Ep 28 - November 27, 2024 - Bye Gary
Welcome to another episode of the weekly crypto check-in recorded on November 27, 2024. I'm your host, Robert Swartout, and I'm joined by my cohost, Andres Sandate. Good morning, Andres.
Andres Sandate:Hey, Robert. Happy early Thanksgiving. Hope you're good. I know it's been 2 weeks. How you been?
Robert Swarthout:Been pretty good. I you know, this is a little bit different for us. We normally record in the afternoons. We're doing this one at, midmorning. So, hopefully, we're awake and, we, you know, say things correctly.
Andres Sandate:I've loaded up on caffeine because we've got so much to cover. It's been 2 weeks and, the, yeah, the kids are out of school. So I, I've gotta get a lot done in the mornings because by about 3 or 4 o'clock, they're, bouncing off the walls, and this house is combustible. So let's hop in.
Robert Swarthout:Sounds good. Well, much like we always seem to be talking about Bitcoin, we're gonna get this one out of the way because there's a lot of other stuff that is not Bitcoin centric. So, Right. All of crypto has done really well since the election. We'll just say that upfront.
Robert Swarthout:Bitcoin is up 30%. Yeah. And, obviously, from a very big number to begin with, it sits at, you know, 90 just shy of 95,000 this morning. This is the day before Thanksgiving. And it's, it's been you know, many other cryptos are much up a lot more than 30%, but this one obviously catches the news because it's the biggest.
Robert Swarthout:So it is on And
Andres Sandate:I put yeah. Yeah. We put that headline in, you know, and I put pulled back to 92 because it was roaring, you know, there for
Robert Swarthout:for months. And 99,500. It was it was Right. Yeah.
Andres Sandate:Right. And then it seems like at 92, it kind of you know, maybe there was some technical factors as you talked about that Right. It it's it's sort of paused there for the last day or so. And then this morning, you, you know, look at what's going on and, you know, it's up 3% today, up approaching 95. So it'll be interesting over the next 4, 5 days with a lot of people.
Andres Sandate:I'm gonna say home. There's a lot of people still working, but, a lot of people paying attention to the markets. And, I think there's a lot of folks that are gonna be watching a lot of TV and looking at a lot of Internet. So I'm I'm thinking over the next 4 or 5 days, we're gonna see some, really interesting price action.
Robert Swarthout:Yeah. It it, you know, it'll be fascinating, because, you know, this time last year, it was crypto was up for 23, but it wasn't what it has done this year. Yeah. And so it'll be much more of a conversation piece, potentially.
Andres Sandate:Yep.
Robert Swarthout:And just to kind of, like, frame where crypto's at, it's it's in a $3,400,000,000,000 market cap. It is up considerably this year, and it's,
Andres Sandate:I think it's all over the world. Up, I pulled some I pulled some of the the the indexes, and performance. So year to date, Bitcoin's up a 114%. Yeah. That's over $50,000 per per coin.
Andres Sandate:And then just in the past month, it's up 41%, which is about $27 and a half $1,000. So yeah. Just I mean, I remember earlier this year when we were doing the show and we were at we were in the twenties. Right? And it it as we talk about, it's it's always a challenge when you're going a little bit against the herd, right, as a as an investor and you see all these other things that are going well.
Andres Sandate:And nobody wanted to really talk about crypto and Bitcoin, and there was uncertainty around the election and regulation and all sorts of other things we'll talk about here today. But not that we're in the clear by any stretch, and we're certainly not offering advice. It's just, it's it's definitely a new day. Yep.
Robert Swarthout:Yeah. It's, you know, I would say crypto for the people that are paying attention, there has been a lot going on. The price has been up, all that stuff. There's been a lot of people outside of crypto that just haven't paid attention, which is fine. We haven't got to the euphoric stage where everybody that you see in public is talking about crypto and how to buy the, you know, Doge or whatever the meme token is at the time.
Robert Swarthout:So
Andres Sandate:Right. We're not
Robert Swarthout:there yet. And I, I didn't put in our notes, but I had been thinking about I think from now and for a good while, each time we do a podcast, I'm gonna basically, mention what ranking the Coinbase app is in the app store. You kinda watch that over, through a bull market. And when it gets to number 1, that might be a signal that it might be time to get some, liquidity.
Andres Sandate:Well, we have some we have some we have some other signals, I think, we've talked about, which are coming later in the interview. And then the other one that I always pay attention to is is Super Bowl ads. Right? So if you remember the last time we saw a lot of crypto advertising, when there's a 110,000,000 people watching one event on TV, it was, you know, the last crypto bull market. So, you know, we're sick we're 7, 10 weeks away probably from the playoffs starting, and the Super Bowl's obviously not till February.
