Bitcoin Just Broke the Bear Market! But There’s a Problem?

bank station. It is the first week of October and the bearish market structure broke. The weekly Bitcoin candle and in addition to that, the monthly Bitcoin candle both closed above the previous May high. I think the big question for the entire market to answer is that is this a green light for October? Ryan, do you remember October last year? >> Oh my god, you said it. You cursed us now. We're all doomed. We you and I were very excited for October last year and the first week of October last year was like a little bit green and we were kind of excited. >> Yeah. And then we said October too many times and we cursed it and >> sucked became downtober like it was bare market but but that was last October. That was last October. We still have October possibly on the menu for this month. Well, I think uh a question to be answered is what's macro doing and could that disrupt our I'm not gonna say it or October because there's a little bit of a paradox going on in markets. Inflation came in kind of cool, but the 10-year yields are going skyhigh and they're not stopping. Ben Hunt said this week something in the financial world is going to break when referring to these yields. We'll talk about that. Also, David, you went to the Hood Summit that was in Houston, Texas. Um, I want to know why you went, what Robin Hood is shipping. I'll find out all about that because I saw a lot of announcements coming out, but you were on the ground. I want to get your impressions on that as well. >> Also, there was a $400 million BitGet hack. You read an an exchange hack on Friday of last week and also that has turned into a conversation around near intense and the permissionless nature of that system and whether crypto wants that or not. Also, New York has sued Poly Market. A federal court has ruled that states can regulate koshi and it seems like we're all taking this to the Supreme Court is just looking more and more inevitable these days. So, we're going to cover all of this and more. But first, we're starting with the market once again. The Bitcoin weekly candle closed above the May high of this year. So, we the weekly candle close was the highest Bitcoin price that we've had since like early January of this year. That is also true for the October monthly candle as well. So in this >> September, you mean this is September. Don't get >> September. Excuse me. September. We are now in October. Uh >> thank you. Thank you. >> If you if you are a trader, if you do TA, the the importance of weekly and monthly candles closes is that's just what is going to be on the chart looking forward. And had we dipped below the May high, you would have seen a lower high, but instead we got a higher high for the year. And so the idea here is that the bearish market structure that we previously had has broken, giving us potentially a green light, a runway for more bullishness in the remaining 3 weeks of this month. My uh I I don't know what your quant is saying, David, but my my quant Michael Nato has also signed off on what you just said. >> He has said we are in the early bull and we got the confirmation this week because we got a second weekly close. what you just said above the 50week moving average which is 76.8K and we got a close above that 84.5K. So the last objection people had which was like uh are you sure is this sustained? I mean the chart is rejecting that and if this chart doesn't hold it doesn't not to say we couldn't go down we may still go down but if this overall structure the structure that you said has broken now in an upward direction broken the back of the bare market if that doesn't hold after these you know monthly averages are locked in then it will be the first time ever it hasn't holded. So that feels like a a good foundation from a crypto market structure to just say we are in the early bull phase. >> Speaking of good foundations, I do kind of enjoy I don't really enjoy it cuz it's financially painful, but nonetheless, we are seeing some weakness in some alts for the first time. Uh lit is down 30% from the highs. >> Wait, what are you enjoying about this? The buying opportunity is are you getting like that? >> No, I'm fully allocated. I got no cash. Uh but let's it's just like this is >> you enjoy the pain of markets, right? >> I enjoy the pain. I'm a little bit of a masochist. You know, my financial era was born by buying like a $1,000 ETH in 2017 and having that go to $80 >> and still believing >> and still believing and and then making that all back in in 2020 2021. Uh and so it it's just important that we just get a breather. Prices go down. there's some pain in the market for that to not be too frothy. We don't want to have a blowoff top too soon. And things had gotten really frothy in like those five assets like Zcash for example down 20%. Morpho down 17%, Uni down 17%. While all these tokens had painted between like 50 and 300% gains in the last like two or three months. Kind of in the same way that like this Bitcoin bare market if we are indeed at the very beginnings of another four-ear cycle there's a bull market ahead of us. That was the easiest bare market of all time. If this is the only dip that we get, it's going to be one of the easiest dips in all coins in the last like 3 months. I could see more pain being on the table. It feels about right. But also at the same time, there's just a new pattern happening in the crypto market right now. And so I think this is kind of something to pay attention to is like how how volatile are we to the downside these days? Cuz so far Bitcoin is saying not not that volatile to the downside. Well, this is like just probably some mean reversion here, right? Because alts, as you said, had been on a tear. Do Do you ever look at the glass node altcoin season index? Um, look at this. We got into almost like full altcoin season zone and we're taking a spin down from that. The last time we got here was like way last summer when things pumped and you can see some other phases when that has happened in the past. So this is a little bit just mean reversion after this the these massive leaps and you know Bitcoin has been up so much what like 44% since the June lows uh 96% of the top 50 crypto assets actually beat Bitcoin over the last 30 days. So Bitcoin's already >> all all of them other than one >> pretty much uh >> the following 48 tokens by market cap beat Bitcoin in the last how long? That's right. 30 days. The last month. Wow. Yeah. Last month. Um, one other thing that might be weighing a little bit on altcoin markets or in general, we have to weigh this into where crypto is going from here in the early bull case is inflation and yields. And there is a story emerging that is somewhat of a paradox. So firstly, we got inflation numbers in this week and the print was actually better than expected. So annualized inflations that's CPI 3%. Whereas expectations were about 3.3%. So below expectations also the numbers were revised down from previous numbers in July. So July was actually revised down and most of this was driven by high energy costs. So it was >> um you know price of the pump, >> gas, oil, that type of thing that was really the driver. So inflation numbers good and in a normal world in a normal market what you'd expect to see is as inflation cools longer or lower long-term yields >> right on bonds right and the reason for this >> if the monetary asset is stronger over longer time horizons people will accept less yields over that time. >> Exactly. So if you get a good inflation print a low inflation print you'd expect yields to fall. was typically right what happens this time that didn't happen. So this week >> I think rose more than they had in at all weeks previous like this was the fastest acceleration of yield to the upside this week than like the last four weeks we've been reporting this. >> Exactly. And so here's a tweet. So yields continue to rise even on the back of this inflation news. Not even budging from that. Um the 30-year is up to 5.64% its highest since 2022. 