Crypto security hacks, AI-powered solutions, and investment strategy discussed on Digital Asset News
Rob and Jerry from Digital Asset News discuss recent crypto hacks, AI-driven security vulnerabilities and defenses, and investment strategy for digital assets.
Summary
Rob and Jerry cover a wide range of topics centered on the theme of "Sunday solutions" — the idea that the same AI technology enabling crypto attacks can also defend against them. The episode opens with the Midnight blockchain's partnership with UK-regulated Monument Bank, framing privacy-preserving tokenization as a major step forward for real-world asset adoption. The hosts then discuss Vitalik Buterin's comments on the limits of human cognition in cryptography, and how AI bots may discover vulnerabilities that humans never could — illustrated by an AI that found a decade-old bug in the XRP ledger that could have allowed 18 trillion XRP to be minted. The bug had survived over a million dollars in bug bounties and more than a dozen audits, with the suspected reason being that it chains together two individually low-severity bugs. The episode also covers ongoing Ledger hardware wallet compromises extending beyond Southeast Asia into Europe, a phishing attack on Coldcard's official X account despite offline two-factor authentication, and a warning about Google Authenticator's cloud backup feature silently exposing 2FA codes to anyone who compromises the linked email account. Rob walks through a ten-step method for turning a new, air-gapped iPhone into a secure cold storage wallet, while cautioning that devices must be purchased directly from Apple rather than third-party resellers to avoid rootkit risks. The hosts close with a Q&A covering the macro outlook (upcoming CPI data and Fed rate decisions), specific layer-one investment recommendations for the agentic economy (Solana, Ethereum, Tron), staking as a compounding mechanism, Bitcoin ETFs versus spot Bitcoin, and Tesla robo-taxi infrastructure — with Jerry arguing that owning wireless charging real estate in robo-taxi geographies is more defensible than owning the vehicles themselves.
Key Takeaways
FULL TRANSCRIPT
Introduction and the Midnight–Monument Bank Partnership
Rob: What a wild weekend it's been so far. We've seen a bunch of different hacks, and some things are coming in that are, frankly, concerning — but it'll be okay. If there is one part that hinders us, there is another part that can help us. Today it's all about Sunday solutions. And because of that, I think we should have somebody come in to help us out. There's Jerry. Look at that shirt — got the Bitcoin shirt on. Very nice. How you doing, Jerry?
Jerry: I'm good. Hello, everyone. Hope you're enjoying your Sunday.
Rob: Another great Sunday. We've got to get this done so Jerry can check out his football team and make sure he continues on his massive winning streak. How's that going, Jerry?
Jerry: Three and one with a bullet, my friend.
Rob: I'll take that. You're doing a lot better than a lot of these cold storage holders and AI bots and different AI scares that are out there. But today, let's focus on solutions. Nobody wants a big bummer of a day.
The first thing I wanted to start with was something you sent me, Jerry, which I thought was pretty interesting — Midnight. I've heard about what's going on with it and the privacy factor, but I wasn't aware that they had already had a partnership emerging with a UK bank that has seven billion in assets. That's pretty great for a bank, and it is regulated. This is the moment where Midnight is moving into something real.
Let me read this: Monument becomes the first bank to securely tokenize retail deposits in partnership with the Midnight Foundation. This UK-regulated bank is going to start off with $250 million in interest-generating tokenized deposits as the first phase in the journey to open institutional-grade investments to retail savers. They have seven billion in deposits, so no lightweight here. Monument clients will be able to hold interest-bearing savings deposits as digital tokens on Midnight's privacy-enhancing blockchain.
There are three phases. The first phase will bring $250 million of Monument clients onto the network. The second phase will focus on providing new tokenized products such as real-world asset investments — and payments managed by global asset managers delivered directly through the Monument app. The third phase will introduce Lombard-style lending, enabling customers to borrow against their investments in the Monument app.
Before I turn it over to Jerry, I just want to remind everybody that Midnight is a very new project and it is already in the top 100 — number 89. Even though we've had a bear market, it's pretty much where it launched, around four to five cents. This might be something to look into. And as I understand it, you can take Midnight and put it on top of Bitcoin, Ethereum, Solana, a lot of different cryptos, and make those transactions private. So you have that privacy layer on top of these three partnership phases. That's a nice solution. What do you think, Jerry?
