Did Institutions Buy The Dip?📉$BTCS Ethereum Treasury🔥CEO INTERVIEW

Ethereum scaling tokens outperformed most of the cryptocurrency market after the weekend crash, signaling stronger price resilience among layer-2 (L2) projects built on the world’s largest smart contract network. Are institutions using this recent flash crash as a great opportunity to expand their ethereum exposure?

~This episode is sponsored by BTCS~

BTCS Website ➜ https://bit.ly/BTCSethereum

Guest: Charles Allen, CEO and Chairman of the Board at BTCS

00:00 intro
00:07 Ethereum Treasuries Bought Dip
00:34 BTCS Bought ETH on Saturday
01:10 Buying During Crashes
02:26 BTCS Wasn't Liquidated
02:45 Ethereum ETF's Sold ETH
03:49 ETF outflows signal rally
04:15 ETF holders vs Treasury holders
05:42 Tokenizing Treasury Stocks
09:26 Bividend Payout
10:32 BTCS Operating Business
12:00 Institutions Buying
13:00 $4,500 or $3,500 first?
13:35 Investors long term?
14:55 Rate Cuts & CLARITY Act
16:49 outro

#Crypto #Ethereum #Bitcoin
~Did Institutions Buy The Dip?📉$BTCS Ethereum Treasury🔥CEO INTERVIEW~
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Episode Transcript

Speaker 1 (00:00):
Let's dive into ethereum today and are whales starting to
inject capital into the network. We'll break it all down
for you. My name is Paul Perre. Welcome back in.
But when you look at digital asset treasuries, if you
kind of look at the chart right here in terms
of these big yellow bubbles right there, those are acquisition points,
and we continue to see acquisitions occurring within the asset treasuries.

(00:24):
You guys have seen the ether reserve ranking right there.
We're going to get of course BTCS on the show today,
but you can kind of see it a bit mind
leading the pack there, BTS holding the number six. So
we thought let's get Charles in from BTCS to kind
of break down what's happening in the markets. Charles, welcome
back in. Thanks for coming in.

Speaker 2 (00:42):
Yeah, Paul, thanks for having me back. It's great to
go to the show.

Speaker 1 (00:45):
So let's go into a couple of points. I want
to hit on one thing that you guys put You
put out this tweet over the weekend, while not material.
On Saturday, BTCS picked up another million and a half
in the eight in the thirty eight hundred dollars range,
So goodbye for you guys, and DeFi continues to perform,
so AVE was still doing great. UNISWAP running twenty four

(01:06):
to seven, meaning you've got access. These are the kind
of things that happened throughout these weekends. Why first of all,
why do you think we were seeing both institutional companies
like yourself in the A on the digital asset treasury
groups really going all in in a time where I
think a lot of traders were very, very spooked by
what happened over the weekend.

Speaker 3 (01:27):
I mean, I think you'll always have that issue of
traders trading, right, they're going to trade the short term,
you know, volatility of a market, and so we have
a very long term view on Ethereum. We're very bullish
on what it's going to do to change the way
digital assets are moved on a global scale. And so
we see a market crash, I mean, that's that's the
best time to buy, right. There's always that expression, like

(01:49):
when you're getting stock advice from like the hot dog
vendor in New York City, it's the time to sell.
When everybody else is selling, it's the time to buy. So,
you know, we saw that that kind of flash crash
on Friday. Unfortunately, I was at dinner with the family,
so we couldn't you know, pull the trigger and do
anything that night. But you know, we started the discussion
and you know, on Saturday we had you know, picked
up you know.

Speaker 2 (02:10):
Another million and a half of ETH.

Speaker 3 (02:12):
And what was great is we were able to do
that on defive So have we been using traditional exchanges.
It was you know, if it was cratified, we wouldn't
have been able to do that, And so we were
able to capture that, you know that that it was
close to the bottom as we possibly could well.

Speaker 1 (02:26):
And I think you hit it right here on this tweet.
We saw the market flash crash, you guys remaining rock Soale,
We're all we are well over collateralized with zero liquidation.
So that's another advantage that you've got in terms of
how you guys are playing this market, which I think
is a good benefit to a lot of the people
who hold btcs. When you look at institutions right now,

(02:48):
Charles and you kind of compare this, I'll go to
the the et F tracker and these outflows that we've
started to see, now, typically what has happened after these
massive outflows If we have started to see the price
of eth start to track back up again. So this
is perfect timing where it appears to be perfect timing
for companies like yourself and others to really pack in

(03:10):
a lot of opportunity of buying these dips. Is this
a typical strategy that you guys are implementing.

Speaker 2 (03:16):
It is, And we have kind of two strategies, right.
We have a fifty million dollars buy.