2022 in the 10 year. 2002. >> Oh my god. Sorry. Yes. 2002. Little dyslexia on >> the highest since 2022. >> Little dyslexia on that readout. And uh the 10year is back to 5.3%. So yield going crazy. >> Wow. >> Wait. 5.3% yields going crazy. >> Well, that is crazy. I This is the biggest um like market in the world. This is the risk-free rate for capital around the world. And we haven't seen these rates and this velocity and trajectory since before 2022, >> right? Yeah. Yeah. Are basically our financial lifetimes because I was not paying attention to the bond market in 2002. Ryan, let me tell you. >> Yeah. Well, so I I saw some tweets in the week, including this one from a friend of the show who's been on before. I haven't had him on in a while though, Ben Hunt. He said this. Not to be alarmist or anything, but this move in the tenure in the 30-year isn't oil or Iran related. He says that because oil was actually down in the week. Something in the financial world is going to break. That's what he said. Not to be an alarmist about things. >> If there's one thing I know about having Ben Hunt on the podcast is that he's kind of an alarmist. >> That actually >> sometimes he's right though, right? >> Yes. Yes. No. Yeah. Not to discredit him in any particular way. He's just like he's a bit of a Yeah. Alarmist. >> The mechanism here, the thing that he's worried about isn't necessarily the raw number yet. Uh although that is You know, something to be alarmed at. It's the speed at which this is happening. >> Mhm. This is like yields are going up so quickly. We haven't seen that, as you said, in your entire investing lifetime. And a lot of investors feel the same. So, he thinks something could break. What do you think? Do you think this is like the sign of um something going really wrong and this is why maybe Bessant is panicking and he's trying to to buy the long end and do all the intervention that he's been talking about lately? Why? Why else would he be doing that if we were if everything was normal? >> When when something as large as the bond market moves this violent violently, something is going to break like somebody somewhere, business, hedge fund, whatever is positioned in a way where this really [ __ ] their [ __ ] to use a technical term. Um, does that mean like catastrophically this messes with everything in the whole world? I'm I'm not totally convinced. Uh, I was listening to the Jim Bianco on his recent podcast. He just started a podcast. Um, I think he's like five or six episodes in. He's a bond guy. He knows bonds. >> Big bond guy. Big bond guy. And he was like he was talking about how like the whole world is freaking out because we haven't seen these rates in so long. Like 5.6% is such a high number. He's like >> unprecedentedly high. He's like, "No, no, no, no." Like if you go back into the history of bond market yields of yields and interest rates, like 5.6% is a totally normal number. You know what's an absurd number? Anything below two. And so granted, ever since the weirdness, not now. >> That was the weirdness. The whole Zerp era 20 post 2008, even pre208, the whole that whole thing has been distorted and finally the clock has run out on like the era of low interest rates. But that was the weird stuff and 5.6% is a totally normal number. I think that's right. Other bond people I'm listening to are saying the same thing. You know, I mentioned Howard Marx last week. Also, Michael Howell is someone who who covers this fairly well, and he made the point that 5.3% it was normal in the '90s. In the 80s, yields were 10 to 15%. And for huge periods during the 80s, the US economy is growing like gang busters. It was like boom time. >> The economy is growing right now >> like and and that's also out outside of AI as well. Like consumer spending is up. There are plenty of healthy indicators in the economy. There is a take here though that you see this is in the move indicator. This is something else that that Howell follows. He calls it kind of the the heartbeat of bonds. It's sort of his heartbeat metric for a global liquidity and it's it's almost like the VIX. Do you know the VIX for stocks? >> This is what uh the move index is for bonds, right? So it's a marker volatile volatility and jitters. When the VIX spikes, it's everyone is glued to TV screens to Twitter because something happened. Something big happened >> and you could see some spikiness like here's the ultimate bond spikiness on the move index back in uh 2008. Uh you remember what was happening there? So we we've got some spikiness right now and Michael How's conjecture is he's watching that because if you get further spikiness, it is an indicator that liquidity conditions are shrinking basically. So global liquidity is shrinking. As the spike spikes, >> as the spike spikes, liquidity shrinkage and liquidity shrinkage is bad for our bags. It's bad for debasement trade. It means there's less fiat money supply in the market. >> And so he's watching this because he thinks there's the case where things could get bad before they get good. >> So basically VIX spikes and then in response to that government's best war, everybody has to respond with some policy. That policy is going to be money printing, >> right? the other side of that is launched the next global liquidity cycle. So he he thinks that we're somewhat in a cycle windown as far as global liquidity goes and the next cycle will begin when there's some sort of jitteriness and and crisis. So that could cause crypto assets to still dip even though we're talking about this >> as if it's an early bull market. And that's one possibility there. I'm not saying it's the the only possibility, but it's something that uh some of my quants are saying, David. >> Yeah. Yeah. I I can kind of see it where the what do we call this? Not the VI the bond what's the bond market VIX that we're the move the move. >> So the the bond market VIX I like that name better actually. Uh the thing to watch is like how spiky that's going to get or is something going to like break. Is a seal going to burst per what Ben Hunt is saying. We're all glued to the news cuz some bank went over third bail out of the banks or whatever. Uh liquidity disappears because everyone has to cover their debts. you know, Bitcoin crashes, crypto crashes, but then there's a flood of liquidity after the fact. Like that's the pattern that that we've all seen. I feel like that would be the worst case scenario. There's probably a much easier case scenario. Like either way, when this the uh VIX for bonds stops being so spiky and it eases out, the process of it easing out has got to be bullish just because great volatility is is leaving the bond market. stability is coming back to the markets and Bitcoin has seemingly done acceptably well the VIX or the bond market has been spiky which would be the time where you would expect it to not be doing well. >> Yeah. And it's going to continue to do well because deficits continue to mount the US fiscal policy continues