Jerry: I think one of the primary foundational elements of Midnight that we will see in other projects is the ability to selectively disclose important information while keeping other pieces of information completely obscured and private. This is the element that blockchain has lacked for the first ten to twelve years of the blockchain journey. Rob, I don't think for one second you would like your portfolio to be public knowledge.
Rob: No.
Jerry: And if you are interacting with real-world assets through an institution like Bank of America, Wells Fargo, or Monument Bank, you don't want your information attached to these things on a ledger. You want the ability to prove it's yours — but without giving your social security number, your phone number, your address. So this selective disclosure element to ownership of a digital asset is relatively new, and I think we're going to see more and more of it. Is Midnight first to market with this? Yes. Will there be others? Absolutely — because it's absolutely essential for the growth of the entire real-world asset expansion.
Rob: Very well said. And before we move on, I was just taking a look at the comments. Time Cone 37 says tokenized stable coins require 100% backing by treasury — this is better than money, and this doesn't sound like stable coins. And you're right, Time Cone. There was something I forgot to read earlier. Deposits will remain fully backed by Monument, the bank itself, redeemable in pound sterling GBP, and protected under the Financial Services Compensation Scheme. So this is not a lightweight operation. I think they know what they're doing.
I like to see these solutions. I like to see backing. I like to see these things thought out. I know we want these things now, but they do take a lot of time. I remember an Elon Musk quote about why it was taking so long for FSD — full self-driving — in Teslas. He said, "Because we're so scrutinized that if there's any accident at any time in any part of the world, it'll be world news within no time whatsoever, and we have to make sure we get this right." So they have to go much, much slower. You see other companies where they're not getting scrutinized as much, so they just roll things out — and you see the problems they're having. With this one, I know it's been a long time, especially for those who've been with me since the very beginning of the journey. It is a slow boat, but I think there is an end and there is a reward. Jerry, quick thoughts before we move on.
Jerry: The comment by Time Cone — I couldn't agree with more. It's no different than using, for instance, a gold-backed dollar. When the currency we're using is backed by an actual asset as opposed to a promise, there's a very big difference. Has the US government ever defaulted on the dollar? No. But we have an entire history of mankind where every single currency that preceded the US dollar has at some point gone belly up. Every empire prior to the US has had their currency go to zero — and because of all the same things that are affecting the US currency today: debasement, deficit spending, all of these things. So I'm in complete agreement with Time Cone that stable coins backed by treasuries have a better chance of surviving than a currency based in faith or confidence.
Rob: "Trust me, bro" — that's what it should say on the back of the dollar bill.
Vitalik Buterin on AI and Cryptographic Vulnerabilities
Rob: Moving forward to more solutions — I think it's important to note this interview that just happened with Vitalik Buterin. And hopefully everybody can remember this: if it was caused by man, it can be fixed by mankind. This is what we're doing versus what we're going through right now with AI and these crypto hacks. There is a flip side to all the problems we have — if it is caused by that problem, we can save ourselves from that problem. We talk about this with knives and guns and things like that. They can be a double-edged sword. Just listen to what Vitalik says here. And when you're listening, realize — I'm not a total genius all the time. I'm a reasonable intelligence. I can talk, I can move around, I can do some things. But listen to Vitalik talk and you realize there are different levels here, different levels to what people can actually say and understand, especially on these topics. Just take a listen. And it all comes down to the last ten seconds of what he says in about a minute and a half.
Vitalik Buterin: "Do you think public key cryptography continues? I think it continues. I do think it will probably take some hits to concrete security. One of the ways I think it's realistic to think about this is to think about what happens to existing hard problems that cryptography depends on — things like factoring, for example. For a long time, people thought the fastest way to factor was basically brute force, but you sort of make it quadratically easier — you do it from the bottom to the top and the top at the same time, you get a square root, and it's pretty easy. Then people invented the quadratic sieve, people invented GNFS, and that's basically why the size of a safe RSA key has gone up from 256 bits to 372 bits. So not broken, but degraded by quite a bit. And I think there is a very reasonable point to make that basically — what if elliptic curves and lattices have about the same level of extra skeletons in the closet? They have their equivalent of the quadratic sieve and GNFS and all of these — it's just that we haven't been smart enough to discover them yet, because they just require holding more things in your head at the same time than we're used to."
Rob: But the bots can.
