Ep 35 - February 5, 2025 - $13B in Profit!
Welcome to another episode of the weekly crypto check-in recorded on February 2025. I'm I'm your host, Robert Swarda. I'm joined by my cohost, Andres Sondate.
Andres Sandate:How's it going, Andres? Hey. Good, Robert. Looking forward to today's episode. Lots of stuff to cover, and it's, Super Bowl week.
Andres Sandate:But we won't talk football.
Robert Swarthout:Yeah. We won't talk football, but, I know this is, like, maybe, like, your, is this is this, more important to you than, like, like, a holiday week, like, a Christmas week?
Andres Sandate:No. No. Not at all. But, it is a good excuse to have barbecue and wings and Yeah. You know, guacamole.
Andres Sandate:And as one of the popular shirts floating around Kansas City, because I am a Chiefs fan, full disclosure, is, popular shirt right now is, I'm just here for Taylor and the snacks. So that's probably how a lot of people feel about football these days since the Chiefs have become that sort of team. People like
Robert Swarthout:to not like be in it. Yep. Absolutely.
Andres Sandate:So, anyway, I digress. But, how are you?
Robert Swarthout:I'm doing good. You know, I've been enjoying this weather. Yeah. And, kind of I had somebody joked the other day when I was out in public that, that maybe spring is here early. I'm I'm thinking it's probably a little early to declare victory on winter at this point, Yeah.
Robert Swarthout:Because it could come back in a quick vengeance, but early February and being in the seventies is a little odd. Yeah.
Andres Sandate:At least in Atlanta. So Appreciate it.
Robert Swarthout:We'll get started here. We have a lot of this a wide ranging topics today. Sometimes it seems to be all about lawsuits or all about ETFs. And now we have a good amount of other things. So it makes this a little more fun.
Robert Swarthout:Our first topics is, there's 36,000,000 crypto tokens in existence. And this is admittedly totally caught me off guard. Like, I had paid attention for a while how many tokens there were, and I was it was like it was like 20,000. And if, like, the obviously, listeners can't see. There's a graph that I'm looking at, and it basically, this large or gigantic number is coming from meme tokens.
Robert Swarthout:The vast, vast majority of it launched on Solana and a couple other networks, but it's, it's up into the right. It is literally going vertical. It's definitely, like, logarithmic at this point, and, it's just it's just all a bunch of trash. It's like, this is the gambling side of crypto. Yeah.
Robert Swarthout:You know, it's these are all in some sense, you can think of as different slot machines that you could play within the crypto, casino. So
Andres Sandate:Well, this this is all fodder for those who are anti crypto in a sense. Right? Because, you know, you don't have to look very hard to see that the SEC, even with a new, you know, set of leaders or a new commissioner coming in anyway Mhmm. There still are cases, right, where they're going after folks who pump and dump, you know, coins and, obviously, commit whether it's securities or not. You know, we won't get into that debate, but, but there is a lot of crap out there.
Andres Sandate:On comparison, I think we talked about this before we went live. Mhmm. The decentralized nature of this whole space, you know, allows for somebody sitting at home that understands the technology and understands how to launch a token can pretty much spin up and launch a token, a meme coin. That's not the case with a publicly traded company. So by comparison, there were about 8,000 stocks, publicly traded companies in The US in the mid nineties.
Andres Sandate:You know what that number is today?
Robert Swarthout:Smaller number.
Andres Sandate:It's not more. I'll tell you that. It's it's right around 4,000. So
Robert Swarthout:Yeah.
Andres Sandate:In a sense, you know, it's there's a lot of forces for why that's the case, but it's, there's a lot of lot more, private companies Mhmm. Electing to stay private. That's a lot of different reasons for that. But, yeah, this crypto space is obviously going the other way.
Robert Swarthout:And then
Andres Sandate:that in the next three to five years, what do you think this number is, is my question?
Robert Swarthout:I mean, I I kinda just wanna gravitate to using the word infinity. Like Yeah. I I don't understand I don't understand what stops it because even if The US has regulations, doesn't mean that it doesn't stop outside the borders. Yeah. And if anything, maybe we get regulations that kinda loosely think, like, govern these gambling tokens for all intents and purposes.