to not improve just get worse of course and that's the that's the debasement trade. So maybe investors are seeing kind of the long-term picture here. And another simple explainer for yields in addition to kind of the fiscal situation is just what we've been talking about what Howard Marx pointed out in his memo last week which is AI capex AI debt is competing against treasuries for those yields. The economy is booming and so yields are going to go up the way they went up in the 1980s. And this is not actually in that context that alarming except for the fact that the whole world is now based on the AI trade. And you know that could be alarming again if we have all the eggs in those baskets and something happens with that. There was also this other minor point David that Kobasi I I I saw made which is uh they did something sneaky on the inflation methodology this month. So u they actually changed it. They changed how inflation was calculating. There's some details here. They revised it back, but they basically according to Kobiosi, they've recategorized some things like portfolio management, investment advice, put it in different category. And >> is this is this like gerrymandering for inflation? >> It's goalpost moving. It's gerrymandering for inflation a little bit. And he said that alone could have knocked about 20 basis points off inflation. That could be the explainer. So, the other reason yields could be up is just the market's not buying these inflation numbers cuz there's a little bit of gold post moving. >> That's that's some um Soviet style accounting is is the idea that comes to mind. That's never good. I mean, it's good in the short term because like we can all trade on paper and hot air, but yeah, over the long time markets need truth and if the government's not giving us truth, that's like a terrible, terrible thing. >> I think the bond markets are really good at sussing out truth, right? Like there's nothing there's no escaping bottom >> Soviet era accounting but in the United States of America doesn't actually work. >> That's right. That's right. Uh so I don't know are you bullish? How are you feeling about things with this macro context? >> Can I I want to throw a few things your way. Um we haven't talked about oil. Oil is actually still at wartime highs. So there was the war the the height of the Iran war conflict. Oil spiked up to 90 to $110. It came down to like 60. It is now back up to $93 a barrel. So, oil is at wartime highs. The bond market yields are cratering up. That's that's scary. Uh the midterms are coming next month and the markets never really like midterms. Uh and like the horm situation is as resolved unresolved as ever. But if you take all of these things into account, like the resolution, the resolution of all of those things is bullish. Bond market yields are one day going to stop cratering to the upside. Oil prices are high. They can't really go much higher because there actually is uh secret oil flowing through the straight of hormones. The Iran war uh the Iran and the Trump administration are in tension and that's unresolved but that could get resolved. Any way that this falls out is bullish. Like the status quo is all of these things are are bad. Like the oil is high, yields are high, uh midterms are coming up. that's giving the market the jitters. And Bitcoin painted a higher monthly and weekly candle despite all of those things. The the default path seems to be that Bitcoin is like bullish despite all of those things. But then all of those things could fall one by one like dominoes. And so I'm kind of seeing like, okay, Bitcoin has done well in a very hostile market environment for the last like two months. Each one of those things could clear up. We we'll get past the midterms. bond yields will stop accelerating to to the upside will will the Iran war and the hormuz will eventually resolve and all of that those are each one of those things are catalysts that I'm see can see happen in the next like quarter to a year >> I think what you're saying is like given the debasement that's on the horizon we can clearly see given crypto market structure has fundamentally changed to the upside right and and given some of these other things could get resolved it's riskier to be offside side. >> Yeah. >> Right now, >> you want to be allocated. >> This is me. I'm trying to be bullish, Ryan. This is me trying to be bullish. >> I think it's a pretty good I think it's a pretty good perspective. >> Yeah. Uh I do too. And coming up next, David, I want you to give me the perspective. Give bankless listeners the perspective on Robin Hood hoods conference. What did you see over there in Houston? What are they up to? AI agents controlling portfolios? Are they doing anything in crypto? Also, there was a $400 million crypto hack last week has some implications for a lot of things and there's bit of discussion going on about it. I want you to fill me in all this and more. But before we get there, we want to thank the sponsors that made this possible. I've been trading crypto for almost a decade. And I've used so many different wallets, exchanges, aggregators, or frontends. And I'm basically always looking for the same thing, just one interface with a deep liquidity across a bunch of chains and assets where I can access markets like per earn yield, trade confidentially, and still control all of my funds. And I've never really found it, and I'm just always switching wallets, juggling gas fees, or getting eaten by slippage. But near.com feels fundamentally different to me. I can do anything I want from any chain and keep all of my activity confidential. Crypto, tokenized assets, per payments. I can even earn yield confidentially. 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And now we've structured all of that data into the bankless MCP. So you can go and connect it to your claude or chatbt and suddenly your AI can answer your crypto queries with the entire bank list archive behind it. And every new bankless article or episode gets added automatically so the context keeps staying up to date. The Bankless MCP is exclusively available to bankless premium subscribers. So you can go to banklist.com, upgrade to premium and connect the MCP in just a few minutes and all of a sudden your crypto queries to your AI LLM, whatever you use will get a thousand times better. So go check it out. There is a link in the show notes and once you become a banklist premium member, you can hop into the Banklist Discord and let me know how you like it. Cheers. This is Frank Shapiro. Big news out of the Robin Hood's Hood Summit today. Uh he mentions a few bullet points. 