Ep 31 - December 18, 2024 - First 100 days
Welcome to another episode of the weekly crypto check-in recorded on December 18, 2024 2024. I'm your host Robert Swartan. I'm enjoying my cohost, Andres Andate. How's it going, Andres?
Andres Sandate:Good. I'm I'm like you. It's hard to even say 2024 anymore because it's like we're we're, like, at the doorstep of of the New Year, but it's good to see you. And we find ourselves amidst a little, heat wave here in Atlanta. We're in December, and it's, like, 70 degrees.
Andres Sandate:My kids are wearing shorts and t shirts again.
Robert Swarthout:Yeah. I, I've been reading enough stuff lately that's talking about 2025, and that's what I almost said, in the opening there. So I had to catch myself.
Andres Sandate:Well, it's yeah. This is our last show of the year, as we said. It's been quite an eventful year. We talked elections. We talked politics.
Andres Sandate:It's now we're wrapping up here the last show of the year. So modest cover as always.
Robert Swarthout:Yeah. This is, it's been a fun year. Like, you know, I've never, done a podcast at this rate, roughly weekly. I've done, you know, one one with my friend Casey. I kind of get come on that roughly once a month with him.
Robert Swarthout:But it's been it's been good. We're, like, 31 episodes in, so we're still quite young, but it's been a fun journey. And
Andres Sandate:Yeah.
Robert Swarthout:Slowly figuring out what what kind of, rhythm this thing needs and, and what people are interested in listening to.
Andres Sandate:Well, we definitely appreciate the folks that have, stuck with us and maybe have tuned in from time to time. We are exploring, you know, a new format here with the podcast, trying to find ways to bring, I think, just more common sense news. Right? Sort of less opinion, more news. There's so much, as you call it, FUD out there, and it's so hard to really put the whole narrative together around crypto on things like Twitter because, you know, it's it's biased.
Andres Sandate:It's, there's, half of it is it feels like goes off on tangents, and some of it's so technical, so I I always thought the show had a place in the whole conversation of crypto just to, try to find a few headlines every week to just break down and keep people abreast of, some of the higher level stuff going on.
Robert Swarthout:Yeah. You know, it's we we certainly don't claim that we're all encrypted news. There's way more than we could ever talk about even on a daily basis, but
Andres Sandate:Yeah.
Robert Swarthout:You know, high level and maybe stuff that is more impactful to the industry. There's certainly pockets, that we don't ever focus on, but nonetheless, here we are.
Andres Sandate:Yeah. And we can't do crypto right now without talking regulation, talking about what's going on legislatively. It's just such an important theme and and will continue to be, right, as as we go forward into 25.
Robert Swarthout:Right. And, you know, all of our shows so far have been about the lack of regulation and the negative side of that. Hopefully, next year, it flips and we get to talk about the positive side. But I think part of that, I guess, changing of the guard of sorts is a bit of our first topic. So Yeah.
Robert Swarthout:Crenshaw, she is a Democrat appointed, SEC chair that was has been up for, like, reelection I mean, not reelection re reappointment. We talked about her last week. They there was a chance that the Senate Banking Committee was gonna try to reconfirm her and, do that in this kind of lame duck period. And then it got bumped, a couple times last week, and as of, I believe, yesterday or Sunday, they have abandoned that effort to try to get her, reappointed. You know, I was talking to you before we started recording, and, like, I was surprised this.
Robert Swarthout:I figured there was gonna be at least an attempt. And I'm sure there was there was vote counting behind the scenes trying to figure out if it was worth worth the, the struggle, but, you know, again, Democrats have the control of the Senate. That's where all this happens. They could have gotten her confirmed in theory, but, obviously, it didn't happen. And I'm, you know, kinda making this up a little bit here, but I would I'm actually wondering if the crypto influence in DC is so strong now that there was enough behind the scenes pressure that kinda be like, no.
Robert Swarthout:Don't try that. Because she's extremely anti crypto.
