
  Speaker 2: Obviously.
• 4:41
  Speaker 1: You look at one of the areas that many people
• 4:44
  Speaker 1: have kind of talked about, which is token is securities,
• 4:47
  Speaker 1: and you kind of look at just what's happening right
• 4:50
  Speaker 1: now in terms of the metrics. We are continuing to
• 4:52
  Speaker 1: see pretty significant growth. And let's just be clear, guys,
• 4:56
  Speaker 1: one of the big culprits that we identified, I thought
• 4:59
  Speaker 1: was friend to the industry. I'm surprised at their activities
• 5:02
  Speaker 1: will securitize and they, of course are going head to
• 5:07
  Speaker 1: head with X stocks. X Stocks is clearly a Solana play.
• 5:12
  Speaker 1: This lends into the benefit of what you guys are doing, Zach,
• 5:15
  Speaker 1: because you've got a Solana etf. So does Solana actually
• 5:21
  Speaker 1: benefit more without clarity right now? What do you think?
• 5:24
  Speaker 2: That's a great question.
• 5:25
  Speaker 3: I think that regulatory clarity would lift all boats in
• 5:29
  Speaker 3: the industry. So I'm bullish on clarity for the industry
• 5:33
  Speaker 3: rather than bearish. But the point is well taken that
• 5:36
  Speaker 3: this will have not just positive effects on every part
• 5:39
  Speaker 3: of the industry, it will clarify the nature of competition.
• 5:42
  Speaker 2: There will be winners and there will be losers.
• 5:45
  Speaker 3: I believe that Solana is in a great place in
• 5:48
  Speaker 3: either scenario and is likely to be one of the
• 5:51
  Speaker 3: long run winners. And I do think that stock equity
• 5:55
  Speaker 3: trading tokenized equity trading on Solana is a pretty natural
• 5:58
  Speaker 3: fit given how optimized that chain is for trading. Already,
• 6:02
  Speaker 3: I's been a leader in meme coins and other aspects
• 6:05
  Speaker 3: of crypto trading. It will be a great fit for
• 6:07
  Speaker 3: token ied equity trading. I think Salana likely to be
• 6:10
  Speaker 3: a winner with or without the Clarity Act this quarter.
• 6:13
  Speaker 1: All right, are you're giving me some good answers that
• 6:16
  Speaker 1: are very political, Zach, I'm just going to say that
• 6:22
  Speaker 1: what matters most right now when you look at the
• 6:24
  Speaker 1: FED fund rate of what we're seeing. Obviously, we're going
• 6:27
  Speaker 1: to have an FOMC meeting here this end of this
• 6:30
  Speaker 1: month of twenty eighth. Chair Pal is going to be
• 6:33
  Speaker 1: over there. You know, dancing around the data, as I
• 6:36
  Speaker 1: say all the time, do you think it is the
• 6:38
  Speaker 1: price of bitcoin or crypto in general, or the Fed
• 6:44
  Speaker 1: funds rates that are going to benefit from clarity going through.
• 6:47
  Speaker 3: I think clarity will be a big positive catalyst for
• 6:50
  Speaker 3: it for crypto, and I think the regulatory piece of
• 6:52
  Speaker 3: it probably is a bigger short term driver.
• 6:55
  Speaker 2: You know.
• 6:56
  Speaker 3: One of the reasons that we're a little bit weaker
• 6:58
  Speaker 3: to start this week probably is the fallout from last
• 7:02
  Speaker 3: week where the market structure built and not get a
• 7:06
  Speaker 3: markup in the Senate, and it looks like the process
• 7:08
  Speaker 3: is at least.
• 7:09
  Speaker 2: Stalled for now.
• 7:10
  Speaker 3: Hopefully can get back on track with that stalling of
• 7:12
  Speaker 3: the legislative process probably the factor weighing on crypto this week,
• 7:17
  Speaker 3: you know. Beyond that, the macro trade is very positive
• 7:20
  Speaker 3: for scarce commodities like bitcoin, like a theoreum. Of course
• 7:24
  Speaker 3: we see that playing out in precious metals. We think
• 7:27
  Speaker 3: that that will be coming to crypto, but probably we
• 7:29
  Speaker 3: need to get over some of this regulatory uncertainty until
• 7:33
  Speaker 3: the capital is willing to chase that trade in crypto.
• 7:36
  Speaker 3: I think the macro side, the dollar debasement side, the
• 7:39
  Speaker 3: need for alternative stores of value very much in focus
• 7:43
  Speaker 3: across capital markets. That'll come to crypto in due course,
• 7:45
  Speaker 3: but yeah, it is skipping over our asset class at
• 7:48
  Speaker 3: the moment.