Robert Swarthout:Yeah. I don't know. It's,
Andres Sandate:because a lot of these don't have any liquidity. There's no Right. There's no market, for them if you buy if you issue them or buy them, you know, there's likely very little trading activity. So it truly is, a speculator speculator world. Absolutely.
Robert Swarthout:And, you know, we mentioned last week in the episode, I did not have Trump launching his own meme coin on my 2025 bingo card, or his wife for that matter. So You got two. I got two of the and then, basically, that is part of this list. Yeah. And, you know, there's all sorts of you know, anytime someone has an idea what could be a meme, like, the next great things, I'm sure it takes you all about five minutes to launch one of these things.
Robert Swarthout:Well, I saw
Andres Sandate:that Musk's dad is, involved. Now he he wasn't behind launching it, but there's a group that approached Elon Musk's dad, and they're creating the Musk token. I don't know. It's another example of this is and, you know, on the website for the coin, apparently, they reference, you know, him wanting to go to Mars and all these other, advances. But, but, yeah, it's opportunistic and capitalism, good or bad.
Andres Sandate:It's Yeah. You just, you know, you just hope that the the argument or the case that we've been making to talk our own book a little bit is, you know, commercial utility. Often these tokens that represent the 99.9% of this 36,000,000 really don't have any commercial utility.
Robert Swarthout:Yeah. You know, and if anything, regulations come. Maybe it doesn't make these meme ones go away, but it actually allows the the ones trying to do, in my our opinion, real work, to be defined differently. Yeah. And then they have the rules to be able to do what they wanna do.
Robert Swarthout:And I think, you know, we would have less to talk about when it comes to meme tokens at that point because, they are getting more of the news and unfortunately right now. So
Andres Sandate:Yeah.
Robert Swarthout:Anyways, on the on the the other end of the spectrum, you couldn't be more serious if you're talking to the, Jerome Powell. And he was quoted as, in his last press conference. It just makes me shake my head, that
Andres Sandate:Head chair Jerome Powell. Yeah. Head chair Jerome Powell.
Robert Swarthout:That, banks are perfectly able to serve crypto customers. And he had this look in his face and like this demeanor that like, hasn't it always been this way? Yeah. There is an ongoing investigation, by I I guess the house or the senate Republicans. There's a committee that's trying to investigate Checkpoint two point o and try to figure out how to who the actors were in that, trying to get rid of them, you know, maybe punish them, all that stuff.
Robert Swarthout:So it it just kinda smacked you in the face when with his comment, like, perfectly able. Like, if I had free time, I would like to go down the street and try to apply for a bank account, for the crypto fund and see how that goes. I don't think it's perfectly able right now, to be my guess.
Andres Sandate:So Yeah. I I think there's a a little bit of, it seems like whitewashing here or something. I don't know if that's the right term, but, you know, like, six months ago I mean, gosh, six weeks ago, you wouldn't have heard a public official in, the government talking this openly, and and he's not the only one, but about that the fact that crypto and the regulated institutions, you know, can effectively, you know, start to dance and get married again. It's like Mhmm. Where were we, the last four years when we could have had more constructive dialogue to prevent some of the blow ups that happen where investors actually were harmed or banks actually did have to shut down.
Andres Sandate:So, anyway, it's, it's easy to Monday morning quarterback. Hopefully, this is the beginning of a wave of what we'll see is, work between regulators, government, the private sector, and, you know, ultimately, customers just to create, you know, lower cost ways for, customers to do crypto banking or crypto investing, with regulated institutions. It's gonna, I think, ultimately be better for all of us in the end. It's just gonna be messy to get
Robert Swarthout:there. Unfortunately. So, anyways, on to maybe some better news potentially here. So the SEC, has moved, quicker than people were expecting or they had to for that matter when it came to Canary Funds had filed for a Litecoin ETF. A 19, b dash four filing has been acknowledged by the SEC, which actually starts the clock.
Robert Swarthout:Basically, it's in twenty one days. Generally, my understanding is is that once you go from initial filing to maybe getting one launch, it's like a two hundred and forty day clock a lot of times. This was greatly accelerated in this case. And not to say there's anything special about this ETF with Litecoin. No one really cares about Litecoin.
