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Crypto assets and blockchain technology are about to transform every trust-based interaction of our lives, from financial services to identity to the Internet of Things. In this podcast, host Laura Shin, an independent journalist covering all things crypto, talks with industry pioneers about how crypto assets and blockchains will change the way we earn, spend and invest our money. Tune in to find out how Web 3.0, the decentralized web, will revolutionize our world.
Alex Thorne, head of firmwide research at Galaxy, discussed his recent essay arguing that Bitcoin reached its bear market bottom in late June. He stated that his thesis relies on technicals like the 50-week and 200-week moving averages, market positioning, and sentiment.
Alex Thorne explained that historical price action shows the 200-week moving average acting as a bear market floor and the 50-week moving average acting as a ceiling. He noted that Bitcoin has spent five or six weeks trading over the 50-week moving average, which historically signals that the bear market bottom is in.
Alex Thorne noted that fast-money hedge funds and macro traders have reduced their spot Bitcoin ETF exposure and basis trades, while long-term buyers such as sovereign wealth funds, wealth managers, and registered investment advisors have been adding exposure.
Alex Thorne pointed out that the movement of long-dormant Bitcoin has decreased significantly, dropping from roughly 67,000 coins per month in 2024 and 47,000 in 2025 to about 34,000 per month in 2026, easing selling pressure from early holders.
Alex Thorne argued that the ongoing rise in national debt—growing from $23 trillion in 2020 to $40 trillion—along with private credit expansion funding the AI buildout, reinforces the monetary debasement thesis that makes Bitcoin attractive to holders.
Tom and Tarun discussed a massive series of security disclosures over a 48-hour period—referred to as Black October—which included major remote code execution flaws in PHP, Node.js, and Linux kernels. Multiple government agencies globally, such as in Finland, the Netherlands, and Japan, took web services offline or urged urgent patching as attacks mounted.
Rob noted that major financial institutions including JPMorgan, Wells Fargo, Bank of America, and Morgan Stanley are blocking or restricting third-party AI agents from accessing customer accounts. Executives cited concerns over unauthorized activity and security, while podcast participants argued the move is designed to protect legacy friction and high-margin non-interest-bearing deposits.
The hosts discussed Bloomberg's Joe Weisenthal interviewing Hyperliquid founder Jeff Yon and reversing his previous skepticism about blockchains. Weisenthal highlighted perpetual decentralized exchanges as a substrate for creating markets across equities, commodities, and pre-IPO assets.
Rob and Robert discussed the unconfirmed Axios report that Visa is in talks to acquire crypto infrastructure provider Fireblocks for around $2.0 to $2.5 billion. The hosts noted that while significantly lower than Fireblocks' 2021 peak valuation of $8 billion, a deal would represent a strong outcome amid a challenging market for standalone wallet providers.
Crypto exchange Bitget has experienced a major hack, losing approximately $387 million. The funds were likely stolen by the Lazarus Group, an entity linked to North Korea. Bitget has confirmed they have sufficient funds in their insurance pool to cover all user claims and have begun processing withdrawals.
Following the Bitget hack, concerns have been raised about ThorChain's utility in laundering stolen assets. Critics suggest ThorChain's cross-chain spot trading protocol facilitates the movement of illicit funds, with its volume spiking after major hacks. The protocol's decentralization and neutrality are being questioned in light of these events.
In contrast to ThorChain, Nier's Intents protocol, through its SHIELD feature, aims to prevent illicit activities. SHIELD operates at the validator layer, identifying anomalies and chain analysis signals to refuse trades with high-risk entities. This approach offers a more controlled and security-focused cross-chain trading experience.
The discussion touched upon Arbitrum's past decision to freeze stolen funds, highlighting a perceived 'middle ground' in decentralization. While some argue this intervention contradicts the core principles of decentralized systems, others see it as a necessary measure to protect assets, contrasting it with more absolute approaches like Ethereum's. The debate centers on whether such interventions represent 'decentralization theater' or a practical balancing act.
