Ep 34 - January 29, 2025 - Crypto Executive Orders
Welcome to another episode of the weekly crypto check-in recorded on January 29, 2025. I'm your host, Robert Swartout, and I'm joined by my cohost, Andres Andate. How's it going, Andres?
Andres Sandate:Hey. Good, Robert. I hope you're, doing well. I'm looking outside, and I think today we're gonna hit 65 plus degrees. So Yeah.
Andres Sandate:I'm, I'm excited. Spring's around the corner.
Robert Swarthout:All of a sudden, you know, we went from really cold to warm and, abnormally warm on top of it. So we were abnormally cold, and now we're abnormally warm. And have a a good maybe 10 days of this would be kinda nice.
Andres Sandate:And abnormally hot abnormally hot in the crypto space in the sense of there's a lot of stuff going on.
Robert Swarthout:There's stuff going on, and it's not our normal news, I guess No. Type of stuff. So it's a little bit of a different episode here. So this would be, fun in some sense and sad in another. So, anyways, we can get started here.
Robert Swarthout:So the first topic, is, Arizona became the 1st state to pass a bill out of committee so it can go up to vote, for a Bitcoin reserve. I think there's 8 or 9 states that are headed in some form. They were not the first, so they're moving faster than other states. And, you know, what I think will be interesting is is all the states, all 8 or 9 of them, whatever they are, I believe are specifically only for Bitcoin. So they're Bitcoin reserves.
Robert Swarthout:You know, we're gonna talk a little bit later about the US reserve could potentially be something more than Bitcoin, and there's some conversation around that. So different forms of these things are kind of potentially congealing a little bit, but we are we're at the beginning stages. I maybe this is the first ending of this of sorts.
Andres Sandate:Yeah. It it does feel that way. Arizona is the, I guess, the first and yeah. Like you mentioned, I think there's gonna be more of this. I'm I'm always curious, like, we've talked about on the show, what's going on kind of behind the scenes?
Andres Sandate:Who who's who's kind of advising the, the states, in in this regard in terms of, you know, how the how the bills are drafted and how they're set up? But yeah. I mean, I think we always thought 25, when we got the election results, was gonna be a year where you were gonna start to see a lot more, you know, proposal regulation and a lot more maneuvering politically, around this type of stuff. So here we go. It's beginning of probably what we'll see is a lot of this over the next several months.
Robert Swarthout:Absolutely. We, and I look forward to it'll be interesting to see if other states pick up the speed with this or they wait to kinda, in some sense, defer to see what the Fed's gonna do or, I mean, what what the federal government's gonna do. I don't know. It'll it could shake out in different ways, so time will tell. Our second topic, I kinda just bring up because, you know, mixed in the shuffle of all the crypto news lately, is you have traditional finance.
Robert Swarthout:Right? And they're always jockeying for their position. You see some of that happening with potentially, like, on the ETF front. There's a lot of ETF filings. We kinda talked about that, last week, but, you know, the big banks, so recently on a, on a Twitter space, Brad Garlinghouse, the CEO of Twitter, was saying how, Ripple custody, which is a, they bought CEO
Andres Sandate:of Ripple. Brad Garlinghouse, CEO of
Robert Swarthout:of Ripple. Yes. Ripple last year bought Standard Custody, a a crypto specific custody solution. And, they said they signed HSBC last year. So there was a rumor that that had happened, but nothing as direct as from the horse's mouth literally here.
Robert Swarthout:And I I kinda just bring it up to say is, like, not it's not just custody that's happening. You know, we're obviously seeing, again, the ETFs happen and other you know, there's on chain, stuff that's happening with, like, bonds and stuff being tokenized on chain. But you definitely have, you know, the banks wanting to have their piece and do what they can do. The crypto space is a little bit different. Right?
Robert Swarthout:You can be a custody solution as well as a, basically, a broker all in one, Coinbase. Right? And I imagine over time, that gets separated, but, you know, you have the the bank specific, institutional grade custody solutions, making hay ray. So
Andres Sandate:Yeah. I mean, it's an it's another business opportunity. Now that there seems to be at least momentum around regulation, I, I don't think you and I are probably overly surprised that the bigger institutions, the banks leading the way, are gonna seize on opportunities to, you know, generate fees. Right? Custody is not free.
