Ep 36 - February 12, 2025 - A "Fresh Look"
Welcome to another episode of the weekly crypto check-in recorded on February 2025. I'm your host Robert Swarda, joined by my cohost, Andres Andate. How's it going, Andres?
Andres Sandate:Hey, Robert. Good. It's staying, warm here in a wet cold, somewhat dreary Atlanta. How about you?
Robert Swarthout:Yeah. Same here. It's, it's it's definitely still winter. The lady last week that declared winter, the victory over winter, I wanna find her and blame her for all this nasty weather we have this week. So
Andres Sandate:Yeah. We're getting a we're getting a dose of it and snow other parts of the country. So I guess the rain isn't so bad. Yeah. But, yeah, we've got a lot of stuff to talk about, including, you know, a fresh set of headlines around politics and regulation Mhmm.
Andres Sandate:And a little bit of rewriting of history, to start us off.
Robert Swarthout:Yeah. It's, you know, slightly different format today, but I think it should be good. So Yeah. Powell here, you know, the I obviously wrote the the bullet point for this one to kinda be a little bit click baity, but he literally said that he's surprised by all this debanking of the crypto. We need to have fresh look at it.
Robert Swarthout:I'm like Yeah. I just rolled my eyes at this. Like, you know he was knew this was happening.
Andres Sandate:Yeah. We're talking about Fed chair Jerome Powell. Yes. Testified yesterday in, in, you know, of course, all the TV's, business networks, including mine, were glued to his testimony. People wanna know what he's gonna do, not that he gets to make the decision alone, but he's Right.
Andres Sandate:He's the, he's the voice when, He's the messenger nonetheless. Yeah. People wanna know what's going on with with, interest rates, what are we gonna see, and that's, you know, the the the open questioning from the senate, senators on the committee. We got into talking about crypto and got into talking about digital assets, and I you know, the the fresh look is the idea that operation checkpoint two point o, there was a lot of criticism from crypto and from folks in the digital asset space that were saying, look, you're choking off any innovation. You're shutting out the potential for enterprise to actually exist.
Andres Sandate:And and he came out yesterday and said, basically, we should take another look. Right. Why the strong reaction from you?
Robert Swarthout:Well, because it's just like he he acts surprised. Like Yeah. Hear that this even happened. Like, you know like, well, the evidence does not exist currently, at least publicly. We were talking before we started recording.
Robert Swarthout:I'm like, once the negotiator gets their chance to come over there, they're gonna find the evidence and they're just gonna publish it. I I imagine that's how that's gonna happen. Right.
Andres Sandate:And
Robert Swarthout:I look forward to that day. But, like, as as a functional victim of this choke point two point o, like, having lost bank accounts a couple times, like, I'm just kind of not in the mood for this whole, like, playing dumb type, approach to it. So yep. So I you know, it's it's interesting. The it it I feel like there should be a lawsuit here.
Robert Swarthout:It feels like there's a possibility for one. I don't know how that works. Like, does he have or does the Fed have some sort of, cover that they they fly under here? The Fed being a private business that is not attached to governments is kind of this weird thing. So we will, have to see.
Robert Swarthout:So I'll move on to, I guess, our next topic here. So Binance and the SEC. There's a lot of enforcement cases happening with the SEC. There's 200 plus cases I think we've said in other episodes. This new SEC led by currently three chairs, one of them that was nominated, to kind of temporarily sit in the seat by Trump, has, kind of changed and had a shift on how the SEC plans to, deal with things.
Robert Swarthout:But the SEC and Binance both, submitted a joint order with the court saying we would like to halt any proceedings in our case for sixty days. I feel like this is the tip of the iceberg of things about the change in crypto when it comes to the SEC. At least the the actions that are currently in place. So so Robert, can you hear me now? I can.
Robert Swarthout:Yes.
Andres Sandate:Okay. Sorry about that. Had a little bit of audio technical issue. So you were talking about Binance, and the SEC decided to halt their case. Is it sixty days they've agreed that they're going to come back in sixty days and, and see where they're at?
Robert Swarthout:Yes. And they're waiting for the task force that Hester Perce, one of the chairs is, I I think he's trying to give guidance because again, in the Binance case, we'll see in this particular Binance case, there's been other ones, obviously, but with this particular case, in the Ripple case, in the Coinbase case, a lot of these big headline cases, there's no allegations of fraud. Yeah. So there's there's the relook at all these cases from a lens of, okay. There's no fraud.