And that's the big thing. That was the whole takeaway. All the things he just talked about — I had to listen to that three times to understand it. Everything he's talking about comes down to one primary point: we can't get it. There are too many things we have to shuffle inside ourselves to actually work through the logical equation of what it actually is or could be. What it has to be — or should be — is that if AI is going to make things more difficult and enable more hacks, it can actually also help us.
AI Discovers Decade-Old XRP Vulnerability
Rob: And it's the same thing we see in this post from Super Beetle. This is a great way to use AI, and congratulations to XRP holders for not having XRP go to zero — because it could have, very quickly.
Check this out. I read this and I still couldn't believe it. They state: "Our AI discovered a vulnerability that let anyone mint infinite tokens on XRP." XRP launched with a fixed supply of 100 billion tokens. You can't mine or stake on the network, and each transaction burns a small fee, so the coin supply should only ever go down. Now correct me in the comments — I'm not the XRP expert, that's just what they're saying here.
"The bug we found allowed any unauthenticated attacker to create 18 trillion XRP with a single transaction. To our knowledge, no white hat has ever found a bigger vulnerability. The previous record we know of was a 2021 bug affecting $24 billion worth of Polygon. This bug has been live on the XRP ledger for nearly a decade."
And this is the part that blew my mind — and this is the part that goes back to what Vitalik was talking about. There's just so much in our brains, so many things going on, that we miss some things. This was going on for a decade. It was introduced in code written in 2015 and 2017, because it was two bugs put together that made one very big bad bug — which could have caused XRP to go to zero.
"This is one of the most heavily reviewed code bases in crypto. The XRP ledger has paid out well over a million dollars in bug bounties and has had more than a dozen audits and audit contests since 2024, including one contest with a $550,000 prize pool."
And after all that, they didn't find it. Guess who found it? An AI bot. Why are we not doing this for every single thing out there? And not just one time — on the weekly, on the daily, on the hourly. I don't know what it's going to take, but if you'd like to not lose $100 million, I think this would be the way. They sum it all up: "We suspect one reason nobody caught this vulnerability is that it chains together two bugs that would be low severity on their own."
Jerry, this is kind of proving our thesis. There are a lot of solutions out there — we're just trying to find them.
Jerry: I think everybody is. If it's not in application today, it's in a meeting room being drawn up in a road map for implementation. Every codebase is susceptible. Therefore, every codebase will come under a new kind of review, audit, and scrutiny — it's just a matter of time. But one of the brilliant things about this is that if you think about what time means — the actual meaning of time is changing. There is our time, the time that you and I think in, breathe in, exercise in, love in, experience sorrow in. And then there's the time that an agent is experiencing. Agents move at the speed of light. They move at the speed of electricity. That acceleration — we will be going through a tremendous metamorphosis over the next period of time, and it's really exciting, especially where I'm sitting in a small startup company that's at the foundational level of this movement. Everybody is doing it. We're doing it. At Compute Portal, we're building a back-end agent, a front-end agent. We anticipate our entire business — at least 90% of it — will be solely agentic.
Rob: Wow. Keep us in the loop. I can see it happening, especially for anything that has to do with computer work. I think once the robots come out and start doing all the different labor tasks, things get crazy. And we talked about this before — we don't want to go too far down that route.
To sum up this last piece: for XRP and for everything else out there, I'm in it for the tech. I believe in the technology. And this is the tech we're talking about. I hope your bags work out, but this is the technology I'm going for.
Tracking Hackers with AI — and the Limits of Recovery
Rob: There's one other thing I had not considered. This is from Romano, and he says: "To find the guy who drained me, I used all frontier AI models with Arkham, Intel, Dune, and Showdown." He tracked this person or group of people and found 80-plus active phishing domains and a few servers to disrupt their current campaigns. He reported them to all the hosts. He's putting this on notice, and he found his hacker who stole all of his funds.
I asked Grok: "Did this guy actually find the scammer?" And it said: "Looking through this post and all of his posts — not yet. He's deep in the investigation, mapping phishing domains, on-chain flows via Arkham and Dune, Railgun mistakes, and shared Angel Drainer kits — but he hasn't named a specific person or claimed an arrest."
I've had other people lose their entire life savings. They know exactly the wallet. They know exactly where the exchange came from. And guess what? Still can't get the money back. So it's better that we protect ourselves now and do these things with AI or however we can, because going on the other end is a big pain. Jerry, what do you got?