Andres Sandate:So it's not, you know, it's it's not a, it's it's not gonna be this free complimentary service that they're offering to their high net worth clients. You gotta believe there's gonna be cross selling, and there's gonna be all sorts of other stuff. I think it does, you know, bring up some interesting ideas, that will get surfaced around how they're gonna do KYC, and and some of the stuff around these assets. And, you know, there there's, obviously, there's a long history of the private banks doing a lot of stuff offshore, Switzerland, you know, Cayman, Bahamas, etcetera, which somewhat dovetails with, you know, where we're seeing crypto at least has moved. So but, yeah, I think we're gonna start seeing a lot more of the services and ads and and other things that populate in, you know, kind of mainstream financial press around these services, just like wealth management and other things.
Robert Swarthout:Yeah. You know, it's I I probably agree with your statement that, you know, so they can generate fees, they're gonna charge, you know, clients to custody. You know, a bit of a devil's advocate here is, like, you don't get charged for custody, at least directly as far as I'm aware of, like, for your stocks and bonds. Like, it's all kinda, I guess, baked in the price of sorts. Right.
Robert Swarthout:Crypto being a little bit different, there's no recourse if it gets moved to some other wallet. I think maybe kinda leads them to the ability, at least for the short term, to be able to charge for it.
Andres Sandate:Yeah. I mean, we talked about this last year when Schwab's CEO came on. The new CEO at Schwab said personally something to the effect of, you know, we just were late to crypto or didn't really embrace crypto, and I think that's changing. You think about the brokerage firms like Schwab and Fidelity, for example, and I know BNY Mellon was one of the big ones that got, approval and, you know, approved custody last year.
Robert Swarthout:But you
Andres Sandate:if you just think about the independent RIA market, just the wealth channel and the massive opportunity and the growth that Cerule and other, you know, folks that cover this space in this industry track. It's trillions and trillions of assets that are Mhmm. In motion and will be. And so you gotta think that Schwab and Fidelity and these banks wanna be able to offer custody as part of this because, again, more and more brokers, advisors are gonna start to at least have a viewpoint on crypto, and they're gonna want a custody solution with their custodian. So Right.
Andres Sandate:It's just if you don't offer it, that starts to become a problem, right, for for their bigger clients, the RIA.
Robert Swarthout:Yeah. And I guess the last thing I'll mention here is, I mean, we've talked about in the past, like, you know, BNY, is set up or setting itself up to do custody, which obviously is the biggest custodian, and they probably touch a lot of different, different advisors through that, solution.
Andres Sandate:And institutions, right, as well. Right. So if you're a a giant pension fund or a a big institutional foundation insurance company account, like, you're gonna wanna know that those assets are in in safekeeping just like all the other assets from a record keeping and and, you know, trust standpoint. So, yeah, I think this is a you know, it's a it's a headline that you could easily gloss over and and, and not realize, but it's it's a big move and something that I think we, you know, talked about and more more to come for sure around, what the fees are if they are and, how how they dovetail with other services they're offering.
Robert Swarthout:Absolutely. Our next topic is really the result of regulation. So, crypto.com, one of those, crypto exchanges you might be able to use, I guess, at a retail level, is delisting USDT, the stable coin, on 131. So, basically, 2 days from now. And I think this news broke, like, yesterday or Monday, so it wasn't like a huge heads up.
Robert Swarthout:I would imagine most of their trading was denominated into these dollars, directly, so it wasn't a huge impact on them. But the MICA regulations that came in in Europe is what's driving this. You've seen exchanges already in Europe start to delist it, kind of ahead of the deadline, crypto dotcom being the most recent. And it's not just USDT that's getting delisted from crypto.com. They're also delisting the PayPal stable coin, which I found interesting because that's run by Paxos, and Paxos is in the US.
Robert Swarthout:So I I didn't dig into that immediately to understand why, but I'm not surprised that USDT is. Part of the MICA is is about how what can actually back a stable coin, and roughly 20% of the value that backs the USDT is not a, like, a Mica comp approved. Mica approved. Right. I understand what's Bitcoin.