A recent hack involving ConsenSys, a prominent Ethereum validator, has prompted a discussion on the 'risk-free' nature of staking yields. Although no user principal was stolen, the incident resulted in the loss of unclaimed rewards and potential opportunity cost for stakers. This event suggests that staking, often considered a low-risk activity, carries an inherent risk premium that may be underestimated.
Kalshi, a regulated exchange, is under investigation by the CFTC following allegations of significantly inflated derivatives volume. An analyst named Benny shared evidence suggesting market makers were incentivized to wash trade, artificially boosting volume figures. In response to the controversy and the WSJ report, Kalshi has announced the termination of its liquidity incentive program.
A recent analysis suggests that AI agents, like Muse or Hermes, could initiate 'agentic bank runs' by optimizing individuals' finances. These agents would move cash from low-yield accounts to higher-yield products, effectively shifting large sums of money. While this is not a traditional bank run, it signifies a potential disruption to traditional banking models built on consumer inertia.
The Clarity bill, a significant piece of legislation for the crypto industry, has failed to pass the Senate. Despite a last-minute attempt at negotiation, the bill did not secure the necessary 60 votes, with no Democrats voting in favor. This failure likely means that regulation will now primarily come through agency rulemaking by bodies like the SEC and CFTC.
The recent failure of the Clarity bill in the Senate has resulted in no clear winner, with participants across the political spectrum feeling left out. Democrats did not achieve ethical wins against Trump, banks saw no revisions to the Genius Act, and developer protections were not enacted. The general consensus is that the bill's failure represents a setback for all stakeholders, including those who worked on it for over a year.
With the Clarity bill's failure in the Senate, the path forward for crypto regulation in the US appears to be through regulatory agencies rather than legislative action. The SEC and CFTC have already indicated their intention to implement frameworks similar to those discussed during the bill's negotiations. This shift suggests a future where regulatory agencies will play a more dominant role in shaping the industry's legal landscape.
Jordi discusses the rapid advancement of AI, suggesting that its disruptive impact is now so significant that political involvement is unavoidable. He highlights concerns ranging from sophisticated hacking attempts, as seen with the Boston Scientific incident and alleged Iranian military use of AI, to the implications of AI capabilities reaching extreme levels that capture public attention. Jordi believes these developments necessitate a political response due to the escalating risks and the need for new regulatory frameworks.
Chris Perkins argues that the rapid progress in AI development is outpacing existing legal frameworks, creating significant liability concerns for companies. He draws parallels to the traditional banking sector, where regulation can consolidate power and box out smaller competitors. Perkins suggests that companies are increasingly worried about their potential liabilities, especially in cases where their AI models are misused, and may be seeking regulatory clarity to mitigate these risks.
Jordi expresses skepticism about the ability of open-source AI models to compete with frontier models, emphasizing the significant compute power required for cutting-edge development. He cites his personal experience migrating to frontier models like Astra for tasks such as market backtesting and GitHub repository deployment, finding them error-free and highly efficient. Jordi believes that while open-source models may try to distill the advancements of frontier models, they will consistently lag behind due to the inherent compute advantage of larger, well-funded labs.
Ram Ollawalia suggests that major AI companies might be strategically engaging with regulatory discussions not just for ethical reasons, but as a commercial play to manage liabilities and create a competitive moat. He posits that companies like Anthropic and OpenAI, facing immense costs for AI development, could benefit from government intervention that favors established players and slows down competition, particularly from open-weight models. This approach could also help them mitigate the significant legal risks associated with their powerful AI systems.
Jordi asserts that despite increasing focus on AI safety and potential discussions around slowdowns, the fundamental demand for compute power in AI development will not decrease. He points to the advancements in hardware like Blackwell and the anticipated power of Vera Rubin chips as indicators of continued exponential growth in computational needs. Jordi believes that the training side of AI development will proceed as planned, driven by capitalist goals and the necessity of capital investment, making a slowdown highly unlikely.