Andres Sandate:But it'll be you know, a lot of those ad conversations are happening right now. So
Robert Swarthout:100%. Yeah. Yeah. So we can say this. Coinbase is number 6 in the App Store for Apple in the free finance apps.
Robert Swarthout:So we'll watch that one over time. That will certainly move up the list, as, things get more euphoric. Yeah. So the other piece about Bitcoin, just generally is the ETFs. We've talked a lot about these.
Robert Swarthout:Mhmm. The BlackRock iBit iBit ETF in particular is is far and away the leader. It passed, 40,000,000,000 in AUM. The the ETF group as a basket has passed a 100,000,000 or not excuse me, 100,000,000.
Andres Sandate:100,000,000,000. Yeah.
Robert Swarthout:So that's, well beyond anything anyone had ever, thought would happen this year. I think Oh, yeah. The initial estimates were maybe 30 to 50,000,000,000 and it is trounced that. So
Andres Sandate:And one of the bigger names that we, we saw when polling
Robert Swarthout:Hey, Andres. I think your mic just died. I'm I'm gonna repeat what he said. I think his mic just died, and he's talking. So, basically, a big name, Paul Tudor Jones, became the top ten holder of Ibit.
Robert Swarthout:And, Andre, see if you can hear me. I think your mic died. So I'm gonna keep moving on while he works on his mic here. So we move on to the next topic, MicroStrategy, which is kinda still bleeding into the Bitcoin stuff, certainly. They have really started deploying their their major purchases of Bitcoin.
Robert Swarthout:There's a capital program of 42,000,000,000. Just over the, basically, the week of November 18th to 24th, they bought 55,500 Bitcoin for 5,400,000,000. This brings their total Bitcoin holdings up to 386,000 and change, worth approximately 37,000,000,000. So they're almost doubled in value from what their basis is, but it's pretty crazy to kinda see the the tear that they're buying at. MicroStrategy alone is buying for Bitcoin on a daily basis than it's minted.
Robert Swarthout:So all the other demand is basically creating, it's, you know, I guess, buyers in the market. So, so I'm gonna move on. The next one, the c b CBOE has launched Bitcoin spot options trading. That happened roughly about a week ago, and the first day was incredible, the amount of volume. It was something along the lines of, just, like, 1,500,000,000, notional value.
Robert Swarthout:So it was a tremendous amount of, options trading. It has since, paired off a little bit, but at the end of the day, it's, just another tool for the institutional investors to use when they're deciding to trade the ETFs and or just Bitcoin in general.
Andres Sandate:Yeah. The development of these, yeah, the development of these markets, as you start getting, options and derivatives and the ability for traders to express views on asset classes, long and short, hedging is gonna bring even more market participation. So this is a big development, and I know that one of the, you know, one of the things that at least folks that are pro crypto are paying attention to are, how the different regulators are gonna get, much more, hopefully, integrated and start to communicate so that these markets become even more liquid and more developed, and you see tighter spreads, and you see a lot more, level of comfort from from asset managers and banks and other bigger institutional players to get involved. Absolutely.
Robert Swarthout:You know, and I guess more of the traditional finance, world kinda creeping into crypto is kind of our next topic here with, Kenneth Fitzgerald acquiring a 5% stake in Tether. So Tether is the largest, stable coin. It's backed by dollars and dollar equivalents, short term treasuries, that kind of stuff. And, they took a, I believe it was a 5% stake, for roughly a $600,000,000 purchase there. Tether is an amazing business.
Robert Swarthout:They have a very small number of employees. I think it's, like, maybe 3 or 4 dozen employees, and they're throwing off 1,000,000,000 of dollars a year because just because pure interest where interest rates are these days. They're getting to reap their reward. And Tether, has a market cap, let me look real quick, of a 132,000,000,000. So there's lots of, and even a 4% interest rate, that's a lot of money.
Robert Swarthout:Yeah.
Andres Sandate:And this is, you know, Cantor Fitzgerald is a is a name that for folks that are, you know, retail investors, individual investors, the name may not jump out. Although if you're reading the news headlines, you've probably heard the name Howard Lutnick, in the news a lot. You know, he was, basically heavily involved in in, now president-elect Trump's, transition team, supporting a lot of efforts to fill the cabinet. He was a leading candidate, up until about a week ago for, the secretary of the treasury post. He's now gonna be running secretary of commerce, I believe.
