Why Crypto Has a Good Long-Term Setup Right Now: Bits + Bips

0:00America leads the world in medicine development. It matters. We get new medicines first, nearly three years faster. Five million Americans go to work because we make medicines here at home, and not relying on other countries keeps us safe. But China is racing to overtake us. Will we let them? Or will we choose to stay ahead? When America leads, America cures. Let's tell Washington to keep us in the lead. Learn how at AmericaCures.com. Pay for by Farma. Hi everyone, welcome to another episode of Bits and Bips, the interview. My name is Steve Ehrlich, head of research at Sharplink and also your host. And I'm here today with Rob Haydick, general partner at Dragonfly to discuss everything happening in Iran. It's ramifications for crypto and broader traffic markets as well as a few other key topics impacting crypto today. So welcome Rob. Hey Steve. Thanks for having me. Yeah, absolutely. So a lot to dive into today, but before we start, let's just take a brief moment to hear from some of the sponsors who make the show possible.

1:23Be sure to subscribe to the new feeds at unchained crypto.com slash bits and bits. Okay, so one quick thing before we begin again, nothing on the show is financial or investment advice for full disclosures. Please see unchained.com, backslash bits and bits. And now with Rob with all that out of the way, let's kind of just dive right into it. Markets today, I mean, it's the usual turmoil when there's some big source of Agita in the world, the Israeli and U.S. attacks on the run. Oil is up, I believe, over $80 a barrel. Gold is up, the dollar is up. Bitcoin is actually kind of holding steady, even though it's not kind of keeping pace with some of the other safe havens. So just kind of lay out for us. Like what are the last 48 hours been like for you? What are you saying? Yeah, so it's an interesting time, obviously, for crypto, but then the more like macro environment. And this was true before the kind of escalation

2:24in Iran. I think actually I've been stopping or I have not been calling it a war, but I think Pete Hegseth and Trump both called it a war in the last 24 hours as well. And so I think we can start calling it a war in Iran. You know, over the weekend, we actually saw, I think crypto hold up pretty well, surprisingly. And despite the fact that global equity markets were all down over night, I think we opened the SP up and down like maybe a point in a quarter or so. Obviously, you mentioned that oil's up. And it does sort of seem like we're in a situation here where there the market is fragile. It's cautiously, it's really cautious right now, but it's not you know kind of falling off a cliff yet. People want to see what's going to happen in the, you know, over the next few weeks, the original story outside of Iran or at least kind of the, you know, the first day was hey, we cut off a lot of the leadership and, you know, we expect this to be ever quickly. That now seems to be I think maybe not true, where I mean, I think even

3:30President Trump yesterday said that he expects this to go at least four weeks, which if it goes, if he's saying at least four weeks, there's probably like we heard that the time frame is actually longer than that, which means that there's a much higher chance of kind of sustained economic risk. Obviously, there was already a conversation around, you know, already in a stagnationary period, are we going into one? And it's very clear that, you know, if we have sustained disruption and kind of a production in the Middle East and, you know, depending on what happens on the straight of our moves and, you know, on the tanker side, like I think that risk of stagnation is even higher, right? And so from a macroeconomic productive, I think we're in a very precarious time at it when the markets are, you know, themselves very fragile, as we saw, like, you know, what happened after the Citroen report. And so I think positive for Bitcoin and crypto and so much that, you know, we didn't, they've kind of held up and rallied it a little bit. And it doesn't seem like there's the crypto markets are as fragile and the equity markets are right now. But, you know,

4:33I don't know if the crypto markets will hold up to, if we have like a real correction in the equity of yours. Yeah. And it's, I think a really good sort of illustration of that turmoil that you're talking about is what happened is what's happening with the rates on the US 10 years because they're continuing to, to go down. And it sort of seems a little like counter orthodox in the world where the, where the dollar is going up. So what, what do you make of that? Yeah, I think what's like very clear is that there's the market is concerned about it's already inflation, right? And like, I don't think there's any doubt in that. I think there's also, and the market is concerned about, you know, the fact that growth might slow. And I mean, might have a, you know, in this calculationary period could, could come. But at the same time, you look at, you know, Kevin Worsh coming in office, right? And he should take office at the Fed, like, you know, call like Mid-May, right? And so I think like May 15th is. And, you know, the question that the

5:38market's been trying to figure out about Worsh has been, is he, you know, he's been, you know, he's been a hawk at times, right? And his public statements. But there's also a perspective that, you know, maybe he's somebody who's like very close to administration and clearly, you know, President Trump wants him to cut rates. And if that's the case, you know, how does he, you know, think about his, you know, personal views and how he might think about monetary policy relative to, you know, what should the administration would want him to do and how does he react to or it's like political pressure? I think people are very confused by that. And I think the market initially reacted in a way that said, hey, we think, you know, we're thinking about future monetary policy based on how, you know, things that he has said in the past. And now it seems like people are coming around to this idea that maybe potentially he's just going to give into more political pressure. We'll see. I think there's, there's also the story we haven't talked about here, which is the, the Aiepa ruling over at, um, in the spring court, which, uh, you know,

6:44obviously deemed that the way that we had, you know, kind of put forth tariffs was legal and was kind of an expansion of, of, you know, executive power. And then obviously, um, you know, President Trump came out right away and said, well, we're going to use this different legal justification to be able to put on tariffs for at least, uh, I think it's about 180 days. It is allowed to, um, up to 15%. First, he said it was 10%. Then they're saying they're going to go and be up to 15%. What happens after that? Uh, we don't know. And so it's, it's very clear to me right now that there's just more confusion in the market than ever. And you actually have different people who trade these different markets who are coming to different conclusions in a way that we haven't seen. Yeah. Thanks for too. And I, I believe I actually briefly misspoke with the way I phrased the first question because, uh, yields are actually going up right now, which is sort of what you would not expect. Like bonds, obviously they move in versus with bond prices. And you would think bonds would be coming up along with the dollar, but they're going in opposite directions, which is really epitomizes that source of confusion that you were talking about with Kevin Worsh coming in, the expectation of lowering rates, especially with inflation that seems

