Welcome back to the starting block. It is a Tuesday and we've got a very big show lined up today. We're going to be joined by Anthony Scaramucci in a few minutes' time to talk about the US midterms and have a much broader, wide-ranging conversation about the changing landscape for crypto both in the US and globally, and perhaps some of his thoughts on the booming AI sector.
If you're joining us for the first time, my name is Gareth Jenkinson. I'm the head of multimedia here at The Block, the host of the starting block, which is of course our daily show. If you've never joined us for the show, we have a very simple flow of the show. We start off with the Block briefing, which is a rundown of the top stories you need to know from the last 24 hours, curated from The Block's exceptional editorial team. It's a great pleasure to read through their top stories every day. And then after that, we usually move into a market poll segment if we've got a market analyst on hand to unpack what's happening in the markets. And then we move into the hot seat, and that's where we'll be chatting to Scaramucci a little bit later on in the show.
If you've missed any of the content that we've been putting out in the last few weeks, we've been very busy. We've been to New York twice in the last six weeks. We've been across to Singapore for Token 2049. Last week we were in Lugano in Switzerland for Plan B Forum and Bitfinex Securities Future of Capital Market Summit as well. So plenty of content to catch up on. If you want to go check some of that out, you can go to our YouTube channel. While you're there, subscribe. And if you're joining us on X this afternoon or morning, wherever you are, please give this broadcast a like and a retweet so more people can join us on the live show this morning. Without further ado, let's jump into our top stories today.
The first one, Ripple just landed a big one. CEO Brad Garlinghouse says the company has received final approval from the OCC to launch a national trust bank, putting Ripple's dollar stablecoin, RLUSD, under federal oversight for the first time. The new Ripple National Trust Bank will manage the segregated reserves backing RLUSD and offer digital asset custody to enterprises, though issuance stays with its New York regulated arm. RLUSD has grown to a $2.5 billion market cap since launching in late 2024. It's the latest in a wave of OCC green lights, one that's already drawn fire from Senator Elizabeth Warren. No surprises there.
Our next story, the world's biggest asset manager is going deeper into tokenization in Japan. BlackRock has signed a memorandum of understanding with SBI Holdings and Startale to explore linked tokenized money market funds with SBI's yen-pegged stablecoin JPYC. The trio will study the technology, distribution and regulation needed to connect the two, and they're keeping the door open to other institutions at home and abroad. BlackRock's tokenized fund BUIDL already manages around $2.2 billion, and SBI's chairman put it bluntly: if Japan wants to lead on-chain finance rather than fall behind, it has to build out those foundations now.
Then Strategy hit pause. The largest corporate Bitcoin holder bought no Bitcoin last week, ending a five-week buying streak, and instead spent around $25 million repurchasing its own STRC preferred shares. Its stash already holds 848,517 Bitcoin, more than 4% of the total supply, worth roughly $68 billion. And that pause comes as MSCI weighs new rules that could put Strategy out of its indexes, which would make raising fresh cash to buy more Bitcoin a lot harder. Shares fell nearly 7% last week as Bitcoin briefly dipped below $80,000.
Meanwhile, one of its big competitors, Strive, is climbing the Bitcoin treasury leaderboard fast. The company scooped up another $511 million in Bitcoin, adding roughly 6,200 coins to reach 43,000 Bitcoin in total. They're now sitting fourth among public holders and closing in on Marathon and 21. CEO Matt Cole wants to finish the year as the second-largest corporate holder and needs about 105 coins a week to get there. To fuel it, Strive has set up an at-the-market program to sell up to a billion dollars of its SATS preferred stock.
And if you missed it, we did sit down with Matt Cole last week in Lugano. It was a really great conversation alongside Rafa Zaguri from 21. I will be posting that full interview a little bit later on today. But if you want to see some of the highlights of that conversation, you can find that both on our YouTube channel and our X account.