Speaker 3 (03:19):
Back in place, so we're buying back shares when the
stock dips, and we have and we see opportunity on
the east side where we're going to do the same.
And so I think it's it's very natural that when
there's a flash crash or there's uncertainty, people panic sell
and that creates a great opportunity. Right when everybody is chasing,
chasing the highs and there's fear of missing out and buying,

(03:40):
that's typically when it's it's a great time to kind
of take a pause and say, okay.

Speaker 2 (03:43):
Well, what is my valuation? Is this the right Is
this the right timing to institute and move right?

Speaker 1 (03:50):
Well, you can kind of see it right here. This
is the total ethereum spot etf net inflow outflow. These
are the outflows that happen, and then we see these bounces, right, so,
coming off that boom, then we see the ether price
start to move up, which I think is kind of
in alignment with what you guys are trying to do
from a strategy standpoint. When you look at ETF holders

(04:12):
versus asset treasury holders, why do you think because this
seems like a completely different audience now, like you're you're
marketing to different people, kind of give me the breakdown
of the two, I think.

Speaker 3 (04:24):
So, I mean, I think you know, ETF one are
just targeting and holding that underline, and so there's a
lot of the investors in an ETF maybe arbitraging that
against a DIGITALIZID treasury company. I've spoken to larger institutions
that are actually doing that and saying, well, okay, if
if a company that doesn't have much operations and all
it does is hold, let's say eth, they can sell

(04:45):
that short and buy the ETFs the in arbitrage it.
So I think in the public markets there's a lot
that's going to go on that is not as simple
as the price coming up or down, or I'm buying
loan and selling high. It's much more complex and so
I mean that's why I created an opportunity for the
weekend where you know, traditional markets are closed and we're
able to go in there and use DeFi and you

(05:07):
know borrow and you know, increase our exposure to ETH.
And it seems like it was a pretty bid call
based on you know where EATH is. You know, after
the long weekend, right, it's back, it's back up in
the four thousand range. I think it got up to
like close to forty five hundred right, looked moment, but
it's it was definitely a good opportunity.

Speaker 1 (05:26):
Yeah. Well, I think you know, when we see the
markets doing what they are right now, and I think
a lot of people were in the position where if
they could get into this dip, this was a great benefit.
I think the key here is watching how the markets
respond now from here going forward. You look at the
news you put out this statement right here, big news
from Sharplink Gaming. They announced tokenization of s bet and

(05:49):
they're doing it the right way your claim here, Unlike
if you look at something of what's happening over on Onto,
which puts a lot more economic pressure on this around ownership.
Laying to our audience why this is a good move
doing it this way. I know you guys are obviously
in this direction as well.

Speaker 3 (06:06):
Yeah, we already did this, right. We did this not
on super state, we did this on upstream. So it
was a platform that tokenized our stock on Ethereum splockchain.
I think there's like three years ago, and it's a
very lengthy process to get it's a very very hard process. Right,
You've got to get liquidity and you've got to get
companies on board these platforms.

Speaker 2 (06:27):
So I think overall, tokenizing stock the right.

Speaker 3 (06:30):
Way, and it's very important, the right way where you're
actually a record holder and you actually own those securities.
It is extremely fundamental in reforming how the capital markets work.
I think tokenizing stock in the wrong way, and I
would put that is, you know, going and getting the
shares for a brokerage firm and then tokenizing those where
you can have fractional shares and nobody knows who owns

(06:53):
what because the company issues of the shares. It goes
to seed and co and then it goes to the
brokers and it's just a legal reperation of ownership through
a chain that keeps adding layers and layers on top
of which is how you end up with fandom shares
and all these issues in the market. So I'm super
exciting when someone you know and any like Sharpling comes
out and says, hey, we're gonna do this, and we're.

Speaker 2 (07:12):
Gonna do it the right way.

Speaker 3 (07:13):
We're gonna do it on a platform where you actually
have direct ownership of those shares.

Speaker 2 (07:16):
It's something we did in the past. We're not going
to pioneer it again.

Speaker 3 (07:19):
We're gonna let other people take the arrows and make
it work, and if they do a good job at
it will follow suit. But it's definitely something I'm excited
to see happy happened, especially on ethereum flockchain.

Speaker 1 (07:29):
Do you think that this solves the stock lending problem,
you know, when you're dealing with real ownership of that
stock applying to the tokenization process right now?

Speaker 2 (07:40):
It should. I mean the issue you have right now,
and this is one of the reasons why we did
the vivid end is if you own stock and let's
say our company, your.

Speaker 3 (07:48):
Broker can and will load it out without notifying you,
without without pay, and so someone can bet against you
and then they pull all those shares together on a
lending desk and then institutions can go to that lending desk,
borrow those shares and bet against the fundamental investors. So
if you tokenize those securities and you put them on
a blockchain, you have the ability to eliminate that issue.