Andres Sandate:And Kenneth Fitzgerald does a lot of work, from an institutional market making perspective. So if you think about ETFs, for example, and how ETF, issuances are are are created and made and the liquidity, that happens to support trading. Canterfish drilled, is is heavily involved in those, types of markets. They were also famous for having lost a lot of employees, you know, on 911. Their offices were on the 100th or 110th floor, you know, in terms of what was then the World Trade Center.
Andres Sandate:And, you know, a lot of people didn't think that the firm would survive. Not only have they survived, but now yeah. They they they've survived. Howard Lutnick ran the company then, and now, you know, now you fast forward, 20 plus years, and, they're in the thick of, you know, the, of the crypto space. So I you know, my my sense is that we're gonna see a lot more of these institutional, market makers, that are heavily involved in sort of what I call the the plumbing and the and the, the grease and the skids of of trading and market making Yeah.
Andres Sandate:Start to get involved if they're not already in in crypto and and blockchain technology. There's just too much money, you know, to be made.
Robert Swarthout:Yep. Absolutely. You know, the the part that surprised me was so Tether is based in the Caymans. You know, obviously, you can purchase a business anywhere in the world. But Circle being based in the US, actually, they have moved their headquarters to the world, the the new tower that's actually built in place of, the World Trade Center there.
Robert Swarthout:So Yeah. Kinda fascinating. I'm sure there was maybe potential discussions there, but obviously worked out for Tethr. Moving on, our our friends at the SEC are packing their bags, Andres.
Andres Sandate:We're gonna have some initiative changes.
Robert Swarthout:You know what? I tried to call Gary and ask him if he needed help. But he, he didn't have any other stuff. Yeah.
Andres Sandate:Yeah. So he's announced, he being, chairman Gary Gensler. He's still the chairman of the SEC. They are still working. They are still doing their job.
Andres Sandate:They are still announcing a lot of actions, but he announced, that he's gonna be stepping down.
Robert Swarthout:Is it January 20? January 20th for him. Yeah. Yep. And then, Jamie Lazard, I think is how you say that, is gonna step down on 17th, so a few days prior to that.
Andres Sandate:So Who's another commissioner on the 5 the 5 panel.
Robert Swarthout:So that's, both democrat appointed, commissioners in that case, Gensler and Lazard. That leaves 3 commissioners, 2 republican and 1 democrat. Obviously, Trump will fill those other 2, and obviously, in in in, I guess, in the midst of that point, a, a a head chair. But it'll be interesting to kinda see if anything gets done within that group, at least meaningful that bubbles up to news, because now the Republicans do have control. They didn't have control of it before.
Robert Swarthout:Both of the Republicans of Hurst and, that has left have both been very vocal about wanting a crypto, basically sandbox, that tokens could play in it for the 1st year to kinda grow their way out of what probably looks like a security. And, also, you have all these court cases. You know, there's 200 plus cases out there. We only talk about the probably top 2 or 3.
Andres Sandate:Yep.
Robert Swarthout:And, you you can see a a thought forming around in at least in the the cryptoverse about, potentially, if a new chair comes in or even before maybe that there's, all the crypto cases that are non fraud related, basically just regulation by enforcement. They either get dismissed or quickly put to bed, and then the ones that have fraud kinda get to move on, and, admittedly, it sounds like the majority of them are not fraud, the large majority of them. So maybe we'll get some cleanup. I think most of that will get cleaned up by next summer. I think it'll take a bit, but we should see progress pretty soon there.
Andres Sandate:Yeah. I mean, there's so much speculation right now about who are gonna be the, the the the chairs and, most importantly, the the chairman or chairwoman of the SEC who who, is put up for that position. Obviously, crypto is not the only asset class and not the only space where the SEC has priority. It's just been an area, when you piece everything together between, the cabinet positions and those that are, you know you know, have the ear of the president, I think the industry is looking for someone who can bring the CFTC and the SEC and these other regulatory bodies, not to mention, and and probably most importantly, is cap bill, into the room. And and, obviously, there's gonna be a lot more crypto influence now.
Andres Sandate:We just talked about Fitzgerald. You talk about BlackRock. You talk about what we're gonna we're gonna mention here Schwab later. Like, these big influential players, now that they see that there's not only market demand for crypto, thus the 40,000,000,000, but they see that there's potentially, like, a path forward for regulation. I think it's gonna be,
Robert Swarthout:a
Andres Sandate:very, very, busy 25, to to try to get legislation in place.
