# Institutional Crypto Adoption and AI Privacy Market Dynamics

**Podcast:** The Milk Road Show
**Published:** 2026-05-21

## Transcript

But I think for sustainable growth long term, you need the big allocators because these are the people that actually run finance.
You need them to use your products.
I don't think that they're using Solana today.
And I don't know that they're using Hyperliquid yet either.
But if that happens.
then absolutely I think Hyperliquid will surpass a lot of privacy coins, AI projects and perpetuals with Bitcoin holding its ground and the Clarity Act finally moving through Congress.
There is a lot happening in crypto these days.
You just have to know where to look.
Hello and welcome to the Milk Road show.
The podcast is here to remind you that Hyperliquid and energy drink are two very different things.
I'm your host, John Gill, and today is Thursday, May 21st.
And today we are doing another exciting edition of the Milk Road Pro Analyst Crypto Research Meeting.
Once a week, we huddle up to talk about what's up in crypto.
I always learn a lot from these conversations.
I'm sure you all will too.
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Share this episode with somebody who's going to enjoy it.
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Without further ado, welcome to the Milk Road Pro Research Meeting.
Kyle Reedhead, Martin, how are you gentlemen this morning?
What is top of mind for you guys today?
What's going on, guys?
I mean, NVIDIA printed 80-something billion for the last quarter of revenue.
How can we talk about anything else other than that?
Yeah, it's holding up the whole global economy by itself.
Martin, how are you feeling today?
Yeah, I'm feeling pretty good.
I have some hype bags, so I'm pretty happy to see my bags pumping.
Yeah, well, maybe let's start with Hyperliquid.
There have been some ETF launches or ETP launches, I guess, whichever one you want to call them.
for Spot Hyperliquid.
The demand has been in stage flooding.
It's comparable to the demand we saw for the Spot Bitcoin ETFs when those came out.
As a result, hype is now breaking above $56.
What do you guys think?
Is this a local top here on these ETF launches for Hyperliquid or is it just going to go straight to $100?
Martin, let's start with you.
You've been really bullish on Perpetuals.
What do you think happens here?
It's pretty funny because we keep talking about Hyperliquid all the time and Kyle is always like, I want to buy this token.
I just don't know when.
it reps every time yeah we have been bullish on stable coins and perpetuals like for months or maybe years no months and uh now the spotlight is on perps so when you uh check hyperliquid or lighter they are both just through the roof and but i have to say i want to check the product if there are new users coming in or if there is more volume generated on the platforms and it's not so i'm not 100 sure what's driving all that sudden spike in prices i assume it's just you know a normal rotation from one sector to the other and so i'm not sure that this uptrend is is gonna last I still have some hype back, so don't get me wrong.
So I'll be happy when hype keeps going up.
I just think that this is not sustainable.
And yes, there might be some digital asset treasuries now buying hype, whatever.
But still, at the end of the day, what are the users buying?
And is that business still worth the price that it's currently priced in or not?
And eventually, I was long-term holder of hype and I sold some of that because I think the recent price performance was just way too much and also the current valuation it's already 15 billion market cap and you know if you compare it to like western union clarna like other things that have you know hundreds of millions of users as well and they are trading like two to five billions so you start to see like okay um what is going on here and are those multiples justifiable And so, you know, I'm rather cautious taking some chips from the table.
And yeah, I would love to see if it keeps going up.
Kyle, are you going to find an entry on this?
I mean, if you compare it to Ethereum, it's still very much undervalued.
Ethereum is worth 255 billion.
Hyperliquid, only 15 billion.
uh looks like it's got a long ways to go what i actually think is happening is one so i think some of this move in hyper liquid is justified the the deal with coinbase um basically diversifies their revenues so it gives them a second revenue stream which is nice right like a lot of the revenues or most of the revenues just came from um from fees of the blockchain.
And then now they have sort of like stable coin revenues as well.
So they're starting to diversify similar to like what Coinbase has done over the past years.
So I think the market like that, right?
And then I think they just launched a few ETFs, which have performed quite well.
They've had some good inflows, probably more of a short term thing than anything, just as people wanted to get some exposure.
So I think that's probably why the price has gone up.
I think If crypto moves up from here, maybe we get, you know, John, you mentioned at the beginning of the show, you know, Clarity Act is kind of coming through.
Maybe something's going to happen there.
There is some hints that maybe there being this like strategic Bitcoin reserve announcement coming.
I think like in early June.
I don't know if that's just it's full speculation, but maybe that comes like if crypto happens to catch a bid, then I think Hyperlink would probably continues.
But if it doesn't, which it hasn't in months, I really think what's going on outside of a little bit of repricing and hype because of the things I just mentioned, I honestly think it's people just, you know, rotating from their ETH bags or their Solana bags, maybe even their Bitcoin bags into hype, right?
Or into Zcash or like these other things that are catching some interest because there's not a lot of net new.
capital coming into the crypto ecosystem, to be honest, like there just isn't.