Robert Swarthout:So I'm not even sure why we have an ETF for it. It may fall into the ETF bucket in my opinion where there's a Dogecoin 1 been filed for. So it's it's I've I was like, why is that even need to be a thing? And I saw some commentary around that maybe these meme coin ETFs are just for degenerate gamblers that wanna do it through the brokerage account.
Andres Sandate:Like,
Robert Swarthout:I mean, which I guess makes some sense. So anyways, yeah, it's cool to see the SEC moving quickly on something. Typically, they like to take the absolute last second. I mean,
Andres Sandate:you have a future in in newspapers or magazines because you wrote a hook here. I mean, SEC and moving quickly all in one sentence or one headline. You don't often hear that. Often, it's a delay or it's, there's not a ruling or there's some extension. So, yeah, the fact that there is movement I mean, this was one of my predictions in the letter that we put out in January for twenty twenty five or less predictions, I would say, to clarify.
Andres Sandate:More things I was gonna watch in '25. And one of the things was, would we see this, increased number of applications and ultimately, like, approval of ETFs, you know, the indexation of the crypto or digital asset space? Is it really gonna happen, or will it be mostly Bitcoin and Ethereum? And it does appear based on the applications that got filed on final day, final hour in office and what's transpired over the last few weeks, and especially in the first, you know, call it month of the Trump administration that there is definitely a, a lot of tailwind, you know, for the industry. And and and and I would say there's a lot of opportunity, to strike, if you will, while the proverb proverbial iron is hot, and it seems that these shores are doing that.
Andres Sandate:Yep. Makes total sense.
Robert Swarthout:Yeah. So, you know, kind of along the same lines, our next topic, Kraken brings back staking for US customers. I, again, would have not had guessed this was gonna happen before we got regulations. Not because I think they're doing anything wrong, but because literally roughly twelve to eighteen months ago, Kraken had Kraken is an exchange in The US, kind of a competitor to Coinbase for those that don't know. But they had a settlement with the SEC for their staking product where basically they said US customers can no longer use it, and they paid like a $40,000,000 fine.
Robert Swarthout:And then everyone seems, I guess, relatively happy at that point.
Andres Sandate:At least, first time. Yeah.
Robert Swarthout:Yeah. And then all of a sudden, boom. New administration, new SEC thought leadership, and, oh, it's fine to bring it back. No problem. Yeah.
Andres Sandate:Yeah. I mean, you think that they probably wanted to come back into staking, of US customers for some time, but I think it's just a shifting of the political winds. Right? And and now that there's a new sheriff in town Yeah. As they say, you know, there's gonna be different activities going on.
Andres Sandate:So I, yeah, I think we're gonna see more of this. I mean, the the the the connection between what's happening in DC, what's happening in the boardroom and strategy room and management decisions, in crypto, Those are so interconnected at this point in terms of Yeah. The movement. And and, frankly, it it might be across all industries a lot more than we maybe are talking about on this show. Right?
Andres Sandate:Mhmm. There's a lot of industries, I think suffering from I don't wanna say it's whiplash in a bad way, but it's just so much is happening with executive orders and the new administration and new policies. Yeah. Everybody's trying to get their arms around it. But Yeah.
Andres Sandate:And it's, you know,
Robert Swarthout:it's a fire hose right now. Right? Yeah. Yeah. It's a it's a lot.
Robert Swarthout:My last favorite piece, when I was reading this news about the Kraken, so I read it as a tweet, it's where I first saw it. And this is a pretty big account that does kinda like, Wall Street type news. And the Kraken's Twitter account replied, we're so back. And I'm like We're so back. Twitter.
Robert Swarthout:We're such a it's such a Twitter thing to do. Yeah. And we're terrible about that. So, anyway, it's pretty cool. So our next topic, is obviously, will involve the SEC.
Robert Swarthout:So Grayscale has had, their trust. They these trust predates, the ETFs. Right. And it was, you know, something for private placement for accredited investors for the longest time so you could invest in crypto. Their most famous one was their Bitcoin 1 that did convert into their Bitcoin ETF.
Robert Swarthout:They have filed the same type of application to, convert their XRP ETF into to excuse me, XRP trust into into an ETF.
