Bitcoin Hits New All-Time High! Is the Real Crypto Pump Still Ahead?

This episode unpacks Bitcoin's surge to new all-time highs, the landmark "Genius Act" stablecoin bill advancing in the US Senate, and groundbreaking ZK advancements poised to scale Ethereum, offering critical insights for Crypto AI investors navigating market shifts and technological breakthroughs.

Bitcoin Hits New All-Time High Amidst Concentrated Investor Bets

• The episode kicks off with Bitcoin reaching a new all-time high, prompting a discussion on investment strategies. David reveals a highly concentrated crypto portfolio, primarily in Bitcoin and Ethereum, likening his approach to investor Stanley Druckenmiller's philosophy.
• Druckenmiller's strategy, as highlighted in a clip, is "putting all my eggs in one basket and then watching the basket very carefully," a sentiment David echoes, preferring focused conviction over broad diversification for excitement and potential returns.
• Ryan notes David's equity exposure through companies like Coinbase (referred to as "hood and coin" in a colloquial manner) that deal in crypto, adding a layer to his concentrated crypto bet.
• Actionable Insight: While concentrated bets can yield high returns, they also carry significant risk. Investors should carefully assess their risk tolerance and the specific assets they choose, especially in volatile markets like crypto. Druckenmiller's advice underscores the need for diligent monitoring if pursuing such a strategy.

Bitcoin Reaches New All-Time High

• Bitcoin's price surged 8% on the week, trading at $111,300 at the time of recording. The new all-time high to watch was cited as $111,512.
• David emphasizes the significance of an 8% weekly gain on a multi-trillion dollar asset like Bitcoin, highlighting substantial market movement.
• Strategic Implication: Bitcoin's continued strength and new all-time highs signal strong bullish sentiment. Investors should monitor if this momentum can be sustained and how it impacts the broader crypto market.

Commemorating Bitcoin Pizza Day: A Look Back at Crypto's First Real-World Transaction

• The hosts commemorate Bitcoin Pizza Day, marking the anniversary of the first documented real-world Bitcoin transaction. On May 22, 2010, Laszlo Hanyecz paid 10,000 Bitcoin for two Papa John's pizzas.
• David recounts the story: Hanyecz posted on the BitcoinTalk forums, and another user facilitated the pizza order in exchange for the Bitcoin. At the time, Bitcoin had no established trading price.
• Those 10,000 Bitcoins, used to purchase two "very mid-looking pizzas" (one cheese, one with various toppings), are now worth approximately $1.2 billion.
• Ryan points out the irony: "It's funny that the first use case of Bitcoin is money was actually not as a store of value. It was as a medium of exchange."
• Contextual Enrichment: Bitcoin Pizza Day is a celebrated event in the crypto community, symbolizing Bitcoin's journey from a niche experiment to a globally recognized asset. It highlights the immense value appreciation and the evolution of its perceived use cases.

Ethereum Price Gains and Shrinking Exchange Supply

• Ethereum (ETH) also saw gains, up 4.5% on the week. Ryan notes this is the fourth consecutive week of green for ETH since his return to the weekly rollup.
• A key metric discussed is the declining supply of ETH on centralized exchanges, which has dropped below 4.9% of the total supply.
• David explains the potential positive implication: "It means it's easier for ETH to move in price. And also like there's just less ETH on exchanges to be sold and so incoming dollars can move the price more." However, he cautions that many variables influence price.
• Actionable Insight: A decreasing supply of ETH on exchanges is often interpreted as bullish, suggesting more ETH is being held in long-term storage, staked, or used in DeFi, potentially reducing sell pressure. Researchers should track this alongside other on-chain metrics for a fuller picture.

Will Bitcoin's Dominance Pave the Way for an Alt Season?