And so what this is, is just people rotating from within the cryptic system, which honestly has been what's happened in crypto for the last like, I don't know, three, whatever years, like it's been a while of this.
There's just not much interest outside of Bitcoin, though I would even say like Bitcoin hasn't had a whole lot of interest recently, even the ETFs have had outflows the last two weeks.
So outside of sailors, like $2 billion bid last week.
I don't really know who else is buying Bitcoin at the moment.
So there's a lot of capital coming into this ecosystem.
It's all going into AI.
And so, yeah, it's hard for anything to move.
But there's a couple things that are getting some sort of interest and some sort of rotation.
But as Martin said, and the thing that I don't love about it right now is there are no metrics really going up for Hyperliquid or Zcash, to be honest, which is the other one doing quite well.
The only one that actually has growth.
So their price.
appreciation kind of makes sense as Venice, which I'm sure we'll talk about in this because I want to pick your guys' brains on that.
But like they at least have growth in their subscriptions and their revenues and their users.
So like, OK, it kind of makes sense.
But Hyperliquid doesn't.
So I don't know.
We'll see.
It needs to cross the chasm of getting more users outside of crypto and really start to generate more activity and volumes.
And right now it's kind of been stagnant for a while.
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Kyle, I want to ask you your thoughts on this.
A lot of people are speculating that these big movers you've just highlighted here, Zcash, Hype, which are now number 10 and 11 on CoinMarketCap, BuyMarketCap, are, you know, let's say at risk of or getting closer to flipping Solana.
And there's a lot of speculation on crypto Twitter about this.
I think as you point out, there's a lot of rotation of just capital that's already in crypto.
But what do you think the likelihood of that is of something like hyperliquid at $15 billion eventually going up and flipping Solana, which is now at around $50 billion market cap?
think of that possibility there?
Oh, that's a good question.
I haven't actually thought about that recently.
Look, I think Solana went, so I sold my Solana back in, I think it was December.
Our community hated me for it.
And now I keep seeing a bunch of messages going, dang, I wish I listened to Kyle back then because Solana is what, 85 bucks.
So it hasn't moved in a very long time.
So can Hyperliquid pass on?
I think What needs to happen is anything in crypto, decentralized finance, the whole point of it is to build new financial rails.
And who uses financial rails more than anyone?
It's institutions.
It's the companies that have the large capital, right?
So I think Solana overindexed on a bunch of small users that have like $100 in their wallet and want to trade that real fast.
That's not what finance is really built for.
So if you're going to build financial services, financial products, financial technologies, you want to do that for.
the biggest capital allocators in the world.
And Solana kind of, I think, made the mistake on that.
Now, it worked during the time when there was this craziness around meme coins and we had a bunch of retail here.
And I'm sure that will come back at some point.
But I think for sustainable growth long term, you need the big allocators because these are the people that actually run finance.
You need them to use your products.
I don't think that they're using Solana today.
And I don't know that they're using Hyperliquid yet either.
But if that happens.
then absolutely I think Hyperliquid will surpass Solana.
I don't know that they will yet, but I do think Hyperliquid at least has, is gaining some interest and some trust there and some awareness in kind of Wall Street.
And I think they're starting to build products that Wall Street would actually want to use.
Perps on oil, perps on silver, perps on, you know, many different real world assets.
I think that they are getting close to kind of like crossing that chasm, which not many in crypto have.
Like Ethereum obviously has, Bitcoin has, but in a different way, you know.
And then I would say like Sky has, right?
That's why they're the third or the largest yield generating stablecoin.
They sort of like built the trust and managed risk well enough that like big capital allocators will put.
10 million, 100 million, even more than that into their stablecoin.
There's just not a lot of protocols in crypto that has managed to kind of build that trust.
Hyperlink would still kind of new, which is why I don't want to say for sure they will.
But if they start to kind of make that move and cross that chasm, then yeah, I think they could for sure.
Gotcha.
So if they get the big capital, the big players, then they got a chance at flipping Solana.
Solana is also playing for that.
So it's not a foregone conclusion.
They are.
Martin, I want to.
They are.
Yeah.
Martin, I want to ask you about something here.
Hyperliquid, obviously, big perp stacks performing really well.
Lighter is another perp decks that you've been very bullish on.
And I think you said that the day you sold, it finally broke out.
It's up over 50% on the week.
How are you reacting to this?
Are you going to reenter your position on Lighter?
Or just how are you feeling?
How's the FOMO feeling right now for you?
Did I do something wrong?
And this could be expected that all the perp tools are out of a sudden just going to...
Pump?
Probably not.
Like the pump started like a couple of days after the announcement of Coinbase and Circle.
So I don't know, like, yes, I lost some upside there, but I'm still fine.
Like for me, it's more about like, I was able to find a good product and like that the fact that I sold early is just a different mistake than when I would, you know, analyze it and like.
think that this is not a good but it shows that people might also pay attention to this so that's one thing and but i also wanted to comment that solana versus hyperliquid i think they are still both trying to target different audience because we We shouldn't forget that Hyperliquid is still managed by like 25 validators at this point.
