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The Starting Block is The Block's new flagship daily live show — the breaking news, the context behind it, and the people shaping where crypto goes next. Each episode is a 45-minute live broadcast hosted by award-winning journalist and broadcaster Gareth Jenkinson and powered by The Block's newsroom and research desk.
Welcome back to The Starting Block.
Happy Thursday to you wherever you
are joining us from today.
If it's your first time here,
welcome to the show. My name is
Gareth Jenkinson.
I am your host and head of
multimedia here at The Block.
We've been doing The Starting block
for just over a month now.
Really, really enjoying the
process so far.
And if you've missed our
last few episodes this week, we had
a great conversation with Sergey
Kunz from One Inch
yesterday.
And earlier this week, a couple of
other really good shows.
So if you've missed any of that, you
can go and check out the Blocks X
account, or you can got to
the Blox YouTube channel if you'd
like to watch some of our
interviews, including that interview
with CZ when we launched the show
just over four weeks ago in
Abu Dhabi. Really, really great
conversation with him and definitely
recommend going and checking that
conversation out. If you haven't
heard some of CZ's
backstory and some
of the law around one of the most
influential men in crypto.
If you are joining us for the first
time, I'll just give you a quick
rundown of the show as well.
As you can see above me on
our overlay, we've got the
block briefing, which is our news
update, where I'll basically run
through the biggest stories of the
last 24 hours, and we'll jump into
the market polls.
Today we've Got Andre Dragos from
Bitwise Europe joining us to chat
about all things markets related.
And then we've got the hot seat
segment of the Show.
We're expecting the
team from Zodal, Josh Schweihart
to join us today.
There is a possibility that he might
not make it, but we'll see how that
goes.
Hopefully, we've got him on
the line a little bit later.
But first things first, let's jump
into the top stories of the day in
the block briefing.
And starting off with a topic that
we'll be chatting to Andrea Barton a
little but, the Federal Reserve kept
interest rates on hold Wednesday,
but that was not a unanimous
call. Three policymakers broke
ranks and voted for a quarter point
hike, leaving the committee split
nine to three.
With the funds rate holding at 3.5%
to 3.75%.
Markets had actually been pricing in
as much as a 35%
chance of a hike earlier on
Wednesday, and the Fed
pointed to solid growth but flagged
inflation still running above its 2%
target. And crypto had barely
flinched. Prices were little changed
in the hour after the decision,
but we'll be taking a closer look
at how the crypto markets have
reacted over the past 24 hours when
we get André on for the market's
pulse in a few minutes time.
Our next story today,
Tether is taking its US regulated
stable coin beyond Ethereum for the
first time.
USAT, the company's genius act
compliant dollar token is now
live on Celo, its second
main net deployment.
On Celo USAT gets native
mint and burn functions and
can even be used to pay gas fees
thanks to the network's fee
abstraction upgrade.
Tether US Chief Bo Heinz
called the expansion a deliberate
decision pointing to hundreds of
thousands of daily users.
Already transacting on Selo.
The network has quietly become the
number one distribution channel for
Tether's flagship USDT.
Then our next headline, Binance's
American arm wants a piece of the
prediction market boom.
Binance US says it will apply next
month for a CFTC designated
contract market license,
a move that would let it list
futures, options, and events
based contracts for retail traders
under federal oversight.
CEO Steven Gregory revealed
the plan at the Rare Evo conference
in Las Vegas.
It sets up a direct clash with
established players like Kalshi and
PolyMarket US, and Binance
US is late to the party here.
Gemini already secured its licenses
here, and Coinbase teamed up with
Kalsh to offer events,
contracts on its platforms.
Our next story on Chain Perpetual's
exchange, Ostium now says
the $24 million hack that drained
its vault this month was an inside
the plumbing job, not a flaw in
its code.
In a post-mortem published
yesterday, Ostium said the attacker
gained unauthorized access to
its off-chain infrastructure and
used it to submit fake Bitcoin price
reports, generating artificial
trading profits from the public OLP
vault.
Crucially, the team stresses there's
no evidence it's smart contracts or
governance multi-cigs were
compromised, and the attacker used
forward to pass the protocol
already trusted, testing the waters
before draining nearly 24 million
in USDC.
Then a big story for DeFi.
Aave has been doing some spring
cleaning.
