Bitcoin Follows Liquidity — Not Narratives | Bill Barhydt (Abra)

Let's call them liquidity cycles. I won't call them Bitcoin cycles. I don't have to leave it there, but liquidity cycles. Now in past liquidity cycles, gold has led. Okay, metals have led. So this does feel a little bit 2021-ish to me. All right. Welcome back to another episode of Token Narratives. I'm Graham Stone, joined as usual by Bitcoin.com news, research, gigabrain, David Sensor, and we're really excited this week to have Bill Barhite. He is the founder and CEO of Abra, which is a digital asset wealth management and lending platform. He's also a long time investor and operator in the Bitcoin and crypto space. So we're excited to pick his brain on all things Bitcoin and crypto today. Thanks for joining Bill. Graham, good to see you. David, good to see you as well. Nice to meet you, sir. All right. So let's get into it. Bitcoin currently having not not performing well. Let's relatively speaking. So currently trading at $84,000 kind of dropped overnight. Meanwhile, precious metals, gold, silver. I don't know, copper, palladium, platinum. They're all spiking to all. All time highs. So that's where I want to start off here, Bill, one of the to get your thoughts on like that. There's it seems there are many tailwinds narrative or otherwise that Bitcoin is facing right now. So let's start off with the headwinds headwinds. Sorry, headwinds. Thank you. That Bitcoin, Bitcoin's facing right now. Let's start off with the one related to precious metals, precious metals, pumping Bitcoin, not. So like, is the digital gold narrative dead? Was it was it ever a thing? What are your thoughts? Yeah, I mean, yes, it's a thing. And yes, it was a thing. It still is a thing. I see it a little differently than a lot of the current narratives. Look, price tends to follow narrative. And right now, clearly, there's a geopolitical debatement trade going on. And people referred to digital gold as this idea that Bitcoin would just simply follow the debatements geopolitical narrative, just like Goldwood. And I don't think that was really the way, you know, it was ever going to play out at hindsight, because I do think that Bitcoin is a better gold. Once it is really globally established to the degree that gold is already established. And it's not right. And so it makes sense that if you have a digital asset that is deflationary at some point soon, it will take on that role. You know, transport issues. It can be more private. You can carry it with you. You know, you can just, you don't even have to carry anything. You can memorize a mnemonic, right? So, so all of those things purport independent of price towards it being a better gold. And that regard, it's a better gold today. Okay. Independent of that, I think that there is a path to acceptance, which basically will, you know, cause it to. In the next empire's fault, become the gold for, you know, the debatements last geopolitical turmoil that will ensue. Okay. I don't think it's going to be that for this empire's fault, because it's still on the way up in terms of getting distributed in the first place, meaning the number of people who understand what it is. Then people have heard of it is huge. Then people who understand what it is is still relatively small, right? You talk to people about Bitcoin, they're like, oh, I missed the boat. Well, that has nothing to do with what Bitcoin is, right? You didn't miss the boat. You, you misunderstood what it is. And, and so that's the disconnect in terms of like, oh, is it digital gold? It's on its way to becoming digital gold. It's on its way to becoming an inflation hedge along the way lots of volatility. Now, that volatility is actually shrinking, even with this pullback, right? So I would say, I would guess, I don't know for sure. I have the numbers in front of me. I wouldn't be surprised if post election run up if Bitcoin has been less volatile than Nvidia. I don't know for sure, but I wouldn't be surprised if that's true. I know that gold, yeah, gold in the past like week or two has been more volatile than Bitcoin. I think 10% in today's swings, which is crazy for 5,000 euro asset, right? So, but, but it's not when you look at it in the context of what folks like Ray Dalio, so astutely talk about, which is, we are now at the end of the old world world order, and we're transitioning into the new world order. And that's when you get the geopolitical turmoil, because the dollar was supposed to be based upon gold, so you didn't need to hold gold. They could outlaw the holding of gold for that reason, right? Well, turns out that you do need gold when the old world order is falling, I guess, because you have a replace that get with something better. We're still on the path to doing that. And so I think what we're seeing is gold leading. Now, independence of that, okay, because it is getting a much bigger run up than it has in past. Now, in past liquidity cycles, gold has led. So this does feel a little bit 2021-ish to me in terms of, okay, you know, Trump, best in co-wanted rates that come down precipitously last year, so they could refinance debts that they could pump money into the system, they could show big stock gains. Well, the thing they like, right? That didn't happen for myriad reasons, some of which we just alluded to. So now, the question is, are they going to make that happen this year? And I think they are, is the bottom line. And when, and the last couple of times that's happened, Bitcoin has followed gold. Okay, and, and so, but that's a different trait. I'm not talking about the, you know, global debasement slash, you know, geopolitical turmoil trade. I'm talking about the liquidity trade. They're two different things. Okay, so I think people have to realize there's different. This is a multi-dimensional world we live in. And there's multiple things happening at the same time. I said a lot, so maybe I'll come up for error and let you guys. Okay. Can I just say maybe, can I summarize? You're saying maybe on, on, maybe two completely different types of skills. One is sales. One is the, the like, I don't know, multi-decade, generational thing, where it may be Bitcoin with prices like gold. And the other is like the short term risk asset, liquidity, what's happening with the like that's right specific policy. That's exactly right. And, and as we, you know, if you zoom in on charts, you see lots of intro week movements that can partially be explained as something might be moving up into the right by news, right? By uncorrelated news, you know, whatever. Well, what might seem like uncorrelated news, but when you zoom out, right? Like it looks like a straight line up, but to the right, right? So, so, you know, there's different timeframes have different meanings and people who try to trade as you zoom in and zoom in and zoom in on the ones who usually get crushed and killed because they don't understand the nuances of what causes those movements. Yeah, I