That doesn't necessarily mean that bitcoin doesn't do well when gold does well. I think it's a similar sort of things benefit both currencies. But if I was to bet, I think the next monetary system will still have the dollar as a reserve currency. It'll have a bunch of other vat currencies, but nations will settle global trade and balances in gold.
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the Thinking Crypto podcast. I'm your host, Tony Edward and my guest today is Arthur Hayes, who is the co founder of bitmex and the CIO and Maelstrom. Arthur, great to have you on. Thanks for having me, Arthur, we were talking before the recording. I followed you for years. I appreciate your views on crypto as well as the macro and boy do I have a lot of questions for you because it's tariff torim oil out there. It's wild,
but you know, I want to get your background. I usually love to hear about people's stories and how they got to crypto. Where did you grow up, how did you get into tradfi and how did that lead to crypto?
So I grew up in a small place called Buffalo, New York. It's as industrial city in New York State, in New York Canada, in the Great Lakes region of the United States. I went to university in Philadelphia, at the University of Pennsylvania Undergraduate Business School. And in university I made a decision that I wanted to, you know, make my mark in China. So I studied Chinese and moved out to Hong Kong when I graduated and worked for Deutsche Bank and City Bank in the tradi fi world.
I was an exchange traded market baker marketmaker for both firms and helped them go that business in the region. I subsequently lost my job at City thankfully, and in twenty thirteen read the Bitcoin white paper, got hooked, started trading, started bitmes by twenty fourteen with my other two co founders, Ben Dilo and Sam Reid, and sort of the rest is history.
And you mentioned you read the Big one white paper. How did you learn about Bigcoe and a friend tell you about it? Did you see in a forum? And when did it click for you? What was your aha moment?
So I was a big, big zero hedge consumer ethic. You know. Actually I think the content was a bit better ten fifteen years ago, but whatever, that's just my opinion. And they posted an article about this thing called bitcoin that it I think surged in price to like tw hundred fifty dollars or whatever it was back in spring of twenty thirteen, and I thought that was quite interesting, and so, oh, let me just read about it and
see what's what's going on? Because they didn't have a job, and I was thinking about what I wanted to do next, and sort of the philosophy and the ethos behind sound money and the centralization really spoke to me. I was a bit of a gold bug, you know. I had my you know, little stash of gold coins and a safety pots of the box because I thought the FED was going to end the world and all kinds of
shit like that. So the the Satoshi's prophecies and sort of teaching sort of really clicked with me on a level. I was like, Wow, I could really get it on the ground level here and hopefully build something quite impactful in this bitcoin cryptocurrency ecosystem.
And then with bitmac, I mean, I remember you guys had amazing volumes, you were doing so well. What happened with bitmes and was it more of you know, we find ourselves in the ky C a m L world now. And then you guys kind of took a hit in that way.
So obviously, you know, we had a bad rap going up against the US government. We lost, you know, obviously we've been vindicated posts but whatever, and you know, we grew really fast, made some poor hiring decisions, and our competitors were able to, you know, take what we built and the products that we created and build a better trading platform. And that's you know, that's hashtag business. So but no, bit mix is still around. We're still trying
to make a comeback here. So the story is not over yet.
And obviously you're an og Arthur when you look back to where things were to cipher funk fung days of bigcoin, and then you have this entire ascid class that was birth out a bitcoin and where we are now with tratify getting involved and ETFs and much more. How does that feel? What are your thoughts around all of that change.
I think it's great. At the end of the day. What's the point of bitcoin? It's a social experiment. Can we create this monetary system in our minds out of nothing that's based on computers and cryptography, and can this mind virus spread all over the world and get other people to believe that these bits of information have value and can be used to buy real goods and services. So it's amazing that all sorts of people, from governments to large banks to asset managers are all you know,
treating bitcoin, have an opinion about it. Are talking about whether it's good or bad. It doesn't really matter, but it's in the conversation. I can't imagine there's any serious investor out there in the world who doesn't know what bitcoin is. Whether they think it's a scam or not, it doesn't really matter. But we want to be recognized. The worst thing is to be ignored.
And with the talks of bitcoin being part of a reserve now in the United States, and you have other nation states and countries that are mining bigcoin like Bhutan and so forth, are we are there at the cusp of another Breton Woods. Are we going to see bitcoin sitting alongside gold backing FIAT?