Andres Sandate:Yeah. Yeah. Like, we have talked about there's such a intense lobby now around crypto, and you've alluded to the fact that they they, being the crypto lobby, have, already amassed over a 100,000,000 for the midterms, you know, around 2 years from now. So there certainly could be some of that influence, that's weighing into that. I mean, that's speculation on our part, but what this means is what?
Andres Sandate:She is not gonna be up for an appointment or for reappointment to is it a 6 year term?
Robert Swarthout:I believe so. Yes.
Andres Sandate:So that means that there'll be a new a new commissioner for the SEC and, likely a new appointment that will be coming.
Robert Swarthout:Yeah. And my understanding of the true, like, I guess fine detail here is the first that the Democrats are able to, suggest an appointment, a name for the appointment. Trump, and the Republicans don't necessarily have to follow that. They can kinda choose to either take it or leave it. And, you know, my guess is it's it's more of a leave it situation.
Robert Swarthout:Who knows? Maybe the Democrats surprised if they tried to, suggest someone that is Democrat leaning that also is, kind of makes more of the Republicans, okay with with the appointment. So Yeah. I will tell. We'll get to talk about that one in January is my guess, maybe in February.
Andres Sandate:Mhmm. Yeah. But there's gonna be a lot of hearings in, the 1st month of, the year, maybe into February. There's so many appointments that are being made and nominations, and I think they're still filling out the cabinet with a few a few people, going through the final vetting process. So, yeah, there's gonna be more to come over the next month to 2 months after the holidays.
Robert Swarthout:Absolutely. Our second topic, this probably hasn't surfaced too much for most people. You know, for for the ones the broad story here is MicroStrategy obviously is a publicly traded company. They've been buying Bitcoin for some time. They are, I think, in the top ten of all holdings from a number of Bitcoins they hold.
Robert Swarthout:So so Michael Saylor has turned into quite the Bitcoin bull. I've been a bit of a skeptic on why people would invest in MicroStrategy to do this, especially now that we have ETFs. We have more efficient ways to go buy Bitcoin outside of just buying it direct, on say Coinbase. But this trade, and we've talked about his capital, plan where they raised basically $42,000,000,000 to go effectively buy Bitcoin. It's just I again, I haven't it has never clicked for me why people wanna do this.
Robert Swarthout:I'm starting to see some people question it online, and what I found interesting about this, and they started breaking down, I've never actually done the math, immediately, but they were saying how you know at today's stock price at 4.30 and that means for every $1 MicroShite you're purchasing 45¢ of bitcoin exposure. So there's a good point, a good amount out there. It just generally, you know, it's not an efficient way to get to bitcoin because the tax, because you're basically getting double taxed because it's in a corporation. And just, I don't know, the the negativity around it seems to be, I wouldn't say rising, but it's there. And will it catch on, I guess, is the question?
Andres Sandate:Yeah. There's 2 thoughts that I have. Again, this is just thoughts and not necessarily news. 1 is, are there buyers who, for reasons like, by by investment policy or by, some rule, some governing type rule, they're not allowed to buy Bitcoin in the ETF, and so they could buy stocks is one thought. I don't know if that's the case.
Andres Sandate:And 2, just this whole meme coin, and and you look at meme stocks, right, during, the days when we were talking about AMC and we were talking about, you know, crypto to to a lesser extent, but more about the stocks on Reddit. Do you think there's a crowd out there that are thinking that they can influence other buyers that are long the stock by getting into the stock versus going out and buying the ETF and or Bitcoin directly, and so, therefore, like, the stock is a better way for you to see a a more aggressive move if you're long
Robert Swarthout:Potentially. I mean and returns. I mean, you have to be willing to set aside the idea that Bitcoin doesn't move strong by itself. Right? Like, I don't know.
Robert Swarthout:We we shouldn't spend tons of time on this. I think at the end of the day what is fascinating to me is there's just enough people, talking about it and at some point you you might hold enough of an asset, in this case, let's say MicroStrategy does, eventually hold enough of an asset that certainly he his his idea that he never wants to sell it may be true because there's no one to sell it to in quantities that they would need to to be meaningful. So I don't know. I this, I think, will play out over the course of years. Michael's recently said he was on a podcast I was listening to that he said he's gonna be buying the top when Bitcoin is already at $1,000,000 as well.