Andres Sandate:Yeah.
Robert Swarthout:So, you know, not tons of news here beyond. It's just kinda showing more momentum kind of going. And I would guess that they wouldn't have filed that if they didn't think the ETF applications that are already in a decently good chance of getting through. So
Andres Sandate:I know it's a private vehicle, this XRP trust, that's, sponsored by Grayscale. But any idea of the size of it?
Robert Swarthout:It's not big. I think it's, I'm gonna say it's $15,000,000. It it's Yeah. Used to be peanuts.
Andres Sandate:Yeah. So so on this on the scale of of an ETF, I mean, we're talking, like, minuscule relative to not just the the Bitcoin ETFs, but even some of the Ethereum ETFs that haven't had as much success and gotten as much traction. But, but XRP has been in the news a lot, and, and, you know, we've talked about them and Ripple Mhmm. Quite a bit with the lawsuit with the SEC. So Mhmm.
Andres Sandate:Yeah. It it it again, I think this whole idea of the indexation and the ETF, that's happening outside of crypto. It's not like, ETFs and crypto is the only conversation. There are, there is a huge movement away just in general in asset management and has been for some time now, really, since, ETFs were launched. But, but if you just look at the size of the iShares platform and you look at platforms like Invesco and Vanguard and others, you know, investors by and large, you know, are looking for low cost ways to get just two types of exposure, index exposure to a particular index, you know, the MSCI, S and P, or very, targeted thematic or very tactical type exposures, which would be something like a Bitcoin, and do it in a low cost way.
Andres Sandate:And advisers and those that are, you know, helping people invest or just do it yourselfers are looking for the lowest cost way, and most efficient way from a tax perspective to get that exposure, and the ETF is winning.
Robert Swarthout:The ETF, with with the small asterisk in the sense that grayscale's ETFs are never low fee.
Andres Sandate:They're not. Right. Yeah.
Robert Swarthout:So it'd be interesting to see what their strategy is here because they did something very different. Basically, reduced it only 20% from two and a half percent down to 2% versus 20 to 25 basis points that the others were fighting at. So I it will be fascinating to kinda see how this one And,
Andres Sandate:yeah, and on the scale of things, like, when you look at some of these index ETFs, they're single, basis points per year in in management fees, you know, and and some of them obviously are much more. But, but, yeah, your average mutual fund with, you know, all the fees associated with it. It's not a business that's going away tomorrow, but, certainly, a lot more active managers are looking at other ways to to grow. And it seems like it's happening in, ETFs, index products, and alternatives for private vehicles. Indeed.
Robert Swarthout:Indeed. So next topic, kind of a bit of a ASF update or follow-up on kind of the state of Bitcoin reserves or the concept of them at the state level. We'll we can kinda touch on The US One a little bit too, but really this is about the states. So there's 14 states that have had a bill at least introduced that is specifically for a Bitcoin reserve in their state. Some of them haven't left committee, some of them have left committee, but nothing has gone to a floor for a vote yet.
Robert Swarthout:Again, it will something or will a state beat The US to any sort of reserve if The US has one? It does seem likely. I'm guessing one of these states kinda gets it, going pretty quickly and things just move quicker at a state level than they will in Washington. So I I I think really the real question is is, like, is there a state that comes along and it's it's a it's a basket versus just a single asset? I think that's the ones that I would find more fascinating.
Robert Swarthout:So
Andres Sandate:Well, I you know, I had an idea and, you know, might as well just put the idea out there. Why don't the two of us go to our legislators and propose that Georgia, where we live, sponsor a basket Yeah. You know, index of, cryptos for the state of Georgia. You know? Talk about I mean, because we are such a pro business state or or market ourselves as such.
Andres Sandate:Right. We're home to many, many Fortune 1,000 companies, so there's a very proactive business lobby. We wanna be business friendly. And, you know, fintech and technology, particularly in areas like payments and payments infrastructure and other things, that's very big in Atlanta. So I'm just saying.
Andres Sandate:There might be a receptive audience.