7:48to sort of be, uh, I mean, it's not quite 2%, but, but it's not increasing like some fear as a result of, of the tariffs, but with oil and everything else happening here, that could just permeate through the entire global economy and, and, and challenge any efforts at, at cutting rates. Um, if and when Kevin Worsh is even confirmed as, as Fedger, because who knows what's going to happen with, um, journey periods investigation of, of Jerome Powell and everything like that. Um, but, yeah, it is really kind of, um, it's a, it's a tough juxtaposition. And I want to kind of broaden the conversation a little bit to just kind of get a sense of what's going to happen over the, like the, I guess the, the near to midterm, because I mean, as you, as you mentioned, and, and plenty of other commentators around the world have been discussing over the last 48 hours or so. Um, the timeline on when this may or may not end is, is fluid. And it seems like President Trump is once again trying to thread the needle that he, he didn't invent as well. When he was able to extract Nicholas Maduro, um, his, um, the vice president essentially agreed to play ball and follow

8:55U.S. guidance, guidance, I guess this, um, interesting term for, for, I think what the U.S. is dictating towards to do. Um, but it's not quite, I'm not sure what is going to happen in Iran. I mean, as you, I think you mentioned that they've talked about regime change or, or not regime change. Like, um, would they find someone within the IRGST or, or like clerical leadership that would, be willing to work with the U.S. or, but because if it's going to be true regime change, that could be a lot bloodier, a lot messier. And I don't see that happening in four weeks, especially if the U.S. wants to rely solely on air power as a way to sort of eliminate casualties, which, um, just, I find, again, I find it very hard to accomplish your mission in a country of 93 million people. So let's kind of a long preamble, preamble to the question of like, how are you positioning? How are some of the people you're talking about positioning in this environment, especially like looking at recent history, like, like liberation date tariffs, or even the bombing of Iran last summer, or like where you, we have these like V shape

9:56recoveries that are pretty quickly, you know, maybe this is a different situation. Yeah, so we're a little bit different than, you know, probably some of your listeners, and the fact that like we take very long views on the market, right? And we invest with the idea that like we will be in positions for, you know, at a minimum, like, you know, call it a year, right? So for years, right? And so, you know, we try to be opportunistic sometimes on like the entry point, but mostly it's around, okay, well, what do we think are like the global, the global backdrop, the macro economic backdrop over some long period of time. And I think there's, there's two kind of answers to your question. I think the first is, well, I actually think it's quite positive that crypto and Bitcoin held up quite well over the weekend. Right? Even at a time when you knew that, you know, equity futures, we're going to open down or trade down. And there's, you know, there's some conversations that, okay, well, you know, Bitcoin is store value. And so like, you know, commodities are up, Bitcoin be up. But Bitcoin hasn't traded that way, obviously, for, you know, for months right now. And so I think

10:59it's positive that maybe it did, you know, have about that correlation or traded that way. And I think it looks like, you know, the type of trading you've seen, you know, around these events recently and around the Satrini article, when I could be sold down, etc, implies to you that they're like, aren't necessarily like a lot of sellers left, right? You know, most of the people who are only now are much more like long term perspectives, right? And so I think that's a good setup for, you know, being in crypto over some period of time. Now, that doesn't mean anything for like the long tail of all tokens because like, you know, there's other structural issues there around the market structure and, you know, you know, whether or not decent should be worth with or worth and, you know, revenue and, and, you know, fundamental value and things like that. So I think there's that base. So that's really constructive. Now, I think the short term though, you know, to your point, right, there's so many things happening that are real risk, right? So like the equity market kind of rallied after Nvidia really

12:00beat our names and they gave, you know, good guidance in the future. And then like, if they did that rally supermaneuverly, right? The equity market also, when the Satrini article came out, like a bunch of stuff traded down right away. And like, you know, Satrini, I really like the, the rating that they do, but this isn't like a household name. This isn't somebody that everybody looks at and is like, okay, well, like I definitely should be trading off of, you know, what they think. And there was a lot in that article that was like just science fiction, right? And I recall reminding you a lot of like Georgia was 1984 type of, you can't. Yeah, I know I 100% right. And so I think it's very obvious that there's a lot of fragility in the market too, right? And I do expect that, you know, kind of the long term setup for, you know, crypto is so very good with potential for market structure with how many, you know, kind of institutions are adopting. But it's, you just, it's very hard. I think to bet on crypto, if you think that the equity market might take a kind of a real bath here. I think there was

13:01a couple articles out over the weekend or some cell side reports, which we're trying to figure out, okay, well, if you fundamental, there's some fundamental value loss around, you know, a increase in inflation and slow down and growth because of the rising oil prices, and depending on how long this goes on, like, you know, maybe we're looking at something like a 10 to 15% correction in the, in the S&P. And if that happens, like, it's hard to see Bitcoin holding up, right? Even, you know, considering all that really good, like, mental value, or fundamental backdrop that we're, that we're talking about at a time when there's just all of these other things that are unclear when comes to tear ups and when it comes to the, anything to do with, you know, AI risk and, et cetera. Yeah, it's, it's funny. I think I saw an article in the FT or the weekend that I think there was no better, like, representation of traders not knowing what to do than seeing the whole market trade down, like, 3% on a block report or a blog that was popper. So I think that, I think that kind of epitomizes things pretty well. So let's talk about

