Welcome everybody, Welcome to Dead cat.
This is our newcomer, my co-host Tom do tan is here.
We're going to talk about crypto.
We've got two guests who I will introduce in one second to set
the stakes. Bitcoin is down 60%, this year
aetherium is down. 72% comparisons to the.com bubble
are ubiquitous and like any financial crisis.
You have the central government trying to pick up the pieces but
in this case the central government is seemingly one man,
Sam bank man freed the CEO of crypto exchange FTX you know FDX
gave this company block Phi, 250 million dollar credit facility
and is now trying to scoop them up and sort of a fire sale SPF
As he's known kick, the tires on Celsius before walking away, is
reportedly looking at Robin Hood, so they're all sorts of
roll up plays going on right now to help us understand that we've
got Jeff, John Roberts, the crypto editor of Fortune
Magazine and author of kings of crypto here.
And we've also got returning podcast, guest Teddy, schleifer
or Porter. A puck who is a bit of a SPF
whisper, I think. Yeah, thanks guys.
Thanks both for coming on. Great, to be here.
Thank you. I believe the term was
obsessive. Yes, a Civ, that's a No-No.
That's that's what you were saying.
You got to mention obliquely Teddy in a Bloomberg profile
about SPF. I believe when they said during
his daily routines, he's emailing with reporters from
fortune and that was it. Fortune.
I know. I know Puck was one and I was
like, I don't believe there's anyone else at puc.
That is that was you, right SPF? Right II, do not know.
I mean, he got he also knows my colleague cocoa and a little bit
but but sure this sort of SPF All up, I gave some of the
headlines but what stands out to you here?
What are the key things happening right now and crypto
world? And why is he is he doing this
because it's you know it's a money-making thing or it's a
save the crypto World from collapse sort of strategy or
what's your sense of what's going on here?
Is it all tourism or Capital? Yeah I think he'd probably like
to say it's altruism but I mean I think the end of the day you
know I don't think you do stuff like this out of your heart.
It is in his interest to sort of stop the bleeding and you know,
the question is can any back stop at all with some wondering
because there's, you know, just for back background.
You know, this all started with Tara's collapse and spin this
horrible downward spiral with like Celsius, you know, being
exposed as you know, over-leveraged and then you
know, block fives mean trouble. You remember these are like The
Darlings. These are some like the, you
know, the blue-chip names of the crypto sector.
So this is not good. Can I just quickly but in for a
definition here so, so Tara that it's collapse.
That was one of the stable coins, which was supposed to be
stable. She clearly was not Celsius was
a crypto lender, right? That was a go park your money,
get 18 percent return, you know, which obviously in a 1%
macroeconomic environment was not going to hold up and they
just kind of like overextended themselves and then, you know,
block fi they were slightly more respectful.
You know, borrowing at 8% returns and, you know, they're
just caught, you know, that they put out a lot of positions.
They were interned lending their stuff, but they put a lot of
their funds into something called stake to eat, which is
basically like a locked up term. Deposit and locked in a way that
you can't call the bank manager. So, you know, there's this
massive liquidity crises and you know, people are angry.
You know, this calls for Celsius, Co to go to jail.
It's ugly out there but you know, so far SPF to seems to
kind of, you know, be able to walk above at all and somehow
stay solvent. So did as we have do anything
with Luna, the Tara Luna collapse or he would, he said
that out. This is another stable coin now.
I think he avoided it, you know. Recall, you know Tara Is the
width is, this is idiotic mechanism to, you know, try to
Peg a currency. But just with, it was kind of a
Ponzi scheme backing it up, as long as it's going up at work,
can I ask a question because I'm certainly not an expert in kind
of the mechanics of crypto here. I mean, I mean Jeff, I mean, is
it is there when we say SPF, there's a distinction, right,
between FTX right, and Sam Sam's doing some of the stuff
personally, right? Like the Robin Hood steak,
that's not the corporate come. That's that's like Sam banquet
for you. He has like a small boy is a
fun, this doing it right? I'm not totally clear.
There's like Alameda research which I understand to be his
fund and there's FTX but I mean he's the majority owner of it so
I'm not sure why he's kind of like the hand behind it all
with. That's my question.
But that's you know, better. It's just fascinating that you
can have like, you know, you can have the icon of a leader in
crypto who kind of is able to use their personal balance sheet
to make, you know, investments in other crypto companies or
other. I mean, I wonder what the
conflict of interest rules here are.
And it's Unusual. Right?
It's not as if like Jeff Bezos. Has personally investing and
various Amazon, the competitors or stings like that.
Well, I'm Bloomberg reported that I think stay Peg spfs well
at like 8 billion right now. I mean, who knows?
