00:00Let's just talk about what Ava was saying there about that sort of lack of correlation really we're seeing between
00:05crypto prices and also equities.
00:07But I think it sort of speaks to that broader challenge, I guess, for finding a narrative for crypto at
00:13the moment.
00:14Because it's really not responded in a lot of ways that we thought it would.
00:18And I'm talking broadly about crypto prices here, but certainly not as a digital dollar, for instance, not acting as
00:23a safe haven when we thought it would or digital gold rather.
00:26But what's your view?
00:27Yeah, so I don't think it should.
00:31I don't think Bitcoin should act as a safe haven while it is still a startup ecosystem.
00:37So, yes, I do think it's going to take the role of a digital gold and be more of a
00:43safe haven.
00:44I think Ether is going to do the same thing.
00:46There's more functional demand for Ether than Bitcoin.
00:49So I think long term, both of them will be essentially safe haven currencies.
00:54I think the decorrelation is partly related to the October 10th shocks that we had in the world, in our
01:04ecosystem.
01:05And more recently, we've had even worse shocks where we knew that there was some traders, some hedge funds that
01:14seem to be in a lot of trouble.
01:16And we finally, I believe, with the massive plunge a couple of weeks ago, we finally, I think, have flushed
01:27that out of the system.
01:28Could you share more details on those issues you were saying around hedge funds of late?
01:34Because it actually hasn't been clear, I think, for a lot of outside market participants to really understand what prompted
01:40that sell off and who exactly the casualties were.
01:44So I don't know what got them into a big hole.
01:47But who are we talking about?
01:48So this is wisdom from crypto Twitter.
01:53I can't give you names, but one or two major entities were selling Ibit quite significantly.
02:01It seems like they got into an issue on October 10th.
02:05And then I think they tried to trade their way out of that issue.
02:10And supposedly they went long precious metals.
02:13And they got hammered when gold and silver plunged after going up quite significantly.
02:19So it's October 10th you're referring to the de-pegging of Athena on Binance?
02:25Exactly, yes.
02:26So that was a big event.
02:30And that essentially caused a lot of market damage, market structure damage.
02:37And it was anticipated that some traders, some funds were affected badly and were forced liquidators for quite a while.
02:49It looked like there was regular sales for up to 90 days.
02:55And it looked like things are maybe flushed out of the system at this point.
03:01And in general, there's just so much volatility in global macro and geopolitics.
03:07And I believe that we're at the end of a debt monetary regime super cycle.
03:13It started at the end of World War II.
03:16And things are really cracking up in general.
03:18That's why we're seeing a lot of volatility.
03:21And we're still the tail on the big dog.
03:24So if there's volatility in the dog, the tail shakes much more violently.
03:28When you talk about Bitcoin, Ether, the ecosystem still being in that startup mode, I mean, they are, I'm not
03:38going to say mature technologies, but they have been around for a period now.
03:41So what does it look like then, that path to mainstream?
03:46And what is your actual timeline?
03:48Because I think for, if you think about it in a more of a commercial sense, you know, companies that
03:53have been around for that long, you wouldn't necessarily consider them startups.
03:56Yeah. So assuming we are at the end of an economic super cycle, what's been happening over the last few
04:06decades, especially more recently, is that there's been loss of trust in centralized institutions, whether they be governments, religious institutions,
04:15financial institutions.
04:16And so things are cracking up quite significantly.
04:20And in 2009, Satoshi Nakamoto invented this incredibly powerful thing called decentralized trust.
04:28And so decentralized trust is what Bitcoin is predicated on.
04:34Ethereum brings decentralized trust to anything you can do programmatically because it is a developer's platform.
04:41And so we've been spending 10 plus years in the Ethereum ecosystem focusing on keeping the system rigorously decentralized because
04:50you get credible neutrality for your platform and censorship resistance from rigorous decentralization.
04:57And we've been making it more scalable, more affordable, more usable.
05:01In the United States, it's now legal, which it effectively wasn't under the previous administration and under Chair Gensler.
05:08But now the United States is blowing wind in our sails.
05:14And and so we are now able to accelerate.
05:18It is essentially Ethereum's mainstream moment and traditional finance is is realizing that.
05:26Ethereum's mainstream moment.
05:28I think we just we just took a look at a one year price chart of ETH is still down
05:32quite considerably from last year.
05:34Why do you think that's not being reflected in trading dynamics?
05:37Because even with with ETH ETFs, for instance, we've considered we've seen considerable outflows again going back to October of
05:44last year.
05:44So ETH is generally very correlated to Bitcoin.
05:48Bitcoin is having quite significant issues.
05:52The quantum computing risk is, I think, exaggerated at this point.
05:59But just to clarify for people, I think you're talking about this concern that as quantum technologies evolve, you may
06:05actually be able to decrypt the crypto technology essentially.
06:08And essentially steal people's money if they haven't protected it.
06:12And so Bitcoin's actually quite vulnerable to quantum computing.
06:17Ethereum is not vulnerable or will not be in a couple of years vulnerable to quantum computing.
06:22And so Ethereum, the crypto prices move quite in sync.
06:27The Ethereum ecosystem is doing incredibly well.
06:30And it's not even clear to most of the world how powerfully traditional finance is onboarding itself to DeFi, to
06:39Ethereum essentially, to both layer one and some layer two technologies.
06:44The banks have been using the technology for a very long time.
06:48Most banks are actually Ethereum shops.
06:52They've been using private permissioned Ethereum.
06:56It's our Basu Ethereum client that runs a part of the public blockchain but is also used in private permissioned
07:04blockchains.
07:05So most of the financial institutions already know Ethereum very well.
07:09And they're now soon to migrate to layer two technology.
07:14Our linear technology is based on Basu and it is going to be able to be migrated to and used
07:23by any financial institution that wants to use stable coins on Ethereum, real world assets on Ethereum, DeFi on Ethereum
07:32and connect to all the other Ethereum related networks.
07:34Do you see any risk between the volatility in Ethereum prices generally and then the availability and the security of
07:46the infrastructure?
07:49Given that the price of Ethereum has gone from effectively zero to now $2,000 and has ranged up to
08:00nearly $5,000, the amount of economic security in the Ethereum protocol at layer one is gigantic.
08:07And so unless it plunged to very small numbers, say sub-100, I don't think anybody would even be considering
08:18that a security risk.
08:20What's been your conversation here with the crypto community this week?
08:24Because it's obviously an interesting time as well for the city just that you had recently China sort of clamping
08:30down a lot on stable coin issuance.
08:33This is supposed to be a testing bet as well, Hong Kong.
08:35What's been the reception to your products?
08:39So our products at ConsenSys are MetaMask, which is a new kind of neobank.
08:45So it started life as a signing tool so that you can sign transactions in DeFi, et cetera, on Ethereum.
08:53It evolved to becoming a full featured wallet, including portfolio management.
08:58And now it is a new kind of neobank in the sense that you own it, you control it.
09:03You can put it in your pocket on your phone or run it on your laptop.
09:08And it has many features of a financial platform.
09:13It can give you access to perpetual futures, to equity perpetuals, to tokenized stocks.
09:21Of course, all kinds of stable coins and real world assets.
09:27Our own stable coin, MetaMask USD, a debit card that enables you to put your money into an Ethereum account
09:36and earn yield on your own money rather than letting a bank earn yield on your money.
09:41And when you pay for something on the global MasterCard account, MasterCard network,
09:48a little bit of money gets taken out of your yielding vault wherever you put your money.
09:54And you pay for your purchase in real time.
09:59So it's a lot more financial, economic agency with the use of these kinds of products.
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