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Topics covered in this episode:
- Crypto ETFs Performance
- Election Betting Markets
- Russell 2000 & Bitcoin
- SEC v Ripple Case Update
- Microsoft voting on Bitcoin
- Emory University buys Bitcoin
- MrBeast investigation for ties into crypto
Creators & Guests
Host
What is Weekly Crypto Check-In?
Hosts Robert Swarthout and Andres Sandate cover the last week's worth of crypto news, providing insights and opinions on this quickly evolving space from a fund managers perspective.
Welcome to another episode of the weekly crypto check-in recorded on October 30, 2024. I'm your host Robert Swerta. I'm interviewing my cohost, Andres Cindarte.
Andres Sandate:How's it going, Andres? Counting down to election. I mean, I'm hoping to one week from today, Robert, we'll have a a winner, and, we can start moving on to Yeah. Discussing crypto regulation and who's gonna run the SEC. Yeah.
Andres Sandate:But until until then, we've got more headlines.
Robert Swarthout:Yeah.
Andres Sandate:So I'm good. I'm good.
Robert Swarthout:We have Halloween and the election, and then, yeah.
Andres Sandate:Oh my god.
Robert Swarthout:We won't be recording next week because I won't be able to make that that we no longer record. So it'd be 2 weeks from now, we'll do our next one. But, yeah, it's, you know, I hope that I don't have to stay up terribly late Right. And we, get results quickly like any sort of civilized country.
Andres Sandate:Yeah. I, no. I an atypical lead in to the show. I'm, I'm doing good. This week has been kinda nuts.
Andres Sandate:My wife is, on a business trip. So I'm on day 3 so far. There haven't been any, fire alarms or, police sirens or anything with the kids running around, you know, here in Smyrna, but, but we're doing good. It's been a, it's it's been a kind of an interesting few days with, like, obviously, anybody paying attention to the the news cycle with what's going on with the the the election. Yep.
Andres Sandate:We've seen some interesting headlines coming out, obviously, today with the GDP numbers. And, I'm speaking at an event tonight, so I've been preparing some, I wanna say, speech remarks, but I've been preparing some remarks, you know, on, alternative investments. So it's been
Robert Swarthout:a busy busy week. Awesome. Well, let's get rolling here. So, you know, we seem to always be talking about either the SEC or the Bitcoin ETFs, and we're not gonna let the, the listeners down today. We're gonna at least talk about a few things.
Robert Swarthout:But just to it's just continued, perspective on kinda how well these have performed, specifically the Bitcoin ones. The Ethereum ones have been less strong, but, you know, of the 575 ETFs that have launched in 2024 to date, 14 of the top 30 are either Bitcoin or Ethereum.
Andres Sandate:Yeah.
Robert Swarthout:Or said slightly differently, 6 of the top 10 are all crypto, and 5 of those top 10 are Bitcoin. It's in the top 4 are only Bitcoin. So it's just amazing. Yeah. In a market that has done out you know, the the broader market has done well this year.
Robert Swarthout:So it's not like somehow crypto was soaking up from everyone else. They're fighting for the same dollars in a lot of sense. So
Andres Sandate:Yeah. And we're gonna talk about we're gonna talk about one of the other top, 6 names, which is the the Russell 2,000. Yeah. It turns out that the of the top 6, 4 are Bitcoin, Ethereum related. 56 are once a ultra short muni bond ETF, so, no, probably not something most people can get their head around even.
Andres Sandate:But the other one is the Global X, Russell 2,000 ETF, which is the index on, you know, small caps. So we're gonna talk about that in a minute. But, yeah, pretty interesting. It it really makes me wonder about all these ETF analysts out there, like, how how much they've had to sort of recalibrate their analysis around this new asset class
Robert Swarthout:For sure.
Andres Sandate:To stay relevant, right, to get clicks, to get advertising, to get headlines. Because, you know, a year ago, this whole thing didn't exist in in ETFs. And now all of a sudden, you know, 4 of the top, you know, 30 are all Bitcoin Ethereum related. So Yeah. How fast things can change.
