# Crypto Regulation, AI Convergence, and Tokenization Trends

**Podcast:** The Milk Road Show
**Published:** 2026-05-14

## Transcript

tokenized stocks, stable coins, like these are the things that actually matter in this space.
And so the more that we can like get capital mark on chain capital markets to actually be relevant to like real products and real things in the world, that's when we're going to start to see the gains in the crypto space.
And we're going to start to make crypto the black hole of capital like it used to be.
Good morning.
Trump is in China making deals while crypto is in Congress getting clarity.
Hello and welcome to the Milk Road Show, the daily crypto show that can't wait for crypto to be the big story again, but not because of bad news.
Today is Thursday, May 14th, 2026.
And today's episode is brought to you by CAPE, the privacy first mobile carrier, Pharos, the layer one built for RealFi, and Nexo, earn interest, borrow and trade crypto.
And without further ado, welcome to the Milk Road Pro.
research meeting.
Kyle, Martin, how are you guys?
Martin, how are you feeling?
Hello, guys.
Good morning.
Yeah, I'm feeling good.
A lot of stuff happening.
So I hope you are going to talk about some of the cool stuff and see what's going on.
A lot to cover today.
Kyle, how are you feeling about the Clarity Act being in Congress and finally getting marked up today?
It's about time.
And this better go through or I'm going to be absolutely pissed.
Let's just let's actually start on this real quick because we have a little bit of progress here on the Clarity Act.
We have somewhat of an agreement between the two sides.
First of all, it's crazy to me that we have spent months now, I guess, allowing the banks to basically say, hey, we're just simply not going to allow stablecoin issuers to give yield and pass yield through to consumers because it might hurt our business.
Why don't we pay taxes to politicians so that they can protect us and like do good for us?
And we are literally just watching live them allow the lobbyists of the banks to not do that.
i it's mind-blowing to me that this is how the world works but i guess i'm the only one that cares about that uh other than maybe brian armstrong it seems now anyway we have somewhat of an agreement where it looks like they are going to be allowed to pass some yield through but it has to be related to activity that's happening on the platform so think of it similar to like a rewards program like you get when you use visa you know and you you tap your credit card and you get three percent back or whatever it's like that kind of idea Previous to this or what actually what happens currently is like I can just put my dollars on Coinbase and they just give me my yield.
I don't have to do anything.
Now you're probably going to have to take an action or it's going to be based on your activity or like, I don't know how they're going to do it.
It's still a gray area, but at least Coinbase feels anyway that they'll be able to have a path forward to pass through at least some of the yield to consumers.
So hopefully it ends up being a good thing and hopefully this just gets passed because at this point, I think this industry just needs it.
uh it's a it's pretty tough to get any momentum i think in crypto without it in fact for a long time my trading view i have like a list of of uh of all the assets that i care about and i categorize them so it's like crypto i've got like 20 and then it's like stocks and mainly ai stocks i've got a bunch and then it's like macro stuff and whatever and i look at it every day And generally, I'm pretty depressed looking at my trading view because it's always red.
But I decided earlier this week, why don't I just move the stocks up to the top of my trading view?
And now every day I wake up and I see green.
So it's actually a great hack if you just want to have a little happier life, a little more optimistic life.
Just move crypto down.
That's my new hack.
I don't know if you guys have decided to do that, but it really helps.
Martin, you pointed out that a lot of markets are fighting for investors capital right now.
Do you think if we do get the Clarity Act through that crypto is going to start winning some of this capital fight?
we'll see some green candles back in the crypto section of the portfolio?
Well, good question.
I think even if it passes, it won't materialize anytime soon.
So like, you know, because right now, I don't want to say nobody's touching it.
But if there is no clarity, people are not, you know, doing things or building things.
And once there is a clear regulation, then people will start to implement it.
So I think The effects of that are going to be long term.
So it's not necessarily like, you know, short term thing.
Yes, like, obviously, things like Coinbase might, you know, have some pump because obviously Coinbase would significantly benefit from that.
But outside of the big companies, and, you know, the biggest beneficiaries are obviously stablecoins and the ones that have the most stablecoins and the liquidity.
Talking more broadly about crypto and DeFi in general, it can help as well.
But I don't think that all of a sudden we are going to see a huge spike and billions of stablecoins supply in a short time.
Stablecoins keep growing, but I don't think that it's going to change drastically in the next three to six months.
I think it will be slow, continuous adoption.
And then at some point it will start to accelerate, but not in the short term.
well i want to talk a little bit more about stable coins yeah go ahead yeah well i i actually wanted to go on that too which is i could see a couple things really ignite from this i don't know necessarily the prices of like i don't know defy assets or like these on-chain assets or even l1s is going to make a huge difference here but i could see some acceleration in two things tokenized stocks and stable coins i do think will accelerate once we get this live um because there is some clarity around that for the most part so I don't know.
I think that we might see some growth.
And like you said, they're already growing, both of them.
Like tokenized stocks have gone from, I think it's about 250 million last year at this time to 1.45 billion today.
So that's actually growing.
I mean, crazy fast, to be honest, it's like what a five, six X.
And I think that that will accelerate.
So it'll continue along that pace, but even grow faster if we get Clarity Act.
So we're already seeing some pretty good growth.
I think that's going to actually continue to pick up as a result.
