Ep 63 - March 4, 2026 - Jane Street sued
Welcome to the weekly crypto check-in, your go to podcast for navigating the wild world of cryptocurrencies, hosted by Robert Swerthout and Andres Sindade. Today, recorded on March 4 on March 4, we're diving into the latest market shifts, blockchain breakthroughs, and expert insights to keep you ahead of the curve. How's it going, Andres?
Andres Sandate:Good, Robert. I know it's been a couple of weeks since we, had a chance to record here on the weekly crypto check-in, so it's good to see you. And I know you've been traveling, and Yep. We find ourselves already in early March. And, wow, what a, what a geopolitical backdrop and and Yep.
Andres Sandate:Unprecedented just times we're in. I I think we always seem like we have something that happens, between our recordings, that's eventful from a geopolitical or a political economic standpoint, and certainly today is no different. But, how you been?
Robert Swarthout:I've been doing good. You know, I, got to enjoy a couple weeks, going skiing and just hanging out with some friends, which was awesome. Kind of good bit of recharging going on there and kind of got back to it. And, it's warm in Atlanta. When I was gone, it seemed to have warmed up.
Robert Swarthout:So
Andres Sandate:Yeah. I think nobody's gonna probably look back on January, 2026 weather wise around the country and say it was, one of the most beautiful Januaries. I mean, we had our days here in Atlanta, but certainly the March, if it bodes well for what the spring is, you know, what the spring has in store for those that love the outdoors like I think you and I do. It's Yeah. It's hopefully gonna be meaningfully meaningfully nicer.
Andres Sandate:I've been busy myself with with a lot of baseball this time of year, both at the high school and travel level. And, yeah, you know, there hasn't been, like, a lot to write home about in terms of crypto asset prices. Correct. Token prices. You know, it's been a pretty tough, you know, first quarter
Robert Swarthout:to, you know Six months for that matter.
Andres Sandate:Well, I was gonna say to pick up on, you know, some of the dismal performance or '25, but I think there still is a backdrop that we've got a lot of interesting headlines, to to cover. There still is a lot happening in, you know, blockchain, crypto, with respect to digital assets. So I think it's great that we're recording because I think, you know, those that follow the space over long periods of time know that these cycles happen. And, and yet there's still a lot of building happening, and and the asset class is still maturing.
Robert Swarthout:Yes. And we have, you know, we haven't recorded for a couple weeks, but we have a lot to talk about. So we'll just jump in here. You know, it's been a pretty consistent theme for, gosh, two or three months now for us. We're talking about this market structure bill.
Robert Swarthout:There hasn't been a lot, and there's been a lot of time that's passed, but not as much progress. It seems like everything has held up on stablecoin yield and whether that should be paid out to holders of a stablecoin or not. Kind of as a recap, the the old guard banks do not want stablecoins to be paying yield to holders and crypto companies, Coinbase's and, you know, crack ends and those kind of guys are pushing for, I would admittedly, a better consumer experience where you get to yield on basically your deposits. I I don't understand. The banks keep saying this is bad for community banks.
Robert Swarthout:I think that's just cover for this is not good for business for big banks, and, they keep pushing back. And the White House has even pushed back against, the current state of things. I guess, specifically, Trump, made a post in True Social saying how he, you know, we need this to pass. Banks need to basically stop holding up the process. He's in his own words.
Robert Swarthout:So Yeah. Hopefully soon we get some, but, you know, there's bigger things going on the world right now and, you know, some of this stuff can fall by the wayside.
Andres Sandate:Yeah. I did a little bit of extra reading on this because I'm like, how do we how do we make this topic, of the market structure bill Right. Relevant and interesting given, you know, what's happening in The Middle East, you know, whether, you know, you call it a war or you call it a conflict, I'm not sure. Even the government doesn't feel like it can decide. But, that that is obviously the the major headline.
Andres Sandate:Right? And then you've got what's going on in the economy. And then you, you know, you you you continue down and you look at this market structure bill. What I read today was now a couple of things I guess I'd share with listeners. Number one, again, I don't think either side is probably gonna be particularly happy with whatever the result is of this bill.
Andres Sandate:The the the that's just legislation, and that's just the way it is. You've got And that makes you agree sides. But that that at least you get a bill Right. I think would would be progress in in terms of this industry. Is either side gonna get exactly what they want?
Andres Sandate:Likely not. Right. So that that's one one, I guess, one thought. Secondly is, you know, we're now into the second month. I've been saying this now certain shows.
Andres Sandate:Yep. We get to the midterms, and there was a big election result in Texas, you know, last night, right, that's making news. And there will likely be more of those primaries to come. I mean, if you turn on the television here in Georgia, you're seeing tons of political ads around, you know, the governor race, for the Republican primary seats. So it's just this environment is heating up.