mean, I think there was a something I saw on on crypto Twitter or just on on X that I think illustrates this kind of gold versus Bitcoin dynamic and a gold bug and a Bitcoin or we're fighting over, which is going to increase more in percentage terms for the next year, right? So they're fighting, fighting, fighting. Finally, the gold bug said, and this is this actually happened. It was awesome. So, okay, a hundred K, let's do a bet, a hundred K today, I'll, yeah, yeah, I'll buy a hundred K of gold, you buy a hundred K of Bitcoin, whatever amount that is. And in a year, whoever, whoever wins, the loser has to send the other there preferred asset, right? And the big, the Bitcoiner was like, look, I think I'm going to win, but if I lose, I'm not going to send you physical gold. I don't even know where you live. I don't know if it's cross-border. I'm not, I'm not buying bars of gold and sending it somewhere in the world. And then the, the goal, I was like, okay, no, we can still do this bet, but we'll settle in Bitcoin, right? I'm just like, why is it a better gold today? There you go. It's just the narrative has to catch up, which is going to take a generation. That's it. Yeah. So, I thought that was like the biggest self-own, and it's very, it's very, very, I saw that. Yeah, yeah. So, and we're getting, we're going to get there. You know, I think, look, there's always a chance something better comes along, can't deny that, but it's been, what, 13, 14 years, and it seems more solid than ever to me, it's been de-risked in many ways. Not only geopolitical, but mostly, the most importantly, technologically speaking, it's been mostly de-risked as far as I can tell, I'm sure you want to ask about, you know, quantum computing, but that's the protocol was designed to basically replace the digital signature algorithms. And anyway, I feel like it's all moving in the right direction towards being, being de-risked as the geopolitical answer to the next cycle. And in the short term, it's going to basically be the liquidity suck, which is going to trail gold, which is going to lead all, you know, especially L1s, right? And that's, that makes sense to me. Yeah, so let's, let's talk about quantum for a second. Like, I've seen this, just dominate headlines for the past month or so. You have like Luke Groman saying in a podcast, he's for the first time ever sold most of his Bitcoin in large, in large part because of this, this quantum risk. I've seen other people on other podcasts, like Bips and Bips last week, a long time Bitcoin and the lever saying that, yeah, the quantum risk has to be now calculated into the price. What do you make of this? Is it a real risk? Does it, does it mean that you need to kind of hedge how much exposure you'd have to Bitcoin? So, you know, look, there's always this friendly tension between the macro head and the techno heads. I tend to skirt both worlds because I have a degree in computer science and study math, and I happen to work in a job that, you know, involves macro. So, I have reasonable understanding of both, and from that perspective, the state of the conversation is, is a little silly. On the other hand, it is, it does have to be addressed. It's just not an acute problem that would warrant somebody being an alarmist for selling their Bitcoin in early 2026. The Bitcoin roadmap should be long and narrow, right? And, you know, hard to execute because you're trying to change the atomic structure of gold. And it does feel like the atomic structure of gold over the next several years and decades is going to need significant upgrades when it comes to bashing and, you know, digital signature algorithms and to make them quantum ready. Now, the majority of people that you talk to in the Bitcoin technology world agree with that. I, as a matter of fact, I haven't had an intelligent conversation with anybody who doesn't. It's the timeline, and it's the process. And Bitcoin needs that process. That's just the way it is. I've seen significant headway towards getting people to pay attention. Over the last, you know, a couple of hundred days, I would say. And it's going to accelerate. So there's no point or reason for an alarmist perspective, not to mention the fact that if, you know, road government ended up with a quantum computer, Bitcoin would wouldn't be in the top 10 list of concerns for what they would probably be spending time on. Right. So, so independent of that. I think Bitcoin is going to be justified in this regard. Do you think it's fair to say that the quantum fudders. As it relates to Bitcoin, they just they just don't really understand how the Bitcoin upgrade process works. Look, I could go to a dinner party with my friends in LA and and wax eloquent about fashion. And my guess is to the three of us at Mount Sinelike, I actually haven't. In some, I informed opinion to them. I probably sound like a bumbling idiot. So, you know, anybody can talk about whatever they want. It's a nature of living in a country where we, you know, or a Western society or an Eastern society where they practice free speech for the most part. That doesn't mean they know what they're talking about. So, yeah, I'm not look. People are in a free market can do what they want with their money. If you're selling your Bitcoin because you are convinced the price is going to go down in the short term. And you basically believe you can, you know, short term swing or day trade better and make more money than people who are going to long term swing trade. Go for it. It's fine. God bless. If you're getting rid of your Bitcoin because you're afraid of the quantum trade, you're out of touch with reality. So, you know, it's, that's the bottom line. Yeah, potentially, potentially this, this would call it quantum fun discount that we're seeing right now in Bitcoin. If that's right, I don't think that's what you could at all. You could, you could be seeing as an opportunity. Yeah, but I don't think that's what it is. In other words, I don't think that the price of Bitcoin fell from 120 to 84 because of fears of quantum computing. I don't. I think it fell because the narrative has died as a result of the liquidity not coming back into the cycle combined with, you know, the, the, the data narrative, which confused retail. And, and so I think that will all work itself out. It may take six months might be a second half of 26 thing. I don't know. I care a little bit. I don't care that much because I know where it's going and I know why it's more probably I know why it's going there. Right. And so I don't think it's a quantum narrative that's driving this. In the short term, I don't. Confused retail is an interesting euphemism for fleeced retail. No, I'm just kidding. But, then you timeline, right. So, yeah. What about what about the, so the another headwind or another narrative headwind, at least is the Bitcoin OGs are selling just a billions of dollars worth of of Bitcoin. How, how about that? Is there some truths to that? Did