Hello. Yeah, I was I'm very curious
obviously with every crypto gazillionaire like how liquid
these people are, right? I mean what is that is that
based on the lacks FTX valuation?
Is that based on, you know, where Sam's money actually is
part Worked. I mean, obviously, he's spending
an extraordinary amount on a kind of the things I'm covering
politics and philanthropy and stuff like that.
And I've been very curious about how the precipitous fall in his
net worth at least in theory would affect these sort of
Ventures. But I don't know.
I mean, I mean it's interesting. You look like a Bloomberg
billionaires index, the how they they have these interesting kind
of confidence ratings for how confident they are.
Or you may remember these from from being there just about like
how confident someone is and you know what Jeff Jesus is worth,
what you on musk is worth and the crypto people.
I thought the confidence ratings are always all over the place,
right? They have a 2 Star on this on
Sandy's. Yeah?
What. A great system.
I didn't realize they did that. I should do that.
Yeah. Wow.
That's good. It's good.
Ratings are much better. I think its new.
I think that relatively neat smart.
I mean, this is gonna go off on a tangent.
I don't think we should go down but just for our listeners out
there, billionaire, wealth assessment, if it's not based on
majority public company owned is, A huge amount of bullshit
and and people sort of like that people really should know that
like the the Peter teal Network calculation like definitely had
to be adjusted by when like the tax returns came out that showed
about his Roth IRA which I don't think was a class anywhere.
Accounted for I generally assumed that like like I think
Jeff Bezos is probably worth around whatever they have met
two hundred billion dollars. It's based on a stake in Amazon
and that's publicly disclosed like I'm sure it's ballpark
right? But lots of other people I would
not be surprised if You really know how much John doar is
really worth. Like I mean it depends on how
right we'll do a whole separate episode on because I have a lot
of thoughts but yeah but going back to the SPF for sex is
Judith. The Shred kryptos, even more of
a black box because you know we know how much a rough idea of
how much trading profits FTX the platform might have, but how
much that goes into spfs pocket then also in case of crypto and
treasury management, it's like one day he's like has x amount
of theorem and Bitcoin which was at 16 you know, 67,000 outs to
20. Seven how like, you know, did
he, how much that did he sell? And maybe flip into stable coins
or even dollars and when did he do it?
And that's just totally opaque. Like, we know like Amazon.
Shares, your down. Bezos Is wealth.
Gonna go down and we have a rough idea how much?
But, you know any we know when he sells them but in the case of
like the crypto camera is seeing the file.
If you sell tablet company, right?
But you don't if you own a crypto and for a luminary like
SPF for him to sell, you know, a significant stake in any
cryptocurrency is We're going to have an effect on the market
because it would show some sort of lack of confidence in it so
it's extremely relevant and important to know how often and
at what level he's holding any of these coins, right?
Yeah. Well I mean, this current, you
know, catastrophe is bringing as always calls for more
transparency to like, what the hell's under the hood, how
leveraged are these companies? And you know, I'm just hoping
the next crypto growth cycle, they'll be new rules in place
your best practices because now it's just like, you know,
cowboys and black boxes and who knows what's going on.
So, I want to Circle back to the This idea of Sam Venkman freed
as kind of the de facto, whatever backstop or almost FDIC
of the you have the exchange world and maybe broader crypto
world. You know, we kind of asked this
question of is it altruism or is it, you know, him just kind of
swooping in for what could be Savvy Investments or
Acquisitions? I mean, what have you seen so
far in these moves? Let's dive into the block, find
one because that one is fairly controversial.
What do you see? As you know, the state of
affairs with block Phi and you know, FTX is And bank and free.
Its decision to want to acquire this thing for Solace.
That 250 Dollar Loan, which factors into it?
Somehow. I assume that's secured by by
block flies. You know, non liquid assets, but
in terms of the matter Meadow stretchy, what he's up to, I
mean, yeah, obviously this could help stabilize the current
chaotic conditions, but, you know, I would so interesting to
me. I'd love to know Teddy's
thoughts on this is, of course, my expertise is coinbase.
Who's just basically dominated the crypto Market since day one,
and the u.s. coin basis in trouble.
I mean, I don't think they're going Bankrupt or anything, but
they're certainly not acquiring anything, they're cutting staff.
And what am I theory for? What ft, a car.
What Sam is up to is, especially with Robin Hood.
Look at all those cool, you know, customer lists you could
acquire on the cheap and Robin Hood to gives them a path to,
you know, selling a crease on the blockchain and did it with
like Celsius and block fire. I mean, what a great way to
acquire a whole bunch of customer accounts once things
stabilize. And then I think, you know, he
could be the new Top Dog in crypto in the US.
I mean, I mean, you could see he's made us.
