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Masa Foundation 7

Speaker A: Miss Wagner is like, yo, MIT version of Gary was pro blockchain, but sec. Gary is anti blockchain. And then Richie Torres is like, yo, is the Pokemon card a security? These people are listening to crypto, Twitter. They are like, these are our dial in. The power of crypto Twitter is like getting into Congress.

Speaker B: Well, it's because it's distilled logic. I mean, bankless nation, it is the last Friday of September. David, what time is it?

Speaker A: It's the bankless Friday weekly roll up, Ryan, where we cover the entire weekly news in crypto, which is always an ambitious endeavor, yet we persevere nonetheless into the frontier this week with a bunch of clips of Gary getting grilled. So everyone, everyone prepare for that one. If you're not listening to this with coffee cause it's too late in the day, well, then you should get your popcorn if that is what you will need.

Speaker B: I mean, this is catharsis. I think for many of you in this episode, you'll enjoy this very much. Also, crypto was present in Washington this year.

Speaker A: It's a one two Coinbase.

Speaker B: Yeah, Coinbase's stand with crypto day was held at Capitol Hill the same day that Gensler was giving testimony in front of Congress.

Speaker A: Convenient.

Speaker B: What about the timing of that, David?

Speaker A: What else we got after that? We'll talk about pudgy penguins in Walmart landing a huge deal, a ton of distribution for pudgy penguins, also with each toy purchased having an on chain identity on Zksync. So we'll talk about that and then after, also, not only are penguins getting identity, but citizens of Buenos Aires perhaps also getting some on chain presence as well. We'll talk about that. And then, of course we're going to do the PSA of deepfakes and phishing attacks that are out there. We got a Vitalik deepfake that we want to show you. It's pretty hilarious, but not, if you believe it. Notable VC Fred Wilson got fished for 40 nfts this week. So if Fred Wilson can get fished, so can you. We will talk about this and more. What else we got, Ryan?

Speaker B: You know, the usual bitcoin ETF stuff. Eth might be getting futures. There's a ton to talk about every week. This is a bullish week. I think I'm declaring it such. David, we got some green candles when we get to the markets. But before we get in, David, we got a message from our friends and sponsors over. Well, you know what? I want to learn more about this week. David, is a markets. Yeah, tell me tell me about the old markets. I think, I think, I haven't looked at this yet, but I think we got some green on the week.

Speaker A: We got some green, dude.

Speaker B: Let's look at the bitcoin charts first. What's bitcoin?

Speaker A: Showing us some single digit green. Look at that green right on the right. On the right. Yeah, that's your, your dose of dopamine for this week. It's like, whoo. Bitcoin up 2%. Whopping 2%. Started the week at 26,600, ending the week at, well, Thursday morning. If you call it the end of the week, it's not the end of the week. 27,150, up 2%. Ether price up a little bit more. Starting the week at 1660, up four and a half percent to the current price. Excuse me. Starting the week at 1560, ending the week right around 1660, where we are right now. 1660. I mean, it's still low. That is a low price. We are getting excited about very little right now.

Speaker B: Yeah, it's up such a small degree, you shouldn't even be excited about this. Yeah, we are. Four and a half percent on the week. I'll tell you, it's better than four.

Speaker A: When's the last time we had a double digit week, man?

Speaker B: Double digit up or down? I can't remember either, actually. We've been in the flatlands for so long, it's just like kind of a little bit of a bleed out. All the way from 1900. Weren't we over 2000 a few weeks ago?

Speaker A: Yeah, we have touched, we have touched over 2000 in this bear market. But man, on the cracking charts, last.

Speaker B: Time we were at two k was July in July, briefly, we went.

Speaker A: Remember July? I was in the mountains. It's been downhill ever since I caught back for the mountains.

Speaker B: Yeah, it really was. It's been all downhill since you guys. So you got, the only thing you could do, David, is go to the mountains. Bad things happen to Gary Gensler when you go to the mountains. Although I guess nothing bad happened to him this week. Anyway, I'm skipping too far ahead. Whatever, Gary.

Speaker A: Later in the episode ETH bitcoin up 2%. Total crypto market cap $1.11 trillion. Layer two scaling factor touched 6% this week, down to 5.5%. Still at all time highs. Layer zero.

Speaker B: Or, wait, what? Touch 6%.

Speaker A: Excuse me. Total value loss, six x. Six x is what I mean.

Speaker B: Activity.

Speaker A: Yes, layer two activity, touched six x of ethereums. But now it's at 5.69. Nice.

Speaker B: 60 transactions per second. 64 transactions per second. Yeah, that's where we get the six x. So, you know, we got more transactions per second left in this tank, I think.

Speaker A: Oh, yeah.