Onto our second-last story today. Galaxy Research has a message for nervous investors: the Bitcoin bear market is over. In a new report, head of research Alex Thorne argues the bottom was back in June, pointing to fading selling from long-term holders and five straight weekly closes above a key moving average. Older wallets are moving far less Bitcoin than in prior years, with ETFs and treasury companies soaking up supply, amid mounting US debt as a debasement hedge. And Galaxy's conclusion is pretty simple: now is a good time to buy and hold Bitcoin. There is a caveat though: a weekly close below 76,000 would challenge that call.
I read through that full report this morning. Really, really great write-up from Alex Thorne. You can find that on my X account with a little breakdown of that full report from Galaxy.
Our final story, the NBA is getting into the prediction markets game, but carefully. The league has signed a memorandum of understanding with the CFTC to protect game integrity amid worries around insider trading and manipulation, and named Kalshi and Polymarket its preferred prediction market exchanges. That makes basketball the third league to strike a deal with the CFTC after hockey and baseball. The notable holdout here is the NFL, which wants tougher rules and argues these contracts are gambling that states should police. The fight could land at the Supreme Court after New Jersey asked the justices to weigh in.
So it's going to be interesting to see how that plays out. Will the NFL enter the race to get business from prediction markets? If you ask me for my opinion, I would say probably yes. The money is too good to say no to, but it depends how ethical they are. And I'm probably going to tip Anthony Scaramucci to kick things off there with his thoughts on prediction markets as well.
But first things first, let's get through the proper introduction here. Anthony, welcome to the show. You're on the hot seat. It's great to have you with us. I think we met a few years ago in Davos, and a lot has changed since then. First things first, I understand you're in Winnipeg. It's cold. How are you doing this morning, sir?
Yeah, I'm just ordering my coffee actually, room service. Thank you, sir. Yeah, I'm freezing up here, but it's a beautiful place. We're a really great culture up here, and they got a great hockey team. But, you know, listen, the prediction markets, is that where you want to go first? Where would you like to go first?
Yeah, sure, let's do it. I mean, we finished off the Block briefing with that news. Obviously, the NBA saying they want to get in on these big deals, the NFL kind of holding it at arm's length. What do you think of prediction markets in general? Because the NFL are kind of saying that they see this as gambling, it needs to be regulated as so.
Well, I see it as inevitable. So it's one of these things where the NFL, you know, I'm old enough to remember when the NFL said, 'No way we'll ever have a franchise in Vegas.' I'm old enough to remember when the NBA said, 'Hey, no way we'll have a franchise in Vegas.' They kicked Pete Rose out of baseball for gambling, and it is inevitable. And, you know, we're about to build a casino in New York City right by Citi Field. And I just think this thing has proliferated in a way where, you know, there's no turning back.
So the prediction markets, maybe it'll get slowed down by the NFL, or maybe there's some people that are bringing pause to it, but I think it's going to happen. I just would suggest to everybody listening: you got to be super careful, because unless you've got information that other people don't have and could likely be illegal, you got to just be super careful, because a lot of people lose money in these prediction markets.
Now, they're phenomenal for you and me to gauge what's going to happen. You know, if you're looking at the midterm elections, you can look at the polls, but then you can look at the prediction markets. My guess is the prediction markets are going to be way better. Look at the 2024 election with Donald Trump. They had him at 65-70%. The polls looked way tighter than that way up until the end, but of course the prediction markets were right. So I think these are things about life that we maybe moralize about, or maybe some of us don't like, but they're inevitable things about life, you know.
They're coming, and I've embraced them, and, you know, I just tell people, please be cautious. It's the same thing with crypto. You got to be cautious. You guys know there's some great assets in the crypto space. You just mentioned Ripple, there's Solana, there's the BNB token, you know, there's Ethereum, but then there's other assets that you really shouldn't be touching with a 10-foot pole, you know.