Robert Swarthout:It's not crazy. The of all the states that kinda surprised me, Alabama is one of those 14 states. I would have felt they have might have been a laggard, but it's, they they beat Georgia. Georgia is not on the list. So
Andres Sandate:I know. Yeah. I'm just saying. So stay
Robert Swarthout:tuned, folks. In all my free time, I can go down there and lobby. Right. Right.
Andres Sandate:The broader broader and more importantly, of these states, do you get a sense for what you've seen on social media, Twitter, x, that that these are, I guess, being taken more seriously, by more of the legislators, than the folks that are sponsoring these bills to actually look at them? Or is this again, I asked this last last week to some extent. Is this more headlines, and about press?
Robert Swarthout:I think it's I think it's the latter. Yeah. I it to me, it seems like a me too or it seems like you're trying to front run the gov the federal government. Like
Andres Sandate:Yeah.
Robert Swarthout:I I just I I don't understand it. I will well, I understand what they're doing. I don't understand why they're doing it. Yeah. So I don't know.
Andres Sandate:Not not enough yeah. Not enough detail yet. Well, the thing is I saw yesterday or the day before, president Trump announced in one of his press conferences, that he had signed an executive order to create a sovereign wealth fund He did. For The United States. That's happened.
Andres Sandate:Right?
Robert Swarthout:That has happened. Correct. Okay. Yeah. Not yet, but yes.
Andres Sandate:Right. But it's it's kind of along the same line of, you know, creating a reserve or a stockpile of some precious asset or some strategically important asset. Right? When you think about Alaska, they have I think they have one of the sovereign wealth funds because of all the oil Right. And and gas and energy assets there.
Andres Sandate:And I'm just curious, like, if if that becomes something that the state start to think about, like, what are our state specific assets that we would contribute into a sovereign wealth fund? Right. Whether it's attracting businesses to set up and do Yeah. You know, crypto in in their backyard or what.
Robert Swarthout:Yeah. I briefly saw at least a clip from the press or it's me, I guess, Trump was sitting at his desk signing that executive order. Yeah. And the two gentlemen, beset from, the treasury Secretary
Andres Sandate:of treasure and Howard Lutnick. And Lutnick were there. Yeah. I mean,
Robert Swarthout:they're the treasury of commerce. Co heading this sovereign wealth fund, whatever that means. Yeah. And Trump literally was floating the idea that maybe the first thing that gets put into it is The US buys TikTok. I'm like,
Andres Sandate:Oh, wow. Okay.
Robert Swarthout:Or he does it with some other wealthy people. He he was just, like, kinda spitballing, but I'm like, he should be very Trump in that moment.
Andres Sandate:But
Robert Swarthout:it's like of all the things that we could put in there to begin with to kinda set a signal. It's
Andres Sandate:Right. Right. Right. So anyways, I Yeah. I'd be curious to see yeah.
Andres Sandate:To see see what if that goes anywhere. Because, you know, there are a number of of prominent countries, You know, Norway's got a huge, sovereign wealth fund. Obviously, a number of Middle Eastern countries
Robert Swarthout:Mhmm.
Andres Sandate:Have big sovereign wealth funds, you know, where they invest in, you know, a lot of their oil oil riches. So, yeah, lot lots to to think through and discuss. This next one is is is is gonna be fun to talk about. You did some research on who has made the cover of Forbes magazine. Yeah.
Robert Swarthout:And next is Michael Saylor
Andres Sandate:of MicroStrategy.
Robert Swarthout:I forget if it's actually out yet or it's coming soon. I don't know. He's, he's on he's on the cover nonetheless.
Andres Sandate:Yeah.
Robert Swarthout:And, you know, I I'm sure there's been, you know, a vast majority of people that have been on the cover and most of them have probably been good at what they've done for the world. But just kind of, like, zooming back out, you can look at, you had, Elizabeth Holmes from Theranos was a Theranos. Right.
Andres Sandate:She the fraud
Robert Swarthout:that she had dealt with or was running there. You had SPF on the cover. You've had, From FTX. Adam Newman from WeWork on there. Yeah.
Robert Swarthout:So probably a mixed bag with him. And then you have Sailor. And you also had Sam Altman. So he the jury is probably still out from him. He's open AI.
Robert Swarthout:Yeah. It's probably very divisive, opinions on him nonetheless, but it's a, I don't know.