that contribute to the, oh, absolutely, to price the time. I don't think it contributed huge. I think, I think other things. I think lack of retail money was was a bigger deal because the road, as a matter of fact, if you go back, it's the opposite. If you go back to late last year, like, let's say, let's say summer to fall, when the rotation was happening, the price wasn't moving much. Right. So, what I mean by rotation is you had a lot of well selling and, but they weren't selling like 100% of their positions. If you look at the wallets and mess, what you're seeing is 10 to 15% of assets and on average being sold, we're being sold not right now by those large holders. And that, to me, kind of, and somebody put it like it was a Bitcoin IPO moment, and that actually was a very eloquent way to put it because those people have been in the money for a very long time. And, you know, okay, so maybe a little bit of diversification, even if you, you know, even if you buy Michael sailors. Soliloquies that, you know, you shouldn't diversify. It's to them that no harm, no foul, right? You know, because I'm still Bitcoin wealthy, you may as well sell 10%. You know, it's like becoming a Catholic when you're in your deathbed, right? You know, what's the harm? So, so, you know, I think that's what that was. And I think the price dropped over the last, you know, a few weeks has been different issue. And again, I think that's a geopolitical fear, risk on asset, you know, lack of liquidity, lack of retail narrative issue. Okay. And then I go ahead, David. Sorry, on that, on that, the retail narrative, we've also talked about this a lot, Graham and I, is it, is AI then kind of like part of this where I feel like a lot of the speculators, a lot of the retail got attracted by the AI stocks. The quantum stocks, all this stuff that's happening in TragFyland. Yeah, we just really invested AI right now. I mean, what's the AI investment for retail? I mean, it's already up for VC's to invest in retail, because it's now, now, now the deals are multi-billion dollar, right? So, I think, I think the video with sports gambling and prediction markets, honestly, I think that the average person who doesn't think about is just speculating, is infinitely more interested in prediction markets and, and sports betting than they are in video shares. That's up to say that some people who have mutual funds and or small amounts of direct stock ownership aren't buying video, clearly they are. It's a multi-trillion dollar asset now, but by and large, the conversations I have with people who are in in my world, when I go to the cities in the US, that's what they're talking about. So, where did the retail flows go then? Did they go nowhere? I mean, did they go into other assets? Well, I think a lot of people, a lot of people are, you know, left crypto post FTX, right, and didn't come back. I think a lot of money went into the ETFs, right? Now, I think the ETF flow versus the Bitcoin non ETF flow is, I think it's like 85, 15, so it's still relatively small relative to the large flow, especially the money that's locked up. But a lot of people got very dismayed with the space when FTX, LCS, Block 5, Voyager, pick your favorite grip, they'll just die. And good riddance, but, you know, it took us a while to recover, and we did. We did, but that recovery was not retail driven. The recovery was two things. It was the fact that the price was already being even more suppressed than just the grip by the Warren regime, right? And so that part of it was like the proverbial beach ball being held underwater, where I think Bitcoin price was being held down by 50%, 60% because of the lack that the fear and uncertainty around kind of the legal status of Bitcoin and crypto. Once that fear was gone, post election, boom, ball was let go and the beach balls, you know, saw at its level above the surface, and that happened. That's what I think that was that wasn't an expectation around liquidity. Because Bitcoin tends to follow other things when the liquidity comes, that was an expectation around regulatory clarity and my humble opinion. Okay, then the rest of the year, we had this, we did have an expectation around liquidity in the spring, and that was offset by the IPO moment we just discussed, which caused this rotation, which is why the price didn't fall. But the liquidity didn't come. In parallel, you know, prediction markets are taking off, sports betting is taking off. The fang socks are taking off again because of the AI narrative and, you know, the crypto narrative is nowhere to be found and retail need that narrative, right? It needs, it's, you know, the last cycle, it was, it was Doge and XRP. I had more, it was crazy how many times I had to explain Doge to people during the last cycle. I've completely, it was until we had this discussion, I hadn't thought about, to me, that's how long ago it was. So it'll have its moment again. I think when you start seeing retail stimulus checks, you know, quantitative easing, whatever they're going to call it, field curve control, they're going to have to do something with what's going to happen in your neck of the woods in Japan. And so, you know, call it what you will, but it's going to basically be equivalent of injecting significant amounts of money into retail investors, which is going to find its way into things that are highly liquid, easy to get in and out of, right? And that people, you know, can, can tangibly understand and crypto investing is one of those things they understand. So, do you think this liquidity flood is going to happen in 2026 and it's related to the, the election cycle? Well, the midterms are going to drive a lot of what happens for sure. I don't think liquidity cycles in general are related to just election cycles. I think they're related to historically what's happened since the AEs as it relates to, you know, inflation and recessionary cycles, which have mostly broken post COVID because we've decided that we're willing to print at dozium in order to stave off anything post GFC post, you know, COVID, but that's historically where those cycles come from, but, you know, given the polarity that extreme polarity we have between the parties now. I think that's, you know, they don't have a lot of shit on the shelf to bring the bear to make sure that, you know, that the, you know, one party's got 30% regardless of what they do and one party's got 30% regardless of what they do, and the people in the middle are confused right now, because at the beginning they had a lot of hope and right now they're not crazy about some of the things that they're seeing. And, and so you want to pull them your way if you're, you know, the 30% of the right, then you you print you give them money historically is what you try to do, so, so I think that's coming. So I agree with you one thing that makes me worried though is like might you know Michael Howell right of a capital wars. He I've corrected me if I'm wrong, but