I don't think so. I think that governments it's in their best interest to maintain their power to issue their own currency and do the type of things that they do without good and bad. And if we're going to go back to sort of a neutral reserve asset, I think it's going to be gold because central bank managers and governments have, you know, thousands of years of history
of using gold as a commodity form of money. This sort of creates some stricture around how much people can spend at the government level, so that doesn't necessarily mean that bitcoin doesn't do well when gold does well. I think it's a similar sort of things benefit both currencies. But if I was to bet, I think the next monetary system will still have the dollar as a reserve currency. It'll have about rather fiat currencies, but nations will settle global trade and balances in gold. Mm hm.
So I guess my question is maybe you touched on this a bit, So where does bitcoin fit if that's the case, right, and they're putting gold in the blockchain, they're going to tokenize gold, So where does bitcoin fit? Is it a hedge against all all of that the fiata governments, even though it's being part of a government reserve.
Now well, I mean I think basically the US government reserve is literally just you know, they still stole, seize a bunch of bitcoin from people and they're not going to sell it. That's what the reserve is. Other countries, the reserve is, hey, we have excess energy and instead of you know, wasting it somehow, we're going to save it by mining bitcoin. And bitcoin is our energy saving. So you have that in the Middle East, you have
that in China. You mentioned Bhutan as well as another country with excess energy trying to do that as well. So that's how I see bitcoin fitting into this. It's
just another system. It's a purely digital system. But if we're talking about the evolution of monetary policy, I think we're going to go back to something that you know, the people in charge are very familiar with, which is, you know, fiat currency is issued by relevant governments, and when I trade with another government or system, I settle in gold because I don't trust the management of your fiat currency.
Interesting, so settling in gold, do you think then gold might back? Some of these stable coins are CBDCs that they're going to you know, obviously they're tokenizing the fiat currencies. How do you how does that relationship work?
I have no idea. I mean, I I don't think that matters one way or the other. I don't know why you want to tree to tokenize version of gold. People want to hold gold, right, that's the whole point of it. If you want tokenize gold, I mean, it's a different thing, but that's what bitcoin is. It's an electronic version. It moves faster, it's got a different sort of proper set of properties. But if you want a whole gold. Tokenizing it means it gets trusting somebody else
to hold your goal. That's not the fucking point. The point is to hold your own gold.
So let's talk about what's happening in the markets now with the macro we got tierff madness happening, right, are the give us the lay of the land. How are you seeing this play? What is Trump trying to achieve here? And how does this impact the markets this year?
I think that Trump has been very consistent with his message.
The execution has been iffy on it. But you know, when he came into power in twenty sixteen, he kicked off the first trade war with China and stuting in twenty eighteen, and it's all about his belief and the people who voted for him believe that America has gotten a raw deal over the past fifty years, that China and other countries, specifically China because they're the biggest beneficiary of this, have taken advantage of the openness of American
markets and they've essentially built this amazing manufacturing juggernaut and then stuffed America are full of cheap goods, and then the American capitalists class have essentially sold out the the average American worker by shipping all the best jobs overseas and retaining all the profits in terms of high corporate profits and shareholder returns at that level. And so that's sort of his message. Now, he started out in twenty eighteen with the trade ward in China kind of fizzled out
by the time he finished in twenty twenty. He campaigned on a similar sort of promise in twenty twenty four. Again similar similar ethos, America's gotten a bad deal. We're going to come after all these countries who've been taking advantage of us, and I'm going to unveil these you know, mind bogglingly amazing tariffs in you know, very quickly into my first term, my second term in office. And what he do He tasked the people. I don't know which
cabinet official runs this thing, but he tasked them. They say, hey, come up with a tariff plan by April second, and they did it. And this is what it was. Now. Obviously it was a lot more bombastic and bigger than a lot of people thought. But again it fits with the goal. There's a current account deficit that's in the true llidon of dollars every year, he says, I want to close that as quickly as possible. So they came
up with this formula. I mean, a lot of people, you know, try to deride it as sixth grade math and all these other things. But if his goal is I want to remove this deficit that I have as quickly as possible, then slapping on some massive tariff on all these countries based on the annual deficit that they have with the US makes a bit of sense. And so that's what he's doing. Very consistent. The methods have changed a bit, but he's very consistent. So I think.
You know, right now, people are I think, are in the denial stage. Oh he's not that serious. If the market drops another few percent, inequities he's going to stop or what have you. But I don't think so. I think he's going for broke on this. It's earlier in his first term. The election, least for a lot of Republican legislators is not until twenty twenty six in the end of the year, so he has some time to take some hits politically and economically before engineering what he
calls a glorious revolution in America. Coming into you know, the third quart of twenty twenty six. So I think we're in the start of you know, this is just another sign post in the unraveling of this post nineteen seventy one Fiat regime two thousand and eight was the first tremor that was papered over with paid with printed money.