Speaker B: David, you want to talk about the general markets, like all the trad, five markets. You want to talk about macro really quick because it's been super confusing to me.

Speaker A: And then I read we're also doing a macro show on Tuesday as well. So a macro show. So talking about the state of macro from a crypto person. So as a crypto person who understands macro. So I'm really excited for that show.

Speaker B: Okay. Are you a crypto person that understands macro, David, do you understand macro?

Speaker A: When I have a smarter macro person with me, then yes, I understand macro.

Speaker B: My question to you is, does anybody really understand macro, particularly right now? You could.

Speaker A: Snapshot.

Speaker B: All right, so here's the tweet current situation. One, stocks are falling like a recession is coming. Yeah. Two, oil prices are rising like there's no recession in sight. Hmm. That's contradictory. Three, interest rates are rising like we have 10% inflation. Yes, they are. Four, gold is falling like inflation is gone. Five, housing prices are rising like rates are falling. And six, commercial real estate is falling like it's 2008. Nothing adds up here. That's the way I feel about macro right now. It's very confusing. There is a confusing set of signals going on, and it's not adding up in my head. What do you think about this?

Speaker A: Yeah, they follow through and they say it's beginning to feel like a pivot point in sentiment. I don't know if I'm about to say what I think they are meaning by this, but when there's a bunch of confusion, people, I think brace for something, brace for clarity. And then whatever that clarity is will define sentiment. Like where are we going? We don't know. As soon as we find out, we'll know how we feel about it. But we know it's going to be different from here.

Speaker B: Different good or different bad. Those are the only two directions, right?

Speaker A: Yeah, I guess that's the reductive state. Take about it.

Speaker B: Well, so, but it's basically like we don't really know.

Speaker A: We don't know.

Speaker B: I mean, that's why I'm very interested in doing this episode, this macro episode next week to see what, you know, the newest macro person kind of knows. I will say one thing, though. I think volatility is back on the menu. I think that's what this means, because when the market doesn't know what direction it's going to go in, then it can kind of like lurch in one direction or the other. So weird macroclimate right now on the back of stimulus, on the back of money printing, like what's going on here?

Speaker A: And just to be clear about something, we've previously talked about stocks being at all time highs, that's been like kind of the theme of the last two months, or I would say, yeah, well, so from looking at the spy, you don't have the chart up, but it has declined by 7% since July. So the spy is down 7%, which is.

Speaker B: That goes to the first bullet point. Stocks are falling like a recession is coming. I don't know. It's down 7%. Just doesn't feel like a lot to me.

Speaker A: Well, in the trad, 7% is a lot historically, but not recently. 7% in the tread markets. Actually, that's just like tread markets are also volatile.

Speaker B: Okay, well, we'll try to make sense of this, but let's get, let's get back to crypto. This is a negative report from JP Morgan, who said Ethereum's activity post Shanghai, that was the last hard fork back in March, has been disappointing. JP Morgan calling Ethereum's progress disappointing, they've got some reasons for this. While the shift from proof of work to proof of stake meant that the energy consumption from Ethereum collapsed by 99%, the Ethereum supply is shrinking and staking rose sharply by 50% since the Shanghai upgrade. While that happened, the increase in network activity has been rather disappointing. Ethereum's daily transactions, daily active addresses and total value locked on Defi protocols on the network have all experienced declines since the last hard fork. So JP Morgan, their analysts expressing, expressing some bearishness here, expressing the last six.

Speaker A: Months or so, yes.

Speaker B: Not mad, just disappointed with that.

Speaker A: My response to that is, who the hell are you? JP Morgan doesn't know how to analyze these things. Disappointing with Ethereum post Shanghai activity, bruh, it's just the broader crypto downturn and also they're just wrong. He, JP Morgan, he is wrong. They say layer twos have displayed mixed results. Well, no TVL and economic activity on layer twos across the board are all up. I don't know where the hell they're getting their data from, but not only is their data wrong, but their analysis is poor.

Speaker B: Okay, well, let's go to the actual numbers, Steven. Layer two beat provides a good source for value locked in layer two. So what are we looking at at.

Speaker A: The 180 day timeframe? It's basically flat. It's marginally up. It's basically flat. So flat flat TVL. Ten point ten one. $2 billion activity is up. It's up so much. It's unequivocally up by a lot. I'm disappointed in JpMorgan.

Speaker B: Wow. Have you ever been not disappointed with JPMorgan, David?

Speaker A: Generally disappointed by banking in general.

