0:00 spk_0

Welcome to Trader Talk, where we dish out the latest Wall Street buzz to keep your portfolio sizzling. I’m Kenny Polcari and I’m coming to you live from Yahoo Finance headquarters in the heart of New York City, a global hub where deals are made, fortunes are built, and the next market move is always just around the corner. Coming up, I’m going to share my thoughts on Bitcoin versus gold. We’re gonna chat with Mo Sheikh, and then I’m gonna share my fall medley butternut squash soup. It is perfect at this time of year. Now, let’s just jump into my big take.For decades, gold was the unquestioned king of safety. When markets panicked, investors ran to it. When inflation rose, gold glittered. It was simple. Gold was the insurance policy against chaos. Then came Bitcoin, a digital upstart claiming to be a gold 2.0. And ever since, the debate hasNever stopped, which which one truly deserves your trust when the system starts to shake. Gold is tangible. You can hold it, you can weigh it, you can store it. It’s been a store of value for thousands of years. Central banks hold it, governments guard it. It doesn’t rely on Wi Fi or blockchain to exist. But that same stability.is its limitation. It doesn’t earn. It doesn’t yield, and it doesn’t evolve. It just sits there. Bitcoin, on the other hand, was born from distrust in that very system. It’s borderless, transparent, and scarce. There will only ever be 21 million coins.Its believers call it digital gold, and for good reason. It’s portable, it’s divisible, and it’s hard to confiscate, but it’s also volatile. When fear hits the market, Bitcoin can drop 20% in a week, while gold will move up and down a few percentage points. That volatility is both its strength and its curse. It creates opportunity.But not comfort. So which is better? The answer depends on what kind of investor you are. If you want stability and a proven hedge against inflation, gold still does the job. If you want asymmetric upside and exposure to the future of money, then Bitcoin gives you that optionality. But the smartest portfolios are starting to say, why not both? A little old world security and a little digital disruption.The bottom line, gold protects the past. Bitcoin bets on the future. The real winners are the investors who understand that the strongest portfolios are built on balance, not belief.Now, joining us today is Mo Sheikh, a name that carries serious weight in the crypto world. Moe is the former co-founder and CEO of Aptos Labs, one of the leading layer one blockchain networks that hit a $20 billion valuation at its peak. He previously served on Trump’s CFTC digital assets Subcommittee, helping shape the next chapter of crypto policy and regulation.With deep experience on both the builder side and the policymaker side, Moe brings a rare inside out perspective on where the digital asset market is headed, from institutional adoption and innovation to how Washington is thinking about the next wave of crypto oversight. Please, ladies and gentlemen, join me in welcoming Mo Shake to the conversation. Mo, it’s a pleasure to meet you and thank you so much for joining us.

3:24 spk_1

It’s, it’s, uh, it’s my pleasure as well. Thank you for having me, Kenny. Well, listen,

3:27 spk_0

there’s so, so much to talk about and you bring a whole different perspective to this conversation. But I have to ask you, before we get into the policy and innovation part, I just got to get your quick thoughts on uh on kind of what’s happened to the Bitcoin market. We’ve gone from130,000 a month ago to 95,000 in a very short period of time. Now putting it in bear market territory. You know, what does that say to you and what should an investor or somebody who’s, you know, who owns a little bit of it or is thinking about getting into it, what does this mean to them?

