November 19, 2025 • 42 mins
If watching the crypto charts lately has given you motion sickness, this episode is your seatbelt and your barf bag in one. The hosts dig into a market that has shed more than a trillion dollars in value in just six weeks, with Bitcoin crashing from an early-October peak above $126,000 to briefly slipping under the psychologically crucial $90,000 line. They unpack why this correction was not only brutal in size, but frightening in speed—and how that compressed 42-day sell-off has magnified every ounce of fear in the system.From there, the episode zooms in on the institutions. On one side, you have sovereign wealth conviction: Abu Dhabi’s funds quietly tripling their stake in BlackRock’s IBIT ETF and openly classifying Bitcoin as “digital gold,” a long-term reserve asset instead of a speculative toy. On the other side, you have fragile commitment: a billion-dollar Ethereum Digital Asset Trust, fully capitalized and ready to launch, abruptly canceled after a single sharp sell-off, and Sharplink Gaming staring down roughly half a billion dollars in unrealized ETH losses as it moves tens of millions to Galaxy Digital in what looks like a de-risking pivot.The hosts then step back from price and examine the financial plumbing being built underneath the chaos. Kraken has confidentially filed for a blockbuster IPO after a funding round valuing the exchange at around $20 billion, backed not by crypto VCs but by Wall Street titans like Citadel Securities and Jane Street. Meanwhile Bullish, already public and newly profitable with surging revenues, is watching its stock trade below its IPO price even as it doubles down on real-world asset tokenization and seeks SEC approval to act as a transfer agent for U.S. securities. It is a paradoxical moment where the fundamentals are strengthening but the market refuses to reward them.Altcoins get their own whirlwind tour. You’ll hear how the first XRP ETF launch turned into a textbook “buy the rumor, sell the news” event, why Dave Portnoy is calling XRP his 10x bet as he plows over $2 million back into the market, and how Zcash has stunned traders with a 1,000% rally powered by a roaring privacy narrative. In stark contrast, Shiba Inu is dissected as an object lesson in failed tokenomics, with burn mechanics that barely dent a supply still sitting in the hundreds of trillions and a price increasingly driven by inertia rather than genuine scarcity or utility.Then the episode accelerates into the tech revolution that is marching forward as if price doesn’t matter. The hosts break down Bitrue’s bold experiment plugging a roster of cutting-edge AI models directly into copy trading, letting users hand a slice of their portfolios to automated machine decision-making. They explore the GNOT biometric hardware wallet that tries to kill the seed phrase once and for all with finger-vein scanning and zero-knowledge proofs, as well as Falcon Finance’s DeFi staking vaults that offer double-digit yields in a synthetic dollar with strict lockups designed to prevent DeFi-style bank runs.Real-world utility takes center stage with Minipay, a Celo-based stablecoin wallet from Opera that now lets users in Latin America spend digital dollars directly through dominant local rails like PIX in Brazil and Mercado Pago in Argentina. Suddenly, stablecoins are not just speculative instruments; they are rent, groceries, and everyday commerce in two huge economies.But every leap forward comes with a darker shadow. The episode highlights a stealthy cryptojacking campaign, Iron Urn 440, hijacking Ray clusters—the same distributed compute infrastructure that powers much of the AI boom—to mine coins in the background. Attackers use AI-generated payloads and carefully throttle CPU usage to avoid detection, turning high-end AI infrastructure into an invisible money-printing machine.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
So if you are feeling whiplash watching the crypto charts
right now, you're certainly not alone, not at all. We are,
I mean, we're navigating a market that is just fundamentally
split into You've got this massive institutional fear that's driving
all the volatility right and yet at the same time,
there's this incredible structural progress, these technological breakthroughs happening just
(00:20):
under the surface. It's a real battle between panic and conviction.
Speaker 2 (00:25):
It really is an essential period of transition. And you know,
the numbers they tell a pretty brutal story about the.
Speaker 1 (00:30):
Short term they really do.
Speaker 2 (00:32):
We've seen a market dip that in just six weeks
wiped well over I mean over a trillion dollars off
the total crypto capitalization, a trillion dollars, A trillion Bitcoin
hit a high in early October, was it one hundred
and twenty two hundred and fifty und dollars, But that
momentum just completely reversed. It fell sharply below ninety two
thousand dollars and even briefly dipped under that ninety thousand
(00:55):
dollar mark.
Speaker 1 (00:56):
And that draw down that just erased everything from twenty
twenty five, didn't it all? Those hards one gains pretty
much all of them. Yeah, what's really remarkable to me
about this correction isn't just the you know, the size
of it, but the sheer speed.
Speaker 2 (01:07):
The speed's the key.
Speaker 1 (01:08):
Previous big market corrections they took what seventy seven days,
one hundred and forty seven days to inflict this kind
of pain. This one did it in just forty two days.
Speaker 2 (01:16):
That compressed timeframe. It just it accelerates the fear. You
can feel it. And we saw that fear reflected directly
in how the institutions behaved.
Speaker 1 (01:25):
Absolutely, you just have to look at the ETFs exactly when.
Speaker 2 (01:27):
You look at the exchange traded products, the panic is
crystal clear. The spot bitcoin ETFs, which you know, we're
supposed to be the source of all this new stability
in capital, safe money, the safe money, right. They saw
record outflows. We're talking three point one billion dollars flooding
out in November alone.
Speaker 1 (01:45):
Wow.
Speaker 2 (01:46):
And the most startling data point I think comes from
Black Rocks Ibit ETF it recorded a single day record
outflow of five hundred and twenty three million.
Speaker 1 (01:54):
Dollars half a billion dollars.
Speaker 2 (01:56):
Half a billion dollars fleeing what was supposed to be
a safe regulated vehicle in a single day.
Speaker 1 (02:01):
And that right there, that sets up our core mission today.
We have to unpack this, this conflicting narrative because on
one side you have this extreme price stress, the institutional caution,
you know, the canceled funds, the record losses, all the panic,
all the panic. But just beneath that, there's this quiet
structural advancement happening. You've got regulatory frameworks solidifying major infrastructure,
(02:28):
you know, exchanges, pursuing Wall Street IPOs, and the tech
integration in the tech genuine technological integration from AI and
trading to real world asset tokenization. It's all accelerating. It's
it's the messy, difficult transition from you know, a fringe
asset class to a maturing financial ecosystem.
Speaker 2 (02:49):
It's the difference between looking at the day's closing price
and looking at the multi year construction plan for the
foundation of the building.
Speaker 1 (02:56):
Let's start with that institutional drama then, because you have
these two stories of just stating capital commitments. One is
doubling down and the other is abandoning ship completely. We
have to start with the Abu Dhabi whale.
Speaker 2 (03:05):
Let's call it sovereign wealth conviction. The Abu Dhabi Investment
Council or ADC, they made a massive strategic bet. They
tripled their stake in Black Rocks ibit ETF during the
third quarter.
Speaker 1 (03:17):
And this was before the crash, right, that's the critical part.
Speaker 2 (03:20):
That is the critical part. This move was completed just
before the market tanked in a way, they bought the
fear before the dib even fully manifested itself.
Speaker 1 (03:29):
Tripling a stake like that, that's not just passive investing.
That's a high conviction, you know, directional trait. How big
did their position actually get?
Speaker 2 (03:37):
It grew from two point four million shares to nearly
eight million shares, so as of September thirtieth, that position
was valued at roughly five hundred and eighteen million dollars. Wow,
but the value is almost secondary to their stated rationale.
This wasn't framed as some kind of speculative trade. ADC
characterized this Bitcoin allocation as a long term diversification strategy.
Speaker 1 (03:59):
That long term view, I mean coming from a sovereign
wealth fund, that's profoundly important. What exactly are they comparing
bitcoin to? Is it just another tech stock?
Speaker 2 (04:07):
For them, no, not at all. They explicitly stated they
compare the asset to gold to gold to gold, they
expected to play a structural role in what they see
as an increasingly digital global economy. This comparison is a
huge indicator for institutional finance because gold is it's the
ultimate geopolitical risk off asset. It's a recognized hedge against
(04:28):
fiat evaluation and political instability.
Speaker 1 (04:30):
So for ADC to put Bitcoin in that same category,
that signals a permanent shift in how sovereign capital is
viewing this asset exactly.
Speaker 2 (04:38):
It's not a temporary allocation for them, it's a new
pillar of a global reserve strategy. This is them saying
they see bitcoin as part of the financial foundation for
the future.
Speaker 1 (04:47):
And this commitment it's shared across the whole organization. Right
because Mubadala, which oversees ADC, they also have a huge position.
Speaker 2 (04:55):
Huge position. Mubidahla Investment Co also holds a substantial eight
point seven million IBIT shares. They're valued at around five
hundred and sixty seven million dollars, So all in you're
talking about over eight billion dollars in sovereign capital making
a structural bet on bitcoin's long term status as a
digital reserve asset.
Speaker 1 (05:12):
A billion dollars of deep long term confidence. But then
you have to contrast that with the other story, the
proposed billion dollar ethereum digital asset trust, the DAT the.
Speaker 2 (05:23):
Complete opposite story. This is being championed by a heavyweight
consortium of Asian backers. We're talking Hubie founder Lee Lynn,
Schnbo of Fenbushi Capital, Shao Feng of Hashki Group, and
Kai Wenching from May two Inc. A real who's who.
Speaker 1 (05:38):
And this was poised to be an institutional behemoth, a
corporate treasury vehicle designed specifically to rival the size of
you know, a gray scale or a bitmine, but focused
only on accumulating ethereum.
Speaker 2 (05:50):
That was the plan.
Speaker 1 (05:51):
What kind of capital did they actually manage to get together?
Speaker 2 (05:54):
Well, that's the thing. That consortium had already lined up
a billion dollars in committed capital. Lee's Avenuer Capital put
in two undred million dollars, and other institutional investors, including
the very powerful Hongshan Capital Group committed a massive five
hundred million dollars.
Speaker 1 (06:07):
So this was locked committed money.
Speaker 2 (06:09):
Yes, it was aimed at fundamentally changing the supply dynamics.
Of ethereum just buying and.
Speaker 1 (06:14):
Holding that level of capital committed by that caliber of
you know, traditional and cryptonative whales. That sounds unstoppable. So
why did they pull the plug?
Speaker 2 (06:23):
It was called off completely. Sources familiar with what happened
confirmed that the primary trigger for halting the plan was
the market downturn, specifically the sharp selloff on October eleventh.
The committed capital was just returned.
Speaker 1 (06:36):
Wow, So a billion dollar strategic venture just disassembled because
of one bad week in the market.
Speaker 2 (06:42):
That's it. And this is the clearest example we have
of just how sensitive some of this committed institutional capital
still is to short term volatility. The Abu Dhabi Fund
they shrugged off the dip and bought more bitcoin. The
Asian Consortium saw the eight dip and immediately pulled the plug.
Speaker 1 (06:58):
That is a devastation dating psychological blow to the institutional
ethereum narrative, isn't it. It suggests that the deep pocketed
ETH buyers are still fundamentally more speculative, more risk averse
than their bitcoin counterpart.
Speaker 2 (07:10):
It definitely highlights a difference in the perceived risk tolerance,
for sure, and we see that risk tolerance being tested
even further with Sharplink Gaming.
Speaker 1 (07:18):
Ah. Yes, they were famously the first publicly listed company
to adopt eth as their primary reserve asset. But now
they are facing a well, a financial reckoning is the
only way to put it.
Speaker 2 (07:30):
A reckoning, is right. When we talk about that, we're
talking about a half billion dollars in unrealized losses. That
number is just staggering.