(08:13):
You also don't have market makers that can print fake
shares that don't exist. It's like selling that, you know,
the title to a house you don't own. So it
eliminates all of those issues. It's a much harder model
to start from scratch and get into the market. And
that's why I worry that the tokenization of stocks the
brokerage firms is really a toxic thing for the capital

(08:34):
markets because now you've got a brokerage firm which would
be lending your shares, which could be you know, printing.

Speaker 2 (08:40):
Fake ones, which market makers do.

Speaker 3 (08:42):
They basically invent fake shares and sell them assuming they
have the assumption that they're going to be able to
rebuy those, right, So it's called market in any other businesses,
it's fraud.

Speaker 2 (08:52):
In the stock market, it's real.

Speaker 3 (08:55):
And so if now they can load or make up
shares or give shares to you a token in a
tokenized form on a platform, it's a layer below that
it's just piling on a what is already a bad system,
so it's using blockchain technology to propagate and make the
system it's already bad worse, versus say, hey, this technology

(09:16):
can completely rewrite how we do things, and let's use
that in.

Speaker 2 (09:18):
The correct way.

Speaker 1 (09:19):
Yeah. I think the strategies that you guys have taken.
Of course, this will be interesting, especially around the pivid in.
I was also looking at your tweet here when you
had the pivid in issued. How many people took advantage
of this? Let me kind of zoom in on that.

Speaker 3 (09:33):
We haven't put that out yet, but it's in terms
of total number of shares, I mean, if you exclude management,
it's material.

Speaker 1 (09:41):
Wow.

Speaker 2 (09:42):
And we actually already paid the.

Speaker 3 (09:43):
Vivid end, which is great, And we took a little
longer to reconcile some of the documents than we thought,
but that got paid out last week. So we had
set a record a payment data on or before October seventeen,
as you are now, if you're getting cash that's going
to go out on the payment ding we've actually already painted.
It goes to DTCC and they're going to give it
to the brokers, and the brokers are going to go

(10:03):
pay it to the shareholders whoever they may.

Speaker 2 (10:06):
Be at that at that time.

Speaker 3 (10:08):
And so if you if you took cash, you'll get
it on October seventeenth, and if you're short to stock,
go pay it on October seventeenth, all right.

Speaker 1 (10:14):
And if you took eight is the same date. I'm
assuming we didn't pay it the same day.

Speaker 3 (10:18):
We just we did it sometime last week, all right.
It was it was fast, right, I mean, it was processed.
You know, it took an hour to process. It was
just a question of making sure we had all of
the documents and pay in place that people adopted in
so right now, and if you look at our business
on the capital market side, you know, we did the
vivid end, We've got a fifty.

Speaker 2 (10:38):
Million dollars buy back.

Speaker 3 (10:39):
On the operational side, I think that's where we really
want to provide investors with, you know, phenomenal exposure to
ethan beyond and I see and beyond because we do
more than just hold eth.

Speaker 2 (10:50):
We have an operating in business where we're we're a
block builder.

Speaker 3 (10:53):
We represent anywhere between one to three percent of all
transactions that land on ETH with our block builder, and
that includes all the l two is you know that
that's a growing business. It was eighty percent of our
revenue in the last quarter. It was a huge driver
in last year for our revenue. So we think that,
you know that that's a core function. So we have
our Validator Operations, which is basically staking with higher yield

(11:16):
because we do it ourselves. We have our block builder,
which is high high revenue and revenue growth, and we're
looking at other other ways we can generate revenue within
the Ethereum.

Speaker 2 (11:27):
Ecosystem because it really, unlike Bitcoin.

Speaker 3 (11:29):
Ethereum is a you know, it's a it's a it's
a digital economy and you can.

Speaker 2 (11:33):
Build businesses and so that's what we're really looking.

Speaker 3 (11:35):
At doing is like how do we expand beyond just Hey,
we're a validator note operator, and.

Speaker 2 (11:41):
We're a block builder, and we're.

Speaker 3 (11:43):
We're also doing these other things. And we spent a
lot of time researching that.

Speaker 2 (11:47):
The a lot of it's built.

Speaker 3 (11:48):
We're just trying to figure out the accounting, which we
tend to we like to get the accounting.

Speaker 2 (11:52):
Right before we jump in.

Speaker 3 (11:53):
I think a lot of these dats have started to
jump into things that they don't understand the accounting side
they're going to pay the price later. But that's kind
of you know, how we see ourselves moving forward.

Speaker 1 (12:03):
Okay, so you look at this flash crash, you compare
how retail and traditional traders dealt with this versus institutional.
Did this not really have much of an impact? Do
you feel on the institutional side and this was just
another opportunity for institutions to buy into this.