Or Sean like Global derivatives trading, but, you know, I think
there's a big play for, you know, retail, you know, retail
participants in the US market and what a good cheap way to
acquire like millions. Millions of customers on the
cheap. That's, that's one Theory I
have, but I think Teddy Long's bettered me.
So I'd love to know your thoughts.
Yeah. It is, it fair to think?
I mean, you think of to post a question back to you, Ma'am, did
you think of FTX is like a coin based competitor?
Like knows exactly what I was gonna like FDX, coinbase
Finance. And I don't wanna put you on the
spot. But yeah.
How much do those companies all overlap and there are services.
But the big difference is coin basis in reality the only big
retail player in the u.s. Robin Hood tried and they have
some luck, you know what, their Dogecoin run but then they're a
basket case now, but I don't think it's a coincidence that
FTX is putting their logo on every umpire major-league
baseball. You know, I mean and you know,
Sam is not a fool. I think the long-term game is to
muscle into the US Market by now, it's never going to happen.
Like, you know, the reporting of like blindness us which is like
basically a potemkin village to like blow smoke up the regulars
ass and like they're Radioactive from a regulatory point of view.
Whereas amazingly SPF is also kept very clean nose throughout
all this. Like, even Maxine Waters likes
him. So, you know, I just think he's
very poised to be the first major Challenger to coinbase the
u.s. to you. You see, you see basically
buying these distressed assets as Art of hey like it's a way to
bye-bye customer growth, right. You know that these are people
who you know alternate alternate universe might buy and it might
have my trade you know Bitcoin through coinbase and now they're
in the FTX funnel and then boom. Yeah.
Or whatever you want to do with them.
I mean you get the strip customer lists and if indeed
long-term, you know, all of us are going to be like, you know,
staking and you know, equities are going to be moving on to
blockchain and stuff like that. If you're playing the long game,
you know I think it's I think it's a very smart idea.
If he has a capital to do it and this is hardly unique to crypto
to whenever there's you know, massive distress the industry.
If the top players got the capital in the pockets to go,
pick up the pieces and incorporate them into the
Empire. I mean you know that's what Big
Tex is done for years. You know, I don't think it's
purely to you know, to to stabilize the industry.
I think he's got a long term vision and we're starting to
seem execute on it. How do you kind of countenance,
Teddy spfs, political donations and his being one of the most
active billionaires? He's in Democratic politics with
his you know business interests. I mean Jeff was mentioning that
Maxine Waters seems to be a big fan of his.
I don't know. That's the first I've heard of
that although it makes sense. Has he donated specifically to
like the D Triple C or I mean? Do you see this as like a very
Savvy move on his part to shore up good relations with you know
what might be a more sympathetic party.
Sam is doing lots of things in politics, that aren't
necessarily. All interrelated.
So I mean, you two buckets, there's like the straight up
crypto work. That Sam is doing which I think,
you know, you can be as cynical as you want about his desire to
capture the regulators and politicians who may have an
interest in regulating crypto. I mean it's a Sam, you know it
has donated a couple million bucks to a crypto Super PAC that
is also been backed by increase in Horowitz.
It's called I as in GM, as in the, you know, crypto speak the
good morning Institute basically.
So Sam and I mean that that's not any different than like you
know your standard you know, Facebook CEO or not Facebook but
like you know just big Tech leader you know tries to often.
It's the re top and playable on mostly donating to you know the
the committee's that regulate Tesla right stuff like that.
And Sam is you know spending a lot of time as Jeff is kind of
knows is spending a lot of time in Washington.
Washington trying to, you know, get crypto Regulators to, you
know, have a light touch. He's called for more crypto
regulation. He's testified a bunch of times
before Congress. Like that's the standard, you
know, CEO of a big company basic Washington lobbying that's
bucket. One bucket to, which I think,
Sam critics don't really believe is a separate.
Bucket is efforts that Sam is taking to basically promote
effective. Altruism or the belief that sort
of a dumb it to dumb it down, simplify it basically.
Utilitarianism that there should be more money spent on
preventing things that cause harm to mass numbers of people,
such as nuclear disasters. Future pandemics the killing of
animals effective altruism is very in Vogue among the Silicon
Valley set and Sam who you know, as we know is only 30 years old
and you know this company is still private Sam.
Spending tens of millions of dollars.
If not hundreds of millions of dollars on affected altruist
causes in part through politics. Sam is now is funding write up a
ballot measure in California. He spent 12 million dollars on a
house primary race for this gotten Carrick Flynn and Oregon
lost. I like 30 points pretty big
disaster. Well, yeah, I know effective
altruism is actually very smart PR framing because you're like,
well, I failed but it was a long shot and if you do the math, the
return on the investment was Eight.
So smart in a modeled version of reality, but not based on sort
of political conventional wisdom.
