On The Brink with Castle Island

Nic and Matt return for another week of ATHs. In this episode:  Coindesk acquires Tradeblock The OCC says that banks can use public blockchains and stablecoins We digest the OCC letter Potential drawbacks to the new OCC guidance Has Brian Brooks had the most successful regulatory term in recent memory? The Treasury's comment period expires Does the Treasury even have the authority to pass these new rules? Our favorite comment letters in response to the Treasury rules Does JPM's price call make them hypocrites on the topic of Bitcoin? Ripple's series C lead investor is suing Ripple Strike announces Strike Global How crypto-based fiat-to-fiat remittances work Our favorite quarterly investor letters Content mentioned in this episode:  Coin Center, Supplemental Comments to FinCEN Neha Narula and Patrick Murck, Letter to FinCEN Fidelity Digital Assets, Letter to FinCEN Bill Miller, Q4 2020 Market Letter Stone Ridge, 2020 Shareholder Letter Matt Hougan and David Lawant, CFA research brief on Cryptoassets

Travis Schwab, the founder and CEO of Eventus Systems, a company specializing in trade surveillance, joins the show. In this episode we discuss: Travis’ entrepreneurial journey and path to starting Eventus Systems How he came to see cryptoassets as a market opportunity Thoughts on current market structure, the role of exchanges, and the institutional readiness of this market How trade surveillance directly impacts the prospects of a Bitcoin ETF 2021 predictions To learn more about Eventus visit their website. Sponsor notes: Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Matt and Nic return for the first roundup of 2021. In this episode:  Why some funds might be buying Bitcoin at year end Are Ripple fans buying Bitcoin? Are fair launches obsolete? Vaneck files for a new Bitcoin ETF CME futures are officially the most liquid futures market BitGo pays a fine to OFAC Exchanges start delisting XRP Will exchanges face repercussions for listing securities? Why being a security dooms the cross-border settlement use case for XRP Which Bitcoin skeptic we'd like to flip the most

Brian Venturo is the CTO of CoreWeave, the largest North American GPU miner, which also doubles as a cloud infrastructure firm for general computation. In this episode:  How Brian went from hobbyist Ethereum mining to wielding a fleet of 50,000 GPUs How Core Weave was able to cheaply acquire GPUs from insolvent mining farms The implications of the Ethereum DAG file growing beyond 4 GB and its effect on miners The effect of the looming PoS transition on miner decision-making Why Core Weave specifically limited their GPU fleet to NVIDIAs with more memory Brian's stance on Ethereum's transition to Proof of Stake Are miners pro-cyclical or counter-cyclical? Does Core Weave hold inventory in the coins they mine or do they divest them immediately? Brian's options based model for pricing hardware The mini gold rush happening in publicly traded mining firms Brian's opinion on hashrate swaps or derivatives How Core Weave is transitioning from purely mining based to public cloud services The feasibility of GPU miners

Craig Warmke is an assistant professor of philosophy at Northern Illinois University. He has written several papers on the subject of Bitcoin, both pertaining to the question of what Bitcoin actually is. We cover Craig's papers (linked below) and explore the role for philosophers in Bitcoin. How Craig realized there was an opportunity for philosophy in Bitcoin Other philosophers writing about Bitcoin Why philosophers don't take Bitcoin seriously The Bitcoin-related questions where philosophers can weigh in The risk of epistemic trespassing Why Satoshi may have been wrong when they defined an electronic coin as a 'chain of digital signatures' How Satoshi made a critical engineering decision which differentiated Bitcoin from prior e-cash systems Why units of Bitcoin cannot be tracked over time through the ledger – and why this matters Why Bitcoin tracks quantities of a substance, rather than discrete, individual units of Bitcoin Craig's stylized model of Bitcoin Why Craig describes Bitcoin as 'fictional substa