Robert Swarthout:It's corporate treasuries. It's stuff that is, not as pure as
Andres Sandate:they would like. So Mika being the European framework around crypto and digital assets. Yeah. For the EU. Yeah.
Andres Sandate:Yeah. For the EU. So these countries, financial regulators and their infrastructure around regulation of financial markets got together over the last several years. They've hammered out these these rules and this framework to say what is and what is not legit
Robert Swarthout:approved. Correct.
Andres Sandate:Yeah. Yeah.
Robert Swarthout:And, you know, and it's and it's Europe's spin on financial regulations. Right? I mean, it's always gonna be a little different than the US, but, admittedly, it's it's ahead of the US right now because we don't have any. And for the most part, people don't complain about the MICA. I think over time, you'll you'll see it kinda get massaged a little bit.
Andres Sandate:But But as that relates to the US, what we could expect to see hopefully in 25, I know you and I are optimistic, is as regulators and and folks on Capitol Hill start to work with this digital assets council, etcetera, that we're gonna talk about, you could you could start to see how that conversation could unfold. I mean, it did not happen quickly, Mika, being it it wasn't like they got together and 6 weeks 12 weeks later, they had this framework. It took several years. It's several years and also
Robert Swarthout:and then once they, I guess, voted it in, I mean, I don't think it went into effect for 6 or 9 months after that. So it wasn't even an immediate thing then. So I would imagine what we see in the US, and we kinda kinda get to it a little bit at the bottom of our last bullet point. Like, we will get regulations. I I would say there's probably a better than 75% chance this year, at least baseline regulations, and we can kind of, hopefully feel like we're on a good track at that point.
Robert Swarthout:But we'll get to that in a minute. So our next topic, is kinda crazy. I don't we've never talked about anything that, at least from a crypto perspective, that has dealt with personal harm. In this case, the Ledger cofounder. So Ledger is a device.
Robert Swarthout:It looks like a USB stick.
Andres Sandate:Oh, wait. We we skipped one. We got in kind create redemption on on TC.
Robert Swarthout:Thank you. Sorry. Yes. Sorry. You teased
Andres Sandate:it out well though.
Robert Swarthout:Yes. Yes. So this is news that I think that everyone hoped would have been, part of the initial launch, the Bitcoin ETF. So in kind creation and redemption. That basically means that you don't have to use cash to get into them.
Robert Swarthout:If you have Bitcoin or you want Bitcoin out, you can get it. I think this is just, this the SCC waking up. We have a new SCC in place effectively, a new leadership, I should say. And, while it's a smaller group of just 3 chairs at this point, 2 Republican, 1 Democrat, they have started changing things. We're gonna get to the the sub 121 thing later, but it's, it's not passed yet.
Robert Swarthout:So I know that, the Nasdaq filed for the IBIDS to become create an, to be in kind. So it And the idea being if you buy it on is close is my guess.
Andres Sandate:So Yeah. Is the idea here the takeaway if I own, and I have Bitcoin in a digital wallet, I could go to, let's say BlackRock or I could go to Bitwise, one of the issuers of one of these ETFs, and I can say, I wanna give you my Bitcoin in exchange for ETFs. In your ETF or shares in your ETF.
Robert Swarthout:Yeah. And that's not a taxable event. Right? I mean, that's been that's been the rub. Right?
Robert Swarthout:So people that have Bitcoin that don't really wanna have to custody anymore, and they want the ETF, they basically get a taxable event on the way in and
Andres Sandate:on the way out. On the way out. Right? So this gives them an opportunity to get shares in an ETF, which is more tax efficient. Sure.
Andres Sandate:And and for some people, they just wanna have custody. I mean, they just wanna have that free custody.
Robert Swarthout:Yeah.
Andres Sandate:They can contribute the Bitcoin in exchange, get shares in the ETF. Yep. K.