Robert Swarthout:Should we even be having these cases or what's the focus? There should be a reset. These guys probably didn't have rules to play by to begin with. They were trying to be good actors.
Andres Sandate:Yeah. Because the case goes back to June 2023 when the complaint was filed by the SEC against Binance and, over a dozen entities affiliated with Binance that they were regulating or obviously were operating at the time. The claim was, an exchange unregistered that they had a BD that was, in a clearing agency, you know, operating in securities that were not registered. So, yeah, I mean, it seems like without, you know, without the task force having a chance to really go out and do what their mandate is to do, it's gonna be tough, for any of these cases really to go forward until we get more clarity.
Robert Swarthout:Right. And to kind of, in some ways, tie our first topic with, choke point two point o and pal in with this topic, because I think there is a link. Binance.US, so the the buy The US version of Binance, summer or two summers ago, it's been a while, they stopped all operations based in fiat. So US dollars, they don't accept anymore. It's all based in stable coins.
Robert Swarthout:So I'd imagine they, like, as pressure was happening on Binance.com and all the stuff with CZ, I imagine that the Fed put their pressure on the banks that were, banking, Binance.US and tried to squeeze them there. So, you know, those tentacles run a long ways. It's not just like going after individuals in that case.
Andres Sandate:So Yeah. And I think for people that are watching, what's playing out in, DC, with a lot of the executive actions and a lot of what's happening with, Doge in terms of, right, the CFPB is gonna go away and the USAID is gonna go away. I mean, I think they're the quick reaction to crypto and and digital assets, you know, could be they're gonna just, take away all regulation. The reality is the SEC is still filing cases, still enforcements. I think what they are also trying to do simultaneous with that is and I think we've got a headline here about, you know, crypto mom, Hester Pierce, came on Bloomberg yesterday, did a lengthy interview about, about crypto.
Andres Sandate:But I I think there is also the hope that there will be some regulation, and there will be this task force taking action over the next few months, or in financial terms quarters to to really drive, the point home that we need reg you know, we need regulation. We need some kind of stable coin legislation, and we're gonna get into that later in the show.
Robert Swarthout:Yep. It will be, interesting and, you know, the part that jumped again, that jumped out of me the most was the sixty day, the the particular numbers these days. They I don't think that was chosen by happenstance. My guess is this task force is further along than most people realize, probably building along upon the work that Hesser has done for years, in her proposals. So maybe we get something, at least guidance in the SEC.
Robert Swarthout:That doesn't mean it's law yet, obviously. That that's congress's job, but, maybe some guidance would be great.
Andres Sandate:Well, hopefully, also sixty days signals, that, you know, the executive branch wants action, wants Correct. A lot less talk and posturing and a lot more action here. And I I think for folks in crypto like us, we'd like like to see, things accelerate as well. Yeah.
Robert Swarthout:May maybe they could just drop a zero. Just do it in six days would be great. Yeah.
Andres Sandate:Easy now. Yep. Awesome. Alright. This next one, I thought you you, you had a good graphic, and I thought it was worth us trying to share it.
Andres Sandate:Yeah. So what we're looking at here, Robert, is the map of The US. Tell us what what, the states in blue represent.
Robert Swarthout:So the states are, states that are have pending, legislation to maybe make a Bitcoin reserve or crypto reserve, something like that. That would be, you know, it's not like not even yet to be voted on. It's still in community effectively. So
Andres Sandate:Yeah. But they've at least done some of the work. Yeah.
Robert Swarthout:They've done some work. So the vast majority of them are in that state and, assuming that state, in in that, status you could call it. Of those, I would say roughly half of them are what this website calls actual strategic Bitcoin reserves. There's definitely a, Bitcoin only maximalist, field to this website.
Andres Sandate:Yeah. Sure. But it
Robert Swarthout:it is helpful information. Some of them have a partial reserve, and I guess others, it hasn't been said how it would actually, be structured. But the idea is there. Two are in considering status. That would be Arizona and Utah.
Robert Swarthout:Arizona would be a Bitcoin only in reserve and they're, basically basically buying Bitcoin not alts, is is the way that would work. And then, I think the part that jumped out at you know, not nothing is further along than, Arizona and Utah. I'll say upfront. But what jumped out at me the most, and I somehow it didn't even cross through my news feed, was North Dakota has already gone and rejected the idea. I I don't know what the status of it was, how long it took, but I did find that kind of, interesting.
