ROLLUP: AI Threatens Crypto Security | Tom Lee Stops Buying ETH | Ethereum L2s Shut Down | Zcash ETFs

David Hoffman (0:04)

Bankless Nation is the second week of Downtober.

AI is breaking math, will it break crypto as well? We're two weeks into October, and blockchains are breaking according to Justin Drake.

Ryan Sean Adams (0:18)

Not yet.

David Hoffman (0:19)

Who is calling for a mass migration of funds to more secure wallets, and also tells everyone, don't panic.

Crypto, perhaps, may be less safe than we once thought. It's all AI's fault. If you're wondering what's going on, it's AI, and people are panicking.

Ryan Sean Adams (0:36)

Oh my god, that was a doozy of a tweet for sure. David is live in Singapore, by the way.

We should say that. So at the end of today's episode, we're going to talk about Token 2049 and what David saw there. Did he see the end of cryptography?

David Hoffman (0:51)

The fees. No, that was not a topic of discussion.

Ryan Sean Adams (0:54)

Well, I was going to ask you if you saw Tom Lee, he gave a session at Token 2049 Some news from that is he's going to stop buying ETH after he collects his 5%. He's almost there. That's the hard cap. That was a question outstanding. He answered it on the week. We'll talk about what that means. Also, two Ethereum L2s 6 feet under, they are deader than dead, abstract and blast, and maybe Starknet next.

Let's talk about that too.

David Hoffman (1:22)

Starknet is not dying, but there is a question about whether they will move off of the Ethereum layer 1 due to the quantum concerns. It all kind of comes back to quantum. I thought it was for token price.

No, no, no, that was why. It's like Starknet is already quantum resistant. And so they're like, okay, well, our base layer is not. And Justin Drake is saying, get off, like go move to safety. Yeah. And so Starknet is like, okay, we'll take Justin Drake's advice. Justin Drake's advice will become a layer 1 Anyways, let's get into the markets. October is not a thing yet. We are still in a down toa for the first eight days. Bitcoin down about 3% on the week to $82,300. ETH down 6% on the week to $2,500.

And then the altcoins are... The ones that were up bigly are down bigly as well.

Ryan Sean Adams (2:15)

Yeah, altcoin flush does continue. I think you noted Zcash down about 13%. Venice down 17%.

Athena down 17%. So coffin up some of those gains from August and September, aren't we?

David Hoffman (2:31)

I believe last week, we talked about how they were already down in the double digits. And I said something along the lines of, if this was all that it was, then it's pretty easy. We're getting off pretty easy. Thanks for saying that. It was not all that it was. Yeah. I think what's really going on is, if we could just take last week's section, Ryan, about yields are up and oil is up, we could just copy that from last week. Copy paste it into this week. Except it's kind of worse when it's like six weeks in a row now of like high treasury yields and high oil prices.

We said this exact same line last week, highest treasury prices since 2002 The 10 year hit 5.3%. The 30 year is at 5.7%.

You know, it's one thing when you're just like noticing the market like and the yields are going up, like, oh wow, yields are going up. This is different. This is starting to be a little different. I think the market, both crypto and the trad market is getting kind of jittery just because like, okay, that's too fast.

Ryan Sean Adams (3:34)

That's too fast.

David Hoffman (3:34)

It is pretty fast.

Ryan Sean Adams (3:35)

Something's going to break. I think another place this comes in is if you're trying to get a mortgage. So if you've been trying to get a mortgage lately, but I have not. Anytime I've tried to get a mortgage over the past 10 to 15 years, I mean, the rates have been, you know, three, 4%, something like that.

David Hoffman (3:50)

Yeah.

Ryan Sean Adams (3:50)

Yeah. Favorable. Now you're trying to lock in a mortgage, a 30 year fix in the US, 7.5%. That's all downstream of treasuries.

David Hoffman (4:00)

I feel like the housing market is going to feel some more than jitters in the short term.

Ryan Sean Adams (4:06)

I mean, in the 1980s, we got into the double digit territory for a mortgage. Can you imagine locking in a mortgage at like 11, 12%, a 30 year?

David Hoffman (4:14)

You have to be really into buying a house. Why would you buy right now when you could just rent?