I believe he will he thinks that the liquidity cycle is kind of turning down and so he sees a trend downward for the next year or two. I don't personally see that, but I, you know, he's kind of the master at this and that that that gives me pause. Yeah, I mean, look, if, if the focus is the strength of the dollar, he'd, he'd have to be right. Right, I mean, the dollar is about to crash in my opinion. Now, wait a minute, let me make it clear. When I say the dollars about to crash, I think most G 10 currencies are going to crash. So the DXY, the Dixie won't fall precipitously because it's a race to the bottom. They're all crashing in parallel, meaning they're all becoming more or less worthless. Right. So, so if you cared about that as the thing you're trying to stay off, then then you would raise rates precipitously. And that's what the bond markets are going to do are trying. That's what the bond markets are trying to do for us anyway. Because right now, when nobody wants to buy your debt, right, the only net buyers that I see for long dated treasuries are us, meaning the US governments and the banking system, who more or less have it forced upon them and tether. Everybody else is a net seller, which means interest rates should rise when the demand is falling, right, because price and rates move opposite each other. So if that's true, government has a problem because the market sets those rates, not the banking, not the Fed. So therefore, they have to try to do other things to get those rates down, especially knowing that it's going to be somebody who's going to tow the Trump administration line who they're going to put in the Fed. And that person is not going to be concerned first and foremost with inflation, then it's not, especially once their inflation narrative catches up to the real time inflation narrative, which is inflation is close to zero now, right. Yeah, they just like the high GDP number because, you know, it looks good, but the reality is that's, that's an AI driven number right now in real time being offset by the fact that the rest of the economy is not doing well. Do you, so you, um, peasant and the Trump had been have been relatively unsuccessful on bringing rates down thus far, you seem confident that they are going to be able to do it. How, how are they going to do that? How are they going to bully the rates down? I don't know. I'm not saying I'm confident they're going to be able to bring. If I had to bet and guess my guess is is that someone that they will, right, but it's always at a price, right. So the last time we got rates to zero, it was at the price of printing 25% of the money supply in 18 months. And we paid the massive price for that as a society massive price, right, and we're still paying. You know, so I, I think they've learned that you can't do it that way, but they are convinced that with their tariffs and other things that they're going to be able to inject liquidity into the system. My guess is they're going to do stimulus checks. They're going to talk about how much they raise. Some of that should go to the dead. Some of it should go back to people blah, blah, blah liquidity. So that could be in the face of higher rates to or stagnate rates. I don't know. That doesn't mean the Fed won't stop. I think I think right now there's there's Fed governors who misunderstand the hot economy for AI and the fact that it's not trickling down. And they don't, they just have a major problem in my opinion with real time information. They're just not good at it. Right there, they can only deal with looking, you know, behind them. They cannot deal with real time. It's, it's their Achilles heel for 10 years. And you see this coming, this starting to come this year, probably, what may, it may ish right when the new German substance. Yeah, I think it's already started with some of the things they're doing to help the banks, but, but yeah, I think I think you two ish is when it'll start to trickle down a little bit more. It's starting to feel like this could become like an h to second half phenomenon where, you know, in other words, Bitcoin. I wouldn't be surprised if it turned around tomorrow, but I could also see a scenario where it fell to 60 and went straight up from there, for example, I can, I can actually explain why I think that could happen, but I could also see why I could explain why I think it's going to turn around next week. Ultimately, given how I invest, I don't care. I only care in so far that, you know, a lot of my clients don't understand the difference. And so, or why they shouldn't care about the difference more importantly, and I have to spend a lot of time explaining it to them. And so that's the challenge, right, because people are just so short term price sensitive, you know, it's so bizarre human behavior, because it should really be the opposite, right? You know, when if I told you that I had a Ferrari F250 and you can have it for 50 grand and you can turn around and sell it probably for 250 grand pretty soon, to be aligned down the street to buy it. But if I told you Bitcoin was going to be at a million in 10 years and you could buy it on sale for even less than what it was last week, people run for the hills, you know, so it's just human nature is just not easy to navigate. Yeah, well, to be fair to humans, when Bitcoin does go to, let's say, 60,000, you, there's no guarantee at that point that it's going to a million, right? So it's just hers. But there is guarantee that we're going to keep printing money. Yeah, Bill, I'd love to hear your, your explanation or rationale for why you said, yeah, you could, you could see one scenario, it goes down, it wicks, we get a scam, wick to, to 60k or something. I'd love to, or alternatively, it just turns around tip tomorrow, I'd love to hear your rationale there. So, geopolitical turmoil, something happens in Iran, China escalates in Taiwan as we basically escalate in Greenland and, and, and Venezuela, because it's all a big, you know, game of, with the board game risk right now, that's what's happening. Right, everybody's basically trying to play their pieces on the game board. You know, like that, that's part of what's happening with gold and why I said, you know, Bitcoin is behaving still like a risk on assets, and since it's not in that gold kind of replacement phase yet. So, so all of those can point to, you know, more uncertainty, but, but lead me to more, believe it's even more likely that they're going to do whatever they have to to get money in the system to give consumers confidence, which is why in that scenario, you could see. A big run-up and assets in the second half going into next year, if, if that doesn't happen, and the rest of the economy continues to slow as it is, I think it'll run up sooner. Okay, and maybe not as much in the cycle, but if it goes, if it wicks down. That's what I'm saying, and they start pumping even more money, the run-up is going to be even higher, right similar to the, to the, the COVID. 