Speaker 1 (07:39):
It demands a closer look.
Speaker 2 (07:40):
Indeed, Sharplink currently sits on substantial unrealized losses. Depending on
the source, it's estimated between four hundred and seventy nine
million dollars that's according to SCR Data to over five
hundred million dollars according to crypto quant Data.
Speaker 1 (07:54):
Okay, so just for our listeners, break that down. What's
the difference between sr and crypto quant data?
Speaker 2 (07:59):
Right, So SR data refers to securities exchange reporting that
captures the book value the company reports triblgulators. Cryptoquont, on
the other hand, provides on chain analytics. So it's measuring
the actual real time difference between the current price and
their average purchase price based on their wallet activity.
Speaker 1 (08:16):
So two different methods, but they both confirm the same thing,
a massive loss.
Speaker 2 (08:20):
A massive loss, and what's driving that liability is well,
unfortunately poor timing. Sharplink's average purchase price free ethereum is
quite high. It's sitting around three thousand, six hundred and
nine dollars out with ETH now falling sharply toward that
critical three thousand dollars level. The stress on their balance
sheet is immense. This is important because you know, institutional
(08:40):
holders often have debt covenants or requirements to maintain certain
balance sheet ratios. Unrealized losses of this magnitude trigger some
very serious risk.
Speaker 1 (08:50):
Management concerns at Sharplink. They had previously treated dips as
buying opportunities. So what specific action did they take that
has analysts thinking there's a major reversal in their strategy.
Speaker 2 (08:59):
They made a very deliberate, high value move on chain.
They transferred five four hundred and forty two ETH, which
is worth approximately seventeen point zero two million dollars to
Galaxy Digital.
Speaker 1 (09:10):
And Galaxy Digital is a specialized over the counter or
OTC exchange exactly.
Speaker 2 (09:14):
And OTC desks are typically used for large volume private transactions,
the kind you do when you want to avoid slippage
on the open exchanges.
Speaker 1 (09:21):
So if they're moving millions of dollars in crypto to
an OTC desk, is the consensus that this signals in
outright liquidation or I don't know, could it be collateral
for a loan, maybe to raise quick cash without selling
the underlying asset.
Speaker 2 (09:34):
That's a great question, and it really speaks to the
nuance of reading on chain data. Well, you know, collateralization
is possible. The consensus among analysts is leaning toward a
risk reduction sale.
Speaker 1 (09:46):
So they're cutting their losses.
Speaker 2 (09:47):
It looks that way given the sheer scale of their
total unrealized loss and the fact that they're moving the
e to a third party known for facilitating these large
private sales, it strongly suggests a major portfolio balancing aimed
at reducing risk exposure. So, yeah, cutting losses or raising
FIAT capital to shore up their operations.
Speaker 1 (10:06):
So regardless of the immediate intent this move, it just
underscores the pressure they're under. Even the second largest institutional
ETH holder and sharp Link still holds what eight hundred
and fifty nine, eight hundred and fifty.
Speaker 2 (10:17):
Three ETH an incredible amount.
Speaker 1 (10:19):
They are demonstrating significant weakness. They are the definition of
an entity being forced to react to market volatility, not
act with conviction.
Speaker 2 (10:27):
So we have a clear picture of this institutional fear
and you know the contrasting conviction of sovereign wealth. Now,
let's pivot away from that short term market action and
look at the actual physical and financial infrastructure being built
underneath all this volatility. We're talking about the exchanges that
are aiming for Wall Street, and.
Speaker 1 (10:46):
We have to be talking about krack In, which has
just taken a massive step toward becoming a publicly traded company.
Speaker 2 (10:52):
Absolutely, crack In confidentially filed a draft S one registration
form with the SEC for a planned initial public offering.
The fact that they filed confidentially that signals they're moving
very aggressively behind the scenes and have secured the backing
they need to pursue this.
Speaker 1 (11:08):
And the valuation they secured just before this IPO filing
was I mean, it was truly enormous.
Speaker 2 (11:13):
It was an eight hundred million dollar funding round that
valued the company at an astronomical twenty billion dollars. But
the crucial detail here is who backed this round, right,
major traditional finance players. We're talking Ken Griffin's Citadel Securities
in Jane Street These are not cryptonative venture funds. These
are the deep pocketed giants of Wall Street.
Speaker 1 (11:32):
That backing Citadel in Jane Street. That signals immense confidence
from TRADFI that Kracking can actually navigate the regulatory gauntlet
and compete head to head with a company like Coinbase.
So what's the immediate goal of this IPO?
Speaker 2 (11:45):
The filing aims to position Kraken alongside the other listed
crypto firms and most importantly, to fuel their global expansion.
They're looking to extend their dominance internationally, using the IPO
capital to build new product lines and secure additional licensing
in key jurisdictions outside of the highly regulated US market.
Speaker 1 (12:05):
But the path to public market glory is, let's just say,
it's fraught with peril. And you can see that with
what's happening with the Bullish paradox. Bullich completed its IPO
at thirty seven dollars a share back in August, and
despite hitting major financial milestones, the stock prices really struggling.
Speaker 2 (12:21):
It is a profound paradox. It really highlights the disconnect
between traditional financial valuation methods and how the public markets
are currently perceiving crypto firms. Bullish reported record adjusted revenue
of seventy six point five million dollars and a net
income of eighteen point five million dollars in Q three
twenty twenty five.
Speaker 1 (12:38):
That's a huge turnaround, a.
Speaker 2 (12:39):
Staggering turnaround from the sixty seven point three million dollar
net loss they posted the previous year. So they are profitable,
they're growing rapidly, and they're demonstrating successful cost controls, all
the things Wall Street supposedly loves.
Speaker 1 (12:52):
Yet despite all this fundamental financial success, their stock is sinking.
Speaker 2 (12:57):
Correct bullishar has dropped over five percent recently and are
now trading below their thirty seven dollars IPO price. They
hit thirty five dollars eighty seven cents. The market, it seems,
is just not rewarding proven, profitable growth in the crypto
exchange sector right now.
Speaker 1 (13:12):
Why not? Is it just the broader market fear or
uncertainty about future regulation.
Speaker 2 (13:17):
It's likely a mix of both. The sentiment is just
so negative that good news is being ignored.
Speaker 1 (13:21):
So if profitability isn't enough to drive their share price,
where is Bullish looking for their future growth?
Speaker 2 (13:27):
Well? Their CEO highlighted two major strategic areas. First, their
options product has proven very successful. It's already surpassed a
billion dollars in trading volume. Second, and this is critical
for the future of the entire sector. They are hyper
focused on real world asset tokenization RWA.
Speaker 1 (13:43):
RWA tokenization so taking tangible assets like real estate, credit,
or commodities and putting their ownership stakes onto a blockchain.
Why is that the strategic focus.
Speaker 2 (13:54):
Because it bridges traditional finance and blockchain with tangible, predictable
revenue streams. And to solidify this commitment to RWA, Bullish
submitted an SEC application to be registered as a transfer
agent for US securities.
Speaker 1 (14:09):
Now that is a massive regulatory step for the listener.
Why is registering as a transfer agent such a significant
regulatory hurdle for a crypto exchange. It sounds like boring
back office stuff.
Speaker 2 (14:21):
It sounds boring, but it's a huge deal. A transfer
agent is responsible for tracking who owns a company's stocks, bonds,
or other securities. If the SEC approves Bullish to act
as a transfer agent for US securities, it means they're
essentially authorized to handle the back end processing of traditional
financial assets, but on the blockchain, so it's.
Speaker 1 (14:39):
A direct regulatory stamp of approval.
Speaker 2 (14:41):
Exactly. It allows them removed far beyond just crypto trading
and into the multi trillion dollar world of digitized equities
and debt. It makes them a foundational layer for RWA
tokenization in the US.
Speaker 1 (14:52):
This ambition, you know, contrasting with the short term price
fhere it ties into this bigger market psychology debate. Are
we finally moving past the purely speculative phase of crypto?
Speaker 2 (15:04):
The data suggests a definitive shift is underway. Market makers
like Influx in Singapore. They observe that the market is
rapidly moving away from being liquidity driven, you know, relying
on massive retail inflex excess leverage and generic momentum, to
being fundamentals driven.
Speaker 1 (15:21):
The old alt seasons.
Speaker 2 (15:22):
Those traditional alt seasons fueled by pure speculation are fading.
Speaker 1 (15:26):
Yeah, So if speculation is fading, what does fundamentals driven
actually look like on a chart when the price is crashing.
Speaker 2 (15:32):
It looks like divergence. You see tokens that are tied
to clear utility, things like staking yields, predictable revenue streams,
approve dtfs or RWA. They're holding up much better than
the purely speculative assets. The weaker majors and the carely
narrative driven coins. They're the ones absorbing the majority of
the selling stress.
Speaker 1 (15:51):
So the market is becoming more discerning.
Speaker 2 (15:53):
Exactly, it's a fine of long term structural health. The
market is prioritizing durability and utility over just reflect of
beta exposure.
Speaker 1 (16:01):
That shift towards structural durability is perhaps what Jim Kramer
was seeing when he suggested it almost feels like a
cabal is trying to keep Bitcoin above ninety thousand dollars.
Speaker 2 (16:11):
That comment perfectly encapsulated the market tension when Bitcoin was
briefly dipping under that psychological ninety thousand dollars mark. But
the community counter argument is crucial here, which is there's
no manipulation. The support is entirely structural buying driven by
clear math. We are seeing persistent mandatory ETF inflows combined
(16:32):
with massive accumulation by corporations like Strategy, and this volume
of buying consistently exceeds the new daily issuance of bitcoin
from minors.
Speaker 1 (16:40):
And Michael Sailor has been the most vocal champion of
this structural argument. He's been arguing that Wall Street's entry
is actually making bitcoin more stable, not.
Speaker 2 (16:47):
Less, he is incredibly committed to this view. Sailor maintains
that Wall Street's adoption through ETF's and corporate treasuries provides
this predictable, deep source of demand that acts as a
continuous floor under the price. I mean, strategy currently holds
an astonishing six hundred and forty nine thousand, eight hundred
and seventy BTC.
Speaker 1 (17:06):
Which is worth about what fifty nine point five to
nine billion dollars roughly.
Speaker 2 (17:10):
Yeah, and he has repeatedly called their leverage position robust.
In his view, the market floor is an arbitrary it's
being raised by massive, transparent, committed institutional capital.
Speaker 1 (17:21):
But if the four is being raised structurally, why did
the price still dip so dramatically. Why didn't that structural
demand just overwhelm the short term panic and prevent the
dip below ninety thousand dollars in the first place.
Speaker 2 (17:32):
And that's the critical question that challenges the perfect stability narrative.
While that long term accumulation is mathematically raising the baseline,
short term volatility is driven by force selling. You've got
liquidations of leverage retail positions, You've get ETF redemptions from
panicked holders, and major corporate risk rebalancing like we just
discussed with sharplink.
Speaker 1 (17:51):
So the force sellers create a tidal wave.
Speaker 2 (17:54):
They create a massive immediate liquidity event that even the
persistent etf inflows can't instantly absorb. Sailor's long term stability
argument is sound, but it doesn't insulate the asset from
acute short term panic induced by leverage and unexpected news.
Speaker 1 (18:09):
Speaking of structure, we have to address the major stress
point within the bitcoin network itself, the economics of the miners.
The reliance on the block subsidy is hitting a critical
level compared to the transaction fees.
Speaker 2 (18:21):
This is a foundational concern for the bitcoin network's long
term security model, which is designed to eventually rely entirely
on fees to pay for security. Currently, bitcoin miners get
their revenue primarily from the block subsidy, which is three
point one two five btc.
