Why Crypto Is Suddenly Trading Like the Nasdaq

Bankless Nation is the first week of May. We've got another all-time high week with the S& P 500 and the NASDAQ dragging Bitcoin, Ether, and the rest of crypto up with it. I think the question though is with all the corporate earnings, with all the stocks at all-time high, is are things getting a little too frothy out there? And uh I think the price of crypto might depend on the answer to that question. Not just that though, but also the Clarity Act uh got over a huge hurdle this week, which also caused a bump in the crypto markets. Uh the fight's not quite over yet. There are some still some hurdles that we need to get over. What is left to get clarity signed by the new date of July 4th. It's also layoff season. It seems like big announcement from Coinbase laying out for laying off 14% of its staff. Uh but at the same time, we've got fundra season. Two multi-billion dollar VC raises deployed directly into crypto. What's the counterbalance here? Like what what's gonna outweigh the other? Also, David Michael Sailor, is he selling? Speaking of — speaking of raising funds. — Yeah. Uh we also have an update on the Bitcoin strategic reserve, the US strategic reserve. And David, Ethereum layer 1, it might be back, David. Okay. And that that's a thing that you wanted to happen. You were talking about scaling — the layer 1 to come back. — It looks like it's scaling. There was a meeting of the devs in the Arctic Circle. This is real, actually. And out of that comes more ETH scaling. We'll talk about all that and more. But first

let's get to uh crypto prices on the week. They've been okay, a little bit down at the time of recording. What are we looking at? Yeah, the morning of recording, but really the week was pretty good for Bitcoin. Up 4. 5% this week. We cleared $80,000 yesterday with confidence. We got up to like $82,000 the peak yesterday. Uh a little bit below that at the time of recording, but still overall a good week. ETH up 1. 2% on the week. a little bit more of a modest week for ETH. Uh like Ryan said, the markets are kind of like coming back a little bit off of its euphoric highs yesterday. If you were on Twitter yesterday, there was just green euphoria everywhere. — Oh, really? I mean, in the tread market, not markets. In trad uh this chart was really the chart of the week for me. This came from the DeFi report, Michael Nato, and he points out that 2026, uh, is the most correlated Bitcoin has ever been to the NASDAQ. This is correlation by year. You're seeing a chart here. So, we are more correlated right now with the NASDAQ on Bitcoin price than we ever have been. I have a question for how this chart works. M — if the NASDAQ goes up 1% and Bitcoin only goes up by like a quarter of a percent but that relationship is consistent is that still strong correlation or is it less correlation if Bitcoin is going up any number that's different than how much the NASDAQ went up by. Does that make sense? — Well, no. I'm not sure I understand your question. Uh a correlation means that uh obviously bitcoin price goes up or down related in a correlated way. You know in this case the correlation — I guess my question is like if the magnitudes are different because the NASDAQ is going up more aggressively than bitco but they are still both going up. — Yeah. This chart doesn't measure that. It doesn't ma measure the magnitude but it does say when stocks go up when NASDAQ goes up bitcoin follows. — That is confidently happening. — Yes. And by the way, 2024 the correlation coefficient was uh 0. 1 and now it's 0. 48. — Yeah. — So this basically means that our destiny is in the stock market's hands right now. — Does this kind of mean that we're kind of like cucked by AI — a little bit? It feels like um buying Bitcoin right now feels like at least in 2026 a worse play on the NASDAQ at this moment in time. It's not going to stay like that, but that's what the regime that's the regime. You're getting price exposure to the NASDAQ, but you're not getting as much as the as returns as the NASDAQ. — That's right. That's a worse NASDAQ. I don't like saying that. I don't think that will always remain true. There were some crypto assets that — two framing went from digital gold to a worse NASDAQ. That's a terrible. — You could take that, Michael Sailor. Take that and run with it. Um, Zcash, a better NASDAQ though on the week, — dude. Zcash has confidently returned. Not breaking all-time highs, but it is up to previous all-time highs. $570 for a Zcash. — For some reason, privacy is just catching a bid, catching a narrative. There were some other like down market privacy coins like Rail Gun that also caught a bid this week. Um, also in the crypto world, VVV, which is Eric Vorhees Venice project, which is private AI. So, it's both AI and privacy — was right in the ven diagram of where you want to be. — Loves that right now. — Yeah. Hitting highs that it hasn't seen since token launch, which I don't even really count as like real price action. So $12. 75 for a VV token. How what's the market cap on VVV right now? It's pretty impressive, right? — Yeah. The market cap, this is not fully diluted, but almost 600 million market cap. — A billion dollars fully diluted. Wow. — Mhm. — Yeah. And the market cap Zcash right now 9. 4 billion. By the way, did you see Multicoin came out and said, "We've been buying Zcash for the last couple months. " — Mhm. — Ever since uh Kyle left. Huh. — They're into the store of value trade. Okay. Uh, let's talk about stocks for a second because that's the big story. — Let's look at it on your screen, David, because you're, you know, — I'm the chart guy. So, this chart's going all the way back to like December Q4, 2025, but you can see the bottom of the Iran war and god, we are just since the very bottom. — The spy is up 17%. And that's across 39 days, which is just nuts. Last week we were talking about how strong the spy was and it hit a record high, a monthly high of 7,200 and today we are at 7,360 or not today but yesterday at the all-time highs. — Um NASDAQ's even bigger. NASDAQ gained 24% over that same time. And so you know these are indices — that's crazy. Can you just pause over like what almost 40 days? Not even 40 days NASDAQ is up 25%. Yeah. 26% from peak to trough. Trough to peak. — What? — That's just gnarly. That's gnarly. Like you really have to zoom out pretty far to put it in like perspective. But the Iran war, it is up double that then the Iran war took it down if that makes sense. Okay. In terms of size, — are there sectors that are winning? I remember we were talking about the SAS apocalypse. That's still getting blown away. I saw in the Mag 7 like Google just crushed it in terms of earnings. Google briefly took over Nvidia as the world's most valuable company. That is no longer true at the moment of recording. Nvidia is back on top. But Google had a big day yesterday. So like the sector that is really leading the market is semiconductors. Like semiconductors are up 12 a. 5% over the last two weeks. Yeah. Which is nuts. And so that who is that? That's Nvidia. That's Intel. Intel's up 60% over the last two months. AMD is up big. Uh so anything that's chip