100%, that's why I think it feels like 2021 and several levels. Yeah, but the price to pay for that is as you've got to have the stomach for, for dealing with the volatility again. I'm torn as to which of those two it's going to be. Like I said before, I care a little bit, not that much, and it's more, it's less about my own bags and more about the fact that I spend a lot of time explaining it to people. But if I've had to bet, I would bet it's probably going to start a run-up in Q2-ish, and, and be, be epic by short-term standards versus what we've been dealing with. And the L, I don't think we're going to get a massive alt run where it's just everything, like memes and all this crap, you know, I think, I think the L ones are going to have a massive run. When that happens, because they're getting big usage and the narrative there is very good. I really like the kind of smart contract platform narrative right now, and, and so if that's what, that's my expectation, but I'll leave it there. Yeah, I'd like to go into that for David, if you mind. Yeah, that's what I was going to ask. Right, because we talk a lot about narratives and I tend to agree with you, but what about, you know, this, this concept that, yeah. Yeah, that actually value doesn't accrue to the L one tokens, and people finally sort of realize that, and, and that overpowers the narrative of like, it's the future of the smart contracts or the future decentralized computers. Yeah, I think the points are mutually exclusive, so Ethereum's different, right, the Ethereum community messed up the architecture and, and in that world, what you're saying is true. The narrative is true and the reality is true, and I think the way that the L2 architecture or the L2 based architecture, pardon the pun, for Ethereum has evolved, has been at the detriment of Ethereum itself in my humble opinion. And I called them out on this when it was happening before, I said, I said, there's no reason to be doing this, and you're basically shooting yourself in the head never mind the foot while you're doing it. And I think they regret it now, I really do. Okay, so, so when I say one smart contract, I'm generally referring to the other ones, you know, Solana, Sui, Aptos, I just joined the board of Algorand, and, you know, probably, they're all extremely compelling in different ways to me. I think the AI narrative, people kind of got it because a few people started to explain it when the memes were running, and so it had its hot, five, five minutes. And so people haven't really processed what it means to have decentralized transaction processing for the agentic web sounds like a bunch of words, that's, you know, just to state. Right, but the reality is, is that's the oracle of the future. And so that value, that to me is the chucky T's arcade of the future, and they're going to need those tokens to put in the machine to play the games. So far, Solana games, Sui games, Aptos games, Algorand games, et cetera, et cetera. And there's only going to be a fine amount of them go around, especially when they're all state. And so that's interesting to me, excuse me. But even independent of, excuse me, independent of the AI trade, it's, it's, it's, look, DeFi is working. If there's anything we learned from the last cycle that DeFi works, right, I was in the middle of all, you know, helping so many people when the all these companies went south, and the one thing that kept working was DeFi. I think it's going to, you know, very quietly wholesale replace retail banking. The entire backend is going to move over the next, especially outside the US quickly inside the US a little more slowly over the next 10 years. And it's, thank God. You know, will they, will they at the banks, tradify, actually use the decentralized networks or will they just spin up their own permissioned versions and, you know, like crypto Twitter doesn't get their bags pumped. So it's a big planet. And so maybe I'll stick with like, I think the implication of your question is we'll chase do it, we'll city do it, bank of America do it. I think there's a good chance that those banks, as we know it don't exist in 15 years. And that they get bought by or more often other things or whatever. And that, and I'm talking literally the difference between blockbuster and Netflix. And so, you know, I've said this many times, if I was building a neo bank today, I'd be doing it on so long, because it's the most performant, the most scalable, and it's the most relatively decentralized of the competitors to a theory of that have kind of, you know, true smart contract capabilities. And, and so, I think you're seeing a massive, and I've heard this, I haven't validated, I've heard it. You're seeing a massive number of funded startups building on these alternative L ones, particularly so on. And, and so will any of them become bigger in the aggregate than, you know, city or chase or their Chinese brethren are today, possibly think about it right every bank right now, even city exists with an anointed moat in a very specific geography. Okay. What I'm describing eliminates that moat altogether. So if you do a really good job of building virality and a consumer experience with lending and other services that, you know, just just work. That should spread like wildfire globally. We don't have that consumer experience just yet, where banks, you know, banks are using defi to the point where I would just spread like wildfire globally, especially in a way that doesn't require any of that licensing, because it's truly. Non custodial or uses NPC or some variance, it's going to happen. It's going to happen and it's going to make traditional banking laws. Right. I don't know if it'll happen in five or 10 or 15 years, but on a log chart, it doesn't matter. Right. So. So at that point, what role does city or chase or the SEC or the OCC play? I don't know. I don't know. So on this Ethereum versus Solana and some of the other like old L ones, the other side of this is that the Ethereum supporters say and you had some, I don't know institutional people kind of say this again, which is that security is paramount. The credibly neutral thing is paramount. And this is why Ethereum will eventually win. Do you just disregard that or do you think this is like a faulty argument or not that important from their point. I just don't think that their perspective on on everything else is correct. Right. So I mean, look, Ethereum was rolled back at one point. How do you roll back a decentralized smart contract platform with no off switch? Well, obviously you can't. So therefore it wasn't decentralized and at the moment it had an off switch. So they used it. Okay. I'd posit they couldn't do that now. I would also posit that that's going to be true for a whole bunch of other smart contract platforms that don't have Ethereum's limitations very soon. So, you know, we're not talking about decades here, you know, we're talking about months and