Robert Swarthout:I think that he's, again, tuning his his story over and over. He's very consistent with anything else. So
Andres Sandate:Yeah. And I think I saw a report earlier this year that he has a price target on Bitcoin of again, this is Michael Saylor, so he's obviously very pro Bitcoin but, of 13,000,000, per Bitcoin so we're at a little over a 100,000 right now and he's got a price target high end at $13,000,000 per bitcoin so it's yeah. We've never been able to really get our hands on a model, we've never really been able to get our hands on anything to sort of back that up and I know that's something that, you know, a lot of people would obviously like to see, but there's probably a case for why he's making that out more outlier number than you see. Because you've seen 500,000, we've seen 250. Sure.
Andres Sandate:He's way out on the curve.
Robert Swarthout:Yeah. And, you know, I I often contrast these crazy, what I appear to proceed to be crazy numbers, especially coming from him. Is this like a head scratcher? Because if his goal is to buy as much Bitcoin as possible, why is he giving people these crazy prices to get them to also come in and drive up the price on him? Like, wouldn't he just be happy accumulating at 75,000?
Robert Swarthout:Why does he have to do it at a 100,000 or 200,000? So it seems to be a bit of a mixed message, and maybe I'm not understanding the psychology there, but it's it's it is evolving. And and to their credit, you know, MicroStrategy, this last Friday got included in the Nasdaq 100, the the queues. So that was a big deal for them. I think they heard him say he would love to also be included in the SP 500.
Robert Swarthout:I don't think that is possibility right now because it just their profitability is too low on how they score those, but it's, you know, the first, crypto company I believe to be included in that. So that's it's a big deal.
Andres Sandate:Yeah. Yeah. I mean, again, more more of this conversation around the, there's a number of of digital assets, sponsors who offer exposures to more than just the coins, right, and more than just the ETFs. And so, you know, whether it's a publicly traded company like a Coinbase or a MicroStrategy, there's, you know, always innovation happening, call it innovation, but there's always product being built around how to get exposure. And like I said, some people can only get it through stocks or prefer to get it through stocks for various reasons.
Andres Sandate:So it's gonna be something to watch in 25. Yep.
Robert Swarthout:Absolutely. So our next topic, staying on the topic of Bitcoin, so this whole idea of the US strategic Bitcoin Reserve, you know, was first floated by Cynthia Loomis from Wyoming, Senator Cynthia Loomis, I should say, and you know, it's gained speed, within the Bitcoin community and it even became something that Trump talked about when he was at the, Bitcoin conference in July in Nashville. Now that, you know, it's president-elect Trump, and it appears that it's gonna be crypto positive, there's certainly this, you know, building narrative around, oh my gosh, we're gonna get this, strategic reserve. Nothing is done until it's done. I'll say that right now.
Andres Sandate:Mhmm. Yeah.
Robert Swarthout:Yeah. You're starting to see, some people talk about apparently the Trump team is looking at doing it through an executive order initially and then trying to get it into law later, which is something that I didn't quite think even would or even consider could happen. So apparently through the Treasury they have something they could do the exchange, stabilization fund, and they can do the purchasing of it through that in via an executive order. So there there is a apparently, I guess, an avenue or a path for that to happen. Whether he'll do that, we will find out here in, I guess, about 30 something days.
Robert Swarthout:But, it's it's, it it could be coming sooner than I thought, if it comes at all. So
Andres Sandate:Yeah. Well, you know, if you go back in history and you look at the very first hedge fund, Alfred Winslow Jones, I think it was, AW Jones, started the first hedge fund back in the I wanna say it was the forties or fifties. Wonder what he'd be thinking about uncle Sam having his own hedge fund buying their first, you know, first asset would be Bitcoin. So I don't know. I, I I've seen a lot of these headlines over the last, you know, few months.
Andres Sandate:You you now hear treasuries, not treasuries. Pardon. You hear corporate treasuries. Right. Microsoft, Amazon, and others that are taking up the issue and putting it out to shareholders.