14:02the, I think it's important to know just to, you know, and I'm, because I want to really re, you know, make this point, which is that the long term outlook for the broader crypto ecosystem right now is probably as good as it has ever been, right? And we continue to have this, like, dislocation around, okay, well, what are the, what's happening in Wall Street terms of adoption tokenized assets? What's happening with stablecoin demand? What does that mean for, you know, real economic activity on chain? Like, you know, what, you know, if we get a market structure bill passed, now we can talk a little bit about that, but I think that's, yeah, a little bit up in the air. But like, all of these things are really good over the long run if you have that type of token horizon. Yeah, yeah, and we'll get to all that because this role really kind of good points and I know most of my listeners are not day traders, they're the more long-term investors, much much like you guys are. But I mean, I was actually looking around Derib at this morning at some of like the options position here, and I think it speaks a lot of what you just discussed. I mean, by far, the biggest open interest is I think I've put at 60,000, especially like settling over the next couple of days,

15:02but then once we kind of like span out, even till like the end of the month, when they were talking about calls at like 90, 100, I mean, it completely switches. Like, there's very, very, very sentiment, or at least people are trying to protect their downside over the next couple days, but then things certainly are changing. And then might also speak to what I was talking about earlier, how usually these like big like acute conflagrations resolve themselves pretty quickly, be it the tariffs or the strikes on the Iranian nuclear facilities last year. That's one thing I think Trump has actually done that the markets misprice in the risk of some of these issues that everyone thought were big red lines that maybe they weren't. And I guess it just depends on how much of a red line this one was. Well, I think it's like I'm not an expert in the military or or more or anything of that, and I won't pretend to be, but it does seem like pricing this like it's June again is probably pretty wrong considering the fact that, you know, that was like very targeted military strikes. And obviously this time we've, you know, eliminated a large part of

16:03the leadership. There's been a lot of, I think you can already kind of see the news shifting towards a negative sentiment this morning, right? There's been, I think, you know, at first, you know, there was an idea that this would end really quickly. Then President Trump came out and said, okay, well, now it's four weeks, which probably means longer. And then you haven't actually seen the US be able to enter Iranian airspace yet, which I think has been very surprising for people because they're, you know, to go and, and eliminate these, a lot of these like missile silos. And again, like this is what I'm reading from from experts and some things that I'm getting, but I'm not an expert myself. But a lot of these missile silos, you need actually that short-range missiles to be able to go find them. So you need to be able to get the fighter jets and the bombers into Iranian airspace. And that hasn't happened yet, which means that we haven't taken down their, their defense systems, right, to allow for that, right? And you actually saw today, I guess, like a couple of 15s that got shot down a quate with accident by air. It's like, yeah. Yeah. And so there's, there's, there's, there's, it seems like, you know,

17:06reading between the lines that there might be some surprise at the ex-how expansive the Iranian kind of reaction has been, right? And, you know, an entire region and clearly trying to put some pressure on the ally, the economic footprint of the allies in the region. And I know what that means for us. And so that type of reaction, and the longer this goes on before we can really start to, you know, get, you know, really take control of the slavery mues and, and, and there were any airspace does, I think, project out that this could be a, you know, kind of a quite long conflict. Yeah. Expression, I mean, President Trump came out again yesterday, I think it was, and said that we, we wanted to do regime change, but that the people that we thought would be good leaders, we actually actually, we killed. So I was, I mean, it wasn't unclear if that was accidental or not accidental. So it's very odd the messaging right now. And it seems like there's, and there's like leaves coming out of the CIA that potentially, you know, we weren't prepared for, you know, the, the arrow on salt were worried about, you know, running out of these interceptor missiles

18:09in the region. And, and so that the, just reading the tea leaves, it seems like there's a shift and, you know, how we're thinking about the length and how expansive this will be. Yeah. Yeah, I mean, I mean, I'm not sure we've ever spoke about this actually worked for the US military for five years as a, but I wasn't, I didn't do like combined weapons like combat or that type of, that type of analysis. So I'm not an expert in like taking down air defenses and that type of stuff either. But one thing I do know from like, like helping our warfighters in Afghanistan and Iraq and other places is once the bullets start firing, anything goes. And when a, when a regime like Iran feels that there seems quite accurately under it, basing existential threat, they're going to empty the chamber one one way or another. And it's hard to me, even when you have the best laid plans and very clear objectives, it's hard, obviously very hard to, to achieve them, let alone sometimes when there's this type of confusion. But let's kind of turn things back

19:12to the markets. A couple of things I want to discuss before we get into a few other issues that, a few other topics not related to Iran. For one, it seemed, I mean, I don't know if basically the data earlier out from Garibit, et cetera, suggest that we're mispricing the market. And you also mentioned to how if the rest of the market tanks, even if Bitcoin is structurally better set up than other assets, it's still going to go down as well. But I mean, I guess maybe do you think that the market is mispricing some of the risk when it comes to Iran because of how messy it could become? And then again, in a very not financial advice way, traders, people listening here might wonder how they can better protect their downside. What, what do you think are the one or two ways that they could do it if they so chose? Yeah, I think, I think markets probably pretty correctly, pricing in risk, to be honest, you know, the equity of markets only being down a little over a point, you know, I think makes sense. Right? Bitcoin is actually up 2% over the weekend, right? And so

20:12it's been kind of sideways. You know, obviously, there's, you know, I'm on an expert and a lot of what's happening on the on the option side right now, but you know, it seems very clear that people are trying to protect, you know, dear, like in near-term downside or long-term structurally, you know, bullish. That all makes sense to me, right? Because, you know, this, this is happening in real time. I think when you put that in kind of context of everything that that is happening on the on the rate side, on the, you know, the AI, you know, concern side, I mean, obviously, you know, we talked about the citrini article, but, you know, one of the things that happened, maybe was Friday, is that block came out and said they were going to cut 40% of their workforce, right? That is the largest correction or largest layoff. And I think SAP history for a company of that size, a public company, right? And like that, you know, it's not clear for sure that that will happen, you know, across all of these other, you know, all of these other companies, but it is, you know,