3:59 spk_1

Yeah, it’s it’s a great topic to kick off with, and, you know, there’s kind of two points that I think are very interesting to highlight. Um, you know, the first is, uh, some of your opening remarks around just Bitcoin and gold, and, and how folks kind of view these two asset classes similarly but also differently, but to your point, how they could be seen as complementary to each other as well. Since 2021, um, I actually going back to 2018, correlation between these two prices was negligible.Um, you’ve seen peaks, however, in kind of the recent years come to as high as a 0.87 correlation when it comes to price action, and so, or or or or the movement of price between those two products. So, you know, there are some interesting, you know, what that basically tells you is there’s interesting overlay between the two, and investors are looking at these two things in a complementary manner. So that’s one. The second, um, in terms of this price, you know, movement over the last few days going from 130K down to kind of where it is today.It’s a function of many things. Um, I kind of look at some of the historical charts of going back to 2021. Bitcoin peaked at around $67,000 and folks thought it was incredibly, you know, expensive, uh, relatively speaking. We then saw a, um, a gradual decline, some may actually call it a steep decline over the next 12 months, where Bitcoin bottomed out at $16,000. That’s a 70% or greater than 70% decrease in price.What I’m trying to get to is this is a budding industry. It’s an uh it’s an industry that there where there’s extreme amounts of volatility, but as long as you have long term fundamentals and uh conviction around the asset class and the technology, you’ll likely continue to see sustained growth over time with, you know, shock periods of what we’re seeing today. So correlation is increasing relative to the broader markets of the world, whichI, you know, a sense, a sign of maturity, but there is still sustain there is uh there are shocks and uh and volatility moments that, you know, as a Bitcoin investor, you have to be open to.

5:56 spk_0

So I guess what you’re saying is it’s not necessarily a time to, you know, light your hair on fire and sell everything you got. It’s really more of a time as you should buy more.

6:04 spk_1

I mean, I mean, for the way I think about it, to your point is please don’t light any hair on fire, especially my hair, or your hair. Um, it’d be great if we can kind of keep it going because I think it’s a good look for both of us. The, the, the second, uh, but, you know, kidding aside, if you think about it, right, like, look at what’s happening from an innovation perspective. You’re, you’re pointing out, you know, look at the fundamentals, and you know that you have Square and Cash App basically turning on Bitcoin acceptance for small business enterprises across the United States.millions of businesses that will be able to accept Bitcoin as a currency, that people are gonna, people, you know, obviously Jack and the team have done their research. That means there’s demand for Bitcoin as an asset and in these businesses. And the funny thing is, I can actually check out and pay for coffee.And not even have Bitcoin, but still pay with Bitcoin in a very smart way that Square is thinking about it. That’s a fundamental like value driver for for the asset, and I think we’re going to see a lot more of these types of products come out of the market that, you know, makes me pretty excited about the future of Bitcoin.

7:06 spk_0

Well, let me ask you a question and and then because then I want to get into kind of policy stuff, but what does that say aboutA digital dollar. Is the Fed gonna create a digital dollar? Does that, is there a tie between Bitcoin and the Fed now trying to create a digital dollar in order to to not only be part of it to also be able to control it.

7:28 spk_1

Yeah, I, I mean, digital dollars definitely exist, right? And we, we, we, we have them in the form of e-moy and we have them in the form of stablecoins, which are, you know, the next evolution of digital dollars.And whether it’s someone like Circle or Tether, they’ve taken taken up lion’s share. Now, you know, does the Federal Reserve, um, or a CBDC or central bank issued currency or digital dollar make sense? Some can make the case, yes, uh, but others can make the case that the stablecoins and e-Money, neither of which were issued by central banks, have done, you know, they’ve done well, they perform and in fact they’re evolving into obviously their next next form.We’ve also seen examples where countries that have issued digital dollars or central bank digital currencies.Not really take uh take foothold or adoption in the way that governments would have hoped. And so yes, we need more digital dollars, maybe we don’t really need them to be issued by central bank digital uh by central banks as in the form of

8:23 spk_0

CBDCs. So what, so what, what countries, I’m just curious, that’s interesting. I didn’t know that what countries have, have, have issued those coins or those dollars, you know, that.

8:34 spk_1

Yeah, you, you’ve seen someone like India come out with their payment system, you’ve seen China come out with their experiments, and even the Federal Reserve is piloting Fed now, um, and providing, you know, real-time 24/7 um uh gross settlement.However, you know, we haven’t really seen adoption at scale, which you can read two ways. One, you know, the market demand, um, isn’t really there today, so, you know, there’s no interest in this, um, or, or two, you know, these, these projects didn’t really, you know, take off in a way that are going to scale. And so in both of those conclusions.Probably are happy with, you know, the form of central bank digital currencies not necessarily being the primary factor of, of money. Where we do see central bank digital currencies obviously or central bank currencies do well is in the form of paper money, right? People prefer paper money, uh, in these, these forms and you know, they’ve they’ve done well. And so I think we should stick with that.