Speaker 1 (18:36):
Per block That translates to about forty five million dollars
in daily revenue.
Speaker 2 (18:40):
Right However, the transaction fees paid by users, the payments
for actually using the network, currently contribute only about three
hundred thousand dollars per day to minor revenue.
Speaker 1 (18:49):
That is less than one percent of their total income
coming from fees. That ratio seems I mean, fundamentally unsustainable
for the future of the network.
Speaker 2 (18:56):
It represents a twelve month low for fee contribution, and
it dramatically highlights the network's heavy reliance on the inflation
based reward system right now, and while the subsidy won't
fully end until around the year twenty one point forty,
this persistently low fee contribution raises a very serious question
about long term minor economics.
Speaker 1 (19:16):
Okay, so why does low fee revenue matter if the
price of bitcoin is high, I mean, isn't the subsidy
still worth a lot of money?
Speaker 2 (19:23):
It matters because miners secure the network. They spend massive
amounts of energy to validate transactions and prevent double spending attacks.
If the block subsidy eventually disappears, the network needs fees
to compensate miners for that security work.
Speaker 1 (19:37):
And if the fees aren't there.
Speaker 2 (19:38):
If fees remain negligible, if the network is mostly used
for simple transfers rather than complex, high fee transactions, and
the bitcoin price doesn't appreciate enough to make those small
fees worthwhile miners won't be incentivized to spend the energy.
Speaker 1 (19:51):
Required, which could lead to a decrease in network hash rate, and.
Speaker 2 (19:55):
That could potentially expose the network to a fifty one
percent attack risk, which is when a single entity gains
control of most of the network's processing power and can
rewrite the ledger.
Speaker 1 (20:06):
So we have institutional investors structurally raising the price floor,
but at the same time, the underlying economic engine of
the network, the fee generation, is showing long term weakness.
The infrastructure is somehow robust and fragile at the exact
same time.
Speaker 2 (20:21):
Moving from the Bitcoin fundamentals, let's look at the all
coin space, where the volatility is often amplified, especially around
major institutional product launches, and we have to start with
the first xrpetf launch, which was a clear by the
rumor sell the news event.
Speaker 1 (20:35):
Yeah, it was positioned as this major breakthrough, but the
launch by Canary was met with a well, a resounding
thud in terms of price action.
Speaker 2 (20:42):
Canary launch their xrp ETF with a respectable two hundred
and fifty million dollars in initial inflows, which you know,
would typically be seen as really bullish momentum, but not
this time, not this time. Immediately following the launch, the
XRP price dropped a sharp nine percent. This just reinforces
that earlier point. In a market under stress, even significant
(21:03):
fund inflows do not guarantee price appreciation if the broader
liquidity and sentiment remain fragile.
Speaker 1 (21:09):
But this institutional access, it's not a one off thing.
There's a strong pipeline of major asset managers gearing up
to launch their own XRP funds right absolutely.
Speaker 2 (21:18):
Franklin Templeton Financial Giant has their XRPETF scheduled for launch
on November twentieth. Analysts are projecting anywhere from one hundred
and fifty million dollars to two hundred and fifty million
dollars in first DAI trading. So there's clearly persistent demand
for regulated exposure. And we also have active filings from Fidelity, Invesco,
and bitwise.
Speaker 1 (21:34):
So institutional access is expanding rapidly regardless of the initial
price disappointment.
Speaker 2 (21:39):
Correct And meanwhile, Ripple itself is making moves on chain.
We saw a shift of four hundred and fifty million
dollars in XRP to an unknown wallet, While the reason
for that move is murky. The most high profile XRP
story involves the one and only Dave Portnoy.
Speaker 1 (21:52):
Of course, Portnoy's conviction is once again highly entertaining and
highly visible. During this market dip, he reported making a
calculated two point one five million dollar dive back into crypto.
Speaker 2 (22:03):
He did. He divided that capital seven hundred and fifty
thousand dollars into bitcoin, four hundred thousand dollars into the ethereum,
and he committed a full one million dollars to XRP.
Speaker 1 (22:13):
And he called XRP his tenx bet, his ten XPT.
Speaker 2 (22:16):
That's a significant vote of confidence in xrp's long term utility,
even as the ETF launch disappointed. His comment about hunting
when there's blood in the streets really confirms his Hodl
conviction and his willingness to bet big on assets he
believes are fundamentally undervalued, regardless of short term volatility.
Speaker 1 (22:33):
It's a pure high stake speculation play that contrasts so
starkly with ADC's structural risk off allocation.
Speaker 2 (22:39):
A completely different mindset, and now completely outside the institral
ETF race, we have the story of z cash, which
is delivering returns that justify the broader market fear.
Speaker 1 (22:47):
A one thousand percent rallies since October is almost unbelievable.
Z cash or ZC. It's soared from what seventy dollars
to now trading above seven hundred dollars per coin. What
on earth fueled this explosive price action in this market?
Speaker 2 (22:59):
The primary driver is a dramatic resurgence in the privacy narrative.
This rally has been accelerated by some celebrity endorsements, and
I think a growing global realization that centralized digital systems
inherently lack anonymity. Z cash, with its superior zero knowledge
proof technology for shielded transactions, became the main beneficiary of
this renewed interest in digital financial sovereignty.
Speaker 1 (23:22):
How has that surge affected its market ranking?
Speaker 2 (23:24):
Zc's market capitalization has reached ten point one billion dollars.
That places it within a sixty five percent price increase
of overtaking Cardana or Ada for a coveted spot in
the top ten rankings. Wow. And what's perhaps even more
telling about its current momentum is its trading volume. In
terms of daily trading volume, ZEC is already ahead of Ada.
(23:45):
It's registering one point seventy one billion dollars. The narrative
is strong and the liquidity is flowing rapidly to support it.
Speaker 1 (23:51):
That's a powerful reminder that utility tied to a deeply
felt user need in this case, privacy, can generate spectacular
momentum even when the rest of the market is in pain.
Speaker 2 (23:59):
Now contrast that strong utility driven narrative with Shiba Enu
or Asia. Here the price action appears to be driven
purely by inertia and hope.
Speaker 1 (24:11):
Right, we've seen massive outflows recently, Over one hundred and
twenty billion to one hundred and thirty billion azib were
moved to exchanges in just a forty eight hour period,
reflecting sustained selling pressure.
Speaker 2 (24:22):
That kind of outflow should crush the price, yet it's
sort of holding weekly above a critical threshold.
Speaker 1 (24:28):
Why the resilience, Well, technically, the asset is not yet
in a catastrophic oversold zone. Its relative strength index the
RSI is staying above the critical thirty mark, which usually
signals that rock bottom is imminent. This suggests that while
there is a lot of selling, there is still some
baseline momentum and a dedicated retail base that is absorbing
the volume.
Speaker 2 (24:47):
But the real scrutiny falls on the project's long term
promise its deflationary mechanisms. Are they actually working?
Speaker 1 (24:53):
It doesn't look like it. They are demonstrably failing to
create scarcity at any meaningful scale. The project has long
p voted burning tokens to reduce the supply, but the
burn activity is nearly non.
Speaker 2 (25:04):
Existent and the amounts are tiny.
Speaker 1 (25:06):
The few transactions that do occur are minuscule compared to
the overwhelming supply of over five hundred and eighty nine
trillion tokens still in circulation. The failure of this intentional
sca fity mechanism means the tokens price movement is driven
entirely by speculation and community inertia rather than any intentional
utility or supply shock. So we've covered the market volatility,
(25:27):
the institutional positioning, and the all coin drama. Now let's
accelerate into the technological revolution that is defining the next
era of crypto, the intersection of AI, next generation security,
and real world utility.
Speaker 2 (25:39):
This section really proved that innovation is accelerating completely independent
of price, and the biggest news here is the direct
integration of artificial intelligence into mainstream trading. The crypto exchange
by true is implementing this into its copy trading service.
Speaker 1 (25:53):
This is a huge leap, allowing users to automate their
investment decisions based on the analytical power of these maps
massive AI models. Which models are they actually integrating?
Speaker 2 (26:03):
They've integrated six of the leading large language and intelligence
models GPT five, Gemini two point five pro, Claude, Sonnet
four point five, Grock four Deep, CGV three point one,
and Quin three max. Users can select any of these
models and entrust a portion of their portfolio to automatic
machine management.
Speaker 1 (26:22):
That list covers the absolute cutting edge of AI development.
What sort of performance track record are these models bringing
from traditional finance.
Speaker 2 (26:31):
Well, experiments conducted in traditional stock trading environments have shown
some remarkable effectiveness. Models like GPT five and Gemini two
point five pro have recorded impressive success rates of seventy
four percent and seventy one percent, respectively. They often outperform
human fund managers under specific market conditions.
Speaker 1 (26:48):
But the crucial question is how they will fare in
the highly volatile, peculiar, and often narrative driven environment of
cryptocurrency markets, which often don't follow traditional technical analysis patterns exactly.
Speaker 2 (26:59):
This is the first major real world test of AI
in mainstream crypto investing by true was allowing users to
define the portion of their investment they wish the AI
to manage, but the profits and losses are entirely retained
by the user.
Speaker 1 (27:10):
So it's an interesting blend of decentralized investment control with
hyper centralized analytical power.
Speaker 2 (27:16):
It is this signals the future where these large language
models might be the primary drivers of short and medium
term trading liquidity.
Speaker 1 (27:25):
Moving from AI trading to a fundamental problem of crypto
securing your private keys, we're seeing a true disruption here
with the gnot biometric hardware wallet.
Speaker 2 (27:35):
The g knot aims to completely sideline the seed phrase,
you know, the infamous twelve or twenty four words that
are simultaneously the key and the single point of failure
for cryptosecurity. It's challenging the established hardware wallet makers like
Ledger and Treasure by eliminating the need for seed phrases
or even pin codes entirely.
Speaker 1 (27:54):
How does gnot achieve that level of security without a
traditional key.
Speaker 2 (27:58):
It uses advanced finger vase standing technology, and this is
far more secure than a standard fingerprint reader. Finger vein
scanning works by reading the unique vascular architecture inside the
user's finger.
Speaker 1 (28:08):
And it requires live blood flow.
Speaker 2 (28:10):
Crucially, yes, the technology requires live blood flow to unlock,
which effectively prevents sophisticated threats from high resolution static scans, molds,
or morbidly, the use of severed fingers. The core security
mechanism relies on zero knowledge proofs processed locally on the device,
ensuring your biometric data never leaves the wallet.
Speaker 1 (28:32):
That's a massive leap in physical security and convenience. I mean,
it solves the single biggest fear for a lot of people,
right losing that piece of paper with twenty four words
on it.
Speaker 2 (28:41):
It does, and it supports all the major chains Bitcoin, Ethereum, Solana, BnB,
and XRP. Furthermore, the company is actively developing multi sig functionality,
which would allow the wallet to unlock only if multiple
users potentially located globally verify their unique finger vein scan simultaneously.
Speaker 1 (28:58):
And what's the price point?
Speaker 2 (28:59):
The Founder's edition pre sales priced at two hundred and
ninety nine dollars. They're betting that users are willing to
pay a premium to eliminate the security nightmare of managing
a seed phrase.
Speaker 1 (29:08):
That solves a major headache for institutional and high worth
individual holders. Let's look at DeFi innovation now specifically Falcon
Finances Staking vaults.
Speaker 2 (29:17):
So Falcon Finance launched these staking vaults to cater to
users seeking higher predictable yield without giving up ownership of
their assets. Users can deposit their holdings starting with a
native FF token and earn yield up to twelve percent APR, and.
