Transcription
We saw record growth in the amount of
businesses buying Bitcoin despite the
flat down market. Adoption hasn't really
been slowing down in this bare market.
Historically, we saw capital flee
adoption really come to a halt during
previous bare markets. That's not really
happening right now. The price downturn
is the result also of the institutional
adoption of Bitcoin. But I think
long-term this is bullish. The percent
held by individuals has gone down and
the percent held by businesses has
increased substantially.
Sup freaks. Before we get into the show,
I just want to send a heartfelt thank
you. Thank you for joining us and ask
for one quick thing. Could you like this
episode, subscribe to the channel, and
if you like the conversation, join us in
the comment section. Alex Leechman, CEO
and CTO of River, one of the best and
most focused Bitcoin
financial institution now. How are we
describing ourselves? Yeah, you call us
a financial institution. Can't say bank
yet, but
>> yet interesting interesting uh
characterization there, but one of the
best in the world. Uh good friend. Been
on the show many times, but it's time to
catch up. The world is chaotic out
there. Many people are worried Bitcoin
is at $67,000. Uh it's it's detached
from the NASDAQ. Gold and silver are
pumping. Uh Epstein files have been
released. It's It's all over, sir.
>> Yeah. You know, apparently Epstein's
Satoshi uh
>> it has uh it's been a combination of
hilarious and tiresome watching the
narrative slow through over the last few
weeks. But
>> yeah, um there's been a lot of new
information. Uh you know, I think the
one of the problems with the whole
Epstein thing is sort of, you know, it's
like the ultimate boogeyman, right? And
uh this guy who was very rich and
connected for uh a long time emailed
people in all walks of life all over the
world and unfortunately some of those
people were working on Bitcoin and so
any everything seems to get sucked into
his orbit. Um unfortunately it's sort of
like a like Wikipedia you you know how
many uh how many hops does it take to
connect two things? It's sort of like
what's the hop between anything
important and Jeffrey Epste? It's
basically like, you know, one or two.
Uh, and so I think everything, you know,
not just Bitcoin is getting pulled into
all of that.
>> Yeah. It's almost like it was a
concerted effort to to wrap uh almost
everything in his web. Um,
>> yeah, exactly. But we don't have to uh
belabor the Epstein files. I think uh
why I love catching up with you is cuz
you have some
deep behind-the-scen knowledge of what's
actually happen happening uh in terms of
adoption of Bitcoin. I mean, you
interact with your clients with
individuals and businesses every day. uh
your research team. Shout out to Sam and
everybody um putting putting a lot of
effort into your research reports uh
trying to figure out what's actually
happening on the network. And um this
morning you released your uh your
basically state of of Bitcoin adoption
light and uh reports and there was a
lightning network report that went out
yesterday. Um, and so I think it'll be
good to start there. Like what what are
you guys seeing behind the scenes in
terms of Bitcoin adoption in this? Are
we calling it a bare market or is this a
bull market correction right now?
>> Um, I would call it a bare market. I
think it's a bare market. Um, yeah, we
gave a little taste of our adoption
research and we're going to have a much
more thorough report coming out uh next
next week. Um, but but really I would
call this a bare market. um you know the
prices down over the last year when you
know tech stocks, gold, other things
have rallied a lot. Um and but what's
different in this bare market and we've
been through a lot of bare markets at
River. I've been through even more just
in personally um in my at this point 13
years working on Bitcoin is adoption
hasn't really been slowing down in this
bare market. Historically, we saw um
capital flee. We saw adoption really
come to a halt during previous bare
markets when Bitcoin was in a much
smaller era of its life. And that's not
really happening right now. Um business
adoption of Bitcoin continues to grow.
Individual adoption of Bitcoin continues
to grow. The smart money continues to
allocate to Bitcoin. And so that's, you
know, happy to dig into that. But, um, I
think that's like what's what's really
interesting here. Uh, and
and and and so, you know, we detail a
lot of those findings in in this report
we're going to put out.
>> Well, that's that's one of my favorite
uh or periodic updates you give is the
type of businesses that are uh on
boarding to river and adopting Bitcoin.
I think that is high on it and I think
this could dubtail into um the adoption
and distribution of ownership charts
that you guys have been putting out uh
over the last week. But um this is a
signal that that I always look for is
somebody runs a business. Yes, we're a
media business focused on Bitcoin
specifically. So, it makes sense that we
would uh invest in Bitcoin as a treasury
asset and use it for payroll and other
things as well. Um, but I think I've
always been waiting for that sort of
mainstream breakthrough for business
owners who have nothing to do with
Bitcoin recognizing that it's worthwhile
for them to hold some uh on their
business balance sheet. And it seems
like that's accelerating.
>> Yeah. What we've seen in the last year
is that the individual ownership of
Bitcoin has decreased um or you know the
net sort of the amount of Bitcoin in
existence the percent held by
individuals uh has gone down and the
percent held by businesses uh has
increased substantially. So um yeah, if
you look at this chart, you know, you
can see that um uh the basically the the
Bitcoin held by individuals has been
eaten up by by businesses. Now, it's
important to point out, you know,
individuals at the end of the day are
still the owners of businesses and and
and ETFs and things like this. Um but I
think what this is showing is
the like Bitcoin is maturing. Um it's
now like this never would have happened
in a previous bare market, right? In
previous bare markets, who would have
thought that um uh you know the the
transfer of Bitcoin would be happening
from individuals to to businesses and
Wall Street. Um and on the business
side, what we're seeing is this isn't
all just financial institutions. This
this is also main street businesses. um
the businesses at RI the so in the last
year right the Bitcoin prices went went
down and the amount of businesses that
accumulated Bitcoin with at River uh
doubled. So um you know we saw record
growth in the amount of businesses
buying Bitcoin um despite the the flat
and down market. So um
uh I you know so so then you could ask
then the obvious question is well well
if all of this is happening then why is
the price dropping? Um and I think that
is actually like you know the the most
interesting question there is and I
don't think anyone knows the full
answer. It's obviously a market full of
millions of actors each making their own
decisions. But I think what we're seeing
is
um while this transition is happening,
there's some short-term price um you
know downward price movement because
some of the individual Bitcoin um being
transfers like early whales selling.
