Ran Neuner on Where We Are in the Crypto Cycle (Crypto Banter)

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1:36What's up, guys? It's Ash Bennington. Welcome to Real Vision Crypto Daily Briefing. Before I bring in our guest, I have an important announcement to make. Today is an exciting day at Real Vision. We've just launched season two of the Real Vision Collective. The aim of the RV Collective is to bring all your favorite NFT communities together while giving you the knowledge you need to navigate Web3. Season two is the next step in this journey. To create this collective, we've pulled artwork from nine of the most significant CCO projects out there and transformed them into three unique mashups. If you want to help us keep building the super community of NFTs, head over to realvision.com slash collective.

2:19That's realvision.com slash collective to learn more and mint your own season two NFT. With that said, let's bring in our guest. Joining me today is Ran Neuner, founder of Crypto Banter. Ran, welcome to the show. How's it, Ash? Good to see you, my friend. As we said, we were speaking in the back here. We actually haven't met and it's the first time we've met, but I've watched so many of your shows that I actually feel like I know you. well i feel exactly the same way it's great to have you here dude it really does have this like kind of worlds collide feeling it's super fun uh obviously when you guys do a show that i'm interested in i'm always happy to watch it's just great to have the community come together and have you here with us today man there's also another link i don't know if you've pieced the pieces together but i think you've also got a bit of a background at cnbc at some point right yes i know and you started this show over at cnbc by the way tell us about that In 2016, obviously 2015, 2016, I was very much into crypto.

3:16And in those days, there was just no crypto information, zero crypto information. And so I went to CNBC and I said, look guys, you should be covering this asset called Bitcoin. And they were like, yeah, crypto is a Ponzi scheme. And I mean, they used every square word in the dictionary about crypto. Until I met one of the directors and he got involved and he started buying and he started realizing there's no information. and then he clicked and he said to me, you know what, go and talk to the production head and tell her what you said about having a crypto show. So I went and spoke to the production head.

3:48You know, when you have that penny drop moment in crypto, like I was explaining Bitcoin to her on the whiteboard and then she had that penny drop moment and she said, we need to have a show. It needs to be weekly. It needs to be live and it needs to be 25 minutes. I was like, great, good luck. Phone me if you need anything. She's like, no, no, no, no, no. You're going to do the show. And I was like, whoa, whoa, whoa, whoa. I don't do TV. He said, we'll teach you how to do TV. And that's how we launched the world's first televised crypto show on CNBC. You know, it's so funny, Radha, because you and I have these sort of almost parallel backgrounds here.

4:17I was at CNBC as well, but also was not on air there. It wasn't until I got to Real Vision that we did this. But, you know, I think that what really matters, obviously, is the passion for the space, the curiosity about what's happening. The TV stuff, like, as they said, you can learn. Yeah, I mean, yeah. Also, I think that, I mean, I was on air on the TV channel for three years. And I didn't enjoy TV. I didn't enjoy, I didn't enjoy, no, I'll be honest, I didn't enjoy CNBC. And the reason why I didn't enjoy it is I just felt it to be cold journalism. And I think in crypto, crypto is about communities.

4:50Crypto is about helping people navigate. And I just didn't enjoy us and them. I wanted to build together as a community. And I think what we've both got here, you guys at Real Vision and us at Banta, and there's a massive crossover between the two, is we've got very, very, very passionate communities. And to be honest, 80 % of why I do what I do is just because I feel like I'm a servant leader to this massive community. And I have an obligation to, as a servant leader to the community, is to lead our community and help them as much as I can. So, yeah, no other place I'd rather be. Yeah, that's extremely well said.

5:29And I think you're absolutely right. And we feel the same way at Real Vision About Community. Talking of which, obviously, a lot of things happening right now in the space. Big picture, what's your take on what's happening right now? I think it's an exciting time to be in the space. And I never thought I'd say that today, because if you look at the price action of Bitcoin, we've been 46 days in the range of 29 ,000 to 31 ,000. And from a price action point of view, it's been one of the most demotivating time periods that I've been in crypto, one of, because I think the bear market in 2019 was much worse.