Robert Swarthout:So
Andres Sandate:Yeah. Yeah. Well, one trend that I pick up on is that on the West Coast, and Yeah. The kinda Deep South, it it does appear, and I guess you could say to some extent in the Northeast, it doesn't appear to be, at least capturing much of the attention, of the the state legislature there yet. So Okay.
Andres Sandate:Middle of the country, kind of, Upper Midwest, and, certainly in the the, you know, somewhat of the, you know, that, Ohio, Pennsylvania kinda corridor, there seems to be interest. So, yeah, I just I thought it was a unique website just kinda graphically. We've talked about this over the the last, you know, couple of months, but, it's something that we'll show from time to time, as as these discussions, at the state houses evolve.
Robert Swarthout:Yeah. And and, again, that's, bitcoin reserve monitor dot com. So Yep. A little bit of a plug for them there. So our next topic is, crypto kinda is it waiting for its next catalyst?
Robert Swarthout:And it's absolutely there. It's a lot of things are in arranging Yeah. Kind of pat trading pattern at this point. A lot of it's resting along the bottom of a channel, you know, if you wanna use technical terms and kind of in some sense holding breath about what Bitcoin might do. Bitcoin was lower this morning.
Robert Swarthout:It's back up now, today being the twelfth and the, the CPI numbers came out today and they didn't look so great. So
Andres Sandate:Yeah. I mean, I think, you know, again, folks were watching, Fed Chair Powell's testimony yesterday for signals that the Fed was gonna resume rate cuts. I think the takeaway from the testimony was not so fast, not so quick. So there and then you see the CPI numbers today, and you put it all together. And I think that the economy is not on the footing, that at least the Fed wants to see, in order to signal that, you know, they're they're gonna resume rate cuts.
Andres Sandate:So as a result, you know, you saw some risk assets respond accordingly. Mhmm. I think, you know, for me as as as just somebody that's followed the market for a long time, like, it's just not so fast. I mean, everybody in the market wants certainty. And, and I think, you know, the the Fed's gonna move at its pace.
Andres Sandate:I don't think they're gonna win a lot of fans, in in Trump's circle because I think he'd he'd like to see momentum early in his presidency in his first first term first year of his of his second term. And, and so we'll see. But, yeah, it just feels like we're we are waiting on some big catalyst in crypto right now. I'm not sure, if that's the right way to put it. You described this technical aspect, but it does feel like, you know, the the space is waiting to see what what comes next, and maybe that will be regulation.
Robert Swarthout:Right. It's, it could be some news around, you know, crypto reserve if there is one for The US, good or bad, there. So I it's,
Andres Sandate:In a boring market, it isn't necessarily a bad thing. You know?
Robert Swarthout:Correct. In in a minute, I would I would say since the election, obviously, the election happened and then you had Trump getting elect actually the inauguration, just the news around that around crypto. For a while, we were kind of a bit, fat and happy when it came to crypto news, and not having news is a bit of a downer, versus what we had two and a half months ago was typically, any news was bad news. So it's it's been a whirlwind for sure.
Andres Sandate:So Well, I I mean, value investors, have had a tougher go of it the last, you know, call it decade as this has been more of a momentum market, and I'm speaking more broadly about the equity market. But, you know, now if you sort of look at the market and look at where there's, renewed focus, it's in companies that actually, you know, generate re you know, real free cash flow and are returning money to their shareholders in the form of dividends. Right? So, those those are the, I guess, the new darlings of the moment. So
Robert Swarthout:Absolutely.
Andres Sandate:So, yeah, we'll see. Crypto needs to demonstrate that it can make money and has utility. We've always said that. So this is, you know, this is a year where potentially we may see some of the pieces put in place in order for that to take place. Agreed.
Andres Sandate:But we should keep moving.
Robert Swarthout:So next topic, is so Galaxy Digital had their Ondo conference this last week. You're the one that brought this, into menu feed. I didn't hear much about it from stuff that I was reading, but I was found quite curious. Yeah. So Mike Novogratz, Right.
Andres Sandate:Who is it runs Galaxy Digital.
Robert Swarthout:Galaxy Digital. Yeah. And he's the guy behind grayscale and all that stuff. So it's kind of Right.
Andres Sandate:Formerly founder of Fortress. Yep. So yeah. I mean, he's he's a institutional insider within within Wall Street, by any stretch, but had gone all in on crypto some years back. Right.