247 stock trading including weekends, corporate earnings prediction markets. So I guess corporate earnings you can you know open up prediction markets on that perpetual futures for US customers. It says eligible US customers by the way AI trading and also a social trading platform. This kind of reminded me of like you know the FOMO app that's picking up in crypto. Robin Hood's version of that. All of those were some of the highlights that Frank mentions. I'm not sure if he was there. You were there in person. I was there. Why did you like give me the context? Why did you decide? I know you don't go to every conference. Of course, there's lots of things you don't go. >> I've gone to very few conferences this year. Actually, I think this might have been my first. >> You prioritized this one. Why this one? And what what what was the news coming out of it? What was the vibe, the news? What's uh what's your feeling? >> I mean, Robin Hood has just captured such a center piece of attention in the crypto industry. Uh seemed worth going. They also invited me to speak with their two kind of like crypto leads. Um Nicola White and uh Hillary Skington. One is the like VP of product who's doing all the crypto product stuff. And uh Nicola White, she she leads Bitstamp. Uh so Robin Hood bought Bit Stamp a while ago. Nicola was doing market making in crypto. Now she leads uh the the Bitstamp and like the crypto integration. Uh so this was actually their trad conference. They kind of do this onoff thing with the hood summit which is their normal Robin Hood equities brokerage tradfi conference. >> That's what you were at the hood summit >> which is what which is what I was at. And then ne next and also previously they did their crypto event. The most recent one you'll remember was in London with Johan Kra and that's when they launched the Robin Hood chain and all the other stuff. This was their trad conference and so we were not I was not expecting crypto things out of this conference and that is what we got. It was mostly TRD stuff >> and yeah, it's all fusing together, right? Because evening crypto thing, isn't it? >> Yeah. So that's that's kind of like, well then David, the crypto podcaster, why were you moderating a panel at the TRD Robin Hood conference? Well, because PERS, tokenized stocks, Morpho, these things are now all in the main Robin Hood app. And so that's why they brought me in. Uh, and so what are they up to then? What's the what are the highlights for you? >> So the highlights you had run through them with Frank Shapar. They opened up with 24/7 markets. So, you can kind of see the priority and emphasis that they had. I thought it was pretty funny. They showed a bunch of Donald Trump truth social posts and tweets about the Iran war conflict and they were like, "Wouldn't you have liked to to trade these over the weekend, right?" Because they happened over the weekend. Well, now you can. I thought that was pretty cool. >> Product market fit in this crazy era of tweets. Wait, but like how are they able to do that? Why couldn't we do that before? How come we can suddenly do that now? Um, I would like to actually explore that a little bit more. Part of the answer does come from having tokenized assets trading on Bitstamp because it's a 247 365 marketplace. And so part of that answer is that they also have just extended their own brokerage services to beyond ours. Uh, and so like if one Robin Hood user is buying an asset and another Robin Hood is selling an asset and they both happen to be doing that at 8:00 p.m. on a Tuesday, they can just clear those things. Um and so they're they're just pushing the left and right earlier and later on the day. >> It seems so obvious and such a like product market fit for how people want to trade these markets now. >> Yeah. Yeah. It was very clear that like if you were the Hood Summit and all the products they were releasing is for like speculators. It is not for the investor. Robin Hood and their like their words that they use is like you we are for the day traders, the speculators, the people on margin and leverage like this is these are for you. like the to the passive investor was not really a target audience here. Uh but yeah, uh anyways. Okay, so that was that was one of them. Uh the the 247 trading was like definitely the the headline thing. Um prediction markets for earnings reports. I actually thought this was pretty interesting. They opened this section up with, hey, isn't it really frustrating when you're bullish on earnings and then you are correct, but then the price of the asset goes down in price. Isn't that annoying? Well, now you can just have exposure to an earnings report with a predictions market. And so I I actually think of all the prediction markets that society hates, I feel like this one should not be included in them because it's it's a financial derivative about a financial company. It's just so financed. It's not like it's not sports gambling. It's not betting on the weather. Uh so I kind of I really like this category of prediction markets because it's a financial product about finance. >> Even Vitalic would approve. >> Yeah. uh the crypto element was the perpetual in the main Robin Hood app. And so this was the >> for us users >> for US users eight markets uh Bitcoin, ETH Soul XRP Doge Cardono Link and Hype. And so for U for some US users, they have they're rolling this out to a few select users. They're going to get feedback. They're going to roll it out to even more. They're going to get feedback and then one day they'll roll it out to everyone. Uh they I thought the interesting thing was they asked the audience like raise your hand if you've ever traded a perpetual or you know what a perpetual is and like less than one of the audience raised their hands. What >> I thought I thought that was really >> What are they doing? Options. >> Yeah, options. Yeah, >> this is a tra You're telling me this is a trader tradfi crowd and they hadn't like four-fifths of the audience had not used a perp. >> Yeah, that's what they said. Yeah. And is this maybe maybe the audience just doesn't really raise their hand. That's always kind of a bias, but they they asked earlier in the show like, "How many people are you are you guys going to um buy an iPhone duo?" Because they they were building out a custom Robin Hood app for the iPhone Duo, like the twofold one. Oh, wow. And like a third of the audience raised their hands. So, it wasn't the audience being shy. Okay. Like the audience was willing to raise their hands. >> More of the audience is interested in buying an iPhone duo than has traded a per before. Uh, so this is also the perpetual is also being offered through their Bitstamp exchange. And so they bought Bitstamp. It has this CFTC license that allows them to offer this to US uh customers, US users. And so when somebody on Robin Hood main goes and does a 10x Bitcoin long or a 10x Bitcoin short, it routes it through Bitstamp. Uh, one of the big news on the week was Lighter, the Lighter token was down like 20% 30% on this week. It was from disappointment that this was not lighter being the service provider in the back end. >> Wait, so I know you've been following lighter. You're a lighter bull. >> Robin Hood does have a partnership with lighter. Is that >> in the Robin Hood wallet, which is their crypto app. It's like the MetaMask or Phantom. It's the Robin Hood wallet. >> Okay. So, they're doing both plays. It's bit Bitstamp for the main Robin Hood wallet and kind of the whole buttoned up version and then lighter for the more crypto native >> and also non US because lighter does not have a CFTC exchange uh license. >> Got it. So lighter still in the picture but I guess there was some hope out there market hope. >> Yeah. Yeah. I mean the distribution difference between being in the main Robin Hood app versus the Robin Hood wallet is massive. Uh and so there was like a lot of disappointment from the light lighter bulls on the timeline. the the answer as to like why why did Robin Hood not put in lighter is lighter doesn't have a CFTC exchange license. You have to have that. It's just like the the conversation stops there. Robin Hood bought Bitstamp so they could do stuff like this trade 24/7 tokenized assets and do perpetuals and they have the the CFTC exchange license. That's why they did this. I think the question is is in the future if and when lighter does get its CFTC