• 7:49
  Speaker 1: Listen, I've looked at what came out of DC. I've
• 7:52
  Speaker 1: had a handful of attorneys take a look at the reports, researchers.
• 7:57
  Speaker 1: None of this looks good, and in fact, it starts
• 8:00
  Speaker 1: to address a lot of the wins that we had
• 8:02
  Speaker 1: in twenty twenty five. I was looking at your report,
• 8:06
  Speaker 1: was going through this key crypto policy changes right there,
• 8:11
  Speaker 1: A lot of which gets affected by this, and if
• 8:14
  Speaker 1: you think about it, it's almost every single one would
• 8:17
  Speaker 1: get affected by clarity, and that includes you know, what
• 8:22
  Speaker 1: we're dealing with right now around privacy, what we're dealing
• 8:25
  Speaker 1: with in the DeFi space, the idea of protecting the
• 8:29
  Speaker 1: DeFi space, yields that came through with Genius, all of
• 8:33
  Speaker 1: these things that went through in twenty twenty five, which
• 8:36
  Speaker 1: were very positive, seems to be almost a complete pivot
• 8:41
  Speaker 1: toward against these points. How would you answer that?
• 8:44
  Speaker 3: Look, I think I would agree with Coinbass Brian Armstrong
• 8:48
  Speaker 3: in the sense that a no bill is better than
• 8:52
  Speaker 3: a bad bill, So we can't go backwards on the
• 8:55
  Speaker 3: gains that we made last year on stable coins, on
• 9:00
  Speaker 3: ETF listings, on protections for developers.
• 9:03
  Speaker 2: We don't want to go backwards. We want to go forward,
• 9:05
  Speaker 2: and so if.
• 9:05
  Speaker 3: That means taking a step back and picking up this
• 9:08
  Speaker 3: legislation under the next Congress, then potentially that's a good outcome.
• 9:13
  Speaker 3: That being said, I do think a lot of those
• 9:15
  Speaker 3: gains are sustainable, and it's important that eventually we codify
• 9:20
  Speaker 3: these things into law such that we can't we don't
• 9:23
  Speaker 3: have to wait on the next election to decide what
• 9:26
  Speaker 3: crypto policy in the United States is going to look like.
• 9:28
  Speaker 3: We want a durable framework for operating a business in
• 9:32
  Speaker 3: this industry for the coming years. A bad bill certainly
• 9:37
  Speaker 3: not as good as no bill at all. So just
• 9:40
  Speaker 3: to get piece of legislation through Congress rather than just
• 9:43
  Speaker 3: rush something through that'll set us back before we were
• 9:45
  Speaker 3: last year.
• 9:46
  Speaker 1: Yeah, I'm looking at your report, which, by the way,
• 9:48
  Speaker 1: great job on all the work that you guys put
• 9:51
  Speaker 1: into this number three theme three that you have for
• 9:54
  Speaker 1: the twenty twenty six reign of terror that we're dealing
• 9:57
  Speaker 1: with right now. Reach stable coins to grow in the
• 10:01
  Speaker 1: wake of Genius Act. Obviously, we've seen that actually happen,
• 10:05
  Speaker 1: and many people would say, all right, does that happen
• 10:07
  Speaker 1: after Clarity, with the situation of them ripping the yields
• 10:12
  Speaker 1: right from the hands of you know, every investor in
• 10:14
  Speaker 1: America and possibly going after even more aggressive how do
• 10:18
  Speaker 1: you think stable coins will react to clarity if we
• 10:22
  Speaker 1: do see that occur.
• 10:24
  Speaker 2: Let's not kid ourselves.
• 10:26
  Speaker 3: The yield issue is very important for stable coin adoption.
• 10:29
  Speaker 3: You know, we'll continue to see stable coin growth for
• 10:33
  Speaker 3: transaction demand as a medium of exchange. It still has
• 10:36
  Speaker 3: a lot of scope there. But without yield, I do
• 10:40
  Speaker 3: think it will slow adoption. You know, with the ability
• 10:44
  Speaker 3: to earn yield, these really become an investment product, not
• 10:47
  Speaker 3: just a payments medium. And so if you're taking away
• 10:50
  Speaker 3: the ability for a stable coin to earn neild, I
• 10:53
  Speaker 3: think it will slow adoption temporarily and can be considered a.
• 10:57
  Speaker 2: Win for the bank lobby that is aiming for this.