Which honestly right. Good.
Good on you to escape the framing of political reporters
and how they try to trap people to only betting on things that
can be successes. Yes.
But those are, those are those sort of to those are two
buckets, right? I mean, there's the there's I
mean, and, and there's the the work he's doing on crypto, which
is more straightforward and there's the work he's doing,
like in his personal capacity that is not as the Ft ex-ceo
just as someone who has a lot of money and thinks a lot about
ways to make an impact in the world and like now to the
recipients or to Washington at large, is it so easy to separate
those two things like at the end of the day, you know, keeping
Sam on your good side, whether that's through supporting kind
of pandemic prevention, or whether it's supporting, you
know, a light regulation. On crypto like Sam is clearly an
important person, right? And there's nothing Democrats
want more than this sort of. True Believer.
You know, that's like, oh, I'm I have a bunch of Crusades to put
me on your team because I really believe it, which is going to
get much more affection that. I mean in a way that you know,
Ilan represent sort of behaving like the actual sort of trump
style Republicans in a way that draws their attention SBF.
I think behaves like Democrats would actually like sort of a
democratic billionaire to do it. It's like I have these strong
principles. I have my little Crusades and I
believe in policy like he seems like he's an institutionalist,
which is very interesting coming from the crypto world, right?
I mean, how does he fit into the broader libertarian crypto
mindset of believing that this is part of a movement?
That's going to burn it all down.
And take the institutions that have, you know, withheld capital
from the people who deserve it and all of the kind of
anti-establishment leanings that these guys have, you know, one
of the richest most prominent people seems to be like buddies
with Maxine Waters and Needing to house races.
I mean it's useless to say that you said I just because he's
engaging in pot like engaging them, frankly.
Yes, yeah. And partisan politics to.
Yeah, I'm Phantom in for a sec though.
I just think the thing we have to know about Sam, which makes
it so different from the other. Crypto Founders is parents.
His pedigree is Mom's the Stanford law professor.
Who I've heard Works closely with a group called mind the
gap, which is to serve about, kind of like fundraising
operation for the Democratic party and his father.
Reportedly like, advises Lisbeth warrant So, you know, he's out
of kind of that milieu, which is very different than the others
and that's also too. I think adding to his white
knight ability because the other, you know, crypto Founders
are really alienating people. CZ is like, you know, got sort
of like eggs. A lot of people are Whispering.
It's a criminal operation. I'm not saying that's true.
And then like he got the CEO of cracking, Jesse Powell other
tweeting, like stuff about, you know, abortion and like, young
people accusing him of flirting with like Neo Nazism, and then
Brian Armstrong, you'll like it. Get out of my Pretty much.
Yeah. And then Brian Armstrong who is
like, you know, forever, like picking culture war fights with
the New York Times. And it's the coin was see ya.
Whether he's right or not. I mean, it's just like, it's not
going to help the initial Sakai help your company.
You know, the New York Times, is not going to stop doing what
they do. You know, might be frustrating
to you, but he just seems to kind of like keep walking into
these, like political hand. Grenades be a black lives matter
or what, you know, whatever it is and whereas SPF is done a
very good job of you know, step Pat staying above that.
However I'll turn it back over to you guys but what I'm curious
about is come November when the Republicans are almost certainly
going to take Congress again and you know, do they really want
Joe Biden's? Biggest you know because and the
Republicans are more friendly to crypto right now you know
libertarianism blah blah blah. What happens when the most
prominent guy in cryptos, Joe Biden's, biggest donor.
Is he going to be the biggest, do we know that is, was last
time around? I believe that, I mean, tension
on that but I, he lost he was, he's the biggest like, CEO.
There's a bunch of qualifications up and I mean but
he's way up there. Yeah, yeah, sure.
I mean like you know I know Eric has made fun of me privately for
like being this is an obsessive. I mean, the reality is he's
like, you know, I think at this point he's probably the second
or third biggest donor in the midterms right now.
I mean like he's up, he's up there with Peter.
Thiel's like people are obsessed with Peter teal'c spirituals
important. Like Sam is spending a
tremendous amount of money like it's this is not people call
obsessing over like a five hundred thousand dollar a year
donor like Sam is now in the 20th 39.
Dollar range. And if you include is lobbying
efforts, like he's up, he's up there and part of this is that
like, he's just genuinely interesting.
Like what he's funding is stuff. That is, you know,
unconventional off the walls. Like he obviously.
I think part of the obsession with him, say, part of it is
exam. As like, cultivated this image,
that Jeff is kind of referring to, right?
Where he wear shorts all the time.
His hair is kind of crazy. He obviously is like, very
media-friendly right in a way that like kids, like it's like
Pete Buddha judge, like you Lots of coverage because like, he
engages with reporters a lot, right?