Don't know if the investment thesis picks up just yet, though, because a lot of the things that are happening are kind of unrelated to where the investable assets are.
So like, you know, Tempo is seeing a lot of great growth.
OK, cool.
Well, I can't invest in Tempo.
Like there's just a lot of things that like are happening, but it's not really accruing a lot of value to the assets in this space just yet, which is the problem.
And so, you know, as you kind of alluded to with this question, John.
There's a black hole of capital that is getting sucked into AI infrastructure right now because, you know, there's a lot of money going in there and there are benefits coming from that.
There are revenues and earnings that are being generated from that within chips and memory, etc.
And you're not really having that in the crypto space today because we don't have a lot of value capture yet.
We have too much block space, for example.
And so, I don't know.
It's going to be tough for capital to not continue to get sucked into the AI infrastructure build-out because I know that there's $1.1 trillion worth of capital going into the AI infrastructure build-out next year.
How the heck does any industry compete with that?
That's pretty damn tough, right?
And there's probably going to be even more than $1.1 trillion the following year, in 2027.
And so it's very difficult for, I think, capital to make its way.
Now, what I do think needs to happen...
for crypto to take advantage of this is it's interesting.
There's a lot of people in crypto that are like, I don't want to go invest in AI.
I don't want to go and look in the stock market.
Like I'm a crypto person.
I want to keep my money in crypto.
And the thing that I've been saying for a long time is the only way that crypto actually becomes relevant is if we go become the capital markets for the things that matter in the world, which right now is AI.
And so what we need is to become the capital markets infrastructure for the AI infrastructure build out and for the AI-agentic economy.
And we are like working towards that, but very, very small.
Like USDAI, we talked about a couple of weeks ago on this show.
That's a great example of crypto, like moving its way into things that matter in the world, right?
Like more DeFi products that are related to like ETH or derivatives of ETH, it just does nothing for the world.
But a stable coin DeFi product.
like usda i that like provides funding and financing for gpus which is what all the world wants right now that's a great way to bring crypto into like relevancy and so like the more we can do those things the better and i think that's what's really going to set up crypto for success that's why i think tokenized stocks stable coins like these are the things that actually matter in this space and so the more that we can like get capital market on chain capital markets to actually be relevant to like real products and real things in the world that's when we're going to start to see the gains in the crypto space and we're going to start to make crypto the black hole of capital like it used to be um but i don't know when that's going to happen we're pretty slow to make that happen yeah i want to say two things go ahead like i agree with kyle i'm bullish on these products that are superior that couldn't exist before and now that's what blockchains unlocks that's huge But does it necessarily mean that it's a good investment?
No.
And that's the problem.
So like you're bullish on USDAI, so am I.
But then you look at their valuations and it just doesn't make sense.
If I can buy some companies that are much cheaper, much less risk with, you know, maybe I would also argue with higher growth potential in the next 12 months.
Why should I invest in these crypto tokens in the first place?
The problem is that there's capital on chain and then there's just not enough good assets to put that in.
So the moment we have one good idea, the capital rushes in there and it gets overbought.
And then you're like, okay, I guess I'll wait for capital to go somewhere else now.
Whereas at least in the stock market, you have a ton of ideas.
It's like you can, you know.
There's just more opportunities there.
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Actually, I wanted to ask a question about this to kind of get your guys' thoughts here.
One of the things in this bill is this compromise on stablecoin yield.
The banks are still fighting this, so it's not even clear this is going to go through.
But as part of...
of this, it seems like Coinbase is going to lose one of their big sources of revenue.
Today, it was announced that Coinbase is expanding their support for Hyperliquid and that Hyperliquid is going to be, I believe, sunsetting their USDH stablecoin to use USDC instead.
It seems like a partnership Coinbase is initiating to sort of bring in some additional revenue because they're going to be losing some of that revenue from the stablecoins.
Talk to me about how this looks and what this means and how big this partnership is going to be.
First, they're not going to lose the revenue from yield because.
that that's the agreement they're coming to in this clarity accident looks like they're going to be allowed to do this still.
So I think they're going to be fine there.
At least that's what it appears.
This is very interesting.
It's kind of funny.
They basically acquired USDH, Hyperliquid Stablecoin, and replaced it with USDC, which is Circle's stablecoin, not Coinbase's stablecoin.
So honestly, this is kind of a little bit weird.
They're like buying a company to replace it with a company that they don't even, I mean, I guess they own some small percent of Circle, but I guess they do make revenues from Circle.
So I think any...
revenues that come from USDC on their platform, they make whatever 50% or 100% mark, maybe you know the details.
So like, it's a very, very smart move.
I think anytime they can find big treasuries and get it on Coinbase, like that's, that's the whole point of their business.
So it's just weird that they honestly, Coinbase needs to buy Circle.
Like, how are they making acquisitions to put them into USDC and they don't even own USDC?
It's very odd to me.
So I don't know.
But I do think it is a smart idea.
What do you think, Martin?
Yeah, I think the announcement was that Coinbase is going to be exclusive treasury deploy or something like that.
So, you know, this might be a way to go around that legal stuff.
But yeah, it's interesting.
And I know that last week or two weeks ago, Lighter, which is, you know, the biggest competitor of Hyperliquid, which is also Perpetual's exchange on Ethereum, they partner with Circle doing pretty much the same thing, but just, you know, skipping the Coinbase.
