Byron Gilliam

Nathaniel Whittemore

The Breakdown

Crypto ETFs are front and center as Trump Media Group files a controversial application featuring Cronos alongside Bitcoin, Ethereum, Solana, and XRP—sparking debate over ETF standards. Meanwhile, Grayscale’s stalled ETF approval fuels frustration and uncertainty, pushing the SEC to clarify token listing guidelines. Plus, Robinhood faces regulatory scrutiny over tokenized stocks, MetaPlanet outlines its bold Bitcoin treasury strategy, and Ego Death Capital launches a $100 million Bitcoin-focused fund to fuel innovation. NLW breaks down the high-stakes developments reshaping crypto markets.
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The Push to Accelerate Crypto ETFs

Elon Musk just announced the formation of the "America Party," embracing Bitcoin and sparking political chaos. Meanwhile, Congress bets on explosive economic growth through massive spending, and House Republicans prioritize crypto legislation. Plus, the government drops its appeal in the landmark Tornado Cash sanctions case, but the criminal trial against its developer looms large.
 
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Elon Musk Launches a Bitcoin-Friendly Political Party

Over 80,000 Bitcoin, untouched since 2011 and now worth $8 billion, suddenly moved this holiday weekend, sparking wild theories—from secret whales to quantum hacks. NLW explores the intrigue, risks, and possibilities behind one of Bitcoin's largest-ever transactions, and the deeper questions it raises about Bitcoin privacy, security, and the mythos of crypto’s earliest adopters.
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The Mystery of the $8 Billion Ancient Bitcoin Whale

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“I wish upon you ample doses of pain and suffering.”



— Jensen Huang, on building resiliency
</blockquote>



The history of the world’s most valuable company is a study in how improbable its survival was, let alone its success.



In <a href="https://www.amazon.com/s?k=the+nvidia+way&amp;crid=N16XBIMZV1DG&amp;sprefix=the+nvidia+way%2Caps%2C179&amp;ref=nb_sb_noss_1">The Nvidia Way</a>, Tae Kim tells the story of how Nvidia, founded in 1993, emerged from the small and volatile market for graphics chips — an industry in which everyone was always &#8220;thirty days from going out of business,&#8221; as Jensen Huang constantly reminded his employees.



That was more or less true for much of Nvidia’s existence, not only because money was tight for most of its existence, but because graphics chips were so interchangeable that one poorly designed product could sink the company.



After Nvidia’s first two chips were poorly designed, the company really was just weeks away from insolvency.



“We were just bad at our jobs,” Jensen told Kim, who refers to Huang by his adopted first name throughout.



(Born in Taiwan, Jen-Hsun Huang anglicized his first name because his parents sent him to a reform school for juvenile delinquents in Kentucky under the mistaken impression it was a boarding school for high achievers.)



Nvidia’s third chip only happened because Jensen took what little venture capital the company had left and gambled it all on an accelerated production process to get it done while he could still make payroll.



It was a hit and the company survived another cycle.



No one was more surprised than the industry leader at the time, 3dfx, which was forming plans to buy Nvidia out of bankruptcy.&nbsp;



But shortly thereafter, Nvidia was the industry leader and 3dfx was bankrupt.&nbsp;



(Nvidia bought 3dfx’s patents out of bankruptcy and hired 100 of their engineers.)



Nvidia would continue to &#8220;oscillate between near-death experiences and market-defining success,” Kim writes, which does much to explain the company’s culture — the world’s largest company still operates as if it’s 30 days from going out of business.



Much of that is a reflection of Jensen’s personality.



As Kim documents, the billionaire tech founder spends nearly all of his waking hours working, including weekends and holidays.



“Work is how I relax,” he explained to employees who asked why he was bombarding them with emails from a beach.&nbsp;&nbsp;



He expected his employees to do the same and they mostly did: Local competitors took notice that the employee parking lot at Nvidia’s Santa Clara headquarters was typically full on nights and weekends.



Even so, Jensen was tough on them.



His method of managing people, in his own words, was to &#8220;torture them into greatness.&#8221;



That wasn’t always appreciated.



Jensen used to save his most scathing performance reviews for all-company meetings, believing that a public dressing-down was an opportunity for everyone to learn from someone’s mistake.



(“Feedback is learning. For what reason should you be the only person to learn from this?”)



Many talented engineers left the company because of that kind of treatment: “It was the most embarrassing, humiliating thing I’ve ever seen,” an executive told Kim of one such incident.&nbsp;



But Jensen was equally hard on himself: &#8220;I look in the mirror every morning and say, ‘You suck.’&#8221;



Nvidia adopted that harsh personality — the “Nvidia way” of Kim’s title is essentially the mindmeld between Jensen and the company he co-founded with two friends.



(One co-founder quit the company in 2000 and sold his entire stake for about $30 million. His 3.5% of the company would be worth about $140 billion today.)



That may have made Nvidia the most unpleasant place to work in Silicon Valley, but it’s made it a survivor.



Even when Nvidia had survived long enough to IPO in 1999, people doubted its chances of holding on much longer.



“Why would we invest in a graphics company?” one investor asked. “You would be the 40th we’ve backed, and all the others have gone out of business. Why would we do this?” The reason, Kim’s story makes clear, was Jensen.



His maniacal work habits, adopted by the whole company, kept Nvidia alive in the early years, and his uncanny ability to see around corners kept Nvidia at the cutting edge of technology.



Jensen was among the first to recognize that PC gaming would be a bigger market for graphics chips than business workstations.



He was among the first to recognize that graphics chips, like CPUs, could become programmable “general processing units” by running software, which Nvidia went on to invent.



(Nvidia contracted Mythbusters to create a <a href="https://youtu.be/Ge-g3xZ5bb8?si=SPTyEY68TD6unfYd">fun explainer</a> on the difference between GPUs and CPUs.)



Most importantly, he was among the first to recognize that GPUs would become the enabling technology of AI.



The same GPUs that Nvidia had optimized to do the math behind the arc of an arrow in Zelda turned out to be uncannily well-suited for the matrix math that powers today’s AI models.



From afar, it seems like Nvidia lucked into it: GPUs just happened to be good for AI and Nvidia just happened to make them.



But Kim&#8217;s account shows that Jensen spotted the breakthrough progress in deep-learning AI while it was still an academic curiosity.



It’s hard to imagine any other CEO being that early to such a deeply technical trend — and impossible to imagine any of them betting their company on it.



“Deep learning is going to be really big,” he told Nvidia executives in 2013, nine years before the release of ChatGPT. “We should go all in.”



Only with hindsight was that an obvious thing to do.



At the time, Nvidia sales were stagnant, its market capitalization was just $8 billion and its shares traded on 10x P/E, net of cash.



Nvidia’s own investors were so low on the company’s prospects that they badgered Jensen into spending $1 billion of the company’s cash buying back shares; they thought there was nothing else to do with it.&nbsp;



Fortunately, Jensen was simultaneously investing billions in getting Nvidia ready for the AI moment that hardly anyone else saw coming.



In many ways, Jensen created that moment.



Without the billions that Nvidia invested in optimizing its chips and software for AI (years before they could show investors any return on it), the ChatGPT phenomenon would not have happened how and when it did.



Nvidia’s GPUs made large-scale deep learning feasible and they wouldn’t have made them with any other CEO.



“Jensen Huang is surely the only person who could have gotten Nvidia to where it is today,” Kim concludes.



There was a lot of pain and suffering along the way.



But there’s no other way a graphics chip startup becomes the world’s most valuable company.



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<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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The Breakdown Newsletter

The first $4T company

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Because that’s where the money is.”



— Willie Sutton, on why he robbed banks
</blockquote>



<a href="https://www.google.com/finance/quote/CRCL:NYSE?window=1M">Circle traded at 1x AUM</a>



At its June 23, history-making peak, Circle shares traded at an enterprise value (market cap minus cash) of roughly $62 billion.



That is wild because Circle’s assets under management is…wait for it…$62 billion!



In other words, stock market investors were briefly valuing Circle at 100% of AUM.



(It’s down to about 67% now.)



By contrast, BlackRock Asset Management’s enterprise value is just 1.5% of the $11.5 trillion of assets it manages.



That’s clearly not a metric any Circle investor cares about, but I still find it extraordinary — and the shares seem extraordinarily expensive on <a href="https://x.com/jonbma/status/1935727836339281965">more standard metrics</a>, too.



The most extraordinary metric, however, is simply the stock’s performance: CRCL shares ended their first day of trading up 180% from the IPO price, and their second day up 247%.