And like, and, you know, I see him like, take interviews
interviews, from like random fucking newsletters, right?
And like, there was some story, I remember the time is, did
about like, the billionaire is taxed proposal and like Sam,
like, it was very willing to be like the spokesman for
billionaires. I was like, he's very much.
He's very much clearly enamored with the media and like, you
know, he's young and maybe he'll get tired of it when he liked
suffers, its first hit piece or something like that, but like
Like part part of it is Sam cultivating an image, but part
of it, I think is genuine and the fact that he is a massively
significant donor with, you know, obviously very substantive
and issues before Congress and is like, I think part of it is
him leaning into it and making it like, you know, having fun as
like a political media mocker and part of it is just like the
fact that he's actually doing real shit.
When lot mostly people, most people aren't right to be clear.
Most people are not actually that interesting but to Jeff's
question, I mean, he's also built up this, you know, public
Persona and media presence during mostly during Biden's
presidency where he is sort of been on the side of power.
And so what does the world look like 44?
SBF, when, you know, Biden is on his back foot and he's suddenly
getting, you know, even the Republic, right?
It's the specifics of Jeff question.
I mean, what do you see happening post?
Midterms sure. I mean, look, I mean he is he's
not actually that. Like he is a, a center-left, you
know, politician. I mean, he is donated to try to
set it up, Jonah. I mean, he's donated to
Democrats, but, you know, he, I don't think he's that liberal
conventionally and yeah, I mean, to be true to be fair.
Like that's true of every, every kind of donor right now or every
corporate leader, who's kind of made inroads during the Byron
FTX coinbase by. And these these companies
interests are like, fairly aligned in the deregulation.
So, Seems smart to me that you would have you have True
Believer, like Democrats, and then you have sort of coinbase
or Brian's meeting posting pictures with, you know, Paul
Ryan. And then you have sort of even
sort of more, right people and Kraken and like having that sort
of as an industry. I'm not saying they all got
together and sort of assign their roles.
It's almost better that they all play sort of a cheerleader for
each side so that they have friends then If they all sort of
half-cocked it is that right? By the way, I post Lots about
Jeff and Teddy, I mean that they, you know, the three
exchanges are necessarily anti-regulation, because it
would seem like with the market and environment as it is right
now, there's got to be some sort of a push for an FDIC like
organizations. Like, you know, Facebook is
always like, you know, we support modern internet
regulations, right? I've been part of, this is like
any company you get entrenched like that and regulations,
right? Sure.
For the biggest players, right? Right, right.
It's all being like, I don't know.
There's like an element of bullshit.
That like everyone you know Belize.
I mean I mean the the key thing happened at regulation level
right now is there's a spill from Cynthia lummis and Kirsten
gillibrand to try to basically have lots of crypto regulated by
the cftc rather than by the SEC. The small weak regulator rather
than the song regulator and we're obviously over
generalizing here but like generally, the crypto industry
is, you know, in favor of the bill and, you know, and is that
because Tom dancer question is that Has like they are pro
regulation or anti-regulation. Like I think obviously they sort
of know that there's going to be some regulation of this industry
and you might as well you know, handicap it or kneecap it from
from the start, right? But be fair like, in that
regulatory climate, like the chairman of the SEC, Gary
Gensler is implacably, and my opinion stupidly hostile to
crypto. He's tried to seize on an issue
to ingratiate himself with a very powerful Democrat, namely
Lisbeth Warren and so he has been too.
Ferociously attacking and it all turns and not being remotely
constructive, you know, I mean, obviously, you know it needs
some regulation but you know on the rumors of him aspiring to be
triggered. Treasury secretary are true,
talk about Gensler here, so he's willing to throw the crypto
industry under the boss to advance his own career.
And in that climate, I understand where the crypto
industry is like, you know, understandably frustrated and
pissed off, but, you know, yeah, of course.
You're right. They're simply trying to get the
regulation that's best for them and get big and then game the
regulatory. Structure to favor themselves
and send comments that says every industry does.
But crypto is that a bit of a special juncture given that you
know, the the implacable hostility the SEC and clearly
more Pro regulation than you. I think, I mean, I guess I'm
very cynical the SEC because it's like much easier to crack
down after everything collapses. It's like he hasn't done that
much, right? I mean, maybe now that
everybody's lost money is going to make everybody's life
miserable. Yeah, seems unfair that Eric's
favorite. This is Eric's.
Favorite arguing on the show, your favorite anti-regulation
are you just at the SEC acts that they act after bad things
happen? Government only comes in on the
way down? It's like, oh yeah, I guess it
was bad. People lost money.
It's like weren't you supposed to enforce rules so that people
didn't lose money in the first place rather than just say
pointing to the money-losing and say nah, they're the bad guys.