Robert Swarthout:Yeah. The, if I could make a vote for who my chairman or chairwoman would be, I would vote for Brian Brooks. He did an amazing job at the office of comptroller. He's very crypto forward. He was a legal counsel at Coinbase.
Robert Swarthout:Like, he gets crypto, and he's, like, for crypto.
Andres Sandate:Well, I think we have to step back and sort of look in history and say what like, nothing against Gary. We don't have an agenda, like, against him. We just wanted to see regulation. I think a lot of people, though, several years back were very excited when he was named.
Robert Swarthout:I was included, admittedly. Yes.
Andres Sandate:Right? So I think there's something to be learned there is, you know, I don't know, you know, I I don't know a lot about what Gensler was saying. I know that he was teaching at MIT and was, you know, doing doing courses and classes and was seemingly all about the technology, but that that seem to have changed pretty significantly once he got in office. So Yeah.
Robert Swarthout:Yeah. And we'll we'll get to it in a couple bullet points here too. There's a chance under this Trump administration that the SEC is functionally not the regulator of crypto anymore. Outside of it being a true security in some cases, I think that there's a path where and more likely that is the c, the CFTC or its self regulated like FINRA. We'll get there in a minute, but it's kinda kinda fascinating to kinda see how that may shape up.
Robert Swarthout:So our next topic, kind of a bit of a twist here. So Brad Garlinghouse, he's the CEO of Ripple. Obviously, we've talked a lot about him and Ripple with this case going on with the SEC. He's gonna be on a 60 minute interview. I believe it's gonna be aired December 1st.
Robert Swarthout:They I've seen it posted the first and they retracted and they said, so who knows? It's coming soon. And it sounds like a lengthy interview as well. And just about how, like, their fight for regal from clarity for regulations and the the fight with the SEC. It'll be fascinating to kinda see what they go through and just kind of, like, I would imagine there's a bit of a victory lap there, for Brad.
Robert Swarthout:But it's this is really bubbling up to this is not a topic that probably 60 Minutes talks about a lot. So No. And I
Andres Sandate:can only I can just see now. Like, Sunday, everybody's recovering from a long weekend. They've had turkey. They've been having family and friends. And then, you know, you got Jim Nantz and Tony Romo calling the Sunday CBS game, and then they cut in with the 60 minutes piece on Bitcoin.
Andres Sandate:It would sure be nice if you're the producers and the people behind 60 minutes if we hit a 100,000 over the weekend.
Robert Swarthout:Okay. Great.
Andres Sandate:And I think that that story then does get run, that on on December 1st. I mean Yeah. They they certainly are into ratings. Right? So there's gonna be a lot more people paying attention, if you're going in, over that $100,000 for the threshold.
Robert Swarthout:Yep. Absolutely. So the next one is probably quick. There's another, issuers filed for a XRP ETF. This one came from, Wisdom Tree, so a name that some people probably have heard of.
Robert Swarthout:At this point, I think there's like 5, maybe 6, applications for XRP ETFs that have kind of trickled in. I don't think anything gets done with this, side of the SEC. It's gonna be sometime in spring or next year. Yeah. It's, and I think that we quickly get an SEC that gives a framework, at some point to have these things because there's thousands of tokens.
Robert Swarthout:Will there be thousands of crypto ETFs potentially? I think it'll take a while to get there, but more, I guess, this is what we expect to see. This is what the market needs to be, experiencing before we can have an ETF on a particular digital asset.
Andres Sandate:You mentioned earlier, Robert, that the the Bitcoin ETFs had crossed over a 100,000,000,000 across all the issuers. Ethereum across all the issuers. Any idea top of your head kind of the
Robert Swarthout:I do not know the Ethereum, AUM at this point. My guess is maybe 10, 20,000,000,000, something like that. It it's it's much smaller than Bitcoin.
Andres Sandate:Yeah. Got it. Okay.
Robert Swarthout:I
Andres Sandate:was just wanted to wanted to sort of know that number because when you look at, you know if we get to a 3rd ETF like a a like a spot ETF, you know, what what's the demand out there look like overall when you look at the total, total market?
Robert Swarthout:Yeah. You know, and it's and this maybe where I'm thinking about it too deeply, but you start to get is getting into assets with XRP. There's a Solana one out there and other things that, one for Hedera, and there's a few others. But specifically XRP has got the most that is not yet launched. It is an asset that actually does something.
Robert Swarthout:You can use it for things versus just pure, treasury asset like Bitcoin might be. Like, you start to wonder, does demand come from other places that wouldn't be there for, say, Bitcoin or Ethereum because they don't have a clear, use case. Yeah. It'll be fascinating to watch play out.