And they are all collocated in one place.
So if I'm Visa or Galaxy, I'm not going to build on top of Hyperliquid.
But like Visa and Galaxy, they are building on top of Solana.
And like we can go back all the way to Ethereum because, you know, even Ethereum is just it's the most decentralized network in the world.
And what's the value of that?
I don't really know.
So like, you know, for me as a retail user, when I want to trade somewhere, I can go to Solana, I can go to Hyperliquid, I can go to LIDR.
And most people don't really care about, you know, the security of the chain, but I do.
So if I trade these days, like Solana is secured enough for me, but I still prefer LIDR because I can just use my...
native ethereum or usdc use it as collateral and trade on lighter i don't need to bridge anywhere so that's why i like that's why i liked lighter uh in the first place and i still do i was just not sure that who is gonna buy that because there are some token unlocks coming up uh later this year and i wasn't still sure either that there are still some money coming in uh but It seems like they are.
I'm not sure those are new money.
I think it's, as Kyle said, just rotating from one narrative to the other.
So, yeah, I think it's just a trade following Hyperliquid.
Hyperliquid has a bit of progress with their ETFs and with their ETP products and they're in that partnership with Coinbase.
And so Lighter being the second biggest perp, it's kind of got to pump alongside Hyperliquid.
That's just how crypto works.
All right.
I want to ask some questions about Venice and about Zcash, but one more question about Perfs before we move on.
Our Milk Road mailman, Chevy, wrote a newsletter for the Milk Road newsletter about these huge IPOs that are coming this year, SpaceX, OpenAI, possibly Anthropic.
A lot of people are looking forward to trading these once these IPOs happen.
However, he pointed out that the Perpetuals contracts for these are already live on Hyperliquid.
What are your guys' thoughts on this?
Do you think that people should wait for the IPOs and trade the spot markets?
Do you think that there's a...
place for these perpetuals on these pre-IPO stocks?
How do you think about this for yourselves?
And just, yeah, what do you think about this?
Kyle, let's start with you on this one.
So I don't, for the reason that two weeks ago or a week ago, Anthropik came out and said that all these sort of secondary markets for Anthropik do not like count as actual stock.
And so I think when that was released, the perpetuals and the...
uh secondary markets of these went down like 20 30 percent uh even though the valuation of anthropic didn't actually change it probably went up because their arr goes up every single week um and so it's just you're kind of betting on absolutely nothing um and that's just not the risk that i want to take with my money um so it kind of doesn't make sense so i would wait personally Still don't know that I would buy even when an IPOs.
We'll have to see what price they come live at.
But yeah, it's too much risk for me.
There's no regulation around it.
If they really end up being worth nothing, who's going to be on the hook for that?
It's probably going to be the bag holders.
It's not going to be the companies that are managing it.
It's going to be those just holding the assets.
Those assets are just going to go to zero.
So I don't know.
It doesn't seem worth the risk.
So yeah, I wouldn't do it.
Okay.
Martin, what about you?
For me, it's more like a signal.
I can look at prediction markets or perps and like, okay, what is market telling me?
And so if they think that SpaceX is about to IPO around 2 trillion, then it's some information I can work with.
Because I was looking at some stock who has 2% share in SpaceX and the price is based on...
some valuation of the spacex but it was assuming just 1.5 trillion valuation but if it's really like higher then i might be able to buy this stock and just you know get that upside so it's like giving me those signals that i could not necessarily go and buy that but i could apply that you know info signal somewhere else so yeah Gotcha.
Okay.
So there's information there, but there's an elevated amount of risk.
So maybe pay attention, but be careful with your capital.
Guys, I want to pivot to this Venice token, VVV.
I think it was just over three months ago, this thing was trading below $4.
I think it was in the $2, $3 range.
And now it's over $17.
It's getting close to $18.
Just got listed on Robinhood crypto as well.
So there's a lot of capital chasing this, a lot of attention on this, and a lot of growth too.
I think, Martin, you said that they've just crossed over 3 million users for Venice.
Talk to me about this AI project.
Is this another one of these like flash in the pan narrative catching pumps, you know, this intersection of AI and crypto?
Or do you think there are real legs here?
Martin, I think you've been watching this closely.
Let's start with you.
What do you think on Venice?
Can we get back as to what Venice is first, just for the listeners, for anyone who hasn't used it or knows what it is?
Martin, do you know, have you used it before?
I haven't.
But like, in a nutshell, I think it gives you access to all the AI frontier models in a private way.
So like, you know, your data are not exposed to anyone.
So like probably when you are using OpenAI or Cloud these days, like they can see your message history and like everything you do.
And Venice is here to build that privacy layer on top of that.
So whenever you interact with any, you can choose whatever model you want.
So it's not just open AI.
It's like many others, even like all these open source models from China and all that kind of models are available there.