Ram Ollawalia highlights Meta's distinct approach to AI development, noting its divergence from companies like Anthropic and OpenAI. While others appear to be engaging with regulators, potentially to slow down development or improve their IPO prospects, Meta, under Mark Zuckerberg, is reportedly taking a more aggressive stance, emphasizing rapid progress. This is attributed to Meta's ability to fund its substantial capital expenditure through its existing revenue streams, unlike competitors who may be more reliant on external funding and thus more sensitive to market conditions and regulatory pressures.
Paul, co-founder of FOMO, addressed criticisms of the platform's focus on meme coins, stating that their vision extends beyond what is seen on social media. He explained that FOMO aims to become the "social graph of all of finance" by simplifying on-chain trading and discovery, making it accessible to everyone.
One speaker attributed significant P&L improvements to trading activity influenced by news surrounding Hunter Biden's laptop. This strategy involved capitalizing on social hype to create or trade copycat coins.
Paul described FOMO as the "first truly cross-chain gasless trading application," highlighting its speed and ease of onboarding. He contrasted this with traditional financial onboarding, which he said can take days.
One speaker recounted spending a holiday weekend engaging in 'trenching' and learning 'expensive lessons' through trading. While not specifying the exact assets, the speaker indicated a net positive outcome of around 10% despite incurring losses.
Paul of FOMO characterized on-chain trading as a significant revolution in finance, comparing it to the computerization of trading in the 1970s. He highlighted its potential for global distribution and its function as the largest social network ever created.
AMC CEO Adam Aron has publicly denounced Robinhood's issuance of tokenized AMC shares, calling them 'contemptible, outrageous, disgusting, detestable, inexcusable, vile.' He stated that AMC has no affiliation with these tokens and does not endorse them. Robinhood's CEO, Vlad Tenev, questioned the concern, while AMC demanded a voluntary cease and desist.
A discussion clarified the nature of 'stock tokens' like those issued by Robinhood, explaining they represent debt securities that offer exposure to share price but not actual ownership or shareholder rights. These tokens are reportedly unregistered in the US and not offered to US persons.
In a curious turn of events, AMC stock saw a significant overnight jump of nearly 21%, reaching $3.07, coinciding with the public dispute between AMC CEO Adam Aron and Robinhood over the latter's tokenized AMC shares. This price movement occurred despite the negative tone of the dispute.
The dispute between AMC and Robinhood raises questions about the legality and broader market implications of stock tokens. While Robinhood claims to have done their homework, AMC's CEO argues that such tokens undermine capital formation principles. Experts suggest the SEC should provide clarity on the 'grey area' surrounding these financial instruments.
During the discussion, derivatives were characterized as tools for risk transfer rather than capital formation. While acknowledged for their historical role in managing uncertainty for producers like farmers, the conversation raised concerns about the current trend of 'derivatives for the sake of derivatives' potentially increasing systemic risk.
The conversation touched upon venture capitalists (VCs) and their tendency towards 'shiny object syndrome,' sometimes leading to investment in speculative use cases within the digital asset market that may not be addressing real-world problems. While acknowledging that some shiny objects can lead to powerful innovations, the speakers noted a concern when these are applied broadly to areas like derivatives without a clear principal use case.
The Ninth Circuit Court of Appeals ruled three-zero that Nevada can enforce its gambling laws against Kalshi's Sports Event Contracts, with Judge Ryan Nelson calling them a "quintessential form of gambling outside the CFTC's purview." This ruling directly conflicts with an April decision by the Third Circuit, which held that Kalshi is regulated by the CFTC, creating a circuit split that could lead to Supreme Court involvement.
The Gaming Association has declared the Ninth Circuit's ruling a significant victory for consumer protections and taxpayers, and a major loss for Kalshi and similar backdoor sports gambling operations. The association's CEO stated that the ruling clarifies that Kalshi's sports contracts are a form of gambling.