Andres Sandate:Well, here's here I did a little bit of, I did a little reconnaissance while we were we were talking. So it looks like there's a little under 10,000,000,000, in assets under management across
Robert Swarthout:I believe
Andres Sandate:there's 8 different Ethereum ETFs. You know, Grayscale Ethereum Trust, e has, 4,700,000,000, and then you have, iShares, the Ethereum Trust from BlackRock, which is, about 1,800,000,000. And then there's a number of, others, you know, Bitwise, Fidelity, VanEck that are, you know, under 500,000,000. So in total, it's a tenth of the size of the Bitcoin, you know, overall AUM from the ETF standpoint. So just to kind of frame and give reference to, the market generally doesn't seem to either understand or put value on, you know, the the App Store of crypto, which is kind of how I've heard Ethereum described if you think about what's the utility.
Robert Swarthout:And and it doesn't help when you flip on CNBC or Bloomberg and all they do is have a ticker on there for Bitcoin. Right? I mean, like, it doesn't do a service to all the other tokens, and that's the world we live in right now. There's not a complaint. Just more of a reality.
Robert Swarthout:Right. I think over time, Bitcoin still stays there, but, like, you probably get more of a rotating ticker with other, assets being shown.
Andres Sandate:So Right. Yeah.
Robert Swarthout:So we we alluded to this, a minute ago. So the Trump administration apparently is rethinking how digital assets should be, had have oversight. Looks like they are maybe leaning towards the CFTC being the primary regulator, which makes sense to me. These things are commodities. They're not securities in most cases.
Robert Swarthout:And there's even, like, a hint that potentially we, may end up with a, a self governing body like a FINRA or a NFA that, has multi agency delegation. So it'd be fist fascinating to kinda see if it played out like that. And it may make sense because, again, some of these securities, some of those commodities, some are kind of a hybrid probably.
Andres Sandate:Right. Well, they're gonna need to give, this this agency a lot more money, because having been regulated by FINRA and being a part of a platform, we own an RIA and a BD, and we're regulated by a state regulator for the RIA, but FINRA for the broker dealer. And the agency, because it's self you know, it's a it's a it's a self reporting. You pay fees into FINRA. They provide continuing education.
Andres Sandate:They provide oversight. They do exams, all this type of back and forth. And the reality is is they they just can't keep up with developments in the market. And the reason for that is that, you know, they don't number 1, they probably don't have the budget they need to do the type of enforcement to keep up with market developments. And that's just in terms of, call it the retail investor and the the broker dealer community.
Andres Sandate:My my initial impression is they're gonna need a bigger budget at the CFTC, and they're gonna need to really staff it and and and be, tightly integrated with the industry. Because the industry is developing so quickly, there's so many advances that happen. How do you put you know, one thought is how do you just put an infrastructure in a sandbox, use your word earlier Yeah. Around this space so that they can be more self self regulating. But at the end of the day, it can create value for customers, for investors, or create investment opportunities that are, you know, legit.
Andres Sandate:Right? So that there isn't Right. Because there are still Ponzi schemes and there are still bad actors even with FINRA. Right? Absolutely.
Andres Sandate:And not all not all the bad stuff is caught. It's just thinking how my experience being regulated for 20 years. Mhmm.
Robert Swarthout:You
Andres Sandate:know, the challenge like, when when they start to issue an update on, say, crypto, it's a year or 2 after so many people in the market have already started just, you know, participating in that asset class. Right.
Robert Swarthout:They they just have
Andres Sandate:to find ways to be, quicker and and more agile, and and that's gonna require capital. Money.
Robert Swarthout:Yeah. You know, my suggestion is figure out what the FCC is spending on crypto right now and take that money away from them and use it elsewhere, because it'd probably better use. Oh, because I know they're spending a ton with all this enforcement actions because those are expensive attorneys. Yeah. Yeah.
Andres Sandate:Well, that's gonna be something to watch because, you know, you don't see a lot of these, regulators, get the the budgets they want. A lot of times, it's appropriated, and, it just seems like they're always, you know, underfunded. And then there's just not a lot of agencies spun up. Right? With the new Doge agency,
Robert Swarthout:they want
Andres Sandate:to cut government, right, costs. So we'll see. There's gonna be a lot to figure out in 25.
Robert Swarthout:Yeah. It it should be, fun to kind of, watch from the sidelines of sorts. So
Andres Sandate:Yeah.