So I don't really know.
It feels quite weird because what's the point of Circle and Coinbase making different deals?
And also Circle is now pushing their own blockchain arc.
They will have token as well.
So it's like, are they going to try to push users to their own blockchain instead of Coinbase base?
It's like, what are these guys doing?
I sort of feel like there is internal fight about like Circle and Coinbase and what is going on and what's their future strategies and because right now it feels like they are both trying to do the same thing.
But we shouldn't forget the economics that right now from all the USDC that's in circulation, 50% goes to Coinbase.
50% from all the circulation that...
Yeah, revenues.
And 100% of the yield goes to Coinbase from the balances that are just on Coinbase.
So, you know, I think Coinbase has like 18 billion USDC on their platform.
So 100% of those revenues are coming to Coinbase.
And then the rest, 50% goes to Coinbase and 50% goes to Circle.
And then when Circle partners with Lighter or some other like new bank and...
other integrators with distribution, they also have to give them some yield as incentives because otherwise, why would they do it, right?
So that's sort of, that's why I have been bearish on Circle like forever because I think that they don't have distribution and it's pretty costly to get, you know, that distribution.
So the economics are not really in favor of Circle.
I think the companies are just going to merge.
Like, why would they not?
I think so.
Circle needs the diversification that Coinbase has and Coinbase needs the liquidity that Circle has.
Put them together and you've got a fantastic company.
Do you know why?
I know that there were some talks before, like maybe a year or two years ago.
Before they IPO'd, yeah.
And do you know what was the reason that it didn't go through?
I don't know.
Because right now it seems like, you know, Coinbase is investing a lot of money into Base and building this distribution there and building their own wallets and stuff.
And I feel like Circle is doing the very same thing with their own blockchain.
And it's just like, if they are really gonna, you know, merge at some point, like, this is just a wasting of money.
And yeah, I think it will happen eventually.
I think it was in my prediction for maybe this year that...
the merge will happen because it just makes sense.
Well, it has to make sense to a lot of people to get that over the finish line.
Kyle, I want to ask you, I think you've had, you know, you mentioned Chip is on your watch list.
Another one you've had on your watch list for a while is Hype.
And I'm curious what you're watching for to take a position there and why you haven't so far.
Yeah, for me, oh man, I just looked Hype is up 6% today.
So that's cool.
So thanks for asking that.
There just hasn't been growth in Hype for the last little while.
And so I'm kind of like, Is it going to keep growing?
What's kind of next for them?
I'm not really sure.
I know they're obviously trying to go after like prediction markets.
And so we'll have to see how that does.
But at the moment, it feels like they've sort of saturated who they're.
their user bases and they haven't been able to expand yet beyond that that's not to say they can't i i think and hope that they can for sure but they need to basically reach outside of the crypto dgen world and that seems to be pretty challenging for a lot of companies in this or protocols in the space so the question is can hyperliquid do that and if they can that's their next sort of phase of success if they can't then i think they do what most crypto companies have done which is like they get the spotlight for a year everyone in crypto uses them and then they just fizzle out, like has happened to many, many, many protocols before us.
So can they cross that chasm?
And I just, I don't know yet.
And so that's kind of what I'm waiting on, to be completely honest.
Yeah.
The other reason is I'm putting more capital into AI because there's just a lot more momentum there.
There's a lot more opportunities there.
I like I'm still allocated to cryptos.
It's not like.
I don't like hyper liquid.
It's just I'm already allocated to things like Bitcoin and to Ethereum and to Sky.
And it's like, how much more do I really want to put into a space that isn't moving for the last however many years?
To me, it doesn't make any sense.
And so I'd rather put my capital into.
into the black hole that we talked about at the beginning of the episode, which right now is AI.
It doesn't mean I don't like crypto.
It doesn't mean I don't support crypto.
It doesn't mean I'm not still excited about crypto.
Of course I am.
There's just better places to put your capital right now.
The only way I would buy these things is if I like sold some Bitcoin or sold some ETH or something like that, which I just, I don't really want to do that right now.
Well, that brings me to Martin.
I'm sure Martin, you have thoughts on what Kyle just said, but you also did, I think this week, sell some Tesla, some Coinbase and some Bitcoin to raise some cash ostensibly for other investments.
I'd love to hear your thoughts on those choices and the repositioning you did in your portfolio.
I did so because I was overexposed to crypto and crypto is not doing well.
And, you know, markets are at all time highs, stocks, I mean, but crypto is still lagging.
I sort of wanted to lower my exposure to crypto and to diversify a little bit.
And I was short on cash and I want to have at least 10% in cash all the time.
So yeah, that was the move.
And if I just make comment, Hyperliquid, it's pumping today because of that announcement.
There is right now 5 billion USDC on Hyperliquid, which means, you know.
If you can earn 3.7% on that balance, it's something like 170 million.
Let's say that Hyperliquid will be able to keep 80% of that.
So it brings additional revenue like 130 million or something around that to Hyperliquid.
So that's why hype is, I think, pumping today.
And it makes sense.
It will also help them to diversify their business.
So it's not just related to trading volumes, but now it's also related to how much USDC balance you have on your platform.
So yeah, I think they are doing the right decisions and right moves.
And to Kyle's point that he doesn't own hype, I still do.
Because, you know, when you are a portfolio manager in stocks, you always want to sort of beat S&P 500 because that's your benchmark, right?