21:13sort of a canary in coal mine of maybe there will be actually a lot of layoffs, right? And what does that mean for the economy and the market if it does, right? And that's a longer term risk, but it's, you know, that sign, people are trying to now price that in, right? And so I think there's just so many things happening and so many variables that's impossible to, you know, really isolate or iron risk versus, you know, risk of everything else, right? And so it seems pretty correct to me at the moment. And I think like cautious with the rate, you know, in the near term, with the right outlook over the long term, makes sense. I think there's also, we've been on the crypto side, we've been trying to price in the likelihood of a market structure bill. And if you look at polymarket today, I think it's, you know, 52% ish, right? The people I talked to on the hill, if they're not in crypto, but they, you know, happen to be close to it or more bearish than that, you know, call it like, you know, 35, 40%. If you talk to, you know, a lot of the lobbyists in crypto,

22:18they're more bullish than that. But of course, like, you know, that makes sense, right? And so there's just so many variables happening right now that I think it's really hard to make sense of the market and it's moving so quickly, right? Yeah, absolutely. A couple more market questions that we're going to get to clarity and a few other topics. For one, I, I feel like Bitcoin for the most part, most of the time has been unfairly punished when bad things happen over the weekends because it's typically the only asset that is trading. But we are now moving into a world where there's tokenized stocks, other tokenized assets that do trades 24, 7, gold, etc. I know especially for, for stocks, it's very, very early days for them. But I'm curious if you've seen anything, if you saw anything interesting over the weekend with how any of those assets are traded or, if not, like, maybe just prognosticate a little bit on how, like, once those markets become bigger and we're liquid, that could sort of, like, impact the way that assets trade over the weekend

23:24when incentives like this occur. Yeah, I mean, that is very interesting topic too. Because if you look at what happened on the hyperliquid over the weekend, right, there's a significant amount of trading volume. What's that? Oh, it's rocket. I mean, I think hype is at home. I was going to ask you about hype. I think it's up like 12% since the, since the, the tax began. So maybe, maybe, yeah, I traded channels about this one end, but it was up, like, yeah, it was up to 12% of the weekend. Yeah, it might be the state table asset and crypto these days. Yeah, well, and because it's clear, and what has happened, right, is these, these hip three markets, which is, you know, trade xyz, is where they're doing a lot of the tokenized commodity perps and the tokenized stock perps and etc. They, we've seen significant, significant uptick in volume on the commodity side and on the, on, you know, some of the rates and like, like, side as well. The stock volume hasn't been quite as high. It's been much more around commodities. I think at one point, silver did itself,

24:29like in a 24 hour period, like a third of all hyper liquid volume, right? And so oil this weekend was like, absolutely the most, the most how they traded asset. But these, these markets still do have like some structural issues in terms of allowing people to take risk over the weekend because how are the market makers going to hedge out that risk? Like, you know, there's still, you have these, kind of buffers put in on trade xyz where, you know, they don't want to allow these things to trade more than 10% over the weekend. One way or another, because of the fact that, you know, if you, especially if it's equities, if you, if you like, limit open and things move really quickly, you could just, you could have like mass liplinations, right? Even just on the, like, that whole there. And so there's, there's a lot of structural issues on it as well. But the derivatives in the perps side, the perps side for the, for the commodities have been much easier for people to market make because of the fact that these are markets that you can more easily, you know,

25:31whirl with the sun and that they are open for much longer periods of time than equities. Equities is a harder problem to solve. And so I think we're going to continue to see that grow. Hyperliquids doing awesome. But I, I think there's the long-term outlook continues to be better for assets that have are more highly correlated across schoolable markets versus our, you know, call it individual assets and the US market or, you know, call it a European market, etc. I also tend to be, I think, relatively bearish on the current state of spot equity on markets, right? And on, on Shane right now, the way spot works today, for most of the products. So, you know, like a crack and bought a thing called I start, I start, yeah, sorry. And, and there was, you know, there's Ando and there's a few others. And there's the way they work right now mostly is that it's some sort of, you know, SPV that,

26:33you know, somebody had a market maker has to go and like put it in order to that SPV and then SPV it goes through a US broker dealer and that US broker dealer then buys the thing. And, you know, during like off periods, you can't necessarily redeem and so there's these dislocations that happen. And it's very clunky and it's really hard to like scale that product. And so I'm much more bullish on the on the derivative side. And I think we've seen that happen today. I think there's a future where, you know, call it natively issued stock on Shane where it's its own primary market. Then I think my has a much better chance of growing than the current state of what has happened on these kind of like, you know, SPV wrappers that exist on Shane. Okay, no, good explanation. It sounds like we could probably have a series of podcasts on our topic then. So one more question and then we'll move on to a few other topics. But I'm just curious. Is there one or two charts, markets that you're really going to be paying attention to over the next excuse me, a couple of days to get a sense of what's happening. It could be crypto, commodities,

27:38equities, anything. Yeah, so I'm not a huge chart guy. And so I, because of the way we invest. But listen, I think what's happening to your boiler rather than even just like an indicator, just your or like a piece of news that you're. Yeah, well, so I think the most important thing for the markets right now is what is the likelihood of this thing lasting a long period of time or if it of it to be deescalated pretty quickly. And so, you know, you saw President Trump come out. I think it was yesterday morning and say that a the Iranian new regime wants to talk and potentially there's, you know, possibility for, you know, some sort of deescalation. That was refud, it rebuted right like right away, right? And so I, I want to see if there's any change in that conversation or what comes out in the media around them. I think you'll see the yield curve react pretty quickly. That'll probably be one of the first things that will react pretty quickly to that and then oil prices, right? And so I think those tell you a lot about what the likelihood is

28:41of the, you know, the sustained conflict that affects a bunch of other parts of the economy, right? So, you know, if oil starts rocking up to, you know, people start to think that there's what there's going to be, you know, huge supply chain issues and oil starts getting close to $100, which people are talking about, right? That implies to you that there's going to be massive amounts of issues and, you know, and broader economic situation, which should theoretically also be bad for, you know, any risk I said and click crypto. And so that's what I'm most focused on right now is what is the, how does the conversation evolve on deescalation? And if you start to hear President Trump and the Israeli media talk about, you know, sustained conflict, you know, further, you know, call it US member deaths. Unfortunately, we had a few over the weekend, you know, things around, you know, continue to increase the amount of bombing, etc. I think that is all an indication that we expect this to be a sustained conflict that will have broader macroeconomic effects and will have broader effects on the cooking market itself. Great. All right.