license, will then Robin Hood also route orders to lighter or will it actually just keep it for itself and only flow it through Bitstamp because why would they share it with anyone else? Like they will just route it through their exchange. Maybe Lighter does give better execution and window will always give better execution than Bitstamp, but Robin Hood doesn't care because they get the fees. So like that's a fork in the road. You can interpret things both ways. The CFTC license to coming to lighter I which I think is coming to lighter inevitably. I think we will know this inside of two months because what are you laughing at? >> I'm just laughing cuz I think I saw your tweet where it was like flew all the way to Houston >> for Robin Hood to bud my bags. >> Yeah, it's Robin Hood for my lighter bags to be down 20%. >> It's great. >> I'm sorry, man, but it maybe it's only a matter of time. It just takes some time. I we are going to find out whether or not Lighter gets a CFTC license inside of like two months because they've been they've been talking about it for a while and the CFTC has 180 days to give a response. >> Well, we know the Vlads are are very tight. So, um that's great. Well, there there was a couple other things I want to ask you about. One was the social trading element. So, somebody described this to me as like it's almost like the crypto FOMO type of experience. There's a social trading thing that they were talking about. And then also um agents. AI agents. What? You can get an AI agent to like manage. >> Have you heard about agentic trading, Ryan? >> That's been all cryptos talked about for the last like 18 months. I feel like >> Have you ever used it? >> I would not trust like right right now. No. Like I actually I would like to I would like to give an agent like you know couple hundred bucks and just see see what happens. >> Yeah. Okay. So during this section I'm like aentic trading you can now you get the power of a hedge funds brokerage information advantage inside of Robin Hood using aentic trading and I just turned I turned to the guy next to me I didn't know him we were just strangers and I just asked him was like who the [ __ ] is doing agentic trading and then he opens up his phone to the agentic trading tab is like me I'm doing it he he had given his agent like $2,000 and his agent had done a bunch of trades and I'm like okay [ __ ] me Wait, what do you do? So, like how does this work? Do you just like, hey, agent, you know, gen generate uh overperforming like you performance over the next 90 days? Make no mistakes, go. >> I think it's one of those things where like the quality of the output is downstream of the quality of the input and so you need to prompt pretty well and be like, okay, like I am interested in this kind of exposure. I be cautious about this. I don't know. I still haven't used it, but some would make it like dumber. probably >> I just I don't want to give the input to the agent. You know what I mean? I want >> the genius super smart agent working for me and to figure it all out. >> But then I feel like someone has already front run me on that is some other hedge fund is using a much more powerful agent with better data. >> I don't know. I don't know. I don't know. >> Okay. May May maybe you could just kind of um if you set a strategy, maybe you could just like automate a strategy in that context. I would I would be okay with it. >> Yeah. Yeah. Yeah. Uh let's see. Anything else? Yeah, Robin Hood social, they they launched, you said it was like FOMO. It's like FOMO and FinTech. It feels a little bit more like a a little bit more trad than FOMO because this is definitely built by millennials and FOMO is built by Zoomers. Um, but it's very similar. So like verified trades, verified P&L. It's like a a Twitter kind of form factor. Um, yeah, >> very good. That that's the conference. There was also a hack that we should talk about, a $400 million hack of the BitGet exchange. Did that happen earlier this week or late last week? >> That was Friday of last week. >> Friday of last week. BitGet, if you're not familiar, uh it's offshore exchange, so outside the US. It's one of the biggest offshore exchanges. You top five, let's say. It's definitely not of the scale Binance. And it was a $351 million hack. What are the details behind this? And what was the conversation it spawned? >> Yeah. So not a crypto or protocol hack. This is just a kind of a a hack of bitgets internal security. Uh so attackers >> just hot wallets, right? Not the cold wallet. >> Yeah. Just the hot wallets, not the cold wallets. So attackers spoofed internal transfer data and drained hot and warm wallets across multiple chains. Uh private keys were not stolen. Private keys were not lost. Um but that the total sum of the losses came to about $387 million which is the largest uh exploit loss of crypto in 2026 so far. Uh I had to kind of explain the technical terms of like how it all worked but I don't really understand it. Uh but it was an internal bit security thing. Uh there was there is a $464 billion protection fund from BitGet and so users are whole. Not no user will lose any money. uh withdrawals were paused and then they resumed uh and so kind of nice that no users were harmed in this exploit. Uh I think it's probably North Korea I think is the assumption here this that's the Lazarus group that did this but I'm not sure if that's actually confirmed. Um a lot of the assets moved through Chain Thor Chain said they can't do anything about it. Uh I'm sure >> ter stolen. So stolen by let's say it was you know hacker like Lazarus group that then the next thing is the hacker has to then launder those funds in order to get liquidity on them. Right. >> Exactly. Yeah. Yeah. Yeah. Uh Thor chain is a pretty common place for this these funds to go. Uh a b a bunch of bitcoin did go through wasabi coin join which is a bitcoin mixer and then uh about half a million dollars uh tried to go through near intense and this is when the story uh moves into the near intense space. Okay, so near intense is an application on top of the near blockchain that does crosschain transfers. Uh 500,000 about dollars try to go through near intense and near intense has this shield thing. Uh it's like a intense security is like a security filter uh like a bouncer that you know checks every swap it throw before it goes through near intense. Alex, the general manager of Near Intent, kind of describes it as like a risk intelligence layer. Kind of like Yeah. bouncer, cops, preventing firewall almost, I guess. >> Firewall. I think that's a good term. Yeah. So, $166,000 did get through, but it blocked about $53,000. Uh, this spawned kind of a conversation. These aren't really the biggest numbers, but it spawned a conversation. >> Tiny numbers in the context 350 million, right? >> Yeah. But really the conversation was around the permissionless around near intents near due to the crazy price action going from like $2 to $5 is now kind of the center of attention. And so the you know the hardcore cipher punk nature of some of these systems is being you know we're kicking the tires here. Uh and I think people are learning that near intense is not like a completely permissionless censorship resistant cippher punk protocol. This is the first time a lot of people learned about that. So when it comes to a hacker steal some funds and they try to kind of you know launder it somewhere uh they'll use different protocols for this right one is tornado cash which cannot be turned off >> right >> another