We're definitely seeing some of the
early big holders selling uh and sort of
estab you diversifying their wealth
after holding Bitcoin for over a decade.
Um, and but then we're also seeing, I
think, the result of some of some more
sophisticated
uh
maybe less ideological instant large
institutions own Bitcoin. Um, using
using it for leverage, trading it when
needed, selling it because it's the most
liquid asset out there on their balance
sheet to sell when there's any sort of
um scare or or fear in the market. And
so um I think this basically like the
price downturn is the result also of the
institutional adoption of Bitcoin uh for
various reasons. But I think long-term
this is bullish.
>> Yeah. As you see here on the chart too,
you have the 2024 figure of net Bitcoin
moving from individuals and it was
negative I think 525,000 Bitcoin around
there if I recall correctly. So around
1.2 to
five well let's just say one and a
quarter million bitcoin moving out of
the hands of individuals towards the
sort of entities on the left side of
this uh chart here and that's what I
think I think a lot of people look at
businesses see plus 489,000 and they
think oh this is the digital asset
treasury companies scooping up all the
bitcoin but and they're certainly
getting a large amount of it but it's
not just these types of businesses
Right.
>> Yeah, absolutely. And you know, we're
also beyond just operating businesses.
Well, actually, just to give you a taste
of like who's buying, you know, Bitcoin
at River, we really see it all. Um,
>> we see, uh, summer camps, um, you know,
putting their excess cash in Bitcoin or
using our Bitcoin interest on cash
product to earn to hold some cash but
also earn Bitcoin on the interest. Um we
see construction companies, real estate
companies, restaurant change, um food
manufacturers. Uh, a cool one, uh, a
really cool one is, uh, there is this,
um, there's a, uh, an order of, uh, uh,
I won't be too specific, but sort of a a
a, um, a Christian group, a Catholic
group that has been saving in Bitcoin
for a long time, and they're um they're
they use the the capital gains on that
to finance um, construction of new
buildings. Um and uh so we we really see
like a really broad array of uh of uh
institutions and businesses buying and
and using Bitcoin. And uh it's really
really cool to see because all the news
on Twitter you see is like this Bitcoin
treasury company Black Rockck and
everything we see behind the scenes is
real main street institutions uh
allocating to Bitcoin.
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below. Yeah. And I think the um the
pumping of the treasury companies and
Black Rockck and all that. And the Black
Rockck stuff really grinds my gears cuz
everybody's like Black Rockck bought
this amount of Bitcoin today or Black
Rockck sold that amount of Bitcoin
today. It's like well actually like they
have customers that are buying their ETF
and then they have to go out there. So I
think the um the I mean Black Rockck is
buying it on behalf of their customers.
So technically they are buying it but
there's a bunch of individuals
um driving those flows in and out of
that IBIT ETF. But I think one thing cuz
we did it was funny you guys dropped
this chart last week the same day here
at TFTC. We made this um ownership
distribution sort of in or um
infographic video for lack of a better
description on the go here and many
people are looking at this chart watch
that video and said oh my gosh like the
individuals are giving up their
sovereignty and it's true obviously to
an extent it's ob undeniable from the
chart more individuals are selling their
Bitcoin as you said earlier a lot of
whales um
but I think getting into the sort sort
of the the nature of this rotation and
is it okay? Is Bitcoin losing its ethos
as this is peer-to-peer digital cash
system for for individuals to to
leverage or is this just uh the product
of of maturation and should this be
expected?
>> I think that it's a it's to be expected.
If you look at any mature asset um
there's a lot of institutional
involvement, right? uh no asset can hit
maturity and be globally important and
have no major institutional involvement.
It just I don't see how that could
possibly work. With that said, I do
think it's important that as
actors in the Bitcoin
community, if you want to call it a
community or just in the Bitcoin
network, we we recognize that, you know,
there's an increasing amount of actors
in this network who are less principled
and less and um and and sort of don't
really share the early ethos of Bitcoin.
And so we need to make sure that the
governance and uh um uh the governance
of the protocol uh can't doesn't get
taken over too much by people who don't
actually follow the ethos. So um you
know exactly how to accomplish that. I
think it's you know it's going to be
something we have to sort out over the
coming years. Um and I'm not actually
too worried about it, but it is
something we should be thoughtful about.
>> Yeah. No, I think people look at this
this chart right here. Institutions may
own a majority of Bitcoin within a
decade and shriek, but it's something I
mean I think MVK made this clear to me
many years ago. It's like, hey, if
Bitcoin's successful, everybody's going
to want a piece. And
>> whether we like it or not, these
institutions have way more firepower in
terms of capital
>> uh to deploy into this. And as I was
mentioning earlier, I think it's also
important to recognize that many of
these institutions represent thousands,
sometimes millions of people as well.
>> Yep.
>> Exactly. And so this chart is really
just like if we linearly extrapolate
what we're seeing, which may or may not
happen. Um but I do think it's
illustrative of if this trend continues,
here's what it looks like in 10 years.
>> Yeah. Which is is wild to think. And I I
think I'm a big fan. I've been reading a
lot of Scott Adams books and a big uh
big fan of reframing. And I think
reframing this is like, wow, it's been
incredible that individuals have been
the largest adopters up to this point 17
years in. I think we should be
incredibly thankful um that we were
crazy enough to take the risk before any
of these institutions did.
