Bits + Bips: Elon vs. Trump, Bitcoin Supply Shock Brewing, Circle’s Wild Valuation - Ep. 849
89
Companies
106
Key Quotes
3
Topics
🎯 Summary
Podcast Summary: Bits + Bips: Elon vs. Trump, Bitcoin Supply Shock Brewing, Circle’s Wild Valuation - Ep. 849
This episode of Bits + Bips dives into a volatile mix of political drama impacting tech leaders, the soaring valuation of Circle, and underlying macro/crypto market dynamics, particularly concerning Bitcoin supply.
1. Focus Area
The discussion centered on Geopolitics/Tech Drama (specifically the public fallout between Elon Musk and Donald Trump), Crypto Business/Finance (the Circle IPO and stablecoin competition), and Macro/Venture Capital Trends (deficit spending, fundraising environment, and the potential for a Bitcoin supply shock).
2. Key Technical Insights
- Stablecoin Competition: The panel noted a proliferation of projects attempting to launch new stablecoins, though many have seen dismal market traction. The real innovation lies in stablecoins that accrue interest, a feature that will drive future competition.
- Interest-Bearing Digital Currency: The concept of holding a digital currency in a wallet that automatically accrues interest is highlighted as a significant, potentially disruptive financial innovation.
- Bitcoin Supply Dynamics: While not deeply technical, the discussion touched upon the concept of a “Bitcoin supply shock brewing,” implying that reduced available supply combined with increasing demand (potentially from institutional treasuries) could lead to significant price appreciation.
3. Market/Investment Angle
- Circle IPO Valuation: The consensus was that Circle’s valuation (around $26 billion, trading significantly above its initial offering price) is likely overvalued based on traditional metrics (e.g., a trailing P/E ratio of 363x) and future competition.
- Venture Fundraising Hardship: The fundraising environment for emerging VC managers has been extremely difficult over the last 12 months, largely due to LPs lacking liquidity (DPI) to re-up in new funds because of the “denominator effect” from lower private market marks.
- IPO Catalysts: Upcoming IPOs (like Circle, CoreWeave, and potentially Kraken) are seen as crucial for unlocking liquidity and reinvigorating the digital asset venture ecosystem by providing distributions to LPs.
4. Notable Companies/People
- Elon Musk & Donald Trump: The central focus of the first segment was their public falling out, stemming from Musk’s frustration over personnel appointments (specifically regarding NASA/SpaceX budget control) and policy disagreements (cost-cutting vs. tax cuts).
- Circle: The subject of intense valuation discussion following its SPAC-related public market debut.
- Tether: Mentioned as a stark contrast to Circle in terms of profitability and scale, raising questions about what Tether would be valued at if it went public.
- CoreWeave: Cited as another recent IPO blending crypto and AI exposure.
- Austin Campbell: Mentioned as a sharp analyst whose view is that major banks or Stripe could enter the stablecoin space, leveraging existing distribution networks to compete with USDC.
5. Regulatory/Policy Discussion
- Legislative Urgency: Steve emphasized that the political distraction (Musk/Trump drama) risks derailing the critical legislative agenda in crypto, specifically the need to pass stablecoin regulation and the JENKINS Act while the current political window remains open.
- Government Power: The discussion reinforced the historical reality that when oligarchs/billionaires clash with the government (citing Jack Ma’s IPO halt), the government ultimately holds the power (“Power is power,” referencing Game of Thrones).
6. Future Implications
The conversation suggests a future where:
- Political instability continues to cause high-profile drama involving major tech figures, potentially distracting from core policy work.
- Stablecoin competition will intensify, forcing players to compete on yield and integration capabilities, potentially eroding Circle’s current high margins.
- Liquidity events (IPOs/M&A) are necessary to revitalize the VC fundraising cycle by returning capital to LPs.
7. Target Audience
This episode is most valuable for Crypto Investors, Venture Capital Professionals, and Financial Analysts interested in the intersection of technology politics, public market valuations of crypto infrastructure, and macro trends affecting digital asset investment.
🏢 Companies Mentioned
Palm Pilot
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N/A (Tech/Historical)
3Com
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N/A (Tech/Historical)
Bitcoin miners
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N/A (Sector)
BlackRock
✅
investment
CoreWeave
✅
infrastructure
One Money
✅
institution
Binance US
✅
exchange
Ripple
✅
institution
Alibaba
✅
institution
Unchained Crypto Kingdom
✅
organization
Falcon X
✅
unknown
Therian Minor
✅
unknown
CoreWeave IPO
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unknown
Howard Lutnick
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unknown
And Circle
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unknown
💬 Key Insights
"The AI story is real. We are seeing innovation. The adoption rates are faster than we've seen of technologies in the internet."
"Productivity growth is a story that Ray Dalio and Larry Summers are getting wrong. You know, the AI story is real. We are seeing innovation. The adoption rates are faster than we've seen of technologies in the internet. It took 10 years [for the internet]."
"I look at the fees for like trading and I compare it to like what I'm used to in the ETF world when I'm looking at spreads and transaction fees and man, they are juicy fees. At some point it's going to have to come down. So if I were, if I were an exchange, I'd launch now when they're still able to charge some of the recurring fees even on Coinbase, I think it's still like 3%, it's absolutely insane. That's like 1970s Wall Street fees to buy and trade stocks."
"Gemini, they're the only people I know and a great cost to the Winklevoss twins and Gemini, the company, they made every single one of their customers hold that were in that Earn program in kind, not just dollarized. So a lot of the FTX people are like their whole but they are whole at Bitcoin when it was worth, you know, $16,000. So yeah, they got their cash back for what they held in most cases, but they didn't actually get it back where Gemini is. I don't know if anyone else that did that in crypto, which is in my opinion, huge win."
"An issuer wants stable diamond hands that believes in the thesis. You can get that in a direct listing like what Google did when they went public. I love to see more of that on-chain, by the way. Topic for another time."
"part of what Jeff was describing in that thread, you know, was around like in the context of crypto Web3, there's all of this ecosystem incentive alignment and people who are backing, you know, businesses who are backing each other have aligned incentives towards outcomes. And that was at a mismatch with how this IPO roadshow and allocation structure came to play."
📊 Topics
#artificialintelligence
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#investment
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#startup
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