• 11:00
  Speaker 3: Eventually, we're going to get there, I mean, stable coins
• 11:02
  Speaker 3: will be ubiquitous in the financial system. It will be
• 11:05
  Speaker 3: obvious at some point in the future that they need
• 11:08
  Speaker 3: to earn a yield. But the bank lobby seemingly victorious
• 11:12
  Speaker 3: here over the short run and slowing down adoption. I
• 11:15
  Speaker 3: think it is what it is. You know, the crypto
• 11:17
  Speaker 3: industry has lots of other things that we're making progress on,
• 11:19
  Speaker 3: but if we can't pay interest on stable coins, it
• 11:22
  Speaker 3: will tap the brakes on adoption.
• 11:24
  Speaker 1: The amount of adoption by regular investors much lower than
• 11:29
  Speaker 1: what it was once we started just to apply one
• 11:32
  Speaker 1: little thing, which was a measly you know, four to
• 11:36
  Speaker 1: five percent yield on a stable coin that's not even
• 11:39
  Speaker 1: you know, what you might get on an aggressive tech
• 11:41
  Speaker 1: stock or even a non aggressive much less a dividend
• 11:45
  Speaker 1: that's out there. So this was really drawing in traditional investors.
• 11:49
  Speaker 1: I want to jump into another area that was interesting
• 11:52
  Speaker 1: within the report, and that was the red herrings for
• 11:55
  Speaker 1: twenty twenty six. You hat a couple in here, quantum
• 11:58
  Speaker 1: computing and then all also dats. Explain to me your
• 12:03
  Speaker 1: position on these.
• 12:05
  Speaker 3: You know, digital acid treasuries just means a public company
• 12:07
  Speaker 3: that has an outsized amount of crypto on its balance sheet,
• 12:11
  Speaker 3: and these were a huge topic in twenty twenty five.
• 12:14
  Speaker 3: You know, twenty twenty five in some ways the year
• 12:16
  Speaker 3: of the dats. Look, when we look ahead, I think
• 12:20
  Speaker 3: that we're going to see a consolidation in this industry
• 12:24
  Speaker 3: to the largest players and those that have an innovative
• 12:28
  Speaker 3: business model. In some way, it's not going to be
• 12:31
  Speaker 3: enough just for a public company to hold crypto on
• 12:33
  Speaker 3: its balanceiet. The ETFs are an excellent way to get
• 12:36
  Speaker 3: efficient crypto asset exposure into a portfolio. They're going to
• 12:40
  Speaker 3: be the first stop for most investors. But if the
• 12:43
  Speaker 3: dats can do something with the public company structure, you
• 12:46
  Speaker 3: have an operating business, potentially have more flexibility with what
• 12:50
  Speaker 3: you can do with your capital, with how you can
• 12:52
  Speaker 3: fund the business than potentially there's some scope. So I
• 12:54
  Speaker 3: think we will see a narrower list of digital acid
• 12:57
  Speaker 3: treasuries this year and some of a lot of consolidation
• 13:00
  Speaker 3: and more innovative ideas well.
• 13:02
  Speaker 1: I think the one, at least I'm betting on I
• 13:04
  Speaker 1: want to get your opinion, was a very weird move,
• 13:08
  Speaker 1: I thought initially, and then I realized, wait a minute,
• 13:11
  Speaker 1: this might actually be a brilliant move. And that of
• 13:14
  Speaker 1: course was Tom Lee and mister Beast, where Tom Lee
• 13:17
  Speaker 1: Bitmine one of the biggest dats, well the biggest dat
• 13:20
  Speaker 1: on ethereum is putting two hundred million into Beast industries.
• 13:24
  Speaker 1: This essentially is a new financial platform that's being generated.
• 13:28
  Speaker 1: You go look at the data between gen z, Gen
• 13:31
  Speaker 1: Alpha and even millennials to a certain extent, Zach, you're
• 13:35
  Speaker 1: talking about two hundred million people. That is insane in
• 13:39
  Speaker 1: terms of a market fit. What do you think about
• 13:41
  Speaker 1: that would this be the winner coming out of the
• 13:44
  Speaker 1: dat phase.
• 13:45
  Speaker 2: Look, I am intrigued by this move.
• 13:48
  Speaker 3: As the parents of teenage kids, I can kind of
• 13:51
  Speaker 3: speak to the power certainly aware of the power of
• 13:54
  Speaker 3: mister Beast. Look, I think it's an intriguing on ramp
• 13:57
  Speaker 3: potential for Ethereum. What we want to see is some
• 14:01
  Speaker 3: type of integration between the platform that mister Beast is
• 14:05
  Speaker 3: building and his access to end users and onboarding to Ethereum.