Robert Swarthout:So and it's, I said Bitcoin ETFs here in the bullet point. I wanna say that some of the Ethereum ones have also filed for that. Ethereum is such a small, fish in the pond right now in the ETF world that it kinda probably flew underneath the radar, but I'm pretty sure I saw one headline about Ethereum there too. So
Andres Sandate:Okay. Back back to this, not to minimize it. This is the first headline that we have talked about a crime from the standpoint of, like, an assault or a kidnapping, a physical harm. Yeah. So it's,
Robert Swarthout:crazy story. So the ledger, again, the device looks like a USB stick. It's kind of a hardware wallet is what it's referred to, to do custody self custody of your own crypto. It's definitely the way if you're an OG in crypto, you've probably touched a ledger wallet at some point.
Andres Sandate:I have one. Yeah. I think you recommended I get one, so I have one. And I've got some I've got some, some some crypto on it.
Robert Swarthout:Yeah. It's you know, I think over time, you're gonna see less and less of these. They'll still exist, but I think it's the the custody solutions will be good enough that people will trust them. And, again, crypto comes from the libertarian mindset of if you don't control it yourself, you don't own it. Right.
Robert Swarthout:Not your keys. And there's some rubble. But there's risk. But so back to this the bit of the bullet point story here is, so the cofounder and his wife were kidnapped. They were taken to separate locations, and the ransom was a 100 Bitcoin.
Robert Swarthout:Well, when Bitcoin's a $100,000, that is that's a chunk of change. And they they are both now safe back home, safe with an asterisk, I suppose. And, the headline was that his hand got mutilated. Mutilated, I guess, is up, you know, up for definition, but he did lose a finger in this. I don't know which finger, and his French, the Paris prosecutors were saying that, everything is, you know, being investigated.
Robert Swarthout:Crazy story. I was gonna say
Andres Sandate:this has the makings of a of, at a minimum, like, a documentary type story because, you you know, this is a well known crypto executive and his wife
Robert Swarthout:Mhmm. Kidnapped
Andres Sandate:with, you know, a ransom Yes. Of Bitcoin. And now we have you know, he he comes back with a, you know, with with a finger gone.
Robert Swarthout:Yeah. I I'm I'm I'm fairly certain that no ransom was paid. Okay. And they were somehow rescued by the police or, you know, freed by the police. It's just a crazy story.
Robert Swarthout:Like, you used to hear, like, rumblings, like, years ago about, like, oh, you can't talk about how much crypto you have, which generally I think is the right thing to do. You should be talking about it online. But back in the day, it was like, don't even talk about having a ledger or, like, any any hardware wallet and just keep it quiet. People love to run their mouth, especially when they're making money, and it becomes dangerous. Obviously, he's a bit of a, a target running this kind of business.
Robert Swarthout:It's obviously he's in crypto, and all those things. But it's
Andres Sandate:Well, you know, we saw the really tragic, you know, attack and and really assassination, I guess, what you'd call it of the UnitedHealthcare CEO that happened, you know, in in Manhattan. I mean, I I think it raises the question around things like, you know, personal security and corporate corporate security for these high profile executives and their families Mhmm. Given just the way in which everything is so much more public. Right? Every every all these individuals are out there, right, living, operating, speaking, attending events out in, you know, major US cities.
Andres Sandate:Yep. Man, that's scary.
Robert Swarthout:Yeah.
Andres Sandate:Well, I'm I'm glad that he and his wife are are, like you said, in asterisk safe. Mhmm. But, yeah, tragic to hear.
Robert Swarthout:Yeah. Yep. Indeed. So next topic, we're gonna jump back in the MicroStrategy train. We I wouldn't say talk about them every episode lately, but it's been frequent.
Robert Swarthout:Yeah. Michael Saylor. Michael Saylor. Yes. And they're the, you know, the tech company that has turned into, for all intents and purposes, a Bitcoin hedge fund.
Robert Swarthout:So they I guess the speculation is they said suddenly have a tax problem. And to the tune of, like, they have $18,000,000,000 in unrealized gains, and they may be reaching out, at least this article I was reading, to the Trump administration trying to figure out how to get some help with the taxes. Not necessarily to pay them, but to get tax, regulations, and guidance changed, because $18,000,000,000 is quite the, tax bill, or, a little bit more to be taxed on it.
Andres Sandate:Am I am I seeing headlines or at least rumblings out there in social media that there's at least one of the Trump sons is floating the idea of eliminating capital gains on, crypto?