I mean that drives me crazy. Now what he could have done it
Has given sir a roadmap for. What do you do you know the
industry complaints? Think rightly that he's saying
regulation enforcement he's like well does follow the rules which
are extremely vague and have them are you articulate since
2014 and if you guess wrong we're going to sue you you know
and that's I think frustrating and then I think coinbase tried
to offer very modest like 4% like you know interest earning
thing on stable coins. It's a very like unambitious
thing and, you know, freaked out said like no no.
Well while the while or whatever crazy stuff is like popping out
all around him and like he totally missed the Stable coin
collapse. So to seems he's out to you know
kind of stimuli everything without providing a constructive
roadmap forward because he's just you know, in my opinion
venal an entirely a moral ambitious person.
Yeah. I mean it's classic that the,
you know, big is sort of company, you know, it coinbase,
big public company that wants to be in good favor of The
Regulators ends up being the one punished the most even though,
like you're saying, yeah, it's trying to behave Fair relatively
responsibly compared to the rest of the industry.
And yeah I mean all right. Yeah.
Eric as an sdn driessen whisper hear from the on the sandwich
Berg I mean what do you make of just their kind of lobbying on
this issue. In general just the fact that
like I was struck the other day when there was that you know
Mark and been donated a million dollars each to this crypto
Supermarket I mentioned earlier, Jesus Marc Andreessen and Ben
Horowitz. Yeah, yeah, my founders of yeah,
I think it was, it's their only political contributions of size
that have been disclosed, like, in the last five or ten years.
And I know there's been a lot of reporting just on the ways in
which injuries and is engaging in Washington.
But what do you just, what do you make of?
Just their kind of political, you know, it's to some extent,
you know, they are pro crypto large, right.
And if they have tons of Investments I dig, it is more
sort of conventional corporate influence.
We will hire the experts. We will hire Hire former people
from the agencies so that you will trust them.
And I do think, and driessen has been able to build build up,
sort of a reputation for being some of the adults in the room
in crypto. So if you're going to regulate
it and you want to turn, you know, it's like okay we'll have
our own draft legislation. I think what's interesting that
it is that instead of being inside of a Facebook, Microsoft
Apple, some big company. You know, forming the internet
Association Andreessen is Jane. Okay, we're making startup
Investments and before these companies are huge, we need to
sort of be the lobbying organization on behalf of all of
them. Are I guess they probably don't
use the word lobbying they give policy policy advice.
I mean, Katie Hans sort of playing trying to play a similar
role where it's we're gonna we're going to be the advocates
for an industry that if it's regulated.
Properly will make a bunch of money.
I think Andreessen has such great coverage of crypto That
it's obvious. Why it's good for them.
I think Katie hon. You know, it's still to be seen
whether she can show that she's going to win deals based on
doing sort of influence peddling.
This probably good for the whole industry and not necessarily
anyone portfolio company. And she hired Chris lehane who
we all know is, you know, you know a political guy who knows
his way around Washington and you know, she's former head of
communications and policy sorry at Airbnb.
And a yeah as well. Yeah.
He was you know, one of her first hires and like what is
that, what does that signify about kind of?
Yeah, you know, to some extent right?
It's just like just smart business right to hire hire,
experts who, you know, can help you craft regulations in ways
that are helpful to your portfolio companies.
That's just like, right? It's pretty simple.
But it's also, you know, it's not as if, like, part of this is
because the industry is so new. Right.
It's not as if like Sequoia is like lobbying on like,
e-commerce before Congress, right?
Because it's like the in, there's, there's Not that much
space for them to, you know, throw their elbows around.
But an increase in my could easily become like the most
important player in Washington on this issue because there's a
vacuum. It also I mean that's an
interesting comparison. You make to, you know, Sequoia
during the rise of e-commerce. And I guess what makes crypto so
interesting here is that there's so much more individual you
know, money at stake that the you know, the regular person can
get involved with that you would sort of look towards regulation
to protect their just really hasn't been another.
Freeze, right? I mean, e-commerce, you wouldn't
see Regular People investing in these companies on their way up
and getting fleeced, you know, as whatever.
E toys falls apart. I mean, maybe as a public
company but it wasn't the same thing as crypto, which is such a
widespread, you know, individualized investment that,
you know, it's just an interesting State of Affairs,
when it comes to the expectations of regulators for
other kind of rising Tech Industries.
Also, the stakes are higher with crypto because it touches the
financial rails. And like you know, the banks are
you're fighting the Thanks. I mean, who did like, you know,
pets.com have to fight really, you know, retailers.