The lending giant has proposed
deprecating dozens of
low usage asset reserves and
winding down six entire blockchain
deployments.
A shakeup touching roughly $98
million in supplied assets and
15 and a half million in outstanding
debt.
Founder Stanley Kulikov unveiled the
plan earlier today prepared by
risk firm LamaRisk under Aave's new
risk framework.
It would off board.
50 low adoption reserves and
21 matured Pendle tokens
and fully retired deployments
on Sonic, Scroll, ZK
Sync, Matus, Ponyum,
and the big one, Aptos.
It's less about any single asset
and more about trimming the
protocols, sprawling a footprint.
I think we'll have to get Stanny
back on the show to chat a little
bit more about this in the
next couple of weeks.
Onto our next story, the founder of
Russia's largest crypto mining
company is heading to jail while
he awaits trial.
A Moscow court has moved BitRiver's
Igor Runets from house arrest into
pre-trial detention, ordering
him held for at least two months.
Runets faces fraud charges
on an especially large scale
tied to a mining equipment deal
with energy conglomerate EN
Plus that investigators say
caused 1 billion rubles,
about 12 and a half million dollars
in damages.
It's the latest chapter in a
mounting legal saga for BitRivers,
which has faced financial and legal
trouble stretching back.
To earlier this year.
A final story this morning or
afternoon, wherever you are, Cathy
Wood is trimming her crypto bets.
ARK Invest sold shares of Bitmine,
Block, Bullish, and Robinhood
on Wednesday as those stocks slid.
The biggest cut was Bitmime, around
$2 million worth offloaded
from the flagship ARKK
fund after Tom Lee's Ethereum
treasury company dropped nearly 6%
on the day.
ARK also shared a million each of
Block and Robin hood.
Where's the money going?
It's going into space.
The firm scooped up roughly $14.5
million of Elon
Musk's SpaceX, even
as those shares slipped below
their IPO price.
So a very interesting investment
decision there from Cathy Wood,
shifting a fair amount of money into
SpaceX. What does she know that we
don't?
Maybe we can ask Andre Dragos.
That's it for the block briefing
today. We're gonna move very swiftly
into the market pulse.
And as I mentioned, and we're joined
by.
Bitwise Europe Head of Research,
André Dragache, who was on
our stream in person at
BTC Prague, and he joined us a few
weeks ago on the show
before he took a well-earned break.
So firstly, Andrée, welcome back to
the show. I hope your summer holiday
was good. How are you doing?
Thank you so much, yes, thanks again
for the invitation.
I'm very happy to be
here.
It's good to have you back.
I think let's talk first and
foremost about the big news
yesterday.
Washer's announcement on
rates staying fixed.
How have you seen the last 24 hours
and how has that impacted the crypto
markets in particular?
I mean, the good news is that
Bitcoin and the major crypto assets
have remained relatively
resilient, right, despite this
kind of increased volatility.
And I do think
Bitcoin will and
other major cryptoassets will
continue to consolidate because
the fat still has this
tightening bias despite the fact
that they didn't.
Raise rates, right,
this time.
But I do expect them to
raise rates in September, because
if you look at, for
instance, three-month T-bill yields,
they're already more than 25
basis points away from the midpoint
target rate.
And if you looked across the whole
treasury yield curve,
right, you've seen substantial
increases at the long end,
especially in 30-year yield to
to essentially highest level since
27, almost 20 years.
And so, yeah,
I think the bond market's already
pricing in, anticipating
rate hikes.
And I think, the
most important bit of that
FMC meeting wasn't the press
conference by Wash itself, but the
fine print. If you look at
the number of descents, and you just
mentioned it, was
among the highest in two
decades, I think.
And so I think
below the surface,
there is pressure, upside pressure
building for more rate hikes
within the FOMC.
And so, I think it
speaks volumes in terms of this kind
of tightening bias.
And as long as this tightening bias
remains unresolved,
right, I think Bitcoin will continue
to consolidate.
That being said, and speaking
about resilience of Bitcoin crypto
assets, What is very remarkable
is essentially since the
whole semiconductor AI
trade peaked in late June.
I just put out a tweet today,
this morning.
If you look at the relative
performance, Bitcoin essentially
flats since Semi's peaked,
while the SOX, the semiconductor
index, is down 28%.
We've seen the crash in the
COSPI literally crash.
It's more than 40% down.