Andres Sandate:In some cases, you hear states, and their treasurers saying, we're gonna, you know, start a a reserve fund for the state of x or y. So everybody's now gotta read these headlines and sort of personally make sense of them and, you know, what what happens, over the next 2, 3, 4 months, we'll see. But, certainly makes for a lot of discussion on the business news and I I like you said, what it watch what they do, not what they say. I I think that we'll know a lot more in 90 days.
Robert Swarthout:Oh, absolutely. Yep. And, then we'll be worrying about something else. So our next topic, is kinda off, into a stable coin. So we mentioned that Ripple is working on launching their own stable coin, rlusd.
Robert Swarthout:It launched officially as of Tuesday. So yesterday, December 17th, it started trading in the morning. Not nothing huge to say besides its launching. It's about a $50,000,000 market cap. So, you know, peanuts compared to what USDT and USDC are.
Robert Swarthout:They've been at at it a little longer. So we'll see what demand looks like, between Ethereum and, XRP Ledger. There it is split, but over time, I think that you might see see that number grow. And if if it's true what we had heard in the past where Ripple at one point was minting, through their customers 20% of all USDC, that volume, you think at some point would get directed towards, their own stablecoin versus USDCs because that's a product they they have margin on now, and they can make some interest.
Andres Sandate:Yeah. And they set this up in New York. Right?
Robert Swarthout:Yeah. This is the the most regulated stablecoin anywhere in the world. Even more than USDC, which claimed to be the the white knight, compared to USDT. So it's, it's being set up in a very compliant way. They even have an advisory board in Sheila Baer or Blair, something like that.
Robert Swarthout:I forget her. She used to be, yeah, at at at the treasury, I believe, or or some somewhere in government to deal with, US dollars. She is on that and a guy that used to be a governor of the Bank of, India is on it. So they've put together an interesting board, whether it's all for marketing or there's actual real, like, use case there for those people. We'll see.
Robert Swarthout:But it's interesting to us in a stable coin.
Andres Sandate:Yeah. Yeah. I mean, definitely something I mean, again, there's a lot of the themes around stuff that we've talked about here today and just over recent shows are it it's like an ongoing narrative. Right? And that hopefully, that's that's something that we can do with our listeners is just provide updates as there's news that develops sometimes more slowly than everybody would want like we all wanted the answer yesterday, but some of this stuff just takes twists and turns and and in a way, like, that's the that's the nature of, I guess, covering it is, you know, you provide an update here and there over the course of, you know, some period of time.
Andres Sandate:So that's what we'll be doing.
Robert Swarthout:Indeed. Next topic is, market structure, but we've talked a lot about wanting regulation, needing regulation, trying to get regulation, all the things. Hopefully, we, can turn that corner here and potentially in the 1st 100 days of Trump's presidency. So French Hill has been appointed to be the head of the Financial Services Committee. He's pro pro crypto.
Robert Swarthout:Generally, I feel like he's very level headed when it comes to crypto. He's not just like all bitcoin or all one particular coin, which I think is great to see. And he was recently quoted, when he was on CNBC saying that, that that we need a market structure built for crypto, and it seems to be one of his priorities, the first 100 day priorities for him. Hopefully, that does align with what the Trump team wants as well, and then you obviously gotta get the senate on board. Just be, the house on board and excuse me.
Robert Swarthout:The senate. That was that was correct. And, get something passed. But maybe it'll just be stable coin, maybe it'll be more than that, but time will tell. Hopefully, these 100 days go by real quick, and we just know the answer here soon.
Andres Sandate:Yeah. I mean, we have you know, we could look back in history. There's a lot of people that get these appointments. A lot of politicians that get these appointments and, you know, they wanna make an announcement usually in front of a camera around, here's what we're gonna do in the first, you know, 100 days that famous 100 days. Right?