years at the most. And then that's just for the current crop of companies and then they'll be the next generation and the next generation. And that's good. That's the nature of competition. Right. It just it allows us to keep moving the proverbial ball forward, which we will. All right. Good. One more question on this like layer one, two space. What do you make of like Bitcoin L2s? Is that dead? Is Bitcoin activity in the DeFi space going to happen on other more like performance chains like Solana or Ethereum or Sui or all this stuff? Some of the projects are very interesting, but it's a marketing thing, right? Because there's not there's no such thing as a Bitcoin L2. There's another project that has figured out how to basically package Bitcoin into their universe and basically say that they support the Bitcoin community, which they do in their own way, whatever it is, that's fine. Just, but no different than the way ETFs in theory support the Bitcoin community, all you're doing is basically putting your Bitcoin with a single custodian and creating another token. Right. It's just in the case of ETF that token is secured. I'm not I'm not putting them down at all. I'm just saying like it's it's not it's not an L2 in in the same way, but but more importantly, from no more creature. I haven't seen a killer use case, meaning meaning the thing that would really get me excited right now is if I could use Bitcoin for collateral and completely eliminate the wrapping process, the centralized wrapping process. That's the weak link in the Ave chain because the vast majority of loans in Ave are collateralized in Bitcoin and the only way to do that right now is to basically centralized the decentralized asset and that's unfortunate. If you if you want to basically do something in in in a Bitcoin with a side chain or code and L2, I don't really care, solve that problem and you'll be here. Okay. Yeah. That's a it's a really interesting perspective. I never heard that. As you were speaking about banks, possibly being disrupted by a neo banks, I thought that, okay, maybe this is a good opportunity to talk about regulations, specifically the clarity act like does in your perspective from your perspective does what's happening right now with like in Washington, how important is that for how this plays out like it will defy based challengers actually be allowed to challenge the incumbents. Well, you can't stop them at scale. First of all, so there's a few implication. There's a few questions in there at the same time. I think the nuances of the clarity act do matter in the short term. I don't think they matter in the long term. I'd rather have any bill right now because it won't matter in the long term. And so that will actually help, you know, catalyze what we talked about earlier around liquidity cycles and anything else. Probably not to the degree everybody's assuming it will, but it will help some. But, but more importantly, I, you know, my feelings on the bank are the same, whether we have a clarity actor, don't, whether the stable coin yield thing gets thrown out or not or, you know, coin base can pay whatever yield it wants. The stable term, it doesn't matter. Coinbase is not trying to be a better crypto company. Coinbase is trying to be a better bank. Okay. So they're basically trying to use cleverly because they're trying to basically rally the crypto community to their cause. They're trying to use regulatory capture to offer the services of a bank without having to become a bank. I would do the same thing if I was them. So, so let's call it what it is. And then there's nothing wrong with that. That's the sausage making process of, of Washington DC find it. I like that. Both it's interesting, but it's also necessary, you know, in a free society. But, but it's, it's, it's not crypto, right? So it's not decentralization. It's not why we all are here, at least in my opinion. I'm here because the system needs to be wholesale replaced from the inside out. There is eating the world. When is it going to do it for banking? Now, now it's going to do it for banking in my humble opinion. And that's not what Coinbase is talking about. I, you know, kudos to Brian for sticking up what he, what he needs to do for shareholders. But there's nothing to do with what I'm talking about. So on, on regulation, earlier you said that part of Bitcoin's price appreciation, a year, maybe 18 months ago, was around kind of some regulatory clarity. I'm concerned just to bring politics into this a little bit. I'm really concerned about in the US, the midterms that are coming up. And then the president's presidential run in 28, what if the dims sweep, what if the dims sweep, I'm worried what will happen to crypto because I swear they're going to like, they're going to be so blood thirsty for crypto. They, I feel like I've heard this already for like a year plus of blaming crypto and crypto related super PACs for the dims loss. And so I just am very worried about retaliatory, retaliatory things. What, what are your thoughts on this? So that's a great question. I think about this a lot. And I'm, I spend some of my personal time in talking and I'm involved in some of these communities. Okay. And I can tell you there's a lot of people who are very worried. Now, I think the consensus is that for the most part, they've learned their lesson. Because we did it once we have more money now. Then we did when we tried to teach them the lesson the first time. Collectively, I don't mean me first, and I'm saying the space, right? So, so. You know, unless they're just brain dead, doing the same thing again and expecting a different outcome is a really bad idea. And I get the vibe when I talk to people in the know that, that the left gets that, that, you know, Warren will not be able to come in and just, just, you know, you serve. It was also a perfect storm because, because Biden can't spell bank. So when she says I want banking for your endorsement, he's like, sure, you know, whatever that is, you can have it. I don't care. What do I give a shit? Right. So, so, you know, he didn't care. I just don't foresee the. Yeah, exactly. And obviously, I'm trying to be a little funny for effect, but I'm not far off. And so, you know, I don't, I don't see that perfect storm of stupidity happening again. I also see more fear injected into this because of the fact that we did make a significant difference in this last election cycle, because we were the proverbial cat back into the corner. What does it do? It's a scratch or eyeballs out, right? And so we didn't want to be back in the corner. We just want to clear rules of the road and everybody else to go away. And so they wouldn't do that. So we fought back. So I don't know, you know, I am worried about the midterms. So I'm kind of with you there. And again, a lot of it is because of, of right now, the extreme left is, is doing a very effective job. Of creating fun around things they actually historically have