And sometimes you just need to be allocated in some assets because if you are not...
and you are not going to outperform, you'll be fired pretty much.
And I feel like for crypto, besides Bitcoin, you need to have two assets and that's sky and that's hype.
Because they are both attracting not that existing capital in crypto, but I'm able to go to some friends from banks or traditional funds and pitch them Hyperliquid or Skype because it's just a great investment opportunity.
But there are not many protocols like that.
So I feel like if you are in crypto, you should have exposure to both of them because both of them are pretty easy sell to anyone who is, you know, thinking from like first principles and like their business is growing and it's doing quite well.
Yes, Kyle said that it's the growth slow down.
I agree.
But I think it will re-accelerate again.
And I think they will be able to find.
Gotcha.
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I wanted to ask about something else here.
Go ahead, Kyle.
Yeah, I was just going to say, you know what's crazy is...
So for those that are listening, we have five analysts in Milk Road Pro all competing with their portfolios.
Martin is number one and Martin is predominantly a crypto portfolio.
And the second and third place are predominantly AI portfolios.
And so we've been sitting here talking about how AI is the black hole and it's dominating.
how the hell are you in the lead versus these guys?
I don't understand it, Martin.
So either Martin has hacked the system or like, I just don't, I just, it doesn't make, I'm even looking and like, they're up like a hundred percent on multiple of their assets and, and you're not in some, you're still beating them.
So risk management, I assume, and just proper positioning, but it's interesting.
Yeah, exactly.
Yeah.
I was going to ask you about this because Martin also bought Uber this week.
And I think that's a pretty controversial choice.
I was actually going to ask Kyle, what's your thoughts on that decision?
Yeah.
Well, I mean, look, I think...
I've talked about this a lot on the AI show.
If you guys are also watching that, I think robotaxis in general are going to be the sort of like next big use case of AI as we bring AI into the physical world and into real devices.
And so I think it's a massive, massive, massive market.
My bet on that is Tesla, but it doesn't mean that Tesla is going to be the only one to do this.
So I'm sure Uber is also a good bet on that because they're kind of partnering with every other car company that's competing with Tesla.
So I think owning both is smart, which I'm just looking at Martin's portfolio right now.
And he owns both Tesla and Uber.
But that's not a crypto conversation.
So we'll revert to something else now.
All right.
We'll go back to crypto.
But yes, sure.
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Martin, I want to get your thoughts on this.
This is something you've been watching for a while.
Galaxy Digital is a...
company that sits kind of at this intersection of crypto, digital assets and AI.
They're up for an additional 1.8 gigawatts of power approval on January, or not January, excuse me, June 1st, I believe.
Are you anticipating that they will get this power approved for them?
And how big of a deal is this for Galaxy's business overall?
Hold on.
This is just speculation, okay?
This is not confirmed fact.
Because if it is, then Galaxy would be, you know, double.
today's price.
And by the way, Galaxy is my biggest position and and best performing.
That's actually why it's your biggest position and your best performing asset in your portfolio.
Maybe I'll show my bags here a little because what happens is that there is air caught which is electricity council in Texas and Galaxy operates their data center in Texas and they have a meeting June 1.
And there is a bunch of sort of cues that are waiting.
applications that are waiting for approval and Galaxy has already got approved 1.6 gigawatts, which is big.
I don't want to talk about all that.
But the point is that someone find out that Galaxy might get additional 1.8 gigawatts energy approved by June 1st.
If that happens, like we are going to see the high double digits growth in that announcement.
Is Galaxy still undervalued versus its AI revenues or like AI potential revenues because crypto has sort of like suppressed the stock and held it down?
Is that still the case in your opinion?
Yes.
I think people still see Galaxy just as crypto.
That's the issue with the company.
But it's changing actually Q2.
Even without these approvals.
if crypto goes up, Galaxy should shoot up and have an incredible moment in their stock.
But now you're saying there's kind of two potential because like Clarity Act happens.
Galaxy is one of the other ones that's going to do really well, along with Coinbase, as you said, because, you know.
Galaxy is the only one of the only other public companies that is like basically onboarding a lot of the institutions into buying and holding and doing things with digital assets, which the Clarity Act is the big thing for that.
So it's a huge thing for their business to get Clarity Act.
So they might have a double whammy catalyst, which is Clarity Act is huge for Galaxy and then approval of another one point, whatever you said, gigawatts.
Like that's a huge moment for both of them if that happens.
Yeah, again, it's just a speculation, but there are just so many things that if you put them together, it seems like it's very likely that it's related to Galaxy.
And if that's true, oh man, yeah, it's going to be a great month for my portfolio.
I'm surprised.
Galaxy hasn't been the first one to do what USDA did.
Because Galaxy sits right in the middle of the infrastructure AI build out and digital assets, stable coins, tokenization.
Why are they not launching a competitive product to USDA?
They are perfect to start doing that, right?
I mean, the only reason they were able to get all this funding to do what they're doing right now with data centers is because of all the digital assets that they hold, right?