is thor chain as you said which has operators but their stance at thor chain is basically like permissionless credibly neutral we can't do anything about it >> that's always been confusing to me about Thor chain is like there is an off switch and they're like we're not we're not messing with the off switch >> right and Taylor Monahan is among those who have called them out and saying, "No, you actually do have an off switch. You could do something about it." Now, this is Mir has an automated sort of firewall bouncer at the door that sort of flagged these things as stolen funds, transactions, and and paused it almost automatically. And so, what's the debate in the crypto community as to whether you should have the authority to do this or was it a debate around neutrality? A little bit. I think really the reason why this is a bigger debate than it really needs to be is that there's some of the words that Near is using like they're using the words like uh we are permissionless infrastructure but we're not neutral and somebody is saying well then then you're not actually permissionless like don't use the permissionless word then there's other people who are saying you shouldn't have this ability at all and I'm throwing a flag at that of like we have some of the hardcore cyberpunk protocols the the permissionless ones we've got that stuff uh exchange hacks and bridge hacks have lost the most funds in crypto ever like over$8 billion combined on those two two things. So like now we have this cross range infrastructure that also the news of as of this morning got exploited today for $3.8 million and the reason why it wasn't worse >> wait a separate hack this is a separate a separate hack this is the near near intense application also got exploited for $3.8 8 million. The reason why it wasn't worse was this same shield mechanism detected the transactions and prevented the loss of further funds. And so all of the people that lost money in this near intense exploit will also be returned the money because Near Intense makes $3.8 million in like a week. And so it's like not really that big of a deal. And so my my take is like we have this system that is like discerning between bad and good. And we've had the previous systems where like you know uh code not kings you know uh we've had the previous systems already and like now this new system is more discerning. Sure there is trust there is custodianship for a moment in near intense. These have historically at least with my ver vernacular been bad but then also at the same time you know what else is bad is losing like $9 billion of user funds. And so like my stance is like, "Hey man, like this is a new strategy. Let's see it play out." >> Yeah. I guess maybe it's a semantics debate over like >> definition, right? So there there's a person quote tweeting permissionless doesn't mean neutral. Yes, it does. >> And so calling out Near for using the words, I guess, permissionless and also, you know, saying we're permissionless but not neutral. Now, Ilia uh on the Near team had a response to this. Crypto space really has a choice. grow the f up or get sidelined with random regulation. So he's making the point, hey, we're building a product. We don't want the product to have, you know, moneyaundering capability. We're, you know, we're actually we have the ability to do this and therefore it's good user experience. Like we should be doing this. It's kind of the right thing to do for our users. It's what everyone wants. And um I guess your point is like that's a fine experiment to run. We already have the super credibly neutral infrastructure, the tornado cashaches, the Ethereums, the the bitcoins of the world. And so like why not everything has to be like that, especially when you're a layer up and you're on kind of the intense layer. So >> yeah, I think people are also confounding near with near intense. Near is a blockchain. It it is permissionless. It is censorship resistant. It has all of those like same properties that we know and enjoy in crypto. Near intense is an application that has no technical dependency vice versa with near the blockchain and the near the near intense application is uh a little bit more trusted has a little bit more opinions about it is not fully like cippher punk and that's also true for any bridge whatsoever crossrain bridges have dependencies in them that's just the nature of how they are. Yeah, I mean there's another thing that happened this week which is uh BAS. So Coinbase, they they have a protocol. It's not the ERC20, but it's a base standard. So you can run something called the B20. It's a token protocol standard on base and you can also do ERC20s, but B20 now added a seize function on top of it. so that the um the author of the B20 token standard has the ability to actually seize assets if they are stolen in a hack like this. And this is not the full cipher punk cryptounk version, but it is product market fit for something like equities. If you're the issuer of an equity and North Korea steals your, you know, your capital essentially, >> your Apple shares. Yeah. >> Yeah. You're not just going to be like, "Oh, I guess that, you know, North Korea's on my my board now. I guess they have a seat on governance, right? >> Let's send them Let's send them the Zoom call. >> Yeah. You just like won't issue your >> tokenized shares in that format at all. So, we have space for fully cippher punk, >> you know, value. >> We haven't lost that. And now we're getting, you know, other product market fit for different use cases. I mean, I think it all makes sense and this is much to do about nothing. >> Yeah, totally. Uh speaking of near, we also got a near ETF this week out of Bitwise. So this is uh ticker NRR, the Bitwise near ETF. Uh pretty notable launch if you compare it to Salana. We had some pretty healthy numbers. Something like over half a percent of the total near supply flowed into uh the Bitwise near ETF on day one, which is pretty crazy. Half a percent of the total supply. Uh if you look at like the Bitwise narrative as like what near is because Bitwise educates to the next marginal circle of investors outside of crypto. >> Yeah. How are they selling it? >> Intersection of crypto and AI. >> Okay. >> Uh near intense which is a primary near product is seeing rapid growth. Near's quantum resistant and private highly scalable low inflation with revenue funding buybacks. So >> all makes sense. Good time to launch an ETF when you're on the upswing like that. Uh let's talk about what's next. New York says prediction markets are actually illegal gambling. What's the news there? Is this going to go to the Supreme Court? Also, Vitalic with a post on the week. He says Ethereum isn't a blockchain anymore. Actually, not just a blockchain. It's something else. And it has the the words world computer in it. We'll talk about all that and more, but before we do, we want to thank the sponsors that made this possible. Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the DeFi Report. This is the guy that sent me a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your podcast, YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. The state of New York has filed a lawsuit against prediction market company Poly Market, saying that the platform is operating an unlicensed gambling business in New York. Uh state officials have asked the judge to stop the company from operating in New York and are also seeking financial penalties and payments to users who took part in the platform. Also, additionally, >> wait, users too? >> Yeah. Oh, no. Got to protect the users, you know. Uh a US appeals court on Friday ruled against the prediction market operator Koshi, saying Ohio and Tennessee can regulate its so-called event contracts under their gambling laws. So two blows to prediction markets this week. Uh poly market getting sued by New York. Cali losing a case against uh Tennessee and Ohio. Uh this the outcome of this the current state of uh there's like a a game of risk being played by the prediction markets teamed up with the CFTC versus the states and it's pretty split. Uh and so there's different like circuits uh with with the court. Uh the states have won the sixth circuit. That's Ohio and Tennessee and the ninth circuit that's Nevada. KI won the third circuit with New Jersey and New Jerseyy's attorney general already asked the Supreme Court for a review and so there are still some circuits to play out but it seems kind of inevitable that this is heading to the Supreme Court. Uh David actually the writer David from from Banklist has been writing on this. So if you want to follow I think he's actually the person producing the best content about the inevitable conclusion of prediction markets in the Supreme Court. Uh, so you can subscribe to the newsletter. >> I mean, it's definitely going to the Supreme Court, right? Because >> Destiny, >> well, state states want their cut. They've had their cut on other sports gambling in the past and so they're going for their cut. I I guess that's what the judges are ruling. The CFTC is on, you know, team these are just markets, any event contract markets. And so the Supreme Court, I guess, is going to have to decide. That seems pretty ex not existential, but incredibly important. That ruling will be incredibly important for the future of prediction markets. And it's sort of a a binary type ruling, right? >> Yeah. Yeah. Uh meanwhile, Coinbase has received a CFTC approval for Coinbase Clearing LLC. Uh this is the third of three licenses that one can get out of the um out of the CFTC and Coinbase now has all of them. So Coinbase can now be the exchange, the broker, and the clearing house for fully collateralized derivatives. So this is not margin, this is not um perpetuals. Uh this is prediction markets. Uh and this is also crypto binaries and fully paid options. Uh so just getting a little bit more options in the uh derivative space which includes prediction markets. This is what Coinbase needed to do to fully ignore Keli kind of in the same way Robin Hood did previously. Uh Robin Hood first had Koshi as his prediction market uh supplier and then Robin Hood just gave Kouchy the boot for its own prediction markets platform. Coinbase now has the ability to do this as well. Do you think do you wonder if like Poly Market and Keli will kind of fight back in the form of launching a crypto exchange? So if Coinbase and Robin Hood are going to come into their territory, then what's to stop >> Poly Market from say becoming more an exchange and kind of they all we're seeing this with the the AI labs right now, the Frontier Labs, they're all somewhat circling around and launching the same thing. >> Mhm. Uh sure. I mean, they're going after gar Coinbase's gargantuan business and like Robin Hood 2 for example. Well, honestly, that's why I'm kind of a hood bull is because the best thing to have in all of this debate. If everything is going to become the everything finance app, the super finance app, then like you want to buy the one with the distribution, which is kind of why I'm bullish Robin Hood cuz like Robin Hood has all of those things. And then it also has the 50 million customers or whatever product skills too, right? They have the ability to stitch it all together in a pleasing user experience. And that is a cut a delightful user experience which is ringing in my ears by the end of the the hood summit. Well, speaking of a delightful user experience, uh, are you ready for the cryptographic world computer? David, >> what the [ __ ] is this segue? >> This is um I think the point is like uh this is Vitalic and he put out a post this week and he said that um Ethereum is not so much a world computer anymore and he's going with the phrase, it's more like a cryptographic world computer. And he's basically talking about the original genesis of blockchains back in the 2010s and what they were, what Ethereum really was and what they're going to be soon. They're starting to become now what Ethereum is going to be in say 2030. And the big difference is you go from a world where you have to if you're Bitcoin or early versions of Ethereum um you have to reprocess every single transaction. That's how you get verifiability to a world where all you have to do is verify it. He's talking about a world that has been unlocked with ZK proof technology, ZK Snarks, ZK Starks, that sort of thing. And he calls this a fundamentally different world. In fact, I mean, do you even call Ethereum just a blockchain at that point? Or you're kind of limiting it if you just think about it as a blockchain. It's really a cryptographic world computer for the verification of whatever you need to verify. And so a lot of the computer a lot of the things can happen somewhere else. Ethereum is just used for verification purposes. One poster put it this way. Ethereum does not have to be fast enough to do everything only to verify it. And he said practically um with ZK the unlock you know we're doing some of this today. Pure Das was attest to this of course uh Snark proofs um decentralization goes from being sort of a a cost that we pay to being a an advantage right because we can have parallel compute parallel storage it's sort of like the magic of of snarks that I think we've previously been very excited about at bankless and what you actually get the guarantees you get are guaranteed inclusion so this is fossil this is censorship resistance that really can't be tampered with and I think Ethereum once it ships fossil will be best in class there. He promises base layer privacy, quantum safety, 4 to 8 second latency. I think you'd like to see that even lower, but at least 4 to 8 seconds, and then light nodes that verify instead of trust. You can run everything in the light node. So, it's kind of packaging the entire Ethereum road map, but in this term of not just a blockchain going off of, you know, paying homage to Ethereum, the world computer, the cryptographic world computer. I read I'd love your impressions of this. I'm not even sure if you read this, but I read this and I was simultaneously incredibly bullish and also bearish. And that's how I kind of feel about Ethereum these days is just like this is the most bullish thing I've ever read I think or maybe it's like a road to her bits and like because we're not talking about use cases at all in this post which always worries me like I'm always like you know that goose meme of like you chasing the guy like >> I'm like world computer for what? For what? >> What are we building it for? >> Just tell me. And I think the thing we're building it for is store of value for money assets for censorship resistance store value. That would totally make sense to me, but that's not in the post. We're talking about abstract verification cases that are hard to wrap your arms around. So Ethereum is just this really interesting project I think right now where it's like in some ways it's the most ambitious thing that exists in crypto and in other ways like we're still like Vitalic anyway. and how to use it. >> Well, Vitalic