Fortune <a href="https://fortune.com/2025/06/10/circle-ipo-stock-price-valuation-outlook/">reports</a> that this makes Circle the best performing IPO of any large stock since 1980 —&nbsp; a genuinely incredible achievement considering that the dotcom boom is included in that large sample size.&nbsp;



But things got even crazier: CRCL subsequently traded as much as 750% above its IPO.



I don’t, however, think the IPO was underpriced.



In their initial research report, analysts at Goldman Sachs (which led the IPO), put an <a href="https://x.com/HadickM/status/1939721883185762794">$80 price target</a> on the shares — nearly 60% below current levels.



(Amusingly, Goldman still rates the shares as a “hold.”)



That understandably makes people question why Goldman priced the IPO all the way down at $31 — especially considering that the issue was 25x oversubscribed.



But investment banks don’t unilaterally dictate IPO prices. Instead, it’s mostly a function of what their institutional customers are willing to pay.&nbsp;



And it’s likely the case that while the Circle offer was 25x oversubscribed at $31, it might have been zero times subscribed at, say, $41.



Institutional accounts typically put in for more than they actually want so as to try getting a better allocation, so the “times oversubscribed” statistic is just marketing.&nbsp;



Regardless, the huge IPO pop has instantly changed the perception of Circle as a business.



I think of Circle as an asset manager running a tokenized money market fund — which I might have valued at 10% or 20% of AUM (generously, to account for its good growth prospects).&nbsp;



But the stock market clearly thinks that Circle is a tech stock, which can be valued at anything.



And the stock market is always right.



So even if Circle did leave money on the table, I’d say it was money well spent.



<a href="https://www.google.com/finance/quote/BMNR:NYSEAMERICAN?window=5D">BMNR is up 30x in three days</a>



Shares of BitMine, the latest in an ever-growing line of crypto treasury stocks, are trading at $135 today — three days after raising capital at $4.50.



BitMine aims to be an Ethereum version of MicroStrategy, and it’s off to a great start, so it might well achieve that.&nbsp;



(I’d still probably put my money on SBET, but I think all these things are silly, so what do I know.)&nbsp;



But who in their right mind thinks that paying 30x more for a stock than professional investors did three days ago is a good idea?



It’s hard for me to imagine and I’m not sure what to make of it.



But this, along with Circle, is a reminder that there’s a lot more money in stock markets than there is in crypto markets — and also a lot fewer ways to buy “crypto.”



This sudden mismatch of supply and demand has created a bizarre situation in which stock market investors appear to be far more bullish on crypto than crypto investors are.&nbsp;



Crypto tokens have been flatlining for months, but crypto-related equities are booming.



There’s even a boomlet in <a href="https://fortune.com/crypto/2025/07/02/coinbase-liquifi-acquisition-mergers-acquisitions-crypto-industry/">crypto-related mergers and acquisitions</a> going on.&nbsp;



IPOs, speculative excess, M&amp;A: The next crypto bull market is here — it’s just not happening in crypto.



Why is it happening on the stock market instead? Because that’s where the money is.



<a href="https://dacfp.com/whitepaper-0625/">Traditional investment advisors love crypto now, too</a>



Ric Edelman, the founder of a registered investment firm with $300 billion of assets under management, now <a href="https://blockworks.co/news/edelman-crypto-allocation-portfolio">recommends that investors allocate</a> as much as 40% of their savings to crypto.



The most conservative investors, he says, should allocate 10%.



Amazing.



In short, Edelman’s reasoning is that 1) with people living longer, even a 60-year-old investor should be investing on a 50-year time horizon and 2) crypto is one of the “exponential technologies” that long-term investors should seek exposure to.



“Thousands of companies in dozens of industries are at risk of obsolescence or massive market decline due to technological advancement,” Edelman warns, before making his case for crypto as a future-proof industry (because of bitcoin and stablecoins, basically).



Having skimmed his promotional PDF (thoughtfully written in a font large enough for 110-year-old investors to comfortably read), I’m a little skeptical that Edelman has studied crypto thoroughly enough to have a strong opinion on the multi-decade trajectory of this brand new asset class.



But, however right or wrong he proves to be (let’s check back in the year 2085), the most telling thing in his presentation may be the “dozens of ways” to invest in crypto that he cites — all of which are different ways to get exposure to bitcoin and ETH on the stock market.



Crypto is the future, he thinks, but I guess he doesn’t recommend using it.



Still, if the kinds of investors that Edelman advises are going to put 40% of their savings into exchange-listed crypto — or 10% even — we’re going to need a lot more exchange-listed crypto.



<a href="https://x.com/opt_fun">1,000x leveraged crypto trading is now available</a>



A new crypto exchange on Hyperliquid, opt.fun, offers traders 1,000x leverage on crypto trades “for one minute.”



That seems like a bad idea to me — for one second, even.&nbsp;



1,000x leverage implies an equity margin of 0.1%.&nbsp;



So if you bought something with a bid/offer spread of more than that, you’d immediately be stopped out for a total loss.



That may not be how opt.fun works, I’m not sure.&nbsp;



But I’m <a href="https://www.theblock.co/post/156031/uprise-lost-99-of-client-funds-while-shorting-luna-during-its-price-crash">reminded</a> of the AI-enabled quant fund that managed to lose all of its assets under management by getting stopped out of a short position in LUNA in the same week that LUNA fell 99.99%.



Even on a zoomed-in chart, you could barely discern the uptick that must have gotten it.



But the AI had shorted with so much leverage that the position was almost immediately stopped out.



If it had held on for just one more minute, it probably would have covered the short nearly 100% lower, possibly turning a tiny sliver of capital into, say, a 1,000%+ gain after leverage.



But a minute is a long time in markets — in crypto ones, especially.



(Edelman might be right to stay out of them.)



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Thursday links: CRCL, BMNR, RIAs and 1000x leverage

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Private markets are the new public markets.” — Matt Levine
</blockquote>



Because I was a professional trader for a long time, people have always asked me for investment advice.



At first, I’d try to explain that traders don’t know anything about investing, but then they’d just ask me for trading advice, as if it were the same thing.



(Full disclosure: Traders don’t know much about trading, either. It’s mostly luck.)



Eventually, I stopped trying to explain the difference and started just offering the standard advice instead: Put it all in an US equities index fund.&nbsp;



For anyone young enough to ride out the volatility, that’s always worked out because the S&amp;P 500 has returned about 8.5% a year since its inception in 1928.



Over a decade or two, 8.5% a year is a lot — compound interest remains the eighth wonder of the world.



But the vast majority of stocks don’t compound at all, which makes things difficult.&nbsp;



A <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2900447">study</a> by Hendrik Bessembinder found that just 4% of stocks accounted for all of the net returns in US equity markets between 1926 and 2019.&nbsp;



4%!



The other 96% of stocks, in aggregate, returned nothing.



So, investors who missed out on Amazon (+225,089%), Nvidia (+407,612%) or Microsoft (+825,487%), are unlikely to have achieved that average 8.5% return — or anything close to it.