>> Yeah. Um, I mean this is you you had a
lot of pioneering crazy individuals uh
you know driving this thing forward and
risking sometimes risking it all uh for
over a decade to make this thing to make
Bitcoin important and yeah I love that
reframing. Um wow how incredible.
>> Yeah we're going to win. We're going to
win.
>> And then I mean it's uh again going back
to like we're in a bare market price is
down. People are
>> freaking out wondering oh are we going
to lower? or is it over? Uh stuff that
both you and I have seen throughout our
uh our more than a decade of experience
in in Bitcoin. And I I find it funny
when we get to these points, especially
now that we're above a trillion dollar
market cap and we have all these
institutions adopting Bitcoin, it's like
it's never been more de-risked and if
the price goes to these levels, you
should view it as an incredible
opportunity. But this is just on the um
sort of adoption of Bitcoin as a as a
store value asset. But the other
um research that you guys released
yesterday that I was mentioning earlier
on Lightning Network too and Lightning's
had um this I think Lightning has been
bismerched and sort of thrown to the
wayside particularly by those in broader
crypto who think there's better ways to
do things. But uh last year was a banner
year for Lightning. I think uh in
November alone Sam's data and again you
have to sort of guesstimate uh because
you guys I think it would be helpful you
helpful for you to describe how you guys
actually go about that lightning
research specifically. Um but what was
it $1.1 billion in in volume in November
2025 alone.
>> Yeah. Um exactly. And you know, one of
the cool things about Lightning is um
it's you know, it's built the Bitcoin
way. Um it's built in a decentralized
it's a decentralized L2. So unlike a lot
of the um you know, Ethereum or other L2
networks that just are basically just
databases, centralized databases, um uh
light the lightning network has no
central place where you can observe all
of the payments happening. So you have
to kind of triangulate the metrics and
we're in a pretty good place to do this
because we've been a pretty sizable node
on the lightning network for um since
we've started really so for seven years
almost seven years now. Um and what we
do is we look at our own data and then
we partner with other big uh
participants in the lightning network,
other node providers, um other exchanges
and node operators and we uh we info
share with them. We have them share
their data and then from that we sort of
extrapolate and make an estimate of what
we think at least a a lower bound is on
the uh on the transaction volumes
happening in the network. So um so yeah
uh it's it's great to see uh it's nice
to see the growth and I think what we're
seeing is a lot of this is driven by
more and more exchanges having adopted
Bitcoin. I mean, Coinbase, sorry, having
adopted Lightning, Coinbase, I believe
the latest is like around 10% of their
Bitcoin transactions are on the
Lightning network. Um, which is pretty
good. Um, I think where we see where the
challenge still is for Lightning is
self-custody
consumer Lightning wallets. Um, because
of the way the Lightning network works,
it's challenging to get those
functioning really effectively. there's
some cool companies really trying to,
you know, level things up there. Um, and
you know, I think like let's see, it's a
hard technical problem. It's a hard
economic problem. So, let's see what
progress those companies can make in the
coming years. Companies like Moon
Wallet, um, Async, um, Light Sparks kind
of got its own L2 Lightning hybrid, uh,
called Spark. So,
>> well, pulling on that thread, I think
2025 was another banner year for
Lightning in terms of um having a clear
product market fit. And the meme has
been like its best product market fit is
this connective tissue between all these
disperate um subprotocols that exist
outside of Lightning like Spark, Liquid,
um Chomian, Mints, ARC, the ARC
protocol.
uh and what what are your ideas about
around that and particularly when it
comes to like scaling and creating these
um consumer consumer apps to make it
easy to use Bitcoin like you have Bull
Bitcoin with their um liquid uh liquid
to lightning sort of op uh functionality
breeze I believe they're leveraging
spark in their SDK and so you're
beginning to
all these different sort of
implementations of um of of wallet
infrastructure
uh that that leverages multiple
protocols to to provide um different
trade-offs for end users.
>> Yeah. Um,
I think I I think really the the the the
bigger question is um what is Bitcoin's
short to medium-term
potential as a medium of exchange? Um
because I think that if Bitcoin is
highly desired as a medium of exchange,
that economic force will pull forward
all of this innovation and we'll just
figure it out. Um, I think the actual
biggest headwind to these technologies
really getting in the hands of
consumers, the self-custody payment
network type scaling technologies is
just there isn't that big of a demand
for Bitcoin as a medium of exchange
today. Um, it's growing. Um, uh, but
it's not like, you know, Tether is still
far more popular than Bitcoin, for
example, right? the global demand for a
medium of exchange is um still
overwhelmingly dollars and and I think
that's actually like the biggest thing
and I don't know that any technological
innovation solves that. I think you
could say let's say we develop the
perfect scaling technology that was
perfectly decentralized, perfectly
censorship resistant, perfectly private,
infinitely scalable for Bitcoin
tomorrow. Um I don't know how much that
actually moves the needle in people
using Bitcoin as money. Um, I think
that's like the right thought
experiment. And so I think like there's
a, you know, until like the inflation
really starts getting crazy with the
dollar, I don't think we'll see Bitcoin
widely used as a medium of exchange.
>> I think I would agree there. Unless
you're like die hard like living on a
Bitcoin standard
>> or demand it like it's the other thing
like merchants need to demand it,
employees need to demand it. um we have
many at TFTC that do and so just be a
nature of those demands that get paid in
Bitcoin. We have to use it as a medium
of exchange to make sure we can make
payroll for them.
>> Uh but yeah, I mean bringing this to
stable coins like and obviously I think
we can combine a bunch of things here.
You got stable coins, you got the
political environment here in the United
States, particularly around crypto and
with a very specific focus on stable
coins. And at the same time, we've got
this emergence of this AI the gentic
economy and everybody's racing to give
these agents different types of wallets.