6:04But if you can take your eyes away from price and focus on what's actually happening around us, I think there's a lot of positives that are happening around us. And I know from previous bear markets, people build in times of the bear market and the explosion happens in times of the bull market. And if I look at the undercurrent, there's a lot of building blocks that are being put into place at the moment, which I think will guide us well into the next cycle. Yeah, it has been this kind of almost sideways time, exactly as you suggest. Speaking of those news stories, lots going on. Talk a little bit about what you see happening in the space.

6:45I know there's been a lot of chatter happening right now about Coinbase, about BASE, about the earnings report. Let's start there. Where do you see that story? I love Coinbase. I've been targeting Coinbase since the beginning of the year, saying that it's the best bet in crypto at the moment. And when I say best bet in crypto, I mean best bet over most crypto tokens. Why do I say that? Because why did I say it back then and why do I hold my conviction so strongly in Coinbase? First thing is that most of the Coinbase competitors are getting wiped out by regulatory action, which leaves Coinbase as the biggest fighter in the room.

7:20And they well capitalized and have a lot of cash. In fact, I think just over$5 billion in cash. So they've got a big war chest to go to war with the SEC. And as Brian Armstrong said, when the SEC evoked the action against them, he had a choice to make. either lie down and surrender, and that would mean the end of crypto in the United States, or actually go and fight this. Now, as they started fighting, we got the XRP ruling, which is one point in Coinbase's favor. Also, if you read the Coinbase, the case that the SEC has against Coinbase, not a very strong case. It's four counts of unregistered securities and being an unregistered securities exchange.

8:04And those kind of cases, it's not impossible for them to win. I think it's probably probable that they will win. At the same time, the XRP... They being Coinbase. Yeah. Coinbase will win. Coinbase will win. And when they win, the prize at the end of this whole thing is that they win the North American market. Now, at the same time, they've hedged themselves and they've opened an international derivatives exchange. So they've got the international derivatives market covered. They've got the U.S. market covered. And they're probably going to be the only massive player standing because I think we've seen what happened to Binance.

8:37And Kraken's great, but it just can't compete. Then they got another point for them when BlackRock, and in fact, all the ETF applications or most ETF applications, said they're going to use Coinbase as the custodian. And then lastly, what they've done, and they've done really well is they've launched Base. And for me, Base is absolutely, absolutely genius. And it's the game changer in this industry. And I don't think that many people understand just how much of a game changer Base actually is. So that's why I think that Coinbase for me is one of the best bets in crypto. Also, you're taking a bet that crypto succeeds without taking a bet on which crypto succeeds.

9:17Now, that's an amazing, amazing bet to take because Coinbase has huge upside if crypto succeeds. And you don't have to take a bet on specific tokens because regardless of which tokens win or lose, the exchange is going to make money regardless. So to me, I still think even at these valuations, Coinbase is good value in the long term. Yeah, it also has obviously greater liquidity than many of the coins because it can be asked through a traditional brokerage account as a U.S. equity, which makes a lot of sense. Let's talk a little bit about BASE because I think there is a lot of confusion or maybe just not confusion so much as just a lack of understanding, a lack of detail that people have about what they're doing out there.

9:54BASE is an Ethereum L2 chain. And the goal here is for them to increase the development that's going to be happening in the space. but I think a lot of folks don't have a very clear sense, myself included, actually, about what they're doing, what direction they're going, and what the ultimate endgame looks like. What's your sense on that? Well, Coinbase realizes that there is regulatory uncertainty in what they do. And as there becomes regulatory certainty, unfortunately, there are going to be casualties. And the casualties are probably going to be that the centralized exchanges operations are going to be limited.