(Bessembinder also <a href="https://download.ssrn.com/2024/11/11/4897069.pdf?response-content-disposition=inline&amp;X-Amz-Security-Token=IQoJb3JpZ2luX2VjEPn%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaCXVzLWVhc3QtMSJIMEYCIQDzBRREWRCOhi4YJ1keOAqX93xc2%2BsYYn%2F28qXwbhsIlQIhAML82tNSZ%2Fx3Rx8pgXnWoQ9T4xi9YHN5NpIqP%2Fgfyyj0KsYFCPH%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEQBBoMMzA4NDc1MzAxMjU3IgzwDMQ8e0RzwYuE5WAqmgWRVqfaz%2BfoQwlK5wCEaSjIVEOu0UXXrv4OuLLt%2FSD8YtSVGPOQxvaZSa4cW%2Flf6yM7pVqZY%2F%2Bgd89fT%2FqTsrFVBmxZULOspj8l37Q0at%2Fb4JWLUOwVGVf5HW0jXKGmGoyF39phC9f0SF1IjQyOlX1Fglm3RJFk5LE3yq4Hssi0yTQCzE80vkBtpi14pVSKzYYVMcbJGrNSM%2BjvgKGlxtBDT5Qe0rx7tEwBtUGfSTci3P4%2Fc60mKx%2BcNqY0VsqYUwUx5m8tKo4wY5pB6mlWKHCJdnaQPdrl%2FULHNOhN8p9pTVUeSEVnbK3%2BWZNnZYmsfKnylqryWC%2BG26ZF%2F77i%2FTKXChGyKSMK7Bi4KQCeeQ%2B0Yp1myKAICvDM4QuPuGv9BYMdh9MaQeBBVJ2LeXUPN7M5qiQLyT6inglP%2FPtVPdX48bzSwZN2vdEaBUac8RiwRPTb7YhkgFWZ1lowJX14srARoCHXjWGH3%2BNAhsvPIprLiDMPSc8HpF20pUzahr53YSE4sL4QZdR%2FTWdzS5lZk31OShI6oniGBeT0VyvkiD86XYGyHUgo5tBJk4hOTnb73mRw6Bxco3GqysTEpCE6qrGUKDHaeE9DtEfJsQl5lJ%2BogQSoK5sOoE5sG5f8ZJo9f1vzcb16bd6GzEOctxGNSwrg3Zj33ojp%2FIavdcw0EIJGHbxPgQedVrFqQk%2FEd04OesGnX0rhWBl48lsvoj4HfCSff%2BpSjWNgguITRxh1gh27vcJih1E9j0jC1SwY%2BLlNH6PlsRbwf6%2BC9rZ6ITh5cLE%2BiHSvG4LKmEPXdduE2p%2B%2BJCaqbWDnimZRt6t95oJVsCwm%2B25TcRUD3fgp8vDzdj3ZQbNn7zUlCvE3LciNH0QLsp4tZLqBv2p3LNcwu7KVwwY6sAFTariU6YXMmRPo%2FQiY%2BtfgRrRtrUcctUZulq27oPMLi0b2pQp107YQeCJDkDC7fYwg20%2BxZhChZK9qCFtZKvroTUBMwGSAIto8CNEskEStmX%2FljZkq5JofQuyp7DzGwV%2B7udHQyLhXkXPgSTORVuC9Lx4eplHZK%2B%2F4drrKlA8rsgBszPBGaqnPyGeTVu7vKsuxenyDCtF0yeAokcCZpPBjpMhJzU9V8Y743c27KfYI8w%3D%3D&amp;X-Amz-Algorithm=AWS4-HMAC-SHA256&amp;X-Amz-Date=20250702T162840Z&amp;X-Amz-SignedHeaders=host&amp;X-Amz-Expires=300&amp;X-Amz-Credential=ASIAUPUUPRWEQWNLDEOU%2F20250702%2Fus-east-1%2Fs3%2Faws4_request&amp;X-Amz-Signature=279e8bda8ba52721519122951ed78d1e0ee273289d3b0b4b38c7a3afcccb244b&amp;abstractId=4897069">cites</a> the 265 million% lifetime return in Altria, but few of us have a 100-year investing lifetime, so I’m not sure how helpful that is.)



This has always been the rationale for index investing: It’s impossible to pick the small number of stocks responsible for long-term equity returns (let alone resist the urge to sell them), so it’s best to buy them all via an index (and never sell them).



Now, though, those kinds of mega-winners are less likely to be in the index.



Today’s most exciting companies — OpenAI, SpaceX, Epic Games — stay private seemingly forever.



This is a problem.



If we’re all counting on our stock portfolios to return 8.5% a year, but the kinds of companies that accounted for that 8.5% are no longer in them, how is anyone ever going to retire?



One possible solution is to “make IPOs great again,” as SEC Chair Paul Atkins <a href="https://www.cnbc.com/video/2025/07/02/sec-chairman-paul-atkins-on-regulating-private-markets-rise-of-stock-tokenization.html">told CNBC</a> he intends to do.



Atkins says that by making disclosure requirements less onerous, companies will be encouraged to return to the stock market.&nbsp;



But I’m not sure why they’d bother — there’s so much private capital available for high-profile companies like OpenAI and Epic Games that there’s no reason for them to suffer any level of disclosure at all (let alone quarterly earnings calls, road shows, litigation risk, etc.).



The other possible solution is simply to let everyone invest in private companies.



Last week, <a href="https://republic.com">Republic</a>, an SEC and Finra regulated investing platform, <a href="https://www.wsj.com/finance/investing/republic-investing-tokens-companies-ipo-ccff7f91?gaa_at=eafs&amp;gaa_n=ASWzDAifvq5QstV0p4Bp-L8k3h1zK1wuMwjESjo6Fu-Vm3MvxSeDgkal95KbWWQh6RQ%3D&amp;gaa_ts=68658bd8&amp;gaa_sig=yRnX_ZPEeV6ANHHm5tMtayCcM6Ln9DxROtFvyI_H5McjD6WaVDxH6LDt34maN4plG3KvrZev2PfiqkgKhLUdrw%3D%3D">announced</a> it will make history by offering equity exposure in private companies to US investors — and that it’ll do so within the current set of US securities regulations, no special dispensation required.



Crypto, apparently, makes this possible.



After being KYC’d by Republic, retail investors will be able to buy tokenized versions of private shares that will (after an SEC-mandated waiting period) trade onchain between whitelisted wallets.



Republic is confident enough that regulators won’t object to its tokenized “<a href="https://republic.com/mirror">mirror shares</a>” that it’s now taking pre-orders for shares of SpaceX, OpenAI, Epic Games and Anthropic.&nbsp;&nbsp;



There are reasons for caution: Mirror shares do not confer any ownership rights. Instead, they are essentially a tradeable IOU, ultimately redeemable only in the event of an IPO or sale of a private company.



The IOUs are issued by Republic, not the companies themselves, so buyers will have counterparty risk if they do get a chance to redeem.



(This afternoon, OpenAI <a href="https://x.com/OpenAINewsroom/status/1940502391037874606">warned</a> that the “OpenAI tokens” being offered by Robinhood to EU customers “are not OpenAI equity.”)



And while I’m guessing that Republic will generally back the mirror shares 1:1 with the equity it represents, it’s not required to.



Retail investors, however, have never been known for caution.



Republic co-CEO Andrew Durgee told me this morning that it’s already received $300 million of reservations for mirror shares. That, I think, reflects the magnitude of the problem currently faced by public market investors, who rightly feel sidelined by the rise of private markets.&nbsp;



But buying OpenAI or SpaceX at a $300 billion+ market cap is unlikely to help anyone retire anytime soon.&nbsp;



Amazon, Microsoft and Nvidia, for example, all IPO’d at market capitalizations of well under $1 billion.



Better yet, Microsoft IPO’d at a P/E ratio of 10, which many people thought was expensive at the time.



It’s hard to imagine anyone making 800,000% from a $300 billion starting point and who knows what valuation. I imagine Republic will soon make tokenized shares of younger, cheaper, still-private companies available, and maybe the next Microsoft will be among them.



But how will anyone spot it?



It’s easy to dismiss the SEC’s accreditation rules as paternalistic, but the equity raising process it enforces is a price discovery mechanism that makes equity markets significantly safer for retail investors.



Moving that process onchain comes with risk.



Still, fewer public companies to invest in is a growing problem for retail investors and investing in more private companies might be the answer.



Just don’t expect to make 8.5%.



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Crypto brings private markets to the public

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
&#8220;Which is the bigger number? Five or one?&#8221; — Robert Baratheon, Game of Thrones
</blockquote>



Distribution matters in business. Often more than the thing being distributed.



Google, for example, always had the best algorithms for searching the internet, but the now-ubiquitous service didn’t catch on until Larry Page and Sergey Brin figured out how to get it widely distributed.



As recounted in an <a href="https://youtu.be/v1nkN0sM2wc?si=D7iCrPDvLfB1brRC">Acquired podcast</a> released yesterday, Google’s co-founders bet the company by guaranteeing AOL $100 million it didn’t have in exchange for the right to show ads to AOL’s users.



(Yes, I listen to three-hour Acquired podcasts the first day they drop. What of it?)



They also aggressively pursued revenue-sharing agreements, sometimes paying websites more than 100% of the ad revenue they generated (because Page and Brin recognized the long-term value of expanding their distribution). But Google’s real coup was the “toolbar” that it paid PC makers and software providers to bundle with their products.&nbsp;&nbsp;



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdK7QvTWhXG1sQPr-jRtMD-UssV6wDt80mJlHQeYW5pEZt0950TdbiYdIhInkjmDHYSMLo7MAPjjbqU565R42QU-ukV04dqCHhYNQKnQgdfpShoTSwGproETzcPBXg5hbr3hJvunQ?key=X26x6BxwP57TxqPeKWJ5Bw" alt=""/></figure>



This expanded Google’s distribution far beyond the early web-adopters who knew to go straight to the Google.com homepage for the best search algorithm.