Andres Sandate:The creation of That was
Robert Swarthout:ten years ago at this point. So yeah.
Andres Sandate:Yeah. Yeah. So he kinda goes back further than, you know, many, many of, even the likes of, you know, Larry Fink and BlackRock and others who are constantly, in the news cycle. So he put on this conference and had, you know, I thought some interesting takes. Two that caught my attention.
Andres Sandate:One was, you know, I think the law he he predicted, and I think this was also a signal of those watching Galaxy and their intentions that the the equity market, particularly the IPO market, would open back up in '25 and that we might see, including, you know, his, and he didn't promise this, but he you might see more crypto companies looking to go public. That could potentially be, meaningful just because, you know, for the VC ecosystem and the cycle of getting liquidity, you know, having an IPO market that's open that people feel is is accessible, is critical. So that so that was one thing. And then the other thing is, Dan Morehead who runs Pantera Capital, which is a big institutional, owner and investor in the crypto space. They have a lot of different products, but he came out and said, you know and this is sort of, consistent with what he's been saying for several years, which is, you know, are we in a bull market?
Andres Sandate:You know, is crypto over overbought, like, in Bitcoin specifically? And his take was literally less than 1% of institutions own any Bitcoin. And if they just did 1%, you know, think about how much that and then we've kinda heard that a lot, but it I do think that these guys are talking to a lot of institutions, and it does it does appear if they're if they're being, you know, forthright that institutions are really starting to pay a lot of attention to Bitcoin. And we have a we have a headline in here about Goldman and their purchases of of iBit. So, yeah, just, you know, more more kind of institutional awareness and adoption.
Robert Swarthout:Yeah. And, you know, it's again, it's not terribly surprising. You know, he even made the comment, you know, I think you alluded to, but, like, people will ask him, is crypto in a bubble? Well, when nobody owns it effectively, how is it Right. How is it in a bubble?
Andres Sandate:Yeah. Yeah.
Robert Swarthout:You need more people. So, you know, I guess it's positive for us that we probably aren't in a bubble, but we we will see how that goes. So Yeah. But talk about bubble and not saying there's one here. And I and I I'm not a big Michael Saylor fan.
Robert Swarthout:I think people have realized this, but, like, there are sometimes there's signals when you're at the top of a bubble or top of a cycle. Michael Saylor could be our signal, whenever we get there. So we'll have to pay attention to him. But they recently renamed for MicroStrategy just a strategy. Kind of Yeah.
Robert Swarthout:Kind of a bit snarky comment to me is they only own Bitcoin, so that is still micro. Maybe not necessarily a number, but the single. But they have resumed their Bitcoin purchases. So
Andres Sandate:Yeah. Yeah. They bought them between February 3 and February 9 according to an eight k filing, at an average price of a little over 97,000, which takes their total, to 478,740, Bitcoin, which at the time was worth over 45,000,000,000. So they spent 30 over 30,000,000,000, in this buying spree they've been on Yeah. Over the last few years, at an average price of 65,000.
Andres Sandate:So we yeah. We've talked about this. You know, they, they sold a lot of stock, to be able to fund these purchases. So you've gotta have buyers of the stock. So they're they're number one, appear to be people buying the stock.
Andres Sandate:They're giving them capital in order to go deploy it in an area where they think they can generate returns. And he said and and and I thought this quote was interesting. As far as an update on their Bitcoin purchases on Sunday, he said, death to the blue lines, long live the green dots. So as as somebody who probably follows more charts than than the average person, tell me what that means.
Robert Swarthout:You know, when I read that, I I think he's referring to charting, but to me, that's not the kind of charts that I look at. So I I was puzzled. Yeah. Yeah. I and and maybe I'm totally missing the point, but, it's it it was a head scratcher.
Robert Swarthout:So Yeah.
Andres Sandate:Yeah. Probably will be a meme coin launched. Long live the green dots.
Robert Swarthout:Right. Yes.
Andres Sandate:So anyway, but that's a good segue into talking about, Barstool founder, Dave Portnoy.
Robert Swarthout:Yeah. So he, I I follow this a little bit closer than I would have any other meme coins. Certainly more closely than I followed the Trump one. But over the weekend, because Dave was down in Louisiana for the Super Bowl. And so he's, like, balancing the time he's there, with all the responsibilities he has with what he what is going on in crypto land.
