filed to add staking to its roughly $900 million F ETH Ethereum ETF. Now they're allowed to stake as much as 100% of the ETH and 85% of that will be passed along as gross staking rewards paid as a monthly uh distribution. The remaining 50 15% will go to Fidelity, custodians, node operators and other service providers. So Fidelity is not the first to do this. The story isn't that we're getting staking inside an ETF, that's already happening. That happened with Grayscale before.
06:15 Scott Melker
The story is that they have to do it, right? Why would you ever buy an Ethereum ETF when there's a native yield by staking Ethereum that exists and not capture any of that yield. You be better off just buying Ethereum and staking it. So offering this with the 85% of it uh being distributed is a no-brainer and a necessity, but clearly Fidelity and others participating in the crypto industry and creating products that are far more compelling. Listen, yield is no longer a four-letter word. Everybody wants it and this makes this a much more compelling product to own.
07:08 Scott Melker
Now, the next story in a vacuum may not be that important, but it's indicative of what we've seen as a general trend and been talking about on this show. Here's the story. Wintermute plans $1 billion AI push into traditional markets. Okay. So Wintermute is the arguably the largest market maker in the crypto industry and I think it makes a hell of a lot of sense that they would want to move from crypto into every other industry and market on the planet because that is clearly where the money is.
08:04 Scott Melker
But the funny part about this headline is, you know, Wintermute saw crypto volumes falling, right? We've seen Robin Hood earnings way down, Bitcoin miners are pivoting to AI. This is the greater trend. So they saw crypto volumes falling and and they asked the question that every company has to act ask itself in 2026. Can we just call this AI? Call it AI. remember long I told you about long Island ice tea that rebranded to Long Island Blockchain ice tea and it went up hundreds of percent. Now you just put AI in your name and you're good.
09:03 Scott Melker
But listen, this is a natural and expected pivot. They want to they want their traditional market business to generate more than half of revenue by the end of 2027 with this an ambitious target because right now it's at about 10%. And so they're spending a billion dollars. I'm old enough to remember when that was a lot of money, uh to build high frequency trading systems and to double down on AI to make sure they can do this. This listen, as I said, you know, we saw Robin Hood's crypto earnings down massively, but they replaced that with prediction markets and did well.
09:44 Scott Melker
Coinbase suffering because their volumes are down massively. Wintermute is beholden to the same trend, which is the depths of a bare market, apathy, very little trading volume, very little to market make. They want to actually make money so they're going to go to greener pastures where they can do so. But just remember, I mean, we have, you know, our our market makers are moving into other markets, our Bitcoin miners are becoming AI data centers and our crypto exchanges are becoming everything apps that are focused more heavily on prediction markets than crypto volumes.
10:28 Scott Melker
That should show you everything you need to know about where we're at in the cycle right now. Next story right here is a fun one. This crypto platform buys gold like a central bank and for the very same reasons. Of course, we are talking about Tether. Tether reportedly purchased more than 27 metric tons of gold during the first half of 2026, bringing their total owned gold up to 146 tons. Now, what I found interesting, only China, Poland and Uzbekistan reportedly bought more among actual central banks.
11:15 Scott Melker
And Tether's buying was the same as Kazakhstan. So I got a picture of Kazakhstan Central banker. Very nice, great success. That should be Paono from Tether. I should have made him the meme. Same amount as Kazakhstan, my wife. She she nice.
11:51 Scott Melker
He's so good. We need Borat back. Don't you guys think? But listen, like uh, you know, Tether makes most of their money by collecting money from people, minting Tether, then taking the money they collected collected and putting it into short-term treasuries, right? Yields are high, 4 or 5%. they make billions of dollars with like 100 employees or less. One of the most successful businesses on the planet.
12:35 Scott Melker
Well, it makes sense for them to diversify their own treasury assets, right? Not to back Tether but their own treasury assets. They buy Bitcoin, they make investments, they buy gold and to put their money where their mouth is. But this is the same thing we're seeing as central banks all around the world. They're not a central bank because they're obviously not issuing their own currency. They're just issuing a digital version of the dollar and other currencies, but they're buying this as a hedge against the same insanity that uh comes from central banks all around the world.