• Bitcoin dominance, a measure of Bitcoin's market cap relative to the total crypto market cap, stands at approximately 63%, having risen throughout 2023.
• The discussion turns to whether an "alt season"—a period where alternative cryptocurrencies (altcoins) outperform Bitcoin—is imminent. Historically, alt seasons have followed Bitcoin rallies.
• Altcoins: Cryptocurrencies other than Bitcoin.
• Alt Season: A market cycle phase where altcoins experience significant price appreciation, often outperforming Bitcoin.
• Arthur Hayes is referenced, suggesting an alt season will occur, but "it just may not be your alts," implying selectivity will be key.
• Chris Burniske's view is shared: "If ETH keeps making moves against Bitcoin... may all your bags moon for a period." He suggests ETH's performance against Bitcoin could be a leading indicator for a broader alt season.
• David concurs, stating, "ETH BTC goes up during alt season. That's how it works."
• Strategic Implication: Investors are keenly watching the ETH/BTC ratio and Bitcoin dominance. A sustained uptrend in ETH/BTC could signal the beginning of an alt season, prompting a potential rotation of capital into altcoins. However, the proliferation of altcoins means careful selection will be crucial.

US Treasury Market Faces Headwinds as Investor Demand Wanes

• The podcast highlights a "tepid demand" for a recent US Treasury auction, particularly for long-duration bonds, causing bond yields to spike. The 30-year US Treasury yield rose above 5%.
• Treasury Auction: A process where the government sells debt securities (bonds, notes, bills) to investors to finance its spending.
• Bond Yields: The return an investor realizes on a bond. When demand for bonds is low, prices fall, and yields rise.
• David notes he has "never bought a single treasury in my life," reflecting a sentiment perhaps shared by some crypto investors.
• Reasons cited for weak demand include concerns over the US tax bill deficit, potential impacts of Trump's proposed tariffs, and unsustainable national debt (now at $36 trillion). Moody's recent downgrade of US sovereign debt is also mentioned.
• David theorizes this is part of a larger shift: "Instead of the United States stock market being and like Wall Street being the epicenter of all of finance... people don't really know where to allocate their capital... they're looking for like what's the next Wall Street?" He suggests this uncertainty benefits assets like gold and Bitcoin.
• Actionable Insight: Weakness in the traditional bond market and rising yields can have broad macroeconomic implications. For crypto investors, this environment may reinforce the narrative for non-sovereign stores of value like Bitcoin, as capital seeks alternatives to traditional financial instruments facing pressure.

Landmark Stablecoin Bill "Genius Act" Clears Key Senate Vote

• A significant development discussed is the "Genius Act," a stablecoin bill that passed a key preliminary vote in the US Senate with a strong 69-32 majority, including 16 Democrats.
• Stablecoin: A type of cryptocurrency designed to maintain a stable value, typically pegged to a fiat currency like the US dollar.
• Senator Bill Hagerty, a proponent, stated the bill aims to modernize the US payment system, foster innovation domestically, protect consumers, and ensure US dollar dominance by stimulating demand for US Treasuries. He projected stablecoin issuers could become top holders of US Treasuries.
• Key Provisions of the Genius Act:
• Stablecoins must be fully backed 1:1 by liquid assets (cash or short-term US Treasuries).
• Issuers must regularly disclose reserves.
• Coin holders prioritized in bankruptcy.
• Mandates AML (Anti-Money Laundering) compliance.
• AML (Anti-Money Laundering): Laws and regulations intended to prevent criminals from disguising illegally obtained funds as legitimate income.
• Defines eligible issuers (banks, credit unions, registered non-bank entities) but excludes large tech companies.
• David notes the bill's passage could unlock trillions in stablecoin growth as traditional finance (TradFi) entities like Visa and Mastercard have infrastructure ready.
• Opposition, according to Senator Hagerty, comes from those favoring centralized control over decentralized networks. Elizabeth Warren and Chuck Schumer were noted as opposing.
• A significant concession to the banking lobby was blocking stablecoins from directly offering yield from their underlying Treasuries to holders. Ryan commented, "So, you know that nice treasury yield that remains a security. We're not going to give you that 5%. Tether gets to keep its massive margins."
• Strategic Implication: The Genius Act's likely passage represents a major regulatory step for crypto in the US. It could legitimize stablecoins, drive institutional adoption, and significantly increase demand for short-term US Treasuries. For investors, this could boost confidence in regulated stablecoins and benefit platforms (like Ethereum) that host significant stablecoin activity. The lack of direct yield pass-through, however, means yield opportunities will likely remain within DeFi protocols.