Robert Swarthout:Our next topic is, tornado cash. We've never talked about tornado cash, I don't believe. Yeah. Is a a 5th circuit ruling, this, I believe early this week or maybe late last week where it was a win for crypto. We'll say that upfront.
Robert Swarthout:Coinbase has largely been funding this lawsuit. Tornado Cash so what is it? Tornado Cash is a, software code that runs on blockchain. You would send funds to it, funds being crypto, and it literally mixes it with other funds from other people and then it sends it out the other side. The idea is it's a privacy mechanism.
Robert Swarthout:You would see the Elizabeth Warren's of the world say this is only criminals are using this because this is money laundering, and all that. But the US Treasury, sanctioned Tornado Cash. I believe the guy that wrote the code, it's open source, run on. He didn't have control once it was running. He's still in jail, being held in my opinion, unfairly.
Robert Swarthout:And, so that's the 5th circuit ruled that, they went above in the they were unlawful. Smart contracts are open source, and it's a big deal. This is a big win. I I think this one's gonna fly underneath the radar generally in crypto, outside of just 28 cash wins, but this is a big privacy win for crypto.
Andres Sandate:Well, when you describe it as, and there's probably a really elegant description somewhere out there that I I I need to go get smart on. But when you described it as taking crypto, putting it in a tornado, mixing it up with a bunch of other crypto, and then spitting it out the other side, I'm thinking, what's the use case? There probably is one, but that's that's always part of the thing when you come to these things late and you haven't been following the case. Clearly, Brian Armstrong and the Coinbase people are smart. They know what they're doing when it comes to crypto, so they wouldn't have funded the case if they didn't see value and utility.
Robert Swarthout:Yeah. I think at the end of the day, this is a privacy mechanism for crypto. Right? Like Okay. If you want to say that you know, if you have, say, Bitcoin on Coinbase and you send it to a wallet, well, that's pretty traceable, with a court order.
Andres Sandate:It's It's kind of equivalent maybe to a dark pool in institutional investing where they don't trade through calling up, you know, somebody on the floor of the exchange, you know, to move a 1000000 shares of x y z. It's all done off market in what what's called a dark in what what's called a dark pool. So there's an you know, there's anonymity. It doesn't affect the price. You know, there's all sorts of actual commercial reasons why they do that.
Andres Sandate:I would yeah. I would say similar. In each
Robert Swarthout:another analogy is it's, in a lot of ways taking crypto and making it like cash. Cash, if I hand it to you, no one knows that we made that transaction. You have it. I don't. And it's anonymous.
Robert Swarthout:I think it's very similar in that nature for crypto. So you would have a wallet on Coinbase. You would send the money to Tornado Cash. It obviously understands that's where you sent it, and then Tornado Cash would have another wallet address. It would send it to the other side so your, identity get basically, it's stripped, or the trail gets kinda broken there effectively.
Andres Sandate:Now this did come, and we don't have this in our headline or check-in, but that that did this does come on, the heels or maybe, was just before it was announced. I think one of, the court system did announce that the cartels were using, certain crypto for laundering Correct. Of of illicit, you know, proceeds or illicit drug, and just other other illegal various activities. I don't know a lot about that specific case, but, yeah, clearly, these these organizations, the ones that are you know, have have a bad intent are gonna they're gonna be embracing the latest technology. There's also the the the the rest of us who are thinking, how can I use this technology?
Andres Sandate:How can I do this? Like you said, pay somebody, you know, the equivalent of cash and just do it via crypto, and it's nobody else's business. Exactly. Yep.
Robert Swarthout:So moving on. Chris Goncalo, he's a, in in my opinion, well respected guy. He's his his pseudonym is cryptodad, because he did a lot of work at the CFTC, under, Trump's first term. Yeah. He his name has been floated potentially as an SEC, chairman.
Robert Swarthout:I don't my guess is based upon the comments he's saying now, he's probably not in the running, because he said, you know, in his opinion, he would drop the SEC case versus Ripple. I don't think somebody in the running would say that. Right. Might say that privately, probably not publicly. If it's the way
Andres Sandate:it'd bike itself out of the race.
Robert Swarthout:Right. Yeah. Exactly. But at the end of the day, you know, it's just more people are starting to share their opinion publicly about just kinda like craziness that's happened the last approaching 4 years, at the SEC with regards to crypto. Yeah.
Robert Swarthout:So, you know, he was on another, interview that I was listening to where he was like, you know, if the US has a strategic Bitcoin reserve, probably should also have other cryptos that are as part of that making a basket. He talked about Ethereum. He talked about XRP. So I don't know. Let me just kinda see how this works out.