Nic and Matt return for a special Christmas episode of OTB. In this episode:  Jay Clayton steps down and Elad Roisman takes over as interim SEC Chair We analyse the Treasury's proposed rule on VASPs and crypto transactions Why the FinCEN rule imposes greater demands on crypto transactions than cash as far as surveillance is concerned Are the proposed workarounds between VASPs and defi asset pools viable? Our book recommendation on the politicization of the Treasury Our analysis of the SEC complaint against Ripple How bad is the SEC complaint for Ripple? Some of the most damning quotes from the SEC complaint The significance of the SEC extending the statute of limitations with Ripple Our theory for why the SEC waited so long to sue Ripple Implications for exchanges facilitating the trading of XRP A development on 15c3-3 We revisit our predictions for 2020 and issue new predictions for 2021 Content mentioned in this episode:  The Treasury's proposed rule on crypto wallets The Presidential Working Group's sta

Matt Hougan, the Chief Investment Officer at Bitwise Asset management joins the show. In this episode we discuss: Bitwise’s new OTC trust product “BITW” The state of play for cryptoasset adoption in the RIA channel The evolving thesis for Bitcoin and other cryptoassets Prospects for a Bitcoin ETF in 2021 To learn more visit Bitwise Asset Management and follow Matt on Twitter. Sponsor notes: Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Matt and Nic return to cover a blockbuster week of ATHs. We invite a pseudonymous bond trader to give a rebuttal to our somewhat misguided take on the Microstrategy bond offering on last week's episode. Also in this episode:  Our take on the STABLE Act (again) Are balances on the Dunkin and Starbucks apps stablecoins Paxos raises a $142m Series C SBI acquires B2C2 The BITW premium explodes Ruffer's telling reasons for investing $740m in Bitcoin The CME announces ETH futures ... three years to the day since the CME Bitcoin Futures launch Did the CME futures pop the 2017 Bitcoin bubble? We screwed up with our take on the MSTR bond offering We revisit the MSTR convertible note Who is buying the MSTR fixed income offering? Coinbase inches towards an IPO ErisX introduces sports-based futures contracts Why onions aren't a commodity Bitcoin values are American values Content mentioned:  Nic in Coindesk, Nationalizing Stablecoins Won't Improve Financial Access

Compliance expert Amber Scott joins the show to explain why crypto-firms are systematically excluded from the bank sector in Canada. In this episode:  Our objective in launching a series on bank suppression of the crypto industry The current bank landscape in Canada Why crypto firms struggle to get access to banking in Canada Why money transmitters face a more burdensome treatment from banks What derisking is and why it is so common Whether MSBs and crypto firms deserve the treatment they get from banks Why derisking often forces crypto firms into using grey market payment processors, exposing them to the risk of fraud The underlying reasons for reluctance on the part of banks to bank crypto firms Why informal guidance from regulators is so critical How US regulations are structurally imported into Canada How a service provider called Central One imports US policy for thousands of credit unions Follow Amber on Twitter and learn more about Outlier Canada. 

Nic and Matt return to cover an avalanche of news and deals. In this episode:  Blockstack's transmutation Bitso raises $62m Matt breaks down the Microstrategy bond offering Mass Mutual buys $100m worth of Bitcoin through NYDIG A bipartisan group of Representatives asked Jay Clayton for clarity on broker dealer custody for cryptoassets The looming crackdown on noncustodial wallets from Treasury The effect of requiring transactional metadata for on-chain transactions More comments on the STABLE Act Matt's plan to primary Stephen Lynch via Dunkin talkin points Would the STABLE Act kill Dunkin Donuts? Why Bitcoin is pristine collateral Fidelity Digital Assets partners up with BlockFi for Bitcoin-backed loans Bitwise launches their index fund Square goes carbon neutral Standard Chartered launches a crypto trading service Singapore's DBS bank launches a crypto exchange Paxos and BitPay file for national bank charters The Financial Times changes their tune on BTC Our call for data portability legislation

Muneeb Ali, cofounder of Blockstack, joins the show to talk about the launch of Stacks 2.0 and its evolution from a securities offering to a freely tradable instrument in the U.S. New developments with Stacks and a novel legal opinion What constitutes sufficient decentralization and how Blockstack took cues from regulators Why Blockstack felt empowered to list their token on public US exchanges The current state of Blockstack governance Reflections on Ethereum's purported transmutation How Blockstack did the first reg A+ securities offering for a cryptoasset Why securities registration is worthwhile for token issuance Whether the SEC disclosure framework is suitable for the issuance of a token Alternative disclosure and securities offering frameworks for registered token issuance Whether Blockstack was willing to treat Stacks as a security in perpetuity Why security tokens haven't taken off in the US so far The evolution from Stacks 1.0 to Stacks 2.0, and the differences between the two Why Blockstack cho