• 14:09
  Speaker 3: If we can find a way to find some sort
• 14:11
  Speaker 3: of economic integration over time, then yeah, potentially this will
• 14:16
  Speaker 3: help bitmine compete against the other digital ASSEID treasuries, And
• 14:20
  Speaker 3: it's exactly the type of strategy that you want to see.
• 14:23
  Speaker 2: You want to see these businesses.
• 14:24
  Speaker 3: Expand beyond just owning the digital assets on their balance
• 14:28
  Speaker 3: sheet and find other ways to support the ecosystem to
• 14:31
  Speaker 3: drive adoption. You know, potentially a partnership with mister beasts
• 14:34
  Speaker 3: could be exactly the right thing for bitmin.
• 14:36
  Speaker 1: Well, I think this is what I'm watching because that
• 14:39
  Speaker 1: was not on my dance card for this year when
• 14:41
  Speaker 1: I saw that come through. So kudos to Tom for
• 14:45
  Speaker 1: thinking outside the box. Let me go to your theme
• 14:48
  Speaker 1: seven on your report, DeFi accelerates led by lending. All right,
• 14:53
  Speaker 1: So I am in agreement that if Clarity were to
• 14:57
  Speaker 1: go through and actually protect DeFi, this might be a
• 15:00
  Speaker 1: monster move. But under the current situation, this looks like
• 15:05
  Speaker 1: it could be a target zone for banks because if
• 15:08
  Speaker 1: they do win against yields, the next place they're going
• 15:13
  Speaker 1: to go hunting for bear is going to be in
• 15:15
  Speaker 1: DeFi around lending. What do you think is going to
• 15:18
  Speaker 1: happen there?
• 15:18
  Speaker 3: Look, I think DeFi is going to win in the
• 15:21
  Speaker 3: long run. I have no doubt it's a better way
• 15:23
  Speaker 3: to offer these products, you know, something like collateralized lending
• 15:27
  Speaker 3: what AVE specializes in. It doesn't require dozens and dozens
• 15:31
  Speaker 3: of humans operating these systems. That's what we've learned. That's
• 15:33
  Speaker 3: why these platforms are already so successful. But your point
• 15:36
  Speaker 3: is very well taken, and I'd say it's both things
• 15:39
  Speaker 3: like applications of ky C A m L rules to
• 15:43
  Speaker 3: DeFi is an important issue as well as token classification.
• 15:47
  Speaker 3: You know, we're in the investor side of this, you know,
• 15:50
  Speaker 3: and we're looking at things like AVE through the lens
• 15:53
  Speaker 3: of token holder rights versus you know, the equity entities
• 15:57
  Speaker 3: that support these platforms.
• 15:59
  Speaker 2: That needs to be clarified with legislation.
• 16:01
  Speaker 3: So, look, the Clarity Act is going to have big
• 16:04
  Speaker 3: implications for our industry and exactly how the text lands
• 16:07
  Speaker 3: will depend determine who the winners and losers are for DEFIVE.
• 16:11
  Speaker 3: What we want to see is reasonable applications of kyc
• 16:15
  Speaker 3: AML laws where they fit. You know, decentralized platforms do
• 16:19
  Speaker 3: not have the ability to respond to those types of
• 16:21
  Speaker 3: requests that they're not appropriate in those places, and we
• 16:24
  Speaker 3: want to see token holder rights clarified. We want to
• 16:27
  Speaker 3: know if you're making an investment into the AVE token
• 16:29
  Speaker 3: in the UNISWAP token, that you have some sort of
• 16:31
  Speaker 3: understanding of the rights that you have claimed to. So
• 16:34
  Speaker 3: that's what we want to see in Clarity. I hope
• 16:36
  Speaker 3: we get clean techs that follows those principles. To the
• 16:40
  Speaker 3: President's desk before salon you lean in.
• 16:42
  Speaker 1: A lot to privacy. There your theme number five was
• 16:46
  Speaker 1: privacy solutions that are needed within the blockchain, especially as
• 16:52
  Speaker 1: this text starts to go mainstream. I fear though, that
• 16:55
  Speaker 1: under the certain under the current you know proposal right
• 16:59
  Speaker 1: now with with clarity you're dealing with essentially KYC and AML,
• 17:04
  Speaker 1: all of our privacy essentially is going to get thrown
• 17:06
  Speaker 1: under the bus. I mean, at least that's the way
• 17:08
  Speaker 1: it looks. How would this even be something that we
• 17:11
  Speaker 1: would need if privacy is not necessarily guaranteed.