Speaker B: Really? You should start a podcast called bankless, David, about escaping your bank over time, slowly. I think Vance Spencer put that tweet in perspective as well. Actually, I don't think he was responding to that tweet in particular, but we are. We got some perspective here from Vance Spencer. This is ethereum. If you chart it against some of the fastest growing tech companies in human history, companies like Alphabet was Google, of course, and Meta or Zoom or Microsoft. And how quickly over time it took them to surpass 10 billion in revenue. Okay, how long did it take them? It took Ethereum seven years. And when charted against these other tech companies, there's only one that did that faster, and that is Google.

Speaker A: Google, yeah. Yeah. And Ethereum really did all of its $10 billion of revenue inside of like 2020 to 2023.

Speaker B: Yeah. I mean, so look at this line. It's just kind of like a slope line up.

Speaker A: Yeah.

Speaker B: So, I mean, doing pretty well, all things considered.

Speaker A: JP Morgan, not disappointing.

Speaker B: I'm not disappointed by this and I'm not disappointed also, long term perspective, not disappointed in the price of eth over the last seven years either.

Speaker A: And we can keep going. Uniswap this week hits 300 million in swaps. 300 million unique trades. Swaps has happened on Uniswap. Uniswap was invented in 2019. 300 million swaps since 2019. Is that disappointing? 300 million swaps. Is that disappointing? I'm not disappointed by that in the slightest.

Speaker B: I feel great about that.

Speaker A: 300 million retain my disappointment. 300 million about JP Morgan.

Speaker B: You know, I think it's part of a broader crypto sentiment, and I've seen a lot of takes, just in general in news, but even in financial analyst news like JP Morgan Research, that sort of thing, it comes back down to this. David mainstream thinks that crypto is dead again. Like always, this always happens. And this is what makes this a buying opportunity lucrative. As with previous cycles and when crypto ten xs the next cycle, don't let anybody tell you you didn't earn it, because if you're buying here when everyone is saying crypto is dead, it's never coming back.

Speaker A: That they're doing the point.

Speaker B: That's how you earn it's so easy.

Speaker A: The signals are just being laid at our feet right now.

Speaker B: They really are. Somebody. I tweeted something like that out and somebody responded with this life cycle. What are we looking at here?

Speaker A: Yeah, just like the cycle of the bull bear market. So in the top of the bull market, some crypto friend of you will tell you, a bankless listener, you're so lucky. I wish that I bought two. And then the crypto market will go down and be like, you're an idiot. I told you crypto was a scam. Yeah. So especially when they say the words, like, disappointing, it's like such an emotional word. It's like kind of just playing into the readership. I don't know if JP Morgan is about that game. Yeah.

Speaker B: I mean, that's. We're in the stage of the cycle where everyone thinks you're an idiot and they told you it was a scam. And you can't talk about crypto at your family events or parties because you're just the crypto moron who knows nothing. Ha ha ha. Spf FTX. That's so stupid. Scams, frauds, nfts are such a joke.

Speaker A: Well, granted, some of those things are actually true. Sure.

Speaker B: But if you're still in crypto and you know why you're here, right?

Speaker A: And you're no longer buying the scams because you can identify them, and then.

Speaker B: You'Ll swing back to like, I am a genius. I am amazing. I am lucky. Or third parties will say, you're lucky when that happens, and you'll feel like a genius anyway.

Speaker A: You've been chewing glass for three years. But you got lucky, though.

Speaker B: You got lucky. How about the bitcoin ETF, David? Here's a tweet from James Seyffert. What's this about?

Speaker A: He just says that the SEC has come out super early and delayed the ArK invest and 21 shares bitcoin ETF filing there wasn't a decision due until November 11. And typically, up until recently, the SEC has always gone up right up until the buzzer. But they decided to delay their decision on this earlier than usual.

Speaker B: You know why? Partially is some of the speculation is because the government's about to shut down. The us government's about to shut down.

Speaker A: That's a Monday, right? On Monday, yeah.

Speaker B: So apparently, if by Sunday night, this Sunday night, Congress doesn't reach some sort of compromise resolution, whatever agreement to keep the government running, then it shuts down yet again. I mean, how many times have we been through this? And so this, this is the SEC just getting ahead of that so that the stuff doesn't expire while the government shut down. And I guess I don't know what would happen if the government shut down and these deadlines were missed, but maybe they would de facto be approved. I think that could be how it works.

Speaker A: Is there some sort of pseudo oracle Oracle about how the SEC thinks that if we do go for a shutdown, we'll get shut down all the way until at least November 11?

Speaker B: I have no idea. I have no idea what this could mean. I do know this is good news. Debt. Both Democrats and republican lawmakers sent a letter to Gary Gensler pleading that he approve a spot bitcoin ETF. Okay.

Speaker A: And I wouldn't even, I'm not even sure I would use the word pleading. The, the first line in this article in this letter says, we write to ensure the SEC does not continue to discriminate.