Andres Sandate:And, you know, my my fear is that we're in the second month. Hopefully, we start to see the emergence of this bill and some real comments happening this second, third week, and especially into the final week of March because I fear that it you know, you know, May, June, it's almost like that that time frame where, you know, the politicians, you know, particularly the ones that are in tight races where there's lobbying and there's there's any any number of issues that are, you know, going to be in play that you you could start to lose support. Right. Not for not for regulation, but you just lose the momentum, and then it slips into 27. So so that's another thing just timing wise.
Andres Sandate:The other thing I read, and then I'm gonna take a break and and let you jump in, is you did say the White House wants negotiations to continue. You you mentioned president Trump's post on Truth Social. I think that's worth people going and and reading. It does sound like the Senate Banking Committee is is eyeing, like, a mid to late March, like, reconvening. So I do think that the parties are hammering through this.
Andres Sandate:But I read that there were 10,000 letters sent to, various senators and committee members, from the banking industry slash, banking participants around the stablecoin issue. So there's there's a huge amount of pressure Right. That's being applied on this issue. And I'd say, lastly, is from what I read on one blog, the stablecoin balances are are likely not gonna earn interest. But crypto firms, like you mentioned, Kraken, stablecoin, are still trying to come up with other ways for customers to get that APY, that that yield.
Andres Sandate:And I think that the banks, from what I'm reading, are concerned that there's some kind of backdoor way in which they may not get, to offer customers the yield on the surface
Robert Swarthout:Right.
Andres Sandate:But there's some other way through participation or rewards or memberships or other things that gets them to yield. And I think that's seems like that is another reason that this is being held up is there's, you know, there's some mistrust or there's some finagling around what what how are we defining these these terms? So Yeah. Vague language is not helping any of us get progress.
Robert Swarthout:Correct. And a thought that I've often had about this is, like, obviously, you know, there's two sides to this. One wants yield. One does not wanna have to pay yield. Mike, why can't we just mirror the current, you know, deposit laws in The United States when it comes to dollars?
Robert Swarthout:I mean, a bank can choose not to pay deposit, to pay yield or to pay an interest. Why can't we just do the same thing there? And if you don't want to, don't pay it and see what happens with your customers. I mean, like, why do we have to have laws saying we can't or can't do this? It seems to be I don't know.
Robert Swarthout:Maybe I'm missing something, but it seems to be overlegislated.
Andres Sandate:Well, I I remember, coming out of the, you know, the World Economic Forum in Davos reading an article about Brian Armstrong who is, you know, is the, you know, the the CEO of of Coinbase, was making the rounds, and he was, like, persona non grata at Davos with the big bankers. Right? The the the Jamie Dimons of the world and the peep you know, the guy that runs Wells Fargo Yep. Charlie something. And, basically, Diamond Jamie Diamond, you know, reportedly again, I wasn't in the room.
Andres Sandate:Just was like, decide what you wanna be. You know? Do you wanna be a bank, or do you wanna be, you know, an asset management firm or securities firm? Like, you can't you can't be, you know, hybrid. And, you know, Armstrong's retort is like, we're creating something new that the market hasn't seen before.
Andres Sandate:We're offering something that the market hasn't seen before, so don't don't put us in a box. So the, you know, the banks have a lot more regulation than maybe people always appreciate until we have an o eight. Right? Right. In terms of they have to maintain, you know, certain capital ratios.
Andres Sandate:There's, you know, Basel regulations. They have to have a specific amount of of capital on hand relative to the deposits and and the loans they're making. So I don't know. I mean, I it it it's simplifying it, but it does feel like we're you know? And it's not the only issue.
Andres Sandate:Like, I know there's other DeFi related issues and other things in this bill that have to get hammered out. Right. The the regulatory framework around the CFTC and the SEC and who's who's who's the cop. But, obviously, yes, the the stablecoin yield is is the headline issue and is the main issue. So just, hopeful that we start to see some progress later this month.
Robert Swarthout:Indeed. It's, you know, it it's a topic that we desperately need, but we desperately need to stop talking about it. Yeah.
Andres Sandate:So Well, we can desperately start talking about something else called the FedEx corporation joining the Hedera Council. So
Robert Swarthout:Yep. So many of these different crypto networks, Hedera, the token HBAR on that network, you have the XRP Ledger, you have Algorand. You have a bunch of different networks. Right? A lot of times they have councils, so they have governing bodies, different things.
Robert Swarthout:So Hedera has a council. FedEx, the name that everyone recognizes there, joined the, Hedera council. So why does that matter? I mean, this is supposedly a random company joining a random council. Well, at the end of the day, the FedEx do does plan to, want to start publishing, you know, their tracking, on a public blockchain versus a private network.
Robert Swarthout:So in some ways, improving trust, I think, is one way you might describe that. And just to me, this is, like, slowly weaving crypto into the fabric of business. And at the end of the day, you know, we're gonna look back and be like, it's gonna be everywhere. It's not we're not there today, but stuff like this needs to happen for that to kinda be able to manifest itself. So pretty cool.