Then we had COVID, and now we have had this and again it's a trend that was going to happen anyways, Like I think that the US and the China will decouple in a two different systems and then every country will just kind of choose which said they're on.
Interesting, So do you think we might see the FED use the same playbook it did in two thousand and eight as well as twenty March twenty twenty where they have to cut rates asap and also start the money printer again.
Absolutely, I don't know what the trigger is going to be. When you have, you know, this amount of carnage in the trad fire mark, it's somebody's going to go bust. And obviously we know that the system cannot allow any of its vested interests, banks, large asset managers, interconnected hedge funds to ever suffer catastrophic losses, and so the federal step in, and maybe it won't be quy or money
printing as we traditionally understand it. Every time was a bit different because internally, the Fed believes that they're fighting the good fight, that they are you know, great stewards of the United States dollar, that they are going to make sure that inflation is contained, unemployment is low, and you know, they are not going to engage in money printing when inflation is above their two percent target. So
it might not be called q it might be something else. Right, the twenty twenty three regional banking crisis, they created the SINKLE the bank Term Funding Program, which I said was a four trillion dollar money printing exercise. Now they didn't call it quite a to the easing because technically, under the economic definition how they define it, it's not so they could said, no, I didn't print any money. I just you know, supported the banking system. But it's all
the same thing. And obviously bitcoin sniffed through all that bullshit and we went from twenty thousand to you know, seventy thousand pretty quickly after they enacted that bailout. So again we're going to get a bail out. I don't know, what it looks like. But we know that it's going to provide some sort of printed money in some way, shape or form. But they're not going to call it like they call everything else.
So is this you know what you're experience in tried fy and much more? Is this the only playbook they have there? There's no other solution, And until something changes, I don't know, maybe in a one hundred years because we're all in some super digital world where money and everything is on the blockchain, I don't know. They have another solution, and it's not for your currency.
So there is another solution. The solution is you had a business, you made bad decisions, you went bankrupt, and we allow you to go bankrupt and the creditors take off your business. That is how capitalism is supposed to work. They tried a bit of that in nineteen twenty nine. Nobody really liked it. That's hard to get re elected
when you actually let the vested interests go bankrupt. And so they said, Okay, every time the system has to reset and expunge credit from it, we're going to make sure that it never happens, and we're going to backstop the system. And that is what the Federal Reserve in the US Treasury Department has done ever since, if it's been created in nineteen thirteen, there's never apart from the Great Depression, which you know was a little bit of that.
You know, the Treasury Secretary at the time, Andrew Mellon, had a famous quote saying, liquidate labor, liquid a capital, stop people from living on the hot, living high, make them be more responsible kind of thing, right, That is not a great way to get re elected. Argentina is trying it, but they've been doing money printing in the most egregiously aggressive fashion since you know, Peronne and Kitchener for the last five years. So that's a reaction to that.
But you know, look at the rhetoric from Trump and she and the leaders of the EU and Japan. No one's saying, hey, we spend too much money, we borrow too much in the future. So I'm sorry people today, we're going to have to take a bit of some harsh medicine and retrench of it. Now they're saying, I have an answer. It's you know, more government, it's money printing. It's all these different types of things. Even Trump, who's
not exactly the most more government types of person. His plan is to move from a seven percent budget deficit by to a three percent budget deficit by twenty twenty eight. His plan is not to move from a seven percent budget budget deficit to a government surplus because that would
require a lot of cutting of government spending. So again, even Trump, the most you know anti government, you know he's got elon swinging a head sledgehammer with his Apartment of Government efficiency thing, is not even saying he wants to move to a primary surplus and his domain so austerity. This notion that we're going to reduce the amount of credit fiat within the system is not the policy. It is money printing, both in different ways depending on the
cultural sensitivities of your particular nation state. But that is the only answer they have because the other answer of credit destruction, means that all of them won't be in power anymore.
So in addition to that, right being close to the money printer, whichever president they're a Democrat or Republican, Right, there's a temptation there, right, print our way out. It puts Jeck. Liquidity solves the problem I get re elected. In addition to that, is it also the world we live in everybody's retirement is tapped into the stock market would leverage, and if you let the collateral go down too far, people lose faith in the system and they'll
be rioting in the streets. Like I just think about the boomers, right and all their retirement and everything like that. They can't let this thing go to zero. I mean, but do you care of a bunch of geriatrics around the street. What are they gonna do? But you know what I mean, not just.