Ethereum's "ZK Miracle": Real-Time Proving Promises L1 Scalability

• The discussion shifts to exciting developments in Ethereum's scalability, termed the "ZK Miracle," based on insights from Justin Drake and Uma Roy regarding real-time Zero-Knowledge (ZK) proving.
• ZK (Zero-Knowledge) Proofs: Cryptographic methods allowing one party (the prover) to prove to another party (the verifier) that a statement is true, without revealing any information beyond the validity of the statement itself. In blockchains, this means nodes can verify transactions much more efficiently.
• Real-time proving means generating ZK proofs faster than Ethereum's 12-second block time. Current progress shows 99% of Ethereum Layer 1 (L1) blocks can be proven in under 13 seconds.
• Layer 1 (L1): The base blockchain, like Ethereum mainnet.
• Implications of Real-Time ZK Proving:
• Stronger Cross-L2 Composability: Enables seamless interaction between Layer 2 scaling solutions.
• Layer 2 (L2): Scaling solutions built on top of an L1 to improve transaction speed and reduce costs.
• L1 as an Enshrined ZK Rollup: Ethereum L1 itself could operate like a ZK rollup, potentially achieving 100x throughput (around 10,000 transactions per second) and eventually allowing for reduced block times.
• Enshrined ZK Rollup: Integrating ZK rollup technology directly into the L1 protocol for enhanced scalability and efficiency.
• Timelines vary: Justin Drake suggests 3 years, Dankrad Feist suggests 6 years for full 10,000 TPS. Ryan notes a 3x annual improvement in gas limits could achieve this incrementally.
• David explains the efficiency: "Only one computer has to solve the sudoku puzzle... everyone else checks the correctness." This contrasts with current systems where every node re-executes all transactions.
• The Succinct Prover Network, crucial for decentralizing ZK proof generation, was also announced, along with its PRO token.
• Actionable Insight for Researchers: The rapid advancement in ZK proof technology is a critical area. If successful, it could fundamentally enhance Ethereum's scalability, security, and interoperability, solidifying its position. Tracking the development of enshrined ZK rollups and prover networks like Succinct is vital.
• Strategic Implication for Investors: This development significantly de-risks Ethereum's long-term scalability roadmap. A more scalable L1 could attract more users and applications, positively impacting ETH's value and the broader Ethereum ecosystem.

Solana Proposes "Appleglow" Consensus Upgrade for Enhanced Speed

• Anza, a Solana client team, proposed "Appleglow," a major consensus engine upgrade for Solana, aiming to further increase its speed and reduce latency.
• Appleglow includes two new components:
• Voter: Designed to finalize blocks in 100-150 milliseconds, often in a single vote round, a potential 100x speedup.
• Rotor: A lighter, faster gossip layer for relaying blocks more efficiently, replacing the current "Turbine."
• Gossip Layer: A peer-to-peer communication protocol used by nodes in a distributed network to spread information (like new blocks or transactions) quickly.
• The goal is to move Solana closer to Web2 latency, enhancing its suitability for real-time trading, gaming, and payments.
• Concerns were raised by some community members, like Jito founder "buffalu" (referenced as Jirean Tyson in the transcript, likely a misinterpretation), about potential increased validator centralization, suggesting as few as seven validators could attack the network under the new model. This claim requires further technical scrutiny.
• Jump Crypto's Fire Dancer client, another Solana performance enhancement, is reportedly targeted for the second half of 2025.
• Actionable Insight: Solana continues to push the boundaries of blockchain performance. Investors and researchers should monitor the development of Appleglow and Fire Dancer, paying close attention to the trade-offs between speed and decentralization/security. The debate around validator centralization will be key.

The Evolving Landscape of Real-World Assets on Blockchains

• Ethereum currently dominates the tokenized Real-World Asset (RWA) space, with approximately $10 billion in assets.
• RWA (Real-World Asset): Physical or traditional financial assets (e.g., real estate, bonds, equities) represented as tokens on a blockchain.
• However, Solana is making inroads. Kraken, a major crypto exchange, announced it is teaming up with Backed Finance to launch tokenized equity offerings on the Solana blockchain.
• David questions Kraken's choice of Solana for this, given Kraken also has its own Layer 2 plans.
• Strategic Implication: The RWA sector is a significant growth area for crypto. While Ethereum has an early lead, other chains like Solana are actively competing. Investors should watch which platforms gain traction for different types of RWAs and how regulatory developments (like the Genius Act for stablecoins) impact this sector.