Oh my God. But like the banks have a lot
more muscle in DC. And then also the other thing is
like, you know, the great game in terms of like, you know,
you're messing with the national currency system, like the two
most important progress to stay in power or the military
followed by the US dollar which keeps Americans borrowing low.
So there's a lot of like kind of hawks in you know the defense
department and in treasury who are like we gotta like smother
this thing in the in his crib because Is and it's reality is
China. And Russia have also been
encouraging crypto stuff as a way to like dislodge the US
dollar as the world's Reserve currency.
I'm sorry. So we can go and unlike some
weird rabbit hole but but China is China, is Crackdown right?
But I'm saying there, Fanning like competitors to the dollar
in the form of cryptocurrencies. I mean, if crypto really takes
off and people don't need the US dollar anymore, that's a shirt
of a geopolitical catastrophe for Uncle Sam.
So you know that it's not like a binary thing but they're
interesting. That's the Worried, like, if
you're sitting there trying to like sell, you know, pet food
online is different than trying to like, you know, challenge the
national currency to frame up like the regular, I totally
agree with what you're saying, I mean, to frame this up, you
know, the Uber strategy which I think is representative of the
broader Tech strategy is get penetration fast enough before
Regulators can do anything. Then there's adoption, consumers
are attached to it including politicians and then no one's
really. To ban it.
And then you have the leverage rather than asking for
permission before things start crypto, as obviously succeeded
in that playbook in that, it's sort of deployed and out there
before there's any real action. I think the question mark for me
is, how does that strategy play out in a huge downturn, right?
It's one thing, like, if Uber is still roaring, people love it.
But in the crypto world where people are losing a lot of
money, and a lot of consumers, feel screwed.
Sure. You have the political
penetration, you know, with like SPF like we've been talking
about. But if you have all these
regular people who've lost a lot of money on it, does that sort
of deploy and then Lobby, strategy work?
I don't know, like Jeff, how much do you think it's possible?
Like, are you open to the idea? They'll like core features of
the crypto World, get sort of band out of existence in the
United States. Or how much existential
regulatory risk? Do you think we still face?
I think we're past that and also because the it's This is too big
and too, you know, there's just too many people working in it.
But also, I think the banks are moving in right now, my readers
next era is going to be stable coins which was just a superior
way to move money around and watching the Goldman Sachs JP
Morgan's and Fidelity, you know, get a piece of that.
So you know it's in terms of what it means for retail
investors TBD. But you know I you know I don't
think it's going to be crushed out of existence you know I
think the next you know half years maybe really Rocky but
it's just even now after all the Carnage, it's It's much bigger
than it was two years ago, you know, even after all the
disasters and it's just, you know, this University classes,
graduating, all these like blockchain native people.
You just not gonna stuff this back in the bottle again, but
the shape it takes is a jump ball, you know, between the
banks and the traditional Financial system and, you know,
the whole lot of other things and how it's going to shake out.
I'm sure the crypto nightmare would be sure it's not getting X
regulated out of existence, but it's regulated such a way that
only like JPMorgan and Citibank can comply.
Something. And then then that's yeah,
tough. Well that also seems to be one
of the major risks that the crypto companies have right now
when it comes to regulation is that they're not coming at it
from a place of strength. Like if this discussion were
happening while crypto was you know on the up and gaining more
and more value and people weren't, you know, losing
billions of dollars than maybe they would have a better kind of
Leverage in the negotiations but where is it is now, you know
they're basically like Eric has said multiple times you know
Regulators are coming at it as they're on their way down.
Down. So it's going to be completely
in the, you know, Power Center of all the institutions to say
that we're going to write the rules in favor of our interests.
Because what are you going to do if we don't, you have absolutely
no business what I mean. I mean they're playing the
crypto Industries playing a long game here.
They've got more sophisticated DC and like there's that, you
know, llamas gillibrand. Bill that you know they'll
notice I'm going to pass this year but they're on a kind of
34-year timeline is what they're doing and you know there's
there's they're building allies and I think in the long term
there. You know, and in the short term
they're simply going to write it out.
Wait for the Republicans to take Congress and you know, just lay
groundwork to to get the legislation through.
I think this is you know, the prospect of them being crushed
entirely is diminished a lot, although you know, the next
couple months, who knows but Eddie.
Where did the the Peter teal, acolytes it on all of these
issues, you know? I guess I'm making of Masters.
And yeah, and JD Vance. Well, I was, I was in, I was
going to bring this up to it to just kind of ran out the
political discussion. I mean like, The right more
broadly is like, very Pro Bitcoin, like Bitcoin Maxi, you
know, that's there. The conservatives are right,
Peter, teal, promised us. It would be bigger than the
entire value of the u.s. S&P 500, I think.
Okay. Look like ladies Market, I don't
know. Yeah, some huge something
absurd. Yeah.