The government wants to intervene,
the Korean government.
And so there's been a lot of
pain and tread fire, but at the same
time, yeah, Bitcoin was pretty
much unaffected by this, right?
And I think in terms of
the overall macro view,
actually, one of our long held views
was spin
for some time, essentially, that
Bitcoin is this kind of canary in
the macro coal mine.
It tends to anticipate tighter
monetary policy, tightening
financial conditions.
Well in advance, both to
the downside, right,
but also the upside.
And I think although there might be
more downside risk
left for Bitcoin in absolute terms,
right.
I think in relative terms, Bitcoin
is already, I mean, there's a higher
chance that Bitcoin will
start outperforming
tech stocks, right?
And in fact, if you look at
the relative performance between
Bitcoin and the NASDAQ.
Like Bitcoin has been outperforming
the Nasdaq essentially since June,
essentially since the whole
semiconductor complex has peaked.
And so I think that
will likely continue.
And I mean, the absolute
bottom in Bitcoin is probably not
yet in, right, because of this
tightening bias by the Fed.
But as there's more
pain in traditional
financial markets, and
the probability for rate cuts
and easing, right, a
reversal of this kind of tightening
bias increases,
I think you should already,
especially you should already see
Bitcoin sniffing out this kind of
easing bias and
continue to outperform like the
whole traditional stock
complex.
I think when we spoke at BTC
Prague, you made the
prediction to me that we might see
the sort of market bottom out around
October.
I stand to be corrected.
I can't remember if it was you or
someone else that said that, but
what are your general thoughts now
on the price of Bitcoin, where
it's been trading?
Do you think there is potentially
more deeper downside
before we
kind of move on from depths of the
spare market.
Yeah, I think it probably wasn't me,
but I think the consensus expects
the bottom around October
because of the harbing cycle,
because I think, the average
drawdown duration for
any kind of Bitcoin bear markets
around 360 days.
I think that the median is around
320 days, which would imply a
bottom around September, so a bit
earlier. But I think the means
around October.
And also key influencers like
Ben Cowan, they've been calling for
this kind of October bottom and
also based on the midterm cycle and
so on.
But I do think because Bitcoin
has already anticipated
a lot of this downside,
a lot for the bad news, a a lot
financial tightening,
macro weakness, I think
there's a high chance that we'll
front run this kind flow.
Because if you look at the macro,
it's, I mean, it is unanimously
bearish, right?
For instance, straight off of most
situations, increasing oil prices,
which is pressuring yields, which
has tightened the market policy,
right.
If you look a FAT policy, they
still have this tightening bias,
it probably will increase rates in
September and so on.
Macro is deteriorating across
the board, but if you look at
the fundamentals, especially like
Bitcoin, crypto-specific
fundamentals,
I mean, long-term holder supply is
at new all-time highest.
It's never been higher.
There have never been more
high conviction buyers,
investors of Bitcoin.
If you look an institutional demand
growth, it has been at rock
bottom, it's been at lowest level.
Since FTX collapse, right,
and it's now re-accelerating,
because we had, I think, two
consecutive weeks of global ETP
inflows.
Strategy appears to be stabilizing
from low levels, right.
It looks like they're getting their
digital credit engine back online,
right? Stresh is pulling back to
par, MSCR is
recovering and so on.
So I think institutional demand
growth is re-accelerating, right
but from very low levels which means
it's very asymmetric.
Very unlikely that it will continue
to decelerate at these very
depressed levels.
I think we've seen some kind of
sell-exhaustion, but while it's
very likely, that will
continue to re-accelerate, right?
And so I think,
yeah, you have this kind of
dichotomy, right, which is
probably the reason why Bitcoin's
rage-bound, right, continues to
go sideways.
But I think the moment you
see a resolve of these kind of
macro risks, especially
This tightening bias by the Fed,
I think that's when you see the
final bottom Bitcoin.
I saw a very interesting tweet from
Elizabeth Warren.
I think it was in the last 12 hours
saying that she supports Donald
Trump in
removing the
debt limit ceiling.
And I mean, it's hilarious to go
through the comments on that post
because all the people in crypto
are like, please make it happen
because if you do that, it means
more liquidity for the markets and
more upside. But generally,
it kind of feels like a sign of the
times and Jordan,
my producer, and I were talking
about this earlier today and looking
at S&P 500 being
the chart looks like this.