10:30And so they set out on a quest to disrupt themselves and to hedge themselves against us. And what did they do? They created an Ethereum layer two, okay? Which is, for those people who don't know, it's a layer blockchain that runs as a layer two above Ethereum. And usually layer twos are quicker, can handle more transactions and have lower transaction fees because they're not burdened with the transactions of the main network and the design of the main network. Now, there are other layer twos. There are things like Arbitrum, there's Optimism, there's Polygonmatic. And so the first question you ask yourself is, well, why do we need another layer two?

11:10And why does Coinbase want to compete with these layer twos? Because you've got to have a sustainable competitive advantage. And what Coinbase created in my mind was one of the smartest moves that we've seen in crypto and probably a move that's going to bring in the next million, 10 million or 100 million users. And let me tell you why. Base is a layer two. It is launched by Coinbase. It allows, it leverages the Coinbase infrastructure, client base, and on-ramps and off-ramps. So the one competitive advantage that Base has is that it leverages Coinbase's customer base and the ability that Coinbase has to bring money from the traditional financial system onto the crypto financial system.

11:57The second competitive advantage that they have is that it's the only blockchain that I know of, it doesn't have a token. Okay, now, why is that an advantage and not a disadvantage? Because most people say that's a disadvantage. But if you think about the regulatory uncertainty in the United States at the moment, you're in an environment where there's so much regulatory uncertainty in the United States, that most companies can't actually build on blockchain. So if you think of like Amazon, or you think about like, I don't know, just a big company in the United States, and you think about them starting to build on blockchain and starting to have to account for tokens on their balance sheets.

12:30Are we holding unregistered securities? Are we encouraging our customer base to hold and trade unregistered securities? There's no regulatory clarity. Coinbase has just said, look, we don't have a token. All our gas fees are paid in USD. There's no token. There's no risk of regulatory attack here. And essentially what that does is it allows big companies, companies that are scared of regulation to onboard people. And as I said, combine that with the ability to bring money from the traditional financial system onto the current financial, onto the blockchain financial system and leverage Coinbase's client base.

13:09I think that base is one of the smartest moves I've seen in blockchain. It is the ultimate bridge between CeFi and DeFi because it's a blockchain that doesn't need a token and doesn't fall into the trap of all the regulatory uncertainty. Hey, everyone, we're going to take a quick pause and hear a word from our partners. We'll be right back.

13:34Well, it's a very interesting analysis in terms of your view of this idea of essentially not putting themselves in the regulatory crosshairs by minting another token. You said some things that I thought were very interesting at the beginning there, and again, at the end about this idea of this decentralization aspect of it and disrupting their own business model. It sounds like what you're saying, and correct me if I'm not interpreting this right, that you see this as a potential transition as the CeFi model begins to decline for Coinbase to have a play in a more decentralized way, kind of something between maybe Coinbase and a DEX.

14:12So most, if you think about the landscape of the CIFI exchanges, most of them made a lot of money because there was lack of regulatory clarity. And as there is more and more regulatory clarity, what we're seeing is that most of them are actually losing their licenses, starting to curtail the operations, starting to limit what they can do in certain jurisdictions, right? I think the most extreme example of that is where the exchanges make all their money. Exchanges make most of their money on the derivatives market. But as crypto becomes more regulated, the derivatives become illegal. So if you look at like, there's no regulated derivatives exchange in the United States.

14:49There's no regulated derivatives exchange in Canada. There's no regulated derivatives exchange in Singapore. There's no regulated, you know, the derivatives where the exchanges make most their money is the first thing to fall away. So what the exchanges are realizing is that as there's going to be more regulation and more regulatory clarity, their service offering is going to become harder to license, and therefore it's going to become a lot more limited. So with that in mind, they went out to disrupt themselves. Now, kudos to Binance, because Binance was actually the first people to do this unofficially through the BSC chain.