13:16 Scott Melker
Very nice. Great success. Great success. All right. So our next story here is that we're having a little problem making money in crypto. It's the same story. It's the same story, but here, I'll show you. We got two of them. Securitize, I love that love Carlos, he was on this very show. You've seen him here before, but they fall 20% after earnings miss as tokenization revenue falls short. They just IPO'd a few months ago.
13:54 Scott Melker
Tokenized assets hit a record and trading activity jumped, but revenue slipped in the firm's first earning report since going public. So this is what it said, security securitize reported second quarter revenue of 14.4 million, which was down 5% year over year. Not bad considering the bear market. They produced a 21.7 million net loss, shares fell approximately 20% after hours. Average tokenized assets reached a record 4.3 billion dollars, transaction volume jumped 147% to 5.3 billion. But again, they were not able to make money.
14:38 Scott Melker
Now we have a second story that's very similar. I think these are just bare market things but here you go. Bitcoin sees revenue jump 80% to 4.3 billion in Q two but post net loss. Bitcoin's first quarter results illustrate the same accounting problem but from another direction here, right? So Bitcoin reported 3.77 billion in revenue against 3.72 billion in direct costs. Digital asset sales margin was 32 basis points while the company lost 60.7 million. So massive, massive jump in revenue.
15:20 Scott Melker
But still struggling to make money, meaning that their economics, the underlying economics of all these crypto companies right now, even the infrastructure ones, uh are extremely, extremely razor thin. Right? So they're able to make money here. Uh just the expenses and the price of the assets and where the market is right now is making it very difficult for them to actually be profitable. Now, I think that once we go back into a good old fashioned raging bull market, which we all know is going to happen specifically at midnight on October 1st,
16:11 Scott Melker
we're going to get October for your second. I'm just kidding. I don't know if that will happen, but it'd be great if it did. It's happened in the past. Once we do get higher prices, that will be the high price cure for everything that we're seeing on the bearish side for the crypto industry. These were two of the later companies to IPO in the IPO wave before there was effectively a freeze. We've been now in a bear market for a very long time. And so I think this is the natural reaction to that.
16:41 Scott Melker
We all know that tokenized assets are going to grow massively and securitizes on the front lines of that. We know that custody and all the other businesses Bitgo runs are going to grow massively with prices rising and more interest in the industry and that is going to help them as well. Now today, we have one of my favorite segments called how not to invest. Hit the music.
17:23 Scott Melker
so good. Ah, I almost want to play it again. No, I'm not gonna do it though. Okay, so I've told you one of the stories yesterday, the zombie L ones because there's another one. Harmony's one sinks 37% after attacker mints 4 billion tokens. That's me right there. I told you they minted 4 billion tokens, went and sold them. Now Harmony has to decide whether they're going to roll back the chain or what they're going to do and blah, blah, blah, blah, blah.
18:03 Scott Melker
But at the same time, a quieter story, one of the darlings of previous cycles Ravencoin, this is proof of work, not proof of stake crashes 20% as critical exploit threatens to roll back network. So different kind of hack. Ravencoin suffered a consensus exploit that allowed blocks to be mined without performing the required proof of work. Cool. Right?
18:38 Scott Melker
So they have a, they didn't even know, they didn't even announce it for a couple days, right? And so these are just separate uh chains with individual problems, but here's the story and this is the how not to invest and is don't invest in zombie crypto projects and certainly in zombie crypto L ones. But I mean, dying chains don't just lose like their price and their users, they lose their developers, which means that they lose the security and as the hash rate drops, they don't have the security that they did and it means they're ripe for attackers.
19:28 Scott Melker
And now we have AI and mythos and fable and all these killers, AI that are going to steal our women. They're coming for us and they're going to come for your stupid L one that's been dead for five years but still has for some reason, tens or hundreds of million in market cap and fully diluted value and you're going to lose your money. So listen, if you're still invested or trying to invest in something, it's down 99%. It's a great deal. It's not a great deal. It's dead.
20:09 Scott Melker
Right? And something down 99% can go down another 99% especially in a world where someone can hack it, make a few million dollars, send it closer to zero and there's nobody even sitting in the lighthouse watching for it to happen, right? There's nobody guarding the walls at these things. The security is entirely gone. How not to invest, don't buy these stupid things because then you like the people who think that we're going to get a rate raise will also be smoking crack.
20:47 Scott Melker
So that's all we got for you today. Am I allowed to talk about smoking? I don't know. I'm gonna be back tomorrow, not smoking crack. See you guys later. Peace.