done. They've deported more people than, you know, then the current president never has. But, you know, they've done a very effective job of galvanizing the troops and organizing the troops around us. So, look, I think the bottom line is is that. This fun is exactly what I was talking about earlier when I say, you know, we could end up with this kind of spiral in the short term that ends up with the whip down and, you know, which is what they want, by the way, you know, the agitators. They're not concerned about solving this problem because if they were, they would have been up in arms when it was happening under a bomb. So, you know, that is, that is a real concern to me. But I think at the end of the day, people care most about their pocketbooks and I'm better or worse. And so, you know, I do think that going into summer Q three, even if that's the worst case scenario, then the money printing that, you know, will offset those fears. But I do expect Trump to lose a little bit of ground at a minimum in the midterm. I think the fear is transitory in a way where it will rear its head again in the next presidential cycle because the narrative will be, hey, we'll wait a minute. You know, this is the safest America's been in in 50 years. Do you want to go back to what we just went through? Like I could see the scenario is playing out of my head. Do you want open borders? Do you want fentanyl streets, you know, et cetera, et cetera. And that's going to be the discussion. It's going to be, you know, how do we get everybody to participate in the tech boom and all these things, right? And so hopefully we get to that point, which is a debate we should be have. Yeah, isn't the murder rate in America down like 90% in one year already. 35, I think is whatever, which is a same number. Yeah. One year remarkable, remarkable number. And it's, and it's something that the current administration is not explaining correctly. To their, you know, to their detriment. So one more thing on this, just like, because I feel like I feel that what you say heartens me, but like I listen to other people like Christopher Perkins on another podcast was talking about he's speaking with lawmakers on Capitol Hill. And privately, privately, they've all said, yeah, we can get the clarity act done. We're down with this. We can get it through the, to the various, whatever commissions or council things that they have to get through. But on an open floor vote, when it's public, these, these dims are saying we just cannot be seen to, to be on the, on the same side as Trump. And so it seems to me it's like gotten even more partisan is what worries me is that. But that's what the right did to Obama, right? I mean they literally you know went out of their way to block everything and that was part of their narrative You know they'll do anything you know it doesn't matter. We say you know people need water and here's the water and they'll say no No, no no no no no more water for everyone. It's bad for you And so they did that for three years and and now it's when I just made right the agitators are basically trying to cry and foul about deporting You know people who are rapists and murderers and all these other things and they did it themselves. They did it themselves so so You know, it's it's the nature of the primary process that we've evolved into that allows the extreme wing of both parties To have an outsized voice Versus middle America that just throws up a kick and sand to go your own nuts You know I am convinced that there's 30% of this country that will vote for vans in the next election cycle no matter what and there is 30% that will vote for You know new somewhere ever it becomes in the next cycle regardless of what don't you Mum dummy whoever it is and there's 40% in the middle that are gonna latch on to a narrative that makes sense just like people latched on to You know, we got it. We got us close the borders, right? We you know, we've we've got to basically fix the food pyramid like they they there was a lot of and by the way We need somebody who's not a nut Right and and it was pretty ironic that what we got was somebody who was perceived as not being the nut But but you know, I don't know exactly what the narrative is gonna be that replaces this for that 40% in the middle But I promise you there will be one You know, so We'll see Yeah Fascinating narratives do sort of pop out of nowhere and evolve quickly. So it's gonna be fascinating to see what happens As we move through the year here David's feeling we want to say something. Yeah, I just have one. I mean We're gonna change topic. I have one one more topic. I'd love to hear you so perp Dex's There was a big narrative last year kind of cooled off in Q3 Q4 I feel like just like in the past week or two it started to heat back up again And I was wondering if you have thought some perp Dex's it feels like maybe tradifies finally starting to kind of get the The benefit or the the appeal of this and and I wondered if you thought it had legs or if it was important or whatever It does it it has legs and I think your interpretation of the fact that it's really tight again is correct It's it's the logical evolution of where we were with bit max eight years ago Right, it's it's less counterparty risk Especially as the technology improves. That's really the remaining counterparty risk is technology and as volatility rears a tad Upper down Dex is as a result become interesting just like you know, the centralized purpose exchanges do more volume the more volatility There is and I suspect more and more of that Volume will move to the to the to the the dex purposes, but how do you say it the dex perp markets purposes? Dex is thank you. I just too late here And and you know, that's that's a good thing It's part of that wholesale replacement of the banking system with the DeFi stack that I talked about earlier and I love it And also it seems what's happening right now with the perp dex is the them sort of Coming back up here and like in volume amounts. It's people trading precious metals RWA's on them right now like that's They're not trading cryptos, which is interesting, right? Okay, I don't think like it's all token look. I don't care if you tokenize. Yeah You you are accepting counterparty risk if you tokenize real world assets. That is not just tech. It's now Whoever holding your goal or whatever it is. That's fine. That's great. That's what competition does It's not going to be gold in nine months. I can't I can't promise you that but I'll come as close to promising as I can I can't without actually promising you okay. It's going to be something else tokenize the X whatever X is Oh, maybe I'll promise you. I don't know. I'll promise you when I see gold this morning. I see like these It's it's kind of all for the perp dex is is that they can just pivot to a different hot right like So but but this makes my point from earlier about the banking system right so You know if you're tokenizing stocks