But also people on a zepic in the street, what are they gonna do? Like the young it's the young people who you know, they're watching their parents are like, oh wow, I can't buy a house. You know, my job sucks if I can get one? What is this life that I busted my ass to go to university for? And yet my parents on all the assets and are the richest generation in human history. So I think there's
a generational conflict going on. And yes, if you let the system collapse or retrench to a more sustainable level, I bet the gen z and younger would feel hopeful again about their future, that they had something to look forward to, something to build a family for, rather than this abject just sort of like dystopia, lying flat, all these different things. Every single culture has a manifestation of
this ire against the boomers and what they've constructed. So yes, if they let the system collapse, I think the younger generation would cheer it. Mm hmm.
I guess this goes out into bigger things. But that's probably why you're seeing the decline in birth rates and population.
Right.
The boomer was was, I believe, the biggest boom and babies and things like that. That economy was driven by that demographic, but then it started ramping down and we're getting the bad end of the stake, so to speak, with the boomer economy and folks begetting disenfranchised.
Yeah. Absolutely, I think there's generational warfare going on. And if you look at who's in charge of every major you know government, that's you know Gen X and boomers who are the ones in charge.
Now? Are there? With this macerel uncertainty and fear and what's happening in the markets, do you see the bigcin cycle and even the bull market cycle extend further into twenty twenty six? Last year we were ahead with the ETF launch, Bitcoin hit a new all time high before the having but it seems like things are slowing down. Do you think it pushes into twenty twenty six.
So first, I think we're still in a bull market. Right We've had a thirty ish percent correction from the all time high, perfectly normal for bickad. We'll see if were you're able to hold the seventy thousand market. If we continue to get another downdraft in the price, I think we will let TBD on that. And again I try not to get sucked into this. Bitcoin must have this four year cycle and the having being the starting of the of the run upwards. Yes, it's worked in
the past, doesn't necessarily mean work in the future. I'm more concerned about global liquidity. We know that bitcoin is now more entrenched and more believed to be the only true free market where I can know what does the world think about how much units of fiat are slashing around and will be slashing around in the near future. That is bitcoin. It's straight twenty four to seven. No sypral bank controls that, no government control That's why, that's
why it exists. And so I think if we believe that we're at this moment where we're transitioning into a different monetary system, different trade system, and we know that every single major leader wants to cushion the blow to their population by doing some sort of fiscal or monetary
accommodation money printing. Then I think we're at a moment where we could see, you know, the cycle extend, possibly passes four years, or maybe we just get a really really intense, compressed run up to a million or some ridiculous number that no one could imagine it as possible, is at a short period of time, because Bitcoin is saying, yes, there's going to be so much money printing compressed in such a short period of time because we're moving to
a new system, and therefore the price of bitcoin should be some ridiculous number.
Hmm. If the Fed does go back to some sort of a qui right and whatever they call it, do you see kind of a march or a's say, twenty twenty after March, that strong run up like what you're saying, like maybe to one fifty by the end of Q two or Q three, and then but it's not following maybe the normal four year cycle. We we don't have a true bear market like we've seen historically.
I mean, there definitely will be a bear market for sure, because our expectations of what the future amount of FIAT growth outpaced what actually happens. Right. But I think if we're talking about what's going to really going to reignite bitcoin from this you know, seventy to one hundred thousand chop that we've been in for the last few months, I think it's the FED capitulates. Then the you know, PBOC allows you on to weaken or at least stay consistent with the FED. They can print as much money
and you know, stay tread water. You have the EU printing money to build bombs, and then you have Japan. The bog might stop its normalization of rates exercise and go back to printing money so that Japan can regain some export competitiveness against China. So again, I think that that is what can take us into the two fifty and above levels for bitcoin.
Very quickly, let's talk about Mailstrom. What are you and Mailstrom investing in? Are you guys holding bitcoin all coins are investing in crypto companies as well?