15:22But the difference is that they didn't integrate the BSC chain into their current CeFi application. So Binance didn't make it seamless to onboard onto the DeFi chain using the financial unramps and off ramps that you could get onto Binance with. What Coinbase is doing, which is much smarter, is they're doing almost like a seamless integration in time. And so you're going to get seamless CeFi integration onto a blockchain that is not run with tokens. Yeah, and of course it gets compatible with the EVM so that you have the ability to be interoperable with Ethereum, as you say, as an L2. It is really interesting.

15:59One of the things that you talk about when you read the Coinbase literature on this, when you go to their blog posts, for example, as they talk about this idea of development and building on top of this layer as an onboarding strategy, what do you see happening there either now or in the future in terms of where they believe they're going from a strategic perspective? Well, they've started to encourage a lot of builders. So there's the whole hashtag build on base. And I think they actually own a Twitter account, which is build on base. And I'm seeing a lot of projects actually starting to migrate onto base.

16:31Like a lot of the projects that we support and have been working with have said, look, we're going to have a parallel integration into base. Or in fact, some of them are even moving their primary stack onto base and saying, look, we don't actually need to deal with tokens. It's just gone to base and rather attract customers. So I think that that's where the shift is here. As I said, I think one of the smartest things to happen in this space, really, one of the smartest decisions to happen in this space. Yeah, very interesting. All right, Rem, what else is going on out there? Let's talk, well, recent charges against Richard Hart, Hex, and Pulse Chain over from SEC.

17:07Civil charges, we should say. Not criminal charges, civil charges. What's your take on this? Obviously, this appears to be different in terms of the nature of the charges from what we've seen filed against Coinbase, for example, in that SEC has included fraud allegations directly in their claim. So let's look at a spectrum. We had the Coinbase, we had XRP. Now, not many people liked XRP or Ripple before the Ripple case. And when they went to war with the SEC, everyone, no matter who you were, no matter how much of a maxi you were, I think you were rooting for Ripple to win the case against the SEC.

17:45And so far, they've won one little bout in the case, which has been amazing. Then you've got Coinbase, which is also going up against the SEC. And again, crypto is completely uniting behind Coinbase saying, we want Coinbase to beat the SEC. So the whole of crypto is now uniting behind Coinbase. Then you've got SEC versus CZ and Binance. And that's kind of polarizing because most people want Binance to win, but they're not rallying as much behind CZ. And then the next case, which you've got is Richard Hart. And I read comments like, finally, they're going after a real scammer. Like, you know, the sentiment is that most people that I've seen, except the Hicks and the Pulse community actually think that it's good that the SEC is going against Richard Hart because they believe that, you know, he's been running at Ponzi and whatever else.

18:34My view is, I don't want to comment as to whether or not Hicks is a Ponzi and whether it's a scam because I don't think it is. But I think that he's going to fight these charges until the end. And I don't think he's going to settle with the SEC. And I'll tell you why. I've had multiple discussions with Richard. Richard's been on my show many times. He's one of the smartest people I've ever met. He is very technologically smart and he's very, very, very, very smart. His entire aim in life is to do good, be remembered, be noted, get the right attention. And that's why he does these crazy things like shopping with bags and bags at Louis Vuitton, buying the biggest diamond in the world and whatever else.

19:19It's all because he just wants to be noted. I once had him on my show and he said, And I do such good things, and scammers have bigger Twitter following than me. And he measures himself by the acceptance in social society. Now, I think his biggest dream is to leave a legacy in crypto. What better way to leave a legacy than to beat the SEC? So I think that his emotions are going to take him to fight the SEC until the end. Whether or not he's going to win, probably I don't think so. But who knows? Yeah, let me just, this is directly from the SEC press release. The Securities and Exchange Commission today charged Richard Hart, a.k.a.

19:56Richard Shuler, and three unincorporated entities. They controls Hex, Pulse Chain, and Pulse X with conducting unregistered offerings of crypto asset securities that raised more than$1 billion in crypto assets from investors. The SEC also charged Hart and Pulse Chain with fraud for misappropriating at least$12 million of offering proceeds to purchase luxury goods, including sports cars, watches, and the 555 carat black diamond known as the Enigma, reportedly the largest black diamond in the world. And just to build on what you say, I myself am not following this story that closely. The great thing about the United States is that people have a right to their day in court.