Robert Swarthout:He'd we'll we'll say it upfront. There's no evidence to say that he launched any of these coins himself. But there was one, called, Fort not Fortnite. Totally messing up the title of it. Jail stool.
Robert Swarthout:So somebody was joking that he should go to jail because stuff that he's done. He found this funny, and somebody had given him some coins, and then he put some more cash in himself. And then he was tweeting about it. Pumping the price up, it went from, you know, worth, like, $6,000,000 market cap to, at one point, I remember seeing it 200,000,000 over the weekend. So the an incredible percentage change there.
Robert Swarthout:And then he, found another one somebody sent him that was Fortnoy, excuse me, Fartnoy. So just, you know, it's mean stuff. It's it's purely how it goes in crypto.
Andres Sandate:Yeah. It's like it's like high school locker room stuff.
Robert Swarthout:Right. Yeah. Especially for his crowd. So I don't know. It's half entertaining, but he has been sued about crypto in the past.
Robert Swarthout:And he's he jokingly said he lost all of his money the last time, so there's no way that he should be sued because he's the one that lost all of his money, not some of his money, as a bit of a, paid endorser of sorts. So I don't know. Like, in the old SEC, I guarantee he wouldn't have done this. Like, I I think he's paying enough attention, has enough people around him advising that he wouldn't have done this. And this new SEC, he probably this is probably totally fine.
Robert Swarthout:In some sense, Trump Trump gave him the signal that it's fine by doing what he did the weekend prior to inauguration. So it's, pretty crazy.
Andres Sandate:Yeah. I mean, I I think the other headline I was gonna put in here was about, the meme coin that was launched when Elon Musk changed his name on x, but it just wasn't it was too x rated to bring into our, family friendly weekly crypto check-in show, but I don't think either of them go and, you know, get close to the line in terms of what what is potentially an old SEC regime would look at and say, this gives us exactly what we were looking for to come after you.
Robert Swarthout:Right. So
Andres Sandate:I I generally yes. Headline agree. I do think that the broader story, though, is that meme coins continue to, demonstrate that there is this huge bifurcation in crypto. There are people who wanna go and gamble effectively, and they if they get dumped on and a token goes, you know, and spikes and then goes to zero in a matter of a day, they're willing to lose whatever small amount of money they probably, you know, consider putting in. There's a couple people couple wallets that made a lot of money.
Robert Swarthout:Right.
Andres Sandate:And then you have the whole other side of crypto, which is, you know, the one we're focused on, which is, you know, very much focused on what's the utility, where is this industry going, are we gonna get stable coin legislation? You know? It it may arguably be the one that gets a lot less headlines, but, hopefully, it's one that really paves the way for where we wanna see this industry, you know, sort of fulfill its promise.
Robert Swarthout:Yeah. You know, I was, actually, my wife of all people asked me about the day of Portnoy thing, and I was explaining it to her. I was like, the meme coins right now feel like a like an intermission or commercial between all the important stuff in crypto. We're just kinda entertaining ourself with it right now, before the market has a chance to kind of go on its next, journey. So Yeah.
Robert Swarthout:But but certainly this crypto cycle is all about meme coins currently. So Yep. Yeah. Moving on. So on a more serious topic, prior to recording, we haven't seen, Trump officially say this, but the the rumor is that the new nomination for CFTC chair is gonna be Brian Kinetes, I think,
Andres Sandate:if I say his name correctly or Quinte No. That's Quintez. Quinteins. Yeah. But an a sixteen z, VC.
Andres Sandate:Yeah. And he used
Robert Swarthout:to be at the CFTC as well.
Andres Sandate:So Very, very much a crypto fan or crypto supporter.
Robert Swarthout:Yep. Yeah. Is,
Andres Sandate:being
Robert Swarthout:Yeah. But what's interesting about this one is is while we, again, haven't seen Trump say anything saying he's nominating it, the rumor was circulating all morning. And then I even found a tweet from current acting chair of the CFTC, and she was congratulating him on his new job. So it seems like it's gonna happen. I I I can't imagine she would have made that tweet, if if it wasn't going to.
Robert Swarthout:So but Yeah. More further proof that it's like, not to say that the CFTC only cares about crypto, nor nor should the SEC. But, we are at least don't have an adversary, in that position going forward, at least for the first next four years or so.