is not the champion of describing exactly how it's used in the real world. And so, there's a lot of layers that have to happen in between that. >> Yeah. Yeah. I think our kids are going to find some really cool things to do with the theory. And I I kind of think that that what I'm saying was like that same thing as what you're saying is like I do think that this is going to be incredibly useful as we accelerate as a society as you know the future is going to be so weird. This is something I've been saying on this podcast forever. The future is going to be so weird. It's going to move so quickly. uh if you you know extrapolate some of the conclusions of the sovereign individual which is a book we've decided a handful of times like the role of governments just kind of gets nerfed to the power of the internet and technology right >> and in that world we need some society ordering system like Ethereum >> some truth machines >> some truth machines some global global truth machines that exist that transcend nation states and are even higher and and more powerful than nation states and I just don't know what to do with that right now. But like I think in the future we're as a society we're really really really going to need it. But the but now it's just like yo let's do let's do like subsecond blockchains to trade tokenized assets. >> I feel like bank list from inception was sort of built around answering a bit of what to do with that and our answer has always been like decentralized finance. It's been monetary use cases that's the thing we do with it. Then then we were really hopeful on like the next layer which would be like decentralized identity and uh alternative systems that otherwise the government would give you and maybe we were too accelerated in our time fra timelines but it's just like it seems further than ever today. >> That's the bullish piece right of all of this. It's still like an incredibly radical revolutionary massive TAM potential thing world computer cryptographic world computer. And then the bare side of it is like, all right, like connect these to the actual use cases. And I feel like crypto is very much pivoted into use cases season, right? Where's the revenue you're throwing off? Who's using it? What's actually happening on these systems? And the biggest use case to me for Ethereum is still >> the Bitcoin style store of value type use case and DeFi associated with that. >> And that's not in the world computer, cryptographic world computer. I mean, that's not the branding of that. So, somebody else is going to have to add that. Barnaby from ETHLabs added this important kind of push back. Agrees that this is incredibly bullish. Um, except for one thing. Needs to make sure that state, the valuable state remains on Ethereum's L1. It's not just verification, not just settlement. He says this, I don't want a liquidation resolving on some other server, an a server. That valuable state has to stay on Ethereum. And I think that is an important piece that previous renditions of the Ethereum road map like the L2 road map have missed. So hopefully people like ETH Labs can add that layer to it. Hopefully people like Tom Lee can come in and give a narrative as not the cryptographic world computer to investors and maybe it all comes together into something really beautiful here. >> Yeah. Yeah. I mean, it's 2026, so we don't need to beat a dead horse, but after Vitalic talked about all these amazing Ethereum properties like quantum resistant verification on your phone, like verification of your account balance of Ether, the asset on your phone and dot dot dot, that's why Ether is the best asset. >> That would be awesome. >> Wouldn't it be great if he had said that? It's it's it's it feels like it's very sayable. It's just like say say why it's good for Ether the asset. >> Oh my god. Oh my god. All right. Um last thing to close this out. Uh this was a tweet I saw circulating. I saw it a number of financial uh publications actually. Um Yano from Blockworks >> calling out a financial times piece. Uh this is a chief economist at um Apollo saying that AI assistants like Muse which was released I believe in the last week or so. instinct also chatgpds dot uh they could be used to cause a bank run because consumers they start using these AI agents they say hey AI agent optimize my finances the very first thing an AI agent is going to say after they say cancel your whatever subscriptions that you don't use is hey look at your savings you have 5,000 in savings >> hey that that $5,000 in your Wells Fargo account why don't we take that and put that somewhere else >> yep put it in a SoFi app and you can get you a four or 5% put in stable coins you get, you know, 5%. Why not do that? And then, oh, you want me to do that for you? No problem. Click here, click, and then the AI agent will go do that. Well, problem is, David, banks aren't set up that way because they love to extract rent on consumer savings. >> For those who don't want to get 5% on their savings deposits, >> yeah, it was the big issue that they the flag that they threw with the Clarity Act, the stable coin yield, right? It's just like, oh no, this will drain all the deposits out of the banks and this will collapse the US lending system, right? Well, AI agents may also deliver that in the form of an instinct or a muse or a DOT that is working on the user's behalf instead of for the banks. So, to me, all of this is great news, but um maybe the banks will get alarmed and try to try to block these AI agents in Congress. Uh, I mean they certainly were will because that's their one job is to protect their margins and this is how they get the margins. I mean overall if this thesis does play out. I'm incredibly bullish on just the world because of all the AI agents that are making like my money more capital efficient. Think if they can do this think about all the other things that they can optimize. Like the world's just going to get better a lot faster and part of that is that money is going to leave the banks. That's a the world's going to be a better place as a result. >> Yeah. I mean I I agree with that. It's bad for rent extractors, but good for >> bad for rent extractors. >> Everybody else, by by the way, are you using any of these AI agents that have come out? So, Chad GBT just released their dot yesterday. I don't know if it's too soon if you've even seen that, but there's Muse, there's Instinct. It's basically like um shrink wrap versions of Open Claw. You remember the whole Open Claw thing, >> right? >> You set it loose. You connect it to yourself. >> I've heard positive things. >> It works for you in the background. It wakes you up or whatever. Sometimes it'll give you a phone call and it'll just be like, "Hey, David, you like you got to get to your meeting. You know, you're late. >> Can I get it to check my email for me?" >> Uh, 100% for the first time in 3 years. >> That's table stakes for these things. >> Okay, cool. Maybe I'll get that. >> I don't know if it's worth the privacy trade-offs for you, but um it is interesting and is >> I'll be your guinea pig. How about that? >> All right, that sounds great to me. >> David can be the guinea pig for the bankless community, too. So we'll hook up with his experiments. Yeah. >> Banglation. That has been it for the first week of October. We'll see you back here for the second. In the meantime, crypto is risky, but not risky enough. This the frontier is not for everyone, but we are glad you were with us on the bank's journey. Thanks a lot.