So they have a huge balance sheet that they could...
get loans for to then to then do this um it's like they could find a way to get very creative here and and um and compete with usdi or other similar products um so i don't know if they're going to do it but i would imagine they've been they're pushing that way but it'd be pretty cool to see well i think the they rather work as a platform that anyone can come in to galaxy and say hey we want to build this help us build it so instead of just hey we have this this our own product and it's I think for business it's better when you are a platform instead when you are just building that one specific product because then if you are lending to you know uh gpus back uh borrowers you should probably have you know deep understanding of that and it might still work I'm not saying not not but I think like it's it's a different business than they are like good at and yeah there is another company that has actually done quite well in crypto recently even though crypto itself has not um i don't know if the stock has i'm just pulling it up right now but figure i think had their earnings come out recently and oh yeah they're up basically up only since earlier this year um tell me about what happened with them they had good earnings martin is this a are you still bullish on the figure are we gonna show my portfolio today okay i like that and i'm just looking at it yeah i think so I think the story of Figure is pretty simple.
We started the discussion that blockchains enable to create superior products, but we lack the distribution or people are not necessarily coming to using those products.
And Figure's story is a little bit different.
They started with their own marketplace for loans generation.
So if you have a home, you can use it as collateral and borrow against it.
And they simplified the whole process, driving the cost down materially, like 90% down.
And then they said, okay, this is pretty good.
What if we actually provide the same sort of loan marketplace for everyone?
So now banks can come into their marketplace and they can issue loan through their infrastructure using their own blockchain.
And, you know, people are coming in and they are growing like, I think the marketplace volume grew like 200% or something.
And yet the Q1 numbers were just insane.
And we could see, yeah, the revenues in Q1 grew 92% year over year.
And their adjusted EBITDA grew 192% year over year.
So we feel like the markets and crypto is down badly.
last year, but their business is just thriving.
And that's like, you know, last week I was talking about Western Union.
This week we talk about Figure.
I think that there are still companies who are able to leverage blockchains, but most people are just looking at the wrong markets.
So maybe the opportunity is not in tokens.
Maybe it's in crypto stocks, because those are the companies that are able to really leverage what this new infrastructure or the blockchain technology enables i don't even think it's tokens versus crypto stocks it's what you don't want to bet on right now is crypto trading volume right no one wants to trade digital assets right now that that's not the thing right um what you want to bet on is companies that are using blockchains to provide better financial services, whether that be with stable coins or loans or other things.
And that's like, like sky, I would say as a token, you definitely want to be holding, but sky is not a bet on trading volume, right?
It's not a bet on a bunch of DGENs interacting in crypto.
It is literally just a bet on, on, on stable coins and yield for stable coins.
Okay.
Um, figure same thing when you buy figure, yeah, it's a crypto stock, but it's not like you're buying.
a bunch of people trading crypto, which is what crypto has always been about for the last decade, you are buying, you know, a kind of new version of how to generate loans, right?
And that's backed by using the blockchain infrastructure.
So I think it's less about token or equity, and it's just about what is the product that these companies are making or providing.
And the thing is, every L1, every L2, most of DeFi, even like a lot of Coinbase's businesses just relying on...
trading and trading volumes, which is why they haven't done so well.
So I think that's a clear like...
But loans volumes are just skyrocketing on figure, but they are down dramatically on Aave.
And Aave is also just a loan marketplace pretty much.
So...
Yeah, well, but they're down on Aave because of an exploit from RSE.
Well, from Layer Zero.
I'm not familiar.
Never heard of it.
So it's not like people don't want to take out loans.
It's just people don't want to do it in super high risk things that have a bunch of these random bridges and bullshit.
Right.
But in a more trustworthy company like figure, it's going to build something more secure.
People are down.
Right.
It's a better product.
I'm curious about this better product question.
There's been announcements recently that.
Fidelity is going to be launching a tokenized money market fund.
The JP Morgan is launching a tokenized money market fund.
The Bank of Japan is exploring tokenizing Japanese government debt and bringing that on chain.
What do you guys make of that?
Do you think that this is bringing higher quality assets into the DeFi ecosystem, into the digital asset ecosystem?
And will there be a lot of demand there?
Or is this sort of like a prototyping thing that's still trying to find product market fit?
What's your thoughts on this?
I would say...
It's a combination of both.
Like it is probably more prototyping.
Like I think this is the first time Fidelity is doing this.
If I don't, yeah, I'm not sure, but correct me if I'm wrong there.
But like, I know BlackRock has already done this with Biddle, of course.
And I think they're looking to do more.
So it's less of a prototype for them because they've been already doing this for like two, three years.
But I think again, when I go back to something like Sky, for example, Sky, you know, it has the Sky savings rate, which is giving 3.65% yield on stable coins right now.
It is allocated to Biddle.
Right.
And it is always looking.
It's got $12 billion or $11 billion right now of stable coins that it's looking to allocate.
And right now, I think almost four point something billion is just sitting in USDC at Coinbase because they don't really have anywhere else to allocate it to.
So they're looking for more things to come on chain and get tokenized so they can allocate to it to beef up their their their sky savings rate.
And so.
yeah i think if fidelity comes on brings a legit product on chain you're gonna see sky go and allocate to that if fidelity brings a a an actual like not just a private fund, but it actually is opened up on chain and public.
It could then be used on Aave, for example, right?
And you could take a loan out against it.
Like there's, they're going to, I don't think that's going to happen right away, but like, that's the things that we need are these like higher quality products by trusted institutions that people are actually using.
And then the financial services we've built in DeFi can like work around that and can do things for those assets.
So that's, that's the key.
So I think this is, this is.