And um it seems like this administration
has been overly favorable towards the uh
crypto lobby because they threw a lot of
money at the administration during the
election uh and now they're getting a
lot of influence on on Capitol Hill. How
do how do you um
what do what are your thoughts on this
sort of nature of we're sort of in the
room now but crypto is in the room as
well and a lot of uh what I would deem
to be idiotic ideas are being taken
seriously and maybe some distractions
away from the signal that is Bitcoin.
Yeah, I think um you know the
unfortunate reality of
you know the confluence of politics and
capitalism is that sort of short-term
money um even if it's coming from bad
ideas or scammy things can get a lot of
influence in politics. And I think
that's what we're seeing a lot of. Um,
and
you know, I think that it's overall
probably good that they're just like
chilling out a bit. Um, from a
regulatory perspective, the real
challenge for all of us was getting
debanked and the fact that that risk is
basically is is, you know, a fraction of
what it was is,
you know, better for everybody in this
industry. Um,
I also Yeah. So, you know, as it relates
to all the legislation being debated,
yeah, it is kind of interesting, right?
Because you have there's a small group
of the the Bitcoin crowd like us that
are just sitting there watching all
these other people debate in DC about
things we really don't care about. um uh
all the debates are around the things
that are going to make the big guys the
big crypto casinos a lot of money and
that's stable coins and um uh moving
tokens away from the SEC as the
regulator into the CFTC
and uh and so yeah it's kind of like I
watch it I watch the debates but I also
don't really care about what what
they're talking about because it just
like you know it's just none of it's
about Bitcoin So, that's how I feel. I
think stable coins are like
I think they're interesting if you live
in a country that has capital controls
and you want dollars. Other than that, I
have a hard time seeing where they're
really going to take off. Um, I could be
totally wrong, but it just doesn't seem
like for for a domestic use case in the
United States, stable coins just don't
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>> Well, hey, they're going to get this
yield on our savings now.
>> You hear that?
>> Yeah. It's like I mean I I could already
have get that, right? Uh so it's it's
kind of just like this weird abstraction
in the bank account that is unclear
anyone really needs. Uh
>> well, it seems to be a big uh big topic
of contention right now on Capitol Hill
between the banks and Coinbase
specifically. I mean this whole and then
that's another interesting sort of sub
theme this sort of clash or
intersection. Who knows ultimately what
it will prove to be but it seems like
the ratfi guys are looking at um Bitcoin
and crypto becoming more prominent and
um clutching their pearls a bit. This
this fight over sharing the yield on
stable coin is very interesting.
>> Yes. The banks don't want the stable
coin issuers to be able to pay back
interest to the holders because then
they're worried that that will put that
will give them competition because these
big banks are scamming everyone
basically. Like you're check your your
checking and savings accounts if you
just have like the default ones at the
largest banks JP Morgan, uh Chase, Bank
of America, Wells Fargo, they're paying
like 0.01%.
Like most of their account holders and
they're just eating all of that money
for free. Um, and so they don't really
want super consumer-friendly ways to
earn actual market interest rates. Um,
so, uh, you know, they're they're
fighting that. Um, but I mean, we
already offer a high yield interest rate
at River. Like if you have cash from
River, you earn 3.3% and you earn it in
Bitcoin. So, you know, fintexs are
already competing with them. Um, but uh
I think like just bank accounts are so
sticky in general that you know you get
so many people that they've just had a
Chase account their whole life and
they're okay just with Chase basically
taking all of their interest. Um
>> taking it putting it in a carry trade,
levering it up like 10x more so they can
profit.
>> Yeah,
>> that's the interesting I talked to some
guys at a Treasury. I was at a BPI event
in DC and they're saying the banks are
worried because they have to unwind all
that and it makes them have to have a
much more narrow focus. But to your
point, these
>> um alternatives already exist. They
exist at River with cash in uh get
yield. It's automatically converted into
Bitcoin. And I think this gets to an
interesting point because like um
the again the big clash right now on
Capitol Hill is Coinbase versus the
banks like we want to share the yield
and the market's treating this like the
banks are withholding this innovation
from the market like if Coinbase wins
we'll be able to get our yield. It's
like hey it already exists which points
to maybe a positioning and narrative
problem that we have in Bitcoin. Like
these these things already exist you
just need to find you just need to go
out and find them.
>> Yeah. You know, I do wonder if the
stable coin debate is more around the
international uh like opportunity. Um
>> but it's also like Coinbase and Circle
see what Tether's doing. They're like, I
want to box them out.
>> Totally. Um I I do think that really,
you know, we're still in this this build
mode and then when the economic forces
that are basically um set in stone
really start to hit inflation um and de
continue to devalue pe like people's
saving their dollar savings, we'll we'll
see an like in the future we'll see a
large exodus from these these big banks.
um you know, River, we're building, you
know, the financial institution for a
future that's where the dollar is still
um you know, you're still stuck using
the dollar as a medium of exchange
because of the network effect, but you
it's not something you want to be saving
in. And so um you know, we we we
envision a future, we call it like a
dual money future where people save in
Bitcoin, but they continue to primarily
still spend and earn in dollars. And we
think that that type of account is going
to is going to replace the the
traditional bank accounts. Um, and
that's what we're building towards. And
you know, that's there it's pretty
compelling today for people who actually
believe in Bitcoin. But the real unlock
is when people really start to see that
saving in dollars just isn't going to
work.
>> Yeah. What what would you say to people
who are looking at the banks racing to
integrate Bitcoin and crypto and saying
that all these Bitcoin startups that are
Bitcoin first, Bitcoin only, they're
going to get blown out by these
institutions because they're going to
have the capital, the scale, the network
effect of a client base already to just
implement this overnight.