And it just gives you that privacy level that many people appreciate as it appears on their recent growth.
Do you lose any features from that though?
So for example, one of the biggest...
features that I love about these LLM models is the fact that it has memory of all the things that I've talked about.
Does it still have that?
Or because of the privacy layer, does it get rid of that memory?
Because ultimately for it to have my memory, it needs to store my data somewhere.
I don't know.
I'm just asking this.
I don't really know, to be honest.
Yeah, it's a good question.
Yeah, I think I'd have to look into the details of how this exactly works.
But I think that the point of it is to not track your data.
So they're probably not storing that in the same way that you would have been just using them directly.
But it's still available for you as the user, maybe.
We should look into this.
But anyway, because that's just a key feature, right?
Like I use Claude, for example, and I connect it into everything.
So it knows my calendar.
It's transcribing this podcast right now.
a reading of every single conversation that I have.
It's connected into my Slack.
And so whenever I go to Cloud, I can just like ask it, hey, what am I missing?
What was I supposed to do last week?
Like whatever.
And it just knows.
And it's so helpful.
So I don't know if it loses that feature.
I would imagine it doesn't.
But if it did, that would be a big, big problem, I would think.
Yeah, agreed.
But the recent growth is pretty, pretty big.
I think they are adding like single millions, single digits millions.
revenue per week.
So I think right now they are about 150 million annualized revenue, which is pretty good.
134 million.
But the problem is that...
2.6 million last week.
The problem is that most people still see this company through the crypto lens.
And so they're looking at revenue multiples and say like, hey, this is pretty cheap.
But you need to be aware of what type of revenue that is and what are the costs.
So Hyperliquid makes $600 million in revenue annualized.
And you can say that they have almost zero operational costs because they are just a small team.
And that's it.
But here, what's happening on the back end is that they are just rerouting your questions.
to those big, to the AI models and Venice needs to pay for that.
So like, I'm not sure what's their, you know, margins there, but I would assume that it's much, much lower.
And so for me, it's a, I'm not as bullish as everyone else right now, because I think it's just a privacy AI wrapper that like, you know, it's one update from cloud or open AI and all that.
Well, the proposition of Venice can be gone.
So it's interesting.
I'll probably pay attention to it and I will learn more, but like, I'm not that full piled like everyone else.
So right now it's revenues.
Sorry, just before you go on, Kyle, I just want to read this into the record.
Venice achieves long-term conversation memory without storing data on its central servers by keeping all chat history and context strictly on the user's local device.
So that's what it does.
It doesn't send it to the large models, keeps it on your local.
So yeah, continue there.
I just wanted to read that for the listeners.
Combining the numbers we just talked about, the 134 million per year, this is obviously annualized.
This is not what they're actually making right now.
That's on subscription revenue.
So from the users, they also have API revenue.
So the estimate right now is they're about 200 million in annualized revenue when you combine the two.
And the market cap is 800 million.
Fully diluted valuation is 1.4 billion.
So like that's a for an AI.
products.
That's an insane multiple.
Now, again, kind of like what you said, Martin, how sustainable is this product?
Can it be like, it's not hard for Claude or whoever to just like add in a privacy feature?
I would imagine it's not hard.
I guess I don't know for sure from a technical standpoint.
So the question is like how big of a moat?
Also, my always thing about crypto is like, how many people actually care about this?
you know, of the users of ChatGPT and of Cloud and all that, like how many of them really, really care about this?
I would bet it's a lot smaller of a TAM than just like an AI user in general, right?
So that's just my take on that.
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So let me ask you a question about this because Martin said people are looking at this through a crypto lens.
What do you think is driving this speculation here?
Is it the privacy piece?
Is it the AI piece?
Is it the AI and crypto piece?
What is so valuable or special about Venice here that's causing this pump and all this attention?
I mean, it's just the privacy standpoint, right?
It's the fact that none of the other frontier models have this.
And so if you care about privacy, it is a great solution.
The other thing is it's an aggregator of all the different models, right?
And so if I want to...
I don't know, do some research.
You know, if you're tied into Claude, you know, maybe Claude isn't as good as doing research as, I don't know, Gemini or Grok or whatever.
Like they all kind of have certain things that they might be better at.
And so Venice does a good job of kind of aggregating and choosing different models depending on what it needs, which I think is a good product.
But I think perplexity does that as well.
So it's not like it's the only one doing that.
So it's really just the privacy layer is the big unlock here.
Now.
I do think it is mainly crypto people that have heard of Venice and that use it, which is once again, the problem, like it's great.
There's like this like community of people that care about privacy that will use this.
And so it seems like that's working.
Can they cross the chasm into the mainstream world?
This is always the thing about crypto is like if you don't move out of crypto, this is all for nothing.
Right.