related. SanDisk is putting in record like it was the best performing stock over the last 12 months and it's all AI related. The second best performing sector Ryan is uh infrastructure uh industrials and that is a combo of uh conflict defense companies but also AI capex buildout companies. So also the correct vin diagram to be in this particular moment and those two sectors are just leading the market and so really what's happening is AI is dragging the whole entire market up in a very big way. Uh industrials is also contributing financials is a wash like a lot of other stuff is a wash and then things like utilities and energy which is down on the week which we'll talk about when we get to the war section. Uh that that's dragging the rest of the market down but it's just like not in any part in any way that over overshes AI. Well, thanks AI for bringing Bitcoin above 80K. Uh, corporate earnings were part of the story here, right? I mean, what what's the like overperformance? Was it uh 84% of all corporate earnings this quarter beat analyst estimates? — So, we are in earning seasons at the moment. Uh, 63% of S& P 500 companies have reported earnings so far this quarter. Like you said, 85% of them have beaten earnings. And this isn't like they eaked out a earnings beat. They like broadly they crushed uh companies are reporting 20% earnings above estimates on average. Uh and also this marks the sixth consecutive quarter of doubled digit earnings growth for the S& P 500. So corporate returns, corporate earnings strong. — You know why? It's all in the back of AI, right? Uh, Anthropic is a huge company in this. You know, Anthropic locked a deal with SpaceX to get more compute. So, compute was a limiter. I mean, part of this story is um I can tell you that my demand for AI tokens is insane. — I'm consuming more tokens than I ever have. — I ran out yesterday for like this fourth or fifth time. — Fourth or fifth time period of time — uh this year, like last month. — Okay. I am now running out. So, I'm I do $50 increments. Okay. I'm running out — two to three times a day. — My just pulling out the credit card is like swiping it again. — Well, I did my first $250 purchase today on you get a bigger discount the larger you pay. — Yeah. So, I was like, "Oh, I'm No, I'm going to use it. " But it's uh I don't know if it's becoming a problem. It's just so damn useful. I think I'm channeling it into something that's productive. — I absolutely do, — but I my demand is insatable. And I got to think like if the rest of the market is doing this as well, it's kind of dawning on everyone that this can make them more productive, that this can save them time, that this can drive revenue and efficiency. Everyone's demand is insatiable. It's that's what's causing all of the overperformance in the AI boom here. So there's been a ton of conversation of just like the AI bubble, it's all a bubble like it's going to come crashing down. Anthropic earnings are growth revenue growth is up 80x in that never happened. That was not the boom, dude. 80x earnings in year-over-year growth in revenue and usage in Q1 2026. — Can you say the words this time is different? Like I don't want to say those words, but like this is a different story. I've never seen this before in markets. I mean this goes back to the debate of like we did this debate on bank list like is AI like no normal technology or is it a fundamental paradigm shift the thing is — ADX earnings year-over-year wild all I can say is just it's not about reading headlines I think that the closest thing any investor can do is look at how they're actually using it — and my demand my use the utility to me has only gone up and to the right and so until that stops happening — that's not a narrative This is my lived experience. — You agree, right? I'm not crazy. — And you see some of the output of like that some of the ways I'm using it with AI. I'm not in some kind of AI psychosis. It's it's useful. Is it useful? — Yeah. — All right. — Yeah. I mean, so we could actually take kind of take a look at anthropics valuation in the market from various derivatives. This is on Hyperlquid. Uh Anthropics coming in just shy of $1. 2 trillion in the private market. This is all implied. He's not actually trading shares. This is a derivative, but it's useful. It's directionally useful. Uh 1. 2 trillion as a preipo valuation. Uh Bitcoin is 1. 6 trillion. — What? — And anthropic is almost a Bitcoin, dude. — What does that is Bitcoin cheap or is anthropic just that damn good? — Bitcoin is definitely cheap. What would you buy at this price? What would you rather own at this price? the same price Bitcoin and Anthropic, which it seems like, you know, total market cap is about the same. Which would you rather buy right now? — Oh, that is a really good question. I don't really like I like buying Bitcoin in trillions because of just what it is. — Yeah. — I don't like buying any equity in trillions unless it's like in a retirement savings context like Google for example, what whatever that is like 4 trillion. But I feel safe with that. Well, good news, Dave. You can't actually buy it, right? You can own a little person. Wait, — why are you even bothering me exposure, but it's private. You get none of this until they go public and you know, they IPO on retail, dump on retail. So, the question is, is all of this getting a little bit too frothy? There are definitely some people who say yes. So, this is a tweet from uh Jason Gopert. Is that how you say his name? Gofort. Sure. — Okay. He said, "Today will be the second consecutive day the S& P 500 closes at a record high with more than 4% of its stocks hitting 52- week lows. " Okay, so two data points here. Second day the S& P closes record high with more than 4% of its stocks hitting 52- week lows. And he says, "Anyone want to guess the only other time in 100 years this has happened? " And there's a book called 1929 by Andrew Ross Sorcin in the tweet. What's it What's the point he's making? I don't I think I would be more scared if all to all equities were going up and to the right, but if some equities are going up into the right and up or going down, to me, that's like, yes, that's how the market ought to work. Somebody's clearly being rational somewhere, — I feel like this is just maybe two data points that he found on 1929 that are — you do a lot with two data points, — but okay, there are other better, let's say, bear cases. One is just like we know what's happening with uh US federal debt, don't we? Like this has gota this has got to hit us. I saw last week, David, that this is the first time since 1946. — You remember what happened in 1946? We just Yeah. Okay. In one of David's previous lives, we just The US had just fought a war. Yeah. — And so all the war bonds, all the debt, we just passed uh the federal debt held by the public as a percent of GDP 100%. And the only time we've ever been higher was 1946. — So that just means that the government owes the public a lot of money. — That's right. Our the government debt has never been higher is what that means. We're at wartime level debts. The level of debt that it took to go defeat Hitler — and the Nazis. That's the level of debt we're in