A CFTC spokesman, Zach Fulton, stated that a derivative contract structured as a swap is a swap regardless of its underlying subject matter, and that the Ninth Circuit erred in its ruling. The CFTC maintains that it has federal preemption over these markets and that derivatives on commodities are clearly regulated under the Commodities Exchange Act.
Kalshi is "disappointed" by the Ninth Circuit's ruling, stating they did not expect it. The company argues that prediction markets are fundamentally different from sports books, operating like commodities exchanges with fair and competitive pricing rather than a book generating prices against the user. They highlight that their platform promotes healthy price discovery and allows users to profit, which improves the aggregate quality of market predictions.
Kalshi contrasts its platform with sports books, stating that if a user makes money on Kalshi, they can continue to trade, thereby improving the market's predictive quality. In contrast, sports books may ban successful bettors. Kalshi asserts that users enjoy their platform for price discovery and value, and winners do not perceive it as gambling but as trading derivative contracts.
Despite the conflicting court rulings, Kalshi reports that its volume continues to grow week over week and month over month, with millions of users actively using the app. The company emphasizes that this growth is driven by user enjoyment of price discovery and perceived value, not by any form of coercion. Kalshi has expanded its market offerings significantly, from 4,000 markets seven months ago to 10,000 markets currently.
Chris Perkins suggests the CFTC strongly believes it has federal preemption over event contracts, considering them within its jurisdiction as derivatives on commodities. He notes that the Commodities Exchange Act clearly regulates such derivatives, and the CFTC has significant discretion over the underlying markets they regulate, a view Chairman Sielig has publicly supported.
Kalshi's CEO described how various individual enterprises, from ice cream shops hedging rent against weather to kayak renters and boat charters hedging against wind or hurricanes, use their platform to hedge business risks. This capability, previously available only to large corporations, now de-risks businesses across the US, fostering growth and investment.
A recent calibration study by Kalshi analyzed 2.2 million data points and found that their markets are highly calibrated to actual event outcomes, even a week in advance and with as little as $50,000 to $60,000 traded. This indicates that institutional-sized volume is not required for a well-calibrated market, allowing smaller enterprises to effectively hedge their risks.
1inch has introduced Aqua, a new shared liquidity platform designed to address the issue of concentrated liquidity sitting idle in DeFi. Aqua allows liquidity providers (LPs) to back multiple positions with the same token balance, enabling them to keep tokens in their wallet for swapping. This innovation aims to increase activity and liquidity depth across various market conditions and pairs.
The price of Bitcoin has surged past $80,000, driven by a significant increase in ETF inflows and macroeconomic factors. Secretary Basset's actions to manage the long end of the bond curve are seen as stimulative to risk assets, reviving the "debasement trade" narrative. This rally has reignited interest in the broader crypto thesis.
President Trump's mention of "Hyper liquid" at a White House crypto summit appears to have catalyzed a significant price increase for the asset. Trump stated that CFTC Chairman Cleg is working to bring Hyper liquid into the US in a compliant manner, leading to a rally above $80.
Discussions around Hyper liquid's potential entry into the US market highlight the tension between regulatory compliance and user experience. While many desire frictionless access, the reality is likely to involve KYC and market surveillance, akin to Liyer's approach in Europe.
The King of Bhutan has expressed significant enthusiasm for AI and has been exploring technologies like Kimmy D3. Notably, he also has a history with Bitcoin mining, having mined it when the price was as low as $4, showcasing an early adoption and visionary approach.
The Clarity bill's chances of passing this year appear slim, with current market odds around 15%. Projections suggest a 50/50 chance of it passing before the end of 2028. The bill's progression is a point of interest following discussions at a recent White House crypto summit.
A speaker observes that while the US market has an 'off relationship' with tokens, often oscillating between love and hate, Asia maintains a consistent enthusiasm for new tokens. This persistent interest in Asia is seen as a contributing factor to the current market energy.