29:45So we're going to switch gears here, but before we do so, we're going to take another quick break to hear from some of our show sponsors. Quick note before we continue with today's episode, bits and bips now has its own dedicated home. We're spinning off from unchained and launching a standalone podcast and YouTube channel focused on the Fed, macro, AI, and how it all collides with crypto. If you want to keep up with our weekly live streams and macro meets crypto breakdowns, make sure you're following bits and bips directly. We won't start publishing until March, but getting set up now means you'll be ready on day one. You can find the new bits and bips channels at unchainedcrypto.com slash bits and bips. You can also find us by searching bits and bips on YouTube, Apple podcasts, Spotify, or wherever you listen. All right. So I said we were actually going to move off of Iran, but one quick tangent before we do so. I am, I wanted to just briefly talk about Dubai. It's one part of the world that has really sort of tried to promote itself as a crypto hub. It has a, it hosts a major crypto conference that I believe

30:48is coming up soon. And of April, yeah. Yeah. And I mean, on top of that, I mean, it has a crypto forward regulator. It put out one of the first regulatory regimes on crypto and has really become a base for a lot of big crypto companies and, and players. Just the way the war is right now. I mean, there was even, it may have been, I don't know if it was inadvertent or not where it landed, but a major hotel was hit over the weekend. And if, if like, Dubai, the UIE is a part of the world that is, is not immune to retaliation from, from Iran, I'm just curious like what you think that might mean for its feature as a crypto hub, at least in the short term. And, and, and yeah, I mean, what the impact on crypto could be. I know there's also a lot of investors in Dubai that companies are trying to court. Yeah. I do also think this is sort of a wait and see conversation, right? Which is, it seems like the, what I hit the fair amount on the palm was like debris.

31:50So there was a, like a missile that was launched that was not shot down. Some debris ended up hitting the fair amount. Terrible, right? And I think like, you know, it's, it's quite sad that, that it happened. I also expect that we will learn a little bit more about like what the actual, or the reason that the, the Iranians have been, they seem to have been shooting purposely at some other hotels. Now, what came out of like Iranian state media over the weekend was that the US government hadn't moved like assets and people into hotels and it'll out from out from some of the bases. And so these were, you know, military operations. That's Iranian state media, which is always going to end up. I feel like, I mean, I'm not an expert on international law, but if that's true, I feel like that's a war crime. If, if you hide things in civilian areas. So, so, yeah, but then I think there was a, something that came out of the State Department today that said there were some people in like Bahrain in a, in a, in a hotel, but it's unclear whether that happened. And so it's like, it's all very, the problem right now is, and this is a tangent. X is a great

32:54place to get information, you know, and then the, the general media is, and it moves much quicker than, you know, call it listening to New York Times or washpow or like whoever the person is that you you think about. But there's also so much propaganda and so much fake stuff that's like very, very hard to know exactly what's true. It's not. And so the best thing you can do is ingest as much information as possible and then try to figure out what's, what's, yeah. Or we'll, we'll see there, the, you know, there's a lot of smoke that needs to clear. I think I'm going to do buying specifically, though, listen, they've, it's been a place where we've seen a lot of focus on tokenization, we've seen a lot of focus on, you know, building the startup ecosystem there, Abu Dhabi as well, right? Like the Emirates has been, you know, very forward thinking we're seeing a lot of new people move to, you know, ADGM regulated entities as well. And, you know, I think if it ends here, that probably doesn't stop some of this, you know, momentum. But if this goes on for a while, and we continue to see destruction and, you know, the surrounding regions, yeah, it absolutely

33:57is going to be tough because you're not going to have the expect community be as robust. People are just not going to necessarily want to move there. And so it's, it's, it's wait and see. Now, on like token 2049 in Dubai, you know, I actually had a lot of our portfolio companies who were reaching out and I'm supposed to go and speak there in, you know, eight weeks or so. And that are, are, you know, kind of, you know, party line has been, let's wait and see what happens. But it's certainly, if there's still going on four weeks from now, the, the likelihood that, that conflict is going or that the conference is going to happen in Dubai is very, very small. Yeah. It's going to be a huge hit to, you know, the, so the kind of the ecosystem there, at least in the near term. Yeah. Okay. All right. So let's switch gears, finally. And I want to talk about clarity. There was supposed to be, I think the White House put a deadline, unofficial deadline of, I believe last weekend, to come up with some sort of compromise between

34:58the banks and crypto in particular to yield on unstable coins. Clearly that that has passed. I don't necessarily think of it as just because of what happened with Iran. It seems like this is a bit of an intractable conflict, but you're tracking it closer than I am. So what are you hearing? Yeah. So I talked about it a little bit before and I was wrong earlier. We, we did trade back up over the weekend from low 50s to, it's, uh, polymarkers now it's 70% like clarity gets packed. So I, I hadn't, I hadn't checked it in two days. It really depends on who you ask right now. So they're, you know, kind of for context, the, and I'm sure a lot of your listeners know this, but, you know, there was this clarity actually passed by the House last, last summer. Their Senate add a market up. There was a Senate banking committee markup that came, uh, came out, you know, I guess it was about a month or so ago that had this, you know, call it new