Robert Swarthout:I'm pretty sure with John Junior saying that all US based crypto
Andres Sandate:US based crypto.
Robert Swarthout:Would be tax exempt.
Andres Sandate:I've read some analysis on that. We probably don't have time to go through, you know, what what I've seen, but would this type of, situation be where, you know
Robert Swarthout:Well, it that type of rule would apply. You know, this whole, like If it
Andres Sandate:if it were to come to pass.
Robert Swarthout:Yeah. That's a fair point. You know, I think there's questions to be asked when it comes to okay. If US based cryptos don't have capital gains, taxes on them, how do you define US based? Okay.
Robert Swarthout:You start going down that rebel. Well, Bitcoin is largely the most decentralized network, or we don't know who the creator is. Right. So, like, is it US based? I mean, it's long assumed that at least the creator's name is, maybe a Japanese type It's not on
Andres Sandate:file in Connecticut like all the other, you know, corporations or dead Delaware. Sorry.
Robert Swarthout:Right. Delaware.
Andres Sandate:Right. Back to Fort Fort Fort Fort Fort Fort Fort Fort Fort
Robert Swarthout:Fort Fort Fort Fort Fort Fort. Yeah. So, you know, there's certainly crypto token networks that have been started in the US, and it's very clear. It is not clear, for Bitcoin. It is not the case for Ethereum.
Robert Swarthout:Not that we're talking about Ethereum here, but, like, it's just it's just interesting to kinda see, it'll be to see how this plays out. Yeah. Because he's he's almost on a weekly basis selling stock, buying more, or selling bonds with some form of, capital. And, you know, at the end of the day, like, the not that $18,000,000,000 so you tax it at, you know, whatever the corporate tax rate is on this kind of thing. I I think it's, it'll be interesting to watch play out because not I I don't think he can move the market enough, but people are watching him as the guy that's claims he's never gonna sell some Bitcoin.
Robert Swarthout:Well, what my guess is he just raises more debt and pays the tax, but you never
Andres Sandate:know. Yeah. Well, there's a lot of debt out there that is, looking to be deployed. So, you know, depending on what kind of LTV you can get on that that crypto, there's there's probably a lender out there that will will make a high interest loan. So
Robert Swarthout:Yep.
Andres Sandate:Yeah. It's it's fascinating when you you get into these, you know, these permables around, Bitcoin because we've talked about this when it applies to just individuals. Right? If if you have dedicated, let's say, a 1 or 2% allocation to Bitcoin and Mhmm. You bought it at the beginning of last year
Robert Swarthout:Right.
Andres Sandate:You know, that might not be a 1 to 2% allocation when you look at your 1231 statement given, you know, what what happened with Bitcoin prices in 24. So the the whole idea of rebalancing and, you know, having to sort of maintain a target allocation is a real issue. Right. Unless you're mark MicroStrategy, then it's just more of a tax issue.
Robert Swarthout:Correct. Yes. I agree. Yeah. It's you know, the whole idea of rebalancing, imagine there's many advisors that are, like, not certain on how they wanna do it for crypto because they don't wanna be feeling like they're left out if it goes up 100%, but they also know that they they need to do, in theory, what's right for the client.
Robert Swarthout:That's right. Right. Their age and those all sorts of other variables.
Andres Sandate:Lot of lot of lot of things to think through for sure.
Robert Swarthout:Yep.
Andres Sandate:Alright. Well, SAB 121 or SAB 121 rescinded by the SEC.
Robert Swarthout:SEC. So this is we've talked about this back, I wanna say, it was October, November where the it made it through the house. It made it through the senate. It went to Biden's desk, and he vetoed the Right. The bill that was going to, repeal this.
Robert Swarthout:Right. So, SAB is staff accounting bulletin, 121, basically said that basically banks, for all intents and purposes, couldn't custody crypto. They made it too expensive too. They could, but no one no nobody was realistically gonna do it. This happened on the 23rd, so this would have been, I believe, last Thursday.
Robert Swarthout:Yeah. Last Thursday, the SEC came out with SAB 122 and basically said, okay. We're 121's gone. You can, banks can do it now and the all the silly rules are gone. Right.