Speaker 1 (29:31):
This yield is paid out in their synthetic dollar.
Speaker 2 (29:34):
Correct, it's paid out in USDF. There's synthetic dollar, which
is specifically designed for consistency and resilience. It aims to
minimize the volatility risks associated with non feautbacked stable coins.
Speaker 1 (29:46):
Twelve percent APR is attractive, but what structural features are
built into the vaults to ensure that consistency and resilience
you mentioned? How do they stop a bank run?
Speaker 2 (29:54):
Well, the design emphasizes orderly asset flow and prevents those
rapid destabilizing withdrawals. The vaults require a one hundred and
eighty day minimum lock up period, ensuring liquidity remains stable
for half a year ah okay, and there's a three
day cool down period before withdrawal can be finalized. This
structure strengthens the underlying pooled liquidity and reinforces the broader
(30:15):
USDF ecosystem by creating predictable capital commitments.
Speaker 1 (30:19):
Now, this next story might be the most critical development
in terms of real world utility. Stable coins finally bridging
the gap to everyday commerce in major developing economies.
Speaker 2 (30:28):
This is a monumental achievement for utility and adoption. Medipay,
which is a Cello based stable coin wallet developed by Opera,
just rolled out a pay like a local feature specifically
targeting Latin America. This innovation directly connects ust eerycannor balances
to local real time payment methods.
Speaker 1 (30:46):
So you're telling you my stable coin balance is instantly
usable for buying groceries or paying rent Exactly.
Speaker 2 (30:52):
Users can now make direct, instantaneous payments using their stable
coin balance to essential local rails like Mercato, Pago and
Argentina and PIX in Brazil. This completely eliminates the need
for expensive card processors, unfavorable exchange rates, or slow bank transfers.
It links global digital dollars directly to essential local commerce infrastructure, and.
Speaker 1 (31:13):
We have to emphasize the sheer scale of the PIX
integration in Brazil. This isn't just some niche app.
Speaker 2 (31:18):
Not at all. Pix is not just another payment app.
It is Brazil's financial operating system. It's used by over
seventy six percent of the entire Brazilian population and it
processes eighty percent more transactions than credit and debit cards combined.
Speaker 1 (31:32):
And Mercado Pago is huge in Argentina.
Speaker 2 (31:34):
It's huge. It boasts seventy two million active users. This
integration immediately turns stable coins into instant, low cost utility
for two massive economies, solving persistent problems like card rejection
and high cross border transaction fees for anyone holding digital dollars.
Speaker 1 (31:51):
It's incredible to see that level of adoption and utility
being built while the price charts are just flashing red. However,
as AI and distributed computing expand, so what does the
sophistication of criminal activity, we have to address the growing
thread of crypto mining malice.
Speaker 2 (32:05):
This is a significant security warning that it's directly at
the infrastructure enabling the AI boom. A botnet which is
being tracked as iron Earn four forty is actively exploiting
a critical unfixed severity flaw in.
Speaker 1 (32:17):
Ray clusters and Ray for our listeners, is an open
source Python network. It's designed to distribute computational workloads across
multiple machines, which makes it essential for AI development and
data processing.
Speaker 2 (32:29):
Right, so, attackers are hijacking this specialized computing power that's
intended for development or AI tasks to mine crypto.
Speaker 1 (32:37):
For themselves, and they're using AI to do it.
Speaker 2 (32:39):
Precisely, the attackers are using AI generated payloads, ironically leveraging
the same technology they are undermining to submit jobs via
the unauthenticated Jobs API in these RAY clusters. The payload
then deploys the xm rig cryptojacker.
Speaker 1 (32:54):
And their method of deployment is highly refined to avoid detection. Correct.
Speaker 2 (32:58):
Yes, this is the clever part. To avoid the easy
detection that usually happens when a cryptojacker consumes one hundred
percent of the processing power and drastically slows down the
host system. The attackers are locking xm rig to just
sixty percent of the victim's processing capacity. It's a very
clever stealth tactic designed to keep the victims server operational
and the theft running longer without anyone noticing.
Speaker 1 (33:20):
How widespread is this vulnerability given how much RAY is
being used in AI.
Speaker 2 (33:24):
Now, the research indicates an alarming spread. Over two hundred
and thirty thousand vulnerable RAY servers are now exposed online.
This is a huge increase from only a few thousand
exposed servers that were reported back in twenty twenty three.
Speaker 1 (33:37):
So the dark side of the AI boom absolutely.
Speaker 2 (33:40):
Specialized computing networks are becoming massive, highly valuable targets for
crypto mining, theft, exploiting flaws in decentralized architecture.
Speaker 1 (33:48):
It truly is the Wild West merging with the future.
You have AI models trading our crypto, while AI is
also writing the payloads used to steal computing power to
mine crypto.
Speaker 2 (33:58):
All this institutional commitment into technological advancement is moving in
lockstep with global efforts to regulate and manage digital assets.
It's a necessary step for mass adoption. We are seeing
governance finally start to catch up to innovation.
Speaker 1 (34:10):
Let's start at the highest levels of traditional banking regulation.
The Basle Committee on Banking Supervision, their chair Eric Sedin,
is demanding an overhaul of the rules governing bank crypto capital.
Speaker 2 (34:21):
This is huge news for traditional finance integration. The current
Basal rules are notoriously stringent. They require banks to hold
massive amounts of capital. In some cases it's dollar for
dollar backing against their crypto exposure. The Dean is calling
for a major overhaul because these stringent rules are simply
not working.
Speaker 1 (34:40):
What specifically is forcing his hand now.
Speaker 2 (34:43):
Two major factors. First, the dramatic increase in stable coins,
which fall under some of the most stringent BASL capital requirements.
Banks want to engage with stable coins for payments and settlement,
but are financially penalized by the rules for doing so.
Speaker 1 (34:56):
And the second factor.
Speaker 2 (34:58):
Resistance resistance from key global financial centers, specifically the US
and Great Britain, which have effectively refused to enact the
current stringent rules.
Speaker 1 (35:07):
Why did the US and UK resist implementation Well, the
industry criticized the original basal rules as being too punitive
and too conservative relative to the actual risks presented by
holding high liquidity assets like bitcoin.
Speaker 2 (35:21):
By delaying and resisting implementation, the US and UK essentially
forced the global body to acknowledge that a different approach
is needed, one that recognizes the growing stability and structure
in the crypto market, especially in regulated stable coins.
Speaker 1 (35:36):
Moving to North America, we've seen rapid coordinated movement on
stable coin legislation. Canada just introduced the Canadian stable Coin
Act YES as.
Speaker 2 (35:44):
Part of its budget Implementation Act. This is a foundational
piece of legislation for them. It establishes a robust federal
regime under the Bank of Canada to supervise all issuers
of FIAT referencing stable coins available to Canadians.
Speaker 1 (35:59):
And it requires a full registration process.
Speaker 2 (36:01):
A very detailed registration application covering governance, financial disclosures, and
reserve management.
Speaker 1 (36:06):
And this framework is very familiar to US observers.
Speaker 2 (36:09):
It is modeled closely on the US Genius Act, which
was signed into law earlier this year. This highlights a coordinated, regulatory,
confident North American approach to defining and securing stable coins.
This regulatory clarity is exactly what President Donald Trump championed
as part of his pledge to make America the Crypto
Capital of the world, and it shows some bipartisan progress
(36:32):
on this specific issue.
Speaker 1 (36:34):
Speaking of the US, the government is also making moves
to severely limit the use of offshore crypto avenues, focusing
heavily on tax transparency and reporting.
Speaker 2 (36:42):
This is the IRS and the White House reviewing a
proposal modeled after FBR and FACA, the frameworks used for
reporting AUSTUO bank accounts and foreign financial assets. This new
proposal would require Americans to report and pay taxes on
foreign crypto accounts, and.
Speaker 1 (36:57):
The definition of a foreign account here is intentionally broad
to catch as much activity as possible. How wide reaching
is it extremely broad?
Speaker 2 (37:04):
It potentially includes offshore centralized exchanges like those operating solely
out of Asia or Europe. It could include foreign custodians,
foreign brokers listing tokenized assets, and even certain foreign wallet
providers that hold private keys outside of US jurisdiction.
Speaker 1 (37:20):
And what's the stated reason for this?
Speaker 2 (37:22):
The stated rationale is not merely tax collection. It's to
promote the growth and use of digital assets in the
United States and alleviate concerns that the current lack of
reporting disadvantages US regulated exchanges. The message is clear, the
US government wants crypto held and transacted through onshore regulated entities.
Speaker 1 (37:43):
This regulatory momentum culminates in what is perhaps the most
tangible sign of sovereign adoption yet, the integration of bitcoin
into municipal finance led by New Hampshire.
Speaker 2 (37:52):
New Hampshire just launched the nation's first one hundred million
dollar bitcoin secured municipal bond. This is not a speculative investment.
It is a financial product backed by the security of
a digital asset. The bond is a conduit bond led
by the state's Business Finance Authority or BFA.
Speaker 1 (38:08):
So what makes this secure for the investors and critically,
how are the state's taxpayers protected from the underlying volatility
of bitcoin.
Speaker 2 (38:16):
The structure is designed for maximum risk management. Bitcoin held
in bitco custody serves as the primary collateral to safeguard
the investors if the BFA were to default. The investors
are secured by that bitcoin collateral, which insulates taxpayers from
the market risk.
Speaker 1 (38:31):
And this is part of a bigger state strategy.
Speaker 2 (38:33):
It is This bond initiative is a controlled trial, and
it follows an earlier critical move that allowed the New
Hampshire Treasury to allocate up to five percent of public
funds to crypto that created the first state level strategic
bitcoin reserve.
Speaker 1 (38:46):
The ultimate goal then sounds like converting idle reserves into
functioning tools for public finance.
Speaker 2 (38:52):
That's the long term vision. The fees and gains generated
from this collateral program will be directed into the Bitcoin
Economic Development Fund, which supports local entrepreneurship. Experts working on
the structure noted that it opens the door for pension
funds and retirement programs to gain limited, managed exposure to
crypto through a highly regulated bond structure. This is how
(39:14):
bitcoin begins its integration into the multi trillion dollar US
bond market.
Speaker 1 (39:19):
Finally, we saw a key shift in direction at the
FDIC this week that could ease access to banking for
crypto firms.
Speaker 2 (39:25):
Yes, Travis Hill, President Trump's pick for FDIC chair, was
advanced by the Senate Banking Committee. Hill has focused on
overturning the agency's direction on digital assets, specifically moving to
end the practice of using reputational risk as a means
to block crypto firms from financial services.
Speaker 1 (39:41):
Which has been a huge problem for the industry.
Speaker 2 (39:43):
A massive problem for years, major banks have denied services
to legitimate crypto firms citing this undefined reputational risk, effectively
choking off their access to traditional banking. Hill's advancement suggests
the agency's poised to move toward a more objective res
disk based regulatory assessment rather than just subjective fear.
Speaker 1 (40:04):
So if we synthesize all of this information, from the
sovereign wealth funds buying the dip, to the exchanges filing
from massive IPOs, and the regulators finally trying to catch up.
We see a market that is just fundamentally defined by tension.
Speaker 2 (40:17):
That tension is undeniable. We see enormous institutional fear. You've
got the billion dollar Ethereum trust canceled sharp Link, facing
a half billion in unrealized losses, record ETF outflows. These
are all signs of acute market pain and caution.
Speaker 1 (40:30):
But on the other side, we have incredible institutional confidence.