Andres Sandate:It it is. I mean, it's it's The U commercial utility. I think that, you know, you've been espousing related to this whole technology for some time. I took some quotes out of the press release from the FedEx EVP and chief digital and information officer who said the goal is of this, you know, of this announcement is to enable commerce to operate at the speed of data rather than the speed of of paper. So anybody that's ever, tracked a package or sent something, right, can probably relate to that quote.
Andres Sandate:The other thing I took was, you know, I think people understand global supply chains when we have this disruption to the global supply chain. Most recent example of that would have been COVID. Right? Supply chains and networks of moving goods and merchandise were completely disrupted. And he's he went on to say, as the supply chains become increasingly digitally native, trusted data must be shared and verified across many parties without increasing risk or centralizing control.
Andres Sandate:And so, obviously, the technology Hedera, network is is built to do that. And then lastly, what, you know, you can't forget is that while most people that you probably poll have never heard of Hedera, and they probably aren't familiar with the inner workings of the software of the blockchain technology, what I think most people out there can understand is, you know, the size of a FedEx company. It's a global company, $90,000,000,000 revenue business. Yep. The fact that they're partnering and now on the council to to help drive the future of this network along with some other major, you know, Fortune 50 companies
Robert Swarthout:Right.
Andres Sandate:Is a big deal. Right? So this is the interaction of the traditional, let's say, economy of FedEx blue chip type company with the, you know, the blockchain crypto digital future that I think we've been talking about on on this show and that we talk a lot about with Teton coming together. So for me, it's a it's it's a good headline, and it's in the right place in terms of our our update.
Robert Swarthout:Yep. And a quick few more notes on this one, before we move on. So to kinda put context around this, I I didn't know these numbers till I saw this announcement, but, like, million shipments happen daily in FedEx. And I imagine that's multiple scans per shipment too. So there's a good amount of scan activity going on.
Robert Swarthout:They're in 220 countries. And, you know, like, what is this use case that I think where blockchain can really help here is if something's going across borders, there's custom documents, all that can be, like, layered into the blockchain via smart contracts to kinda help prove and kind of, again, make it more transparent and potentially, more efficient, for moving between different customers.
Andres Sandate:Yeah. And, I mean, I think everybody who thinks Bitcoin when they think crypto trading or they think crypto trading is just Bitcoin, they have to read these, announcements or listen to these announcements and really understand that what this is is actually enterprise blockchain adoption Yeah. At a global scale. Right? That has nothing to do with crypto trading and, you know, the doge and the price of Bitcoin and all the stuff that makes headlines on CNBC.
Andres Sandate:You don't see these headlines on CNBC because they're not, you know, they're they're not what gets clicks. They're not what gets views. Right? But this is enterprise blockchain adoption, which we've been talking about. And I think that if we were to see more progress on, you know, the the the legislation in the first point, right, I think you'd see even more of this happening in asset and asset management and capital markets and banking.
Andres Sandate:Like, it's already happening in, you know, transportation, global supply chain, business service companies. 100%. Yeah.
Robert Swarthout:Yep. So we'll move on here. Our third topic, I found the forensics behind this incredibly fascinating, and this could not happen in a traditional finance world because all this is, like, behind, in, like, a black box. So there's a, a Twitter or, excuse me, an x account that I follow that really, you know, is quite in the know about doing forensics on, trades that happen on exchanges, around the globe, and all this, again, is public. So there has been a, a a $5,000,000,000 one directional selling pipeline running twenty four seven for almost a year on one exchange with XRP.
Robert Swarthout:Okay. That was a mouthful. Let me break this down real quick. So $5,000,000,000. Okay.
Robert Swarthout:Lot of money in notional value there. The pipeline or the the code, this is being run by a bot, he concluded, was running for $24.07 for a year. Basically, it only took a thirty three second break over the course of one year. All trades were, posted and executed within ten milliseconds. So it's like it's it's thinking it's not just posting a bid and ask.
Robert Swarthout:It's literally executing something when it goes through. And this is all done and up. It's just a South Korean exchange. So the question is is who had that much to sell? Why were they selling so continuously?
Robert Swarthout:It's it's I don't know. There wasn't an answer to that specifically as part of this thread, but it's a, you know, it's cool to kinda be able to dig through and kinda understand what's going on in the market. It may not tell you direction where the price is going, you know, five minutes or a week from now, but it's a it's cool to kinda see people curious enough to kind of dig through this kind of stuff.
Andres Sandate:Yeah. I took away a couple of of of things from this one. Just big numbers. Point 6% of the global population in South Korea
Robert Swarthout:Mhmm.
Andres Sandate:But 33% of the XRP trading volume on a daily basis.
Robert Swarthout:Yes.