Major Exploit on Sui: Cetus DEX Drained, Validator Censorship Raises Questions

• Cetus Protocol, the largest Decentralized Exchange (DEX) on the Sui blockchain, suffered a major exploit, leading to a trading halt and drained liquidity pools.
• DEX (Decentralized Exchange): A peer-to-peer marketplace where cryptocurrency traders make transactions directly without handing over management of their funds to an intermediary or custodian.
• The exploit resulted in losses estimated around $200 million, with assets in liquidity pools, including USDC, losing significant value as SUI tokens were drained.
• The hacker reportedly moved around $54 million worth of SUI, converting some to ETH and bridging it to the Ethereum network.
• A critical point highlighted by Ryan was the response: "Sui validators are censoring transactions from the hacker at the layer one level."
• David finds this concerning: "It's just showing like the man behind the curtain like this thing is censorable. Why have a blockchain, right?"
• Actionable Insight: This incident highlights security risks in emerging DeFi ecosystems and raises fundamental questions about censorship resistance. The decision by Sui validators to censor transactions, while potentially aimed at fund recovery, undermines a core tenet of blockchain technology. Researchers should analyze the long-term implications of such actions on network trust and decentralization.

MakerDAO's Transition to Sky: A Rebrand and Shift in Strategy

• MakerDAO, an original DeFi protocol, is undergoing a significant rebrand and restructuring into "Sky."
• MKR token holders will need to migrate their tokens to the new "Sky" governance token to participate in governance and accrue rewards from the Sky ecosystem.
• The rebrand includes a new stablecoin, USDS, which, unlike the original DAI, will feature a "censorable whitelist," making it more compliant with regulations.
• Ryan and David express a sense of nostalgia and some sadness, as MakerDAO was foundational to DeFi. David mentioned, "MakerDAO was where I cut my first teeth... before I started writing content about Ethereum, I was writing content about MakerDAO."
• Strategic Implication: MakerDAO's evolution into Sky, particularly the introduction of a censorable stablecoin, reflects a broader trend of DeFi protocols adapting to regulatory realities. This may attract more institutional participation but could alienate users prioritizing maximum censorship resistance. Investors in MKR must actively manage the token migration.

Debate Over Bitcoin's Smallest Unit: Sats vs. Bits

• A discussion is ongoing within the Bitcoin community about rebranding Bitcoin's smallest denomination, currently known as a "Satoshi" (SAT).
• Satoshi (SAT): The smallest unit of Bitcoin, equal to 0.00000001 BTC. Named after Bitcoin's pseudonymous creator, Satoshi Nakamoto.
• Jack Dorsey, former Twitter CEO and a vocal Bitcoin proponent, suggested that "sats are so confusing" and proposed "bits" or simply "bitcoins" (for plural) as more intuitive alternatives.
• A Bitcoin Improvement Proposal (BIP 177) was mentioned, which proposes redefining Bitcoin's base unit by making one Satoshi equal one Bitcoin, a significant change from the current 1 BTC = 100 million satoshis. This seems to be a misunderstanding of BIP 177's intent, which is more about display conventions. The core debate is about the common term for the smallest unit.
• BIP (Bitcoin Improvement Proposal): A design document providing information to the Bitcoin community or describing a new feature for Bitcoin or its processes or environment.
• David favors "bits," finding it more logical ("Bits and bitcoins that makes so much sense.") Ryan prefers the traditional "sats."
• The hosts acknowledge that for this denomination to become widely relevant in everyday transactions, Bitcoin's price would need to be significantly higher.
• Contextual Enrichment: This debate reflects Bitcoin's evolution and attempts to improve user experience and mainstream adoption. While seemingly minor, unit nomenclature can impact perception and ease of use, especially for newcomers.

Texas Establishes Strategic Crypto Asset Reserve

• The state of Texas has passed a bill to create a "strategic Bitcoin reserve," though it's broader than just Bitcoin.
• The bill allows a dedicated fund, managed by the state controller, to invest in any crypto asset with a market capitalization above $500 billion.
• This means assets like Ethereum (currently around $320 billion market cap, but potentially exceeding $500 billion in the future) could also be included. As Ryan noted, "Ether at $320 billion. Yeah, we get a 4k Ether, you know, it's on the [list]."
• Actionable Insight: Texas's move is a significant step by a state-level entity to formally incorporate crypto assets into its strategic reserves. This could set a precedent for other states or even nations, signaling growing acceptance and potential for government-level investment in major cryptocurrencies.