right now. — Who? — And look at this. We did this in 2000, the year 2000, which is in our lifetimes. — Yeah. — We were at 31%. — Okay. So since the year 2000, we went to 100% of federal debt held by the public as a percent of GDP. — What did we spend? do with all that money? What did we get out of that? — I mean, there were some wars. It wasn't a World War II, — but where else did it go? — Yeah, I don't know, man. — Okay, good question. — That's the debt story. You also have firms like Birkshshire Hathway. They have announced their cash balance is now up to a record almost $400 billion. They are aggressively selling into the market which is what they do when markets go up. Markets go up, Birkshshire sells, markets go up even more, they sell even more. But like there is an acceleration here. Look, this is the 14th consecutive net quarterly sale. 14 consecutive sales. They've been selling into this market for a while and the cash on reserve they have is above 30%. This is uh Warren Buffett. This is what he says about the market. I want to play this for you, David. — What does this feel like to you? Is does it feel expensive? Does it feel like there are opportunities in some? — Well, it feels like, you know, I' I've compared it the markets to a church with a casino attached and people can move between the church and casino and I would say there are more people in the church and casino. But the casino's gotten very attractive to people. — The casino has people is what Buffett says. This is the reason for their cash position. Stocks are not cheap. He said in his 60 years of investing, there's only about been about 5 years that felt inexpensive to him and cheap. So, he is absolutely playing the long game. Does not like the price of stocks right now. — Does he have time left to play on that game? — He's a legend, dude. Warren Buffett is 95 years old. Imagine being as coherent as 95. — Look, he's built a legacy. Burp he's playing, but like yeah, legendary investor. So, I mean, what do you think? Are we frothy or like are that is the AI token demand insatable? Is that going to pull everything else up? I mean, I'm not a long game. — No, — I'm one to be in the market. — Uh, that's a long game. — What are you talking about? I guess — but he's selling because he's like, "These are expensive and I'm going to wait for uh these things to be cheap. " And I'm in uh we are in unprecedented times. AI is novel and unique. — You're scared to be out. I'm always I'm always scared to be out of I don't want cash. I want — Why would you want cash? Look at the cash chart. Look at the debt to GDP. — Yeah, man. — I understand that. I understand that, too. Um All right. Well, we'll have to see how this uh this all plays out, but what about Iran? What's going on there? — Yeah. Uh both not a lot and something at least somewhat notable. Um and so Monday Trump announced project freedom which is basically an attempt to open the straight of horm by brute force. Uh he said that the US will just manually guide and protect ships to assist them in crossing the straight. Uh Iran of course didn't like that. They really depend on the straight being closed. So they sent missiles and drones towards the US Navy which the Navy intercepted. Uh Iran also sent missiles and drones to strike a UAE oil facility. one actually did land in cause of fire which I think is what might have um caused Trump to put a pause on Project Freedom just less than 48 hours later. Uh he said that we are now back to talking in Pakistan to get a deal done with Iran which is basically where we stand now after a quick skirmish in the straight. We are now back to pausing while a deal is potentially being formulated and discussed. And so it seems nothing has really changed this week in Iran. Straight over still closed. We are still talking about a deal. The deal is being dangled in front of investors by Trump as it is every single week. — Okay. — I'll kind of propose that like even though nothing's really changed, something kind of has fundamentally changed. — What's that? — And that is oil is down big this week. Oil is down 15%. 15 to 18% depending on where you look. — Why? — Um because it is. — Because I don't know. Yeah, I don't know why. It just is. And that's important. And so if oil is down 15 and 18% respectively between WTI and Brent, that's really good for the global economy. So pain is being felt less. Uh 10-year yields down 2. 7% over the week. Also great for the United States not experiencing as much pain. And so where did we things we leave things off last week? It's like oh this is a — it's a pain tolerance game. — It's pain tolerance. And with the equities at all-time high, yields down and oil down. All of a sudden, like the Iran is still feeling all of the same pain that it was prior cuz they're isolated and cut off and the rest of the world is feeling less pain. And so that's what's changed. — Well, I guess we'll check in on the — where the pain pendulum shifts next week. — And just checking in on the poly market that we usually do. So the odds of a permanent peace deal between the US and Iran by June 30th, which man that's coming right up, we're almost there, is 53%, so it's still pretty high. By the end of the year, 74% on Poly Market. — Notably the June 30th date, 55% as you said, is up 14% week overweek. So a big green jump in that in the over the week. — Okay. Well, I mean, Poly Market knows things that we don't somehow. So I'm sure that's a good sign for this being ended a little bit sooner. Uh David, we got more to talk about, which is when will the Clarity Act actually happen? We have a date of July 4th. What's the probability that we hit that? Also, did the banks win that deal or did we get what we wanted out of it? Coinbase layoffs. We'll talk about that. And Sailor on the record, he said this. He intends possibly to sell Bitcoin in order to pay a dividend, but he — sentence never uttered before by Michael Sailor. — Yes. What does it all mean? And we'll get to all that more, but before we do, we want to thank the sponsors that made this episode possible. 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based on card holder assets on Coinbase. The Clarity Act got over a big hurdle this last week. We had a tweet from Senator Tom Tillis who is one of the main senators pushing this forward. Uh he tweeted out, "We have worked in good faith and all sides. The result is a substantially improved consensusbased product. Our compromise prohibits stable coin rewards from resembling interest on bank deposits. " Our core concern over deposit flight. Some in the banking industry may not want either of these things to happen, and we respectfully agree to disagree. But nonetheless, there seems to have been a compromise. We we'll talk about the nuances there. Uh but then we also have a date, a target date for signing by July 4th. And so we're not there yet, but that is kind of — July. Really? — Yeah. The 4th of July. Yeah. That is the date being projected and like, hey guys, everyone rally, get the troops, get the last bits of things debated on because we want this signed by July 4th. Uh and so we're over this one potential hurdle. Um well, where we left things, it was all about