You have eighty nine is tripling its Bitcoin stake, treating
it as a structural peer to gold. You have crack
In marching toward a twenty billion dollar IPO backed by
giants like Citadel and New Hampshire, and New Hampshire launching
the first Bitcoin secured municipal bond, legitimizing BTC as collateral
in public finance.
Speaker 2 (40:49):
The market might feel chaotic and volatile in the short term,
but the machinery underneath is rapidly maturing. The persistent effort
to bridge crypto innovation. You know aim models trading automatically
on bitru stable coins paying via pix in Brazil. G
not revolutionizing hardware security with traditional regulatory guardrails like the
(41:10):
overhauling of Basil bank rules and the new Canadian stable
coin law, suggests we are solidifying the foundations for the
next era regardless of the price TEPS.
Speaker 1 (41:19):
What stands out here is that despite the short term
price trauma, the technical and governance infrastructure is just moving
forward as if the chaos doesn't matter. But we do
have to acknowledge the one area where this market is
deeply intertwined with broader economic forces, the global AI boom.
Speaker 2 (41:35):
We've seen AI feed crypto trading, We've seen AI create
new security threats, and the AI narrative in general is
driving risk appetite among the major tech investors, who also
backfirms like Kracken. The sources noted warnings from figures like
Google CEO Sandor Pichai and JP Morgan warning of irrationality
and a potential bubble in AI valuations globally.
Speaker 1 (41:55):
So here is the final provocative thought for you to consider.
If the high valuations and speculative frenzy driving the current
excitement in the AI sector, the very sector that provides
capital and narrative confidence to the mature and crypto world
were to correct sharply. How might that global systemic correction
affect the newfound structural stability that institutions like ADIC and
(42:16):
Michael Saylor believe they are building into the Bitcoin ecosystem.
What stands out to you about that potential spillover risk
So if you are feeling whiplash watching the crypto charts
right now, you're certainly not alone, not at all. We are,
I mean, we're navigating a market that is just fundamentally
split into You've got this massive institutional fear that's driving
all the volatility right and yet at the same time,
there's this incredible structural progress, these technological breakthroughs happening just
(00:20):
under the surface. It's a real battle between panic and conviction.
Speaker 2 (00:25):
It really is an essential period of transition. And you know,
the numbers they tell a pretty brutal story about the.
Speaker 1 (00:30):
Short term they really do.
Speaker 2 (00:32):
We've seen a market dip that in just six weeks
wiped well over I mean over a trillion dollars off
the total crypto capitalization, a trillion dollars, A trillion Bitcoin
hit a high in early October, was it one hundred
and twenty two hundred and fifty und dollars, But that
momentum just completely reversed. It fell sharply below ninety two
thousand dollars and even briefly dipped under that ninety thousand
(00:55):
dollar mark.
Speaker 1 (00:56):
And that draw down that just erased everything from twenty
twenty five, didn't it all? Those hards one gains pretty
much all of them. Yeah, what's really remarkable to me
about this correction isn't just the you know, the size
of it, but the sheer speed.
Speaker 2 (01:07):
The speed's the key.
Speaker 1 (01:08):
Previous big market corrections they took what seventy seven days,
one hundred and forty seven days to inflict this kind
of pain. This one did it in just forty two days.
Speaker 2 (01:16):
That compressed timeframe. It just it accelerates the fear. You
can feel it. And we saw that fear reflected directly
in how the institutions behaved.
Speaker 1 (01:25):
Absolutely, you just have to look at the ETFs exactly when.
Speaker 2 (01:27):
You look at the exchange traded products, the panic is
crystal clear. The spot bitcoin ETFs, which you know, we're
supposed to be the source of all this new stability
in capital, safe money, the safe money, right. They saw
record outflows. We're talking three point one billion dollars flooding
out in November alone.
Speaker 1 (01:45):
Wow.
Speaker 2 (01:46):
And the most startling data point I think comes from
Black Rocks Ibit ETF it recorded a single day record
outflow of five hundred and twenty three million.
Speaker 1 (01:54):
Dollars half a billion dollars.
Speaker 2 (01:56):
Half a billion dollars fleeing what was supposed to be
a safe regulated vehicle in a single day.
Speaker 1 (02:01):
And that right there, that sets up our core mission today.
We have to unpack this, this conflicting narrative because on
one side you have this extreme price stress, the institutional caution,
you know, the canceled funds, the record losses, all the panic,
all the panic. But just beneath that, there's this quiet
structural advancement happening. You've got regulatory frameworks solidifying major infrastructure,
(02:28):
you know, exchanges, pursuing Wall Street IPOs, and the tech
integration in the tech genuine technological integration from AI and
trading to real world asset tokenization. It's all accelerating. It's
it's the messy, difficult transition from you know, a fringe
asset class to a maturing financial ecosystem.
Speaker 2 (02:49):
It's the difference between looking at the day's closing price
and looking at the multi year construction plan for the
foundation of the building.
Speaker 1 (02:56):
Let's start with that institutional drama then, because you have
these two stories of just stating capital commitments. One is
doubling down and the other is abandoning ship completely. We
have to start with the Abu Dhabi whale.
Speaker 2 (03:05):
Let's call it sovereign wealth conviction. The Abu Dhabi Investment
Council or ADC, they made a massive strategic bet. They
tripled their stake in Black Rocks ibit ETF during the
third quarter.
Speaker 1 (03:17):
And this was before the crash, right, that's the critical part.
Speaker 2 (03:20):
That is the critical part. This move was completed just
before the market tanked in a way, they bought the
fear before the dib even fully manifested itself.
Speaker 1 (03:29):
Tripling a stake like that, that's not just passive investing.
That's a high conviction, you know, directional trait. How big
did their position actually get?
Speaker 2 (03:37):
It grew from two point four million shares to nearly
eight million shares, so as of September thirtieth, that position
was valued at roughly five hundred and eighteen million dollars. Wow,
but the value is almost secondary to their stated rationale.
This wasn't framed as some kind of speculative trade. ADC
characterized this Bitcoin allocation as a long term diversification strategy.
Speaker 1 (03:59):
That long term view, I mean coming from a sovereign
wealth fund, that's profoundly important. What exactly are they comparing
bitcoin to? Is it just another tech stock?
Speaker 2 (04:07):
For them, no, not at all. They explicitly stated they
compare the asset to gold to gold to gold, they
expected to play a structural role in what they see
as an increasingly digital global economy. This comparison is a
huge indicator for institutional finance because gold is it's the
ultimate geopolitical risk off asset. It's a recognized hedge against
(04:28):
fiat evaluation and political instability.
Speaker 1 (04:30):
So for ADC to put Bitcoin in that same category,
that signals a permanent shift in how sovereign capital is
viewing this asset exactly.
Speaker 2 (04:38):
It's not a temporary allocation for them, it's a new
pillar of a global reserve strategy. This is them saying
they see bitcoin as part of the financial foundation for
the future.
Speaker 1 (04:47):
And this commitment it's shared across the whole organization. Right
because Mubadala, which oversees ADC, they also have a huge position.
Speaker 2 (04:55):
Huge position. Mubidahla Investment Co also holds a substantial eight
point seven million IBIT shares. They're valued at around five
hundred and sixty seven million dollars, So all in you're
talking about over eight billion dollars in sovereign capital making
a structural bet on bitcoin's long term status as a
digital reserve asset.
Speaker 1 (05:12):
A billion dollars of deep long term confidence. But then
you have to contrast that with the other story, the
proposed billion dollar ethereum digital asset trust, the DAT the.
Speaker 2 (05:23):
Complete opposite story. This is being championed by a heavyweight
consortium of Asian backers. We're talking Hubie founder Lee Lynn,
Schnbo of Fenbushi Capital, Shao Feng of Hashki Group, and
Kai Wenching from May two Inc. A real who's who.
Speaker 1 (05:38):
And this was poised to be an institutional behemoth, a
corporate treasury vehicle designed specifically to rival the size of
you know, a gray scale or a bitmine, but focused
only on accumulating ethereum.
Speaker 2 (05:50):
That was the plan.
Speaker 1 (05:51):
What kind of capital did they actually manage to get together?
Speaker 2 (05:54):
Well, that's the thing. That consortium had already lined up
a billion dollars in committed capital. Lee's Avenuer Capital put
in two undred million dollars, and other institutional investors, including
the very powerful Hongshan Capital Group committed a massive five
hundred million dollars.
Speaker 1 (06:07):
So this was locked committed money.
Speaker 2 (06:09):
Yes, it was aimed at fundamentally changing the supply dynamics.
Of ethereum just buying and.
Speaker 1 (06:14):
Holding that level of capital committed by that caliber of
you know, traditional and cryptonative whales. That sounds unstoppable. So
why did they pull the plug?
Speaker 2 (06:23):
It was called off completely. Sources familiar with what happened
confirmed that the primary trigger for halting the plan was
the market downturn, specifically the sharp selloff on October eleventh.
The committed capital was just returned.
Speaker 1 (06:36):
Wow, So a billion dollar strategic venture just disassembled because
of one bad week in the market.
Speaker 2 (06:42):
That's it. And this is the clearest example we have
of just how sensitive some of this committed institutional capital
still is to short term volatility. The Abu Dhabi Fund
they shrugged off the dip and bought more bitcoin. The
Asian Consortium saw the eight dip and immediately pulled the plug.
Speaker 1 (06:58):
That is a devastation dating psychological blow to the institutional
ethereum narrative, isn't it. It suggests that the deep pocketed
ETH buyers are still fundamentally more speculative, more risk averse
than their bitcoin counterpart.
Speaker 2 (07:10):
It definitely highlights a difference in the perceived risk tolerance,
for sure, and we see that risk tolerance being tested
even further with Sharplink Gaming.
Speaker 1 (07:18):
Ah. Yes, they were famously the first publicly listed company
to adopt eth as their primary reserve asset. But now
they are facing a well, a financial reckoning is the
only way to put it.
Speaker 2 (07:30):
A reckoning, is right. When we talk about that, we're
talking about a half billion dollars in unrealized losses. That
number is just staggering.
Speaker 1 (07:39):
It demands a closer look.
Speaker 2 (07:40):
Indeed, Sharplink currently sits on substantial unrealized losses. Depending on
the source, it's estimated between four hundred and seventy nine
million dollars that's according to SCR Data to over five
hundred million dollars according to crypto quant Data.
Speaker 1 (07:54):
Okay, so just for our listeners, break that down. What's
the difference between sr and crypto quant data?
Speaker 2 (07:59):
Right, So SR data refers to securities exchange reporting that
captures the book value the company reports triblgulators. Cryptoquont, on
the other hand, provides on chain analytics. So it's measuring
the actual real time difference between the current price and
their average purchase price based on their wallet activity.
Speaker 1 (08:16):
So two different methods, but they both confirm the same thing,
a massive loss.
Speaker 2 (08:20):
A massive loss, and what's driving that liability is well,
unfortunately poor timing. Sharplink's average purchase price free ethereum is
quite high. It's sitting around three thousand, six hundred and
nine dollars out with ETH now falling sharply toward that
critical three thousand dollars level. The stress on their balance
sheet is immense. This is important because you know, institutional
(08:40):
holders often have debt covenants or requirements to maintain certain
balance sheet ratios. Unrealized losses of this magnitude trigger some
very serious risk.
Speaker 1 (08:50):
Management concerns at Sharplink. They had previously treated dips as
buying opportunities. So what specific action did they take that
has analysts thinking there's a major reversal in their strategy.
Speaker 2 (08:59):
They made a very deliberate, high value move on chain.
They transferred five four hundred and forty two ETH, which
is worth approximately seventeen point zero two million dollars to
Galaxy Digital.