So you know, our fund which is basically not basically is all of my money, So we're not really a traditional venture capital fund in that sense you don't have external wipes. We write small checks for early stage projects, fifty one hundred thousand dollars checks. We do a lot of advisory. So obviously the best project we've advised so far has been Athena, a standout project in the synthetic dollar stable coin field. And then we do a bunch of liquid trading. And so right now we've slowed down
on the early stage token stuff. We believe the prices are too high, the thing that we're seeing are not that compelling. Obviously, we're still advising projects like Athena and Aptose and those sorts of things. And some of the money that we've made we've harvested probably in early first quarter because I believe that there was going to be a large sol off due to Trump's inauguration as sell the news type of situation, and so right now we've been,
you know, steadily redeploying that capital, mostly into bitcoin. I think that bitcoin dominance, which is the percentage of bitcoin relative to the entire crypto market cap, will continue to rise, and we're going to go somewhere close to seventy percent right now, so I'm like sixty two sixty three percent and so once we get up there instead of maybe bitcoins at one hundred and ten, one hundred and fifty whatever, some level much higher, then we start to see a
real all coin season. And then for projects that have already been listed, we were very interested in projects that have product market fit, that have protocol revenue, and have users, which is a very small subset of projects, many of whom we've already invested in and we've seen them grow over the last few years, will double down on the liquid side because their token prices have gotten so destroyed because everyone just gravitating towards the highest quality crypto, which
is Bitcoin. And then obviously I think we'll get back into whatever the shittiest of shit coin theme is for this next leg of the cycle. I don't know what that'll be.
What we think is meme coins, of return to meme coins.
I don't think the meme coins will return to the same extent that they were, you know, six to nine months ago. Yes, there'll be some meme coins that retain value, and some of Murad's whatever thing will probably go open value. Most of them will not. They'll just be stuck in mumbo because I think the retail trader they did the mean coin thing. They lost a bunch of money. There'll be a new new thing that's shiny and new with no history, and so everyone I'll gravitate towards that and
we'll be trading that. I don't know what that's going to be, but we'll participate as well, because you know when music is playing and got a dance?
Yeah, well, said Arthur. Is there any hoper etherorem I'm an eth holders, It's I'm too. It's painful. Look at that chart.
If you think about layer ones, and I try to frame this as if I had a fresh unit of FIA capital today and I was had to invest in a layer one, which one would it be? Now? I think Eth is the best relative performer, possibly for the future, because it's the most it's the most hated layer one. Everybody's dogging on it, saying, oh, they haven't done anything
in gears and blah blah blah. But if you look at what theory is, it's the number two largest cryptocurrency by market cap for a proof of steak system, It's the most secure because it has the mouse amount of value stake securing its network. It has the most amount of developer activity and talent. Yes, you know, salon On some other blockchains are catching up in that, but still theorium is still the largest developer community for DeFi. Every
single major DeFi primitive began on ETH. So if you want to think about the new developers creating the new primitives that are going to derive the next you know, ave, compound, Uni, swamp, those type of things, I think they're going to happen on Ethereum versus any other other blockchain. Not to say some of those other ones aren't good trading vehicles. That
is why I think. And then the only thing we have people are mad is think, oh they have the layer two sort of feet issues and the prices down. You know, let's say if eth is rallying faster than Solon or some of the other layer ones, everyone forgets about all that shit and they remember, oh, yeah, it's the biggest, it's the most secure, and then that's what they start touting in their mind as the reason why
they need to own ETH. So again, I think if you're looking at it from now to in the future and on a risky war basis, I want to create the thing or own the thing that's the most hated of the previous cycle ethereum versus the thing that was most loved, something like Solana. That's not to say that Solana is not going to rip, you just won't rip as much as eth.
Do you think what you usually we see like narratives, right? Do you think a strong narrative and it's not really a narrative would be a factual thing. But the SEC is looking to add ether or staking to the etherorem et aps and that could attract a lot of inflows. Get the narrative out there that you can earn this yield. Here's the mainstream folks, come on in, you know, earn
your yield, YadA YadA. But also the upgrades that are going to be coming to native to the layer one versus the layer two scaling solutions.
Maybe, but I don't think that TraFi doesn't set the narrative. Retail DJ and set the narrative, and so the price will rally well before if it does any of that stuff, that'll just be icing on the cake. The Coimbra's rallying well into the ETF, the black rock ETF and all the other being launched. And then it became another reason why people wanted to be long Bitcoin. It wasn't the primary reason. So I don't I think that's a icing on the cake.
Oh for sure. Now there's been a lot of talk between Ethereum and Solona and the battle there. Do you I see a lot of enterprise adoption happening around ethere I mean black Rock they launched their tokenized fun on Eth. Fidelity just came out and said we're going to watch a stable coin and Eth. We're also going to tokenize the fun on Eth as well. But Solana seems to be more of the retail I want to launch NFTs or meme coins. That's where I go. Is it is
it that you know? As far as the dichotomy between the two.