35:59language around yield, right? For there's a few other things in it that the industry is very against around some of the conversation around, you know, tokenized assets and how exactly we think about them. Also things like developer protections and making sure that developers can't be treated as criminals if their software is needed for nefarious activities. And so there's a few things that people are really focused on, but that yield language was kind of this new thing that got certain people, especially Coinbase, kind of really up in arms, right? That, um, you know, and then, you know, uh, bright arms run tweeted about the, the, uh, you know, that, that markup and not being, you know, very happy with it, not being able to support it and that through the negotiations into a little bit of, uh, what I would say kind of overdrive because they, what everyone thought were kind of like locked in arm, moving hand in hand, they're that started to, you know, I think create some division, uh, in, uh, within, within Congress. Um, you then got an ad committee markup that was much cleaner and much more like clarity or like what the, you know, the industry,

37:03I hope to see, but you have to reconcile those two and you have to get it to, to the floor. For me, I'm sorry, I might be wrong. What's one of the markups cancelled or did they both end up happening? So what happened is the ad committee market was supposed to come out on a Thursday, like a couple days after the banking committee, uh, when, uh, bright arms run came and tweeted and said he couldn't, he couldn't, uh, support the banking committee markup, it pushed it, uh, and it, and it pushed about two weeks, but then it did eventually come in dinner. Okay. So, yeah, it just got pushed up all weeks. Right. Thank you. And so, so that markups out now as well. But the banking committee, uh, and because the banking lobby is so interested in, they're the ones that are, are driving a lot of this conversation around yield. So now there's been a couple of round table sessions, uh, at the White House, uh, on, you know, trying to reconcile this language with the industry and with really the banking lobby, it's the banks doing this. And over the weekend, there was, uh, some news or some, because some conjecture came out that essentially said that, you know, Coinbase, the industry and the White House representatives and the, uh, the government

38:07representatives think that we're at a good, you know, kind of middle ground. We're at a, we're at a really good resolution point, but the banks are still being, you know, kind of hardwined, right? And so we need to get the bank, banking lobby and the banks themselves to say, okay, this resolution works for us. And the main thing in my mind and, and, you know, this is a little bit different than on US is it's certainly important that we be able to, um, still be able to do revenue share and a lot of people to fund things like reward programs and loyalty program through revenue from the stable coins, right? That is really, really, really important. The question and, uh, that the banking lobby has is they don't want there to be you, the, uh, the issue is to be able to send you directly programmatically to call it end consumers. Uh, but the, we know, where we fall in the middle of those two kind of extremes right now is the, what we are negotiating. And the banking lobby has said, okay, well, like listen, we actually don't really care if clarity

39:07happens. And if we don't really care if clarity happens, we're going to do the most hardline stanch, which is try to, uh, entrench ourselves in our regulatory mode and say that no revenue, whatsoever from stable coins should be allowed to ever pass on to a consumer. And that's also what the OCC initial rule said, uh, last week when the OCC put out their first guidance based on, you know, genus act. And so if we, if there can be enough political pressure from the administration and, you know, call it the, you know, broader government apparatus to get the banks to get to somewhere in the middle ground here, I think the industry is there. And if that happens, the rest of everything that's still open, there's like five open items or so, all of that is solvable. Uh, uh, this is the, this is the main, main issue. Yeah. I mean, I do wonder, I mean, the, the, the, everything you said just makes perfect sense. But I do wonder that what is that common round that you can find a solution to, even if it's not making everyone happy, find something everyone can live with because I mean, banks pay virtually nothing to depositors, yield to get passed on to stable coin holders is running half percent something. I mean, I mean,

40:11I mean, that would just eviscerate, um, bank nims. And, and that's like economically unsustainable for them. So this, like, you could argue that this is sort of existential to the entire banking model. I mean, I, I'm, I'm curious like what the type of situate, what they could live with regardless of how much pressure gets strong armed by, by Washington. And, and obviously, this is something that we all want. Uh, I mean, frankly, there's a good chance. It is the, the, and maybe the only, uh, the biggest, maybe the only catalyst that will be bullish for crypto this year. Um, but it's just hard to figure out, like, like, everyone's trying to figure out, like, what that, what that might look like. And I am, so if any of the thoughts on that, and we please share about two, um, you said the odds ticked up from 50 to 70% on polymarket. I mean, I know sometimes markets can be manipulated may not be the right word, but they can move based on certain traders putting on, on positions. I'm, uh, I'm going to just ask you to speculate wildly here and wonder if you have any idea, um, what was behind that? That it, like, it was it, uh, is it a series of

41:15positions? There's a one major position that moved the market. Uh, I'd love to kind of just give him what happened. It would, it would seem that the, uh, luckily, he would go down, giving that the deadline was missed and we're at war now, but it ticked up. Yeah, I think on the pulling market side, it looks like there was quite a lot of trading. Okay. Around 730 this morning that took it up from, you know, call it low 60s to 70, uh, and then, you know, over the weekend, it went from 50s to the 60s. Uh, over the weekend, that was a little bit of what I talked about, which is I think David Sacks and a few others tweeted that like, Hey, we, we have an agreement. Or we have a place that we think is acceptable for all parties. We just need the banking lobby to kind of walk through the door and to say, okay, right? That's what we just need though. Yeah. So, but I think that got people excited, which is that like, like, David Sacks is out tweeting about it right now and, um, and a few others, the, the, you know, to your original question, okay, well, what gets people, or what, what can the big, uh, the big lobby's live with?