Speaker 1 (09:10):
And Galaxy Digital is a specialized over the counter or
OTC exchange exactly.
Speaker 2 (09:14):
And OTC desks are typically used for large volume private transactions,
the kind you do when you want to avoid slippage
on the open exchanges.
Speaker 1 (09:21):
So if they're moving millions of dollars in crypto to
an OTC desk, is the consensus that this signals in
outright liquidation or I don't know, could it be collateral
for a loan, maybe to raise quick cash without selling
the underlying asset.
Speaker 2 (09:34):
That's a great question, and it really speaks to the
nuance of reading on chain data. Well, you know, collateralization
is possible. The consensus among analysts is leaning toward a
risk reduction sale.
Speaker 1 (09:46):
So they're cutting their losses.
Speaker 2 (09:47):
It looks that way given the sheer scale of their
total unrealized loss and the fact that they're moving the
e to a third party known for facilitating these large
private sales, it strongly suggests a major portfolio balancing aimed
at reducing risk exposure. So, yeah, cutting losses or raising
FIAT capital to shore up their operations.
Speaker 1 (10:06):
So regardless of the immediate intent this move, it just
underscores the pressure they're under. Even the second largest institutional
ETH holder and sharp Link still holds what eight hundred
and fifty nine, eight hundred and fifty.
Speaker 2 (10:17):
Three ETH an incredible amount.
Speaker 1 (10:19):
They are demonstrating significant weakness. They are the definition of
an entity being forced to react to market volatility, not
act with conviction.
Speaker 2 (10:27):
So we have a clear picture of this institutional fear
and you know the contrasting conviction of sovereign wealth. Now,
let's pivot away from that short term market action and
look at the actual physical and financial infrastructure being built
underneath all this volatility. We're talking about the exchanges that
are aiming for Wall Street, and.
Speaker 1 (10:46):
We have to be talking about krack In, which has
just taken a massive step toward becoming a publicly traded company.
Speaker 2 (10:52):
Absolutely, crack In confidentially filed a draft S one registration
form with the SEC for a planned initial public offering.
The fact that they filed confidentially that signals they're moving
very aggressively behind the scenes and have secured the backing
they need to pursue this.
Speaker 1 (11:08):
And the valuation they secured just before this IPO filing
was I mean, it was truly enormous.
Speaker 2 (11:13):
It was an eight hundred million dollar funding round that
valued the company at an astronomical twenty billion dollars. But
the crucial detail here is who backed this round, right,
major traditional finance players. We're talking Ken Griffin's Citadel Securities
in Jane Street These are not cryptonative venture funds. These
are the deep pocketed giants of Wall Street.
Speaker 1 (11:32):
That backing Citadel in Jane Street. That signals immense confidence
from TRADFI that Kracking can actually navigate the regulatory gauntlet
and compete head to head with a company like Coinbase.
So what's the immediate goal of this IPO?
Speaker 2 (11:45):
The filing aims to position Kraken alongside the other listed
crypto firms and most importantly, to fuel their global expansion.
They're looking to extend their dominance internationally, using the IPO
capital to build new product lines and secure additional licensing
in key jurisdictions outside of the highly regulated US market.
Speaker 1 (12:05):
But the path to public market glory is, let's just say,
it's fraught with peril. And you can see that with
what's happening with the Bullish paradox. Bullich completed its IPO
at thirty seven dollars a share back in August, and
despite hitting major financial milestones, the stock prices really struggling.
Speaker 2 (12:21):
It is a profound paradox. It really highlights the disconnect
between traditional financial valuation methods and how the public markets
are currently perceiving crypto firms. Bullish reported record adjusted revenue
of seventy six point five million dollars and a net
income of eighteen point five million dollars in Q three
twenty twenty five.
Speaker 1 (12:38):
That's a huge turnaround, a.
Speaker 2 (12:39):
Staggering turnaround from the sixty seven point three million dollar
net loss they posted the previous year. So they are profitable,
they're growing rapidly, and they're demonstrating successful cost controls, all
the things Wall Street supposedly loves.
Speaker 1 (12:52):
Yet despite all this fundamental financial success, their stock is sinking.
Speaker 2 (12:57):
Correct bullishar has dropped over five percent recently and are
now trading below their thirty seven dollars IPO price. They
hit thirty five dollars eighty seven cents. The market, it seems,
is just not rewarding proven, profitable growth in the crypto
exchange sector right now.
Speaker 1 (13:12):
Why not? Is it just the broader market fear or
uncertainty about future regulation.
Speaker 2 (13:17):
It's likely a mix of both. The sentiment is just
so negative that good news is being ignored.
Speaker 1 (13:21):
So if profitability isn't enough to drive their share price,
where is Bullish looking for their future growth?
Speaker 2 (13:27):
Well? Their CEO highlighted two major strategic areas. First, their
options product has proven very successful. It's already surpassed a
billion dollars in trading volume. Second, and this is critical
for the future of the entire sector. They are hyper
focused on real world asset tokenization RWA.
Speaker 1 (13:43):
RWA tokenization so taking tangible assets like real estate, credit,
or commodities and putting their ownership stakes onto a blockchain.
Why is that the strategic focus.
Speaker 2 (13:54):
Because it bridges traditional finance and blockchain with tangible, predictable
revenue streams. And to solidify this commitment to RWA, Bullish
submitted an SEC application to be registered as a transfer
agent for US securities.
Speaker 1 (14:09):
Now that is a massive regulatory step for the listener.
Why is registering as a transfer agent such a significant
regulatory hurdle for a crypto exchange. It sounds like boring
back office stuff.
Speaker 2 (14:21):
It sounds boring, but it's a huge deal. A transfer
agent is responsible for tracking who owns a company's stocks, bonds,
or other securities. If the SEC approves Bullish to act
as a transfer agent for US securities, it means they're
essentially authorized to handle the back end processing of traditional
financial assets, but on the blockchain, so it's.
Speaker 1 (14:39):
A direct regulatory stamp of approval.
Speaker 2 (14:41):
Exactly. It allows them removed far beyond just crypto trading
and into the multi trillion dollar world of digitized equities
and debt. It makes them a foundational layer for RWA
tokenization in the US.
Speaker 1 (14:52):
This ambition, you know, contrasting with the short term price
fhere it ties into this bigger market psychology debate. Are
we finally moving past the purely speculative phase of crypto?
Speaker 2 (15:04):
The data suggests a definitive shift is underway. Market makers
like Influx in Singapore. They observe that the market is
rapidly moving away from being liquidity driven, you know, relying
on massive retail inflex excess leverage and generic momentum, to
being fundamentals driven.
Speaker 1 (15:21):
The old alt seasons.
Speaker 2 (15:22):
Those traditional alt seasons fueled by pure speculation are fading.
Speaker 1 (15:26):
Yeah, So if speculation is fading, what does fundamentals driven
actually look like on a chart when the price is crashing.
Speaker 2 (15:32):
It looks like divergence. You see tokens that are tied
to clear utility, things like staking yields, predictable revenue streams,
approve dtfs or RWA. They're holding up much better than
the purely speculative assets. The weaker majors and the carely
narrative driven coins. They're the ones absorbing the majority of
the selling stress.
Speaker 1 (15:51):
So the market is becoming more discerning.
Speaker 2 (15:53):
Exactly, it's a fine of long term structural health. The
market is prioritizing durability and utility over just reflect of
beta exposure.
Speaker 1 (16:01):
That shift towards structural durability is perhaps what Jim Kramer
was seeing when he suggested it almost feels like a
cabal is trying to keep Bitcoin above ninety thousand dollars.
Speaker 2 (16:11):
That comment perfectly encapsulated the market tension when Bitcoin was
briefly dipping under that psychological ninety thousand dollars mark. But
the community counter argument is crucial here, which is there's
no manipulation. The support is entirely structural buying driven by
clear math. We are seeing persistent mandatory ETF inflows combined
(16:32):
with massive accumulation by corporations like Strategy, and this volume
of buying consistently exceeds the new daily issuance of bitcoin
from minors.
Speaker 1 (16:40):
And Michael Sailor has been the most vocal champion of
this structural argument. He's been arguing that Wall Street's entry
is actually making bitcoin more stable, not.
Speaker 2 (16:47):
Less, he is incredibly committed to this view. Sailor maintains
that Wall Street's adoption through ETF's and corporate treasuries provides
this predictable, deep source of demand that acts as a
continuous floor under the price. I mean, strategy currently holds
an astonishing six hundred and forty nine thousand, eight hundred
and seventy BTC.
Speaker 1 (17:06):
Which is worth about what fifty nine point five to
nine billion dollars roughly.
Speaker 2 (17:10):
Yeah, and he has repeatedly called their leverage position robust.
In his view, the market floor is an arbitrary it's
being raised by massive, transparent, committed institutional capital.
Speaker 1 (17:21):
But if the four is being raised structurally, why did
the price still dip so dramatically. Why didn't that structural
demand just overwhelm the short term panic and prevent the
dip below ninety thousand dollars in the first place.
Speaker 2 (17:32):
And that's the critical question that challenges the perfect stability narrative.
While that long term accumulation is mathematically raising the baseline,
short term volatility is driven by force selling. You've got
liquidations of leverage retail positions, You've get ETF redemptions from
panicked holders, and major corporate risk rebalancing like we just
discussed with sharplink.
Speaker 1 (17:51):
So the force sellers create a tidal wave.
Speaker 2 (17:54):
They create a massive immediate liquidity event that even the
persistent etf inflows can't instantly absorb. Sailor's long term stability
argument is sound, but it doesn't insulate the asset from
acute short term panic induced by leverage and unexpected news.
Speaker 1 (18:09):
Speaking of structure, we have to address the major stress
point within the bitcoin network itself, the economics of the miners.
The reliance on the block subsidy is hitting a critical
level compared to the transaction fees.
Speaker 2 (18:21):
This is a foundational concern for the bitcoin network's long
term security model, which is designed to eventually rely entirely
on fees to pay for security. Currently, bitcoin miners get
their revenue primarily from the block subsidy, which is three
point one two five btc.
Speaker 1 (18:36):
Per block That translates to about forty five million dollars
in daily revenue.
Speaker 2 (18:40):
Right However, the transaction fees paid by users, the payments
for actually using the network, currently contribute only about three
hundred thousand dollars per day to minor revenue.
Speaker 1 (18:49):
That is less than one percent of their total income
coming from fees. That ratio seems I mean, fundamentally unsustainable
for the future of the network.
Speaker 2 (18:56):
It represents a twelve month low for fee contribution, and
it dramatically highlights the network's heavy reliance on the inflation
based reward system right now, and while the subsidy won't
fully end until around the year twenty one point forty,
this persistently low fee contribution raises a very serious question
about long term minor economics.
Speaker 1 (19:16):
Okay, so why does low fee revenue matter if the
price of bitcoin is high, I mean, isn't the subsidy
still worth a lot of money?
Speaker 2 (19:23):
It matters because miners secure the network. They spend massive
amounts of energy to validate transactions and prevent double spending attacks.
If the block subsidy eventually disappears, the network needs fees
to compensate miners for that security work.
Speaker 1 (19:37):
And if the fees aren't there.
Speaker 2 (19:38):
If fees remain negligible, if the network is mostly used
for simple transfers rather than complex, high fee transactions, and
the bitcoin price doesn't appreciate enough to make those small
fees worthwhile miners won't be incentivized to spend the energy.
Speaker 1 (19:51):
Required, which could lead to a decrease in network hash rate, and.
Speaker 2 (19:55):
That could potentially expose the network to a fifty one
percent attack risk, which is when a single entity gains
control of most of the network's processing power and can
rewrite the ledger.