Andres Sandate:Yeah. And and who knows? It could be signaling that under, you know, president Trump and with the crypto task force and with, you know, the folks that are in, you know, in in place in his inner circle as far as advisers that perhaps the CFTC will be more out in front in terms of crypto regulation and crypto
Robert Swarthout:I'm wondering. Yeah.
Andres Sandate:Than the SEC, for sure, seem to wanna be out under Gensler
Robert Swarthout:Mhmm.
Andres Sandate:In in the under under, you know, former president Biden.
Robert Swarthout:So Yeah. I would guess by summertime, we have decent clarity on how this is gonna go. Maybe not full rules, but we're gonna have, more clarity than we've ever had before by a magnitude of difference would be my guess. So Yep. So our next topic, kind of segueing here, the the SEC, so Commissioner Peirce, crypto mom, as we referred to her in the past as, came out and said that meme coins may be outside the jurisdiction of the SEC.
Robert Swarthout:And I'm I mean, assuming that they're not all like, a meme coin is not held by five wallets, it actually has some, actual, spreading out of the tokens amongst a lot of wallets. The, I could see the CFTC caring about them more, admittedly. And in some ways, the gambling regulate regulations may actually come in on the top of meme coins too. So it's kind of this weird overlap.
Andres Sandate:Yeah. She gave a lengthy interview, Hester Pierce, who's one of the few holdover commissioners, from the SEC under this most recent presidential transition from Biden, to Trump, and she's been more forward about wanting crypto regulation, couldn't get anything under Gensler. She's effectively the one voice the industry, you know, knows, or at least that has been out vocal and has been on the circuit speaking at conferences, etcetera. So, again, I don't even think this interview happens under president Biden. So for her to go out, you know, and do a lengthy fifteen minute interview on Bloomberg or whatever Mhmm.
Andres Sandate:On their crypto show, I think, just shows, that there's there's more air cover out there to go, than there has been in some time. So
Robert Swarthout:Absolutely.
Andres Sandate:I think we can't get more the the market crypto cannot get, enough of these types of folks going out and speaking, about what they want, what they see, and providing their views because it's just it's not something that the industry had for the last four years, at least Or ever.
Robert Swarthout:Not just four years ever. Yeah.
Andres Sandate:Yeah.
Robert Swarthout:But certainly last four years were more of a challenge. I agree. So what what it's gonna take is regulators, which is our next topic. So Right. Right.
Robert Swarthout:Regulators coming in it's gonna be congress putting regulations in place so the regulators can do their work. So this last I think earlier this week, a US House rep, came out and was talking about because they had this bipartisan panel and lawmakers were showing basically it's like how tricky it is gonna get crypto regulations. Because it's not a cakewalk. Each side are gonna have their own things. The the Republicans obviously have control of both, the house and the senate, but it's not quite that easy, unfortunately, because there's such a small margin of error there for the Republicans.
Robert Swarthout:So
Andres Sandate:Yeah. I mean, it it's like the least popular word in in politics called bipartisanship.
Robert Swarthout:Yes.
Andres Sandate:We'll we'll have to see if there is a willingness, to find some common ground, middle ground. It's not a fun way to think about politics for probably either side right now. But, nevertheless, the industry will not move, at the pace it needs to under president Trump, unfortunately, without, you know, Democrats and Republicans trying to come together on, on stablecoin legislation, which is probably our best hope, in terms of legislation, in the near term. So, yeah, I thought it was the right term. You know, it's not a cakewalk.
Andres Sandate:None of this stuff ever is. But even with like, you had said this last year before the outcome of the election, even, you know, under the first Trump presidency with Congress, you know, behind him, he couldn't, you know, get his full agenda in place. So Right. We we, you know, we'll just have to wait and see. But, yeah, the first hearing, I think, raised, I wanna say doubts, but just raised the reminder that this is DC in this politics.
Robert Swarthout:Yeah. It's a little sobering. Right? I mean, like Yeah. Yeah.
Robert Swarthout:The, I think if I hold any hope, it's that's what the whole cryptos are with David Sacks. Like, the ability for him to kinda come in and be a voice, that is the White House that has some level of, validity behind it. It's not just a politician saying something, I think may help, but who knows? It could be some of these politicians and that are up for reelection at the midterms digging digging their heels for whatever reason, and we have to fight through that. So Yep.
Robert Swarthout:But, yeah, we will see. Next topic is, Goldman. Goldman's been buying Bitcoin ETFs, Andres. Yeah.