And this is the problem is most things in crypto don't have the ability, whether it's because of marketing or positioning or just like, I don't know, their product isn't actually good enough to move to the rest of the world.
right and i'm not talking wall street here this just needs to go into like the everyday people that use chat gpt so this is more like silicon valley can you get out to those people if you can okay we're on to something here and this product can go much much much bigger right because if you look at how much you know how many users claude and um chat gpt has like these numbers are massive so can they eat some of that share if they can this is huge right right now i don't think they are i don't think if you ask anyone outside of crypto they will know what venice is And so that's the thing is, can they can they move past the crypto verse?
Because the crypto world is so small.
And I don't think crypto people fully understand that.
But like crypto Twitter means nothing to the rest of the world.
And it's such a small user base that it doesn't give value to companies.
Do you know what I mean?
Like you can't compare a Venice to a Claude or to a Chachi BT because it has this little niche group of people and that's it.
Right.
And so it has to be able to move past it.
Crypto is a bad tag to have.
So like, for example, we run PR for a lot of companies in crypto.
It's really, really hard to get them on mainstream media.
We have to actually, when we pitch media, we can't use the words crypto.
We can't.
As soon as we do that, it's automatic, no open, no response.
No one wants it.
The only time that mainstream media wants to cover anything to do with crypto is an exploit.
And so as soon as an exploit happens with Aave, our inboxes are filled.
Hey, can we get whoever on to talk?
I'm like, no, we don't want to talk about that stuff.
But hey, do you want to talk about this cool product or this growth?
And they're like, no.
So it's, crypto people don't realize this.
It's fucking hard to build a business if you're in crypto and expand past it.
And we see it because we work with so many of these big crypto companies.
So that's, it's a, Venice needs to tell a message that is not about crypto.
They happen to have a token, which is cool and all.
But like that shouldn't be around their message and it should not be a crypto related product, which I don't think they're doing.
It needs to be about privacy and AI, which is which I think is what they're leaning into.
Martin, what's your take on all this?
Again, I just want to remind that those are just revenue.
So it's the same case like for OpenAI and Antropic.
We only see their revenues, but we don't know how much money they are burning.
And I would assume that at this point, both of those companies are still not profitable.
even though we all use them, right?
Because the costs are just huge.
Supposedly Anthropic put up its first property in the quarter.
Yeah, I heard that.
I don't know if that's actually true, but it sounds like they did around, I think it's like 600 million with I think 10 billion in revenue for the quarter.
So again, this is not audited financials.
We don't actually know, but it sounds like maybe they are.
Yeah, but I saw that their deal with SpaceX or XAI.
And the numbers are just ridiculous.
And it's because they were sleeping a lot.
And like OpenAI were closing all these deals to get, you know, the compute.
But Antropic didn't.
And now it's like, oh, shit, we need to do something here as well.
Because so many times their servers are off and we are like, oh, man, what should I do?
That's one of the things about Venice is they're not.
they're not an actual LL model themselves.
So they don't need to spend all the the the compute, right?
So now obviously, their costs are tokens, I would imagine, because they're the ones using Claude.
They are paying Claude or OpenAI.
Yeah, exactly.
Now they would have some sort of deal, some enterprise deals, like they wouldn't be paying the same rates that we're paying for tokens.
But tokens are not cheap these days either.
And they're kind of going up in price at the moment.
So I don't know if they're necessarily profitable, but they definitely don't have the overhead like an Anthropic or an OpenAI does, which is a big benefit, I would say.
This is actually kind of the strategy that Apple's supposed to do, but they've just not done it.
I remember I was in an Apple store half a year ago, maybe, maybe a year ago.
And I was like talking to the guy because I was getting my MacBook fix or something.
And I was like, why do you guys not?
like have any LL models.
Like, what are you guys doing?
And he's like, well, we're actually going to be the aggregator of them all.
So when you use your phone or you talk to Siri, it's going to it's going to aggregate all the different models.
That's like our plan.
And I was like, OK, that's a sick idea.
Let's see how that goes.
We just never done it.
But that's exactly what Venice is doing.
So again, I think the Venice product is sweet.
And I do think they're probably a lot more profitable than than an open AI.
Do you think there's a moat around this?
Because it seems like, you know, just like you said, other people could aggregate this.
Maybe there's a way to add a privacy feature pretty easily into other things.
Is there a defensible moat here that either of you see or do you think it's too early to say?
Yeah, it's a good question.
I don't think that there's a true moat yet.
I guess I don't fully, what I need to do is look into like, what is this privacy layer?
How hard is this to do?
But either way, no tech is really, a moat at this point.
Now, can they, what they do have is first mover advantage.
They don't have a lot of competition in what they're doing.
Like, I don't think there's any other privacy first LLMs that are aggregators.
There's barely even any other aggregators, right?
So like they do have a good product.
So can they drive a lot of users to it?
If they can, these things can be somewhat sticky, especially as they've recently launched agents.
So one thing I think that is.
It was very easy to move from one LM model to the next when all you did was chat with it, right?
Because you can just go to your, you know, Grok and say, hey, can you just summarize everything we've ever talked about or give me your memory?
It'll put it in an MD file for you.
And then you can just go put it in Claude.