yield, right? And the uh the banks wanted their yield back. They realized that they forgot to negotiate harder over the genius bill last week. And so they wanted kind of a doover and they didn't like the fact that Coinbase and other crypto exchanges could essentially give their users depositor stable coin yield. — Yeah. In a roundabout way where they're not Yeah. Like the bankless stake here has always been look guys, you know, the banks are just taking the yield. They're trying to protect their monopoly interest. — They don't have any good reason for keeping monopoly over that yield. — And that remains true. This is why previously Coinbase uh backed out of the negotiation. Still, they are a powerful lobby group in DC. And in order to get things done, apparently you have to appease the banks in some way. So there was a compromise that seemed to have been reached over this stable coin yield issue. It's somewhat nuanced though. Uh we'll have to talk about who really won the issue. But what are the details here? — So far the uh chief policy officer over at Coinbase, he uh tweeted out, "In the end, the banks were able to get more restrictions on rewards, but we protected what matters, the ability for Americans to earn rewards based on real usage of crypto platforms and networks. " And so big asterisk there. Big like that's the compromise here. — Wait, what is that? Can you go over that again? So if you if the stable coins are just sitting there — Mhm. — they can't provide rewards. But if the stable coins are being used in some way, then possibly there's a backd dooror to provide rewards to users. — Yeah. So Alex Thorne probably the tweet from Alex Thorne is probably most helpful here. He's the one who drilled right into the actual verbiage. He said uh stable coin yields cannot be paid solely in connection with holding is the words. So idle balances or in a manner economically or functionally equivalent to bank deposits. And so I think that wording is like if it looks like a bank deposit, you can't pay yield. — I wonder what that means. So if it's if probably if it's just on Coinbase sitting in a custody custodial Coinbase account that — if you are doing set and forget behavior I think the banks will then argue that is like a bank deposit and you cannot pay yield on that. — What if the stable coins are on base in DeFi or something like that does not look like — bank deposit? Yeah deposits. Yeah. — Yeah. I mean I think this is where it gets very squishy. Uh and so what is banned in section 404? This is the section we're talking about covered parties paying interest or yield to US customers solely for holding stable coins. What's allowed is these are the words activity based or transactionbased rewards, payments, transfers, marketmaking, staking, governance or loyalty programs. And this will be get a continual this will get updated within one year by the SEC, CFTC or Treasury joint rulemaking about more clarity around that. Oh, the SEC and CFTC and Treasury get to jointly rule make. Yes. And so this issue is kind in some way kind of being punted but with a pretty clear like flag planting by the banks saying if it looks like a bank and it quacks like a bank, you guys don't get to pay yields. But then there are these words activity based, transaction based rewards, payment transfers, marketmaking, staking, governance, loyalty programs. And then within one year the SEC and CFTC and Treasury will do joint ruling. — By the way, those are our guys. Those are our guys — right now. They're very crypto friendly, right? — Okay. So that's why Coinbase must have thought that this is a compromise that they could somewhat deal with. Okay. So my understanding though is that this issue is kind of closed but not all the way closed. There was a report from um Eleanor Terret that banking trade groups plan to actually revamp and ramp up outreach to additional members in the coming days. And so they're not quite sure that because like I think what they're doing is they're kind of just like drawing the lines but then also punting the fight. — Okay. — And so there's like yeah no idle yield. If it looks like a bank deposit, you can't do it. But then also, we're going to give this up for interpretation later, which is why it feels like we kind of got over the hurdle. Yeah. — By simply moving the hurdle to a different place. — I see. Now regulators get to decide. If you have crypto friendly, they might do that. If you have anti-crypto, Wow, that's fun. Okay. So, did the banks win in your mind? — It's TBD. It is partially because they got their line in the sand as in like you can't just have naive bank deposits which is kind of what I was excited about like going bankless doing like taking banking away from the banks like all this kind of stuff. — Um that the simple path to get there seems to be closed. — Well maybe it's still there for you David. — The creative complex a little bit convoluted path definitely still open. — Yeah. Like if it's on base for instance and it's what does loyalty participation look like? — I mean you look pretty loyal. You're pretty loyal. — I look loyal. I I'll press a button every now and then. Remember to claim your reward you claim button and now you get your and also vote on something fun thing, you know. — That's right. Okay. There's still some stuff left to do here though. You remember the developer and DeFi protections that was kind of baked into earlier versions. It was called the blockchain regulatory certainty act. care a lot about this. Coin Centers talked about this. That is still a little TBD. They're going to have some negotiations about it this week. It doesn't seem so contentious, but if we got that in clarity bill, that's a huge win. So, still crossing our fingers on that. And also, this might actually be the thing that derails the entire — all of this might be just for nothing. — The ethics provision, David. So, the ethics provision, right? There are some senators that are hardlining on Trump's the Trump family crypto activity. Uh the White House and basically saying, "Hey, like there can't be conflict of interest here. You have to tone down the world liberty finance probably all of these things, right? " And the White House says it's not going to accept any language like this because of course the president doesn't want to be individually singled out. So this is another thing that requires a different type of compromise in order for the Clarity Act to go through. It might derail the whole thing. Poly market David has shot up though to a probability of at the time of recording mid60s. So it got as high as almost 70% in terms of a clarity — act 45% not terribly long ago. — It was I mean just last week it was down in that. So — so we went from 46 to 66%. — Yep. So this is pretty good. I like these odds. It's much better. It's better than a coin flip and I think it's pretty accurate. So, we'll uh we'll hope for that. — Dude, what the real question is, what are the odds that Donald Trump refuses to budge? He's like, "No, I like my grifting. Don't take my grifting away from me. " — I don't know. Maybe he'll have some sort of grift loophole still. Uh, you know, just if he's actively — loyalty reward based on loyalty.

