Transcript
obviously the hack at Polymarket as well.
And then we also got a talk about,
and I hope Dave Levinson is ready to talk about this too,
Stan Druckenmiller supporting perpetual futures trading
with an investment in hyper-liquid,
just an interesting turn of events,
terms of yesterday, other than the Google Story Service Now,
down 27%, they guided to a slowdown,
Crocs, the footwear, up 25%,
it's biggest gain since April 2020,
hyper-liquid strategies, thicker PUR,
are up 23 and a third percent,
how to pillar outstanding numbers,
worst day since March 2020, down 9.3% on the day.
If it wasn't bad enough, Amazon was down 4.3% yesterday
only to lead into earnings after the bell,
Dave Levinson, you gotta hold that hand there, my friend,
there's a bunch before that I get to, that hand, hang on,
I gotta get to Carlo first,
because he's gonna have to bolt and he's needed for a bunch.
So the big news overnight is Intel down 25%,
PC weakness is the name of the game there.
If you think it's overblown on the basis of PC weakness,
could be a buying opportunity, Amazon,
right after they reported was down double digits,
it's been paired, but all this is while the market is not open,
so we'll see what happens when it does open down
between 7 and 8%,
alpha that not getting a bounce from yesterday's fall,
not surprising since Intel and Amazon are down.
There are other types of companies reporting these days,
all the oil companies crushing it, Chevron, Xon,
BP on the side of tech,
ready, changing its policy is a big deal,
we'll talk about it in a little bit,
down about 20%, Roblox down around 17%,
the other space that's been doing well in terms of earnings
has been the former space AstraZeneca reported
up 3.5 pre-market, regeneron,
also up a lot, 35% in the pre-market.
Oh, I'm sorry, excuse me,
its revenue is up 35%,
it's higher in the pre-market, apologies.
We're done with central banks for a little while
and the Bank of Japan held today,
the ECB held on Thursday,
the Fed held on, held on Wednesday,
all of those holds if Andy Kaufman joins
all those holds seen as hawkish holds
and all three are seen to be quite live
when it comes to a December move.
Just to get this couple of other earnings Starbucks,
turn around working stock up
and that has been a pretty hefty job,
we'll see if it sticks,
general dynamics in the defense space,
in the industrial space,
a beaten arrays,
co-get palmole live also a beaten raise
and we'll have a couple more as the show rolls on.
Let me get to Carlo immediately.
So we gotta talk about the Binance hack,
which affects roughly $6 plus billion
of the exchanges holdings on behalf of customers.
There was a polymarket hack as well,
I don't think it's necessarily as important coin base reported.
Its profit was up despite,
I would say a very midling crypto quarter
and then we gotta talk about perpetual futures
and what Stan Druckenmiller seasoned them.
So Carlo, good morning, go ahead.
Oh David, what a week.
This is a moment I think where people are justifiably scared
because the very trust in many of the centralized institutions
that we've come to depend on for custodian,
not only our crypto assets,
but our banking funds, our investments.
The entire financial system is currently under a sustained attack
by bad actors who are using AI to find vulnerabilities
and it is hitting and it is breaking
the structural integrity of some of the largest players in the space.
And the Binance hack yesterday is
the largest single theft exploit ever in crypto for sure.
Binance suffered the largest crypto theft on record
and I've put an article up kind of breaking that down
but also circling around to just kind of giving some people
a little bit of guidance in this storm
because Elon posted it and I had to sort of build on that
every day now feels like it's zero day.
Every day between polymarket,
between Binance, between the attacks on banks,
between the attacks on markets
and financial institutions,
people are starting to worry that there is no safe place
to put your money and I think it's important
that we zoom out David
and we just take a pause here and breathe.
Yes, the doom loop that we are seeing
is very rightfully justified.
What we've seen over the last few days
and what is building as far as the continued narrative
around not only financial institutions being under siege
but concerns about the grid and infrastructure,
nation states coming out and telling citizens to prepare
for potential disruptions in the internet,
in banking, in utilities.
It is rightfully justified for people to be scared right now
but I wanted to pivot to the fact that yes,
there is no zero risk store of value
and that applies to everyone on this space
whether you're in crypto,
whether you are trading and holding equities,
whether your money is sitting in cash,
even if your money is sitting in cash under your mattress
or in gold in your safe,
all of these things come with a potential for exploit and loss.
But the important thing to do is to not panic during these times.