9:29 spk_0

Isthere, is there a concern that, you know, digital money then allowsThe Fed or anybody else to kind of track what you do and where your money is, and how you spend it, and who you donate it to and who you pay and all that kind. Isn’t that isn’t that the whole kind of concern underneath that? And

9:48 spk_1

Kenny, you’re you’re you’re hitting all the good spots. I mean, absolutely, you know, the digital money isIt is very easy to track, whether that be or stablecoins issued on chain. You can track wallets, you can track IP for many companies out there today that have, you know, that make their money literally doing justice and providing that to, um, all sorts of parties. Now, what isn’t easily trackable is paper money. I mean, is anyone checking the serial number on the dollars when you go in? Holy not. So you’re absolutely right. Now, the difference is.The optics of things. So the optics in terms of, you know, sure if this money or this central bank digital currency produced in by a central bank, regardless of the country that it’s in, is now in my wallet. Now the central bank kind of knows what I’m doing with it, right? Guess what, you know, people know what you’re doing with money to begin with. If you swipe your credit card, Mastercard or Visa, you know, if that information is subpoenaed, it will be made available.But the, the optics of the fact that, you know, uh uh uh a central bank currency just doesn’t sit well with with humans, uh, understandably so, and so I, I think for, for many reasons beyond just the component of track uh traceability, there is this, you know, psychological, deeply rooted psychology of we don’t really want people to know what we’re doing with ourmoney.

11:08 spk_0

Right, well, and I think that’s true. Hold on one second, we’ll take a quick break and we’re gonna come right back.Right, Mo, so we’re back and I want to ask you a question about, let’s get into policy, right? So tell me where policy meets innovation and how Washington is preparing for kind of mainstream digital assets. Sure,

11:29 spk_1

happy to happy to go into that. I mean, first of all, the US is one of the best places, um, that, uh, to, to innovate, and that’s not only a function of technology but also a function of the innovation behind capital markets. I mean, we had the Securities Act passed that allowed people to invest in public companies and made companies accessible to the public.We’ve seen evolution of that in ways that, you know, allowed for more capital to come in, things like the Jobs Act and and even things that help prepare or protect investors. For example, the last major legislation that was passed, that was passed in the United States was Dodd-Frank.That’s a long time ago. Yeah next major financial legislation that has given folks access is the Genius Act, and we have to give a lot of credit to the US government by being bold enough to provide clarity on the on the future form of money, stablecoins, and that’s what the Genius Act really did. It it provided that that that uh um that visibility. It gave comfort to large financial institutions that they can participate in the game in in in crypto economies in stablecoins.Um, so on and so forth. And the next major legislation that’s coming up back to back, we’re not waiting another 20 years here for major US legislation is actually going to be something, uh, that’s being referred to as the Clarity Act or market structure bill. And so as that makes its way through DC with a lot of the feedback that it’s getting right now, we think that that’s really going to open up things even in a bigger way for more institutional capital to come into the crypto uh crypto ecosystem.

12:58 spk_0

You know, we’ve seen a ton of institutional capital come into the crypto ecosystem, certainly over the past year, year and a half anyway. Let me ask you a question about, just so listeners understand, define for them exactly what a stablecoin is and why there are multiple stablecoins.

13:14 spk_1

There are stablecoins that are backed by, you know, hard assets, things like the US Treasury, uh, US Treasuries or treasuries of any kind.And backed one for one by the dollar itself, and those stablecoins are typically been issued by private companies that have taken mass adoption. The two biggest issuers of those stablecoins today are companies like Tether and companies like Circle that have issued USDT or USDC.The second type of stablecoin that is slightly different are algorithmically backed stablecoins. These are stablecoins created in a sort of synthetic way that automatically rebalance assets that stabilize and have a one for one pairing. So for example, it can take something like Ethereum or Bitcoin, and it can rebalance our stablecoin to make sure that it remains in line with whatever, you know, the market price of Bitcoin could be.Both have taken, you know, major adoption. However, the first category dwarfs the second category. People and what we’ve, you know, what you can sort of have as a conclusion is people really want dollars. People really want US Treasuries. Some of these stablecoins actually go above and beyond and provide yield back to the user. So Kenny, if you and I have stablecoins that we’re holding in our wallet.You know, we could be earning US Treasury yield on those stablecoins directly. That’s better than holding USdollars.