• 17:15
  Speaker 3: Everybody has an expectation for financial privacy. You know, your paychecks,
• 17:19
  Speaker 3: your taxes, your spending habits, your assets, and nobody wants
• 17:22
  Speaker 3: all that information on a public ledger.
• 17:25
  Speaker 2: I think that that just is completely obvious. Now.
• 17:27
  Speaker 3: There are lots of ways that we can approach this issue,
• 17:30
  Speaker 3: and lots of different solutions. Within crypto z cash, we
• 17:33
  Speaker 3: find an especially compelling idea because there's clearly demand for
• 17:39
  Speaker 3: decentralized digital currencies like bitcoin. But we know that bitcoin
• 17:43
  Speaker 3: has this weakness. It doesn't have privacy integrated into the
• 17:47
  Speaker 3: base layer. You know, one of our favorite assets here
• 17:51
  Speaker 3: at greyscale, z cash a good place to allocate capital.
• 17:55
  Speaker 3: If you're beginning to express a view on this specific team.
• 17:59
  Speaker 1: Now, z cash was the platform that lost all its developers, though.
• 18:04
  Speaker 3: There was a kerfuffle a couple of weeks ago. They
• 18:07
  Speaker 3: certainly didn't lose any developers, but some change in org
• 18:10
  Speaker 3: structure around a wallet program that was trying to raise
• 18:13
  Speaker 3: more capital. They're going to go spin out into a
• 18:16
  Speaker 3: private entity raise capital. I think positive for the for
• 18:20
  Speaker 3: the community. So, as you know, Paul, in crypto, there's
• 18:23
  Speaker 3: often some kind of debate around kind of development priorities
• 18:27
  Speaker 3: and the different organizations that surround these platforms. But the
• 18:30
  Speaker 3: good news is that we don't need to rely on
• 18:32
  Speaker 3: these things. These are decentralized public networks that are based
• 18:36
  Speaker 3: on economic incentives, and so you know, small changes in
• 18:39
  Speaker 3: terms of the development orgs around it not a big deal.
• 18:42
  Speaker 3: But in this case, I would see this as positive
• 18:44
  Speaker 3: for the ability to bring new capital into z cash
• 18:47
  Speaker 3: over time, rather than something negative for the ecosystem.
• 18:49
  Speaker 1: Okay, all right, you're selling me on it a little bit.
• 18:53
  Speaker 2: I'm I'm going to keep trying.
• 18:55
  Speaker 1: Yeah, keep going, listen. I'm talking about AI and centralization
• 19:01
  Speaker 1: is the problem and it calls for blockchain solutions. You
• 19:03
  Speaker 1: guys called this out. I agree with this. I think
• 19:06
  Speaker 1: that yes, that does. The Only problem is that I
• 19:10
  Speaker 1: don't think that our cryptos are and our ais are
• 19:13
  Speaker 1: believes this. I think he's just going to and I'm
• 19:16
  Speaker 1: talking about David Zachs. I don't think he gives a
• 19:18
  Speaker 1: shit about this. So my question is if they don't care,
• 19:23
  Speaker 1: how would this even matter?
• 19:25
  Speaker 3: The public is going to care, So we have we
• 19:28
  Speaker 3: have bitcoin because money is so important that we can't
• 19:32
  Speaker 3: leave it all to a centralized set of people. We
• 19:36
  Speaker 3: have to have an alternative. And the same is going
• 19:39
  Speaker 3: to be true for artificial intelligence. You know, AI technologies
• 19:42
  Speaker 3: we believe will be so important in the twenty first
• 19:44
  Speaker 3: century that we can't just leave it to a small
• 19:47
  Speaker 3: group of centralized parties. We have to have an alternative,
• 19:51
  Speaker 3: decentralized a solution. If you had to pick one platform,
• 19:54
  Speaker 3: that bit tensor is really the leading platform offering that
• 19:58
  Speaker 3: alternative today. You know, we'll see whether it's a long
• 20:00
  Speaker 3: run winner, but we're convinced that we have to have
• 20:03
  Speaker 3: these alternatives, and today bit tens are the one with
• 20:06
  Speaker 3: the most compelling chance to run away with the network
• 20:09
  Speaker 3: effects in this AI based at blockchain tech.
• 20:12
  Speaker 1: I'm looking at why people would because you look at
• 20:16
  Speaker 1: dollar debasement risk, This is driving demand for monetary alternatives.