Jerry: You know what's interesting about this? When I came to this space, there was so much energy being put out around "not your keys, not your crypto." Confiscation by municipality or governments is a real threat to sovereignty. These digital assets represent sovereignty. I bought into that. So I got Ledger and Tangem wallets and Trezor wallets. But the more and more I see AI coming into play with the sophistication of attack, I have been migrating my things to Kraken and Coinbase — and not because I don't believe security isn't important, and not because I don't believe in sovereignty. As I am getting older, I am less interested in complexity and more interested in simplicity. And the threat of confiscation, although real, is not as magnified as the threat of AI security attacks on these digital security platforms.
Ledger Hardware Wallet Compromises Extend to Europe
Rob: And that's why you have your guard dog on point, making sure nobody comes and steals your Ledger. Moving forward into the hacks and solutions — we know there are solutions out there, and of course that's up to you, the viewer. It depends on what you want to do.
But there's a new wrinkle in what just happened with Ledger. I know people say, "Rob, Ledger wasn't hacked — Ledger devices were hacked." Okay, Ledger devices were hacked. That is 100% true. And from what we understood, we thought it was just in the Southeast Asian market. People would say, "Well, Rob, it's so easy — all you have to do is not buy from resellers." And it's not that easy for some people in different countries. Not every country can get direct shipment from Ledger. They have to count on these resellers. So people get screwed over left and right.
But now there's another wrinkle. It looks like it's not just Southeast Asia. The Ledger incident isn't limited to Asia. This is a device purchased in-store from an official reseller in Europe. And remember — with some resellers here in America, I don't think you're going to have a problem with Best Buy. But with Amazon, you're still going to have a problem, because Amazon will show you "we're an authorized reseller" and then a couple of sentences down it's actually a third party of a third party with no association with the original reseller. I don't know how they get away with that.
So this is not Southeast Asia. This even seems to be an old version of the spy implant, even though the device was purchased a couple of weeks ago. And here's the interesting part: this compromised Ledger never transferred funds to an exploiter. Either the device didn't work, or they were waiting for more widespread usage of the compromised devices.
And I think what happened here is — wouldn't it be easier, if you had all these devices hacked, to say: "Okay, we can either hack everything right now, or we can slowly siphon a thousand bucks here, twenty bucks there, maybe ten thousand here if it's a very large wallet, and just go from there and no one's going to know the difference"? Because what are you going to do? You're going to go to Ledger and they're going to say: "Sir, ma'am, do you have your security key? Did you type it anywhere? Were you exposed to public Wi-Fi? Did you ever type in any of your seed phrases?" You'd go through a bombardment and they'd say, "Well, we don't know — that doesn't make any sense, it's never happened to us." I think that's what they were planning to do. Jerry, thoughts on that?
Jerry: Yeah, I have a few thoughts. One of our participants in the chat brought this up earlier and I'm in complete alignment with it. Currently, when you create code and produce it, you give it to the world — you lock it in. That's the code, and it's static. I think we're moving into a world where code will be fluid. It'll be constantly updating. Agents will be constantly monitoring, updating, and securing. There'll be repositories and news alerts all in an agentic community that we're not even engaged in — we're not even involved. We may get reports on it. There'll be news, quote unquote. And I think that's where we're headed, especially in these areas where value is present.
Rob: Right. And I think that's the big thing — where value is present. And like you said, time code becomes dynamic code, and these agents can actually do that on the fly. This is where the solution is. It's AI to attack and AI to defend. That's pretty much what it is.
But to finish up this last piece — all these things going on with these resellers. I have to ask the question: how can Ledger, or anybody else, allow third-party official resellers to have access to selling their products without putting something in place to randomly check all of those resellers? Kind of like what they do in the pharmaceutical industry — if you're going to have a distributorship, you go to these places and say: "Are you storing these accurately? Are the things being displayed the right medication?" And of course, things are going to fall through the cracks. So with these devices, you either have to do that or stop the third-party sellers altogether.
And I said this will cut some countries out because they can't receive devices directly from the manufacturer. You're going to lose out on people. Here's a list straight from the Ledger website — Vietnam, Sudan, Philippines, Nepal, Morocco, parts of China, Egypt — you name it, it's in there. It's not a lot, but I think that's just how it has to be, especially with these resellers.