14:37 spk_0

OK, let’s move on and talk about how AI, artificial intelligence, uh, and the blockchain, right? How these two revolutions, uh, could converge actually in the next few years, or maybe they’re already converging, right? AI and and blockchain.

14:52 spk_1

You know, Kenny, as I’m sitting with you, it’s uh it’s, you know, coming into a late night here in London.And I’m, I’m sitting here because I had a meeting with some of the largest banks, uh, uh, executives over the last few days. As I was talking to a lot of those executives, they were talking about exactly what you mentioned, the convergence between AI and blockchain. And one of the questions that they talk about is when will my agent be able to actually buy something for me rather than just tell me what to buy. The missing link in that is a smart form of currency, a digital dollar or digital currency that can actually do that.And that’s not going to be an API call to your bank account or to your credit card company. It’s going to be a stable coin. It’s far superior for many reasons. The second point, right, where we’re on trader talk here, so we should talk a little bit about, you know, what happens in the world of investments, right? You know, you have someone like Robin Hood building their own blockchain.And they’re not doing that because they think it’s a fun endeavor. They’re doing that because it can actually make investing far more accessible and more intelligent. You know, imagine your AI agent can actually build a portfolio for you real time based on your risk appetite, based on yourPreferences maybe you don’t want to invest in certain types of stocks, others you do and you know, you don’t want to have to worry and manage what are all these companies doing are doing, you know, their earnings, earnings reports, their management uh discussions that come out on a quarterly basis, sometimes more frequently. And as that happens, an AI agent can of course sweep and crawl these reports. They can do, they can be your custom AI analyst.And make it, make an assessment and provide recommendations to you and Kenny, you can hit the the go the green button if you want to to rebalance your portfolio. And if you don’t want, if you’re if we’re so lazy that we don’t want to hit that green button and it just does it on our behalf, that would be amazing. But in order to make,

16:40 spk_0

yeah, so what happens? What about the natural bias that’s built into some of these AI agents though?Right, from the people that program them.

16:48 spk_1

Of course, of course. I mean, there, there is a lot of bias that exists, but I mean, you know, the number one bias that exists is probably in the, the, the analysts reports that are that are being put out there, right, whether it’s a a sell-side analyst or

17:00 spk_0

it’s conflicted, right? It could be conflicted.

17:05 spk_1

That’s right. That’s right. So I think it would, it would be interesting, but you know, you’re, you’re pointing out a great, um, you know, you’re you’re making a great point, these biases do exist, you know, the models are only as good as the folks that are sort of, you know, designing these models, but look, I’m, I’m willing to bet that a model is probably a little less biased than, uh, you know, the sell side analyst, uh, that that’s sitting at, you know, at a, at a large financial institution selling, pushing a stock, right?

17:30 spk_0

Yeah, well, listen, you know, all you have to do is go back to, you know, the early Antoinette days when they had the, the, you know, the twoUh, the two analysts, one was at Merrill Lynch, I forget what his name was, and then the Mary Mary Meeker over at Morgans tell me, who, you know, were, were pushing these dot com stocks when really they had nothing behind them, but they were pushing and pushing and pushing them because they had an investment banking relationship. And so they had to go out and buy them even though they were, they were essentially useless, right, or worthless, uh, which ended up being its own whole story. But yeah, no, to your point, it’s very, very interesting. Maybe.We’ll have less bias than an analyst sitting sitting at an investment bank. I just, I’m just curious about, and I guess maybe it evolves with time about, you know, here you are, you’re someone you might have, you know, put yourself as Joe Qub. You got, I don’t know, $4 million in your portfolio and you want to, you know, you want to invest it and all that stuff. Well, right now they call me, right? Because as a wealth manager, I, I talked them through it, we designed the portfolio, we go over it. I talk to them, I adjust it, I tweak it, I do this, I do that.Um, but they know that they can pick up the phone and actually call me, right? Because I’m a human being, right? I got a heart that’s beating and blood that’s pumping, and they can call me on the phone and talk to me. They can’t, even though I can talk to chatbot, I can talk to to GPT, I’m still talking to a computer. I’m not talking to you.And so there’s part of me, and maybe it’s maybe it’s my, my generation, right? I am the boomer generation, so maybe it’s just me thinking I don’t know how that’s gonna work and how comfortable am I really gonna feel or maybe in the younger generation that’s just the way it’s gonna end up being.Yeah, I mean,