• 20:21
  Speaker 1: You look at you know, bitcoin over maybe something like gold.
• 20:26
  Speaker 2: If you look at gold and silver.
• 20:27
  Speaker 1: As we're recording this, I don't know, as gold has
• 20:30
  Speaker 1: been blasted through another all time high maybe within the hour.
• 20:34
  Speaker 1: You know, it just keeps on going. And now you
• 20:36
  Speaker 1: have Solana, which is essentially develop a tokenized gold product.
• 20:41
  Speaker 1: So why would people go that route as opposed to
• 20:45
  Speaker 1: going the route that what has happened over the last year,
• 20:48
  Speaker 1: which has been into the commodity sector. What do you
• 20:51
  Speaker 1: think would happen there?
• 20:52
  Speaker 3: Well, yeah, there's lots of different assets that are affected
• 20:55
  Speaker 3: by dollar debasement, and this is precious metals, gold, silver,
• 20:59
  Speaker 3: platter them and palladium. These have been taking off other
• 21:02
  Speaker 3: foreign currencies. I think the Chinese you want is China
• 21:06
  Speaker 3: has given more space in Asia as the US pulling
• 21:09
  Speaker 3: back from some places. You know, potentially benefits from these
• 21:12
  Speaker 3: types of moves, and cryptocurrencies like bitcoin and ethereum also benefit. Now,
• 21:18
  Speaker 3: the nature of capital going into each of these spaces
• 21:21
  Speaker 3: is different. That's why gold, silver, the Chinese you want
• 21:24
  Speaker 3: price of biggoin.
• 21:25
  Speaker 2: They don't all move in lockstep.
• 21:27
  Speaker 3: There's different investors different types of capital flows, but over
• 21:31
  Speaker 3: time there will all reflect the effects of dollar debasement.
• 21:35
  Speaker 3: So the reason to pick a crypto is that we
• 21:38
  Speaker 3: think will have higher returns than these assets because it's
• 21:41
  Speaker 3: not only a dollar debasement theme that is a huge
• 21:45
  Speaker 3: piece of it, but we have a piece of technology
• 21:48
  Speaker 3: that's going to transform the financial system. And so when
• 21:50
  Speaker 3: you're allocating capital in crypto, you're getting both bets. You're
• 21:53
  Speaker 3: getting dollar debasement and you're getting this innovative technology that
• 21:56
  Speaker 3: will have all kinds of ramifications across the financial system.
• 21:59
  Speaker 2: I put those there's two things together.
• 22:01
  Speaker 3: To me, there's no better asset class for me to
• 22:03
  Speaker 3: be spending my time and capital on and crypto because
• 22:06
  Speaker 3: it is that double whammy of macro demand and adoption
• 22:10
  Speaker 3: of blockchain technology that's driving things forward. I think that
• 22:13
  Speaker 3: continues very much this year.
• 22:15
  Speaker 1: Granted, what I'm seeing coming out within this clarity component
• 22:19
  Speaker 1: is one thing that is concerning me, So that would
• 22:22
  Speaker 1: be the only shaking point in essence that would possibly
• 22:26
  Speaker 1: set crypto back maybe as much as a decade. I
• 22:29
  Speaker 1: feel like if this goes through the way that they're
• 22:31
  Speaker 1: trying to get it through, because it would put the
• 22:34
  Speaker 1: gatekeepers back in charge for at least that long or
• 22:38
  Speaker 1: move all of our innovation offshore again. And we've already
• 22:42
  Speaker 1: almost got some of that innovation back. But even then,
• 22:46
  Speaker 1: a lot of the developers we talk to, they're still saying,
• 22:50
  Speaker 1: let's wait and see, so they even have a little
• 22:53
  Speaker 1: bit of skepticism as to how this is going to
• 22:55
  Speaker 1: play out here in the US. I want to go
• 22:57
  Speaker 1: to a lightning round with you, okay, And the lightning
• 23:02
  Speaker 1: round is just quick yes, no answers. That's the rules.
• 23:06
  Speaker 1: Short if you have one sentence, okay, I'll love with that,
• 23:10
  Speaker 1: but short answers. And what we're talking about is l
• 23:14
  Speaker 1: one outages. Okay, we've had another l one outage that
• 23:17
  Speaker 1: just happened not too long ago. You guys know who
• 23:20
  Speaker 1: it is. If you don't know that, go out there
• 23:22
  Speaker 1: and do some research. I won't name names. Well, okay,
• 23:24
  Speaker 1: it was Suey. So the point is is, will the
• 23:28
  Speaker 1: l one outages move people to trusted chains? What do
• 23:31
  Speaker 1: you think?