Coldcard Phishing Attack and the Google Authenticator Backup Warning
Rob: And here's another thing that's disturbing as far as security goes — it doesn't matter how great you are, there's always some wrinkle, always something like: "Oh, you didn't do this one little thing? Well, you lost everything." This is from Coldcard, which was involved in — I think it was $58 million, I can't remember exactly. I know with this Ledger hack we're up to $100 million plus. With the Coldcard wallet, I can't remember how much it was, but it was a good amount. And the reason was because people didn't roll the dice enough for their entropy to make their security codes more randomized.
And now this just happened today. Coldcard says a phishing link was posted from its official X account despite offline two-factor authentication with tightly restricted access since 2017. The deleted post posed as an urgent Coldcard security update, urging users with affected seeds to begin a careful migration now. Coldcard said it has contacted X and is reviewing all account access.
So it leaves me with a couple of questions. Coldcard is saying this happened at the level of X itself — somebody hacked X — because their two-factor authenticator is on and they're safe. My question is: what kind of two-factor authentication are we talking about? Are we talking about text? Because that's a two-factor authentication — you want a code, it sends it to your iPhone, you get it on your phone. The one we're all used to is an authenticator app like Google Authenticator, where it generates codes regardless of whether you're connected to the internet or not. So are they talking about that, or the text? Because if they're talking about text, that's a huge disappointment for a company like Coldcard.
But if they're talking about Google Authenticator-style two-factor authentication — Jerry, did you know that in your two-factor authenticator it backs up these codes and you can use them at any time on your Google account?
Jerry: Yeah, exactly.
Rob: So everybody — I know you're probably just realizing this now. This happened, and I posted about it about two years ago, but it keeps coming up. If you go to your Google Authenticator right now, in the upper right-hand corner, if you see a little cloud icon and it doesn't have a slash through it, it's backing up onto your Gmail account. And if that's the case, all they have to do is hack your email account and wait. Now they've got all your codes. And those codes don't expire. So if you'd like to look at this and say to yourself — this is just one more thing you've got to do to be your own bank. "Not your keys, not your crypto," right?
To do this, I put a link in the description and you can go through it to make sure you turn this off. You also have to delete those backup codes that are right there.
Security Solutions: Cold Storage, ETFs, and the iPhone Wallet Method
Rob: To finish this up — you can do all that, and that's great. This is what we're into. You've got your choices now. The solution is this: you can keep it on one cold storage device that you have. Sounds good. You can do multiple cold storage devices. You can do a Bitcoin ETF. You can do custodial services. You can do whatever you want. I'm just giving you options — it's what you want, what you think is best for you.
And also, if you're like, "I don't trust any of that stuff, Rob" — here's another one. This is from CryptoJargon: here's how to turn an iPhone into the most secure crypto wallet. Ten steps. This was actually from Zach XBT — he talked about this a lot. Here's all you've got to do. It's very simple.
Buy a cheap new iPhone — about $700. Get a new Apple ID, fresh email, unique password. Face ID — turn that off. Do a custom alphanumeric passcode, twelve characters. Lockdown Mode has to be put on. Erase data after ten failed passcode attempts. iCloud backup off — that's a good one. Before you install anything, install the wallet from its official site and check the publisher. Generate a new address. Write the seed phrase on paper or steel — never photograph it. Send a small test amount first, then move everything. Airplane mode on. No SIM. No Wi-Fi ever. Phone's in a safe. Seed in a different place. Make sure nobody gets that, and make sure what you wrote down never gets compromised. That's all you've got to do.
Jerry: I'm going to have to go to Amazon and get a new phone. I think that's a smart idea.
Rob: I have a personal friend — one of my lifelong buddies who I got into crypto. He fell in love, had a couple-year journey that was incredible. Turned like $300,000 into $750,000. And in one afternoon — now he's a boomer, but in one afternoon — getting a caller ID from Coinbase, he lost his entire Exodus wallet worth of $750,000 in crypto, which was going to be his golden parachute.
Jerry: We had Steve Wnooki, a very intelligent crypto investor — been investing his whole life, very intelligent, very pragmatic, very disciplined man — lost a multi-million dollar wallet. It happens and it happens and it happens.
Rob: We need to protect. What was safe two years ago may not be safe today. We need to understand that. We need to continually evolve or fall victim to all kinds of different things. I don't try to be a doomer or an alarmist, but if we're not constantly staying up on these things, we could lose everything. Don't get complacent. Maybe that's my message.
Jerry: Don't get complacent.