Yeah, I think that um I'm not really
worried at all about that because I like
you know I don't see a future where JP
Morgan is putting Bitcoin side by side
in your checking account um in the near
future. They just don't actually they
don't believe that. They don't believe
in that future. it'll always be this
like side thing that uses a third party
that's kind of a crappy user experience
and like we'll get some people using it
but like you're not they're not actually
gonna build a competitive product
because the organization and its DNA
does not believe this is the future. Um
and so and if it is and if they
eventually like realize that and they
catch up well you know the markets move
like you know a rising tide lifts all
ships. If JP Morgan eventually
integrates Bitcoin as a first class
citizen, we will have grown tremendously
as a business as well. Um, and it's it
will because like a company like River
has taken market share. That's why they
would start doing it. And the the
inertia that they have is so large. Um,
it's it's it's not like they're going to
die, but we al it's it wouldn't be like
a they would just be trying to catch up
with us.
>> Yeah, I'm a big believer of that, too.
This is like a Bitcoiner and who knows
we're early adopters and who knows if
the later waves later adoption waves and
the people come on those waves care at
all that I would find it very hard to
believe to trust JP Morg Bitcoin.
>> Yeah. I mean at the end of the day
they'll care about user experience um
and they'll care about what they're
getting right uh and I think that that's
where you compete. They'll care about
service, user experience and economics.
>> Yeah. And I think the upstart's
definitely beat on UX and it's easier.
>> Yeah.
>> Well, that's like that's another
interesting topic we dive into like with
this wave
of AI tools coming to market. Uh I I
don't think I've talked to you directly
about this like like are you guys
leveraging these tools at River and if
so has it changed your perspective on
what the future trajectory of the growth
of your business from a revenue
profitability standpoint but uh more
importantly from like a headcount
standpoint uh has it has it affected
your views on this at all?
I have kind of a two competing thoughts
in my head at the same time about these
things. Um,
on one hand, I do believe that as these
tools continue to accelerate in their
capabilities, it'll unlock tremendous
potential to move faster for our
business. Um, it's already,
you know, pretty heavily improved the
productivity for our engineering team in
a in a number of places, but not every
place. And I think that really what a
lot of these tools are surfacing to
people is the hard part was never really
writing the code for most things
anyways. Um uh there are certain like
tasks and aspects of building an
application or a tech company where just
like writing the code and getting this
thing done is is like just a lot easier
now. But all of the consequential things
that you do are usually not that. The
consequential things that you do are
usually require humans to synthesize the
complexity
um and apply taste and their
understanding of their client base to
prioritize
and make changes to the product. And AI
is accelerating like subsets of tasks
that allow you to do that, but it
doesn't really accelerate a lot of the
human decision-m bottleneck there. And
I'm I don't see a short-term future
where it does. So, but there are some
areas where it it really accelerates
things like yesterday for example like
when we generate account statements for
our uh for our customers, right? We we
had historically we had to use this like
PDF tool where we like generate the data
and then like we use this other system
that like generates the PDF because PDFs
are like super complicated to understand
how to make them. But with AI, I I you
know, I was like, "Hey guys, like try
and just make the PDF directly now from
and write the code to just generate the
PDF directly because these AIs
understand how to make PDFs, you know,
and they have all that information." And
they were like, you know, they were like
a little hesitant cuz like no one ever
no one really does this. Um it's very
unusual to do something like this. And I
was like, "Hey guys, like look, it's a
different world right now. Let's just
try it." And we experimented for like
half a day yesterday and it actually
worked beautifully. And so we're able to
delete like this whole, you know,
subsystem that we just don't need
anymore. Um, and so there are things
like that where it's really like
magical. Um, but I don't think like it
isn't unlocking us like making better
product decisions or it's not prevent
it's not like saving us time sitting in
a room and debating like the right, you
know, design decisions. Uh, so that
those are like my two sort of competing
takes.
>> No, and I I I would completely agree. I
mean, it's been we've been leaning in
heavily over the last month and a half.
I mean, we've been leaning in heavily
for the last two years really, but now
like the the open claw um phenomena,
we've been using that for like a 6 weeks
now or five or 6 weeks and it's really
extended what we can do. And to your
point about taste, like there's a ton of
ideas I've had was like, okay, I would
love to do this, but we're bootstrapped.
We run lean. we only have so much
capacity to try these things. And now
with OpenClaw, like it's allowing us to
like sprint towards a lot of the the
goals, but taste is like we revamped our
uh morning newsletter 5 days a week and
it's pretty much not automated, but the
the AI our little clanker builds it.
But, uh, there's a lot of taste and it's
collaborative
sort of endeavor between myself and, uh,
my agent Martin, who's a more
sophisticated version of Marty, um,
throughout the day to sort of just get
the get the, um,
uh, the stories that we're going to
include in the newsletter and the
structure. uh but there's a lot of taste
like curating but now I have the ability
instead of spending two 3 hours actually
formatting and uh putting putting things
into the newsletter I can just
throughout the day put links in a Google
sheet with some notes voice to text
notes about what I want to touch on with
a particular topic and then at the end
of the day hit up Martin be like okay go
to the Google sheet look at what I put
in there and let's put together the
newsletter and 30 minutes later it's
ready to go um like that the taste is
extremely important, but in terms of
being able to get stuff done,
particularly with small teams, it's
accelerating that. And I think there's a
misnomer going around out there, too,
which is h you're not going to have to
work more, but if you have high agency
and willpower, it's just like I've I've
had more 1 a.m. nights over the last
four weeks than I have in like the last
two years because I'm just like, "Oh, we
can go after these ideas now."