Robert Swarthout:Well, you know, and this is shouldn't be a surprise to anyone, but, like, just the news cycle is so fast and it you know, you can't print it and put it in a paper and, you know, be fresh in the morning. It's it's gotta be within 15 minutes online somewhere, and then it's old already. So it's, crazy to see the the news move so quickly. Yeah. So kind of on the topic of news, we we have touched on the different, there's poly markets and there's different, betting markets specifically around this, you you know, election cycle we're in.
Robert Swarthout:And there's other things you can bet on in those markets but, you know, I believe we've touched on the topic of is outside money. So outside money being outside the US, non US citizens influencing any of these quote unquote polls where people are betting whether it's a Trump win or or Harris win. And there's, a couple that are specifically only allowed to be US, assuming identity is done correctly and all that stuff. Sure. And, basically, it was proven out.
Robert Swarthout:This this gentleman, Jim Bianco, I went through and just kinda talked about it. It was pretty fascinating to kinda see that, like because I had wondered myself, and I don't know enough to know, you know, if it's good or bad. But he proved out that the betting markets, that are domestic and the ones international are basically in line with each other, and they're proving to be statistically within variations he would expect. So Yeah. Interesting.
Robert Swarthout:Well
Andres Sandate:yeah. And like we were talking about before we went live, like, Bianco, Jim Bianco, who you're referring to, you know, he he's he's well known in at least in investing circles for, the research he's done. He's been at this, at the space, at this game, not just crypto, not just betting markets, but just overall, like, macro research for for decades. So, you know, who knows? Maybe Jim Grant is next.
Andres Sandate:Maybe one of these other more traditional TradFi people, or research gurus comes out and starts to opine on the space. I think this one of the big takeaways is just this convergence we're continuing to see, right, between digital, assets, crypto,
Robert Swarthout:Mhmm.
Andres Sandate:Blockchain and traditional finance. I think, you know, when we look back in, you know, 5 years to today, I think we'll say, gosh. That's all there was that was going on. So I think the more I see of these headlines, the more it's like you can sort of ignore it and say nobody's that's that's all, irrelevant, but I think that, that's a little bit, like, sort of sticking your head in the sand
Robert Swarthout:Right.
Andres Sandate:And pretending like it doesn't exist because it does and it's real and there's a lot of capital flowing. So we'll see. It's, it's pretty interesting. You know, the last big election we talked about Russia influence and China influence and hackers this year. We're talking about election betting markets.
Andres Sandate:Influence. It's kinda yeah.
Robert Swarthout:Yeah. You know, in going on. Admittedly, Americans like to gamble. Right? I mean Oh, yeah.
Robert Swarthout:There's the sports betting, which has become huge. Oh,
Andres Sandate:gosh. Yeah.
Robert Swarthout:5 years ago, you would have never thought to see that you would see betting odds on a live broadcast on ESPN or ABC. Sure. Now they are injecting it whenever they can because they're they found a way legally to make money with it. So you know, I just find it fascinating. In I was reading something recently about how, you know, you hear about these pollsters around election, you you know, you gotta take those with a grain of salt because who knows if they're accurate.
Robert Swarthout:But you start to get into these bigger markets, especially where people putting money on the line, and they appear to be, so far, to be accurate, more accurate than, say, the traditional polls. So are we seeing a a sea change here in how election polls are gonna be done in the future? What what I find fascinating, and we're not there yet, is once you have an identity on the blockchain in a way that is safe and all that stuff is I would hope, you really could have true polls. It doesn't have to be with dollars. You can have, you know or you could be with betting or it doesn't have to be.
Robert Swarthout:And it's much more provable, but we're far
Andres Sandate:transparent. Yeah.
Robert Swarthout:Yeah. We're far away from transparent elections in this country at this point. So who knows if we'll make that leap, anytime soon. So
Andres Sandate:Well, I think it's yeah. I I think the the final comment I would make is just how, like, you you said this, but just the amount of, now legalized, betting or gambling, the amount of, especially that under 30, cohort. They're they're they're digital natives. Right? They're much more comfortable with technology, and and have said over and over in just just about every poll that they intend to, be big users and adopters and are of, digital assets.
Andres Sandate:So this is, just another example of how it's it's it's moving into more, quote, unquote, mainstream areas, of our life, like elections.
Robert Swarthout:Yep. And hopefully, we can actually use this technology in an election, in my opinion, at least. I get how some people don't like it. But I would love to see blockchain used in an election. I think it would clean up some of the mess that we might might have.