This was critical because web search is a bizarro business in which the law of supply and demand is flipped on its head — the more ads Google sold, the more it could charge for them.



This unique dynamic of “increasing returns to scale” (as the Acquired co-hosts call it) made web search a winner-takes-all market.



It also ensured that whoever got the most users first would win that market, however good or bad their tech was.



We might soon learn if the same applies in crypto.



<h2 class="wp-block-heading">When one is the greatest number</h2>



Robinhood does not have the best tech in crypto — not yet, at least.&nbsp;



After announcing its new offering of tokenized stocks yesterday, CEO Vlad Tenev said Robinhood would be issuing the new tokens on Arbitrum, but only “for a short time” while it builds its own blockchain.



It might, however, have the best distribution.



Given its branding, Robinhood’s 25.9 million account holders probably represent the cohort of retail investors most inclined to give new crypto products a try.



In addition to tokenized stocks, Robinhood will be offering perpetual futures and crypto staking.



I’m guessing that Robinhood’s tech in these categories won’t be as good as, say, Hyperliquid’s and Jito’s, respectively.



But much like Google’s early revenue-sharing deals, Robinhood is doubling down on distribution by offering a “2% match” on any crypto that customers deposit.



And Robinhood’s slick, mobile-first UX could play the same role as Google’s search toolbar: a distribution shortcut that brought a complex product to the mainstream.



Unlike search, crypto is probably not a winner-takes-all business because it doesn’t enjoy “increasing returns to scale” — anyone that’s been long altcoins recently will know that the standard laws of supply and demand still apply.



But the standard laws of counting might not.



As Robert Baratheon explains in Game of Thrones, one can be bigger than five in the same way that one clenched fist is more powerful than five waggling fingers.



“One army,” he says, “united behind one leader with one purpose” will defeat five armies with five leaders and five purposes.&nbsp;



Similarly, Robinhood is betting that its unified offering of crypto services will defeat the crypto industry’s ever-growing offering of individual purposes.&nbsp;



Crypto has been arguing about this for a couple of years now: Solana is the clenched fist of monolithic blockchains and Ethereum is the waggling fingers of modular ones.



So far, that ever-heated debate has played out along technical lines: parallel execution, local fee markets, decentralized sequencers and other things I don’t totally understand.



Either approach could work, just as monolithic worked for Apple and modular worked for Microsoft.&nbsp;



And both sides can claim victories this week: Robinhood is building an Ethereum layer-2 blockchain for tokenized stock trading, and tokenized “xStocks” began trading on Solana <a href="https://x.com/blockworksres/status/1940043857842012211">today</a>.



So we might finally find out which approach to blockchains is faster, cheaper and more secure.&nbsp;



But what if it’s distribution that really matters?



If so, crypto could turn out to be a winner-takes-most kind of business.&nbsp;



Robinhood says its intention is to &#8220;make the technical part invisible&#8221; and offer &#8220;one platform for everything investing,&#8221; which sounds like a take-most-of-the-business kind of strategy to me.



Notably, that ambition was <a href="https://x.com/RobinhoodApp/status/1939701274217460047">announced</a> by a CEO in a white pinstriped suit and silk cravat at a French seaside villa in front of a Robinhood-branded pool and the Mediterranean Sea (not yet branded).&nbsp;



Could anything be further removed from crypto’s cypherpunk roots than that?



But crypto is a business now.



And distribution might make Robinhood its big winner.



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The new crypto debate: Monolithic distribution vs. modular tech

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“We are the best place in the world to fail.”



— Jeff Bezos
</blockquote>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1438" height="762" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=1024&amp;h=1024" alt="" class="wp-image-104617" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=1438 1438w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2025/06/image-5.png?w=80 80w" sizes="auto, (max-width: 1438px) 100vw, 1438px" /></figure>



<h2 class="wp-block-heading">Crypto markets can win by frequently failing</h2>



Charlie Munger once said that in 50 years of reading Barron&#8217;s, he had found just one investable idea.



It was an unusually good one, though.



After a Barron’s article caught Munger’s eye in 2020, he spent just 90 minutes researching the auto parts company Tenneco before investing around $5 million.



Two years later, Tenneco was taken private at 15 times the price Munger had paid.



Munger then rolled his $80 million windfall into a fund managed by his friend, Li Lu, who more than quadrupled his money from there.



“So I have made $400 or $500 million reading Barron&#8217;s for 50 years and following one idea,” Munger concluded.



The twofold moral of the story, he implied, is that 1) it only takes one great idea to make it big, and 2) you should ignore all the others while you wait for it.



“The trick in investing,” Warren Buffett liked to say, “is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot.”



I&#8217;m not sure how actionable that advice is for us mere mortals of investing; few of us will be able to pick out the one winner in 50 years of Barron&#8217;s articles.



But we can take heart in the idea that one big winner can more than offset a lot of our inevitable losers.



This is even more true in business.



In baseball, to extend Buffett’s analogy, swinging for the fences can only ever earn you four runs.



In the stock market, you might get the occasional “10-bagger” (or maybe even a 15-bagger, like Munger’s Tenneco investment), but not much more.



In business, however, “that upside isn’t really capped,” as Jeff Bezos explains. “Every once in a while in business, you step up to the plate, you swing as hard as you can, and you get 1,000 runs.”



Bezos was always swinging as hard as he could.



Unlike Munger, he usually struck out.



Worse yet, many of the pitches he swung and missed on seem a bit ridiculous in hindsight.&nbsp;



At one point, Bezos hired staff jewelers to craft custom rings over an open flame on the mezzanine of an Amazon fulfillment center in Kentucky because he briefly believed that the retail jewelry market was the key to Amazon’s future.



Personalized “zShops,” auto retailing, partnering with Toy“R”Us, and no-checkout stores are among Bezos’s other passing enthusiasms that failed to get anyone else enthused.&nbsp;



His investing track record wasn’t much better.



Bezos used money raised in Amazon’s 1997 IPO to make venture-capital investments in Drugstore.com, Pets.com, Gear.com, Wineshopper.com, Greenlight.com, Homegrocer.com, and Kozmo.com, all of which, perhaps predictably, turned out to be losers.



(A seed-round investment in Google was a giant winner, but he made that one with personal money.)



In other cases — such as auctions, search engines, and mobile phones — he picked a reasonable pitch to swing at, but whiffed.



He never regretted the misses, however, because if he wasn’t so willing to swing hard at seemingly every pitch, Amazon wouldn’t be anything more than an online bookstore.



From the beginning, he was always looking for opportunities to become much more than that.



When an employee suggested a subscription service for unlimited free shipping, for example, Bezos not only adopted the idea, he committed Amazon to losing an unknowable amount of money to make it not just a big bet, but a transformational one.



Similarly, when Amazon engineers began working on an early version of cloud computing — while they were still unsure it could work — Bezos demanded that they think bigger: &#8220;This has to scale to infinity. Infinity!&#8221;



Amazon Web Services does now effectively scale to infinity, which makes Bezos look like a prescient tech genius.



But he was equally high-conviction on all of his misses, too, which suggests that his real genius was in his willingness to always swing so hard — just in case he hit something.



That strategy won’t work for most of us; we’d all quickly go bust if we invested as aggressively as Bezos.



But the best financial markets encourage this kind of risk taking — where would we be without business founders willing to take irrational risks?



We’re fortunate that every entrepreneur wildly overestimates their odds of success because society captures the uncapped upside of all that risk-taking without bearing any of the downside risks.



At its best, crypto will enable more of this.&nbsp;



During Permissionless last week, I heard, for example, that “AI arbitration” would be a perfect use case for crypto; that crypto will turn data into an asset class; that decentralization is the only way to audit artificial intelligence; and that “DeSci” might accelerate the development of personalized medicine.



Whatever the investment merits of these ideas may be, I find it notable that they’re being floated at all, because the stock market, with all its centralized gatekeepers, is unlikely to encourage these kinds of bets.&nbsp;



Not that “permissionless capital markets” are perfectly decentralized. Far from it.&nbsp;



But they are permissionless in the sense of allowing anyone to take a swing at building something significant, and allowing anyone to back them.



It might be a long wait still for the next big crypto hit, of course.



In addition to finding just one investable idea in 50 years of reading Barron’s, Munger also said he read Fortune magazine for 60 years without finding any at all.