Mustafa Yilham, VP of global business development at Bixin, joins the show. Bixin is an early Asia-based Bitcoin miner; they operate a popular wallet app, and they run a Bitcoin-denominated quant fund of funds. We cover prevailing myths around industrial Bitcoin mining and the reality of sourcing energy at competitive prices for mining. In this episode:  The story behind Bixin's Bitcoin-denominated quant fund How Bixin's fund of fund employs a Bitcoin benchmark Why Bixin as a firm is not market neutral and does not hedge their mining operation Whether miners have a procyclical or countercyclical effect on the price of Bitcoin Whether or not miners are fundamentally long Bitcoin The key considerations for finding a good source of electricity for mining Why Central Asia, Russia, and North America are promising locations for mining Why Mustafa expects more hashpower to end up in North America in the near term The factors leading Mustafa to expect less hashrate concentration in China in the future Whether the C

In this week's episode, Nic and Matt torch the STABLE Act cosponsored by their local representative Stephen Lynch (MA-8). Also covered:  Stephen Lynch and Rashida Tlaib's STABLE Act What the STABLE Act requires of fintech providers hosting user balances What stablecoin issuers are not like banks Why the STABLE Act would be disastrous for competition in the Fintech space Why the moral positioning for the bill is internally inconsistent The prospects for the STABLE Act Why legislation like the STABLE Act will likely become USDC partners with Visa, and what it means for the industry Why the USDC-Visa partnership solves a critical issue that the industry has had for years BlockFi announces a Bitcoin-back credit card Larry Fink starts to shift his tone on Bitcoin Garry Cohn's bizarre new Bitcoin critique Our takeaways from the BCAP Bitcoin survey Will Bitcoin outlive the Euro? Content mentioned in this episode:  Spencer Bogart, Bitcoin is (Still) a Demographic Mega-Trend Niall Ferguson, Bitcoin Is Winning the

Mathias Imbach, cofounder and CEO of Sygnum Singapore, joins the show. In this episode:  How Mathias came to cofound Sygnum The state of affairs in Crypto Valley in Switzerland today Why crypto banks are necessary and useful Why the company is split – cofounders, offices, and investors – between Zurich and Singapore Why Switzerland and Singapore are suitable venues for a crypto bank The case for convergence between traditional financial infrastructure and the crypto industry Sygnum's product lineup Current regulatory attitudes towards the crypto industry in Switzerland in Singapore How Sygnum compares with the entities receiving crypto-focused bank charters in the U.S. Switzerland's treatment of the Travel Rule for crypto exchanges The current state of EU regulations for crypto service providers How Sygnum created a tokenized Swiss Franc backed directly by central bank liabilities Differences between tokenized base money and a state-issued CBDC Mathias' explanations for the renewed enthusiasm for Bitcoin in

Pelle Brændgaard, the cofounder and CEO of Notabene, an enterprise software company building compliance tools to enable trusted cryptoasset transactions between financial services firms, joins the show. In this episode we discuss: Pelle’s early work in distributed systems and pre-bitcoin cyber-cash projects His path to cofounding Uport and his views on decentralized identity systems The vision of Notabene how the firm is addressing the compliance needs of financial institutions and crypto exchanges and brokerages His views on the travel rule and how this will impact market participants The unhosted/hosted wallets debate Learn more about Notabene here. Sponsor notes: Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.