Robert Swarthout:This was the beginning of the cleanup at at the SEC for crypto, and are either Thursday or Friday, which we'll get to here in a minute. Trump signed some executive orders around crypto. This you know, if this wasn't repealed, some of his stuff really couldn't have done much unless he was gonna do an executive order, which I'm not sure if he could even do, to get rid of s a b 121.
Andres Sandate:So Now, you know, not to go back and sort of revisit all the history under the Biden administration, but they were they were operating under what was commonly known as Operation Chokepoint. Right?
Robert Swarthout:That was The Chokepoint 2.0. And that was more banking related.
Andres Sandate:Banking related, but we saw some banks close down, that were crypto banks, really. I mean, I call them that. They were they were largely set up to bank the crypto industry. Correct. Yes.
Andres Sandate:And that that all went away. And, you know, that was in part of a broader narrative that you had talked to me about. I don't know if we did that on air or offline, but, you know, there was all this stuff happening behind the scenes with ETFs coming, you know Yep. Together behind the scenes. A lot of, anticipation about, were they gonna get approved, were they not.
Andres Sandate:We saw, obviously, the failure of, FTX. Mhmm. There was just a lot of stuff when you go back and look at crypto probably in 10 years, and you put it all under kind of a a zoom out sort of Right. Lens. It's gonna say, well, that happened and then that happened and now this happened.
Andres Sandate:This all makes sense. Yeah.
Robert Swarthout:Yeah. It's yeah. You know, the TrickPoint 2.0 stuff was largely just making it where crypto companies could get bank accounts. Yeah. Yeah.
Robert Swarthout:And there's now investigations happening, I believe, out of the senate, if I'm not mistaken. Basically trying to figure out who was responsible. Should they be held accountable? What does that look like? And it's certainly early days for that.
Robert Swarthout:But, my guess is something at least newsworthy comes of that, whether there's actual, like, kind of jail time is the right thing. But if there's some kind of penalty, I I would be surprised, but Yeah. You never know.
Andres Sandate:Well, there's been a lot of stuff happening at the SEC. As we know, Gensler's last day was, you know, what, a couple weeks ago. We've got a a nominee that's gonna be going before, you know, congress at some point or committee to, you know, give their background. We've got this digital asset council that we're gonna talk about. But, also, did I see a headline, not not to add one more bullet point because I know we don't have all day.
Andres Sandate:But did I see something about the website for the SEC no longer mentions the Ripple lawsuit?
Robert Swarthout:Yeah. But the lawsuit's obviously still active. It moved from what would have been the active litigation list. Now they they just don't keep in a list for stuff on appeal. Got it.
Robert Swarthout:So that But it's not
Andres Sandate:it's not away. It's just Not away. But Yeah.
Robert Swarthout:It definitely made the news cycle for a couple hours. Yeah. Misunderstanding, really. And then the last thing that, I'll we'll mention about Gensler here is, he is headed back to MIT to, no joke, teach about crypto.
Andres Sandate:Oh, wow.
Robert Swarthout:Okay. Amazing. So I'm hoping that this
Andres Sandate:is gonna be a MOOC or is this gonna be like a closed door, you gotta be enrolled at at MIT? Because I'm sure if it was a MOOC, you would actually have tens of thousands of people that would sign up to hear his point of view, because he's he's gonna be a little bit more unscripted.
Robert Swarthout:Yeah. It'd be interesting if he goes back to his previous opinion the last time he taught up talked about crypto there or his the current party, I guess, party line, that he carried for the last 4 years. It'll be fascinating to hear.
Andres Sandate:Hey. If it's like any other regulated industry in our country, I don't care if it's health care or food, everything. It it's it's a revolving door. So, you know, you have to put your time in on Capitol Hill and as a regulator to get a great job as an academic or in law to then get back into, you know, have a front row seat. It's just the way.
Andres Sandate:It unfortunately, at least on the outside, that's how it seems like it works sometimes.
Robert Swarthout:Yeah. Again, yeah, unfortunately. So our next topic, so tokenization, Larry Fink, was quoted saying, I wanna see the SEC rapidly approve the tokenization of bonds and stocks. And I often joke what Larry wants, Larry gets. I was gonna
Andres Sandate:say, you're just calling him Larry now.