Andres Sandate:And the other thing is the Korean domestic exchanges, which have been, very volatile, right, since the attacks began in Iran. I mean, more broadly than just just in crypto, but there's no, there's no derivatives. It's it's all spot. So it's it's interesting that 70 to 80% of the trading volume is altcoins. And, yeah, it's just a a a very different market structure and and kinda creates a dynamic where XRP, you know, is one of these is kind of this high frequency, high high volume asset Yep.
Andres Sandate:Or instrument.
Robert Swarthout:Yeah. The so a couple things. Like, Asia, generally, they are bigger fans of the altcoins for whatever reason, but Japan and South Korea are huge fans of XRP. I don't know if it's marketing or whatever it is. It's it's disproportionate there, but to see that it's such a big volume.
Robert Swarthout:The the one thing that I, I guess, I'll leave, this topic on is so to have an account in Korea to be able to deal in Korean won is highly regulated. So it's like whoever this seller is has a reason why they need to be doing this market versus going to another market because they were selling at a potentially a 6% fill all the time. So their $5,000,000,000 could be 6% more if if it wasn't for having to literally have a sell in Korean won. It's kind of interesting antidote there. So
Andres Sandate:Yeah. Do you, do well, I was gonna ask you one last question just because I know how how closely you follow and have followed XRP for years, do you think that, this type of volume or this type of retail activity has what's the impact on the commercial utility use case of XRP?
Robert Swarthout:I don't know if this has a tie to that. Yeah. Didn't see the only tie, admittedly, I think that actually may be going on here is when you're going back to the question of who has enough XRP to be this kind of seller. Yeah. Yeah.
Robert Swarthout:Ripple comes to mind, admittedly. Like, I know that they're constantly selling into the market. They talk about this in their quarterly things. They have billions and billions of XRP, so it's provides liquidity for them and also kind of, like, helps distribute XRP out in the market at the same time.
Disclaimer:Yeah.
Robert Swarthout:Yeah. So it could be them, maybe someone else. But at the end of the day, I'm I don't have a great answer to your question.
Andres Sandate:Yeah. Well, I mean, look. There's a lot of people that trade stocks, and they're not necessarily interested in what the underlying company does, and it's commercial utilities. So it wouldn't be the first and only asset. You know?
Robert Swarthout:That's
Andres Sandate:that's sorry. I tell people, don't call me when we're doing these live shows, but, they don't listen. So but it wouldn't be the only asset that's traded where, you know, people don't necessarily care what the underlying utility is of the business or what it does. Yep. So Indeed.
Robert Swarthout:Okay. Well, our next topic here, Meta. So Facebook plans to launch a stablecoin. This feels a little deja vu.
Andres Sandate:We literally
Robert Swarthout:had this topic in the 2020 when they were planning to launch Diem.
Andres Sandate:Yep.
Robert Swarthout:And the crypto world and congress lost their minds. Yeah. It was not the right place. It was not the right time. Now probably seems a little more appropriate.
Robert Swarthout:It just I think the only thing I note here is is Facebook has a reach of three or 4,000,000,000 users. Yeah. 3,000,000,000. Onboard a lot of people to stablecoin use very quickly.
Andres Sandate:Yeah. Talk about global payments at scale, right, between WhatsApp, Instagram, and and Facebook. Yep. If you're under, if you're under 30, you don't use Facebook. That's what they tell me anyway.
Robert Swarthout:If you're
Andres Sandate:over 50, it's all you use. So Yep. But yeah. I mean, so the question is well, couple thoughts. Right?
Andres Sandate:There's a different regulatory environment. Obviously, president and and, the people in in the White House have made it clear this is, a pro crypto, you know, presidency or will be. And, and so, yes, you're right. The environment's changed. My question is, what what's the rollout likely to be?
Andres Sandate:I mean, it's not gonna be their own stablecoin likely. Right? Or or do we not have enough details yet to know?
Robert Swarthout:I we I haven't seen the details of who like, which stablecoin it is. My my assumption is it would they would be their own. Because if they can get yield on it and not to pay it, then that's a revenue stream Yeah. From a lot of different people. But, also, it's just, like, how they're gonna construct the stablecoin?
Robert Swarthout:Because, originally, when they were doing DM, it was gonna be a basket of dollars, euro, and I wanna say the Japanese yen. There was a third one in there. And I my guess is there will not be a basket. It'll just be denominated in something. They may have multiple products, but it could be a euro stable coin.
Robert Swarthout:It could be a dollar stable coin separate from each other. So I guess we'll get more details here. But it's interesting to kinda see this spun back up because when they did DM, it was people were freaking out because it was Facebook doing it. So they separated it out, started its own thing. It became a company that ended up not going anywhere and the assets got sold off.
Robert Swarthout:So I guess we're about to try this for round two. And
Andres Sandate:Yeah. But there's there's sounds like there's a connection with Stripe or at least there's an RFI or an RFP that's been sent to outside firms with Stripe mentioned as a potential likely candidate according to CoinDesk. And, obviously, they've learned probably this arm's length approach is is probably better
Robert Swarthout:Better. Right.