Speaker 1 (20:06):
So we have institutional investors structurally raising the price floor,
but at the same time, the underlying economic engine of
the network, the fee generation, is showing long term weakness.
The infrastructure is somehow robust and fragile at the exact
same time.
Speaker 2 (20:21):
Moving from the Bitcoin fundamentals, let's look at the all
coin space, where the volatility is often amplified, especially around
major institutional product launches, and we have to start with
the first xrpetf launch, which was a clear by the
rumor sell the news event.
Speaker 1 (20:35):
Yeah, it was positioned as this major breakthrough, but the
launch by Canary was met with a well, a resounding
thud in terms of price action.
Speaker 2 (20:42):
Canary launch their xrp ETF with a respectable two hundred
and fifty million dollars in initial inflows, which you know,
would typically be seen as really bullish momentum, but not
this time, not this time. Immediately following the launch, the
XRP price dropped a sharp nine percent. This just reinforces
that earlier point. In a market under stress, even significant
(21:03):
fund inflows do not guarantee price appreciation if the broader
liquidity and sentiment remain fragile.
Speaker 1 (21:09):
But this institutional access, it's not a one off thing.
There's a strong pipeline of major asset managers gearing up
to launch their own XRP funds right absolutely.
Speaker 2 (21:18):
Franklin Templeton Financial Giant has their XRPETF scheduled for launch
on November twentieth. Analysts are projecting anywhere from one hundred
and fifty million dollars to two hundred and fifty million
dollars in first DAI trading. So there's clearly persistent demand
for regulated exposure. And we also have active filings from Fidelity, Invesco,
and bitwise.
Speaker 1 (21:34):
So institutional access is expanding rapidly regardless of the initial
price disappointment.
Speaker 2 (21:39):
Correct And meanwhile, Ripple itself is making moves on chain.
We saw a shift of four hundred and fifty million
dollars in XRP to an unknown wallet, While the reason
for that move is murky. The most high profile XRP
story involves the one and only Dave Portnoy.
Speaker 1 (21:52):
Of course, Portnoy's conviction is once again highly entertaining and
highly visible. During this market dip, he reported making a
calculated two point one five million dollar dive back into crypto.
Speaker 2 (22:03):
He did. He divided that capital seven hundred and fifty
thousand dollars into bitcoin, four hundred thousand dollars into the ethereum,
and he committed a full one million dollars to XRP.
Speaker 1 (22:13):
And he called XRP his tenx bet, his ten XPT.
Speaker 2 (22:16):
That's a significant vote of confidence in xrp's long term utility,
even as the ETF launch disappointed. His comment about hunting
when there's blood in the streets really confirms his Hodl
conviction and his willingness to bet big on assets he
believes are fundamentally undervalued, regardless of short term volatility.
Speaker 1 (22:33):
It's a pure high stake speculation play that contrasts so
starkly with ADC's structural risk off allocation.
Speaker 2 (22:39):
A completely different mindset, and now completely outside the institral
ETF race, we have the story of z cash, which
is delivering returns that justify the broader market fear.
Speaker 1 (22:47):
A one thousand percent rallies since October is almost unbelievable.
Z cash or ZC. It's soared from what seventy dollars
to now trading above seven hundred dollars per coin. What
on earth fueled this explosive price action in this market?
Speaker 2 (22:59):
The primary driver is a dramatic resurgence in the privacy narrative.
This rally has been accelerated by some celebrity endorsements, and
I think a growing global realization that centralized digital systems
inherently lack anonymity. Z cash, with its superior zero knowledge
proof technology for shielded transactions, became the main beneficiary of
this renewed interest in digital financial sovereignty.
Speaker 1 (23:22):
How has that surge affected its market ranking?
Speaker 2 (23:24):
Zc's market capitalization has reached ten point one billion dollars.
That places it within a sixty five percent price increase
of overtaking Cardana or Ada for a coveted spot in
the top ten rankings. Wow. And what's perhaps even more
telling about its current momentum is its trading volume. In
terms of daily trading volume, ZEC is already ahead of Ada.
(23:45):
It's registering one point seventy one billion dollars. The narrative
is strong and the liquidity is flowing rapidly to support it.
Speaker 1 (23:51):
That's a powerful reminder that utility tied to a deeply
felt user need in this case, privacy, can generate spectacular
momentum even when the rest of the market is in pain.
Speaker 2 (23:59):
Now contrast that strong utility driven narrative with Shiba Enu
or Asia. Here the price action appears to be driven
purely by inertia and hope.
Speaker 1 (24:11):
Right, we've seen massive outflows recently, Over one hundred and
twenty billion to one hundred and thirty billion azib were
moved to exchanges in just a forty eight hour period,
reflecting sustained selling pressure.
Speaker 2 (24:22):
That kind of outflow should crush the price, yet it's
sort of holding weekly above a critical threshold.
Speaker 1 (24:28):
Why the resilience, Well, technically, the asset is not yet
in a catastrophic oversold zone. Its relative strength index the
RSI is staying above the critical thirty mark, which usually
signals that rock bottom is imminent. This suggests that while
there is a lot of selling, there is still some
baseline momentum and a dedicated retail base that is absorbing
the volume.
Speaker 2 (24:47):
But the real scrutiny falls on the project's long term
promise its deflationary mechanisms. Are they actually working?
Speaker 1 (24:53):
It doesn't look like it. They are demonstrably failing to
create scarcity at any meaningful scale. The project has long
p voted burning tokens to reduce the supply, but the
burn activity is nearly non.
Speaker 2 (25:04):
Existent and the amounts are tiny.
Speaker 1 (25:06):
The few transactions that do occur are minuscule compared to
the overwhelming supply of over five hundred and eighty nine
trillion tokens still in circulation. The failure of this intentional
sca fity mechanism means the tokens price movement is driven
entirely by speculation and community inertia rather than any intentional
utility or supply shock. So we've covered the market volatility,
(25:27):
the institutional positioning, and the all coin drama. Now let's
accelerate into the technological revolution that is defining the next
era of crypto, the intersection of AI, next generation security,
and real world utility.
Speaker 2 (25:39):
This section really proved that innovation is accelerating completely independent
of price, and the biggest news here is the direct
integration of artificial intelligence into mainstream trading. The crypto exchange
by true is implementing this into its copy trading service.
Speaker 1 (25:53):
This is a huge leap, allowing users to automate their
investment decisions based on the analytical power of these maps
massive AI models. Which models are they actually integrating?
Speaker 2 (26:03):
They've integrated six of the leading large language and intelligence
models GPT five, Gemini two point five pro, Claude, Sonnet
four point five, Grock four Deep, CGV three point one,
and Quin three max. Users can select any of these
models and entrust a portion of their portfolio to automatic
machine management.
Speaker 1 (26:22):
That list covers the absolute cutting edge of AI development.
What sort of performance track record are these models bringing
from traditional finance.
Speaker 2 (26:31):
Well, experiments conducted in traditional stock trading environments have shown
some remarkable effectiveness. Models like GPT five and Gemini two
point five pro have recorded impressive success rates of seventy
four percent and seventy one percent, respectively. They often outperform
human fund managers under specific market conditions.
Speaker 1 (26:48):
But the crucial question is how they will fare in
the highly volatile, peculiar, and often narrative driven environment of
cryptocurrency markets, which often don't follow traditional technical analysis patterns exactly.
Speaker 2 (26:59):
This is the first major real world test of AI
in mainstream crypto investing by true was allowing users to
define the portion of their investment they wish the AI
to manage, but the profits and losses are entirely retained
by the user.
Speaker 1 (27:10):
So it's an interesting blend of decentralized investment control with
hyper centralized analytical power.
Speaker 2 (27:16):
It is this signals the future where these large language
models might be the primary drivers of short and medium
term trading liquidity.
Speaker 1 (27:25):
Moving from AI trading to a fundamental problem of crypto
securing your private keys, we're seeing a true disruption here
with the gnot biometric hardware wallet.
Speaker 2 (27:35):
The g knot aims to completely sideline the seed phrase,
you know, the infamous twelve or twenty four words that
are simultaneously the key and the single point of failure
for cryptosecurity. It's challenging the established hardware wallet makers like
Ledger and Treasure by eliminating the need for seed phrases
or even pin codes entirely.
Speaker 1 (27:54):
How does gnot achieve that level of security without a
traditional key.
Speaker 2 (27:58):
It uses advanced finger vase standing technology, and this is
far more secure than a standard fingerprint reader. Finger vein
scanning works by reading the unique vascular architecture inside the
user's finger.
Speaker 1 (28:08):
And it requires live blood flow.
Speaker 2 (28:10):
Crucially, yes, the technology requires live blood flow to unlock,
which effectively prevents sophisticated threats from high resolution static scans, molds,
or morbidly, the use of severed fingers. The core security
mechanism relies on zero knowledge proofs processed locally on the device,
ensuring your biometric data never leaves the wallet.
Speaker 1 (28:32):
That's a massive leap in physical security and convenience. I mean,
it solves the single biggest fear for a lot of people,
right losing that piece of paper with twenty four words
on it.
Speaker 2 (28:41):
It does, and it supports all the major chains Bitcoin, Ethereum, Solana, BnB,
and XRP. Furthermore, the company is actively developing multi sig functionality,
which would allow the wallet to unlock only if multiple
users potentially located globally verify their unique finger vein scan simultaneously.
Speaker 1 (28:58):
And what's the price point?
Speaker 2 (28:59):
The Founder's edition pre sales priced at two hundred and
ninety nine dollars. They're betting that users are willing to
pay a premium to eliminate the security nightmare of managing
a seed phrase.
Speaker 1 (29:08):
That solves a major headache for institutional and high worth
individual holders. Let's look at DeFi innovation now specifically Falcon
Finances Staking vaults.
Speaker 2 (29:17):
So Falcon Finance launched these staking vaults to cater to
users seeking higher predictable yield without giving up ownership of
their assets. Users can deposit their holdings starting with a
native FF token and earn yield up to twelve percent APR, and.
Speaker 1 (29:31):
This yield is paid out in their synthetic dollar.
Speaker 2 (29:34):
Correct, it's paid out in USDF. There's synthetic dollar, which
is specifically designed for consistency and resilience. It aims to
minimize the volatility risks associated with non feautbacked stable coins.
Speaker 1 (29:46):
Twelve percent APR is attractive, but what structural features are
built into the vaults to ensure that consistency and resilience
you mentioned? How do they stop a bank run?
Speaker 2 (29:54):
Well, the design emphasizes orderly asset flow and prevents those
rapid destabilizing withdrawals. The vaults require a one hundred and
eighty day minimum lock up period, ensuring liquidity remains stable
for half a year ah okay, and there's a three
day cool down period before withdrawal can be finalized. This
structure strengthens the underlying pooled liquidity and reinforces the broader
(30:15):
USDF ecosystem by creating predictable capital commitments.
Speaker 1 (30:19):
Now, this next story might be the most critical development
in terms of real world utility. Stable coins finally bridging
the gap to everyday commerce in major developing economies.
Speaker 2 (30:28):
This is a monumental achievement for utility and adoption. Medipay,
which is a Cello based stable coin wallet developed by Opera,
just rolled out a pay like a local feature specifically
targeting Latin America. This innovation directly connects ust eerycannor balances
to local real time payment methods.
Speaker 1 (30:46):
So you're telling you my stable coin balance is instantly
usable for buying groceries or paying rent Exactly.
Speaker 2 (30:52):
Users can now make direct, instantaneous payments using their stable
coin balance to essential local rails like Mercato, Pago and
Argentina and PIX in Brazil. This completely eliminates the need
for expensive card processors, unfavorable exchange rates, or slow bank transfers.