Yeah, 100%. I mean, just to weigh in there, I used to work in the sports broadcasting industry, and in 2019 I covered the Rugby World Cup, and my main sponsor was a big sports betting company in South Africa. And without them, I wouldn't have got there and done the coverage and got that experience under my belt. At the same time, you know, there's a lot of people in South Africa that would argue that these gambling houses are a net negative for society. So it goes both ways, but prediction markets are not quite cut the same.
I'm not saying that gambling is not a net negative. I'm not saying that it isn't. I mean, because it is. Okay. You know what? It's also likely a net negative. How about prostitution? Okay, that's pretty much a net negative. And you know what?
But it's the oldest profession in the world, as they say, right?
Yeah. And again, it's not me praising gambling or prostitution. It's me being a realist about human nature and life. And I'm just saying it's coming. And the NFL, the NBA, the MLB, you know, Premier League, they will be embracing these things the same way when I was a kid you couldn't smoke pot in New York. But try walking around in New York today. Okay. It smells like skunk everywhere, man. You can't come out of the building without it smelling like skunk.
Well, I live in the Netherlands, so yeah. I mean, like, I've been to New York a couple of times in recent months, and yeah, it smells like I'm walking around in Amsterdam. But yeah, just to that point, I wasn't trying to lead that anywhere either. I genuinely think prediction markets are a net positive, especially when people have skin in the game. It just makes it different. It does allow these markets to actually be a trusted indicator of what might happen in the future.
And I think that's what's so fascinating for me, is because a poll is a poll, right? It takes nothing except you clicking a button. But a prediction market requires you to put money into predicting the outcome of an event. And, you know, if it's fair and free and no one has privileged information, it should give you a fairly good idea of what people think is going to happen. So I think that's the most fascinating part about that.
But I want to talk to you about your book. Tell us a little bit about what people out there can expect from this book. You've had such an interesting and colorful experience throughout your life. I can imagine there's some nuggets of wisdom that they can find there.
Well, look, I've written a couple of trade books, and I wrote a book about Bitcoin. I wrote one about Solana. I'm writing one right now about Avalanche. So I'm a little bit of a multitasker. So those are trade books, but this is a little bit more of a political and economic and historical book. And I tried to take my upbringing, my time at Goldman Sachs and working in the hedge fund industry, my lopsided and failed career as a White House communications director, but also 30 years in presidential fundraising for presidential candidates.
And I'm trying to stipulate to people that we have created this anger-based movement in our society, at least the United States, where we have left-leaning and right-leaning anger-based populism. And the central question always is: why? Why did that happen? Why are we so angry at each other? Why can't we get the politicians together to agree on anything? And I distilled it down to three things. It's a little bit simple to say it that way, because of course there are many things. But if you just hear me out for a second, we did three things since the Berlin Wall fell. This has created a lot of economic anxiety for about a third of our fellow Americans.
And so what are they? Number one, when China came into the World Trade Organization, they came in as an emerging market country, and they had these additional powers that were very beneficial to them to grow. As they became the size and scale of the Netherlands, let's say, or Germany or the United Kingdom, we needed to treat them like that, and we needed to treat them more fairly as a developed nation. We did not do that, and they grew into this economic superpower, which I don't mind. God bless China for that, but it had a hollowing-out effect of our manufacturing. Now, some will say it was robotic technology as well, but this was very symbolic for the Americans.
Second thing quickly: we went to war. Two decades of war, two tax cuts. Never did that before. The United States always raised taxes if we had to go to war. We did two wars in Afghanistan and Iraq, two tax cuts, two decades of war. These guys were expecting this war to last a few months. It went on for two decades. It cost us $8 trillion. So step one, wage anxiety.
Step two, we are rapidly inflating our currency. We are monetizing our debt. We are devaluing our currency. You've got that big, beautiful neon sign behind you. The Satoshi team understood that and said, 'Hey, man, we got to get a hard asset in here, something that's totally decentralized and that the government can't, you know what, with.' But we went from, guys, you got to think about this: we went from Bill Clinton's administration's end to George W. Bush, Barack Obama, Donald Trump, Biden, Trump. $33 trillion of deficit spending, guys.