I literally just did this like two days ago.
So like zero moat on that.
However, where the moat starts to come, not even moat, but stickiness is...
connectors and agents.
So connectors are where, and I talked about this earlier, where you connect your cloud into like your Google calendar and into your Gmail and then into your like your transcriptions.
It's like all those, those just take a while to set up.
So it's a little bit more annoying to move from one platform to the next when you've got like 20 things or 50 things connected into all the applications you use, right?
It's just like, it's really annoying, especially when you connect APIs and stuff.
So like that's a little bit of stickiness.
And then agents is a really big thing.
Once you start to get agents doing things for you, the last thing you want to do is like move to another platform and reset up all those agents.
Because there's, it takes a while to get those things set up and working properly and like understanding what they need to do.
And Venice just recently launched that.
They're all launching this, so don't get me wrong.
But again, if you can get these users in.
get them connecting, get them with their agents.
It's going to be harder for them to move from one LLM to the next.
So what Venice needs to do is just go ham on marketing and get some users right now.
And that's really what the first mover advantage on this is kind of their moat, but that doesn't last very long.
So that's the big thing I think they need to do.
Yeah, I agree.
I think right now they're at the sweet spot where they combine like privacy, AI and crypto.
And so like, The story is pretty compelling, but when you start to dig deeper and ask the questions whether it's sustainable, do they have some defensible business or not, that's when it gets interesting and I think they are not there yet.
Well, we had the founder of Venice and Thor chain, Eric Voorhees on the Milk Road crypto podcast not too long ago.
So if anybody missed that episode, I recommend you go check it out.
But I want to ask about privacy because, you know, another thing that's been pumping a lot that we've talked about once or twice, but I want to ask more questions on is this Zcash narrative, which has been around for a long time, both as a product and as a narrative, but is catching a bit here in a very serious way.
And there's been a lot of VC capital going in this direction, too, which I think I want to call out.
There's been, you know, Z16Z and other VC firms have been raising capital, deploying it towards projects that are trying to offer some kind of privacy solution.
Zcash specifically, though, is leading the pack on this.
It's up over 100% in a month.
It's closing in on $700, which is, I believe, a local all-time high, if not an all-time high.
But what is the take on the privacy narrative here?
How much higher is Zcash going to go?
Martin, let's start with you.
What do you think about privacy and the value this creates and what's driving this Zcash pump here?
I probably have a very differentiated take than everyone else because I think that in the previous cycle, everything was about decentralization and we wanted everything decentralized.
And now it seems like privacy is the winner here and we need everything private.
But I'm not so sure that that's the case, that like everyone needs a privacy for...
I don't know if you use agents or if you pay for something like even today, if you pay for something, is it private or is it not?
Like, can your banker see what you, what do you buy?
So I think it's just very overhyped thing.
And it's, it's, it's a narrative trade, I think.
And for Zcash, like right before this call, I was sharing with, on our discord, the chart of Zcash that the activity was.
just through the roof like a couple of months ago and it's just down only from then.
So I don't know what's driving the price of that right now, but I'm definitely a bunch of KOLs on social media.
Yeah, look, I think privacy for money is important, but Zcash is not a blockchain that people are using for their money.
And so it's a privacy layer on a blockchain that no one uses.
Who cares?
Right.
So like what you need is a platform that, again, financial services are run by institutions with large capital that like that's where the money is in financial services.
OK, these are the black rocks of the world, the stripes of the world, you know, so on and so forth.
And so like where they.
put their capital and where the capital is being moved there, that's the stuff that matters in the financial world.
And, you know, they're building on Ethereum and Solana and things like that.
And so like, you know, they're starting to move their capital and their businesses and stuff on chain, but they're doing that on Ethereum or on Solana.
They're not doing that on Zcash.
And so like Ethereum needs a privacy layer, right?
And, you know, anyone, anywhere where there's actual money and users, like that needs a privacy layer.
Zcash doesn't have...
anything being built on it.
So like you're making privacy for nothing.
It already is private because there's no one over there.
I can go do a transaction on Zcash and whether it's privacy or not, no one's going to know because nobody gives a shit about Zcash.
So I just like, I don't see.
And then it's not like it's a great tech to like build programmable finance on like a Solana is or like what Ethereum is building, right?
So it doesn't have the capabilities to build the new financial system on top of it.
So what's the point of it, right?
So it just, to me, it doesn't make sense as a real product for the world, especially for the future.
I think it's full narrative, full hype.
I don't think privacy is a hype.
Like, yes, privacy definitely makes sense.
We're seeing it with Venice, right?
It makes sense when people use things a lot, whether it's finance or it's data, you need privacy, but you need privacy on products that actually matter.
And Zcash doesn't have a product that matters to the world.
So I think it's privacy for nothing right now.
I think every chain will have, you know, private, like that option.
So, yeah, yeah, yeah.
So I just think it's a hype cycle on privacy and I don't think it's going to go well.
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.