>> Absolutely. And I I think what it does
and from a hiring perspective and
headcount perspective is um it it
honestly hasn't changed our headcount
projections
um it's just solidified and hammered
home the qualifiers that we have for who
we hire. Um like we just will only hire
people we think are high agency who have
taste who can synthesize and understand
the business problems. Um, and uh, like
act like hire people who have the
qualities that we need to solve the real
human bottlenecks that still exist that
these AIs aren't solving. Um, and you
can still get more done by hiring more
of those people. You just don't need the
the people who are doing busy work and
the code monkeys who aren't thinking
from first principles and understanding
the business. So, that's my take.
>> Yeah. Yeah. It's a brave new world. It's
so funny because there.
>> I get the sense that we're just like
teetering. Like the world right now is
like equally exhilarating and um
completely
uh unnerving cuz it's like we can go
many different directions. Obviously
geopolitically everybody's meeting the
straight Hermuz right now to figure out
what we're going to do with Iran. We got
uh like we said the Epstein files here.
We got this AI explosion. You've got the
high velocity trash economy just
accelerating. had a crazy pace with
prediction markets. Uh now we have
attention markets that just dropped on
Zora.
>> What is attention markets?
>> Oh yeah. Yeah. Remember Zora was like a
>> coin base. They they pivoted and they're
on Salana now, but you can
>> coin your content kind of thing.
>> It's like Well, not only that, but
people can um can bet on trends can can
basically ride trends and monetize it
somehow. I don't understand
>> how it works or why you would want to do
it, but
>> Well, I think I think there is this
thing where, you know, what we've seen
in the last 10 years, especially in our
industry, um, and what we're seeing now
leaving crypto and just moving elsewhere
with prediction markets, is um, you just
have this like class of people that
chases financialization and new games
they can convince
normies to to play because they can just
extract. Um, and I think that's like
we're just seeing that now. Like I think
prediction markets is a big example of
that. It has like some really legitimate
cool use cases like trying to just
understand what's going to happen with
the truth. Um, I which I think is
actually very cool and innovative. Um,
but actually like 90 something% of the
volume just sports betting. Um and so
it's like you know uh at the end of the
day like you take these this technology
and then it's just like oh let's just
yeah like extract from uh a subset of
the population who we can farm.
>> Well I will say
is like sports betting is um especially
if you're spending all your money on it
or all your time on it. You shouldn't be
doing that. But if you're trying to
compare it to like DraftKings or like
the big books, it's like okay, I can see
the argument like prediction markets um
make more sense because there's no house
to take it big and to play both sides
like it's peerto-peer if you want to
take that risk.
>> Uh you get in and out of a position
>> which is interesting. You can like get
out, right?
>> Yeah.
So like compared to the status quo, I
think it is net benefit for consumers
from a fairness perspective. But if you
don't have impulse control, you can
still lose all your money um in these
prediction markets.
>> I mean, the real fight is the states the
state level where you had Texas and
California just sports betting was
illegal and now the prediction markets
are going, "Oh, well, we're federally,
you know, regulated. We're allowed to do
this everywhere." And then and then all
of a sudden everyone in California and
Texas can now sports bet when they
couldn't before. And it's like this big
states rights question. Uh which is also
like kind of an interesting thing. We'll
see how that might end up in the Supreme
Court.
>> Yeah. I feel like we're fighting all
these battles and I think the core of
the battle is the uh
the essence of our humanity as we
transition to the digital age. Like what
are we going to get? Are we gonna get
like a Bitcoin standard with lower time
preference and better capital allocation
and better incentive alignment or do we
just steamroll into Wimar version two
for the 21st century?
>> It's unclear. Um it's unclear. I mean,
we might get a it might allow us to go
back to focusing on real things like
>> I don't know a bull, you know, a a white
pill scenario would be these AIs allow
us to get out of the email jobs like the
email jobs go away and everyone actually
has to go back to doing real things. Um
and uh this like
you know the last few decades where
everything was just an financial
abstraction and um um you know like
fewer and fewer people did like real
things uh in in the real world. um you
know maybe that gets reversed because
like a lot of that can just be done by
AIs and we all go back to you know
manufacturing or farming or I don't know
or maybe all of that just also gets
automated with robotics because the AI
advances so fast that and then we're all
like well what do we even do now? Um and
there's actually just like a thousand
people who are like high agency and high
IQ enough to actually be valuable and
everyone else is just like you know
>> permanent underclass.
>> Right. Exactly. Like I don't know. I
honestly don't know.
I had a conversation with Justin Moon
last week about this and it's something
I've been trying to grapple with in my
head. So I think um particularly our
generation I think we broke out of it
but there's a ton of like preconceived
notions of how the world works and how
humans operate. And I think one of those
is that there's just like a natural
distribution of people who are high
agency and those who have the uh the
fluoride stare if you will. And I I
don't know. I've been trying to think
like is there a way that you can instill
and engender a culture of high agency.
Um if we recognize that it is what
you're going to need to have to be
successful in this new age.
>> Cool.
>> I go back and forth like I can totally
and I probably lean actually towards
there's just a natural distribution of
people who have it and people who don't.
Um, but I'm curious like is there like a
Spartan like culture you could uh you
could put out there to convince people
that you need to develop the skills to
have agency?
>> I think I think there'll also, you know,
be more and more interesting
conversations around collectivism or I
think I think people like might start
thinking about collectivism a little bit
differently as the technology progresses
if it really does truly begin to
advance. Um and and you know I think
there is like this like in the last sort
of 30 years or or so or maybe even 50
years you could say like Americans like
frowned upon collectivism because
everything was just working really well
for us and like being individual being
independent and high agency just like
made you wealthy. Um and if that stops
being the case then all of a sudden
collectivism might start being viewed
differently. Like hold on a second. Like
we need to all like who is my group who
I band together with to make sure that
like we all benefit and we protect
ourselves um and put oursel our group
first because being a being alone you
know just doesn't work anymore. Um and
maybe like the fact that you know we
were able to be h have this ethos at all
was just because the US just worked so
well. Um uh and you know what's the
future of that? just some unformed
thoughts.