I mean, you know, we went from George Washington to Bill Clinton, 5.8 trillion, and it's not sustainable, guys. Okay? And that was where it got started. And then the last piece: the American citizens got mad when we bailed out the banks.
We gave the banks a trillion dollars. Yes, the banks paid it back. But I'm just talking about the symbolism of it. The American people were like, 'Wait a minute. You killed my wages. You're inflating away my savings. And now when bad times come, you're taking care of the fat cats.' And just a reminder, everybody: 5,000 people in the year 2008 got a million dollars or more in bonuses in a year where the banks needed a $1 trillion bailout.
So these are things I'm writing about in the book, so I can help people at least understand why we have Occupy Wall Street, the Tea Party movement, the MAGA movement, the Bernie Sanders DSA movements. And I'm trying to suggest to people there's an alternative way we can calm this thing down and start working on more practical things that can help a government do better.
Yeah, beautiful. A lot of that really resonates with me, what you've just said, and it does make me kind of want to pick your brain a little bit about, you know, the current landscape. The Trump administration in this, the second go, and the amount of good work that that administration did for the crypto industry in general when you compare that to the Biden administration.
Yeah, no question. But at the same time, I think all of us can very honestly say that there was a lot of grift and graft going on. The Trumps and their family, you know, have benefited massively from the ties that they have to all sorts of businesses in the cryptocurrency industry. And as someone who's been working in this industry since 2017, it's a bit disconcerting for me, because it's a balancing act, right?
We all wanted all these positive things for our industry to happen in the United States, but on the other side, it's like one group of people taking advantage like that could come back to bite us very badly in the next few years. And I wonder if you do think the scales are going to tip again in the other favor, and we might see some of the good work reversed if there is a change in the White House.
I'm worried about it. I'm not not worried about it. What I'm hoping is we have two years left in the Trump administration, and I'm hoping that the codification that's now going to happen from the SEC, which is effectively going to have an administrator write the Clarity Act, and I'm hoping that there'll be enough people in the industry that advance. I like the Ripple story that you brought up today because that's an advancement in the industry.
And I'm a big believer, you know, that I want everybody to win in this industry. You know, I'm a big believer in rising tide lifts all boats. You know, if I'm with different big founders or players in the industry, I'm always suggesting to them, hey, it's too small of an industry. We got to get it together and help each other in this industry. Let's not peck each other's eyeballs out because we got the big banks to peck our eyeballs out, okay? We don't need any more internal strife.
And I am worried about it. I'm not going to say that I'm not worried about it, but I'm hoping that we got some level of ramping and escape velocity from Paul Atkins and the SEC, where there's a lot of sediment in place, so that if a Gary Gensler redux happens or a redo happens, that we will be able to stop him from making seismic, maniacal, unnecessary, partisan changes.
You know what I hate about what goes on in American regulation? It's not what's left regulation or right-leaning regulation. It's not what's right or wrong for the industry or right or wrong for the customer. And it's just silly. You know, in the meantime, you know the technology, I know the technology, and I submit to everybody listening that the technology is actually better than the traditional financial technology. So TradFi, God bless. But they're the same thing with the prediction markets. They're going to move to a 24/7 trading cycle with tokenized stocks and bonds. That's just going to happen.
You want to slow it down, okay. You want the big banks to lobby the Senate. I mean, Elizabeth Warren is like the joke of jokes, right? She's supposed to be some like progressive populist, a champion of the non-banked, the underbanked people. She's the champion of it. But then when she's, you know, putting her social media screens out, it's the talking points from the American Banking Association, the largest lobbying. You see what I mean? And so these people are like a joke.
You know, why don't we just do what's right for the industry and what's right for the customer? And, you know, I don't know. I'm worried about it, but I do think we've got two years here where we can create some ramping the way Brad Garlinghouse just did at Ripple. And I'm hopeful.