Again, why we need Clarity Act so bad, because you'll get a lot more of these banks doing this when we have the Clarity Act.
Right now, you've got, you know, BlackRock kind of took a chance.
It was like, hey, we're going to build on Ethereum even without Clarity and regulation.
Fidelity probably sees, okay, Clarity Act's coming.
Like, now's the time to just do this and get ahead of it.
And so I think, again, with good regulation, you're going to see more and more of this.
And this is ultimately what I was saying before of like, these are the things we have to have for crypto to become valuable.
And until we have them, crypto is just a bunch of financial services for nobody.
Right.
And we have great products.
Don't get me wrong.
Like I'm very bullish on what DeFi is, but if we don't have good assets, then it's all for nothing.
And so right now we are an incredible, efficient, transparent.
It's like this amazing thing that we've built this new financial system, but there's nothing there.
So who cares about it?
Right.
And that's my problem of why I don't want to invest in it right now.
Once we actually get assets in here, cool.
Then this is going to be the greatest thing ever.
And like, you know, greater than sliced bread.
But right now it's not greater than sliced bread.
Sliced bread is more useful to me than using DeFi.
What about you, Martin?
Sliced bread or DeFi?
Sometimes just things come out and I love it.
That's going to be a good clip.
That's why we do the show.
Yeah, Martin, what are your thoughts on this, Martin?
Yeah, I think for whatever industry, it's obviously a good thing.
But I'm personally more excited about like more.
experimental yield strategies that are coming on online, which is like USDAI.
That's pretty sick.
So I want to see more.
That's not even experimental.
Like, like that's just financing GPU, something we've done for like for decades.
And that's, we're just bringing that on chain.
Now it is, I understand it's experimental in terms of like, it's innovative.
So it's like creating better rates and it's, it's a, it's a more scalable way to do it.
right that blockchain is enabling but like ultimately that's not a new thing we have financed infrastructure for hundreds of years right um and so all we're doing is bringing that financing something in the real world on chain so that it's better perfect that's what we built this infrastructure for my main concern is that i want to see how usda i will behave when there is some bankruptcy or something we don't know how the whole process is gonna work that's why i say experimental so like i wouldn't put 100% of my cash to USDA because the product is great.
Yes, it is, but I want to see it tested through difficult times.
And I think that's the mindset that everyone should think about that.
Okay, have they already sort of experienced some bear market or some troubles and how they figure it out?
So next time when someone is going to, you know, underwater and they're not going to be paid back their debt.
What's going to happen?
How long does it take?
Like, what if I want to redeem?
You want to redeem money, but it's locked somewhere in GPUs that are not used by a bankrupt company.
What is going to happen?
Like, I will be locked because there is not enough money to withdraw.
So like, you know, I get that.
It's a great story, but let's...
Hey, here's the question for you guys.
And this is completely different than what we've been talking about, but I'm just curious.
Do you see people wanting to buy Bitcoin?
over the next 36 months or wanting to buy Nvidia and Micron and the infrastructure build out?
Why are people buying Bitcoin today?
I mean, no one is.
That's why it's not going up.
But like if they were to, let's say because Clarity Act or whatever the catalyst is for it, do you think that people don't care to speculate on that anymore and they want to just put it into AI or do you think Bitcoin still has an edge here?
I would love for people to stop speculating on Bitcoin and just start allocating to it.
I think that there are a lot of catalysts that are going to...
lead to an appreciation in Bitcoin and in buying of Bitcoin.
Right now, I think at this moment, the spot volume has dipped a lot.
But I think that as we see more products being launched, more digital asset adoption, more capital coming into the digital asset ecosystem, there gets to be a stronger and stronger thesis for holding some of these digital assets like Bitcoin, like Ethereum, other things.
But how does that benefit Bitcoin?
I'm going here.
Hold on.
Stable coins.
Doesn't do anything for Bitcoin.
Trillions of dollars in real world assets are stuck off chain.
Real estate, commodities, private credit, all locked behind outdated systems that weren't built for a global 24-7 economy.
The fix?
Bring those assets on chain.
Problem is, most blockchains weren't designed for that either.
Feros is.
It's a layer one purpose built for RealFi, a real world financial infrastructure that lets assets be tokenized, verified, and traded at institutional scale.
We're talking parallel execution for serious throughput, compliance baked in from day one, and infrastructure that actually connects on-chain and on-chain systems.
They've got a $10 million incubator backing builders who want to make RealFi a reality.
Join the Atlantic Ocean testnet and start building at milkroad.com slash ferosnetwork.
Yeah, so it brings it into the financial ecosystem.
And I'll point to one example that was something I discussed with Rick Edelman on the Macro podcast this week, which is that Morgan Stanley manages $7 trillion over their combined collective of 16,000 RIAs.
And they're now recommending a 2% to 4% allocation to Bitcoin.
And so that is going to bring a lot of capital in as that starts to happen.
Michael Saylor talked about this when they launched their preferred products is that you have to season the market.
People have to launch these products and then go out and sell these products.
And that takes a little bit of time to bring in that capital.
But that is going to happen.
And I'm kind of enjoying the fact that crypto has not been in this euphoric phase where everything is pumping and over.
overvalued.
The water, the tide has gone out.
You can see who's swimming naked and you can also see who is really building a robust, fundamentally sound business of financial technology that's made to last for a really long time.