Speaker 2 (12:21):
It depends on the institutions if they were levered.

Speaker 3 (12:24):
Yeah, I mean there was I think there's one hundred
and eighty million dollars of ave that was like loans
and ivay that were liquidated, which is great that that
that whole ecosystem and define lending protocol held up and
didn't didn't break. I think there was issues with binance
if I f I recall where there was in that trash.
They had issues and that really speaks to how powerful

(12:45):
defile is. But back to your original questions for institutions,
if they're you know, properly invested and have the right
you know, risk management procedures and policies in place, I
don't think it really made much of a difference at all.

Speaker 1 (12:58):
When you look at the ethereum right now, some adjustment adjustment. Now,
do you feel like this is a forty five hundred
dollars ETH first or a thirty five hundred dollars ETH first.
Where do you see this price going?

Speaker 3 (13:11):
I mean, I think I'd like to believe it's a
forty five hundred. But again I'm biased. I'm bullish on ETH.
I'm bullistim blockchain. So we'll see, I wouldn't It wouldn't
shock me if you drop back down. These things happened
the market goes down. I think your better question is
where is it going to be at the end of
the year, Where's it going to be a year from now,
Where's it going to.

Speaker 2 (13:29):
Be two three years from now? And that that's where
I'm most bullish. Not really.

Speaker 1 (13:35):
When you look at the kind of investor that you
guys are are I want to say profiling but attracting,
do you feel like they are in a position where
they are looking at this long term like most ETH holders,
or do you feel like, hey, no, this is this
is kind of the slot that we're looking at for
short and interim burst on investing in the stock market,

(13:57):
and this just is our play on crypto.

Speaker 2 (13:59):
Well, look, I.

Speaker 3 (14:00):
Love all long term fundamental investors that believe in the
business and having a mix of retail and institutional, because
I think that's the perfect balance. The reality is that
doesn't exist if you're a public company. Anyone can go
buy your stock, and we have a lot of short
term investors that look on a day to day basis.
We have investors that are, you know, buying the stock
and selling covered calls. We have all sorts of investors.

(14:23):
I get emails from investors or messages on DM Well,
they're looking at the technical analysis. And as far as
investors go, I mean, I think it is a public company.

Speaker 2 (14:31):
You just you get what you get, and you know, you.

Speaker 3 (14:34):
Do your best to try to rope in and get
fundamental investors that believe in the story and management where
you're taking the company.

Speaker 1 (14:41):
Yeah, for sure. I'm looking back at this tweet, I
was surprised at how many people think that the market
is bullish right now. This of course happened. We put
this out on the thirteen, just yesterday afternoon, and whether
it was bullish or barrass and then we saw the pullback.
So I think a lot of the market is still
very very bullish on where it's going from here, especially

(15:01):
unto the Clarity Act potentially, and a couple of rate
cuts that still are going to play into this. Do
you feel like that's going to change any of your business?
Rate cuts, Clarity Act again, more positive nature for DeFi,
and obviously crypto overall.

Speaker 3 (15:15):
Well, I would break into two categories. So rate cuts
is just general macronach economic effects. It will effect not
really our business, but probably our stock just like any
other stock. The Clarity Act is really big because it's
going to touch on defile.

Speaker 2 (15:27):
We'll see where that goes.

Speaker 3 (15:29):
My recollection of where it left off is it's in
the Senate, there's some changes that it may not be great.
It's obviously back to the House. You know, Congress is
going to have to come to a consensus on what
it will be and then get that to the President
for signature.

Speaker 2 (15:43):
So I think that could be.

Speaker 3 (15:45):
One of the biggest catalysts, especially if it's if it
comes out with positive regulation for DeFi, where it could
really drive you know, the price right that could be
something where you could have you could see a twenty
five fifth the hundredercent price increase based on having positive
regulation in the market, so that we can seeing.

Speaker 2 (16:07):
Adoption when that occurs.

Speaker 3 (16:09):
Who knows right like, we've got to come and shut down,
you know, when things pick back up and get back
on track, we'll see yeah.

Speaker 1 (16:15):
For sure. Listen, you guys should keep a track on
the Strategic eth Reserve listing right there. You'll see BTCS
holding in right there. Check them out, learn a little
bit more. If you're getting into digital asset treasures, which
seems to be one of the biggest things I'm getting
questions on. Is I think retail is also waking up
to this now going wait a minute, this is kind
of like micro strategy, and they kind of know what

(16:37):
that is from a bitcoin stance, but they're learning about
it here on ethereum. So Charles has been great having
you on today. Thank you so much. We'll keep a
close eye on what's happening over at BTCS. Appreciate it,
Thanks so much. You bet all right, you guys. If
you're not in our Diamond Circle, that's a place where
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(16:57):
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next time right here on The Paul Baron Show.