Robert Swarthout:So our next topic, we kind of alluded to it in the beginning. So the Russell 2,000 in Bitcoin, when I saw this tweet, Blockchain Backer is a, is a technical, analyst that does crypto stuff among others. He has a huge following in YouTube. And, when he put this chart up, I was blown away, like, how similar the Russell 2 thousand's performance on a daily basis since, basically, call it early July until now compared to Bitcoin. It it looked like he just literally copied the same line and changed the color on it.
Andres Sandate:Right. Right.
Robert Swarthout:Right. It felt like so similar.
Andres Sandate:Yeah. We should pull the chart up. When we get fancier with our technology, we'll have a live look in like like an analyst, you know, or somebody behind the scenes, a studio analyst pulls it up for us. But if you go to, if if you go to his handle,
Robert Swarthout:on Twitter Yeah. BC backer, on on Twitter. Yeah.
Andres Sandate:Yeah. The title of his tweet is birds of a feather. Right? And it's like you said, it's everything's moving in sync, at least back to July. Yeah.
Andres Sandate:I mean,
Robert Swarthout:a lot of volatility. I mean, both of them, obviously, because they're functioning the same line. But, like
Andres Sandate:Right.
Robert Swarthout:You know, Bitcoin is effectively touching an all time high right now. You know, this, you know, it it's crazy to see that, basically, the news has not covered it. I mean, yesterday, Bitcoin was at functionally an all time high. Today, it's pulled back a little bit at 71,000 and change.
Andres Sandate:Okay. But yeah.
Robert Swarthout:So we crossed 70 this week? It was up to 73. Okay. I had a a little bit of a run, basically, Monday, Tuesday, but it's a, but it's not in the news cycle. In the middle, I think, obviously, the election is just sucking all the air out of the room right now.
Andres Sandate:So Right. Well, one thing, the the Russell 2,000, this is the small cap index. So for those out there who are paying attention to the equity markets or the stock markets, like, 2,000, you know, publicly traded companies, obviously, key publicly traded. Mhmm. So obviously a lot more than, you know, 2,000 out there.
Robert Swarthout:Sure.
Andres Sandate:But, but the 2,000 publicly traded companies that make up the Russell 2,000, if you look at, what they call the periodic table of investment returns, which is a fancy, chart that gets put out. It's sort of like that, chemistry, periodic table that we used to get way back in middle, high school. Yeah. Yeah. I didn't take chemistry probably till high school, so you probably took it in middle school.
Andres Sandate:But point point being, it it shows the returns of, you know, 15 or 20 asset classes over decades and, you know, in some cases, going back 100 of years. Right? And you know what the number one performer is going back to the twenties to today? Over over a long period of time, granted,
Robert Swarthout:small cap stocks. Really? Okay. Yeah.
Andres Sandate:And things revert to the mean and the average, you know, return over that long period of time. Now granted, the financial adviser in me says you gotta diversify. You should. Sure. But that goes to to the point of the volatility.
Andres Sandate:Right? Some years, the Russell has been down 50%. Yeah. Other years, it's up 75%. So we see a lot of those parallels in in crypto, right, particularly, here in the last 3 or 4 years.
Robert Swarthout:Yeah. And, I mean, admittedly, that also mirrors crypto. You know, I know the Russell struggled as of of late and, crypto, it's been up. Bitcoin's up 60% for the year, but it that is not the whole story. It's Bitcoin Bitcoin than everybody else and everybody else has not had, as as great of a year
Andres Sandate:to date. Right. Right. So yeah. Interesting.
Andres Sandate:That's a that's a cool chart. We'll have to, find a way to share that with, with listeners. Yeah.
Robert Swarthout:Absolutely. Our next is just an update. We recorded last Wednesday, then I think on Thursday, some more news came out. But basically, the SEC via Ripple case, the SEC said it was appealing. Ripple said they were cross appealing.
Robert Swarthout:So the SEC filed an extension, asking the court to be able to basically give it a full, basically, documents by January 15th. That's rather extended. I think it was a month extended, if I'm not mistaken. Just interesting timing. There may be nothing behind it, but it's also 5 days, before an inauguration of whoever the next president is.
Robert Swarthout:Mhmm. And, you know, certainly if Trump gets elected, there's a new chair of the SEC. Potentially, even if Kamala gets elected, there is. And it's a, it's an interesting gift to give the next, chair. Right.