20:36They have a right to make their case. So I don't prejudge this and we're just going to have to see what happens yeah i mean look so the fraud is is in my mind not sure it's the strongest case of fraud in the world and i'll tell you why i think that and by the way we should we should say these are civil charges not criminal charges yeah so richard hart is um who claims to be wealthy from before hex and before pulse and i actually believe him because i followed his journey before hex and before pulse and he was a big bitcoin holder very early he was a very very very early buyer of Bitcoin and seemed to have a lot of money before this.

21:12Now, if you look at the charges, he's got $12 million fraud charges against him. And it is for allegedly misappropriating funds to buy these diamonds and watches and whatever else he bought. The truth is, though, he's also got in the same SEC papers, they talk about the fact that he's still got$700 million in an account. So they're talking about, they say that, and they point to the account that has$700 million worth of dye into it. Now, if he is so rich, then why would he need to take the$12 million? I think the disconnect is they say that he used the protocol funds. And he's going to say that when you invested, when you gave me the money, it was a sacrifice.

21:55Literally, he called it a sacrifice. And it wasn't an investment and you shouldn't have invested. He actually said, you don't expect any returns. You're sacrificing your money, you're burning it, and it's gone. And so I think it depends how the judge views this. I mean, if a judge takes a view that the sacrifice was legitimate, I can't comment because I'm not a legal person. It sounds a bit absurd. But if the judge takes a view that the legal status of the sacrifice makes it not a security, then if you use the funds to buy diamonds and watches and Louis Vuitton bags, well, tough luck. Or he could spin it and say, look, the reason I was able to build such a big community is because I did such great marketing.

22:32And the marketing that I did was I bought the biggest diamond in the world for the Hicks community. I bought these watches to show them how rich you can become. I mean, I don't know what his case is going to be. I'm just saying these are possible defenses that could come out in the case. I think he's going to defend. And I don't think he's going to take the slap on the wrist and a little bit of a penalty. So I think it's going to be popcorn times ahead. Hey, everyone. We're going to take another quick break and hear a word from our partners. We'll be right back to the Real Vision Crypto Daily Briefing.

23:04Well, it will be interesting. And again, we should say these are just allegations right now, and this is going to have to go through the legal process before we get any clarity on it. And hopefully we will get some of that clarity when both sides get to present their case. Let me ask you this. I know that you had our mutual friend Ben Cowan on this morning. I was watching that show before you and I got started here. Let's talk a little bit about your warning on altcoins. I know this is something that you guys have debated. Talk a little bit about where we are in terms of BDI, Bitcoin dominance, and your view on the altcoin market?

23:36So my view and Ben's view are slightly different. Ben believes that there's going to be another altcoin reckoning and that in that reckoning, the alts are going to go down 40 % to 50 % and the dominance is going to go up to 60%. I'm not sure that I agree with him. He's very much a technical analyst. He's a chartist. I'm much more fundamentals. I always look for the underlying reason. He doesn't care about the underlying reason. He's just looking at the charts. He's saying, based on the previous halvings, based on where we are in the cycle, if I just copy the halving one after the other, then the data shows that we're going to have one more dip and in that dip, altcoins are going to get a reckoning.

24:20I must say, I think the worst is over for altcoins. I think that the XRP ruling by the judge, even though some of the judges aren't accepting the ruling, I think it has weakened the SEC slightly. I think also we're going into an election year. And I think that in an election year, the last thing that Gary Gensler wants is political pushback. And I think that if we watch what's been happening with Gary Gensler and the SEC, there's been a lot of political pushback against him. I don't think that they want that during an election year. So I think that that gives two bits of good news. The first thing is I think he may tone down a little bit on alts.