>> Yeah.
>> Well, because it's all I mean I seen it
up close and personal like it's
definitely
massively beneficial but it's still it's
still not perfect. Like I had to slap my
clanker around every once in a while
like, "Hey, you did that wrong. Uh
you're not autonomous yet."
>> They don't learn. Um, and I I think
there's still some major like break
there's still some major breakthroughs
before these things are actually
changing everything. Um,
>> well that's the other thing I wonder
like how much how much of like what's
being put out there by Sam Alman, by
Daario, others is just like them pushing
their book and like trying to get their
valuations up, raise another 100 bill.
>> Exactly. It's hard to say. um it's hard
to relate cuz obviously these things are
revolutionary but at the same time um
there's obviously something missing with
them right um you know it's it's like
that classical conversation of why does
why do we need to train these things
with gigawatts of compute or hundreds of
mega you know megawatts of compute and
all of the information on the internet
um
when a human doesn't need any of any of
that um you know there there's something
like fund a human doesn't need to all
the information in the internet to be
able to be useful. So like there's
something fundamental missing in our
understanding of int like building
intelligence and the real maybe scary
thing is if we figure that out that's
when it gets scary and until then maybe
it's actually just kind of like
>> I don't know these things are just
really smart but dumb at the same time.
Yeah, that's yeah, I mean I think
there's been more discussion
arising around this too. I mean the just
separating intelligence and
consciousness like can you actually be
um genuinely intelligent in the sense
that you can learn new things and have
creative thought if you're not conscious
and can these things ever be conscious?
If
>> I think the answer is probably at some
point we can get we'll get there, but
I'm also not convinced it's like going
to happen in the next few years. Um
>> yeah,
>> I'm not convinced this like I could be
wrong. I I I don't have like you know I
wouldn't have predicted how good these
things are today um 5 years ago. So I
want to like you know I I do think we
should consider a world where
extrapolating these things getting
smarter and smarter and accelerating
pace does happen. But at the same time I
just like from a first principles
perspective have a hard time seeing how
throwing more energy at compute
solves that fundamental problem of these
things aren't learning. Um these things
can't aren't like aren't handling novel
tasks. Um,
and you know, every time you send it
something like it has a context window,
it doesn't remember anything, right? And
those are problems that that they're
working on. The question is like how
will they actually be solved in any
near-term future? I don't know.
>> Yeah. Is there a problem as uh
insurmountable as scaling logical cubits
for quantum computers? Who knows?
>> Yeah. Um, that's a big uh been a big uh
>> What are your thoughts on the whole
quantum debate? You know, I hate
I hate being in a position where
you're where where or where an my
argument is betting against humans
figuring something out, right? So, like
I hate sort of being somebody who sits
there and says quantum computing will
never work and here's why. And the
problem I hate I hate being in that
position because it um it's
nonfalsifiable, right? you can't you
can't ever prove like you can't prove
they won't figure something out. Um and
uh but at the same time like there's
there is some truth to it. Like it's a
really hard problem. I think it's
probably overblown but like also what if
it's not right um there's a lot of
information asymmetry here like
understanding quantum computing is not
easy. It's a highly specialized field
and um from what I can tell there is
real progress happening and I don't
think and and if if the you know the
what makes Bitcoin great is that I know
I have high confidence that it's going
to be functioning effectively 10 20 30
years into the future. Um and so we
always want that to be true. We've
always want people to believe that
Bitcoin will always function and be
secure many many years into the future.
So because of that I do think we do need
to care about this. I do think we need
to we we are I mean the there is a lot
of development effort already going into
post quantum
um signature algorithms for Bitcoin and
what transitioning to that could look
like and I think that's important work
and I think it should be done with
conservatively but with some with some
urgency. Um, but we we also don't want
to rush something that makes that that
creates a vulnerability. So that's my
take
>> that completely agree and that's I think
that's been the most frustrating thing
about the uh whole narrative around uh
Bitcoin its relationship with potential
quantum breakthroughs at some point in
the future is that people are saying
you're not doing anything. Will the dead
do something? It's like well this has
been an ongoing discussion for over a
decade. There's a lot of research being
done. There's a BIP out there that um
could potentially be merged. If you want
um to put your Bitcoin in a uh an
address that's nested in a a tap leaf
that is quantum resistant, you may be
able to do that at some point soon. Um
but then to your point, I mean, you
don't want to rush it because you could
um you could introduce some sort of
critical vulnerability that destroys uh
the network itself. But I think another
interesting perspective that somebody
like you could provide like what what
would the logistics of your business
like the transition to this for your
business look like? Like like how many
different sort of things would you have
to change um if we were to transition to
this?
>> So there's a few components here. One is
cold storage, one is a hot wallet, which
is where you know most transactions are
going in and out of every day. what we
would probably do is um so let like
let's just put totally aside how do we
handle like the lost coins or you know
the the coins that don't get moved over
to a new quantum secure signature. Um
let's just assume you know okay we have
a soft fork it introduces a quantum
secure signature um like sphinx plus
like something like you know Jonas Nick
is working on what we would probably do
is move all cold storage coins over to
that once it was you know once we felt
really really confident about it um we
wouldn't do it like right away um
because presumably this would be this
upgrade would happen many years before a
viable quantum computer actually existed
So, we would, you know, let it run its
course, you know, test, do a lot of
testing, have it live on the network for
hopefully a year or two. We move all
cold storage coins over to this new um
new signature scheme. Um, and the hot
wallet we probably still keep running
with the old signature scheme, but we'd
start building and getting the, you
know, getting things in place to to
support this new signature scheme.