— Um, there were some layoffs this week from Coinbase as well. They let go of 14% of their staff. At the same time, we have two pretty large multi-billion dollar VC raises. Tell us about this. — Yeah, so this is actually kind of a market cycle right of passage. Coinbase has laid off employees at the bottom of every single cycle. I remember this happening in 2018. This happened in 2022, and now this is happening again in 2026. As you said, um 14% workforce reduction. talked about AI saying like we're rebuilding the company to be less layered. So five maximum layers from Brian down to the bottom whatever you call it the bottom of the or chart. Five layers max and also no pure managers. Yeah. — So there are no pure managers at Coinbase according to Brian. Everyone is at least somewhat of an individual contributor. Um — I don't think this was AI though. I mean I think it was — I think AI is a useful — Yeah. — a useful scapegoat. It makes everything more tolerable. — Yeah. And I don't even know if it's a scapegoat really. Like he didn't say that this was the reason uh necessarily. He just said we're going to take this opportunity for efficiencies, right? But to your point, they've done this every single cycle. There have been uh 1,200 layoffs in crypto in the past 5 months. — So Coinbase big one. Yeah. — Yeah. That's the big one. And to your point, you know, fun fact, these layoffs previously from Coinbase have marked the bottom. Yeah. — So June 2022, 18% of the workforce uh they laid off. — Wasn't quite the bottom, but pretty close. — Yeah. Pretty close. So this happens. — It's not a I won't call it a bottom ticker, but it is a bottom signal. — I agree. Now, let's talk about the raises though because this is the other side of that. So if that's the bearish news, layoffs, — there were some pretty big VC raises. A6Z and Han Ventures. Is that right? — Yeah. — And the total between them 3. 2 2 billion. — Yeah. The timing of this was actually kind of funny. Uh Han Ventures announced their $1 billion raise on Monday and then Tuesday A16Z comes in and says we raised 2. 2 billion just like — dropping it. — 3. 2 billion is not a small amount of money by any these are crypto funds. Yeah. And they're not the only one. So Dragonfly previously raised 650. Paraffy raised 125. uh blockchain capital raised is raising 700 million paradigm which is not just crypto it's also AI and robotics 1. 5 billion so closing it on 6 billion crypto and now crypto adjacent funds and so you can't really be bearish this is healthy for the industry — capital new round of startups — uh refreshed for what it takes in 2026 I think kind of the big question is what are these people deploying into well did you read. So it was new financial infrastructure, a lot of stable coins mentioned, new assets and markets, agentic economy, that kind of thing mentioned. Things not mentioned. I didn't hear much DeFi for instance. No. — Now Hib reminded everyone that all of these funds including, by the way, Dragonfly, their mandate is broad, so they can totally deploy into — Bitcoin and Ether and Zcash and any other liquid uh crypto token out there as well. But that was not the uh stated reason for the fund raise this time. — No layer ones, no DeFi apps, no NFT platforming. What else? Yeah. — Yeah. Lots of tokenization, lots of Wall Street stuff, lots of neo banks, lots of payment stuff.

— As you'd expect in 2026, uh David Michael Sailor said the words out loud, the thing he should never say that he was thinking about maybe at some point selling some Bitcoin. This was all over my face. — Why would he sell Bitcoin? What would he need to sell Bitcoin for? — I think he's got to pay some uh some of the people he that are lending him funds, David. Dividends — lending him funds to buy Bitcoin. — Yeah, that's right. — So, he's being lent funds to buy Bitcoin and then he's selling Bitcoin to pay the dividends for the capital requirements for the people who he sold the equities to. — He He's selling he he's uh selling a little bit in order to raise kind of the interest payment dividend type. — I don't believe it. It's fake. He never said it. — It's not fake. Let's play the clip. so uh people can hear it. — You uh buy Bitcoin with credit. You let it appreciate and then you sell Bitcoin to pay the dividend. And as long as you're issuing credit in excess of the break even point, then this business works and grows forever. — What I love about this, Ryan. — Yeah. — You and I would debate with Bitcoiners as a pastime in years past. One of our most fundamental arguments against Bitcoiners is that they always have this fundamental assumption that Bitcoin just goes up forever. It's in the Bitcoin security budget arguments and it's now sailor's quarterly earnings report of you buy Bitcoin, you wait for it to appreciate, you sell a little bit of Bitcoin to pay back the dividends. — Yeah. — All Bitcoin has to do is appreciate. I mean, I think it works though. Honestly, I just don't hate it. I think it's it all works. It's not a lot of Bitcoin that he would sell, but this is him opening the door in order to do that. And I think this is um he needs to do that with products like Stretch, right? You need to have this option. The structure of micro of strategy this time around is much different than it was previously. And the only way you're going to um entice more stretch buyers is to actually open the possibility that you may have to sell some of the underlying Bitcoin as collateral in order to pay them back or they're not going to continue buying your Stretch product and your other preferred shares products. — I think that that's totally right. as like I think you and I I bought a little bit of stretch like a $500 of stretch just because and like the reason why I'm not doing more is because like oh what if Sailor wipes me out like what if he goes like ah I ran out of money but I'm definitely not selling my Bitcoin so Stretch it's going to zero so that's why it can't be a savings account but if Sailor is publicly saying I will sell Bitcoin to fund the yields it probably opens up the TAM for the interested buyer of Stretch which opens up his ability to buy more Bitcoin now And really, I actually don't think there's anything fundamentally wrong with this. — Of course, there's nothing wrong. — What is his whole deal is he is arbitrageing time frames. And so, if people want 11% now and Michael Sailor wants 30% later because he thinks that's what Bitcoin is going to appreciate by over the long term, he will uh he will give you that arbitrage opportunity. — That's right. What what's wrong with it, if there's anything wrong, is it's off script. Michael Sailor at every point I've ever sell your Bitcoin. Never — He literally tweeted out uh sell your kidney if you have to buy. — Yes. — So is he going to