Bitcoin fits that description.
Ethereum does.
Chainlink.
There's many others in the space.
But while so much attention and sentiment is focused on other things, it gives investors a great opportunity to educate themselves about digital assets and then make an allocation for the long term.
So, yeah, I think that there's a lot of capital that hasn't ever had access to Bitcoin specifically, but to just digital assets overall that's about to get it.
And you're going to see products and digital asset products launched by everybody on Wall Street, every asset manager, every bank and every financial or every technology company as well.
Apple, Meta, Google, all of these players are going to have to come into this space to compete because there's too much capital at stake to not have it.
And this is the reason, by the way, why.
both Coinbase and Circle are like, you know, you guys are saying, why don't they just merge?
Because nobody wants to merge.
Everybody wants to play for the world where they own the stable coins, they own the deposits, they own the chains the stable coins settle on, they own the products, they own the tokenized versions of the products, and they own the chain where the products settle so that you don't ever leave, your capital never leaves their business.
And that's kind of like an infinity gauntlet type of financial technology.
And so every institution of any kind, from Google to JP, P.
Morgan to Coinbase to Ethereum is trying to create that world where they have that infinity gauntlet, but they all know that they're all trying to play for this.
So they're fighting over it.
And I don't think anybody's going to actually get it all together.
But that's sort of the messy middle of figuring this out, right?
We've seen, I think, the prologue of crypto.
We're almost to chapter one, which I think starts after the Clarity Act.
And then we'll see this sort of mad dash land grab for the digital asset world.
My relationship with Bitcoin has changed so many times.
And I guess I started as Bitcoin MaxB as everyone here.
And now I hold again a significant portion of my portfolio on Bitcoin.
And the reason is that I am sort of scary what is going on.
And I feel like I have no idea where the markets are going to be in one or three years.
And for me, Bitcoin is a hedge.
If, like right now, all the momentum is in AI stocks, that's great.
I think crypto still has some ketchup to do.
But Bitcoin, it's a different leak.
It's a different asset.
I'm not going to hold Bitcoin because the multiples are attractive or because their business is growing.
No, it's none of that.
It's just a better version of digital gold.
when the markets turn bearish or the sentiment turns bearish, I think that many people could actually allocate into Bitcoin.
So I think like, I don't want my portfolio to go whenever markets turn bearish Bitcoin gets it harder than anything.
Yeah, it has been the case so far.
But maybe gold is still, you know, the flight of safety.
But I don't know, I'm just, that's my hedge.
That's my protection.
And Let's see if it plays out or not.
By the way, just so everyone knows, I know I'm like being mega bearish on Bitcoin right now.
I hold a ton of Bitcoin.
You can see my portfolio again.
Dollar trial.
Go sign up.
You can see my portfolio.
I just like to question the things that I hold and see how people back them up.
Right.
Which, by the way, answers.
OK.
Didn't love them.
Not super bullish coming out of that conversation.
Basically, we're holding.
Basically, what I got from this was like.
The world is, we're starting to tell everyone you should hold at least 2% to 4% of your portfolio in crypto and thus capital is going to come into Bitcoin, which is to me not the greatest sales pitch.
You could be like, hey, we're converting the entire world's energy into intelligence and it's going to completely change the world.
That's why you should hold Nvidia because you need to compute to convert that energy into intelligence.
Like, okay, there's a story.
I'll buy that.
It's now at 5 trillion, just surpassed silver.
There's a fucking story.
Bitcoin is just like, you know, it's a bit different.
That's only one part of the thesis.
The thing I like about Bitcoin is that all of these, all of these theses that you could put about investments of any kind all lead back to Bitcoin, right?
So like Bitcoin is heads I win, tails you lose.
Bitcoin is if everything goes speculative and risk on, Bitcoin appreciates a lot in that environment.
If the market turns and goes down.
We are so risk on right now, John, and this is the problem.
We are so risk on and Bitcoin is not appreciating.
So that's just not a fact anymore.
That was a fact in 2021.
It is not true today.
We are so risk on right now.
It's crazy how risk on we are.
But people are like, there's no sentimental thing.
No, it is.
It's very bullish and risk on.
But I think that as all of this attention and capital, as you say, goes into artificial intelligence, all of those, that then leads to, we have a world with, we have trillions of agentic agents doing economic activity.
And they're doing that in rails that settle back down to Ethereum and Bitcoin.
So like, we haven't gotten to that in state either yet, right?
Like you're still using.
Bitcoin?
Does it settle the Bitcoin?
So I'm with you on a crypto stablecoin.
Why don't you ask AI about this?
I think you should talk to AI about this because AI itself will tell you that in that world, the tokenized dollar and Bitcoin are dual capital and currency assets that benefit a lot.
Yeah.
So all I'm saying is like super bullish on stable coins tokenization.
Like I obviously am not bearish crypto.
I understand how we're going to completely change the financial system.
However, 0% of anything agentic or stable coins has settled to Bitcoin today.
Zero.
So like there is also a world where like, you know, I fully 100% believe stable coins is going to take over the world.
Bitcoin does not need to appreciate one cent as a result of that because it literally has nothing to do with that.
so that's my only other fear is just like i don't know the two things i'm most bullish on is like okay we're upgrading the financial system with with stablecoin rails and and you know smart contract blockchains etc and we are converting energy into intelligence those are two huge secular trends bitcoin fits zero of those now now i'll give my bullet case my bullish case is in the world of so much intelligence there's so much abundance and so there's no scarcity in that world which is why software is getting cooked and so like Bitcoin brings scarcity.