bonds gold commodities Crypto itself. You've got your meme coins. We've got tokenized versions of prediction markets, which I think is coming It it allows These markets to exist independent of narrative Because you you don't have to worry about the bank. You don't have to worry about Hump.fun. You know you can basically compete on the platform and the protocol And then have user experiences that aggregate it all and that's super interesting and I think that's the future banking to me You know, I just Yeah, I just I would not be in that buyer of banking. Yes, that's right. I'm sorry. I would They had they had a great 2025 though. They they did really really well last year So it's gold. Yeah, I'm not buying gold either. So I'm a 10 year. I buy things for the 10 year. I'm not I'm not a speculator You know, I I under if I cared exclusively about the kind of late stage empire narrative In my kind of investment thesis. I would own a ton of gold Um, I'm already looking for what's like coming you know 10 15 years and I've made my bets and it's not that Last question for me uh, still on this perpdex thing just from what you've said in this conversation It sounds to me like you would be more interested in perpdexes on Um kind of nominally decentralized open L L ones like Solana versus like um Uh It's kind of narrow narrow ones like hyper liquid or or lighter is that correct? I right not necessarily when it comes to usage I mean, I'll look at I I think all these projects are interesting to me Um, it's always interesting to figure out why developers make the choices that they do in the moment that they make them Because a lot of times they make choices on a whim and then they try to justify their choice later Right um or somebody gave them some money from you know some coin base ventures or you know, so What's the guys who funded Solana I figured um Cloud smart is front anyway, you know, yeah, yeah, yeah, yeah, yeah multiple multi coin right so they'll they'll develop on Solana developers don't always make Uh wholesome choices for wholesome reasons and and and so That has repercussions in the long term the more successful you get the more repercussions those choices matter if you die it doesn't matter obviously um And and so you know Developers often have to refactor platforms even if it's a decentralized platform That's why you's uh may I think is on version five right now right and version did the problem with decentralized systems is versions of one to four still exist Whereas version one of Oracle and doesn't exist any more um and so uh that's the challenge with decentralized systems But but yeah, I think there's I learned something from these architectures regardless of what they do um That's one of the reasons I joined the born valgoran because one I I think they are Poorly marketed to the developer community and their friends might obviously join so they they would agree with me Um, and there's some things that they're doing and I want to learn I actually like I looked at this and I said okay. This will help me get closer to that community And I think I can bring maybe a little bit of wisdom at the 30 years to talk about how to integrate and engage with developers um But you know they've got a big development community already to learn um All right, uh bill and as we wrap here. I know it's late for you um just want to give you a chance to talk about abra so I know abra from uh 2018, I believe uh, I was playing around with it was at that time. I feel like it was a retail oriented self-custody app Correct me if I'm wrong and it has now sort of evolved into A wealth management platform would that be accurate? Yeah, that's partially the tech the the the legal modes if you will I feel like abra in a way was similar to blockbuster and the starting up blockbuster netflix in the early days when they used to ship the the DVDs physically to your house Uh, yeah, the youngins watching. Yes, they ship DVDs to your house and and um you had to ship them back And you get the next DVD now their vision was to basically be the on the I don't know how you would say that you know eloquently, but the one-stop movie house for the internet Okay, and then the early days of the internet you couldn't ship the ones and zeros So you had to ship the physical plastic and so Abra in to extend the analogy we wanted to be the bank for the digital generation and and that to me was decentralized out of the gate And the only thing that existed when we started abra was Bitcoin. There was no Ethereum um, you know I was intimately familiar with nixabos writing on smart contracts, but none of that existed So so we came up with a way too early of building that we actually created a synthetic dollar out of Bitcoin All right, which ironically we just recreated using Solana Which we announced at the breakpoint conference we created a new Stablecoin called USDF Which is a yield bearing Stable coin similar to Athena, but but Solana based Back to our roots, okay, but our vision is still the same We want to build a decentralized banking system to take advantage of all these rails But now we have a lot of rails take advantage of right we have true stablecoin rails We have multiple ways of doing smart contracts and we select the deal with the legal Requirements from jurisdiction to jurisdiction Um, and so what we've built is it uses RIA You know rules to instantiate the service Well, advisor rules, but it's an NPC based architecture where each client is actually getting their own vault Right, so it's a hybrid between um, you know, just putting things in a ledger and bearing them in the yard And having your assets online and being able to take advantage of defying smart contracts All these things, but not commingling assets and not putting them on my balance sheet Which is the most important thing right so it doesn't look like a traditional bank And so now you're already moving down the path of actually looking like when I was talking about earlier Which is how a banking system should be run So for us right now it looks very much like a traditional wealth advisor And you'll see things that we're going to do this year that that combine Looking like a decentralized bank with looking like a you know a wealth advisor And then being able to provide more and more crypto native services to our clients Yeah, today it's very simply barring against bitcoin barring against a lot of using a vault as you know for the collateral Or maybe earning yield on dollars or bitcoin or were Ethereum on and you know in a vault And then the progression of services along those lines is going to You know accelerate this year Boy, I bet you were a hit with the regulators I am literally the lawyer dream I just I don't shut up and I don't stop All right, love it Bill, thank you so much for your time today very interesting insights. I love the conversation today Yeah, if anyone wants to check out abaradsabra.com and at bill bar on x All right, thanks for listening have a great week. Oh