Robert Swarthout:So so there's that piece of it. Ripple Cross and and their cross appeal, they they did bring up that they planned well, that they are appealing, the idea that there has to that there can't must be there doesn't have to be a physical contract for there to be an investment contract. Air quotes there. That's part of the Howey test. The SEC kind of fought around that.
Robert Swarthout:So they they're bringing that back up, and they're also bringing up the part that they never really fought over, and it didn't get ruled on by the judge, but the fair notice defense. Like, if Ripple was acting acting in faith, its executives thought they were following the law, how could they be held guilty for something that they didn't that there was no clarity on? It's basically the the the, I guess, the short way of saying that. It sounds like that's a pretty strong argument, especially if it made it to the Supreme Court. They they tend to be following that kind of line of thinking these days, from everything that I've read from other attorneys.
Robert Swarthout:So, you know, we we got a ways to go. I hope that some level heads into the room, the SEC in January and or February, whenever the senate kind of gets around to confirming the next chair and the chairman or chairwoman, and we can have some civil discourse and get this thing over with.
Andres Sandate:Yeah. Well, this didn't make our headlines, but it's worth noting this week out in Las Vegas is the annual money 2020 show, which is a big financial technology conference that attracts, you know, lots of big financial technology companies. Do you know who the fireside chat was, keynote, this week?
Robert Swarthout:Oh, I'm not gonna guess Gensler, but I have no idea.
Andres Sandate:It sure was. It was, chairman, Gary Gensler. Now he did that from the confines of what appeared to be his living room, or or a home look home studio. Yes. And, you know, he talked a lot about industry innovation and the importance of trying to keep pace, but also embracing technology and Mhmm.
Andres Sandate:Obviously, to a crowd of technologists and folks in financial technology, that was probably, encouraging. But he did get a question from the, from from the interviewer about, the consideration of what happens, you know, in the event of a, you know, outcome of a Trump win. You know? Will you be replaced? Are you concerned about being, you know, let go?
Andres Sandate:And he said calmly, I sleep well at night. We wake up every day focusing on helping and protecting individual investors. So I I was hoping, selfishly, like, we might hear something about the industry, about crypto, and you know? But Yeah. He he he he took the money, he took the money line and and just said, look.
Andres Sandate:This is a volatile topic. It's a, obviously, really hot button, topic of crypto and and and the time of that question.
Robert Swarthout:I don't
Andres Sandate:know if they were gonna get anything if they asked, but they did ask. So
Robert Swarthout:Well, I can tell you he got that same question on CNBC Asia, earlier last week. Okay. And it sounds like this time he did a much better job answering it. Because she literally goes the lady the the lady that was interviewing him goes, you know, if Trump gets elected, he said that he would fire you day 1. Would you like to respond to that?
Robert Swarthout:And his and his answer was, you can go on to your next question. Yeah. So, again, I guess, polite of sorts, but, like, the way that you described his answer was much better than that.
Andres Sandate:Yeah. He did 40 minutes. So, obviously, for, you know, for for money 2020 to get, you know, somebody like him who's constantly in the news, with the SEC, was a pretty big get. So I doubt he gets a speaking fee, though. You know?
Andres Sandate:So Yeah.
Robert Swarthout:Yep. Cool. Well
Andres Sandate:Alright. This next one caught my attention because, you said Microsoft and hedge fund and Bitcoin all in one sentence, and I said, sign me up. Let's let's talk about this one.
Robert Swarthout:Yeah. So this this also caught my attention when I first saw it. So Microsoft is gonna put it up to vote for their shareholders whether the company should, invest in Bitcoin. I think, a, it's the right thing to do from a
Andres Sandate:From a corporate governance standpoint.
Robert Swarthout:From a corporate governance. Yes. This is being done correctly. I'm not sure that I've ever thought of Microsoft in the in the light of are they a hedge fund? And obviously, this is maybe a great way to a great area to describe here, but, like, it just kinda blows my mind.
Robert Swarthout:They obviously have cash on hand. They're trying to figure out something to do with it. And I'm not sure that you wouldn't think that they're gonna invest enough in Bitcoin to be meaningful against their balance sheet, but who knows? Maybe they have ambitions to really move into it hard. I don't know.