42:16I think, I, I think they should be able to live with that whether or not they can, anyone not close to, you know, Brian one in and Jamie Dimon, but, but I think they should be able to live with is an agreement that the issuers can't programmatically directly send yield to an end holder, right? Because their perspective is that if you want to do that, then you are a money market fund, you are a security and you are operating like a bank issue, you should be a fully regulated bank to be able to do that, not just a charter bank, and you should be able, and you should be, these things should be directly to have securities, right? So, uh, okay, well, so if we take that off the table, that's fine, but in my mind, that's not fine for everybody, but in my mind, that's fine, but they should be able to live with an idea that, okay, well, companies make revenue from this, companies should be able to do revenue share agreements with this, the way like circle and Coinbase has today, and Coinbase should be able to do with their revenue, whatever they want, in terms of loyalty and rewards and cash back, and anything else to their own customer. Like, that feels to me like a very logical solution that everybody should be able to live with, because that already happens in a lot of ways, right? And so, there's, if we get in the situation

43:22where we literally try to carve out the revenue from a stablecoin issuer and say that can't be used for loyalty or reward program, surprising back cash back to, and then consumer, that's regressive, that's not just like, it's not just like, oh, we're producing this out of scroll, it's actually hurting current fintech, and that's crazy to me, and anyway, what I accept that is, like nobody should, and the OCC putting out that guidance last week as well, like that, I think put a lot of people on alert as well, because there's, okay, well, what happens in clarity is one point, but even if, let's say this, we get to an agreement in clarity, but then the OCC says, hey, well, in our rulemaking ability relative to genius, we are putting this in there, that it doesn't matter, it's a moot question, right? And so, we have to now fight the fight on both, you know, kind of both sides, both on the rulemaking side with the OCC and also on the on the legislation slide here at clarity. Yeah, it's really tough, I mean, I try to have sympathy for both sides, you know, I've been in crypto for over decade, I also used to work in city bank, and I mean, the banks, I mean, their deposits aren't sure, they pay into that insurance,

44:26they have like orders of magnitude more regulatory overhead than crypto exchanges, and it's a whole, it's a whole mess, but I mean, I think you distilled it pretty nicely, like at some point, bank should, or anyone should be able to pay share rewards with customers, if they want to, I mean, that's the competitive environment. So, so I don't know, we'll see. I have one more topic I want to discuss, but before I do, is there anything else related to clarity or DC that you wanted to mention before we move on? No, I mean, I think that's where we are today. The, you know, you asked me before, like, what am I hearing? You know, that's 70% for clarity on polling market is much higher than I would say I'm hearing from people on the ground that are, you know, maybe, you know, less economically, you know, directly aligned that are saying, hey, realistically, I think it's, you know, maybe a coin flip or maybe slightly less than that. And so, that said, like listen, I think we're all, you know, in the industry, we all want to get a deal done,

45:28but it has to preserve certain things that has to preserve developing protections, it has to get somewhere that makes sense for, for a yield, it has to make sure that these organization wrappers do not, you know, get treated so differently that they're, you know, you can't actually use them as, like, you know, performing collateral, things like that. And so, if all that gets, gets solved, I think, you know, there's a, the last open point is going to be that the Democrats want a some sort of like ethics language in there as well. I am told that that'll get solved. And the White House understands that and the administration sees a path forward there and that that won't kill the deal if we get the other stuff solved. And so, that's good sign. But I think it has to happen by Memorial Day. I think if you don't get a vote for it by Memorial Day, I think we're, we're really just fine. I actually like to just, I don't know if press is the right word, but just maybe explore a little more the ethics thing because that is a big,

46:29that is a very big issue that that's central to the Democrats. And I know Patrick would, I guess the, I figured is that title, but he's basically the White House's point man under David Saxford for all things, scripted out. He gave a comment, I think, in going to ask that an ethics pledge was sort of off the table. But it sounds like there is a little bit of wiggle room. So can you expand on that at all? Yeah, I, my, this is me reading from the lines. I don't know anything, you know, personally, this is all told when I'm I'm being told by people on the ground. And so, so Patrick Wait is the, the, I think the deputy chief of staff at the OPM, the, the office personnel management, but yeah, to your point, he's working is kind of let the lead man on all of this, all his conversation. He's leading all the negotiations between the, is laying all the negotiations for the administration and the White House when it comes to in trying to find a path to yield and clarity act. And the, the thing that we have on our side here is that getting this past is a core part. It's a very important to the administration. It's

47:32very important to the White House. And, and typically when something is very important to the White House, they, something happens because like the, you know, the Republican senators who want the support of the White House, they want to do what, you know, their leadership wants them to do, which, which is the president is, right? That helps them in the future and in the party apparatus, etc. And so the fact that it's very important to the White House is a good sign, right? And, what I have been told is that, you know, this, hey, listen, we're not absolutely not going to do any ethics language whatsoever is sort of an opening posture, but is not actually where they're at. There's, there's some place to, you know, get something that, you know, Elizabeth Warren probably won't be happy with, but some Democrats will be happy enough with, right? And get, and, and that the, the White House can live with as well. But we'll see. I mean, we haven't gotten any image of that point. Yeah, we're, that is not going to even be talked about until we get the other stuff solved

48:35first. Understood. Okay. All right. Great. Well, thanks for that. Just last, last bit here. I'm, I'm curious, congrats. I mean, your firm raised, I believe it's your fourth fund, fourth fund, yeah. And five hundred and sixty million dollars, which is, which is pretty sizable. 650. That's what a 650. So even more sizable. So congratulations on that. As you, I mean, as you very well know, I mean, back when I was at Forbes, especially in, earlier part of this decade, it seemed like every week we were getting an announcement about some VC fund raising billions or accelerator fund from one of the foundations behind a blockchain, like nine, 10 figure things that hasn't happened quite so much. But, and VC funding has sort of, I think migrated from a lot of smaller projects, did like some, doubling down on some of the bigger plays that I've already proved was successful. But I'd love for you to just spend a minute or two and sort of explain the rationale for, I mean, aside from just your VC fund, so you want to keep raising funds. Like, why now the right, it was over time, why 650 million? And like, what are some of the areas that you're really targeting with