Q&A: Macro Outlook, AI and Crypto, Investment Strategy
Rob: I see a bunch of people going back and forth in the comment section about that cloud backup of two-factor authentication. Again, that post walks you through the process, and there's a link in the description. If you have that on, maybe you should do that today.
As everybody is getting their questions in — this is going to be an interesting week for macroeconomics. We've got CPI numbers coming out year-over-year. CPI core — I am interested to see how much inflation has gone up and how the raising of rates at the last meeting is doing for this month. I believe in October 2026 the Fed will meet again, but I think this will be a big catalyst depending on whether they raise or not.
Jerry: Can I make a quick statement based off of a comment?
Rob: Sure.
Jerry: Time Cone again — great participation in the stream today. Time Cone says: "Crypto is not taking over the world because of AI." I'll tell you what, Time Cone — I have this perspective. I think AI is the killer app for crypto. The reason being is that an internet-native form of value transmission and agentic workflows — including payment of goods and services — is the perfect marriage. Therefore, what humans couldn't bring to the market cap of crypto, AI will. AI will unlock the actual real value of these digital assets. Whether it be a store of value like Bitcoin, or transmission methods like we talked about today with Midnight — AI is the killer app for crypto. I would encourage you to at least consider that context.
Rob: I think the future is AI and the future is crypto, and the agents are going to use those for payments. That's the big thing. But right now, before we get the bots coming, before the Optimus robot rolls off the assembly line and starts doing everything, I think the companies being bought up — the Teslas, the SpaceXs, the Bloom Energies, Firebase, Google, all those big companies — and also take a look at Caterpillar, because we have to build all these different sectors for AI and data centers, and Caterpillar is backhoes and front loaders and all that cool stuff.
I think one of the reasons some crypto didn't take off is because people said, "Well, the next big thing is AI — I've got to invest in that." And so far people have been right. Look at Nvidia. But I can also see what you said, Jerry — the next evolution is crypto and AI going together.
There is one point I need to make. This is a good one from A6833: "Issue with this iPhone idea is also that there are many rootkits that survive resets, and places like Amazon will resell return products as new."
Rob: That's a bigger problem. If you're looking for an iPhone or an Android, you can't go to a reseller — even if it's listed as authentic — because Amazon sells their own products and could do exactly what A6833 is saying. So the only way to get around this is to go directly to Apple to get an iPhone. And I've got to tell you, I don't know if they have $700 iPhones anymore. Tangem is looking pretty good — I think it's like $40 these days. Just going to put it out there.
And Robert Downey says iPhones are not good — better to use an Android phone with GrapheneOS or Kali. I'm going to guess those are operating systems.
Rob: Jerry — Gas Fee says AI is having Swift move money cross-borders is not going to work. How long has Swift been around?
Jerry: It came about post-Bretton Woods — probably the 1960s, sounds right. Don't quote me on that.
Rob: Makes sense. And here's a comment — Rob and Jerry should launch an ice cream brand. Instead of Ben and Jerry's, it's Rob and Jerry's. And A6833 says that's a fair solution, everything we talked about, but good luck explaining that to the general public. Jerry, how do you explain all the things we just talked about today?
Jerry: Basically — why are you interested in this space? If it's "number go up," that's easy. Use your Schwab account, get an IBIT ETF, and participate in the expansion of the space. Whether that be digital assets, AI, or if you were interested in Caterpillar, there is an industrial ETF for those types of things too. That's the simplest stuff. And then layers of complexity expand your participation ability. There's no one-size-fits-all answer to any one of these questions. It's always where you're at, what you're thinking, where you want to go, and how the world — or the market — is responding to those things. The world and the market are interchangeable for this conversation.
Rob: You're right. And it's definitely not easy. If you're trying to explain to normies that this is the future of finance, it's very difficult. Here's a good question for you, Jerry. What are your suggestions on AI crypto projects for this cycle?
Jerry: I think at the core of an investment thesis should be: where do I think the world is going? I think there's going to be a tremendous amount of integration of world assets and AI, and they're going to merge and complement each other. So from an investment thesis, the chains that are already present in the transmission of value — Tron, Solana, Ethereum, just to name a couple — are at the top of the list of layer-one protocols I want to have, own, and acquire more of. Because they already have, in one degree or another, product-market fit. There's no more speculation — they're actually doing the thing they were designed to do in a market where saturation is relatively low relative to where they can go and where they most likely will go.