Robert Swarthout:You know
Andres Sandate:what I mean, Todd? Yeah. It it yeah. I do because it bring obviously, they've got I'm just gonna put a number out there. In the 100 of 1,000,000,000 in cash on the balance sheet.
Andres Sandate:Yeah.
Robert Swarthout:I
Andres Sandate:don't know what the actual number is. We could pull that up. But, but, yeah, they have this gigantic amount of cash sitting on the balance sheet. They're earning, you know, very small amount, but it's in cash. It it it it reminds me of the decision that Cowper made.
Robert Swarthout:What's that number? Real quick. 75,000,000,000 as of the end of June.
Andres Sandate:75,000,000,000. So no. It was
Robert Swarthout:Relatively small number, I guess. Yeah.
Andres Sandate:I was off by 25,000,000,000. Yeah. They have made some monster purchases, though.
Robert Swarthout:Yes.
Andres Sandate:I don't know how much in cash and stock, but they bought some pretty big, competitors or bolt ons recently in the last 2 or 3 years. What I was gonna say is this reminds me of when CalPERS, the gigantic, pension fund in California, the California public and pension employee retirement system, decided to pull out of hedge funds. And a lot of people in alternatives took note of that, and it made a lot of headlines for a couple of weeks, led to a lot of interviews, and a lot of people wondering, are hedge funds dead? Mhmm. And their take was for it to make a meaningful impact in our program relative to the amount of money that we would have allocated, it just didn't make sense.
Andres Sandate:Like, we we could go in other places. I think hedge funds were coming off a pretty abysmal, performance. You know? I don't know the specific managers and strategies they were in, but their their takeaway was it just wasn't worth all the hassle. So I I really wonder if if they're making this decision to go to the, you know, shareholders and ask because whether it's lawsuits or is there enough of a, you know, a figure that actually moves the needle?
Andres Sandate:Now here's what will happen is I I I guarantee you a whole bunch of other corporate treasurers, CFOs, and otherwise are getting that call from their board Mhmm. And saying, what are we doing? Are we even looking at this or not? Right?
Robert Swarthout:So Yeah. That's a that's a great segue to our next topic, actually. So, Emory University, based, you know, here in Atlanta, so this is a bit of hometown news, is the first endowment to buy into Bitcoin. They bought, like, $16,000,000 of Bitcoin through an ETF, I should be clear. Sure.
Robert Swarthout:But it's, I was surprised it took a university this long. It's, and it's, you know, it won't certainly won't be the last. So
Andres Sandate:Yeah. Yeah. I mean, Emery has a, has a has a a good size endowment. I think, my recollection was that it was close to 10,000,000,000. We could probably, again, look that number up.
Robert Swarthout:But 11? Yep. Just over 11.
Andres Sandate:10, 11,000,000,000. So, yeah, I mean, a sizable investment. But Mhmm. You know, if you say 10% of that number, it's it's it's not a huge amount from a percentage standpoint. Right?
Andres Sandate:I mean
Robert Swarthout:And and and it may be that they're gonna buy quarterly that amount. Well, I guess time will tell. Time will tell. But it's to start buying now, either they feel like they're about to make a really good trade. And, generally, endowments are not in the trading business, but you could see there being some, taking of gains if it really starts to run.
Robert Swarthout:But, again, it's not a meaningful number for them. So I guess the news headline is the first university has got it in. We we talked about some of the, state pensions up in Wisconsin that did that, back in May. So
Andres Sandate:It's 1 it's 1 and a half percent. Right? Like, it's a pretty pretty small amount. Mhmm. Less than no.
Andres Sandate:It's less than 1%.
Robert Swarthout:So 110%.
Andres Sandate:Yeah. It's, yeah. But it it is sort of note because they are, you know, a large private endowment. They are you know, they gotta be in the top 30 endowments, here in the US anyway, in terms of size. They have a healthy allocation to alternatives.
Andres Sandate:Mhmm. Very smart, sophisticated CIO and staff. So, I'm curious how much research analysis and diligence went into the decision.
Robert Swarthout:But Right. You know?
Andres Sandate:And to think You'd have to be on the board of trustees to really know that. It's kinda curious.