sell his kidney before he starts to sell Bitcoin to pay? — No, I think he's got to pay some preferred shareholders. — I think he should do it as a bit — before he pay before he sells any Bitcoin to pay stretch dividends. He should sell his kidney first. How convicted is he? If he's not willing to sell his — Come on. He's got two. — He said it. How many chairs are you sitting on? How many kidneys do you have, Michael? How many do you need? — That's a great idea. I hope he's listening. Uh David, coming up next, we got to talk about Ethereum. It is scaling. There was a — meeting of the devs in the Arctic Circle. I want to tell you about a summit. — Yeah, a summit. Also, the strategic Bitcoin reserve an announcement that within weeks there's going to be something to announce. I actually have a bullish take on this. We'll get to all this and more, but before we do, let's thank the sponsors that made this episode possible. In 2024, emerging markets generated over $15 billion in annual yield for investors with yields ranging between 10 to 40%. These are some of the highest, most persistent yields on Earth. The problem, DeFi can't access them. Bricks changes this. Built on Mega ETH, Bricks takes emerging market money markets and solver carry and turns them into composable primitives you can access straight from your wallet. While DeFi investors earn 3 to 6% on stable coins and T bills, institutions have been harvesting 10 to 50% yields backed by sovereign monetary policy. 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always, this is not investment advice. — Ryan, let's get back into the Arbitum DAO layer zero kelp hack story. Do you remember where things left off with that? Arbitum had frozen some funds on its chain that they were just kind of waiting for a and the rest of the ecosystem to figure out what they want to do. — They were part of DeFi United, right? So those un like those frozen funds were going to contribute towards the restoration of the RS collateral. Yeah, there's like 116 ether hole from the exploit. Arbitrum was able to recapture 31,000 ETH that it yked from North Korea. — Is that like 60 million 70 million? — 70 million I think. — Um there's a small little hiccup that happened which is kind of um posing a big question about Dows and DeFi. There was a court order from the US District Court of the Southern District of ENORC issuing a restraining order on arbitram da from moving the 31,000 ether that it froze from North Korea. — What? Why and how? And what happens next? The order introducing a competing legal claim. Okay. from a completely unrelated case, unrelated people who also have damages, damage claims against North Korea for unpaid terrorism judgments against the DPRK for with claims totaling over almost a billion dollars. So — nothing related to crypto, nothing related to it. — But there are these people who have legal claims against North Korean assets. — Okay. There's some US court that said, "Okay, yes, Kim Jong-un and North Korea owes you guys $877 million, and that claim has just been outstanding somewhere. " — Yes. And so these people's lawyers argue that the frozen ether constitutes North Korean property. Oh. because layer zero attributed the April 18th hack to the North Korea Lazarus group because the hack was done by the Lazarus group and so therefore it's North Korean property and there are these people who have claims on North Korean property and so the New York court said arbitrum don't move that ether is contested — it's contested — okay they didn't make a ruling on it there there's no way this holds up there's no way you can say — I'm not a lawyer but like holy hell no way dude That's um that's what A is essentially saying. I did see this tweet. A LLC has filed an emergency motion to vacate a restraining notice served to the arbitum Dow. So A getting involved here about this 71 million in ETH. And they said this, this should be pretty obvious. I think a thief does not gain lawful ownership of stolen property simply by taking it. And the law is clear on this. — All right. So if the law is clear, what's up with this hold order? How did like why is the court doing this? And what's the legal team behind this? — Yeah, I think it's really who is the legal team is the very big question because this is the same lawyers that in 2021 sued compound and a in frivolous lawsuits and also pulled together. — Okay, — this was there was this Elizabeth Warren staffer or ex staffer. They were involved in that. — Who? Yeah. Who put like $26 into pool together a prizeel no loss lottery and then lost the money because of gas. It was like gas payments or something. They like lost because of gas payments. They go to this same law firm and they file a frivolous lawsuit which pulled together had to fight for years and won but completely sucked pulled together dry of funds fighting the legal case. Yeah. So the intent and these are the same lawyers. — The same lawyers. Okay. The intent there in that case in the pulled together case seemed to be just to cause a ruckus in DeFi, right? Just sew some chaos. Is that the same intent here or are they actually more like cuz you know obviously — the ambulance chaser type of lawyers with frivolous lawsuits, their incentive is generally to get, you know, some commission on the legal payout there. There's a profit incentive there. Are you saying this is more of a like we hate DeFi, we're going to show some chaos, or is there a profit incentive here for this law firm? I don't know how else not to interpret it as these people just hate crypto and they keep doing frivolous lawsuits that always lose but they just cause a ruckus in the meantime and they just drain legal funds. — All right. Well, so this probably there's no way this holds up in US courts of course, but it does open the nexus for this it's this the security council, right? It's 12 multi-IG signers and they don't get paid a lot in order to be a multi-ig signer. In fact, I thought it was something like 5K a month or something like this. — I guarantee you when the people who signed on to be an arbitr signer, they when they sign agreed to do this, they did not think about how the Southern District Court of New York would might potentially hold them liable — if they violated a court order. And that's why it's a real story. Yeah. So when I saw some of this, I'm like, okay, these layer twos, they want to throw away the keys and get rid of their security councils and get to stage two as soon as possible because — if this vector does exist, you're going to get more of these types of cases and they don't. — It's kind of interesting that this has happened so quickly post the recovery of the assets where like the big question was like, oh, is this going to put more liability on the security council? And now here we are