Robert Swarthout:The Bitcoin people would not be happy about that. To them, there's 1 crypto in the real world, and it's Bitcoin.
Andres Sandate:Right. Right.
Robert Swarthout:But I think that it's more realistic to think that you might, stock by other things. You know, the US has got oil. It has other things that it cares about. It also stockpiles. So
Andres Sandate:Sure. Right.
Robert Swarthout:Here we are.
Andres Sandate:Yeah. We care about, you know, renewables. We care about natural gas. We care about coal. We care about nuclear.
Andres Sandate:I mean, yeah. It's Yeah. There's a lot more than just big oil.
Robert Swarthout:Yeah. So our next topic, I'm I'm surprised we're talking about this right now, immediately. So the FairShade crypto pack, they had a huge influence on, promoting candidates in this last election that were for crypto on both sides of the aisle. 48 of 48 candidates we've talked about, that they supported were elected to their seats, which is pretty amazing to hit, a 1,000 on that. Yeah.
Robert Swarthout:And so Ripple has donated another 25,000,000 to this. And, as of going into the midterms for 2026, this pack has a $103,000,000 they're ready to spend. Like, in some sense, I wouldn't say they're doubling down, but they're, like, they're keeping the pedal to the metal, trying to make sure that this is not, like, a a blip in the radar for positivity with regards to crypto in congress.
Andres Sandate:Yeah. I mean, they're they're putting money to buy that influence or at least to have a conversation with those that can, you know, enact, you know, the next set of laws. They're gonna take this industry, and many believe, you know, to, retail, to, you know, new markets, to get the banks involved. Right? That's the amazing thing.
Andres Sandate:You said the the market cap is 3,000,000,000,000, for for for Bitcoin and Okay. In a large Period. For crypto, period. Sorry. So but largely, you know, if you were in a room of a 100 people and say, how many of you are actively doing crypto or involved in crypto?
Andres Sandate:You know, if that room was full of banks and insurance companies and everyday individual Americans, still be a lot of people that are skeptical, still be a lot of people that aren't participating. You know? 100%.
Robert Swarthout:Yeah. It's, early days. And, you know, I would imagine that we even 2 years from now, we're not fully feeling like we have the right laws and everything that we want in crypto. Crypto. I would love to be wrong about that, but I think that the midterms are gonna matter for crypto.
Robert Swarthout:And maybe by the time that Trump has had his 4 years, that maybe we can have this all set and set and feel like we are where we need to be to you guys will have to have a time machine and come back, and we can finish this conversation.
Andres Sandate:Well, the reality is is even if you are in a better run rate, in terms of of regulation, market participation, the guardrails, the frameworks, all the things that, you know, protect investors and protect capital and ensure that, you know, you're putting, putting, you know, your your your, your hard earned money, right, in an institution. Like, say, a bank. Right? All the banks pulled out of lending. Okay?
Andres Sandate:Mhmm. And those banks are regulated by the FDIC. They're regulated by the OCC. They're regulated by countless institutions. You know?
Andres Sandate:And and so the the idea is our banks gonna get back into the crypto business. Right? And they're not gonna get back into the business unless they feel like there's regulatory clarity. And and so for all these reasons, you think, okay. In 3 to 4 years, do we have we fixed that?
Andres Sandate:Probably. But are all these regulators that regulate the energy industry, regulate the drug industry, regulate the food industry? I mean, they haven't gone away. There's constantly a back and forth between, you know, too much regulation, not enough regulation. You know, we we I think we all have to just get our heads around the fact that this industry is quite early.
Andres Sandate:Mhmm. We are trying to figure out quite a bit. And, you know, from the standpoint of where are we in 4 years, it's gonna look a lot different than today. It's gonna look a lot different in 40 years. Right?
Andres Sandate:So you gotta be playing the long game.
Robert Swarthout:Absolutely. And in in some ways, we're swimming upstream because this is the administration that wants to cut regulation, but we're saying, please give us some. Yeah. So it's a bit of an opposite in narrative.
Andres Sandate:That's one of a dichotomy. Yeah. Yep.
Robert Swarthout:So our second to last topic here is the Schwab CEO was interviewed recently and, about crypto. And the quote Works pretty. Yeah. This is at the Schwab conference to be clear. Schwab impact.
Robert Swarthout:Yep. And, you know, the the first quote I have here is I have not bought, crypto, but now I feel silly. That's pretty interesting comment.