Robert Swarthout:Yeah. You know, in I mean, props to them for being forward thinking potentially in this case. I mean, generally, these these boards are, made up of older people. Right? Like, so and it crypto doesn't skew that way, so they're potentially definitely reaching, if it truly was made up that way.
Robert Swarthout:I don't know what the makeup of Emory's board is, but it's,
Andres Sandate:Yeah. And it's it's also the question is, does the board get to, weigh in? So, like, in a public plan, a lot of times, you'd have an investment staff.
Robert Swarthout:Sure.
Andres Sandate:They're making recommendations to the board. The board is ultimately voting. A lot of times in some of these private foundations, endowments, etcetera, it's the investment staff has the discretion, right, to
Robert Swarthout:for certain stuff.
Andres Sandate:Invest and allocate, and don't necessarily have to go to a board. It it'd be interesting to know, how the process kinda played out there. But, yeah, nevertheless, like, local and, certainly right right in the sweet spot of of what we're reporting, so that's a good pickup.
Robert Swarthout:I I figured the gentleman's name. I've met him a few times at some of those events that you run here in town. Yeah. Her memory's off to next time I see him, I have to ask him. I'd be curious.
Robert Swarthout:Yeah. Yeah.
Andres Sandate:For sure. Okay, Robert. This last headline, mister Beast. My kids don't probably turn into the show yet. Yeah.
Andres Sandate:Yeah. But when mister Beast, makes its way on YouTube, I always have to do a double take because, it's fascinating what these creators he's a big YouTube creator, a big social media presence.
Robert Swarthout:Biggest YouTube following period.
Andres Sandate:Yeah. I mean, it's fascinating, like, the the the empires that they've created. And, I'm always constantly pushing my kids off of off of YouTube. They they they tend to be the boys are are, they're 10 and 8, so they tend to be attracted to these, influencers who are doing, like, wacky, zany, crazy, like, challenges, and mister Beast is probably one of the leaders, if not the leader of that, you know, coming up with all these wild things. Like, can you adopt out, you know, 500 dogs in a weekend?
Andres Sandate:Right? Or can can you put a couple in a random, like, glass cube and see if they can, like, you know, live together for a week? It's just some crazy stuff. Yeah. But, tell us about this headline because it caught, you know, it it caught me off guard.
Andres Sandate:I didn't I didn't see it. I know he's at the top of the food chain, but, certainly, somebody trying to probably take him down or what?
Robert Swarthout:You know, I I don't know exactly the motives, but I can tell you investigation I need to define here. This is not a federal investigation of any kind at this point. This is purely the community, basically on Twitter.
Andres Sandate:I mean,
Robert Swarthout:it's kind of or x. I keep calling it Twitter. It's always gonna be Twitter to me. Making, doing some investigation. And the way that they came about this, and this just shows that, like, once you put something online Yeah.
Robert Swarthout:It potentially could be years later before it becomes meaningful, but all of a sudden it's it really kind kinda starts to be impactful. So in, goodness. I don't see the date. Oh, it's me. In 2021, mister Beast, via his Twitter account, posted that he had bought an NFT on Ethereum that was worth basically $100,000.
Robert Swarthout:Okay. Everything on a blockchain being public, no one think much of it. He's like, I just bought this one blah blah blah. They have then taken that wallet address that did that and kinda traced back the funds. They call this chain analysis.
Robert Swarthout:It's a company that does this, but it's really just linking things together and watching flows of stuff because it's public, but there's not typically names attached to stuff. Well, they did that. And then in this case, they have found potentially what looks like a scheme where he will promote a token via his platform of some kind, whether that's Twitter or YouTube or whatever. And then at some point thereafter, those tokens already are being held. They get sold out and make some money.
Andres Sandate:After after there's assuming Right. You know, there are people go out and buy them, say, oh, mister Beast is in those. Maybe I should be in those. Okay.
Robert Swarthout:Yeah. I mean, you know, they let And the
Andres Sandate:SEC did come down on some of these celebrities who were in, if you will, you call them pump and dump, you know, in the in the penny stock terminology. Like, they got well known celebrities to sort of back and promote some of these tokens that ended up going to 0.
Robert Swarthout:Right. And Yeah. So they alleged, in this case, that there's $23,000,000 in total profit. So it's a lot of money, but to mister Beast, it's kinda like is if if he really did this, this could actually turn into something if the SEC decided to care. Not just the $23,000,000 was not worth it.