Andres Sandate:To reduce, like, legal and regulatory exposure and some of the just the political blowback that happened when they tried to launch their own. And and and we also, I think, have have have reported on this. I mean, picking up on other sources, I don't know who exactly it was, but Stripe did receive a national bank Big charter. Trust charter. Yep.
Andres Sandate:And we've got another headline about, you know, Morgan Stanley, to that to that point, but they a lot of these institutional platforms, financial fintech firms are getting bank charters so that they can custody assets. Right? It's what you said before we started the call.
Robert Swarthout:Yeah. That it's, you know, I think Stripe's also building a custom blockchains specifically tailored to stablecoins. I think it's one thing that they're working on with I forget who else it was, but there's a lot going on in space. And it's cool to see the innovation and, you know, whether something wins or loses at the end of the day, I guess time will tell. But
Andres Sandate:Well, it's important put the bow on this whole thing. We started the conversation talking about this debate around stablecoin yields. So if I'm a customer, right, I am a customer. I have an Instagram account. I have a WhatsApp account.
Andres Sandate:I have a Facebook account. Although, again, I'm can't say my age, but I I don't use it. Right? Let's just say that. But my point is is if I took $10,000 and and I wanted to, you know, get stablecoins or I wanted to have stablecoins to transact using, you know, these platforms.
Andres Sandate:This ties right back to this debate, right, that's happening around could Meta offer me yield Mhmm. On those stablecoins, right, or for my for my $10,000? And the banks are saying they wanna limit. Right? Is that correct?
Andres Sandate:Correct. What they could offer, how they could offer it, etcetera. And Meta or maybe those that are in the camp of being able to offer yields would say, wait a minute. Why why can't this guy's a customer. Why can't he give us the $10,000 and us give him 3%?
Robert Swarthout:You know? So I the last thing I'll say, then we can move on, is they need to have a better name than Diem or Libra this time. I I I probably would vote for Zuckbox. I would just like
Andres Sandate:Yep. Yeah. There you go.
Robert Swarthout:Yep. Okay. So talking about Coinbase here a second ago. So Coinbase is our next topic. They have, for US clients, have turned on 24 slash five stock trading, which is pretty cool.
Robert Swarthout:This is a baby step towards everybody being able to do stock trading twenty four seven, March. Not not a surprising step here, but cool to kinda see it happen. I don't think it's the full stock market. My guess, if I dug a little bit deeper, it's gonna say top
Andres Sandate:100 about 8,000 equities and ETFs. Okay. So it's a pretty sizable amount of of securities. And the other thing that's interesting is it's also features $1 fractional shares, which is is is out there on other platforms. But if you think about who's probably the typical user of Coinbase, it's probably somebody that skews a little younger.
Andres Sandate:Sure. Probably somebody that skews, not necessarily don't have assets to invest, but their their balances might be different than somebody that's like your Bank of New York Mellon customer, for example. Yep. And so being able to go in and, you know, fractionally invest, with as little as a dollar into some of the, you know, US listed equities and ETFs is is maybe right in line with, you know, how that customer wants to spread their bets or spread their investments.
Robert Swarthout:Agreed. And I, you know, I imagine this will be a topic that we see more of. And at some point, we'll just stop talking about it because everyone's doing it, but this was seemed a little bit newsworthy this time around.
Andres Sandate:So They can also fund their trades with dollars or stablecoins. Mhmm. So
Robert Swarthout:You keep weaving stablecoins in there.
Andres Sandate:I have a question for you, though. You remember when all these headlines came out years ago when, you know, Amazon's founder, Jeff Bezos, said he wanted to be the everything store? Yes. When you hear Brian Armstrong and CEO of Coinbase say he wants to be the everything exchange, what's what what's what's your thought on that?
Robert Swarthout:In some ways, he's saying that he wants to be a software platform that allow easily as DeFi. Because that's what DeFi is. It's decentralized finance. Yeah. You can do anything to anything.
Robert Swarthout:I don't think that that will I mean, we may be a long ways away if it ever happens on a regulated platform like that, but I I think that world's coming. Yeah. You'll be able to buy some Amazon stock. You're producing the Coinbase with some obscure, you know, I guess, something of value that's already on the platform that doesn't necessarily have a market. No.
Robert Swarthout:They'll create markets out of that kind of thing.
Andres Sandate:Mhmm.
Robert Swarthout:It's it's probably closer than we think, but it still feels like a long ways off. So Yeah. Our next topic, Terra sues Jane Street. It's not a topic that I have my bingo card for this year. So what's going on here?
Robert Swarthout:Terra is the the group that launched the Luna token. This is roughly four or five years ago. There was a so the lawsuit's over Jane Street, is being alleged that they did insider trading leading to the collapse of u s t UST and Luna. UST was the stablecoin that was backed by Luna. It wasn't backed by dollars.