Andres Sandate:I I I Well, it is a media asset. I sell a little bit of media. So what I have learned is, you know, you are trying to sell ads and get clicks, and that that is what you're doing. I'm not saying that they don't have good journalists. Right.
Andres Sandate:Nothing away from our our now colleagues, we could say, our in in the journalism business, we are. But they they are obviously trying to sell, trying to sell magazines. And what what you know, I was probably young and naive at the time, but I used to think there's only one cover of Forbes, like, the same cover everywhere, and that's not the case. You know? They they have covers they have Forbes Asia.
Andres Sandate:They have Forbes Mexico, Forbes Middle East. You know? So but, yeah, I'm sure there there's a lot of debate that goes on as to who to put on the cover. But Yeah. He's having a moment.
Andres Sandate:Right?
Robert Swarthout:He's having a moment, and I like, I'm very conflicted on him. And and we've probably talked about this in the past, but, like, I I fear he becomes the boogeyman for Bitcoin. Because what he's doing with MicroStrategy, you know, this kinda how he's going about that. I just don't it doesn't feel healthy to me. I don't I don't have a ability to put my finger on what is the problem right now, admittedly.
Robert Swarthout:But it just feels something feels off here. And my I guess my ultimate worry is it it's it actually affects all of crypto, in some way. So we don't need another I'm not saying he's doing any sort of fraud because I don't think
Andres Sandate:this is
Robert Swarthout:we don't need another SPF. Right.
Andres Sandate:Somebody built up that they're almost like the messiah. Absolutely. They're they've got the golden touch, and they can do no wrong, and they sort of walk on water. Mhmm. Not to use that analogy too much.
Andres Sandate:I don't wanna go too far with it. But but the idea, the media loves to build this up, and the media also loves to tear down. So there's there's, like, the the hero villain interplay. And Yeah. And it's controversial, which is perfect if you're trying to promote a magazine.
Andres Sandate:Yep. I think that what you know, you have to dig in, like, anything. You gotta dig in and sort of understand what's the backstory. And every time they go to raise money for purchasing more Bitcoin, they seem to have people lined up at the door. You know?
Andres Sandate:Right. They wanna give them capital. And this is not individual investors giving them a hundred bucks at a time. I mean, these are institutional offerings of, you know, debt and equity net offerings now. Managed by institutional investment banks.
Andres Sandate:Right? They're in the business of making fees. Right. There's disclosures. Right?
Andres Sandate:But, yeah, it's it's, people are doing their research and digging in and understanding kinda why to get involved. So yeah. But I do have that same concern. Like, we're not hearing enough about again, as is always the skeptic in me, we're not hearing enough about the killer use case of crypto like we are with AI. And, like, you know, we see with AI.
Andres Sandate:And, again, there's a lot of there's a lot of questions in AI about when is enterprise adoption gonna happen at scale.
Robert Swarthout:Right.
Andres Sandate:There's been a lot of consumer adoption, but as we saw with is it DeepSeek or DeepThink?
Robert Swarthout:DeepSync. Yeah.
Andres Sandate:When when you make something available to people at a low cost and it works, people are gonna use it. Right. And so we you know, now we even use, they will. Exactly. They don't care about the privacy.
Andres Sandate:They don't care about that their data is is taken and sold. They don't care about all that. They just want something that makes life a little bit more fun, a little bit more efficient, a little bit easier. They don't care about their data. Maybe they should.
Andres Sandate:Maybe Leslie Stahl will do a piece on sixty minutes. Who cares? They don't care. It's it's about efficiency and and, you know, especially if it's free. So we'll, I don't know.
Andres Sandate:We'll we'll have to see. I just, I I really do hope that you're wrong in the sense of, like Right. Who who are the people that got on Forbes that didn't turn out to be real? Right. Because crypto needs, you know, needs some needs some success.
Andres Sandate:And, and then no. I didn't say Bitcoin. I said crypto, you know, which includes Bitcoin.
Robert Swarthout:Sure. Absolutely. Yeah. Well, we, I guess, well, we'll see. On a pause.
Andres Sandate:So Forbes cover's coming out. We just sold them a few more magazines because people are gonna go pick it up, but I guess the jury's still out. We'll have to see where it goes.