It links global digital dollars directly to essential local commerce infrastructure, and.
Speaker 1 (31:13):
We have to emphasize the sheer scale of the PIX
integration in Brazil. This isn't just some niche app.
Speaker 2 (31:18):
Not at all. Pix is not just another payment app.
It is Brazil's financial operating system. It's used by over
seventy six percent of the entire Brazilian population and it
processes eighty percent more transactions than credit and debit cards combined.
Speaker 1 (31:32):
And Mercado Pago is huge in Argentina.
Speaker 2 (31:34):
It's huge. It boasts seventy two million active users. This
integration immediately turns stable coins into instant, low cost utility
for two massive economies, solving persistent problems like card rejection
and high cross border transaction fees for anyone holding digital dollars.
Speaker 1 (31:51):
It's incredible to see that level of adoption and utility
being built while the price charts are just flashing red. However,
as AI and distributed computing expand, so what does the
sophistication of criminal activity, we have to address the growing
thread of crypto mining malice.
Speaker 2 (32:05):
This is a significant security warning that it's directly at
the infrastructure enabling the AI boom. A botnet which is
being tracked as iron Earn four forty is actively exploiting
a critical unfixed severity flaw in.
Speaker 1 (32:17):
Ray clusters and Ray for our listeners, is an open
source Python network. It's designed to distribute computational workloads across
multiple machines, which makes it essential for AI development and
data processing.
Speaker 2 (32:29):
Right, so, attackers are hijacking this specialized computing power that's
intended for development or AI tasks to mine crypto.
Speaker 1 (32:37):
For themselves, and they're using AI to do it.
Speaker 2 (32:39):
Precisely, the attackers are using AI generated payloads, ironically leveraging
the same technology they are undermining to submit jobs via
the unauthenticated Jobs API in these RAY clusters. The payload
then deploys the xm rig cryptojacker.
Speaker 1 (32:54):
And their method of deployment is highly refined to avoid detection. Correct.
Speaker 2 (32:58):
Yes, this is the clever part. To avoid the easy
detection that usually happens when a cryptojacker consumes one hundred
percent of the processing power and drastically slows down the
host system. The attackers are locking xm rig to just
sixty percent of the victim's processing capacity. It's a very
clever stealth tactic designed to keep the victims server operational
and the theft running longer without anyone noticing.
Speaker 1 (33:20):
How widespread is this vulnerability given how much RAY is
being used in AI.
Speaker 2 (33:24):
Now, the research indicates an alarming spread. Over two hundred
and thirty thousand vulnerable RAY servers are now exposed online.
This is a huge increase from only a few thousand
exposed servers that were reported back in twenty twenty three.
Speaker 1 (33:37):
So the dark side of the AI boom absolutely.
Speaker 2 (33:40):
Specialized computing networks are becoming massive, highly valuable targets for
crypto mining, theft, exploiting flaws in decentralized architecture.
Speaker 1 (33:48):
It truly is the Wild West merging with the future.
You have AI models trading our crypto, while AI is
also writing the payloads used to steal computing power to
mine crypto.
Speaker 2 (33:58):
All this institutional commitment into technological advancement is moving in
lockstep with global efforts to regulate and manage digital assets.
It's a necessary step for mass adoption. We are seeing
governance finally start to catch up to innovation.
Speaker 1 (34:10):
Let's start at the highest levels of traditional banking regulation.
The Basle Committee on Banking Supervision, their chair Eric Sedin,
is demanding an overhaul of the rules governing bank crypto capital.
Speaker 2 (34:21):
This is huge news for traditional finance integration. The current
Basal rules are notoriously stringent. They require banks to hold
massive amounts of capital. In some cases it's dollar for
dollar backing against their crypto exposure. The Dean is calling
for a major overhaul because these stringent rules are simply
not working.
Speaker 1 (34:40):
What specifically is forcing his hand now.
Speaker 2 (34:43):
Two major factors. First, the dramatic increase in stable coins,
which fall under some of the most stringent BASL capital requirements.
Banks want to engage with stable coins for payments and settlement,
but are financially penalized by the rules for doing so.
Speaker 1 (34:56):
And the second factor.
Speaker 2 (34:58):
Resistance resistance from key global financial centers, specifically the US
and Great Britain, which have effectively refused to enact the
current stringent rules.
Speaker 1 (35:07):
Why did the US and UK resist implementation Well, the
industry criticized the original basal rules as being too punitive
and too conservative relative to the actual risks presented by
holding high liquidity assets like bitcoin.
Speaker 2 (35:21):
By delaying and resisting implementation, the US and UK essentially
forced the global body to acknowledge that a different approach
is needed, one that recognizes the growing stability and structure
in the crypto market, especially in regulated stable coins.
Speaker 1 (35:36):
Moving to North America, we've seen rapid coordinated movement on
stable coin legislation. Canada just introduced the Canadian stable Coin
Act YES as.
Speaker 2 (35:44):
Part of its budget Implementation Act. This is a foundational
piece of legislation for them. It establishes a robust federal
regime under the Bank of Canada to supervise all issuers
of FIAT referencing stable coins available to Canadians.
Speaker 1 (35:59):
And it requires a full registration process.
Speaker 2 (36:01):
A very detailed registration application covering governance, financial disclosures, and
reserve management.
Speaker 1 (36:06):
And this framework is very familiar to US observers.
Speaker 2 (36:09):
It is modeled closely on the US Genius Act, which
was signed into law earlier this year. This highlights a coordinated, regulatory,
confident North American approach to defining and securing stable coins.
This regulatory clarity is exactly what President Donald Trump championed
as part of his pledge to make America the Crypto
Capital of the world, and it shows some bipartisan progress
(36:32):
on this specific issue.
Speaker 1 (36:34):
Speaking of the US, the government is also making moves
to severely limit the use of offshore crypto avenues, focusing
heavily on tax transparency and reporting.
Speaker 2 (36:42):
This is the IRS and the White House reviewing a
proposal modeled after FBR and FACA, the frameworks used for
reporting AUSTUO bank accounts and foreign financial assets. This new
proposal would require Americans to report and pay taxes on
foreign crypto accounts, and.
Speaker 1 (36:57):
The definition of a foreign account here is intentionally broad
to catch as much activity as possible. How wide reaching
is it extremely broad?
Speaker 2 (37:04):
It potentially includes offshore centralized exchanges like those operating solely
out of Asia or Europe. It could include foreign custodians,
foreign brokers listing tokenized assets, and even certain foreign wallet
providers that hold private keys outside of US jurisdiction.
Speaker 1 (37:20):
And what's the stated reason for this?
Speaker 2 (37:22):
The stated rationale is not merely tax collection. It's to
promote the growth and use of digital assets in the
United States and alleviate concerns that the current lack of
reporting disadvantages US regulated exchanges. The message is clear, the
US government wants crypto held and transacted through onshore regulated entities.
Speaker 1 (37:43):
This regulatory momentum culminates in what is perhaps the most
tangible sign of sovereign adoption yet, the integration of bitcoin
into municipal finance led by New Hampshire.
Speaker 2 (37:52):
New Hampshire just launched the nation's first one hundred million
dollar bitcoin secured municipal bond. This is not a speculative investment.
It is a financial product backed by the security of
a digital asset. The bond is a conduit bond led
by the state's Business Finance Authority or BFA.
Speaker 1 (38:08):
So what makes this secure for the investors and critically,
how are the state's taxpayers protected from the underlying volatility
of bitcoin.
Speaker 2 (38:16):
The structure is designed for maximum risk management. Bitcoin held
in bitco custody serves as the primary collateral to safeguard
the investors if the BFA were to default. The investors
are secured by that bitcoin collateral, which insulates taxpayers from
the market risk.
Speaker 1 (38:31):
And this is part of a bigger state strategy.
Speaker 2 (38:33):
It is This bond initiative is a controlled trial, and
it follows an earlier critical move that allowed the New
Hampshire Treasury to allocate up to five percent of public
funds to crypto that created the first state level strategic
bitcoin reserve.
Speaker 1 (38:46):
The ultimate goal then sounds like converting idle reserves into
functioning tools for public finance.
Speaker 2 (38:52):
That's the long term vision. The fees and gains generated
from this collateral program will be directed into the Bitcoin
Economic Development Fund, which supports local entrepreneurship. Experts working on
the structure noted that it opens the door for pension
funds and retirement programs to gain limited, managed exposure to
crypto through a highly regulated bond structure. This is how
(39:14):
bitcoin begins its integration into the multi trillion dollar US
bond market.
Speaker 1 (39:19):
Finally, we saw a key shift in direction at the
FDIC this week that could ease access to banking for
crypto firms.
Speaker 2 (39:25):
Yes, Travis Hill, President Trump's pick for FDIC chair, was
advanced by the Senate Banking Committee. Hill has focused on
overturning the agency's direction on digital assets, specifically moving to
end the practice of using reputational risk as a means
to block crypto firms from financial services.
Speaker 1 (39:41):
Which has been a huge problem for the industry.
Speaker 2 (39:43):
A massive problem for years, major banks have denied services
to legitimate crypto firms citing this undefined reputational risk, effectively
choking off their access to traditional banking. Hill's advancement suggests
the agency's poised to move toward a more objective res
disk based regulatory assessment rather than just subjective fear.
Speaker 1 (40:04):
So if we synthesize all of this information, from the
sovereign wealth funds buying the dip, to the exchanges filing
from massive IPOs, and the regulators finally trying to catch up.
We see a market that is just fundamentally defined by tension.
Speaker 2 (40:17):
That tension is undeniable. We see enormous institutional fear. You've
got the billion dollar Ethereum trust canceled sharp Link, facing
a half billion in unrealized losses, record ETF outflows. These
are all signs of acute market pain and caution.
Speaker 1 (40:30):
But on the other side, we have incredible institutional confidence.
You have eighty nine is tripling its Bitcoin stake, treating
it as a structural peer to gold. You have crack
In marching toward a twenty billion dollar IPO backed by
giants like Citadel and New Hampshire, and New Hampshire launching
the first Bitcoin secured municipal bond, legitimizing BTC as collateral
in public finance.
Speaker 2 (40:49):
The market might feel chaotic and volatile in the short term,
but the machinery underneath is rapidly maturing. The persistent effort
to bridge crypto innovation. You know aim models trading automatically
on bitru stable coins paying via pix in Brazil. G
not revolutionizing hardware security with traditional regulatory guardrails like the
(41:10):
overhauling of Basil bank rules and the new Canadian stable
coin law, suggests we are solidifying the foundations for the
next era regardless of the price TEPS.
Speaker 1 (41:19):
What stands out here is that despite the short term
price trauma, the technical and governance infrastructure is just moving
forward as if the chaos doesn't matter. But we do
have to acknowledge the one area where this market is
deeply intertwined with broader economic forces, the global AI boom.
Speaker 2 (41:35):
We've seen AI feed crypto trading, We've seen AI create
new security threats, and the AI narrative in general is
driving risk appetite among the major tech investors, who also
backfirms like Kracken. The sources noted warnings from figures like
Google CEO Sandor Pichai and JP Morgan warning of irrationality
and a potential bubble in AI valuations globally.
Speaker 1 (41:55):
So here is the final provocative thought for you to consider.
If the high valuations and speculative frenzy driving the current
excitement in the AI sector, the very sector that provides
capital and narrative confidence to the mature and crypto world
were to correct sharply. How might that global systemic correction
affect the newfound structural stability that institutions like ADIC and
(42:16):
Michael Saylor believe they are building into the Bitcoin ecosystem.
What stands out to you about that potential spillover risk
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