The crypto industry is taking quantum-resistant cryptography more seriously due to recent advancements in quantum computing technology and algorithms. Elia Polosuhin of Near Protocol notes that while a clear date for a quantum computer remains uncertain, the rapid progress and increased investment make the threat feel more immediate than ever before.
A competition launched by Igenlayer tasked AI to find an algorithm that could break current cryptography, and it was reportedly solved within 48 hours. This development highlights the increasing effectiveness of AI in advancing quantum computing capabilities and algorithmic improvements.
Near Protocol has launched mainnet with the first post-quantum signature support, enabling users to hold assets with quantum-secure keys. This move allows the broader ecosystem to begin supporting this new security standard.
Ledger is collaborating with Near Protocol to ensure they are working on the same signature scheme and tooling for post-quantum cryptography. This partnership aims to make Ledger the first hardware wallet to support these new security measures.
Bitcoin's adoption of post-quantum cryptography is hindered by its less flexible nature and governance structure compared to newer blockchains like Near. The focus is on signature schemes that are less computationally intensive and smaller in size, such as MLGDSA.
The biggest hurdles for the crypto industry to become quantum-safe are social consensus and ecosystem coordination. Elia Shin and Charles Geyme emphasize that achieving agreement on a unified approach and fostering collaboration across different blockchain ecosystems is crucial for widespread adoption.
A Bitcoin soft fork, specifically a reduced data temporary soft fork, has been implemented to limit OP_RETURN outputs to 83 bytes and taproot witness pushes for one year. The goal is to mitigate Ordinals and ERC20 spam on the network. The change was proposed by an anonymous developer and championed by Luke Dashjr.
The speaker criticizes the perceived hypocrisy of some 'OG Bitcoiners' who, while historically advocating for anti-censorship, are now pushing for measures that equate to censorship. This shift is seen in their support for actions that restrict certain uses of the Bitcoin network, such as ordinals and token spam.
A proposal, identified as BIP 8361, suggests significantly reducing Ethereum's staking rewards, potentially to zero. The mechanism involves burning a rising share of validator rewards as the staking ratio increases, reaching a 100% burn rate at 60.25 million ETH staked, or roughly half of the total supply. This phased approach, intended to be implemented over 18 months, would burn newly issued ETH, not transaction fees or tips.
Mike Silagadze has voiced concerns regarding the speed of a proposed monetary policy change for Ethereum, suggesting it could lead to an exodus from the top 10 protocols and a dramatic loss of confidence. Stanny from Ave described the proposal as one of the most resisted in Ethereum's history, criticizing the Ethereum Foundation's 'ivory tower academic approach' as disconnected from developers.
Seth expressed initial surprise at the Ethereum staking yield proposal, leaning towards the view that it might be an academic exercise rather than addressing a pressing issue. He highlighted the need for broad community discussion for such fundamental changes and stated that the proposal seemed like a 'solution looking for a problem' at this time.
Chris views the Ethereum proposal positively, suggesting it means the Ethereum Foundation (EF) will 'eat its own cooking' by not controlling the network's direction. He believes the proposal will fail because the community and value-accruing applications do not grant the EF that control. Chris also emphasized the importance of yield rates in blockchain economies and the need for transparent, community-driven rate adjustments.
Seth believes that staking saturation poses an existential problem for Ethereum, explaining that too much staking can incentivize stakers to attack the network, while too little compromises security. He sees the proposal to reduce yields as an attempt to find an equilibrium point and considers the discussion and potential passing of this proposal to be 'incredibly bullish' for Ethereum's maturity.
A significant vulnerability in the Coldcard hardware wallet, stemming from flawed entropy (randomness) generation, has been discovered. This issue dates back to 2021 and has potentially compromised private keys for users over the past five years, leading to ongoing fund drains.
The Coldcard hardware wallet hack has resulted in over $100 million worth of Bitcoin being stolen, amounting to approximately 1,600 to 1,800 Bitcoin. The attackers are reportedly mining five years' worth of compromised private keys.