So I think I see something a little bit different than both of you here, but I want to get your thoughts on this.
What I'm seeing happen is sort of an existential crisis happening in the digital asset investor community and in the user base.
So Kyle, I think you're right on the money here.
What's driving all of this is the need to bring institutions into digital assets.
And in order to do that, a lot of projects are coming up with rational privacy is what they kind of call it, but privacy solutions, which allows institutions to conduct business on these public blockchain ecosystems while still maintaining a degree of anonymity and privacy.
In order to do that, you kind of have to compromise some of these.
you know, cypherpunk values in certain ways.
And so like, I think Ethereum is a great example of this right now.
We've just seen some major departures from the lead developers of the Ethereum protocol devs.
There's a shakeup going in the leadership at the Ethereum Foundation.
Vitalik this week tweeted out that Ethereum needs to come up with a privacy solution directly on the L1 as opposed to using like Aztec Network, which is an L2, specifically because they want to bring capital from institutions into the Ethereum L1 to drive value to the ecosystem.
system to the asset.
But this is obviously controversial.
And some of the compromises that have to go into this to get this institutional capital, I think, is causing this sort of existential crisis.
And I think that what you're seeing in Zcash is people saying like, hey, Bitcoin is being taken over by Wall Street.
I want to go into something that's a cypherpunk asset and they're seeking Zcash.
And you're seeing this in different ways.
So like the other things that investors have invested in recently, VCs, Canton Network, Tempo.
ARK, right, from Circle, their L1.
All of these things have privacy solutions, but they're also a little bit compromised on the decentralization.
So to me, I think what we're seeing is this sort of like existential crisis and some capital going and voting in one direction, some capital going, voting in another.
And it's not yet clear to me what's going to happen.
But like Kyle said, the people with the biggest wallets usually get their way.
And so that's kind of what's happening.
But I don't know how crypto comes through this and what it looks like on the other side.
What do you think of that?
So like, I think you're right.
And there, so people are experimenting.
My problem is, is Zcash is an $11 billion asset.
You don't.
hold $11 billion experiments, right?
Like when a company is worth $11 billion, it's a very supposed to be a very legit company with real revenues, like providing a real service.
That's not Zcash, right?
That's not most, most things in crypto are just experiments.
And we let them get valued at such ridiculous numbers that anyone with any ability to think logically about markets will look at that and go.
holy shit i'm never going to put my money in an 11 billion experiment that is absolute stupidity but that's what crypto does so i don't know if everyone wants to be stupid and invest in stupid experiments then go for it i'm just not touching that well it's every time if you've been this long enough you will see 99 of them don't work out um and so i just you know to me i don't want to do that Sure.
Yeah, I think there's a clear need, but it doesn't necessarily mean that these valuations are justified.
So it makes sense.
Martin, I want to ask both of you quickly here what your...
looking at doing in your portfolios recently.
But Martin, before we go on to portfolio moves and changes, anything you want to say to kind of wrap up this privacy conversation here?
We said enough.
Okay, well then let's ask that question then.
Martin, you sold some lighter, you got some cash on hand.
What are you looking at?
I think you also took some profits on Hyperliquid.
What are you looking at doing in your portfolio this week?
Anything that's got your attention in your eye right now?
I think I will buy more figure today probably.
i i was listening the other day podcast with the founder of figure and i just love the way he thinks about like the company and what they should be doing how they should leverage blockchains what's their mode um so i think i'm gonna add more figure to my portfolio because i think it the upside potential is just huge and i think it's still not priced as it should be because Most of the things that are growing, like for startups and fintechs, you keep seeing a rule 40, which means your revenue growth and your profitability, your margins.
And if it's above 40, then you are like solid.
Okay.
So you are like check, you are fine.
You are in growth stage.
That's okay.
That's what the market wants.
But figure is growing like that rule of 40.
It's rule 140.
so figure is just like growing like nuts and like destroying everyone else right now despite you know the whole crypto sort of right now is the crypto sentiment is you know somewhere um in the bear market sort of but figure keeps growing like nuts and yeah i'm just gonna add more figure Gotcha.
Okay.
So there's still a lot of value happening.
You just got to know where to look.
Figure is a place to look.
Thanks for that, Martin.
I'll keep watching your portfolio moves.
Kyle, anything you're looking at, are you going to get a position in Hyperliquid here or do you think you've missed that train?
I definitely am not going to now at these prices, unfortunately.
But I mean, I was saying that back earlier too.
So I'm just out on the purchase rate, unfortunately.
I'm finding it increasingly and consistently hard to...
put capital in the crypto ecosystem and digital assets.
I think it's just so difficult.
It's like fighting gravity.
And it's like, why do that when you have so much momentum in the AI infrastructure build out?
And I mean, you look at the estimates that just came out from Goldman Sachs like two days ago, they're expecting $8 trillion of AI infra spend in the next six years.
So it's like, I don't know what more signal people need to diversify outside of crypto and just go where there's going to be eight trillion dollars spent, you know, one point two trillion next year.