Robert Swarthout:It was kind of a mix of assets behind it. It literally collapsed over the course of forty eight hours and went to zero, the stablecoin did, and Luna price fell substantially as well. And, you know, the crypto market moved on. One of the founders of of Luna, or of Terra, they they he got arrested in South Korea. This is been holding with you since jail.
Robert Swarthout:There's a long story. If anyone's interested, go look it up. So why do we care about this now? Well, Jane Street is, they do a lot of work with ETFs these days, specifically the crypto ones we're talking about here. And they you know, on crypto Twitter, there's this it's it's sarcastic, but it's real joke about every 10AM that the equities markets open, they there's a drop in the Bitcoin and Ethereum price.
Robert Swarthout:Pretty, you know, noticeable. It's not just like a small tick. And it's it's been going on for a year plus at this point. Everyone's assumed it was Jane Street doing it, kinda laughed it off, but no one's ever liked it as far as I could tell. Well, the at least on Twitter.
Robert Swarthout:I think the people that are on the winning side of that are the ETFs that need to buy more Bitcoin or Ethereum based upon their shares from the the day before. They get a discount on price, rents, and repeat. Well, kinda putting this back together here. So Tara sues Jane Street, for insider trading and market manipulation. The day following the lawsuit being announced, there was no 10AM slam.
Robert Swarthout:The day after that, no 10AM slam. The day after that, no 10AM slam. So it seems, though, you know, I don't know if it's coincidental, but it seems pretty obvious to me at least that Jane Street was behind us. You know? Not that that that mean means the price goes up to infinity, but it's
Andres Sandate:Well, the Bitcoin price surged 6%, you know, right after that. And the trading the trading patterns and you talked a little bit about some of the forensics that can happen in markets in in one of the earlier headlines, with the South Korean XRP market headlines. So the tools are there. Right? And so the trading research experts went and looked.
Andres Sandate:And for months, you know, they were they were tracking this, and then it reportedly stops. Come on. There's no coincidence. Let's go. I mean Yeah.
Andres Sandate:Chain Street earned $24,000,000,000 in, you know, one report. You know? I mean, it's a multibillion dollar market making operation. They're a a key player, when it comes to market making, particularly with, ETFs, as you said, and it puts them in the spotlight. And this is the second institution I'm reading.
Andres Sandate:Jump Trading was the other one Mhmm. That was sued for $4,000,000,000 for also alleged, you know, market manipulation and exploitation. Right?
Robert Swarthout:Yep. Yeah. It's you know, my understanding is Jane Street does not exactly like to be in the news just generally. Yeah. They're very secretive.
Robert Swarthout:Yeah. They're very secretive. And I guess to kind of put a crypto twist on this, for those that remember way back in the day, Sam Venkman Fried of FTX fame, he came from Chain Street. That's where he learned how to trade. So Yeah.
Robert Swarthout:It's there's always these links. Just trying to find them, whether they're interesting or not is, I guess, to be decided. So Well,
Andres Sandate:I think the the the the need for market structure, legislation couldn't, you know, be more
Robert Swarthout:Right.
Andres Sandate:I guess, couldn't be more clear when you talk about this, because these are the kinds of things that happen, unfortunately, when there isn't you know, there aren't the consequences in the market structure and the kind of surveillance that would come with regulation.
Robert Swarthout:Mhmm. Yep. Absolutely. So our next topic, Morgan Stanley files for National Trust Bank Charter. What does this mean?
Robert Swarthout:Essentially, they're looking to be able to custody crypto. They have a lot of clients. A lot of clients have a lot of money with them or a lot of, you know, value with them. So being able to custody that in crypto makes sense. And more and more of these you know, there's been crypto companies getting trust bank charters and other stuff.
Robert Swarthout:So the the world's changing when it comes to who does what role in, I guess, the finance stack.
Andres Sandate:Well, yeah. And then if, you know, we reported on this last year, I think it was, or maybe I don't remember when the acquisition took place, but there was a small acquisition, right, in Morgan Stanley's, like, blue chip Wall Street history that happened not too long ago. Remember when they acquired E*TRADE?
Robert Swarthout:Yes.
Andres Sandate:E*TRADE being the, you know, retail platform and one of the ones that sort of revolutionized, you know, people that were moving away from call your broker, you know, Charles Schwab to secure trades. And it's like, why are we doing that? Well, let's just set up an E*TRADE account. We could do it ourselves. Zero commissions is is one of the results.
Andres Sandate:Right? And people Yep. Keeping more of their capital. Well, this is you know, according to analytics insight, this is, you know, a first half objective for the for the firm. Morgan Stanley to launch direct spot trading for Bitcoin, Ethereum, and other Solana, you know, Solana and other things through E Trade.