• 23:32
  Speaker 2: No?
• 23:34
  Speaker 3: No, no, that's my one word answer is no, not
• 23:39
  Speaker 3: to permission chains. Look, we've seen Solana had a period
• 23:44
  Speaker 3: of outage, and we work through those things and have
• 23:46
  Speaker 3: a great uptime track record more recently, Sue, we think
• 23:50
  Speaker 3: one of the leading next generation block chains. Not surprising
• 23:54
  Speaker 3: to see occasional outages. It'll work through those challenges over time.
• 23:57
  Speaker 3: I think be in a great position to compete over time.
• 24:00
  Speaker 2: Zach.
• 24:00
  Speaker 1: I mean, come on, we know what the outage was over.
• 24:02
  Speaker 1: That was not a technical difficulty, This was just mismanagement.
• 24:06
  Speaker 1: So I don't know about that.
• 24:08
  Speaker 2: Okay.
• 24:08
  Speaker 1: Corruption wins over innovation in twenty twenty six, definitely.
• 24:13
  Speaker 2: Corruption.
• 24:16
  Speaker 3: Innovation continue to drive the market Ford no question, and
• 24:21
  Speaker 3: clear regulationivity uns positivity. I say corruption is stronger right now.
• 24:27
  Speaker 3: It's stronger right now as of today.
• 24:31
  Speaker 1: So I love the fact that we are going definitely
• 24:34
  Speaker 1: opposite here.
• 24:37
  Speaker 2: This is great.
• 24:37
  Speaker 1: Banks try to stay band staking rewards if successful on
• 24:41
  Speaker 1: stable coins. What do you think?
• 24:43
  Speaker 2: Good question.
• 24:44
  Speaker 3: I think they will not try to go that way
• 24:47
  Speaker 3: because they see staking rewards as sufficiently distinct from stable
• 24:54
  Speaker 3: coin yield.
• 24:55
  Speaker 2: They will focus on every last dime from us period.
• 25:02
  Speaker 1: There is no okay, all right, Well, I like your positivity, man.
• 25:06
  Speaker 1: I hope you're right on all of these Trump chaos
• 25:09
  Speaker 1: will only escalate in twenty twenty six. What do you
• 25:12
  Speaker 1: think we've got the tariff chaos coming, We've got global macro,
• 25:15
  Speaker 1: we're trying to take over Greenland, We're talking about you know,
• 25:19
  Speaker 1: crazy thing. Who knows what we're going to be doing
• 25:22
  Speaker 1: in two years? What do you think?
• 25:24
  Speaker 3: Look, let me say that I think we are probably
• 25:27
  Speaker 3: at peak uncertainty right now on this topic. And if
• 25:32
  Speaker 3: the Supreme Court rules against the White House on the
• 25:36
  Speaker 3: Lisa Cook issue, and if he nominates Kevin Walsh or
• 25:40
  Speaker 3: Chris Waller for FED chair, I think actually that will
• 25:44
  Speaker 3: put more confidence back into the idea of FED independence
• 25:48
  Speaker 3: and we will move beyond some of this particular source
• 25:51
  Speaker 3: of uncertainty. Now that doesn't change many other things, including
• 25:54
  Speaker 3: our enormous debt problem, which we're going to be dealing
• 25:57
  Speaker 3: with for many years. But in terms of tutional uncertainty
• 26:02
  Speaker 3: and FED independence type issues, I think we maybe pass
• 26:05
  Speaker 3: the peak of that by the end of this week.
• 26:07
  Speaker 1: I'm on the fence on this one because Trump throws curveballs,
• 26:13
  Speaker 1: and I have been hit with these curveballs multiple times
• 26:16
  Speaker 1: when I thought I wasn't going to get hit with
• 26:18
  Speaker 1: an inside high curveball right across the chin, and that's
• 26:22
  Speaker 1: what he does.
• 26:23
  Speaker 3: So, you know, depending on how the depending on how
• 26:26
  Speaker 3: the tensions with Western European countries unfold this week.
• 26:29
  Speaker 2: It could certainly get worse.
• 26:31
  Speaker 1: Yeah, for sure, sentiment terms against the centralized exchanges in
• 26:36
  Speaker 1: favor of decentralized exchanges.