Of course exchanges have counterparty and operational risk
okay, then put your crypto off exchanges
and put it in cold storage and hardware while it's well that
we've learned comes with its own set of risk
because of supply chain and these devices being compromised
in the supply chain yesterday's hack of finance was a hot wallet.
Apparently the source of this was a laptop
which opened an attack vector
that allowed finances signature infrastructure
for that wallet to be exploited
and the most incredibly ironic thing of the day,
David is who would have bet that two stablecoin issuers
circle and tether would be the heroes of this thing
by having immediately executed freezes
on a lot of these assets that were taken
in this what is estimated now to be a $6.3 billion drain.
This is going to have a ripple effect.
It's caused Bitcoin to tumble.
I expect markets to open in the red today
based on the response to this
and I think it will take some time for this to unwind.
Binance is trying to recover as much as they can
for the consumer but I think it is important David
before I hand the mic back and happy to answer any questions
and continue the conversation.
Whether it be an exchange, whether it be a financial trading app,
whether it be cold storage, hot wallets, banks
and even cash, there is some degree of counterparty risk
in all of these things.
But the worst thing you can do is feel a sense of urgency
right now and panic and make sloppy moves
and even greater mistakes could be made
in these moments of panic.
So the best thing to do in closing,
make sure you have the strongest available
to factor authentication that the accounts
where your funds are being held offers you.
Hardware keys like Ubiquiz,
two factor authentication through separate apps
are certainly better than simply relying
on a text message verification.
If you've got your crypto and long term cold storage,
obviously be very careful.
Multicignature seems to be things that people are talking about,
puts your crypto and multicig.
But even that David comes with a risk
because right now you don't know who's exploited,
you don't know what devices have been compromised.
So if you ran out and tried to institute a multicignature
and that simply means having two separate devices
or two separate protocols in place to sign
before you can move your crypto,
if you add a new one to your upseq,
you don't know if what you have just signed up for is exploited.
You don't know if the device you just ordered
and got delivered to your house has been tampered with.
So exercise a bit of caution in everything you do.
Keep your software upgraded.
Make sure your passwords are strong and resilient
and not redundant across all of your accounts
and try to limit the surface of the threat to you personally.
In other words, control what you're capable of controlling
and accept that there are things
that are gonna be beyond your control
as this thing continues to unwind.
And I think that is an important public service announcement
in the mix of all that's going on right now
because the timeline is definitely scared right now.
There's no other way to characterize it, David.
Back to you.
Great.
Let me just add a couple things for the audience.
First of all,
Binance has pledged to cover all the losses.
Okay, so it's just Binance taking this on
and I think we're gonna see that more and more often.
Obviously, that money has to come from somewhere.
And so clearly from Binance's profitability,
when I say we'll see this more and more,
I think financial institutions to the extent
that there is no other backing
are going to use their profits to pay it back.
Carlos point about the coordinated freezing
by competitors, by peer firms, tether circle,
so on is also something that I think we will continue
to see if everyone operates in sync.
It makes the system better over time
and wards off the hackers.
The hackers in this case are,
have been preliminaryly identified
as emanating from North Korea.
And I think that it's gonna stick at six,
this is my opinion.
I think it's gonna stick at six billion
in terms of the size it's not gonna grow,
but that being said,
I don't think a lot of this is going to be recoverable.
And before you go, Carlos,
on the flip side of this,
not to say that this is not an incredible event
in the history of crypto,
but I do wanna talk a little bit about
Visa and MasterCards earnings
because the annualized stablecoin settlement volume
for these folks are up 10X year over year,
10 blockchains they're operating on 200 plus
card programs.
And their stocks are at all time highs
and since you focus largely on the stablecoin world,
what does this mean for you, for them,
and for their peers that are crypto first
as opposed to Visa and MasterCards
which are not necessarily crypto native firms.
Yeah, outstanding question.
And it confirms what we have been talking about
on this show for months that stablecoins
are the future of dollars.
And these major players understand that
and despite the banks and their hand ringing
and their opposition front that they presented
to stablecoins,
they have to an extent capitulated.
The Genius Act regulations are going live.
They've been approved by OCC
and the line has been drawn.
And yeah, the banks will litigate it and they'll fight it
but they're gonna lose that fight in my estimation
because ultimately everyone understands
that markets are gonna go 24-7.
The Drunken Miller News about the hyper-liquid thing
should give you even further confirmation.