I mean, I'm cripping something. That guy, the founder of a penis aid the trad FI doesn't give a fuck about later one blockchains and which one it is. They care about where the users and if I'm a salesperson. Okay, there's a big user base on Eath. I launched their first Boom. I launched on Eth. Oh there's some lo Solana who want my product boom a lotch on Slana. People on Aptose, Yeah, launch on Aptose people on Sonic Lab. Yeah, a lot, it's there, right, Like pick your layer one blockchain.
If you've got a differentiated instead of users, the end product originator will issue there. They don't care about security and all these decentralization, all these It doesn't matter because it's a centralized product that they're selling anyways. They just say, if somebody wants to buy my product and I can integrate that, Okay, here's the cost of integration. Here's how many people I can potentially sell this product to. If the math makes sense, then I do it. It doesn't
matter what the blockchain is. So you might have chosen to eat first, but they'll be on Solona pretty quick and all the other ones down the line. So I don't think that should be a reason for against investing in a particular blockchain, because a traify asset measure does not care what it is. Are there more people that can sell this stuff too?
That's a great point because recently Securitized the announced that black Rocks miiddle Fund moved to Solona as well. So are they? Do you see the future being multi chain and that there's going to be a good maybe twenty blockchains running around the world and it will be consolidated to that.
I mean we already in a multi chain, You're already in the future, right, and there'll be infinite number of it will be as many layer one blockchains. Other are VC muppets willing to fund these things, right, So we've got the barrier chains and the monads and the mega eth and all these these other layer one things. Why because you know, somebody in Western Europe and San Francisco had a fuck ton of money and they had to
do crypto. So let's just throw these guys a bunch of money to build the next fastest da da da da da layer one blockchain with no fucking clients. Right, So we're gonna have many more of those because once this market recovers, and this is one of the best performing subjects of asset management, guess what, all the money's gonna flow over here and you're gonna have these mega funds.
With all this money, you need to deploy it. And one of the best ways to deploy money very quickly is a massive layer one project that aims to fix it Ferium or fix Alana, or fix one of these other you know, pick your later one blocking that they want to fix and then they just get a hundred few hundred million dollars from the usual suspects and they go and build something that nobody needs. So again we're
gonna keep having that not gonna go away. And then if they're a great party, so who am I at a thairy shade, I'll keep kicking the free booze.
So on that note, right, is this the best macro trade right now? And how long do you think these type of returns stay in play? Is in the next two bowl markets or just one more twenty twenty eight?
I mean, I think that this is the if you want to talk about what is going to perform the best when the people in charge reflate the system to fight the change that's happening the global macro perspective, I think crypto is the best place to be. Bitcoin as restart the risk. The upside is, We've seen how bitcoin is performed over since two thousand and eight until the present with the FED to value the dollar effectively byranting all that money. We've seen how bitcoin has performed when
the Chinese yuan has depreciated. We've seen how bitcoin has performed in a global pandemic when the authorities flooded the system with liquidity. Again, it's always been the best performing asset relative to stocks or even gold, although I think goal is going to have a great run as it's reintegrated as a global neutral reserve currency. But at the end of the day, Bitcoin has been the best performing
asset since two thousand and eight period. There's nothing else has done better, and it will be continue to be so because it's a small door relative to the gargantuan infinite amount of FIA that needs to find a home and a real asset, and it's portable. I get take it anywhere, I can store it in my head. Right, It's just one of those things. It's got the best properties, and so as more people realize that, I think that
this is going to be the best expression of that trade. Yeah, you can pick some stocks and maybe there's a few commodities that will do well. Of course, if that's your thing, there'll be definitely ways to earn so over average returns. But again I think bitcoin does the best.
And of course the scarcity aspect, right, it's hard cap gold. They're going to continue to mine more gold and stocks and all that. You know, it's not hard cap like like bitcoin, of course.
Yeah.
I want to get your thoughts on the ETFs and do you see that as a good thing or is it a bit of a trojan horse tratify taking over bitcoin right where the majority of the public or population may go to black rock in fidelities and they don't have the self custody aspect of bitcoin. Obviously, it doesn't trade on the weekends and things like that. And I don't want to. I don't think the United States would try to do this like they did with gold, you know,
in the early days of confiscating it. But if they wanted to, it's there in the ETF rapper. What do you think about that?