Speaker B: Yeah. By. We're not begging him.

Speaker A: That is interesting.

Speaker B: We hired him. That's the thing. He's not our king. Right. I always forget this. Like, he actually works for us and the people. He's part of the executive branch, but he works for the people.

Speaker A: That's us.

Speaker B: And Congress can rein him in. He operates under their legislation. And they said in this letter following the court of Appeals decision, there's no reason to continue to deny such applications under inconsistent and discriminatory standards. So that's Congress's take. And we're going to see a bit of the grilling that Gary takes in front of Congress in the next section. But one other thing this could mean, actually, David, is ether futures. ETF's could be trading as early as Tuesday. This is all part of this government shutdown.

Speaker A: Oh, we need to keep the government open until Tuesday.

Speaker B: Well, the SEC is looking to speed things up in order to get it done before the looming shutdown. Okay. So they might actually approve it before. If they were going to approve it anyway, they're thrown approve it before the government shuts down. So that could happen. So there could be a world where we actually have ETH futures trading on Tuesday. We'll be talking about that next week if we do.

Speaker A: Fun fact, the crypto volume. Crypto volumes are heavily favored towards futures as soon as futures have ever come about. So the ether futures, that's a big unlock.

Speaker B: Yeah. Well, you think it's a good thing or bad thing? There's always that debate of whether, when you have kind of big liquidity unlocks whether people just hit sell or people hit buy or what happens in the short term.

Speaker A: Right. Do people think that, well, we got bitcoin futures, ETF at the top of the market in 2017 and then we just proceeded to dump for twelve months. That was just a coincidence of the timing.

Speaker B: Like, no, it's just, I think it's just going to either do nothing or just amplify the trend that's already happening.

Speaker A: Is what's more, more liquidity is bullish and it's even more bullish when prices are low and liquidity is low. Like when you add liquidity to a low liquid market, prices go up fundamentally.

Speaker B: Yeah. All right, what's coming up next, David?

Speaker A: Coming up next, Gary gets grilled in front of Congress again. We've clipped out some of the best moments so we can just all have our schadenfreude. Meanwhile, crypto bites back. At the same time, Coinbase leads with their hash standwithcrypto day at Capital Hill. So we got some pictures and coverage around that. Kevin Owaki gave some great takes. A lot of friends and family were all out there. Penguins are in Walmart. Pudgy penguins lands a big deal with Walmart. We'll talk about the nuances and details behind that as well. All of this coming up more. But first, a moment to talk about some of these fantastic sponsors that make the show possible.

Speaker B: Gary Gensler under pressure this week in front of Congress. He was grilled, I would say we got some clips coming up, but he testified before the House Financial Services Committee. And Republicans, I would say, are increasingly apoplectic about the more than 40 rules Gensler has been proposing lately, especially now that the, the market is adopting them. And he's been blamed for kneecapping us capital markets. And some of the discussion was actually about crypto as well. And some guests made some appearances, particularly some pro crypto legislators asking some questions of Mister Gensler. David, you actually did this for us. You live streamed this whole entire event and you helped curate the clips that we're about to watch. What were your takes as you were watching this event unfold? Is it just watching C SPAN? Is it boring?

Speaker A: Yeah. So everyone in the Senate finance, the House finance committee gets to have their five minutes where they just talk and they ask Gary questions. And so there's a wide variety of subjects. There was actually, before we get into the crypto stuff, there was a lot of focus on climate change and capital markets around climate change. And it just seems so contrived. I was really frustrated because all the people that were bringing up climate change, they couldn't connect it to the SEC in any way. I'm like, why?

Speaker B: They just wanted to talk about climate.

Speaker A: Change kind of a little bit. It was a little bit forced to put that in. At least it felt forced to me. So it starts off with Pat McHenry, who always starts these things off. And this is the second time we've done this. So I've seen this kind of rodeo for the second time now. So Patrick McHenry starts it off, grills Gary Gensler, because he's a pro crypto person. So it always starts off with a Bangdan. And then the baton is immediately passed to Maxine Waters, who dumps last scene blowing kisses. Yeah, yeah. So she's just like, dousing water like her last name on those. On the whole thing, because she. Cause Patrick McHenry starts off saying, I'm fed up and tired with Gary Gensler's shenanigans. And then Maxine Waters goes, well, I'm fed up and tired with the opposite side of the aisle, and just immediately turns it into red versus blue. And so there was a lot of, like, red verse bluing about it. And so that was the start. And then it went into, like, 30 minutes of non crypto stuff. All the good stuff happened at the end. So you had to wait to the very end where let's play the good stuff. Warren pulled out.

Speaker B: All right, what are we about to watch? So I think the first clip is.