No one has that kind of patience in crypto.



But Permissionless capital markets could be well suited to the Bezos model of swinging hard at every reasonable pitch that comes by, no matter what the odds of connecting.



Like Amazon, crypto could win by being the best place to fail.



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Crypto markets can win by frequently failing

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The legendary Peter Lynch advised investors to stop following the news.



&#8220;The person who never bothers to think about the economy, blithely ignores the condition of the market, and invests on a regular schedule is better off than the person who studies and tries to time his investments, getting into stocks when he feels confident and out when he feels queasy.&#8221;



The news has been unusually nauseating this year: trade wars, real wars, recession fears, AI doomerism.



And yet, here we are, right back at the all-time highs in both the Nasdaq and S&amp;P 500.



There’s nothing particularly new about this.



Writing in the simpler times of 1993, Lynch noted in <a href="https://www.amazon.com/One-Up-Wall-Street-Already/dp/0743200403/ref=asc_df_0743200403?mcid=06a3bcc798a1339bb508b59f992086b6&amp;hvocijid=18147238387577396879-0743200403-&amp;hvexpln=73&amp;tag=hyprod-20&amp;linkCode=df0&amp;hvadid=721245378154&amp;hvpos=&amp;hvnetw=g&amp;hvrand=18147238387577396879&amp;hvpone=&amp;hvptwo=&amp;hvqmt=&amp;hvdev=c&amp;hvdvcmdl=&amp;hvlocint=&amp;hvlocphy=9004338&amp;hvtargid=pla-2281435179778&amp;psc=1">One Up on Wall Street</a> that “if you had paid close attention to the negative tone of most of our ‘whither the economy’ sessions over the past six years, you would have been scared out of your stocks during the strongest leg of the greatest market advance in modern history, when investors who maintained their blissful ignorance of the world coming to an end were merrily tripling or quadrupling their money.&#8221;



Markets have gone on to far greater advances since then, and I&#8217;d argue that the only way to have fully captured them was to have remained blissfully ignorant of the world.



It&#8217;s easy to look at the long-term performance of stocks and think everyone should always be fully invested.



It’s much harder to look at the daily news and think now is the time to be invested.



Lynch suggests you don’t try.



&#8220;The best way not to be scared out of stocks is to buy them on a regular schedule, month in and month out.&#8221;



US investors have taken that advice to heart, to a degree that Lynch probably would not have imagined.



Now, an <a href="https://www.ici.org/401k">estimated</a> 70 million American workers invest in 401k plans, metronomically pouring pre-tax money into equities, no matter what the news is.



This makes the stock market <a href="https://www.nber.org/papers/w21749">less volatile</a> than it otherwise would be. Or should be, probably.



And that should make them more valuable, too, because investors will accept lower returns (i.e., higher valuations) for assets that cause them less worry.



So it makes sense that equities would be more expensive now than they used to be.



They might get even more expensive.&nbsp;



As long as we have jobs — and therefore 401k plans — it might be hard for the market to go down much.



That would make stocks increasingly less scary — and increasingly more valuable.



Let’s check the charts.&nbsp;



Still saving:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf0CdTEdndC0ELMWMKRXea2e5gXkHrAzqXdHLxm7EO765pJWKMrB6dH5sY6x3hmmcby86ZRcIlEbi9Asa1g1xNE3kyOle_H1dcPAfP7TnIkRntJt0DYgakh0wLhj9ZRUPww7LeHOQ?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



The US personal savings rate ticked down to 4.5% in June. That’s low by historical standards, but still 4.5% of a large and ever-growing number. Some portion of those savings will go into buying equities every month, whatever the news.



Sentiment still has some catching up to do:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdOxbmvGu24eXZ--zEKV2pO3rnBTvsufLyBiszLsZPqRtJtaEJ0gQ2cZmYCnMV1xuCCdQDEftIWLXbiI6RdazxyKdmh2mHn6ZVEj3-DHv8kahrLFXSRWSVHLaVolIChyJvz1TQo8Q?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



Stocks are back at all-time highs, but investor sentiment, as measured by AAII, remains on the bearish side of neutral.



Moving out on the risk curve:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdaw4Qltlu2yDv4jQh5FgswdigVK0lIuGUjRkGoJ4i1GS_tQXsdFA_u1gvIv9MHelOS-wdPV4x2_saINMbeoe4q3tGlA5ThMixq6FBhQwaXi5u3UbW1rD0qjQqceUH3FgJ3YIKWTg?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



US investors are embracing risk, perhaps because stocks seem less risky after weathering all the seemingly bad news this year. If equities are less risky overall, it makes sense to buy higher-risk equities.



The rest of the world is buying value:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd0wBUVjqfswDbw8ZHcmrNKjIFGcGYEwPqYGI7YSqQNAnHGWkoQeN4zA80t6-ghDYzJNdUt0R2utT4RPW7S4Zmy3f4xaCSwHSA5jlqZhN_TPE3rCx5DSTSjr69k20fdGfWI51zkWw?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



Per Goldman Sachs, there’s been an unprecedented divergence between the outperformance of growth stocks in the US (the dark blue line) and the outperformance of value stocks in the rest of the world (the light blue line). While the rest of the world reaches for safety, US investors are all-in on growth.



Is everything safe now?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdWvbyWbMIN-wmQJh8a9yWe9hviXJwu5P9PT8sTd9Sb50HdUnrkfJS_E5MGUfwDyfDd5WBHJQb9BBcLcX5Lv0T8XBANj3L4ALED4zC6xciB1eF_usCKwVP6JjYjoKRe8ukyhCXmoQ?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



Ed Yardeni notes that profit margins in the semiconductor industry continue to rise. Semis were historically the most cyclical and therefore riskiest sector to invest in. Now, they seem almost defensive.



Good news or bad for humans?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXd2kPoU8IplUKpwRTpnZw25Cai9qnrmofuyHa6isuIz1j_gk2hgPyin07QTEZ2OoHnUBOkaEC94TzPNiisxY4lnUDQMUzq1vENlqyQLXCHc0mgF-0JHoJ0MTKP9qi_BZCcoCPvG?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



Less than 10% of companies polled by the US Census Bureau report employing AI over the past two weeks. That might mean AI has only just started disrupting the job market. Or it might mean humans are more useful to employers than the AI hype would have you believe.



The proximate cause for all-time highs?



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXf8yLCrXPDYXEXMjlgL7fdZyQpj_B5F_qsXu5p2HaJWImXDAJefM1ijWVn089QGO7PWlN7HYhnoGTNFKUUkT4Z0klxtkWngQF3jV8dJ58dMctf23CVuOFej3THEZyLp0R1MifgUzQ?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



Expectations for an imminent rate cut are giving investors a reason to buy now.



One less reason to worry:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXeyxhbgXm5wszaF7lxyyBCtAz2Bp3GU9DwaPmk18KHbDToCLAdjdaQdX3kfddOFDuG3D1j_1YdhDutccQNcyiKvG4ed02_Mkljny1-Nissd6pK8CRZqHGNb7EdP8kFbZz6_G0X-2g?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



The Cleveland Fed InflationNow model sees US prices, as measured by CPI, rising at an annual rate of just 1.6% in Q2.



Stocks for the long run:



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcuydBiqR10sZL6C1QpRNdyoF7k3OMmOLKYlz-ZlM8Pd7iLH1bH0uP9f468MNIA2TrDrBvk461FWwFpaKfDi_zhKzoY-5tiz4YENUB7_DXIaGb407Cy9w9fTtLQhVQy48BN7PO60Q?key=womsqVlgj8jTxzn3VX3-yA" alt=""/></figure>



Bank of America strategists say US equities are on the cusp of just the seventh “great breakout” since 1990.



Noting the new highs in equities this week, a <a href="https://www.bloomberg.com/news/articles/2025-06-26/wall-street-goes-all-in-on-risky-stocks-as-bears-race-for-cover?fromMostRead=true">Bloomberg article</a> listed all of the things that should be worrying markets at the moment — tariffs, the economy, consumer spending, and even professional advice to be cautious — and then concluded that “investors appear to be ignoring all of it.”



Peter Lynch would approve.



Have a great weekend, breakout readers.