Robert Swarthout:Like, because it's gonna it'll his potentially, the house of cards starts falling apart here. So I don't know. This is early. This literally came out today, so it's, not terribly tons of news around it yet, but they they have definitely been doing their homework. You can tell.
Robert Swarthout:So I guess the point is if you're gonna put something online, make sure you want it to always be there and not bite you in the butt.
Andres Sandate:Yeah. Yeah. For sure. So let me let me ask you about more of a tech tech a technical question, like, with wallets. So if if somebody goes out and sets up a crypto wallet and makes, does transactions in that digital wallet, that crypto wallet as they call it
Robert Swarthout:Yep.
Andres Sandate:Is there any anonymity in that crypto wallet, or can it always be traced back to, like, an IP address or a legal entity or an owner of the wallet?
Robert Swarthout:Generally, there's no identity of any kind attached. No IP address. No nothing. Typically, how this stuff, like, we just talked about come about is either somebody they call them doxing. So it basically means that you either somebody does it to you or you do it yourself.
Robert Swarthout:You post about something that effectively ties an identity to that address or that wallet address. Okay. So there's other ways for wallets to get funds. And you can go create, say, an Ethereum wallet right now. It has nothing attached to it, no funds in it.
Robert Swarthout:You need to fund that wallet to do things. So you might go to Coinbase and send some Ethereum to it, or you might go from another wallet that you have and send stuff to it. So initially to the public, there's no connection. They don't know it's you. But if there was a criminal investigation, they obviously can go to Coinbase and say, let us know who owns this.
Robert Swarthout:Tell them about this transaction. And again, there's multiple companies that try to help around this stuff, but Chainalysis is, I think, the biggest, and there's, like, 2 or 3 others, that really help law enforcement kinda decipher this, this gigantic web because there's all sorts of different things. You were on this. I had to get into it today, but this whole tornado cache thing that happened roughly a year and a half ago where a software developer made a system where you would send Ethereum or Bitcoin or whatever into this thing. It you could think of it as a washing machine and it spun it around, blended it up.
Robert Swarthout:A whole bunch of people did this together, then you would basically get your funds out the other side and you're basically trying to break that chain of, identity. So so you wonder, like, who in their right mind that is doing good things and not trying to do bad things would wanna use that? But there's very many people in the, blockchain community that's purely, want to stand by the ideals of blockchain and should be anonymous, and I should be able to do what I want with my money. The problem is you have criminals that decide that Tornado Cash is a really good idea, and jump in on it. So
Andres Sandate:Well, I when you when you said doxing, I I thought, I've heard of this in the in somewhat of a different context, not crypto related. So I pulled it up as you were talking and, showing my age here, but, like, it's it's it's derived from the term dropping docs or documents. Doxing is a form of cyberbullying that uses sensitive or secret information statements or records for the harassment, exposure, financial harm, or other exploitation of targeted individuals. Yeah. So I've I've heard about, you know, like, these pranks people play where they, like, send the SWAT team to someone's house.
Andres Sandate:Yeah. And then they call it
Robert Swarthout:a SWAT team. Yeah.
Andres Sandate:Right. Terrible things have happened as a result. People have died. Yeah. I mean, it's like so, obviously, as our lives become more digital, as there's more and more transactions and activities Mhmm.
Andres Sandate:I guess the public services announcement is, you know, protect your identity, be sensitive about where you share information. Right. Be thoughtful, about, you know, who the counterparties are and the transactions, who's on the other side because, yeah, there is a lot of this stuff happening out there Yeah. In terms of exploitation.
Robert Swarthout:A 100%. So, memorize that and repeat it every morning, and you'll be good. So
Andres Sandate:Yeah. Yeah. Alright. So next week, no show?
Robert Swarthout:No show. Okay. We will, catch you soon. Week after. So
Andres Sandate:Yeah. And we'll maybe have a a new, a newly elected president? I I hope so. We'll see. Should be interesting.
Robert Swarthout:Calling out, ballot ballot counting is not my favorite form of entertainment. So, awesome. Well, thanks for joining us in this episode of the weekly crypto check-in. If you wanna stay updated on future episodes, you can find us in any podcast player by searching TEE TIME crypto capital or the weekly crypto check-in. Take care.