just a couple weeks later with a court case. — Yeah, it's exactly like as you know as we predicted as we expected it to play. Do you see Taylor Monahan? She was I was having a meltdown. I'm not even going to read this tweet, dude. — You have to read it. — Yes. Little effing who can't do the work. So they come chase after people who did the work. Bite me worse than effing ambulance chasers. STG. What's STG? — Swear to God. Oh, — I think — this is part of a series of tweets. Little can go f themselves. You want some money? Go f and do the work. Wow. — If you don't know who Taylor Monahan is, that's kind of an important context for understanding why Ryan is laughing. — This uh Taylor, by the way, she is a fantastic person. I think like I um unhinged on Twitter and usually it's pretty entertaining. — Yeah. — Sometimes it's accidentally pointed at you, but usually it's just entertaining for everyone involved. — Exactly. So, I'm join enjoying the entertainment of this. Um, she's part of, you know, the SEAL team. Like, she's done so much for the crypto space. She's angry, expressing some anger against

these lawyers who are just trying to Yeah. So, some chaos here. — Um, David, you want to hear about Ethereum and what they're doing with L2, L1 scaling, not L2, L1 scaling? — I have always wanted to hear that. — I know you have. I know this has been a passion project of yours uh around scaling the L1. Well, um, do you remember that thing that came out last year? — It was an EIP, kind of a Donrad EIP, and he said, "Wouldn't it be great if we could 3x L1 scale every single year from here on out, — right? " Yep. — You remember that? I got it looked like this. And there was a slide that Justin Drake put together. It looked like this. — And it had different mega gas targets, gas limit targets for 2025, 2026, all the way to 2030. And if you do accomplish the 3x per year, you get to one gig gas by 2030. Well, there is a another hard fork coming. The Glamsterdam hard fork EPBS is in that. Um the uh BAL, what is that? The block um access list update was in that. Some kind of esoteric updates. One of the other things though is the increase of max block space from I think 60 uh million to 200 million. — 200. — Yeah. And so I charted this out. I had my quant chart this out chart. Oh, this is where all your tokens are going. — I'm spending some of those claw tokens. Dude, this chart probably costs 20 bucks. Okay. Um, and this is like showing TPS and block space of Ethereum and projecting that based on the 3x per year line. And David, with this Glamsterdam upgrade, we will be right on track, right on the 3x trend line. — We are lagging behind the original prediction, but this catches us right back up. — So, it catches us back to the trend line. This would be a 3x uh sorry, excuse me, a 7x in transactions per second and block space availability on the L1 in 12 months. — Yeah. — Which is pretty astounding cuz we went to you remember this, we went to 30 million. We were at 30 million for like 4 years and then just last year we went from 30 to 45 to 60 and now we go from 60 to 200 and that results in something close to 80 to 100 transactions per second. So L1 is actually scaling. Like they're actually doing it. I think this means that we're not going to see any uh L1 fees anytime soon. — I think blockchain fees as a concept are kind of just gone. — Oh my god, I've been saying this. — Yeah, I've been saying like no chain has fees anymore. What's one chain that has fees? — Why would they? You — Bitcoin has no demand, so they have no fees. — Of course, — Ethereum scaling — Yeah. also has much less demand than in the past. And then what other chains are left like Mega the brand new chain is like negative fees because it's the theoretical limit of throughput. Salana is going even faster. — You only get fees. You are right. Tron has fees. — You only get fees on a blockchain if there's block space contention. If demand exceeds supply and if you are creating more supply — and supply exceeds demand, you don't get feeds — fees. And so, you know, like if your bullcase on Ether is just about fees, then you also have to not care about scaling, right? Anyway, — yeah, — this is why for decentralized blockchains, my thesis on like how they acrew value is all about store value. It's all about money. Bitcoin's always been right. Y — Ether is a store of value. My opinion is always right. There will be times where we'll oscillate and we will generate some fees and that will go into the burn and that will slightly reduce issuance. But ETH is either a store of value asset and a money or it's not worth very much cuz it's not worth much on fees alone, right? This is a whole separate rant. — You guys know my position on this. Basically, Ryan is saying that as Ethereum's throughput increases, ETH becomes more and more moneyike rather than uh revenue like

— that's right. Uh I believe that. Um David, you want to hear about the strategic Bitcoin reserve that — there was something out of consensus Miami which is happening right now. — Oh yeah. Actually uh I forgot to tell you by the way because we talked about the Arctic Circle meeting. The Glam Amsterdam upgrade — was all the devs met somewhere in the Arctic Circle. Can you pronounce that? You pronounce this place — Salvard. — Salbard for the uh Solan. — What country is that? Is that like Finland? — It's somewhere very cold. All right. The devs met there and that's where they everyone's in Miami and they're in Solborg with a weird line through the O. — It doesn't in Miami. — Yeah, the ET devs go to the Arctic Circle. Like why guys? You don't have to go there. — I mean, they definitely don't want to go to Miami. So, — yeah. Anyway. All right. So, back to the Bitcoin uh the strategic Bitcoin reserve. So, um this is the third tease we've had and the biggest tease over the past three weeks. So, you remember last week we talked about Pete Hexus, the Secretary of War, talking about Bitcoin as a matter of security, saying there could be an announcement in the future. Eric Trump was in Miami. He said big things are coming that the US government has 300,000 Bitcoin. It's won't sell it, he said. Now, we have Patrick Wit who is actually the guy at the White House who is responsible for crypto and implementing the policy. and he said this, "The strategic Bitcoin reserve is coming. An announcement is coming in the next few weeks. " All right. So, what could he be announcing? — An announcement of an announcement. — Yeah. Uh and it's going to be a big deal. There could be all sorts of possibilities here. What do you think the possibilities are? — Oh god, I have no clue. — Really? Like no clue at all? Um, I mean, yeah, I have no idea actually. — Okay, so Patrick Wit, do you remember Bo Hines? He's now he used to be in Patrick Wit's uh