The non-custodial nature of Coldcard wallets makes it difficult for the company to warn users about the seed phrase generation vulnerability. This is because Coldcard does not hold user data, preventing them from proactively alerting customers to move their funds.
Analysis of the Coldcard hack reveals at least four distinct 'waves' of activity, suggesting the possibility of multiple threat actors. Each wave is believed to represent a separate cluster of malicious actions, though the exact number of attackers remains unconfirmed.
Reports suggest the Coldcard development team may have antagonized security researchers and engineers, potentially hindering early detection and resolution of the entropy generation flaw. Some researchers claim they attempted to engage with Coldcard about code base issues but were met with uncooperative responses.
While there is speculation about AI's role in discovering the Coldcard vulnerability, it is acknowledged that exploiting it requires significant computational power for mining compromised private keys. The attackers are effectively 'mining' for these keys rather than a direct exploit.
The hardware wallet manufacturer Coldcard has experienced a significant security breach, with approximately $100 million in Bitcoin being drained from user wallets. A vulnerability in the device's random number generation (RNG) system, introduced five years ago, allowed for the creation of weak private keys that were easily crackable.
Artificial intelligence tools were instrumental in discovering a critical vulnerability in the Coldcard wallet's code. One AI model reportedly found the bug in just eight minutes, while another, without internet access, identified it in 20 minutes at a cost of approximately $2.
The recent Coldcard wallet exploit has led to discussions about the future of self-custody in the crypto space, with some suggesting it's a 'death of self-custody' moment. Others have commented that it might signal the end of Bitcoin maximalism, though the immediate impact is likely on Coldcard's reputation and business.
Tom suggests that the Bitcoin maximalist developer community may not prioritize rigorous security practices like regular audits, drawing a parallel to their skepticism towards certain dietary advice. He points to historical exchange hacks stemming from poor entropy generation as evidence of this trend.
A speaker argues that the resistance to Bitcoin upgrades and changes, particularly from miners and large holders, may have contributed to the ecosystem's security issues. The sentiment of 'rough is forever' has allegedly stifled necessary development, even affecting user wallets.
A systemic flaw related to entropy and key generation in Coldcard Mark 3, 4, and 5 hardware wallets has led to a significant drain of Bitcoin from over a thousand wallets. The exploit is believed to stem from a miswired random number generator in a firmware update from March 17th, 2021, which failed silently and led to the use of a weaker entropy source for key generation.
Alex Thorne, an expert in on-chain forensic tracing, has identified at least three distinct waves of the Coldcard hack, with a potential fourth wave emerging. Thorne detailed that Wave 1 and 2 involved bulk transfers to collector addresses, while Wave 3 used a different topography with one victim per vault. The difficulty in tracing lies in the thousands of previously unconnected Coldcard addresses.
The Coldcard hack is characterized as a core cryptography exploit, not a Bitcoin-specific issue. Alex Thorne explained that a poorly generated pseudo-random function for seed creation could impact any system using that cryptography, including email providers or other blockchains like Ether or Solana. The failure was due to software and firmware not properly routing key chains through the random number generator.
The software development failure leading to the Coldcard hack, which remained unfound for approximately five years, is attributed to insufficient eyes on the codebase and a lack of proper review. The codebase was not fully open source, and commits lacked comments. It's suggested that AI may have assisted in uncovering this vulnerability, though it wasn't necessary for its initial discovery.
The Coldcard hack, where high levels of compute allowed attackers to derive seed phrases, is seen by some as a potential precursor to quantum computing threats. While quantum threats are different, the ability to derive seeds across a vast space is a shared fear. This exploit might serve as a wake-up call for the community to focus on high compute threats, potentially impacting not just Bitcoin but all financial services.
Alex Thorne strongly advises any Coldcard user with funds in single-signature or multi-sig addresses to move them immediately. The ongoing exploit, which began early Thursday UTC, has seen significant Bitcoin drains. Thorne is actively tracing funds and working with law enforcement and crypto intelligence firms to flag addresses and potentially aid in recovery.
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