For instance, the agentic economy is at its infancy. Therefore, a stable coin on Solana, Tron, or Ethereum that gets caught up in a workflow has really nowhere to go but up — versus me investing in MoneyGram or Western Union. They both move money, but one is very slow and one isn't. Which one is going to get adopted? Which one is going to die? I think the writing on the wall is already there for that particular example.
Rob: Yeah, that's a good one. Looking for more questions. Things are going down — Jerry, are you buying any alts right now or just holding?
Jerry: I am only buying Bitcoin and Tesla, but I do acquire more alts every month because I buy an asset and I stake the asset. The staking gives me more of the asset — it's no different than dollar-cost averaging into the asset. I will have more Cardano at the end of the year, more Ethereum, more Solana, more Tron. I will have more of all of those assets at the end of this year than I started with without putting an extra dollar in. That is an amazing ability. If you bought gold today, Rob — will you have more grams of gold at the end of the year without putting any more money in?
Rob: No.
Jerry: Same amount. So I think that's one of the things people don't give enough value to — the ability to compound more of the underlying asset without having to actually denote dollars to it. It's no different than dividend reinvestment in the stock market, but very few stocks that are worthwhile to have offer dividend reinvestment. They don't offer dividends. But almost all of these layer ones do.
Rob: Dividends are kind of important. It's definitely nice to have when you stake. How about this one: dollar for dollar, does an ETF go up percentage-wise the same as Bitcoin does? If we're talking about spot, not futures.
Jerry: I believe Bitcoin still has a higher return rate per dollar than an ETF. If you're talking about a spot ETF and the underlying Bitcoin itself, the appreciation rate is not the same because Bitcoin is a marketed product that has its own bid and ask, and the ETF is based off of how many dollars go into it. But they peg it to the value of Bitcoin, so it's very, very close — they can have gaps depending upon which side the trend of the market is happening at any one moment. But over time they should be the same.
Rob: And of course there's always going to be a spread on different exchanges, always going to be fees for the ETF. Exactly what you just said, Jerry. A spot Bitcoin ETF — these funds hold real Bitcoin. Bitcoin rises 10%, the ETF rises 10% too. The only real drag is a small annual fee. Over time that adds up. Futures lag more because of roll cost. Stick to spot.
Tesla Robo-Taxis, Infrastructure Investment, and Closing Q&A
Rob: What happened to the Tesla self-driving taxis — the robo-taxis?
Jerry: They started with eight and are now exponentially growing. There are over 300 robo-taxis on the streets of Austin, Texas right now.
Rob: Would you invest in that, Jerry?
Jerry: No.
Rob: It sounds awesome though, doesn't it? Residual income — it's like Airbnb for cars. You just roll it out. Actually, it's more like — have you ever been in an area where you use the Uber app and within what seems like nanoseconds your driver is there?
Jerry: Yeah. There comes a point where there's a saturation of the thing, and you don't want to get into a situation where you've bought a machine and it isn't maximizing its return. There can easily be a point where any one area has too many taxis, and therefore you're going to get a diminished return on your taxi. Is that time today? No. But will it occur within the time it takes you to depreciate the entire robo-taxi? Consider five years. I don't know the answer to that. Therefore, I cannot present a good thesis for that kind of investment.
Rob: You're right. At some point it's going to be oversaturated and it's not going to work out. But I will say — if you're in the market for a new car and that came up, I would definitely buy that.
Jerry: You know what I would invest in? A piece of real estate in one of those geographies where I could build a wireless charging facility so that any robo-taxi can be a customer of mine. That is the kind of investment I would make in that industry. Buy some ground, put in the wireless magnetic charging plates where the Tesla just drives over it and recharges — because remember, there are no human beings. A robo-taxi can't plug in a cord.
Rob: Not yet.
Jerry: Not yet. But I think there is definitely some great investment opportunity in that industry.
Rob: Maybe at some point they make a little Optimus robot — like Tattoo from Fantasy Island — and he just jumps out of the back seat, plugs things in, washes it, and goes back. What Jerry was talking about is pretty interesting, because if you go to tesla.com/robotaxi, you can actually fill out a form. And one of the questions I found interesting: "I am interested in Cybercab fleet vehicle purchasing." That's one option. But what Jerry talks about makes a lot more sense.
Jerry: Mobility and infrastructure.
Rob: There you go. Picks and shovels, baby. Picks and shovels. That's a good one.