So, you know, I've been diversifying out of crypto for the last year.
I will say I want to be very bullish on crypto at these current prices.
You know, Bitcoin's at like 76000, I think, as we're recording.
ETH is at.
I don't know, like 2100 or something.
So like I'm not saying it's a bad time to be buying crypto by any means.
Like we are we are in the as you said, Martin, like sentiment is real bad, which is always the best time to be buying, which is why I still hold Bitcoin and ETH in my portfolio and some other a few other crypto assets.
I just to keep adding is just it's a struggle to me because I, you know, get Nvidia made 81 billion last quarter up like.
almost 90% year over year.
It's a $5 trillion company growing 90% revenues year over year.
How can any industry compete with that?
It can't.
It just really can't.
And so I struggle to be sitting here digging through the, finding a needle in the haystack of something in crypto that's going to pump when you can just go into AI and you can just see that all the world's capital is going there right now.
It's a struggle to me to be wanting to add to any of my crypto bags at the moment.
The only thing, the only thing I just want to add one more thing is like, again, Clarity Act should be a bullish moment for crypto.
I think maybe whatever happens, if the strategic Bitcoin reserve thing happens, but I don't really know if it will.
Otherwise, I'm struggling to see what the big...
catalyst is for crypto in the near term.
Outside of these very niche things, like what Martin's talking about with Figure, we've talked about with Sky.
So like bringing credit on chain, bringing tokenization and stable coins on chain.
These are great.
But again, like all of stable coins coming on chain is growing slower, about 50% of the speed of what Nvidia's revenues are growing on its own.
Right.
So the entire stable coin market grew by 50% last year.
Nvidia grew by 90%.
So it's like, okay, I can try to find the needle and haystack in stable coins, which is the best thing we have in all of crypto, but it's growing at 50% of the rate of just NVIDIA, the biggest company in the entire world.
So it's like in comparison, just it doesn't really make a lot of sense.
Yeah, so I think for myself, the way I think about this is I don't necessarily disagree with everything you said, but I think I have a different way of trying to play this.
And for our audience, you can see how all of our pro analysts are navigating these markets by joining our pro community.
It's $1 for seven days to get in there, look at everybody's portfolios and see all the different products and services we're offering to add value for our community.
But the way I'm thinking about this is that all the attention.
energy and capital is on AI right now.
And I think, you know, as you guys have pointed out, a lot of the earnings and growth of a lot of these major AI companies do justify this.
However, I think that that industry is inherently very volatile.
It's priced to perfection and they can't all win, right?
So there's, I think there's a lot of risk and a lot of short-term risk.
Like a year ago, it looked like open AI was going to kind of like run away with everything.
Then, you know, it turned out the anthropic strategy of focusing on enterprises and not.
retail consumers, it turned out to be more effective at generating revenue.
And now Anthropic has kind of like leapfrogged open AI in a lot of ways.
And I expect that to continue.
You know, Google has their own strategy.
There's just a lot of players and a lot of competition.
And it's not yet clear to me where that long term value stays, how defensible NVIDIA's moat is into the future for forever.
So there's just a lot of unknowns there.
And it's a lot of capital moving really quickly.
Whereas, you know, if you look at digital assets, I think, you know, we've got a new chairman of the Federal Reserve who's given a directive to allow crypto companies and businesses to.
engage with the US financial system really for the first time.
We've got the SEC saying they're like speed running approval for tokenizing basically the entire Western economy.
And we've got the Secretary of the Treasury very bullish on getting stable coins, USD stable coins to two to four trillion dollars by the end of Trump's term.
And, you know, this clarity act coming through gives a lot of.
clarity for investors, but also for new products and services to be launched.
And Wall Street is hiring, investing, and pivoting their companies in a way that they do not do this kind of thing.
This is like the internet finally coming for Wall Street.
And so to me, it feels like one of these times where...
speculation, enthusiasm, euphoria is all in another part of the market.
And the fundamentals in crypto have never been stronger.
The outlook has never been cleaner for the next five years.
So it's one of the best, like to me, risk rewards to just take a longer view on this asset class and then just be patient because that way I don't have to be over trading my book and getting emotional or panicking.
I can just accumulate and hodl and chill.
So that's my strategy.
Kyle, Martin, all of our other approach analysts have different ones and there's not a right or wrong answer.
Everyone has to kind of like figure this out for themselves.
So that's just kind of how I'm playing this.
I wanted to kind of close with a little bit on that there.
Gentlemen, this has been another very insightful and exciting research meeting.
I think that there's finally some big things pumping in crypto, which is always fun to talk about.
Thank you both for joining.
For anybody listening, you're welcome to join our pro community for just a dollar.
Hop into Discord and ask more questions there.
But otherwise, we will see you all in the next research meeting.
Thanks for joining us.
Stay safe, stay educated, stay bullish.
And we'll see you all on the next episode of The Milkroach Show.
Thanks for being here, everyone.
Bye.
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