49:41this new fund? Yeah, absolutely. On the why now, I think we've been pretty good at raising in times of where the market is at a place where you want to put money to work, right? And so, I wouldn't say necessarily in bear markets, but the way VC should work, and it's very, that it doesn't work this way, is that you should deploy a bunch of capital when markets are bad, and you should probably not deploy as much capital when markets are good, because prices are higher, right? But, you know, what happens is, let's look at the anti-micro-seller model. Yeah, exactly. When happens, it's sort of the opposite a lot, because, you know, there's, you know, more entrepreneurs enter the space, you know, when, when prices are up, there's excitement, you know, LPs want to put more capital to work when, you know, prices are up, there's just like more excitement, right? So, when there's fear, people don't necessarily want to give you money. So, the key is, is to raise the money from the LPs when prices are up, and then deploy it, when prices are down, and we try to do that. And so, you know, the way venture fund raises work,

50:46and so everybody knows is, you know, we announced yesterday, or sorry, last month, but the, it takes some period of time, and you have to have, you know, you have first clothes, and you do a couple of clothes after that. So, just about, you know, call it, you know, close to a year, which is very typical, right? And so, in 2021 to your point, in 22, people were closing funds in like three, four, five months. That never happened in the history of venture, and it has not happened since. And so, you know, we were able to raise during this time when there was a lot of excitement about what a new administration would bring, what genius act would do for the, for the space, and then, and things like polymarket, which were large investors, and you got their investment from ICE. And now, it strikes us that the time is now for us to go and actually give a lot of capital to startups who are, you know, really excited about building during this period where there's not as much distraction and film, etc. So, we think it's a perfect time to go, to go shopping and go invest right now. To your point around, and actually, before I even pivot to that, I talked about

51:50this earlier, but there's so many structural tailwinds behind our space ring now. It comes, stable, coordinated auction, when it comes to tokenization, when it comes to real-world businesses building on top of blockchain rails, when it comes to the, you know, product market fit we're seeing with some of the DeFi with things like hyper-liquid and a lot of these vault products. It is, in my mind, one of the best times to be building in our space, especially around any sort of financial product. And there was a tendency, some, you know, call it innovation, or at least some experimentation around crypto AI, and we'll see what happens there, right? And so it's a, I think it's a perfect time to be building in our space, especially, and I think really the only other two spaces that are as exciting would be, you know, call it AI, maybe AI robotics, and biotech. And I think that's it. I think that those are the only areas that, like, want to be on the edge of, in frontier tech right now. So I think it's an awesome time to put in mind to work when we're building. And I think on top of that, you know, you asked why 650 million dollars? Well, you know, we, our last one was also 650. We had done the same exact

52:55thing that we did last time, which is we went out of the 500 million dollar target, and then we put on what we talked about with our LPs, hardcap, because the LPs don't want you to get it too big. And so we said, okay, well, hardcap it at 650, 500 million dollar target, we filled it all the way to our hardcap. And why did we do that? We did that because the LPs were obviously very bullish on wanting to back us, and we were lucky enough to have, you know, really convicted investors. But but also the reason we're not allowing ourselves to go bigger than that is our perspective is that this space is still not so big that you can, you know, invest, you know, call it a billion, one and a half, two billion dollars, and, you know, protect returns, right? And so there comes a, I got it to say, there's still a lot of people, which there comes a time in every asset manager's life, or where you become or every venture capitalist life, where you become either an asset manager, and you solve for the 2% management fees, or you stay a venture capitalist, and you focus on the 20% carried interest, because you get really good returns, right? So you've seen this play out and call it traditional venture too, where in Drees and Horowitz goes and they raise 15 billion dollars,

53:59right, or some more than that. And, you know, I think you look at the returns of their funds, and I can almost certainly tell you that across every vertical that they're in, they're not the best returning fund, right? But they have this big media organization, they do a lot of portfolio support, they have a, you know, they have kind of all of these assets on management, and I was going to do so many different things, right? And then you look at like a benchmark, which has continued to raise, you know, call it, you know, 400 or 500 million dollars for years, like 18 funds now, and you look at their returns, and their returns are consistently better than, you know, the there's just not enough places to put all that money that the correct, yeah. And so then, so each, we, so we try to thread that needle of being big enough to do, we do, all right, we have great portfolio support team, we have a, you know, large talent team that does all of this hiring, where we've got, you know, teams in Washington that are, you know, working with our, you know, our portfolio companies and, you know, trying to help them navigate and happening on D, in D.C. And so we try to be big enough to have enough management fees to support all of that, right?

55:00While also protecting the returns, and not necessarily, I mean, I think, you know, there's been, you know, a lot of conversation, there's been some, some articles around, you know, other firms raising a bit more money again, right into the billions of dollars. And, you know, I think you probably do have to expand your aperture a little bit if you're going to put one in half to two and a billion dollars to work today. And we still believe that there was enough opportunity in our space that we should be heavily focused on the thing that we know we do well, which is stablecoins, crypto, you know, the, the, you know, the kind of the intersection of the two, the financialization of new market rails, right? And kind of the digitization of other rails coming into tokenized assets and being on blockchains. And so that's what we're really excited about. Yeah. I guess raising aperture is sort of a euphemism for lowering standards. Is that I guess either that or you will get, you know, call it other verticals. Or just going completely different verticals that have nothing. Okay. All right. Well, I think this is a good place to end it. Rob, is there anything that we didn't discuss that you wanted to share?

56:06No, I, you know, I think you heard it from me throughout the podcast and in this interview, but I am very bullish from where we're going over time. But short term, you know, there's a lot of things that we don't know, right? And so I continue to be, you know, call it cautiously optimistic and very optimistic over the long term. All right. Great. Well, thanks so much for for joining. Well, obviously, I have to have you back another time. Thank you to everybody for watching and listening. Next day. Stitch fix. Shopping is hard. Let's talk about it. I don't have time to shop. So I buy all my clothes where I buy my seafood. I just want someone to tell me what shirt goes with what pants. I just want jeans to fit. Stitch fix makes shopping easy. Just show your size, style and budget, and your style is since personalized looks right to your door. No subscription required plus free shipping and returns. Man, that was easy. That was good. Stitch fix. Online personal styling for everyone. Take your style quiz today at stitchfix.com.