Galaxy Digital Achieves NASDAQ Listing

• Galaxy Digital, Mike Novogratz's crypto financial services firm, was successfully listed on the NASDAQ stock exchange.
• Previously, Galaxy Digital was listed on a Canadian stock exchange. The NASDAQ listing provides access to deeper liquidity in the US capital markets.
• Ryan mentioned a recent recording with Mike Novogratz (to be released later), where Novogratz emphasized "liquidity, liquidity, liquidity" as the reason for the NASDAQ move and expressed a desire to tokenize Galaxy Digital shares on Ethereum "as soon as possible."
• Strategic Implication: A NASDAQ listing for a major crypto firm like Galaxy Digital enhances its legitimacy and accessibility to traditional investors. This can bring more capital into the crypto space and signals maturation of the industry.

SEC Commissioner Peirce Offers Clarity on Crypto Asset Classification

• SEC Commissioner Hester Peirce delivered a speech offering a "new paradigm" on crypto asset regulation.
• Key takeaways from her speech:
• "Most currently existing crypto assets... are not securities."
• Specifically, "Crypto assets that do not represent economic rights or an interest in a business entity or other promisor and are solely for use or consumption should not be subject to the federal securities laws."
• David interprets this as positive news for NFTs and collectibles, suggesting they are "in the clear."
• Ryan notes this represents a "complete 180 pivot" in the SEC's public stance, with Peirce now "unleashed" to voice these views.
• The SEC is also continuing enforcement against clear fraud, with charges filed against "Unicoin" (a distinct entity from Uniswap) for an alleged $100 million securities fraud.
• Actionable Insight for Researchers & Investors: Commissioner Peirce's statements, if reflective of a broader shift within the SEC, could significantly reduce regulatory uncertainty for many crypto assets, particularly utility tokens and NFTs. This is a crucial development to monitor, as it could reshape the legal landscape for crypto in the US.

DOJ Investigates Coinbase Data Breach

• The Department of Justice (DOJ) is investigating a recent data breach at Coinbase.
• The discussion clarified that the DOJ appears to be working with Coinbase to investigate the breach and identify the perpetrators, rather than investigating Coinbase for malpractice, though the full scope is still emerging.
• The breach has led to numerous reports of phishing attempts targeting Coinbase users.
• The hosts touched on the ongoing debate about the extent of Coinbase's responsibility versus the inherent risks of centralized data storage mandated by AML/KYC regulations.
• KYC (Know Your Customer): A standard due diligence process used by financial institutions and other regulated companies to verify the identity of their clients.
• Strategic Implication: This investigation underscores the persistent security challenges in the crypto space and the vulnerabilities associated with centralized data repositories. It highlights the need for robust security practices by exchanges and ongoing vigilance by users.

Circle Acquisition Rumors Persist Amidst Market Speculation

• Rumors continue to circulate about a potential acquisition of Circle, the issuer of the USDC stablecoin.
• Coinbase and Ripple are reportedly in a bidding war for Circle.
• An interesting detail mentioned by David is a clause in the original Coinbase-Circle deal that allegedly gives Coinbase veto rights over any other acquisition attempt, questioning the viability of a Ripple bid if true.
• Ryan expressed a preference for Circle to remain independent or find a path that doesn't involve what he perceives as a less favorable outcome like a sale to Ripple, stating, "It feels like everything's going so well... why does Circle have to sell to Ripple?"
• Actionable Insight: The potential acquisition of a major stablecoin issuer like Circle by either Coinbase or Ripple would have significant market implications, potentially consolidating power and impacting competition in the stablecoin and broader crypto payments landscape. Investors should monitor these developments closely.

Reflective and Strategic Conclusion

This episode underscores a pivotal moment where regulatory advancements like the Genius Act and technological leaps in ZK proving are converging with strong market performance. Crypto AI investors and researchers should prioritize analyzing the impact of US stablecoin legislation on market structure and tracking Ethereum's L1 scaling progress for future opportunities.