Andres Sandate:Things often end up a little different in reality. The the thing that gives you some optimism is the mandate. Right? And we talked about that at the beginning of the show, like, with with the mandate were being tossed around with crypto where you had a lot of, elected election outcomes, where there was a crypto candidate or a candidate that was running on a pro crypto platform, voted into office, this notion of a crypto mandate is real, I think. And so the the the question is, are there other competing priorities that could potentially muck up the, you know, the the focus, if you will, on that first 100 days?
Andres Sandate:Because I know that there's a lot of speculation when you listen to other podcasts about, the election and the focus of the new administration, their policies, what the Fed's gonna do with rates in 25. You often hear, you know, on from people across all different parts of the market that there is optimism that, like, the m and a activity will pick back up and that the economy is in a maybe a little healthier spot than people thought, 6 months ago and therefore rates might might end up looking the rate environment may end up looking different than what people initially thought we were gonna get 3 or 4 or 5 rate cuts in, you know, in sequence and maybe the Fed's gonna go a little slower and then you look at crypto and so I there's so much happening and there's so much to watch. Mhmm. The question is, will we get some legislation on the table? I'd love to see that in the first, you know, 3, 4 months of the new administration.
Andres Sandate:There's a lot of competing priorities. I just hope crypto doesn't get, I wanna say, forgotten, but the momentum that you see right now around doing something constructive, hopefully, that continues, you know, into February, into March.
Robert Swarthout:Yeah. I mean, it's, it it would be a big letdown to see the kind of all this effort and all this momentum kinda get wasted. But, you know, I I I tend to believe that we're gonna get it done, almost for in some ways, some people would say not a great reason. That being the Trump's have launched their own crypto coin, and they, they probably also recognize that we need regulations. And, there's money to be made there for them and other people that are part of that, and that may be enough to kinda nudge this along.
Robert Swarthout:Or Yeah.
Andres Sandate:That's something we don't, yeah, we don't talk about that often. You know, this is just unprecedented times that we live in, right, where there's so many different variables, that could potentially you could pick apart, right, on that whole special edition of the weekly crypto check-in as to why we're gonna get regulation this time around. One thing that's different this time though is that we're not coming off of a crisis. We're not coming off of an FTX implosion Right. And saying see this is why we need regulation.
Andres Sandate:This is why we need I think that, you know, crypto was in the, you know, was in the dumps if you will.
Robert Swarthout:You
Andres Sandate:know, early 23, it's Right. There's been some wins, there's been some positive developments, you could argue, over the the last, you know, couple of years. So it just seems like there's a lot of things setting up that, could potentially lead for constructive, dialogue obviously the the Bitcoin ETFs, right, that's a big development that didn't wasn't there, you know, a year or 2 ago so, yeah, a lot a lot to wait and and watch and, you know, crypto people in crypto like us that are following this story, certainly cause for optimism. Can't be anything else. Correct.
Robert Swarthout:Yeah. Yeah. So our our second to last topic here is around, AI, has been creating meme points, driving their value. I I've been fascinated by this, the the crossroads of AI and crypto, because in a lot of ways, crypto is programmable money that AI agents, these bots can use, to do whatever they wanna do for that matter. So when I saw this, this is the first time I even really thought that this was going on, but an AI agent, basically started a, meme coin called, this may this mean the agent is from Terminal of Truth and drove a meme coin to a $250,000,000 market cap.
Robert Swarthout:Pretty wild. The craziest part, the the agent owns 2,000,000 of these goat tokens. It is posted content online. It has built a community and it influenced the market. All the things that you probably don't want it doing.
Andres Sandate:Right.
Robert Swarthout:And, this happened and it and then it did it over the course of like 3 weeks. So it is made millionaires for people that decided to buy this goat token. And and we're certainly not suggesting people go out and buy it, but at the end of the day it's fascinating to kinda see, this happening. There's even, rumors that some there's some AI agents running some crypto hedge funds, and and basically managing the assets 247. So changing world very quickly.
Robert Swarthout:We're gonna be at a job here, Andres.
Andres Sandate:Wow. Yeah. I I saw some headlines about AI, tokens early in the week, and, I said, you know, Robert's the technologist here. I'm gonna let him run with that topic because it's so quick. It it's just AI is happening so quickly.