Robert Swarthout:Yep. So our next topic, we probably can safely say that the folks at Tethr are not as much on the up and up as Michael Saylor is. I think that Michael is probably maybe he's making bad choices potentially, but, like, he, is not doing illegal. I think there's been in the past where Tether has potentially done stuff that has been shady. They again, we're not gonna dig it all up again, but they their audits are produced by their internal folks.
Robert Swarthout:That's not an audit. So the the their business is crazy profitable, though. Like, $13,000,000,000 in profit last year. And, you know, sometimes you'll look at these things on, like, on a per employee basis, like
Andres Sandate:Yeah.
Robert Swarthout:That they have only a 50 employees. So they're making just shy of $87,000,000 per employee. Apple is doing just shy of 600,000, dollars. Microsoft's 3 hundred and 30, like, peanuts compared to what, Tethr is able to do. So
Andres Sandate:Yeah. They have good unit economics as they say. So tell us quickly, what does Tether do? I mean, I know that we in crypto spend a lot of time batting these same names around, but catch us up on what they do.
Robert Swarthout:Tether, they have some stable coins. Their biggest one, most famous and most successful by far is, USDT. It is referred to as Tether, but, yes, USDT. And it's it's one to one backed by the dollar. The reason why they aren't allowed to be in Europe, they're probably not gonna be allowed in The US once we have stablecoin regulations is theirs is not fully backed only by, what would be like treasuries and actual hard cash.
Andres Sandate:Highly liquid, very redeemable assets.
Robert Swarthout:Yeah. 10 maybe maybe even 20%, I think the number offhand, is backed by Bitcoin, corporate bonds, other stuff, that's more volatile. So it's interesting way. I mean, they they're based in The Caymans, so they've been able to kinda do what they do because of that. But they are moving to El Salvador, which I don't know if that's an upgrade or downgrade from a, a perception standpoint, but Right.
Robert Swarthout:Unless they are moving. So Yeah.
Andres Sandate:Well, on on the on the headline, the the most profitable per employee company, at least that we're aware of in the world, certainly in crypto.
Robert Swarthout:Yeah. Yeah. Anything of scale, especially when you're talking about billions of dollars. It's I'm sure they're in a league of their own at this point. Yeah.
Robert Swarthout:Volatility. It was crazy this last weekend. Yeah. I, I was admittedly outside. My brother texted me and kind of brought it to my attention about what was going on.
Robert Swarthout:I was enjoying the great weather and crypto, in response to the tariff stuff that happened, I mean, it it's all Right. Tied together. Started selling off, and then you have these leverage traders. They get liquidated. It could continues that sell pressure.
Robert Swarthout:And it, there was some tokens that were down 40% at one point on a wick within the same day candle. Yeah. You know, use XRP as an example, it was way down. It had a dollar of movement within the same day of candle. For a token that is at $2.40.
Robert Swarthout:It was down at $1.70. It started Friday at, like, 03:15. So Do you,
Andres Sandate:I yeah. This is, like, market commentary question time now. So going into, you know, the weekend, the threat of tariffs was hanging out there. Trump said he was gonna impose tariffs on Canada and Mexico. They responded and said they will retaliate, and we're into our first trade war.
Andres Sandate:Might meanwhile, in the backdrop, Rubio is going to, you know, negotiate with Panama to try to get the Panama Canal back. I mean, there was just a lot going on. We get to Sunday, tariffs are put out there, they're gonna start, and then all of a sudden, yeah, we saw the market react. Mhmm. And do you think that there was a whisper, hey.
Andres Sandate:Let's back down. Or were there actual real concessions made, on trade policy with Canada and Mexico?
Robert Swarthout:I the only the only thing I heard come out of these both Canada and for the Mexico piece was and maybe this is all Trump wanted. I have no idea. It was about fentanyl. Right? Trying to
Andres Sandate:Yeah.
Robert Swarthout:Walk the flow of it into The US. Yeah. I did hear some commentary about, like, how he's so early in this presidency that, like, he may not mind in some ways to take a few, like, hits to the market if he can actually get somewhere with it. Right. Which is he's not worried about reelection.