Yeah. Look, we chatted to Chris at Avalanche Summit. It must have been about a month ago, and he kind of said the same thing. He was like, it was literally the day after the Clarity Act had kind of failed, and he said he wasn't too concerned because both the SEC and the CFTC right now have very capable people within the administration and at the top of it, and they're going to do everything in their power to, you know, take the baton from the politicians that have failed and go and make sure that the right things are kind of put down for the industry to succeed.
And at this point, the genie's out the bottle, and you just can't put it back in. And I at least have that feeling. And yeah, I'm generally a glass-half-full type person, so I don't see it going backwards drastically because I just don't think it can at this point.
But I did want to kind of chat to you. The first time we met was in Davos while I was still working at Cointelegraph. I think it was 2023, and we had a very interesting conversation. It's been about three or four years since then. I'd imagine your breadth and understanding of the industry has evolved a lot. I know that I, you know, I mean, you mentioned the Bitcoin sign behind me. I'm a big proponent for Bitcoin, especially in the times that we live in. You know, people should take control of their money and lean on something that is completely devoid of any sort of third-party control.
But when you look at the industry now, are you more hopeful than ever that, you know, Bitcoin and a handful of these other protocols that are building the financial rails of the future will save us from, you know, this $33 trillion in debt kind of situation that you find yourself in the US and the rest of the world also finds itself in in different states?
Well, you know, here's what I would say. Four years ago, I would have thought we were higher. Four years ago, I would have thought we would have had way more institutional adoption. Four years ago, I would have thought by this point we would have probably had some perps in the US market and there would have been some 24/7 trading on exchanges like the NASDAQ or the New York Stock Exchange. So it has gone slower than I thought.
If you said to me, what's Bitcoin's price? It was 2022. We were getting our asses kicked. You allowed to say that on your show? I'm assuming you are. You can cuss all you want. You're nice and young. I'm figuring I'm allowed to curse. So we were getting our asses kicked by the FTX debacle. And I'm like, all right. You know, we're starting to see a little bit of a green shoot in Bitcoin.
I would have begged for Bitcoin to be at 80,000 about four years ago. I would have said, 'Oh god, if we could just get back to 80,000, I'll be so happy.' But the euphoria of the Trump administration knocked us to 126,000. And so when I was there, which is like a year ago, I'm like, okay, this is going to get fully adopted. This is going to mainstream. And again, just 25-30% of the market capitalization of gold gets you to some pretty big numbers, right? So gold is right now, I mean, I could look it up, but it's probably like a $25 trillion asset globally.
So if you were just 30% of gold, you are a $7 trillion, $8 trillion asset for Bitcoin. I would have thought after the Trump euphoria that we would have been closer to that. Now that's $600,000, $700,000 worth of Bitcoin per coin. Didn't happen.
You got a lot of naysayers out there now. You got the All-In guys like Chamath and Jason saying Bitcoin's going to zero. Quantum computing is coming, it's going to take out Bitcoin, and all that stuff. I like that stuff. Okay. I want that stuff in the market because that type of FUD floors Bitcoin. You know, that type of FUD shakes out the loose holders of Bitcoin.
So, you know, I'm a perpetually optimistic person. So hopefully you'll interview me in four years. Hopefully I'll still be above ground and Bitcoin will be closer to where I think it should be. I mean, it should be 300,000 right now. I don't understand honestly why. I mean, I do understand it, but I'm saying all things being equal, especially what's going on in the AI boom, rotation of capital in and out of gold, Bitcoin should be a lot higher. And I'm confident in it.
So, and I'm a holder of Bitcoin, so I don't worry about it every day, but I would tell you that the regulatory headwind that our industry has faced is way worse than what Uber faced, or way worse than other technologies. I mean, these guys are locked in spending billions of dollars trying to stop this industry from breaking out.