Andres Sandate:I mean, I the the the overall takeaway here is, you know, obviously, one of the venerable investment banks, they, many of these firms, filed 13 f's, which are required filings, when, you know, you own a certain amount of securities over a certain amount of securities. And so they give a glimpse, if you will, into the portfolio of what of what these institutional investors own. And as of their filing on Tuesday, it showed, which is their final one for 2024, it showed that they had, they had increased their, holdings in IBIT to 1,270,000,000.00. So call it 1 and a quarter billion dollars Mhmm. Of the BlackRock iShares Bitcoin Trust ETF, which is IBIT, which is the largest, Bitcoin, ETF by AUM.
Andres Sandate:But what's notable is the percentage increase in the amount of shares, owned from the prior quarter, which is just, you know, literally three months. Right? So a almost a 90% increase in the amount of shares that that Goldman owns. So, yeah, pretty bullish, move. Right?
Andres Sandate:Yeah. Again, we've talked about this for a couple years. Like, institutional adoption, will institutional investors embrace Bitcoin and crypto? How will they embrace it? Direct ownership through the ETF.
Andres Sandate:In this case, you know, we have a pretty clear signal.
Robert Swarthout:Yeah. I, I I don't think that the, 13 f would show this, but my guess is the vast majority of that buying happened after November, when it was clear that Trump, had won. So I don't know. It's but I I we're gonna start seeing a lot more of this, and not just from the investment banks. I think it's gonna be from sovereign wealth funds and all sorts of other, you know, companies.
Robert Swarthout:We I mean, we've heard rumors that and we talked to it like Amazon or Microsoft or that kind of stuff.
Andres Sandate:Yeah. That one of my predictions for '25 or things I was looking for in '25, less of a prediction, more of something I'm watching in our end of year letter was what would be the composition of ownership, in the top 20, top 30 holders of Bitcoin, one year from now. And, you know, clearly, MicroStrategy or now strategy is one of the biggest, if not the biggest. But would we see bigger blue chip names, you know, the likes of the Magnificent Seven or some of the big Wall Street firms? So something we'll pay attention to over the next ten months.
Robert Swarthout:Sounds great. So our last topic is a bit of a crazy story. Yeah. So this kinda goes back to the inauguration week or the weekend of inauguration, leading up to it. And that's Friday night around, I think, 7PM is when Trump launched his meme coin or somebody that's, I guess, related to Trump launched.
Robert Swarthout:I can't imagine.
Andres Sandate:Yeah. So, I mean, effectively, he and Melania launched these meme coins the weekend before he's gonna be sworn in as president of The United States, and she's gonna be, you know, first lady. Right? Exactly. So they do it Friday night.
Andres Sandate:And who's MoonPay?
Robert Swarthout:MoonPay is, basically another exchange that exists out there, with, like, a Coinbase. Okay. And they have, sole, basically, access or rights to the liquidity for onboarding people into a decentralized exchange kind of, I guess, arm links away from MoonPay for Solana. All this happened on the Solana network, not Bitcoin, not Ethereum, not XRP, but on Solana. But if
Andres Sandate:you are an individual and you say, oh, there's a there's a way to support the Trump coin or buy the Millennia coin. You go to the website. Right. You then see MoonPay is on the website, and you're able you're able to set up an account.
Robert Swarthout:Yeah. You sign up an account. Over the course of that weekend, 750,000 people signed up accounts. Okay. So the
Andres Sandate:They may never have heard of me of of MoonPay in their life.
Robert Swarthout:Or even have other crypto for that matter.
Andres Sandate:Well, they may be go on. They put their information. They put their credentials. They they put down a form of payment.
Robert Swarthout:Yeah.
Andres Sandate:And they say, I wanna buy a hundred dollars or I wanna buy a thousand dollars of the Trump coin and a thousand dollars of the Melania coin. Correct. Okay.
Robert Swarthout:That was happening. So
Andres Sandate:if that's all happened, we saw this huge spike in interest Yep. Going back to that Friday night to
Robert Swarthout:Saturday and
Andres Sandate:sworn in. Right? And get sworn in.
Robert Swarthout:Yep. K. So so it launches on Friday. Saturday morning, MoonPay, operations team realizes they don't have enough stable coin to, be able to pay out all the people that are selling and all the trading Pay. That they're gonna have a liquidity issue over the weekend.