Andres Sandate:So it's just Mhmm. There's a reason why they do these acquisitions. They don't necessarily always announce them at the time because we didn't have regulation at the time of the acquisition.
Robert Swarthout:Like, they they couldn't say the word crypto, admittedly.
Andres Sandate:Right. Now now you've got the retail market, right, that is do it yourself investors that use E*TRADE, and they wanna trade other assets in those platforms or through that platform. Why wouldn't why wouldn't they? Right? So why why why have the E*TRADE account and go to Coinbase to do your trading?
Andres Sandate:Right? Morgan Stanley is not they're not dumb.
Robert Swarthout:So That you know, we keep beating this drum episode after episode. Market structure build needs to happen because all these things all these things you see happening, if we had a different administration come in and have a difference of opinion on crypto, this all goes away except for the stablecoin legislation that's in place. Everything else is on fair game to be changed, at the whim of a executive order. So in in my opinion, it needs to get done.
Andres Sandate:Yeah. Yep.
Robert Swarthout:Man, I didn't think we would have this topic. Iran has links to Bitcoin. So they, Iran has been mining Bitcoin. It is I've learned. And the reason why this is a myth is they effectively have infinite energy, and they have been able to mine Bitcoin without really having the cost of the power, which is the biggest cost when it comes to mining.
Robert Swarthout:And their their average price that they're, mining a Bitcoin at right now is $1,320. Again, Bitcoin is worth 6 or 73,000 today. That's quite the, return on investment for you know, it's something that obviously also skirts the, any sort of, sanctions and all Right.
Andres Sandate:International sanctions. It's all Perfect. Yeah. When when you're able to subsidize the electricity at what reportedly by CryptoTicker is saying is less than half a cent per kilowatt hour with Bitcoin trading at around, you know, 68,000. That's a 50 x spread by my math.
Andres Sandate:So Right. Yeah. It it sounds like their ecosystem reached close to $8,000,000,000 last year. Yep. And the IRGC, addresses accounted for over 50% of the inflows in '24, in the '25, and and received 3,000,000,000.
Andres Sandate:So, I mean, when you're cut off from a lot of international markets, I mean, they obviously trade, you know, one of the biggest oil, exporters and, and one of the biggest players, in international energy markets. But but, yeah, when you're cut off, right, in many ways from western economies, they're gonna come up with other ways, right, to, to generate revenue. So Yep. Yeah. It's pretty interesting.
Robert Swarthout:Yeah. So kind of just some numbers to understand how, I wouldn't say important, but how impactful they are to the Bitcoin network. So two to 5% of global Bitcoin hash rate. So, basically, think of it as horsepower. So one in every 25 blocks was confirmed confirmed, basically through the IRGC Bitcoin machines.
Robert Swarthout:It's, kinda crazy to think. But in the now that, obviously, this war or whatever it is that's going on over there, you know, the power's out. So you you already see a drop in the hash rate of Bitcoin because those machines are offline. And, you know, well, who knows what will happen long term, but it's, again, not a topic that I would have thought we'd be talking about.
Andres Sandate:Well right. And, you know, it it begs a question when you have state level sanction evasion using Bitcoin Mhmm. To to basically partially fund your economy. It kind of reveals this darker side to, you know, this decentralized permissionless, digital economy. Right.
Andres Sandate:Ironically, you know, at the same time that we're sitting here talking about, like, the need for transparency, the need for market structure, the need for this, whole entire ecosystem to become, part of traditional finance in a way or at least to become accepted by, more of the mainstream. It needs regulation. You have this going on. And so, yeah, it's gonna be, yeah, it's gonna be something to to to pay attention to as that conflict plays out, over the coming days and weeks and whether or not the conflict impacts, you know, production and potentially, like, Bitcoin price.
Robert Swarthout:Yep. Indeed. Our second to last topic, so the DTCC shows that hidden road is live. Okay. What does this mean?
Robert Swarthout:So DTCC deals with it says in digital trade commodities commission, I believe. And they so they deal with this mean depository trust and clearing corporation. Yeah.
Andres Sandate:It's the plumbing of how assets are effectively tracked and accounted for. Yes. Exactly. Reported.
Robert Swarthout:So the old finance system effectively. Right? So Hidden Road, this is the acquisition that Ripple did, gosh, probably almost a year ago at this point. And so now that they are live what this really means is now that Hidden Road is live with DTCC, they can basically help make that bridge even easier between traditional finance and the, crypto world. And I guess as a side note, Ripple doesn't call it Hidden Road anymore.
Robert Swarthout:They call it rip, Ripple Prime, but it's the same product at the end of the day. And cool to kinda see these inroads happen. On Twitter, when this happened, David Schwartz, who is now the ex CTO of Ripple.
Andres Sandate:CTO. Yeah.
Robert Swarthout:Yep. He he he goes, probably important. He just quoted it.
Andres Sandate:Yeah. It seems important. Yeah.