Robert Swarthout:It's not near the midterms. It's it's kinda insulated a little bit right now. Right. And in a week from now, everyone's gonna forget about it, assuming it all kind of Yeah.
Andres Sandate:I mean, he did say there's gonna be some short term pain for some Americans. Yeah. But in order to address what he believes are, just looming huge deficits, with just about every trading partner. Right. So yeah.
Andres Sandate:I mean, look. We the whole, run up to his, being in office after the election was what was what was his trade policy gonna be, and would we see tariffs? And it was tariff, tariff, tariff every day on all the news networks and business, you know, as usual outside of just talking about tariffs. And then, you know, we saw this the market, including crypto, say, Not so sure how we feel about that. And it just kinda went away.
Andres Sandate:So not to minimize the importance of addressing fentanyl and the importance of illicit drugs coming over, you know, our borders. But, but, yeah, it might be the beginning of what we expect to see and will see in the cycle of news, which is, you know, what's a threat versus what's actually going to transpire and the gap between those two things could sometimes be hours or or days and sometimes just never materializes, but the threat gets more headlines than the actual Mhmm. You know, news itself.
Robert Swarthout:For sure. And and to put some numbers around this volatility, across the crypto market, so liquidations I kinda referred to happened. Yeah. It was first reported it was around $2,000,000,000 in liquidations. But as I started digging in, I found a gentleman, his name is Ben Zhao.
Robert Swarthout:He runs an exchange out of Asia, Bybit. He was saying how on their exchange alone, they had 2,100,000,000.0 in liquidations. But for whatever reason, it wasn't being reported correctly out to Coin Glass, which is kinda like a website to kinda aggregate this data. And it was aggregated at one seventh of the value, which he assume is also happening for all the other providers. His assumption is the, total liquidations are around 10,000,000,000 across the, the entire crypto
Andres Sandate:ecosystem. Wow.
Robert Swarthout:That's that's that's a lot of money. Yeah.
Andres Sandate:And we saw Bitcoin get to a hundred and 4,000 around there and then pull back. I don't know where it's at today, but it was at 97.
Robert Swarthout:It's 97. Yeah. Yeah. I mean, it even dipped to almost well, I know at least 94. I don't know how low it went.
Robert Swarthout:But yeah. You know, it it's still, you know, nothing structurally has changed. I don't think we're still in this bear mark it's gonna be bull market, and we should be, in some ways, we're just waiting for a catalyst. I think the market was waiting for the crypto ETF. It wasn't as specific as, I guess the market wanted, and we're just kinda more in a wait and see approach right now.
Andres Sandate:So Yeah. My my sense from the market is it's hard to get super excited about talk of legislation because we all know, you know, people that pay attention to politics and and watch what's happening. Is it it it's it's it's moves at a pretty slow pace. Right? So I'm hopeful and optimistic that whatever legislation we do get, even if it takes a little bit longer for the industry, is, you know, somewhat of a game changer and step change in the direction and likely will be in stable coins to tee up our final headline.
Robert Swarthout:There you go. So and we don't have tons of meat on this bone to talk about, but it's so senator Bill Hagerty, said he will introduce legislation that creates a framework for stable coins. Basically, this has been long suspected to be the first building block, you know, basically getting legislation in place for stablecoins. It I don't know if it's gonna follow the same format that what we see for Mika in Europe, where basically that's why Tether can't be there because they are not backed exactly how they want to see these things structured. I'd imagine you can't have an algorithm XDA Bitcoin anymore.
Robert Swarthout:So there'll be some stuff that comes out, as more details are released, but it's, I was excited just to see this headline and seeing another senator talk about it. You normally wouldn't see talk about this stuff. So Yeah. Six months ago, he was not in the list of, people working on crypto legislation.
Andres Sandate:Well, yeah. Hopefully hopefully, senator senator Hagerty will, have some, some some young energetic aids that are willing to pull all nighters to to, you know, work work the back channels and get, get some legislation in motion, at least some draft language that we can start to see and put our hands around.
Robert Swarthout:Yep. Sounds good. So thanks for joining us on this episode of Weekly Crypto Check-in. To stay updated on future episodes, you can find us a podcast player by searching Teton Crypto Capital or the Weekly Crypto Check-in. Take care.
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