Robert Swarthout:Yeah. Uncle Larry. So I my guess is sometime this year, we get some sort of framework, that talks about tokenizing, bonds, which are already happening, but more specifically stocks. And then you get to the point where it's like, okay. Why does the traditional markets have hours?
Robert Swarthout:Because all of a sudden you can trade these things 247, 365.
Andres Sandate:Yeah.
Robert Swarthout:If they're on a blockchain. I'm and there's other stuff that needs to be figured out like KYC. The question is, does that need to be reformed? I'm probably in the camp that says yes. But there's, you know, there there's a myriad of things that could be looked at here, but I think that at a minimum, tokenization of them, maybe on a private blockchain to begin with, potentially moving to a public.
Robert Swarthout:I could see that transition. But, yeah. He he requested it, and I was like, okay. Start the stopwatch because it's coming soon.
Andres Sandate:Well, here's what I'd I'd, challenge our our listeners, or offer an opportunity. If if you're interested in the direction of financial markets, which now include digital assets, crypto, of course, in terms of a point of view, it's just one company's perspective. They're they're clearly biased. But if you're interested in just a a overall perspective of where we could be going as financial industry in terms of, asset management, wealth management, financial products, technology, transparency and reporting, and how data, plays a role in all of that. Go and listen to the most recent earnings call, which was the 100th quarterly earnings call that Larry Fink has presided over, obviously, since he started the company.
Andres Sandate:Yeah. So it's a little bit of a an interesting sort of anniversary milestone. But to hear their team and him, talk about where BlackRock is positioning the organization as a, you know, multi $1,000,000,000,000 firm
Robert Swarthout:Right.
Andres Sandate:At this intersection of technology, data, and, obviously, providing services to consumers, institutions around risk and around investments and around crypto is is to me, it's kind of must listen from the standpoint of if you wanna know kinda where as they always said about Gretzky, I I skate to where the puck is going.
Robert Swarthout:Going. Yeah.
Andres Sandate:It's just fascinating. And if you thought they were big today and if you thought they were a powerful, influential organization company in the financial markets today, I don't think people fully appreciate and grasp what they will be in 5 or 10 years
Robert Swarthout:Interesting.
Andres Sandate:Which is how long it could take for us to see tokenization of certain funds, certain stocks, certain private vehicles, but they are putting all of this together now Mhmm. And they're talking about it, on their earnings calls when when you really step back and sort of add up all the tech, all the things around data, all the things around what companies they're buying, etcetera. It it just really does make sense.
Robert Swarthout:So Yeah. And and what a difference a year makes because I guess 13 months ago, they wouldn't talk about this at all.
Andres Sandate:They wouldn't talk about it on an earnings call for sure, but they were definitely doing work behind the scenes as we know. And they're doing work 5 10 years out now. So, yeah, something to pay attention to.
Robert Swarthout:Yep. For sure. So our last topic, is kind of a a bundle of things. So Trump signed, obviously, a lot of executive orders, many of them not crypto related last week, and immediately continues to sign them. But specific to crypto, he signed an executive order that establishes a presidential working group on digital assets to strengthen leadership.
Robert Swarthout:That working group will be tasked with developing a federal regulatory framework. Yay. We we we need to see that. We need, the crypto czar David Sachs, will include the the treasury secretary, Bessette, which who has been, I believe approved. Confirmed.
Andres Sandate:Yeah. Yep.
Robert Swarthout:And, like, it, it will not include, the FDIC and a few others in that group, which I thought was a good thing. They're they're kind of in the time out corner after their operation to checkpoint to point out.
Andres Sandate:Probably folks
Robert Swarthout:from the CFTC. Yes. It'll include them as well. So the executive order also, basically prohibits any setting any agency to set up a CBDC in the US, which, again, I'm not terribly surprised about at this point because I think, stablecoins are gonna be the retail version of that, and then there may end up being a stablecoin of sorts that sits behind at a commercial level, but, they're certainly not gonna call it a CBDC. They they revoke some of Biden's, EOs around, crypto and also told the, the working group they wanted to do them do research on having a digital asset reserve, not, you know, I'm being very careful with my words here, not a Bitcoin reserve, which has always been the rumor.