Nic and Matt return with a special Thanksgiving issue of OTB. In this episode:  How Castle Island VC was almost Brink VC The difference between financialized walled-garden gold and its Bitcoin equivalent How USDC is being used in Venezuela via AirTM How stablecoins are now tools of geopolitical power projection Vaneck lanches an ETN on the Deutsche Bourse Is GBTC the cause of the rally The OCC proposes fair access to banking services A few people and organizations that we're thankful for Chaincode Labs Bitcoin Optech Greg Schvey and Adam Ludwin Caitlin Long John Pfeffer Fidelity Digital Assets Coin Center Three Arrows and CMS Holdings Should thanksgiving turkey trots be cancelled? Content mentioned in this episode:  Jeremy Rubin's collegiate BTC sweater Adventures in Capitalism, Why this Reflexive Ponzi Scheme will Continue Office of the Comptroller of the Currency, Proposed Rule Would Ensure Fair Access to Bank Services, Capital, and Credit Sponsor notes: Withum is a forward-thinking, technology-dr

John Newbery, Bitcoin Core developer and founder of Bitcoin Optech, announces an independent nonprofit organization to support Bitcoin development, Brink. Donate here. In this episode, we discuss the formation and mandate of Brink, as well as the developer funding context that we find ourselves in. Covered in the episode:  John Newbery's core developer story and how he came to found Brink Why John left Chaincode and struck out on his own Brink's mandate and foundational purpose Lessons learned from the Bitcoin Foundation The future of Bitcoin Optech The state of funding for Bitcoin development The accessibility of Bitcoin protocol development today Does the existence of financial incentives cannibalize the intrinsic motivation to work on open source? Why John works on Bitcoin Why ossification might be more remote than we expect Whether Bitcoin's developer funding model exposes it to corporate capture The political implications of Bitcoin having a sole reference implementation The importance of distinguishing

Nic and Matt return for deals and news of the week. In this episode: Nic's appearance on Bloomberg TV Is Jay Clayton's departure good for the SEC? Our dark horse pick for SEC Chair Scaramucci's fund considers a Bitcoin position Is Binance decentralized? How are enterprise blockchains still going? How Bitcoin is akin to gold in the 1970s Bitcoin's changing narratives as a strength How our quiet rally isn't quiet How to interpret the BTC inflow into GBTC Why digital asset interest rates are structurally high   Sponsor notes: Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and productive in today’s complex business environment. Our Digital Currency group is proud to partner with members of the cryptocurrency community. Get to know us at withum.com/crypto.   Sponsor notes: Withum is a forward-thinking, technology-driven advisory and accounting firm committed to helping our clients be more profitable, efficient and produc

Parker Lewis, head of Business Development at Unchained Capital, and author of the Gradually then Suddenly series, joins the show. In this episode:  Parker's progress in our Bitcoin fantasy league Our views on how Bitcoin gives purpose Bitcoin's relationship to the prospects for fiscal spending How the virus may have been an excuse to extend the fragile credit system Why Covid-related spending is often framed in moral, rather than economic terms How Bitcoin eschews academic debates Unchained's mission and current product focus Why on-chain multisig is such a good blend of resilience and convenience What multisig enables in terms of bitcoin applications What credit in a Bitcoin economy looks like Bitcoin as a corporate treasury asset and how Unchained is building for that future Why Bitcoin custody is fundamentally hard Parker's feelings on avowed Bitcoiner Cynthia Lummis being elected to the Senate How Bitcoin aligns with American values Parker's favorite piece in his Gradually then Suddenly series

Nic and Matt return for news and deals of the week. In this episode:  Cred files for bankruptcy Why Bitcoin banking is uniquely robust Why we should not be discouraged by the occasional failure of Bitcoin banks The ECB looks to create a CBDC within 2-4 years Gary Gensler's influence on the Biden administration XRP's fate hangs in the balance Stephen Lynch's letter to Brian Brooks criticizing his stance on crypto Zelle's influence in Venezuela and the reality of crypto-dollarization Why crypto-dollarization is more sustainable than physical dollarization Our response to Ray Dalio's critiques of Bitcoin Why Bitcoin can't be 'Order 6102'ed' today Valid and less valid critiques of Bitcoin Content mentioned in this episode:  Nic Carter in Coindesk, The Case for Bitcoin Banking (Despite Cred’s Bankruptcy) Coindesk, US Representatives Rip OCC, Brooks for ‘Excessive Focus’ on Crypto Coindesk, Canada Tax Collector Seeks to Force Crypto Exchange Coinsquare to Fork Over Client Records Bloomberg, Zelle Has Turned Dol