situation. the Crypto Council executive director. He's now at Tether. — Patrick Wit is the guy who replaced him. I think what they're going to do here is I don't think they're going to announce a program for purchasing Bitcoin. What I think they're going to do is actually announce the execution and implementation of Trump's executive order, his strategic Bitcoin reserve executive order that really hasn't been implemented. And I think what they're going to do is go down the process of creating a Fort Knox for crypto. I think that's the part of it. So, if you recall, there was an executive order of March of last year that called for a few things. one centralized cold storage of all of the Bitcoin that the US government had. You recall all the Bitcoin, all the crypto assets seized were scattered across the DOJ, you know, cold wallets and desk drawers. Like there was remember that US Marshals case where somehow 30 million of — there was like a seed phrase in the evidence room and then the associated Bitcoin magically disappeared because the police officer stole it or the investigator stole it. So you need something centralized, some cold storage, some Fort Knox type of infrastructure in order to do this. I think also an audit framework will be part of this. I think they'll formalize the we're not selling Bitcoin, the teeth behind this. And I think they will do this. They will give Bitcoin maybe some other crypto assets a reserve asset designation. So that puts it in kind of the class on the Fed balance sheet alongside gold alongside other fiat currencies that they might hold and SDRs. So I think that's what they're really going to do. And the US government does have about 300 to 328,000 Bitcoin. Um although a chunk of this is court bound is tied up in courts is victims have — not necessarily the government's — owed to people. So the the Fort Knox pile, the part they would put in the strategic Bitcoin reserve is probably like closer to like 150 to 200k Bitcoin. That's what I think they're going to roll out. And that is in my opinion very bullish. Now it might not be as bullish. Yeah. Like the reason why I kind of thought this was a nothing burger is because like there's no way that they're announcing that they're buying Bitcoin and that's really what people want and that's just not so unfeasible. Yeah. — I think what you're saying is that like this is just a an increasing legitimization of Bitcoin because we're creating process and structure and commitment to holding Bitcoin. — Yeah. A giant government vault for it. — Yeah. — Like if you told if you're not excited about this. You don't get this. Thumbs up. — Dude, 5 years ago, if you were to tell me that the US government was going to create a Fort Knox for digital bearer instruments, I would be blown away. I'd be like, "Okay, well, — we won. It's over. " — You're right. But like, we already had the announcement. It's just like, "Hey, we're doing the thing that we said that we're going to do. " — Yeah. — And it's 2026 and it's 42 years later, but like Yeah. Okay. You're right. You're like, "We got there. — Yay. " — You're right, though. I mean, they're not going to announce that they're going I don't think they're to be purchasing Bitcoin. Um, there is a way that the Treasury could do that, by the way. It's called an ESF, exchange stabilization fund. They could. So Bessant could outside of Congress actually start purch purchasing Bitcoin. There's no way he's going to do that. And then you remember Senator Lumis, she had a proposal called the Bitcoin Act, which was to actually buy 1 million Bitcoin. That's a congressional act. That's not going to happen either. — happen. Not in the same time where our uh debt to GDP ratio just passed 100. — It's probably the right time though. time. So that's bullish. So the probability according to poly market of a US national bitcoin reserve as defined you know in the way I defined it is 33% right now but rising but it rose on the week. So there you go. I you don't see I guess it's just remarkable in the sense that like I kind of forgot that they didn't do it. They just announced that they did it. — That's right. They did — and now we're actually doing it. But I just don't want to like applaud for them for just being late. It's so exciting to me to think about what a um what a crypto Fort Knox would actually look like. — Sure. — Like how are they locking that down? Is the government doing this? Like oh my god, that's kind of scary. I mean does — cuz that means like the government will have a Ethereum wallet and a Bitcoin wallet. It will be a Bitcoin wallet. — Well, they already do, of course, right? But — I wish they had an Ethereum wallet because then we could send meme coins there — and like other shenanigans like that. Like yeah, isn't it cool to just like this is a government's Bitcoin wallet? It's this and also here is the Ethereum wallet. — I mean will it be protected physically like the way Fort Knox is? Will there be army there? — But like you can still expose the public keys. — Yeah. And we can meme coins. I mean, will foreign adversaries be trying to attack it for instance, trying to infiltrate it, find trying to break in? Like just the thought? — Why wouldn't you like if you're in North Korea, why wouldn't you go after that? — Of course, that would be an incredible prize for them. And like is the US government actually competent enough to pull this off or do they really like I don't think I trust the US government. — They should just hire fire blocks or anchorage or something. — But then that's like a nation state target. Anyway, I find it very interesting. — Yeah. Can the United States government self custody his Bitcoin? — Well, is Trump going to just have it on his uh you know, — steal a bunch of files and hide them in his bathroom after it's going to end up in Mara. — Dude, he's going to take the private keys with him when he goes. — It's uh on a ledger somewhere in Mara Lago. That's like, you know, the Bitcoin strategic reserve. I I'm just picturing you know how the there's like the drawer in the desk of the president is a I don't know if this is still true — but it was it's a drawer full of gifts — that like I remember this old story of like Nixon when Elvis visited the uh the White House. Nixon needed to get a gift for him. So he pulls open the drawer and like here's a watch. — I can just imagine just like a gold ledger just being in that drawer.

That's just where it is. I think you could give that to Trump but not actually have the private keys on there. Just say they're on hold it up and he would be pretty happy with that. — You'd hold it up. — Oh my god. All right, guys. Got to end it there. You know, crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. Not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.