Robert Swarthout:I think that you you we're about to enter a time where assets or digital assets that, provide utility will start pricing themselves differently. I think the US and Trump is kind of or Trump's people have said maybe having one that is well, tokens that are in the reserve that are US based, US created. So, again, Ethereum wouldn't fall into that. Bitcoin probably just ends into it ends up in it because it's the biggest asset, not because it's US based, or US created, at least that we know of. So I don't know.
Robert Swarthout:There there was a lot there, but crypto was waiting for EOs from Trump, and got them, but probably not all the meat that we people thought would happen. I think some people thought that an EO was gonna come through that actually said, oh, we have a Bitcoin reserve now, and we've already bought half of it or something crazy. Right? I mean, like, the, the Bitcoin maximalists are, are awfully wound up these days. So
Andres Sandate:Yeah. Well, I my take on this is I I read, and you you may get this, email daily, but, I think it's an interesting read every day about digital assets and crypto from Byron Gillum Gillum. And his take on is we're at a very we're at a very precarious I don't know if that's the word he used, but we're at an important time in crypto because you you have, as he called it, you have a president and and president Trump who is operating at an 11, right, when it comes to to crypto. Not not a 10. Like, he said an 11, as he said, which is interesting to to hear that perspective.
Andres Sandate:But we we kinda heard that, and and that was how he ran and has positioned himself. But you also now have this debate, I guess. Maybe it's happening more in social media than it is out in more mainstream media around, you know, what, Trump and the the media platform he's created, the the the the meme coins he and and Melania have created, what what the sons are talking about in terms of tax reform, and and all the work that the industry has been doing, call it for now over a decade plus around utility, institutional, enterprise, government, stablecoins, like banking. And and where those two intersect, that doesn't mean that we can't have meme coins and doesn't mean we can't have DeFi and and also have all this other stuff. But I thought that that, that writer, that, perspective was important because I think when you're stepping back and trying to make sense of all of the things we're reading and seeing and and hearing, it's like, where is this industry going?
Andres Sandate:Is it gonna go the route of the I'm not saying they're they're the only voice in the room, but the Black Rocks of the world where we're creating products and access for individual investors through ETFs to get into this industry more easily and custody from Bank of America and Bank of New York Mellon, or is it gonna go more of the route of the innovator creator entrepreneur who wants to drop a meme coin promoted and, you know, see it, you know, popping value. Like, those that doesn't mean they both can't exist, but it they're they are trying to solve for different things.
Robert Swarthout:Yeah. And, you know, all of those things that you just talked about there that are being created are around people speculating. Right? Like, on it's just a just another asset. You guys are betting on sports of sorts.
Robert Swarthout:Like, to me, the part the fascinating part about crypto and where it kinda get marries back in is, like, how these things are actually gonna be used to solve problems. Right. And that's where the real value comes from, in my opinion. Yeah. And everyone's again, focuses on the shiny rocks right now.
Robert Swarthout:Those shiny rocks, I think, are gonna become rather dull when utility kicks in. You just can see what these assets can do. Admittedly, we're probably months years away from that fully being realized, but it's, you know, it's it's just, you know, I think people get distracted easily right now. Yeah. Like, trying to understand why you got into crypto.
Robert Swarthout:And some people got in it because of NFTs, and then they are now in it because of meme coins. That's currently, what what is part of this hype cycle of sorts is the meme coins for sure. So
Andres Sandate:Yeah. But I guess it parallels with, you know, things like, well, if you go all the way back to, like, the Internet. Right? Like, when it was created initially, it it was maybe this unique thing, and you could do, you know, social stuff with it. And now you look at, like, what you're able to do when you see AI and what's going on there.
Andres Sandate:It's Yep. I don't know if it's the same parallel or if it's a good analogy, but it it's definitely something where, yeah, when we see governments and people and everyday stuff in your life is made easier because of the technology and and and and and crypto's role in it. That's what that's what I think. What's the killer app as they always say. Right?
Robert Swarthout:Absolutely. Well, we we don't know the answer today and hopefully find out soon, but we will we'll have to see. So Yeah. Sure. So thanks for joining us on this episode of 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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