But but like, the politic is issue.
I mean, like, yeah, I mean there's the t 0 acolytes who
are, you know, very Pro Bitcoin and like you know for instance
Blake Masters has like done NF. He's of 0 to 1 which is his
book, you know. Very that's old trying to Sandra
copies with Peter teal, he's dumb.
Like nft is to do campaign fundraising which is like a new
frontier and certainly an Innovative way to raise money
for a campaign Innovative way to use your mega donor, benefactor
share benefit. But you know, there also are,
like far-left people who are, you know, somewhat crypto
curious, right? And, to some extent, this is
generational right? Like, you know, Jeff brought up
Warren earlier. I mean, they're sort of the Old
Guard. Guard of people who are anti
crypto and there's like the younger generation.
I mean, I don't think it's a surprise that you see the people
who are more, you know, the Millennials are pro crypto and
whether there are pro Bitcoin or Pro crypto more generally which
I think is the more position on the far left you know you see
some lefties kind of talk about crypto as empowering people of
color, you know taking power away from Wall Street.
There is like the Lefty Kumbaya the golf rope Ever played by Vie
crypto people. I wanna, I definitely want a
table that for another episode. There is a strong Pro Lefty
active development. I call BS on the crypto people.
I talk to are devastated by the fact that they view the left is
inherently against crypto. Yeah.
Nice things dreaming. I mean Jeff.
Do you disagree? You think there's a strong
leftist crypto World here. I don't know.
I think you're being a little cynical.
You simply begin with the crypto crowd with might call you and no
Corner Eric but that's fine. Yeah.
And you met Be right. I own coins just so they can
call me that. I don't know what you call that
willing to lose money to spite, you know, just to spite people.
I guess is what I am. But yes.
All right. I don't think it's totally
Kumbaya. I mean like you look at the
finance committee hearings. You're seeing like even AOC.
Sounds moderately interested Congressman Richie tourists in
the Bronx is very into it. You know, just says, there's
like food deserts, there's banking deserts and I think a
lot of poor people in this country have a right to hate the
banks and they like the idea of crypto The use of crypto by
like, you know, I'm, you know, Black and Hispanic communities
in this country is higher than whites.
So I think there is something there and I do think there's
tension Democratic party in that like Elizabeth Warren friggin
hates it and people crypto and people took their marching
orders from her. I think a lot of Young Dams are
frustrated and part because you're being shut out of
fundraising opportunities and the risks eating like the, you
know, the crypto thing to Republicans, it's Ruby likes
eating the internet to, you know, to Republicans Or
democrats. But you know, who knows it's
early days, you might be right? The End.
Eric will see. Here's my last question.
I mean, you know, a key part of this conversation has just been
the centrality of Sam Venkman freed and you know, some of
these other exchanges, you know, isn't that doesn't that just cut
against the core of crypto like that?
It's supposed to be decentralized.
I mean, the idea that there's there could be sort of a bailout
in any sense, even if it's sort of a total, you know free It
thing, I mean clearly SPF is worried about contagion risk
here and thinks that he needs to make some cheap eyes along with
maybe getting a deal. But I don't know.
Is there, is there anything about this that cuts against the
core of what cryptos supposed to be about?
If you're having sort of a bailout in some way?
Because wealth is so Consolidated that someone
someone can afford to do, it doesn't every industry of
winners and losers. Just to the extent that like,
there's always gonna be some centralization, right?
I mean, the fact you're Ting a company at all and, you know,
raising outside money and accumulating customers, like, I
understand that as like a theoretical concern, but like,
at the end of the dentist like so much of the heart of what
excites people about crypto is sort of the Dow Dow.
Yeah, I just did a lot of people can get involved and, but the
solutions were seen are sort of Big Rich entity who has a lot of
control over the market, has probably made a lot of money
from their visibility into the market further, consolidates,
the It to me. What's happening?
Wouldn't speak to sort of most of the virtues that people talk
about when they talk about crypto.
Yeah. No, I mean, Eric that the
difference, I think Teddy between other Industries and
crypto is other Industries don't have like their Central theology
is not the centralization and you know, like, you know,
Devolution of power to the common man, you know, you don't
see like, you know, Bezos running around saying that but
that tensions been part of crypto.
Since the beginning, it's never been as, you know, to
centralizes it professes to be, it's always like an ideal.
That's just over Her eyes and just, let's get a little more
decentralized and, you know, it's, it's the storage been
there since day one. Yeah, great.
Well, Jeff Teddy. Thanks for coming on.
I really appreciate it. Fun fun to mix it up on and
crypto. You bet.
I was a lot of fun guys. Thanks everyone.
So goodbye. Goodbye goodbye, goodbye.
Goodbye. Goodbye.