There's a lot of open questions from a
wallet experience perspective for both
consumer self-custody and also uh
businesses where some of the things that
are make operating wallets very
convenient today might not work. For
example, like BIP 32 derivation, right?
Um being able to derive
addresses from a public key. um uh th
like you know by just th those tools
probably won't exist for postquantum
algorithms and so things might get a
little clunkier. Um
>> we might see
>> take longer
>> signing. Yeah. Longer or like just the
transaction might be bigger, right? The
um you know the it might be more
expensive and so it would be a it would
be a um a hit to uh self-custody
usability unfortunately.
But you know if that's if that's where
the tech goes it's we don't really have
a choice.
>> Yeah. No I had Jonas and male on. We
talked about this. That's like what I
think uh many people who are like
pushing a rush to this don't realize is
like hey we have a bunch of standards
partially signed Bitcoin transactions
lightning network you have the HTLC's
all these things you can't just like
upgrade now and bork all this stuff
that's been built over the course of 17
years it's like you have to think
through this strategically coordinate
um across the Bitcoin network and all
the individual actors within it and put
a concerted effort forth Uh
and then on the hardware wallet side
like a like that's actually a business
opportunity for somebody who can build a
beefy hardware wallet um that is like
high power can actually sign the
signatures in a timely manner.
Um I would think as well
>> yeah um it will lead to opportunities.
Uh like you like you said it's hard to
sus out sort of the economic opportunist
pushing the quantum fear versus the
actual technical reality. And I think
the I think that the at the end of the
day really no one knows, right? You
can't you don't know what's going to
come out of the mind of some guy in the
lab at Google. Um
>> or some model maybe the models figure
out how to learn actually and they're
like, "Hey, guess what?
>> Figured it out."
>> I think what we do know for sure and
we've known for Bitcoin's lifetime is
theoretically like the laws of physics
do not prohibit this. Um it is an
engineering problem. It is not a does
not require breaking the laws of
physics. And you know at the end of the
day that's the scary thing about
cryptography in general is there's no
law of physics that says a certain
cryptographic primitive is secure. It's
more like probabilistic. We haven't been
able to prove it's not hard but we can't
prove it is. Uh so you know that's this
that's kind of the scary thing about
math in general is it's not really
constrained by physics.
>> Yeah.
Um
just gave the 2025 retrospective. We're
almost 2 months into 2026. What are you
um excited about? What are you looking
forward to? What are you focused on? Uh
>> whether it's at River or Bitcoin
generally right now. We're focused at
River. We're focused on uh this dual
money vision. We want to, you know,
historically,
we were this place where people came to
buy Bitcoin. Um we want to be the
central hub for people's money. We want
to be that place where you bank. Um and
so, you know, the future for us is this
year like focusing on building the
future of Bitcoin banking. Um having
dollars and Bitcoin in one place. We are
not a chartered bank. we partner with a
a bank uh to provide dollar
functionality. Um but you know I do
believe that this is the future of money
and uh and so that's our focus. So we're
working on things like bill pay, you
know, being able to pay your bills from
your river account. Um uh making it just
more and more compelling and easy to use
Bitcoin and dollars in one place. For
Bitcoin more broadly, I think the
quantum stuff is going to be a big focus
of conversation. Um, I think that we
have a big opportunity there to show
people that again, Bitcoin is the most
secure and certain chain in the world
and we think about the longtail risks.
So, I do think that conversation will
dominate over the over the coming year
and I think every time a new blog post
comes out from a quantum lab, it'll
relame, you know, re reignite these
conversations about Bitcoin and quantum.
And I think every month that happens,
we'll have better and better answers for
people. Yeah, it's funny to the uh I
think uh we caught at least some of the
grifters yesterday um because two weeks
ago we had a large downward difficulty
adjustment. There are many people on the
quantum side saying look the miners
recognize the quantum risk. They're
unplugging. They're giving up on their
investment.
Uh this was happening while a winter
storm was was taking over most of the
United States, right? And ash rate was
either
>> turning off because they were involved
in demand response programs or the the
actual data center had some disruptions
due to uh inches of ice uh falling from
the sky. Uh and then yesterday we had an
upwards adjustment of 14.7% uh or above
where we were before that. It's like
well wasn't quantum.
>> Yeah, exactly.
Um, you there's always someone who's got
a bad take that goes viral and all of a
sudden, you know, everyone's texting you
about it, unfortunately.
>> Yeah. Just wait two weeks. Wait two
weeks. Well, Alex, it's always great
catching up, sir. Pleasure. Thanks for
having me on.
>> Honored to call you a friend and a
colleague in this Bitcoin network. Are
we colleagues? Colleagues in the
network. Is that what we're going to
call it? I don't like community either.
I don't think we can call you.
>> We're actors.
>> Yeah,
>> actors in the network. This is more of
the mathematical term, I guess.
Colleague is Yeah, I like I like
colleague brothers.
>> Yeah,
>> brothers. Brothers. I like brothers.
Brothers in arms here. Um
>> we'll uh we'll link to these reports in
the show notes. Keep crushing the
research. It's highly valuable. And I
think um it's it's great to be able to
have this research to point to to be
like, "Hey, Lightning's not dead.
Actually, it's better than ever. Yes,
individuals are losing um their share of
Bitcoin overall, but businesses are
adopting it uh alongside governments and
institutions. It's not just uh these
large actors that people don't like
coming in. It's mom and pop main street
businesses as well. Um I think it's very
beneficial for the pitch to people who
are skeptical.
>> Absolutely. Yeah. Excited to share more
there.
>> All right. Well, all right. A little
tease. Little tease to end it. We'll uh
we'll uh we'll catch up again at some
point soon.
>> All right. Looking forward.
>> All right. Peace, love, freaks.
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