Andres Sandate:Yeah. So, I mean, you know, big bank, coming in. Obviously, Schwab, is is hugely important to the financial industry from the standpoint primarily of supporting, not only retail investors who go direct, right, who go open up a Schwab account, set up an IRA, set up a brokerage account, invest in stocks and bonds and mutual funds and ETFs, but, equally, the number of advisers that they support. Right? So folks like us who use Schwab for custody and technology and, investing and all the all the support that they offer to run a wealth management organization.
Andres Sandate:And for many, many years, they were just against crypto. Right? And they just probably said they
Robert Swarthout:wouldn't want a business, period. Yeah. They
Andres Sandate:just wouldn't wanna talk about it. Right? So what did those advisers do? They had to go somewhere else or they had to go take those assets away or just tell their clients, sorry. We can't do it.
Andres Sandate:And that's why we came back to the stats we mentioned in the episode maybe 6, 9 months ago when I'm at these conferences and, you know, there's 100 of 1,000,000,000 of dollars of assets held away from the custodian for a wealth adviser. That means the adviser may manage a $1,000,000 for a client, but the client may have $250,000 at another institution that that adviser is is not collecting on. Schwab's not making any money on, and they wanna now bring all that back. And I think it's also interesting that that, Rick Worster said not only did he feel silly, but he recognizes that investors are the younger investors are the investors that are the earlier adopters of crypto. And if he wants that younger investor base, that under 40, under 30 client, not go to Robinhood, he's gotta offer them products.
Andres Sandate:You know? You know? And if he wants to attract the next adviser to say, we're gonna leave one of the big prime or one of the big, wire houses and go set up an independent financial planning, financial advisory practice, and I'm trying to figure out who do I wanna work with, and you're saying we don't do crypto, you're probably out of the running. You're going somewhere else. So he's got all kinds of reasons to start thinking about how to embrace this, but it it comes down to money and it comes down to regulation.
Andres Sandate:And they probably now feel like there's a better chance of regulation than they did 3 or 4 years ago. But yeah. I mean, I don't think it's too late, by any stretch, but I think, it it's a powerful move by a big important player. And I think that as you start to see retail adopt crypto and that whether that's them leading and dragging this institution in or vice versa, it's an important move when that type of institution decides to go into space.
Robert Swarthout:Absolutely.
Andres Sandate:Well, as you have always said, Robert, pay attention to what they do, not what they say.
Robert Swarthout:Yes. At least that's that's the mantra that I like to to mark
Andres Sandate:as champion.
Robert Swarthout:Our last topic, kind of interesting timing here, and I think it's the right timing. So crypto's got these cycles. You know, these crazy run ups, blow off tops, it kinda comes down. A lot of times 80, 9%, kind of a stair step approach over time. And if you look at the past, assuming we kind of enter the same kind of cycle, which I think you can make arguments that this cycle potentially is gonna be different, and elongate and all the different reasons because you have institutional money coming in now.
Robert Swarthout:But set that aside. You potentially are right around the market cap now. What you might experience is the bottom once we go to a blow off top and we kind of have that sell off, that kinda brings us back down. So if you, hold crypto and you wanna hold through it, the prices that you see now might be what you see in 2 years, after a huge change in between. So kind of an interesting little, I guess, observation there.
Andres Sandate:Yeah. Yeah. For sure. Well, lots of headlines. I guess that can happen when you don't record, in 2 weeks, but, also, I think it's a I think it's an indication of the the amount of participants that are, you know, weighing in, are spinning up, and or doubling down, or entering the space.
Andres Sandate:Right? All all of which are worth, you know, covering in a check-in.
Robert Swarthout:Yep. Well, thanks for joining us on this episode of the weekly crypto check-in. If you wanna stay updated on future episodes, you can find us any podcast player by searching Teton Crypto Capital or the weekly crypto check-in. Take care.
Disclaimer:The The information presented in this podcast is for educational informational and entertainment purposes only and does not constitute financial investment, trading, or any other advice. The content provided is general in nature and not tailored to any individual specific circumstances. Always conduct your own due diligence and consult with a professional financial adviser before making any investment decisions. Cryptocurrency trading involves significant risks including, but not limited to, of the potential for loss of all or a portion of your investment market volatility and regulatory uncertainty. The host, guests, and producers of this podcast are not responsible for any decisions or actions taken based on the information discussed herein.
Disclaimer:Cryptocurrency is not legal tender in many jurisdictions and is subject to market risks. Past performance does not guarantee future results. This podcast does not endorse or guarantee any investment outcomes or results. Use of this podcast implies your acceptance of this disclaimer.
Creators and Guests