So? I think an ETF is not bitcoin, it's a it's a financial asset. It's a I want to trade bitcoin to earn more FIAT. That's my goal, and which is a perfectly fine goal. That's what people who own the ETF are there to do. And Larry Fink and his ILK are they are to provide a service which
is going to custody. Yet when to give you this rapper that trades on these tradify markets you can put into your retirement account and blah blah blah, we were completely within the trad five fiat system, but giving you a return that's coming from outside the system. And that's fine. But at the end of the day, an asset manager is a passive institution. They don't do anything with any
of the assets that they hold. So is Blackrock going to sponsor core developers, you know, get involved in protocol upgrades, have an opinion on these on these types of things. Most likely No, it's going to be individual holders or people who own businesses within the ecosystem. They're the ones who are going to drive the chain change and make
sure that bigcoin stays relevant going into the future. So it's great for the fiat price of bitcoin that you have, you know, this massive horde of people wanting to get that fiat return. Again, it's an open system, that's a whole point. This is what the too she created. So I don't think it's a good or bad thing. I just think it's another facet of the market. And I don't think people should say, oh, we need to ban the ets or anything like that, but this is the whole point.
Is an open system, yeah, for sure. And I think I was talking to Mark Usco about this. He was saying if anything like that happened anyway, because it's all in an open system on the blockchain, we could blacklist that bigcoin, so to speak. And I don't know only the ones that under what circumstance if they try to confiscate the bigcoin so to speak.
If that was it sounds a bit sounds a bit suspect for sure.
Okay, US crypto regulations and this favorable environment we're in. What are your thoughts on this one to eighty from what happened under Biden with Genser and Elizabeth Warren, and do you see a boom companies returning to United States, maybe bitmax opening up more in the United States and things like that.
I think ultimately, if you take a look at what was happening with the FTX and Sam bankmin Freed fiasco, if he hadn't if you know, this is always the if you hadn't of when you have a massively over leveraged trade, which he that's what he did. If he if he hadn't stolen all the money and the market went against him, you know, he would have gotten all the licenses. He is poised to get a license to issue a stable client. He was poised to get a
bunch of other licenses from the SEC. He was poised to get some licenses to do derivatives with the CFTC all predicate it on the massive amounts of campaign donations and money he was spending politically in the United States. Now, obviously he was a complete fraud and he was stealing people's mind. And when that came out, everyone who he was dealing with felt embarrassed and had to basically do a one eighty and they said, oh no, we hate crypto. We're not a bunch of like on the take politicians.
And I think that was sort of the main you know, one ady thrust that either the Biden administration and all the other you know, downstream Democrats took after f checks because they were embarrassed. And there's pictures they've done with Sam and shaking's hand and going on stage of them that conferences and all this kind of stuff. Right, And so the you know, Trump and his brand of Republicans saw an opportunity. His an ecosystem. They've got material wealth,
they've been abused by the Peters administration. Let's use his cohort as a great fundraising mechanism. And as you know, voters. Right. Supposedly fifty million people in America whole crypto right. So I'm sure some of those are marginals, swing voters, and they helped bring Trump and a lot of Republicans into office in twenty twenty four. And so now there's a lot of talk about what sort of crypto regulation the
United States should have. I've been pretty vocal on record that I think that the best you know, if I was in the issues, I am not. I'm just a private citizen out here, and you wanted to have the biggest, most robust crypto ecosystem within your particular country, you should do what the United States did in nineteen ninety six with the Internet platforms, which they basically said you can do whatever you want. The things that happen on your
platform is not your responsibility. If somebody commits a crime using email or AOL or Google, that's their thing. They committed the crime. It's not up to you Google or platform operator to police that police set activity and prevent it from happening. Right. And so if we adopt a similar sort of situation to crypto, it's basically saying, you know, bitcoin is free speech, it's private, We're not going to
touch it. You know, if you defraud somebody or steal someone's money, we're going to come after you, and you know all that, all that kind of stuff. But you are free to do to centralize finance and build an exchange, and we're not going to put any rules or regulations or licenses around that. Watch how many people move to
the United States to open up a crypto business. It would be you know, insane, the amount of activity that would happen in America, similar to the way that all this activity happened in Silicon Valley with the mega platforms like the Googles, Amazons, Facebooks, Microsoft, all those all those sorts of players who all benefited from the nineteen ninety six Communications Act, Section two thirty for those of you who are into that. Yeah, so I think something similar
should happen with crypto. What's going on right now is more of more of the same, you know, traditional politics. It says, Okay, there's a bunch of different people who have invested interests are all speaking into Trump and his advisor's ears, and then it's up to them to come up with what is this bill or slated bills that they're going to put forward and what do they get enacted. Who knows what that'll be. I have no idea. I'm not really on you know, the different stable coin acts
or licensing and all that kind of stuff. But that's just more of the same politics. It could be good, could be bad. I don't know. But if you know, if they really wanted to do something, I wouldn't say radical. Could they already did it with the big Internet platforms,
or another country wanted to do something similar. If they want, if they really wanted crypto and these really smart people to be within there made up jurisdiction called the nation state, then they could do something like this as well.