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Friday charts: Retail is one-upping Wall Street

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Great things in business are never done by one person, they’re done by a team of people.” — Steve Jobs
</blockquote>



<figure class="wp-block-image is-resized"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcV3kLIRva-_oRY1fjMdlO1HuKiv4B9XH2Of4YZ059fpLU0-M-5aDH9wtG2iVtkuXA_05gvzMj3wG2dksL82rjPgnrjhGMlgqQ0oMw5iPpISLWVTWlRBp2aus_ER4YNBC9H-Pih-A?key=jAbiypjm3gXzOvW6tKo1fw" alt="" style="width:612px;height:auto"/></figure>



Steve Jobs <a href="https://youtu.be/njYciFC7mR8?si=jDinkTcfmeVGT2Df">liked to tell a story</a> of a “slightly scary” old man from whom he did odd jobs as a kid, including, one time, gathering some rocks out of the yard.



The man put the rocks into a tumbler in his garage, added some liquid and grit, and told Jobs to come back the next day to see the result.



Jobs says he was amazed as the rocks emerged from the tumbler as smooth, shiny objects of desire.



Later in life, he found this works with people, too.



“A group of talented people, bumping up against each other, having arguments, having fights sometimes, making some noise. By working together they polish each other and they polish the ideas.” In other words, put a group of people in a room together and they’re all likely to look smarter when they come out.



Unlike rocks, however, they do have to be the right kind of people.



As individually visionary as Steve Jobs was, he <a href="https://pca.st/episode/26dcb911-925b-4fae-b13c-9c7ccc50688c?t=1697">attributed his success</a> at least in part to the people he chose to be around:&nbsp; “I think I consistently figured out who the really smart people were to hang around with. You must find extraordinary people.”



One place to find extraordinary people is at conferences.



The magic of an innovation cluster like Silicon Valley is the critical mass of tech people constantly bumping into each other.



Conferences create temporary innovation clusters, like a pop-up version of Silicon Valley.



“One way to think about an industry conference,” Byrne Hobart <a href="https://x.com/ByrneHobart/status/1800537690787471849">explains</a>, is that it “synthesizes high real estate prices by charging an entry fee (and plane tickets plus hotels are also going to have the same economic effect); they make time more expensive, so they raise the relative value of the highest-utility interactions.”



Translation: the high cost of attending conferences weeds out the riff-raff.



If you’re still wondering why people incur the cost of attending a conference in person that they could watch for free at home, I think that’s pretty much it.



You get to meet the kind of people you’d want to be tossed into a rock tumbler with.



<h2 class="wp-block-heading">A panel on crypto’s current meta: Treasury Asset Companies</h2>



I’m a skeptic of crypto treasury companies (to put it mildly), simply because I think companies should be in the business of making things, not just holding them.&nbsp;



I still feel that way after listening to this morning’s panel with three enthusiasts for companies that mostly just hold crypto, but there was more nuance to the story than I had expected.



Dan Kang notes that DeFi Development Corp also runs validators, which allows it to grow its Solana stake independently of the NAV multiple that investors assign to its stock (DFDV).



Could they earn enough Solana by running validators to service their dollar-denominated debt if their stock fell below 1x NAV? I expect we’ll find out, eventually.



In the meantime, DeFi Development Corp “gives you the ability to accumulate crypto even faster than you could on your own.”



I’d like to see the math on that for people paying <a href="https://defidevcorp.com">3.1x NAV</a> for DFDV today, but that’s the service they provide to investors.



Thomas Lee rationalized the seemingly inexplicable valuations that crypto companies command by saying it’s “similar to how oil companies trade on a premium to its proven reserves.”



“MicroStrategy will probably become the biggest stock in the US,” he predicts. “And it’s not valued on earnings, it’s valued at a premium to its bitcoin reserves.”



Call me old-fashioned, but I’d prefer the biggest stocks in the US be valued on earnings — because earnings are a measure of how valuable a company’s product or service is to their customers.



Lee says the crypto treasury companies with the highest NAV multiples have effectively turned their investors into customers.



That’s true, but I’d bet that most of these “customers” still think they’re investing, which could cause problems.



David Grider injected a welcome note of caution, predicting that “several of these will go bankrupt.”&nbsp;



He didn’t sound particularly concerned about it, but I think people should be, because how is this meant to end?



Treasury Asset Companies “equitized tokens,” as Thomas Lee phrased it, and earlier this week, DeFi Development Corp <a href="https://www.globenewswire.com/news-release/2025/06/23/3103316/0/en/DeFi-Development-Corp-Partners-with-Kraken-to-Tokenize-DFDV-Stock-on-Solana-Becoming-the-First-U-S-Listed-Crypto-Treasury-Strategy-to-Go-Onchain.html">announced</a> that its stock will soon be tradable as a token on Solana.



Tokenizing a Crypto Treasury Company is the equivalent of tokenizing equitized tokens.



If that’s worth doing, it’s only a matter of time until someone starts a Crypto Treasury Company that will equitize the tokenized equity that equitized tokens.



This, I fear, risks a <a href="https://www.youtube.com/watch?v=9wrEEd1ajz4">Ghostbusters moment</a> in which the streams will be crossed and the crypto world comes to an end — and maybe take the rest of the world with it.



I see no other logical end point because, as Joe Lubin said on another panel, there’s a “race to acquire the highest-power money” (bitcoin and ether, in his view).&nbsp;



Whatever the risks, Crypto Treasury Companies are one way to run it.&nbsp;



<h2 class="wp-block-heading">One newsy panel</h2>



Speaking this morning, Joe Lubin casually filled in some recent crypto history — from his well-informed vantage point, at least.



Explaining why Ethereum seemed to have fallen behind over the last couple of years, Lubin shared his suspicion that “Gary Gensler was given a mandate, probably from Elizabeth Warren, to kill or slow Ethereum.”



In particular, “It appears they had secretly decided to reclassify ether as a commodity.



“They were trying to pin it on people who were responsible for The Merge,” he explained. “When we saw a bunch of researchers were getting subpoenas, we decided to sue the SEC.”



I imagine few Permissionless attendees would find any of that surprising, but it hasn’t been part of the official record, so I think we got to hear it first.



<h2 class="wp-block-heading">Day III Quotes</h2>



“It’s the ultimate meme.” — Santiago Santos on the bull case for bitcoin



“The highest-power money is bitcoin and ether, because they’re permissionless.” — Joe Lubin&nbsp;



“Ethereum got their shit together. The Ethereum Foundation is firing on all cylinders now.” — Joe Lubin



“MSTR is so big it has a sovereign put.” — Thomas Lee



“The meta-narrative is: Tokens need to make money.” — Michael Anderson, Framework Ventures



Overheard: “The product is how to get rich quick.” — Anonymous, on crypto’s true product-market fit



<h2 class="wp-block-heading">Permissionless IV Newsletter Awards:</h2>



Best elevator pitch: <a href="http://zeoapp.com">zeoapp.com</a> — WeChat + Pinduoduo with crypto rewards. (IFKYK.)&nbsp;



Best merch: personalized coin purses, Aptos



Wackiest moment: Jason Yanowitz interviews Dennis Rodman (I hear he had alpha)



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdQgeUBE6PywnaJSMNrY5eaPgRR2IQ2FDH910Td-IfuRR03ioa_8wPB-RQ608mIWY2tQZlo8tJYkBleWI9IL98oJ1vuXtg75_RpVMj810zcXh-1XFLrkdYrlHxpyyKRxYfDr0Qd?key=jAbiypjm3gXzOvW6tKo1fw" alt=""/></figure>



Best guerilla marketing: Uniswap posters on construction walls blocks from the venue



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdSjvJPriQ0t-IRcPhZYBUZu4okDaO0VZdbc8jQvgcmJqEqXEc-4YFDacolDWXXSUGrVd30wtnvEJs_HcBmAUE_PivPcFX_Wo5Dv6bzw3e6yhTFjC8DJI32y3fRg3uhiE1IDJC14g?key=jAbiypjm3gXzOvW6tKo1fw" alt=""/></figure>



The color-coordinated bicycle appeared to be serendipitous, unlocked, and there all week. Who says New York City has a crime problem?



Most mind-bending experience: The <a href="https://www.ryanoakes.com/?doing_wp_cron=1750957031.5636379718780517578125">magician/mentalist</a> in the Aptos lounge who made me question the laws of physics.



Most degen branding: “One App. 150x Leverage. 113% APR” — Merkle Trade.



Final Permissionless takeaway: It’s good to get off the sofa and see people for real.



And that’s a wrap for Permissionless IV.



Thanks for following along this week and I’ll see you at the next one.