It's crazy. And it's kind of like,
when does this all pop and
explode? And even just the
debt bubble itself.
Since Bitcoin,
the genesis block in 2009,
the US debt has 10x,
basically. I remember it being like.
Something like three trillion back
then in 2009 and now it's, you know,
close to 40 trillion.
It's crazy to see politicians saying
like, let's remove the debt ceiling,
but what are your general thoughts
if something like that happens and
how does it kind of tie into
monetary policy as you see
it.
Yeah, in general, I agree with
Lin-O, nothing stops the train.
I think one analyst,
I can't remember who it was exactly,
but he said something like,
I'll remain bullish
on Bitcoin until
they reverse
this kind of chart, the debt chart,
but we know it's just up only,
it's been up only.
It's probably part of the fiat-based
system that this is up only
because of interest rates and money
printing, essentially.
But I think the overarching theme
and why there's always consensus on
this. And it's funny, if you
look at past debt ceilings,
they've always managed to
reach consensus across the aisle
and increase the debt limit,
judicial debt limit.
But eventually, it's just a show, I
think, in some kind
of theater. There's some kind
political theater around it.
But they have no other choice.
Right, they need to keep
the.
The government going,
else you have government shutdowns
and all that stuff, which is
detrimental to probably both
parties.
And so, yeah, nothing stops the
strain. And I think in terms
of monetary policy and what it means
for Bitcoin and fiscal policy,
I mean, the Fed is essentially,
especially wash.
It's like between a rock and a hard
place, right?
He needs to fight inflation,
right.
And the way the Fed does
this is via tightening monetary
policy, increasing interest rates,
tightening liquidity.
But of course,
especially what changed between
COVID and now is the deficit.
I think Powell
was able to ramp
up interest rates and tighten
monetary policy in of the COVID
spike. Post-COVID spike in inflation
because like the deficit was like
half a trillion per year,
but now a 3x again right at 1.5
trillion per year and
counting right every year it's
getting bigger because the debt
load's getting bigger because
interest rates are rising.
And so I think now Washington is
kind of a rock and hard place
situation where he can't really
tighten monetary policy that much.
That means at some point he
needs to
tighten less than is warranted
by inflation and
let inflation run.
And so I think that's ultra bullish
for Bitcoin and scarce assets in
general, because at
the end of the day, you need to have
some kind of inflation protection.
Investors will move out of
treasury bonds.
And that's probably one of the
reactions you've seen.
You've seen capital outflows from
treasury bonds, especially
yesterday.
While the dollar was plummeting,
like yields were spiking, the dollar
is plummeted.
It tells you there's some kind of
capital flight, right?
Especially from foreign investors
who sell the bonds
and move out of the currency.
And so I think you'll see
probably some kind of Japanification
of the US, right,
that treasury bonds become
more and more like JGBs,
Japanese government bonds.
We've seen this kind of phenomenon
of rising the yields
and also plummeting currency.
I mean, it tends to be good for the
stock market because it tends be
inflationary.
And yeah, I think we'll see this
kind Japanification of the astrology
market, but that it's
definitely a macro tailwind
for Bitcoin. I'm fine.
Yeah, I've got two more questions
for you, Andre.
My first one is just about
Bitcoin specifically and some of the
questions that folks
at Bitwise get from investors.
Has there been any real focus or
question marks around BIP 110
and what might actually happen to
Bitcoin? We haven't gone into it
in depth on the show as of
yet, but we will in the next week or
two. But all
the BIP 110 proponents will tell
you that.
It's, you know, all the miners are
going to be forced on to, you know,
to support Bitcoin 10.
And are there question marks from
investors about what this actually
means for Bitcoin?
Or is the large majority of people
completely oblivious?
So, I mean, for us, right?
For us that spend a lot of time
on Bitcoin Twitter and crypto
Twitter, right, it's
all the talk right now.
But I think it's
somewhat striking that many
traditional investors actually don't
have this on their radar.
And I do think it is a risk, right.
Probably just a short term risk, but
I think the key risk is replay
protection and replay risks, right
that transactions
are being reversed
right after a certain period of
time. I think that could cause some
volatility because then
major crypto service providers,
major exchanges and so on,
they might halt processing
transactions for a certain period of
times because there's just too much
uncertainty and that could
create some volatility.