Robert Swarthout:I think it's not only a weekend, it's a long weekend because they got Monday off because it's a holiday. So they reached out. The CEO did reach out to, Mike Novogratz at Galaxy, which we talked about him earlier on this episode. Crypto OG. Yes.
Robert Swarthout:Basically, told him the story. Basically, you know, we basically have a liquid liquidity crisis. And, Not a good look. Not a good look.
Andres Sandate:To be very honest. We're not a good look if this is all happening right after you launch your new coins.
Robert Swarthout:Correct.
Andres Sandate:It doesn't matter who the sponsor is. It doesn't matter who the issuer is. Like Right. This provider's in the liquidity crisis. They call one of the blue chip names in crypto
Robert Swarthout:Right.
Andres Sandate:And say, we need capital or else.
Robert Swarthout:Yeah. Right. Or new or new people coming on the platform won't be able to sign up, to make transactions or current transactions won't go through. So it would have been a bad look for everybody. What did no regrets do?
Robert Swarthout:So, did his due diligence, got his team involved, put a contract around it, and he, sent them in stable coin, a hundred million dollars because that's what they asked for.
Andres Sandate:Okay.
Robert Swarthout:A lot of money. And again, this is happening on crypto because it's twenty four seven. The settlement cycle's instant. It's not like, oh, we have holidays.
Andres Sandate:So Remember that company FTX when they said give us a day, we'll get your money back? That led to a problem.
Robert Swarthout:Yes. Absolutely. So that was Saturday. They woke up Sunday morning and realized that the market cap of the Trump coin had gone from 30,000,000,000 to 70,000,000,000. Trading activity that only accelerated and that they needed another $60,000,000 to kinda make it through by by their projections, make it through to Tuesday when the when, you know, traditional finance system started working again.
Robert Swarthout:So they reached out to Brad Garlinghouse at Ripple. Ripple ended up, working with them, but it was so late in the day. They didn't think they could get it done before they needed the actual, like, liquidity. So Ripple ended up, sending the money to Galaxy who already had the contract in place with MoonPay. And, basically so MoonPay got a hundred and $60,000,000 to be able to get through the week the long weekend.
Robert Swarthout:And by Tuesday at 02:30 eastern time, they had paid it all back and all this stuff. What's interesting is their CFO of MoonPay sits on a board that deals with some kind of ETFs. And they had relationships with people at BlackRock where MoonPay kept all the reserves at. But on the weekend, no one at BlackRock's offices ends in the phone call. So they basically had someone at she used her connection through that board to get to someone at BlackRock to have someone basically vouch over the phone that there's no other leans against those reserves sitting at BlackRock.
Robert Swarthout:So because there's been a bunch of bad stories in crypto when it comes to reserves or lack thereof. Yeah. Are they there
Andres Sandate:or are they not? Yeah.
Robert Swarthout:Yeah. Absolutely. So at the end of the day, this ended to be in a great story. I think that it start it just kinda came out today. So it's kinda been a little bit under wraps of sorts, but I think it's a good look for Mike Negra.
Robert Swarthout:It's a good, look for Brad and Ripple. And everyone, you know, worked out at the end and, now Trump the Trump coin's down 80%. So here we are.
Andres Sandate:Okay. Yeah. Postscript. Yeah. Sometimes the story captured it within the story is is is really More entertaining.
Andres Sandate:Yeah. Yeah. It's more entertaining. So, I mean, again, this is probably not something that would have bled over to the broader financial markets. It's also, I think, an example of where a a a a couple of meaningful players in crypto got those phone calls because they could carry weight, and they could get things done in a short amount of time.
Andres Sandate:Right. If this was, you know, probably, you know, I can't say I'm speculating, but if this was just any other meme coin launch, you Probably wouldn't care. Even get this guy on the phone. Right? So Probably not.
Andres Sandate:Case. Yeah.
Robert Swarthout:Yeah. Because, you know, both of these Galaxy and Ripple slash Brad obviously don't wanna get on the bad side of Trump. So if you have that whole dynamic, there's a there's a this kind of this weird combination of, things going on here. But Yeah. Pretty crazy story.
Robert Swarthout:So
Andres Sandate:Yeah. For sure. Alright. Well, we went we went way over this weekend, but that was a good one to end on.
Robert Swarthout:Yeah. It's fun. So thanks for joining us on this episode of the weekly crypto check-in. If you want to stay updated on future episodes, you can find us in a podcast player by searching Teton Crypto Capital or the weekly crypto check-in. Take care.
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