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Permissionless

Permissionless IV, Day 3 takeaways

Fundamental insights and behind the scenes perspectives from the industry’s key operators and innovators

Empire

The must-follow crypto brand for savvy degens who want to think like researchers and analysts.

0xResearch

Investigates the macro landscape as the laws of investing are being rewritten, helping investors adapt to a rapidly changing environment.

Forward Guidance

The essential source for all things Solana — exclusive news, deep analysis, and the latest trends.

Lightspeed

Join Rizzo, The Bitcoin Historian, as we detail Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.

Supply Shock

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Since health, well-being, and security are proper concerns of Government, scientific progress is, and must be, of vital interest to Government.”



— Vannevar Bush, godfather of government research spending
</blockquote>



Should the US government spend money on scientific research? It’s a fair question to ask: Critics worry that government-funded R&amp;D may crowd out private-sector investment and that we’ll never truly know to what extent because the government, unrestrained by profit-and-loss statements, is not accountable for its results.



So let’s look at some results.



A 2015 <a href="https://www.nber.org/system/files/working_papers/w20889/w20889.pdf">study</a> of NIH grants found that virtually every new drug the FDA approved between 2010 and 2016 benefited either directly or indirectly from NIH support — and that every $10 million of NIH funding resulted in a net increase of two to three private-sector patents.



You might not care about drug patents, sure.&nbsp;



Maybe you think <a href="https://www.technologyreview.com/2021/09/04/1034364/altos-labs-silicon-valleys-jeff-bezos-milner-bet-living-forever/">Jeff Bezos</a> or <a href="https://techcrunch.com/2025/01/24/retro-biosciences-backed-by-sam-altman-is-raising-1-billion-to-extend-human-lifespan/">Sam Altman</a> will single-handedly solve longevity for all of us, or that AI will do <a href="https://www.fastcompany.com/91363911/googles-ai-drug-company-says-human-trials-are-very-close">drug discovery</a> now.



Those are reasonable opinions to have.



But what if I told you the government earns a high and quantifiable return on those grants?



A congressional committee <a href="https://www.ott.nih.gov/sites/default/files/documents/policy/wydenrpt.pdf">report</a> once estimated that the government earns an annual rate of return of 25% to 40% on the money it spends on NIH grants, because they reduce the economic cost of illness in the US.



It’s not just about being healthier, though. It’s about being wealthier, too.



A recent <a href="https://www.dallasfed.org/%7E/media/documents/research/papers/2023/wp2305r2.pdf">study</a> published by the Dallas Fed found that non-defense government R&amp;D spending has accounted for at least one-fifth of business-sector productivity growth since 1945.



Productivity is the most important driver of long-term economic growth, so that’s a significant return on investment.



Another <a href="https://www.dallasfed.org/~/media/documents/research/papers/2025/wp2519.pdf">Fed study</a> found that the R&amp;D increases authorized under the CHIPS Act, if fully appropriated, would raise US productivity by as much as 0.4%.



That seems underappreciated because even the proponents of the CHIPS Act pitched it mostly for the investments it would make in physical infrastructure.&nbsp;



But the innovation policy expert Heidi Williams <a href="https://www.ft.com/content/d5fe0bfb-4c3f-4aa2-b57f-51295f4a30e2?utm_source=chatgpt.com">cites studies</a> estimating that the return on government R&amp;D spending (in terms of economic growth) is 20x greater than the return on infrastructure spending.



Pretty much everyone is in favor of infrastructure spending, so why wouldn’t they be in favor of research spending too?



In Williams’ own <a href="https://www.aeaweb.org/articles?id=10.1257%2Fjep.33.3.163&amp;utm_source=chatgpt.com">study</a>, she finds that R&amp;D is probably the most impactful policy the government has to raise both innovation and productivity in the US economy.&nbsp;



Still, you might be a de-growther, and unmoved by the prospect of the US government growing its deficit problem.&nbsp;



Or uninterested in people living longer, wealthier lives.



But what if I told you that government research grants helped develop something really important? Like Bitcoin.



Cryptocurrency didn’t spring fully formed from Satoshi’s white paper; instead, it built on decades of academic work in cryptography and distributed systems, much of which was funded by the US government.



Foundational things like public-key cryptography, cryptographic hash trees and tamper-proof time-stamping were developed at university research labs with funding from government agencies like the National Science Foundation and DARPA.



If that sounds like ancient history to you and therefore irrelevant, I get it — now that we have crypto, what else could we possibly need from the government?&nbsp;



But consider that a government agency — the National Institute of Standards and Technology (NIST) — is leading a multi-agency effort to encourage the development of the quantum-resistant algorithms that will soon be necessary to protect Bitcoin from a quantum-enabled hacker.



It’s not an immediate risk: Dr. Michele Mosca, CEO of the quantum software security firm <a href="https://www.evolutionq.com/company/about">evolution q</a>, assured me in a call that quantum computers are currently too small and error-prone to break Bitcoin’s cryptographic defenses.



But a <a href="https://globalriskinstitute.org/publication/2024-quantum-threat-timeline-report/">survey</a> Dr. Mosca conducted among fellow cryptographers found they estimate a 10% chance that quantum computers will be powerful enough to threaten Bitcoin within five years, rising to a 27% chance within 10 years and an 85% chance within 30.



Fortunately, the NIST is on the job — evaluating, vetting and standardizing the quantum-proof algorithms that will hopefully make Bitcoin quantum-resistant.



(Not to mention the global financial system, everyone’s emails and all of our login passwords.) Unfortunately, the NIST is facing a <a href="https://fedscoop.com/quantum-industry-leaders-voice-support-for-nist-other-science-agencies-following-trumps-requested-budget-cuts/">$325 million</a> cut to its annual budget.&nbsp;&nbsp;&nbsp;



The cuts, part of the president’s <a href="https://www.whitehouse.gov/wp-content/uploads/2025/05/Fiscal-Year-2026-Discretionary-Budget-Request.pdf">proposals</a> for discretionary spending, haven’t been passed by Congress just yet, so perhaps the White House will be dissuaded — possibly by its many Bitcoiner friends.



Or maybe the NIST’s quantum efforts will be spared (the White House <a href="https://www.whitehouse.gov/wp-content/uploads/2025/05/Fiscal-Year-2026-Discretionary-Budget-Request.pdf">says</a> the cuts are punishment for the NIST pursuing “a radical climate agenda”).



But I’m not sure why we’re risking it because government research appears to pay for itself.&nbsp;



Especially for a government that’s long bitcoin.



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The Bitcoiner’s case for government R&D

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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“It could explain why we can go out for seafood, but seafood can’t go out for us.”&nbsp;



— Malcolm MacIver on our evolved ability to make plans
</blockquote>



Neuroscientist Malcolm MacIver&#8217;s <a href="https://pubmed.ncbi.nlm.nih.gov/34957852/">study</a> of electric fish explains a lot about how all fish think — and all humans, too.&nbsp;



The electrical currents employed by these distant cousins of ours to understand their surroundings allow MacIver to measure how far into the future fish are able to plan.



Not very, as it turns out.



Electric fish can’t see more than a few centimeters in the murky waters they swim in, so their brains have evolved to think no more than a few milliseconds into the future.



That gives them just enough time for an instinctual response when prey, predator or obstacle gets close enough to matter, but nothing else.



In that kind of environment, deliberation is a luxury, not a survival advantage, so fish have evolved a reflexive kind of brain, optimized for speed and devoid of planning.



Evolution didn’t bother with the more complex cognition that planning requires because the aquatic environment of fish didn’t reward it.



Fish that climbed up on land, however, eventually evolved the ability to see the Moon, the Sun and beyond.



Over millions of years, land-based fish were naturally selected for better eyesight because it’s easier and more useful to see through air than it is through water.&nbsp;



It wasn’t just their eyesight that improved, though — it was their ability to think, too.



MacIver <a href="https://www.youtube.com/watch?v=ESqI1nBMZN0">argues</a> that the expanded vision available on land created a selective advantage for planning and abstract cognition.&nbsp;



In other words, thinking ahead is useful on land in a way that it’s not in water — so the fish that climbed onto land evolved to think ahead.



“We speculated that moving onto land poured jet fuel on the evolution of the brain,” MacIver <a href="https://news.northwestern.edu/stories/2020/06/hunting-in-savanna-like-landscapes-may-have-poured-jet-fuel-on-brain-evolution/?utm_source=chatgpt.com">explains</a>, “as it may have advantaged the hardest cognitive operation there is: envisioning the future.”



No land-based fish is better at envisioning the future than humans, of course.