• 26:39
  Speaker 3: What do you think we saw evidence? So I think
• 26:41
  Speaker 3: yes is the answer. And I think we saw evidence
• 26:44
  Speaker 3: last year that crypto was increasingly eating its own cooking
• 26:49
  Speaker 3: in this regard with the success of hyper liquid, you
• 26:52
  Speaker 3: know that I think an important leading indicator that more
• 26:55
  Speaker 3: and more volume will shift to decentralized platforms over time.
• 26:59
  Speaker 2: But it's a long time coming.
• 27:01
  Speaker 3: It'll take a long time, and the centralized exchanges of
• 27:03
  Speaker 3: course have some advantages, but hyper liquid an important for
• 27:07
  Speaker 3: success story last year.
• 27:08
  Speaker 1: Here's one for you you can answer this. Gray Scale
• 27:12
  Speaker 1: launches a fully open D five PRODUCTIX do I do
• 27:17
  Speaker 1: I get you there to say anything good?
• 27:18
  Speaker 2: Here?
• 27:20
  Speaker 3: Look, let me let me say that you know, Grayscale
• 27:23
  Speaker 3: has had a large number of firsts in its history.
• 27:26
  Speaker 3: Most recently you know the first asset managers taking our
• 27:29
  Speaker 3: ethereum ETFs at scale, and you will continue to see a.
• 27:33
  Speaker 2: Long list of first from us.
• 27:36
  Speaker 3: This year, I think focused at the start on more
• 27:39
  Speaker 3: old coin ETF products.
• 27:42
  Speaker 1: I think you're up to something. Okay, I'm gonna say,
• 27:45
  Speaker 1: were always do it? Yeah, you're up to something. I
• 27:48
  Speaker 1: know you guys. I think you're going to do it.
• 27:50
  Speaker 1: So there you go, all right. Visa will continue monopolizing
• 27:54
  Speaker 1: credit cards and merchant rails. This is another one. These
• 27:57
  Speaker 1: are great.
• 27:59
  Speaker 3: Stable coins are are coming after the credit card business,
• 28:02
  Speaker 3: and I think what you will see first is that
• 28:06
  Speaker 3: online payments, you know, for online shopping. You know, consumers
• 28:10
  Speaker 3: are increasingly going to see a stable coin option for
• 28:14
  Speaker 3: payments and this will be attractive for consumers and merchants.
• 28:17
  Speaker 3: And so I believe that the monopolies that you know,
• 28:20
  Speaker 3: the quasi of monopolies that the credit card companies have
• 28:23
  Speaker 3: on our payments networks are are coming to an end
• 28:26
  Speaker 3: and stable coins will be the mechanism to to really
• 28:29
  Speaker 3: change that.
• 28:30
  Speaker 1: Man. I've I'm going to say, I think they're going
• 28:34
  Speaker 1: to They're going to keep winning. After seeing what I've
• 28:37
  Speaker 1: seen so far, the lobby is just so powerful, Zach.
• 28:41
  Speaker 1: How can you battle a lobby that is spending half
• 28:44
  Speaker 1: a trillion dollars a year. How can you battle that
• 28:47
  Speaker 1: it's it's.
• 28:48
  Speaker 3: It's don't needs to compete at the you know, during
• 28:51
  Speaker 3: the election season, I think is a piece of it
• 28:53
  Speaker 3: as we saw last time. I think you know fair
• 28:55
  Speaker 3: Shake will be very active this time around as well.
• 28:59
  Speaker 3: But the most important thing is it's just better technology.
• 29:01
  Speaker 3: So we'll get to the right answer that that is
• 29:03
  Speaker 3: true conventionally.
• 29:04
  Speaker 1: Bar none, because had you asked me that question just
• 29:08
  Speaker 1: six months ago, I would have said, oh yeah, they're done. Yeah,
• 29:11
  Speaker 1: game over. No, these guys, they got a lot of
• 29:15
  Speaker 1: tricks in their bags. Interesting stuff.
• 29:17
  Speaker 2: Zach.
• 29:18
  Speaker 1: I don't mean to put you on the hot seat.
• 29:19
  Speaker 1: I hope you aren't mad at me, but I do
• 29:22
  Speaker 1: that with every guest. Is we like to get answers
• 29:25
  Speaker 1: as you know here on this show. But thank you
• 29:27
  Speaker 1: so much for being a good sport and coming on
• 29:29
  Speaker 1: the show today. We appreciate it.
• 29:31
  Speaker 2: My great pleasure. As always, Paul, Let's do it again soon.
• 29:40
  Speaker 1: If you like this video, like and subscribe, drop a
• 29:43
  Speaker 1: comment down below, and also join our free private member group.
• 29:47
  Speaker 2: The link is in the description.