Robert Swarthout:Yeah. It seems important. So he he's a guy who likes to be sarcastic, but, also, you know, making light of the situation, think, is kinda cool.
Andres Sandate:Before the acquisition by Ripple, Hidden Road was clearing 3,000,000,000,000 with a t Yep. Tango, 3,000,000,000,000 yearly, for more than 300 institutional clients across FX derivatives and digital assets. So, yeah, it
Robert Swarthout:And and if I remember correctly, so they announced the acquisition, then it closed, I think, six to nine months later. In that period of time, the business tripled in size and volume. So it's, you know, And I only imagine it's gonna grow crazy from there as crypto gets intertwined more and more. Yeah. Yeah.
Robert Swarthout:So our last topic is, Kraken gets a Fed master account. There's many crypto firms will say that that would love to have a fed master account. I would have not assumed Kraken was the first one to get one. I didn't even know they were on the list to want to get one, but it was a, it's cool to see that the Fed actually approved this, the Kansas City Fed in particular. So
Andres Sandate:Yeah. Yeah. I I I I just have to laugh because you think about the the Federal Reserve Bank. Yes. And then I'm sure somebody showed up at the office and, you know, works in a maybe a totally different department the Fed and says, what the heck is Kraken?
Andres Sandate:Right. I mean, just the name is Kraken. Right? The name alone, it just shows that how we completely, I think, underestimate how resilient this comment was made today by the chief market strategist, a friend and mentor of mine, David Yearwood. I give him a shout out.
Andres Sandate:He said, check out the clip of the Goldman Sachs chief market strategist, I think. I may be getting her title wrong, hat on the economy. She talked about just how resilient the economy is in The US. Right? And just sort of, like, they have a pretty high probability that we don't have a recession was her her view.
Andres Sandate:And, he said, check it out. And it was it was interesting because talked about just the resiliency of The US economy. And what I always find so fascinating is just how quickly you know, a year and a half ago, we would never have seen this headline. You know? Like, the Federal Reserve approves a master account for a company called Kraken.
Andres Sandate:Yep. So And now here we are. And and think about how long our show's gone today. I mean, forty plus minutes, and we're talking not about crypto asset prices, not about volatility in Bitcoin, not about, you know, how's your crypto token portfolio doing. But Mhmm.
Andres Sandate:All these headlines, a lot of them have to do with just the blockchain infrastructure, the tokenization, the institutional adoption, the enterprise adoption, you know, the political environment. You know? And, yeah, we'll get a bill done. It might be another three to six months, and maybe it takes another year, but we'll get one. Yeah.
Andres Sandate:And I just think, you know, you have to kinda sometimes zoom out and look at where where this whole space has been and just how quickly it's changed. And, that doesn't mean there will be no bumps in the road. There certainly will be. But, but, yeah, I mean, it's it's pretty remarkable.
Robert Swarthout:Yeah. So Kraken filed this this application initially back in October 2020, so four, five and a half years. So the person that whoever been working on this doesn't feel like it happened very quickly. I guarantee
Andres Sandate:No. No. No. You never do, but that's the nature of the grind. Right?
Robert Swarthout:Yep. Absolutely. And I I think something important to point out here is this is not a full a full master master account with the Fed. This is what they're calling a skinny master account. It allows them to hold reserves and settle in central bank monies to dollars, but they're not allowed to lend.
Robert Swarthout:But I can't imagine that they were exactly wanting to do the lend part anyway. So they have access to the Fed's discount window and, or can operate oh, no. No. It cannot, it doesn't have access to the Fed's access, window, and it cannot, act as a commercial bank. So Yeah.
Robert Swarthout:I don't think that was in their ambition at least initially. So
Andres Sandate:Right. I was gonna say if they got that much, man, I think, you know, you and I need to go, set up a, you know, an operation and go apply because the Fed's definitely open for business. But, no. I mean, look. I I always like to try to find a way to lead things on an upbeat tone.
Andres Sandate:I mean, anybody that's in crypto right now that owns assets is probably like, man, this is just we're in the middle of the winter. But I I and it it you know, when you do, it it may not feel good, but, you know, sometimes you have to be able to take that in in perspective and sort of zoom way out or up or whatever direction you need to, to kinda get perspective. There's a lot of positive stuff happening despite, you know, what what's going on with the crypto asset prices.
Robert Swarthout:And and this is the things that, in my opinion, will eventually lead to the higher prices. But you have to get you have to get the dirty work done first. So
Andres Sandate:Yeah. Yeah. You gotta get there and kinda live to the other side of it.
Robert Swarthout:Yep. Well, I think that's a wrap for this episode of the weekly crypto check-in. Keep updated with latest crypto insights by searching TETON crypto capital or the weekly crypto check-in in your favorite podcast player. Leave us a review to share your thoughts or find us on LinkedIn and like our page. Until next time.
Robert Swarthout:Take care.
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