Andres Sandate:I'm I'm I'm using a couple of AI tools now, you know, just just the stuff that's out there, like, in the the the mass market, if you will, and I'm fascinated with the things that they can do. So I guess I should not be so surprised that they can go and set up a their own, you know, meme coin, and, clearly, there's enough people out there that are active in this market for nothing more than just the pure trading and speculation on a short term basis that they'll just jump on any any any, you know, crypto that, that's launched to see if they can, you know, make a quick buck.
Robert Swarthout:Yeah. It's pretty crazy times. So, you know, we have this last bullet point here. We've kind of, alluded to a little bit of that when we open the show, but just any comments that come to mind for you, you know, we'd love to share them with the with the podcast last few minutes here. 2024 for me was a crazy year.
Robert Swarthout:It, you know, it started off with not doing the podcast, now we're doing the podcast. The market turned around. It felt like it was gonna be the year that turned around and we're, you know, at the beginning of a or maybe the mid part of a bull market. We're waiting for Bitcoin to kinda make, in some some people's opinion that it's last great run of this cycle. Maybe it's second last great run.
Robert Swarthout:You'll see it, rolling over into alts. Alts will kinda do their thing. I'm under the opinion where you got 3 or 4 months left to this, particular cycle, and then we kinda are off to repeating it, and kinda going into a bear market. But again, regulations could change that. ETFs are definitely changing the calculus a little bit.
Robert Swarthout:There's more capital flowing into this space than ever before. So, yeah, I think that I look forward to 2025. 2024 was a fun year.
Andres Sandate:Yeah. I mean, my my summary of 24 is it's, you know, easily it's easily a space where if you blink, right, when you're living in it day to day, you feel like not a lot changed. But when you are not in it day in, day out, and you don't pay attention to it, you know, like we are daily or weekly, you could you could look at 24 and say, wow. Like, I didn't I didn't I didn't know that BlackRock had launched a an ETF, and it was the fastest growing ETF in history. Right?
Andres Sandate:I didn't know that, you know, some of these bigger asset managers were so active in the space, and some of these bigger enterprise customers had now announced alliances and partnerships and that there's now an administration going in to the White House and a lot of elected senators and members of the house that are, you know, that that were supported by the the crypto pack, if you will. You add all that up and, you know, you go into 25 and say for somebody that was in the space only in the last, call it, 2 or 3 years, if you had that year again and then you had another year like that again, meaning not always the election results are gonna go one way or the other, but just the momentum, the the building, and the infrastructure, some of the bigger pieces falling into place or coming into fruition, that's where you start really seeing the potential for crypto and the technology to really have more of a transformational impact on society and enterprise and at the end of the day, the promise of it that it could be something that provides more utility, Right? An easier way to transact, a cheaper way to transact in the original going back to all the way to that very beginning of Mhmm.
Andres Sandate:The the white paper from Satoshi. Yeah. A peer to peer like, talk about Bitcoin anyway. Right. A peer to peer network to move money
Robert Swarthout:Mhmm.
Andres Sandate:With no intermediary. And so I think that's easily lost when you are in the the weeds day to day, but it's, or just don't pay attention to it. But I think we're seeing some of those original concepts kinda come into play. It's hard to know when you you talk about strategic Bitcoin reserves and some of these other more controversial topics, if maybe we're letting it get too, too far or or it's it's gotten so far ahead of, like, what its original purpose was. However, it's been fun, and it's been fun to cover it and talk about it and see how its influences moved into, you know, people like Jerome Powell, the Federal Reserve chair and the president of the United States and, you know, people in congress, like, they're now having to pay attention to it.
Andres Sandate:Absolutely. It's yeah. To you know, to think that, it was just anything but a year where you just needed to pay attention, I think, is, is is easily not not the case. So, yeah, I'm looking forward to 25.
Robert Swarthout:Yeah. Well, I think it's a great place to leave it. I'm also looking forward to 25. Thanks for joining this. Thanks for joining us on this episode of the weekly crypto check-in.
Robert Swarthout:To 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.
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