But despite being out of the water for hundreds of millions of years now, our brains remain partly aquatic — primitive limbic and brainstem pathways still govern our fastest, reflexive responses to stimuli.



This is mostly to our disadvantage: We startle too easily, react when we should reflect and fail to plan for retirement.



But the ancient aquatic part of our brains also protects us from falling pianos, lunging snakes and hot surfaces — all the perilous situations in which there’s no time to reflect or think ahead.&nbsp;



So it stands to reason, I think, that the aquatic part of our brains may also be more useful to us when things get murky and we can’t see very far into the future.



Have things ever been murkier than they are right now?



<h2 class="wp-block-heading">Fish-brained investors</h2>



Jeff Bezos is a famously long-term thinker, but he sometimes cautioned against it.



“If you are planning for more than twenty minutes ahead in this kind of environment,” he <a href="https://www.amazon.com/Everything-Store-Jeff-Bezos-Amazon/dp/0316219266?adgrpid=185328955904&amp;hvpone=&amp;hvptwo=&amp;hvadid=748008426930&amp;hvpos=&amp;hvnetw=g&amp;hvrand=8257751875253664991&amp;hvqmt=&amp;hvdev=c&amp;hvdvcmdl=&amp;hvlocint=&amp;hvlocphy=1021047&amp;hvtargid=dsa-1595363597442&amp;hydadcr=&amp;mcid=&amp;hvocijid=8257751875253664991--&amp;hvexpln=67&amp;tag=googhydr-20&amp;hvsb=Media_d&amp;hvcampaign=dsadesk">warned</a> during the dotcom boom, “you are wasting your time.”&nbsp;



At the time, the internet was evolving so rapidly that he thought it was dangerous to base a business model or an investment on any long-term assumptions.



Now, thanks to the unprecedented advance of AI, things seem even murkier — for businesses executives and investors, especially.



Will stocks and/or companies even be necessary a few years from now?&nbsp;



Will people even be necessary?&nbsp;



Technology has allowed us to see ever deeper into the universe, but it&#8217;s impeding our ability to see into the future.



One thing that does seem certain, however, is that AI will disrupt many businesses over the next few years.



A few obvious victims (like newsletter writing) aside, it’s unfortunately impossible to say which.&nbsp;



Microsoft, for example, might be a huge winner if everyone is soon using its co-pilot to write code and make powerpoints.



Or it could be a huge loser if AI eliminates white collar employment (and therefore the need to write code and make powerpoints).



I can’t imagine there’s ever been a time when potential investing outcomes have been as binary as that.&nbsp;



The world’s largest registered investment advisor, Ric Edelman, <a href="https://blockworks.co/news/edelman-crypto-allocation-portfolio?utm_source=mail.blockworks.com&amp;utm_medium=referral&amp;utm_campaign=thursday-links">thinks</a> this is a reason to own fewer equities (being businesses of the past) and more crypto (being a technology of the future).



But his recommendations require a perhaps unrealistically clearsighted view of the future.



He recommends bitcoin, the appeal of which is largely based on its resistance to change — and Ethereum, which evolves in meticulously thought-out five-year plans.



Conspicuous by its absence from his recommendations is Solana, which does the opposite, aiming to iterate quickly, like a fish.



That has been an advantage in the current environment where crypto’s most active users don’t seem to care about anything other than the speed and cost of execution.&nbsp;



But this too could change.&nbsp;



Tomorrow’s users may put more value on censorship resistance and decentralization (however defined), in which case, crypto activity might migrate back to the slower-moving Bitcoin and Ethereum ecosystems.&nbsp;&nbsp;



I’m guessing there’s probably a happy medium between the two approaches.



Jeff Bezos, for example, concentrated Amazon’s resources on things that he could observe now and was certain would persist: Customers would always want lower prices and faster delivery, he reasoned.&nbsp;



In planning for the future, then, he argued that the most important question to ask is: “What’s not going to change in the next 10 years?”



Seems like good advice just now.



Be it crypto, equities or anything else, fish-brained investors and builders should probably focus on the things directly in front of them — and which of those are unlikely to change.



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<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



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<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
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On thinking ahead when markets get murky

This is a segment from The Breakdown newsletter. To read full editions, <a href="https://blockworks.co/brand/the-breakdown">subscribe</a>.



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<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
“Since 1971, when the United States indefinitely suspended its promise to convert paper dollars into gold, we all use Massachusetts currency.”



— Dror Goldberg
</blockquote>



The American colonies won their independence from Great Britain with a weapon of their own invention: fiat currency.



In 1690, the Massachusetts Bay Colony had made monetary history when it issued 7,000 GBP in “bills of credit” to soldiers returning from a failed raid into Quebec.



The disgruntled soldiers had expected to be “paid” in plunder, and when that failed to materialize, the colony gave them newly printed paper money instead — paper that was valuable only because it was required for paying taxes.



It wasn’t the first paper currency ever — that honor belongs to the Song Dynasty, which issued paper money in China roughly 700 years earlier.&nbsp;



But those ancient notes were initially redeemable for copper coins.



The Massachusetts bills of credit, by contrast, were the first paper money in history to hold value solely because the issuing government required them for tax payments.



It was a neat trick: Print paper money and then force people to earn it (by soldiering, for example) because they needed it to pay their taxes.



The Massachusetts money was “an invention on a global scale and a great intellectual breakthrough,” as Dror Goldberg documents in <a href="https://www.amazon.com/Easy-Money-American-Invention-Governments-ebook/dp/B0BXX5G7TD/ref=sr_1_1?crid=1A06GRPHIJFIA&amp;dib=eyJ2IjoiMSJ9.VxXZIFgtI1-2iniBdN3vx-Os7TFH24Sva69R6SZY-H0.qEJQBDSq5jp46XsnxeYybK2pTq2Qlg2_eNN2sLOD5u4&amp;dib_tag=se&amp;keywords=easy+money+dror+goldberg&amp;qid=1751502757&amp;sprefix=easy+money+dror+goldberg%2Caps%2C141&amp;sr=8-1">Easy Money: American Puritans and the Invention of Modern Currency</a>.



“It was a fundamental change in the legal foundation of money, shifting the anchor of money for the first time in history from the intrinsically valuable goods it was made of to the circulation of money into and out of the state’s treasury.”



“Who needs gold when you have taxes?” Goldberg neatly sums up.



As simple as that idea was, however, governments were a bit slow to catch on.&nbsp;



The Massachusetts Bay Colony ended its first experiment in fiat money just two years later when it retired all of the bills it had issued (after collecting them for taxes).&nbsp;



Other American colonies followed their example, but also only in brief spurts — and there was only one such experiment outside of the colonies: a 1716 issuance of billets de banque that quickly plunged France into the financial crisis known as the Mississippi Bubble.



The world only recognized the power of tax-backed paper currency a few decades later, when the colonies collectively used it to win independence from their British overlords.&nbsp;



In 1775, the cash-strapped Continental Congress paid the rebel army it had raised by issuing paper currency backed only by the promise that the individual colonial governments would accept it for tax payments.



It didn’t go very well.



Despite the proof-of-concept in Massachusetts, people struggled with the idea of tax-backed money — so much so that the Continental Congress printed its dollars with an entirely fictional promise right on the front.



In large letters, each dollar declared that “THIS BILL entitles the Bearer to receive TWENTY Spanish MILLED Dollars or the value thereof in Gold or Silver.”



But the only thing the government ever intended to give in return for a continental dollar was a tax receipt.



Also, the Continental Congress printed far too many of them. By 1781, continental dollars had lost nearly all of their purchasing power.



But against all odds, it kept an army in the field. And in so doing, it proved that fiat currency, however unsound, could win wars — and even print a nation into existence.



“The noise of the rebels’ printing press was the stamp heard round the world,” as Dror Goldberg puts it.



After the war, however, even the victorious Americans recoiled at the thought that money could be backed by nothing more than the power to collect taxes.



“Paper is poverty,” Thomas Jefferson wrote just a decade after paper money had come to his rescue. “It is only the ghost of money, and not money itself.”&nbsp;



Nearly everyone agreed.



It wasn’t until 1971 — 281 years after the Massachusetts innovation — that the United States fully accepted the idea that money could be backed by nothing more than its power of taxation.



This might not end well.&nbsp;



The American government is currently exploring the outer boundaries of just how much tax-backed currency the world is willing to accept.



But if you celebrated the American Revolution today, you should consider celebrating the great American invention of fiat currency too.



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