Yeah, I hope they do that sooner than later, and they get these these bills through and we got to, of course make sure they're good and balanced, because you never know. The devil's in the details. Stable coin market, we're seeing everybody in their grandma launching stable coins now. I think Ripple, you got PayPal circles about to ipo. We've seen their file to do that. Tether still king of the hill though. How do you see the stable coin market playing out? Are we like at a trillion
in market cap by next year? Banks getting involved? Now that the restrictions are being loosened than things like that.
So I think this when you say stable core revolutions is mostly just a bunch of American companies or people in America who now want to issue stable coins for Americans, and I think they're missing the point. The reason why Tether is the most successful sale point and will continue to be the most successful stalle coin is because it offers US dollar banking to those who do not have US dollar banking, which is everyone outside of America America
to have US dollar banking. They have instant settlement of dollars, Venmozelle, cash app, PayPal, all these type of thing, right, they're not perfect. I'll give you that they're centralized. Who cares, But if you're a random American, I can send you dollars and I even not using the banking system. So I'm not exactly sure what a circle or Ripple or all these or a GP Morgan or a Bank of America they what's this product? They're gonna they just gonna
make a better version of Vemo. Okay, great, but all you guys can go and raise one hundred million dollars and then go compete on advertising dollars to convince this person to save once sent on their transaction fees or doll another app on their on their smartphone to send money between each other. Great, go and do that. I don't want to be anywhere near that business because that's just a money losing exercise for most of these individuals. And the under in the client already has access to
the product. They don't need another dollar banking solution. Can I already have one? Now? Talk about the Chinese person or the exporter in Africa or somebody in Argentina they need dollar making? Is anyone trying to solve their problems? Well, tell their solve their problems. USTT works great. When I travel to Argentina into go skiing, I pay everybody in USDT. It works right. There's a reason why Athena has such appeal.
I can earn an above average yield over treasuries getting this basis yield, and I don't need to have access to the US Treasury market or access to the centralized changes. I can just buy this, you know, at stake USD and earn this yield. This is who this is for. That that is why these businesses have done so well. Everyone also is saying, oh, this is there's this new bill in the US that's sort of code of codifying how stable coins are done. Therefore I can launch a business.
I'm looking at tether. Oh, Teather is like one hundred and forty billion mark circular supply. Oh, of course, America is the biggest place in the world. I should be able to do that. So I'll can follow rules and you know, raise much money and then boom, I'm gonna I'm gonna go off to each other. But you're not going up to the Tether is not in America. I meanah, of course it is, but it's not. That's not their
core customer. The core customer is outset of America. So I think everyone is fundamentally missing the point here of why certain stable coins are successful and ultimately they're just you know, lose all the investors' money.
All right, final question for we hit the wrap up items are the best prediction by twenty thirty, how do you see us interacting with Web three and crypto? Is a lot more usage of stable coins? Do we have digital identity on the blockchain? More people holding bitcoin? But what do you seem I.
Mean, honestly, I don't know what the thing will be. I think will be better at payments. I would imagine possibly hopefully more integrated into consumer stuff. Now. Obviously I'm an advisor of avaptos, and I think they're working very diligently on bringing extremely low cost, fast payments, you know, obviously outside of America for things that people actually want
to do. So they build the system for Facebook and that is a sort of client base that they're going after with these payment systems, and I would love to see something like that more ubiquitous, so I can just take my smartphone, n FT tap and boom, there is you know, some stable coin transferred over the aptose network to the merchant and I can go and spend my crypto that way because it's fast and cheap enough for
that kind of use case. I think we're going to see somebody do that quite well by the two thousand and thirties, and that'll probably be a massive revolution in sort of consumer payments, especially outside of you know, the US, Western Europe.
Do you see like NFT technology powering contracts, deeds, vehicle titles and things like that, concert tickets and stuff like that. Maybe, I don't know, it could be all right, first wrap up question. If you could great your own metaverse, what would the theme be? Oh, House music, rapid Fire questions, favorite food.
Uh, favorite food.
Chicken, favorite musician or band, daft Punk, favorite movie, Dune, favorite book, three Body Problem series. When you're not doing working in crypto, what are you doing for fun?
Playing tennis and skiing?
Arthur pleasure chatting with you. Appreciate your insights and we'd love to have you back on. But thank you so much.
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