19:08 spk_1

these are really interesting societal things that you’re calling out. I mean, first of all, I, I totally agree, right? There’s something amazing about being together in person and, you know, that can’t be substituted by, um, you know, a chatbot. A chatbot is great, you know, you might feel more comfortable actually talking to a computer than you might a human about certain topics. All right, so

19:28 spk_0

listen, before we end, I want to ask you one other question, where innovation and policy and capital, are they going to come together and collide in 2026 in your opinion?In this space,

19:38 spk_1

I mean, yeah, I mean, I, I, I think we’re we’re already seeing the collision of it, right, in a very positive way, where, you know, crypto had to operate specifically within, you know, the shadows and, you know, pray and hope that things would be, there would be some clarity. We’ve gotten a lot of that clarity in sort of this first chapter under the current administration, they’ve done a phenomenal job of getting us here. I think the second chapter is gonna be an interesting one. I think everyone’s looking at 2026.And it’s not just crypto policy, right? There’s, you know, a lot of talk around tariffs and what that means. There’s monetary policy that goes into things. There’s things around inflation that we have to take into consideration, and crypto ends up being sort of a great hedge against some of these things. And so, you know, I’m, I’m particularly obviously excited about this intersection between policy, crypto, and where just the markets are headed. I think it’ll be an interesting time for folks and investors to sort of navigate that.But in this next chapter, again, I would, if I’m looking at my crypto portfolio, I am looking at where innovation is taking place. And you know, you opened up with Bitcoin and obviously we’re talked a little bit about stablecoins. These are two areas that I continue to remain excited about, but I’m also starting to pay attention to what the future of finance will look like.Through decentralized financial markets, right? Define markets are really interesting. And there’s, you know, all the things that we talked about around AI agents being able to rebalance. I mean, you don’t, you may not need to go to NASDAQ, you know, you may not even need to go to Coinbase or Robin Hood. You might be able to do this in new.Centralized financial system.

21:01 spk_0

I, I think it’s an amazing time in our life, certainly. Um, but you’re right, kind of in the center of it. So I enjoyed this conversation. I’d love to have you back because I want to have, you know, chapter 2 and chapter 3 of this conversation because this is just the beginning of the story.This soup comes from the moment, the moment when you look outside and you see that the leaves are turning and instinctively reach for that heavy pot that you only bring out when the weather changes, right? The smell of roasting squash, butternut squash and garlic and onions and peppers, and this is the scent of fall itself. It reminds you of years when everyone was home, when dinner meant gathering around the table and not rushing, and when a bowl of something warm could fix almost anything. And in a way, the soup is a reminder.of how that simple comfort can be. A few vegetables, slow roasted until they’re sweet and soft, a little broth, a little cheese, and a little thyme. Nothing fancy, just honest ingredients treated with care. You can serve this with a grilled rue sandwich. Oh my God, it is so delicious. And suddenly the whole world feels a little bit calmer, a little bit cozier, and a little bit more like home. You can scan the QR you can scan the QR code on the screen for the full recipe, and you can thank me for it later.Now that’s a wrap for today’s Trader Talk, but the conversation continues. Subscribe on Apple Podcasts, Spotify, Amazon Music, or wherever you get your podcasts. You got questions or topics you want covered? Email us at tradedertalk@yahoo Inc.com because we’re always listening. Until the next time, stay sharp, stay disciplined, stay in touch and take good care.

22:45 spk_2

This content was not intended to be financial advice and should not be used as a substitute for professional financial services.