But I think the
probability that Bit110
will reach any kind of majority
is very low.
I think if you look at
prediction odds, it's like around
10%.
And so I don't think it's a
major game changer for Bitcoin.
At some point, I would
expect that they do
a hard fork even at
some point and trade a new token,
essentially.
But it could create some volatility.
It won't be a game changer for
Bitcoin itself.
Yeah, my final question to
you just on Michael Saylor and how
things have changed over the last
month, we spoke at length at
BTC Prague a little bit about this,
but your general take on
them kind of suspending
both MSTR stock
dilution, selling of those shares,
and then just beefing up
their reserves to pay off dividends
and giving themselves like more than
a two-year sort of runway to
meet dividend obligations.
It seems like he's being pretty
pragmatic in the depths of this bear
market right now.
Absolutely.
I think what was the game changer
for strategy was
not only that they managed to
increase the dividend coverage from
I think was initially seven months
only, which is why there was some
kind of route right in the preferred
stocks.
But so he increased it to I think
the latest number was 22 months or
so. So almost two years of dividend
coverage.
But I think what was even more
important was this kind of pledge,
right, to maintain at
least 12 months of dividend
coverage in terms of dollar
liquidity and even
the pledge to be willing to
sell bitcoins, to to maintain this
buffer. Right. And so,
yeah, I think that that was a
game changer. And that's why that's
when you saw like stretch bottoming
out and pulling back to par.
I think he averted
a forced liquidation of
Bitcoin. And the
funny thing is, although he kept
diluting common stockholders,
right, over the past couple of
weeks, in order to increase this
dollar liquidity buffer,
right? MSC was going up as
well. The common stock was going out
as well despite this dilution.
But I think it's ultimately the
case that common stock
holders are actually happy
that he's increasing this liquidity
because he's averting
forced liquidations of Bitcoin,
he might get this kind of digital
credit engine back online.
He might pull back a
stretch to par or to a level where
investors are comfortable with
more stretch supply and you can
buy more Bitcoin, which is also
beneficial for common stockholders
at the end of the day.
And therefore, I think you saw
both a preferred equity
and common equity rally after this
kind of move.
Beautiful.
Andre, thanks so much for for
joining us once again. It's always
great to talk markets with you.
And I still, you know, hold you in
high regard as one of the big brains
in the industry when it comes to,
you know, breaking everything down,
especially from a macro perspective.
So we look forward to having you
back on the show quite soon.
And shout out to the Bitwise team,
some of the goats in the industry,
we're going to take a break.
We are thanks, Andre.
We are still waiting for Joshua to
to come on the line.
And there is every chance that he
might not be with us here today.
So we will take a short break.
Stay with us.
If he doesn't join us, we'll give
you a quick recap of what's coming
up in the next few days I've got
big name guests tomorrow that I want
to tell you about and we can also
talk a little bit about who we've
got coming next week because Lots
and lots of big guests coming on to
the starting block.
Stay with that. We'll be right back
in a few moments time
Welcome back to The Starting Block.
Thank you so much for staying with
us this afternoon.
We are going to be wrapping up the
show right now.
We'll have to reschedule with Josh
and catch up with him and the
Zottel team and talk about Zcash
Ironwood upgrade in
a couple of days' time.
We've got a few exciting shows
coming up over the next week or so,
and I'll give you a brief rundown.
We got Jack Mallers coming on
tomorrow to talk for the first time
on the record about his exit from
21.
We will dive into things happening
at strike and
Bitcoin space in general.
Next week, we've got loads of
big names.
Really, really excited to be
chatting to Yoshi
Yokokawa from Alpaca.
They recently raised $430 million
in their
second raise of 2026.
We've got Ophelia Snyder, who is one
of the co-founders of 21 shares.
She recently stepped away from the
business after a very successful
exit, so I'm looking forward to
picking her brain.
On Wednesday, we got Ellie Ben
Sasson and Nathan Jaffay
from Starkware.
To chat about Eli's new
book and the
general ecosystem for Ethereum
and scaling when it comes to
stockware, as well as
Bit of Zcash.
Eli Ben-Sasson is one of the
co-founders of the Zcache protocol.
And then on Thursday, really excited
to have Jesse Pollack from BASE.
So we've got a stacked lineup of
shows coming up over the next five
days.
If you don't know already,
we broadcast every day at 8.30
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