So like, okay, I understand that.
That's exactly the thesis.
It's just like the stable coin is the currency asset of the agentic community.
The capital asset of the agentic community is Bitcoin, right?
Like we have dollars in gold.
They'll have stable coin dollars.
Or it's compute and energy.
Or it's energy.
That's Bitcoin.
That is Bitcoin.
Was Bitcoin.
Not really.
Because I would say there's, now there's a better way to express your energy, which is through compute and intelligence.
That is Bitcoin.
Martin, what's your take on this?
I was going to say one thing and then I'm going to let you go, Martin.
If you look at most of the Bitcoin miners converted their centers where they do compute, which is taking energy, putting it into Bitcoin.
Most, not most, but many of them converted the last three years from taking the energy and using their compute to...
create intelligence rather than Bitcoin.
So like if you're seeing it from the people that are actually doing what you're talking about, John, you're already seeing a big trend of them moving the other way.
Now, it doesn't mean that's the way this trend goes for forever, but there's one thing to keep in mind.
People, people, the agents are not going to, I don't think the agents are going to transact in kilowatt hours, but we'll see.
No, they're going to transact in dollars.
And Bitcoin.
I think the whole agents bus around agents coming on chain and interacting on chain.
I agree, it's definitely going to happen, but not the way people think that it will pump my bags.
It is going to happen, there is going to be a shit ton of activity from agents, but the economics are not there.
So I would rather do not have high expectations there.
I think interesting question is...
What is going to be native asset for these agents?
Because at some point they are going to be making money.
They are going to manage their own portfolios.
Are they going to be...
okay to to buy stocks and have some you know third party risks or are they gonna hold bitcoin or eat because those are like you know native assets that you can hold permissionlessly that might be interesting story but you're gonna be able to hold any asset permissionlessly once we tokenize them all right like once you have you're not gonna be able to hold anything permissionlessly if the I mean, that's what Canton and ARK and Tempo are for, is that they're all permissioned and privacy-compliant blockchains so that you can conduct this activity in a KYC AML way, but it's not permissionless.
Yeah, yeah.
No, so I mean, let's say we tokenize every stock, every commodity, everything on Ethereum, for example, then you're going to be able to buy anything permissionlessly at some point.
I mean, that's the idea of crypto, right?
That's the big picture.
Right.
We'll see if that plays out.
But you still have to trust someone, right?
If I hold Bitcoin...
Agreed.
You don't need to trust anyone.
Agreed.
So that is the question for agents.
Yeah.
So it is the one thing that I always go back to of why I remain bullish on Bitcoin and ETH is there are two assets that you do not ever have to trust.
And so when it comes to collateral, I mean, we've heard this before, you know, we call ETH money or Bitcoin money or pristine collateral.
It's like that's the one thing that is the clearest bull case for these two assets is they are pristine collateral.
Right.
And I would probably even.
Yeah, they're pursuing cloud.
So the thing is, is like they're not really uses that today.
So it's just like that's the use case we need to happen for them for the big bull case of Bitcoin and ETH to like exist.
And.
I just, yeah, I don't know if that's because it used to be ETH is what we're going to use on chain and it's the money for on chain.
That's not it.
We realize stable coins is that, right?
It used to be Bitcoin is going to be money.
We realized, OK, we're not using Bitcoin as money.
It then went to ETH.
Then now it's stable coins.
I think we know it's not going to be those.
But we have to it has to become pristine collateral.
And I mean, the problem is, is like two weeks ago, Aave almost completely blew up one of our top DeFi protocols because it was using ETH as collateral.
Now, I was using a derivative of ethos collateral, but you know what I mean?
That's not why it blew up.
Yeah, so I think that we're coming towards time here, so we'll end the plan.
I think that what I think our audience should take away from this is that even people who are very passionate and enthusiastic about this industry can have...
relatively like sound theses for different places, different assets where value is going to accrue from crypto's growth and adoption, from AI's growth and adoption.
So I think the thing to watch for now is that, oh, and also that can change on time horizons too, like short-term versus long-term versus medium-term, where that value accrues is going to change a lot.
And so that's why we have the Milk Road Pro research meetings, why we have the Milk Road Pro portfolios, because every analyst in our team has a different way of thinking about this and a different way of allocating around their thesis.
and the way that they're approaching this.
And I think the big value of this is like, obviously, Kyle and I think very differently about a lot of these things, but it's not a question of right or wrong.
It's like what's right for us and what we think makes sense on our investment time horizon.
I think that's important for the audience to remember too.
I think we're at time here.
The Clarity Act, I think in about 30 minutes is going to be voted on in the Senate Banking Committee.
So I, yeah, no, I know it's going to be interesting to see what happens, but it's got to go to the agriculture committee.
I mean, this is not going to all go over the finish line today, but I'm going to go watch that and see what happens there.
But I think, yeah, we'll land the plane there.
Thank you all so much for joining us, everyone.
We hope you all learned something today.
Until next time, stay safe, stay educated, stay bullish.
There's always a bull run somewhere and we'll see you guys in the next episode of the Milk Road Show.
Thanks for joining everybody.
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