Ethereum bulls have flipped the script.
While some in the crypto industry may have been laughing and making lots of jokes just a few months ago.
How about Ethereum?
It has been the hot crypto trade over the last 4 weeks or so.
We're seeing companies create Ethereum treasuries, as well-known investors like FunStrat's Tom Lee are out there saying ETH is about to have its Bitcoin 2017 moment.
Ethereum believers point to Wall Street's growing adoption of stablecoin. and general tokenization but still has not yet traded above the 4000 level since December.
Joining me now to break it all down, Arjun Botani.
He is the founder and chief researcher of Everclear.
Arjun, thanks for being here.
So we've seen this huge shift in narrative, and that's really what drives the financial markets.
We love a good story, and that story has fundamentally shifted in so many amazing ways for over the last few weeks to the last few months.
Why are the major financial players eyeing adoption of the blockchain right now?
Yeah, that's a really good question, JD.
I mean, this is something that in the ecosystem we've been kind of thinking about and talking about for a long time, right?
Ethereum is this platform where you can go and build a new kind of finance, but so far it's been, it's been sort of just hasn't really been quite ready to get there.
Um, and now we're finally at the point where like major financial institutions feel comfortable actually moving on chain.
Uh, now why they're doing that is it, is it really, it, it's kind of interesting, right?
You, you have a, you know, like payments industry giants like PayPal, and others that are kind of seeing that they can be, they can have just a much more disintermediated business process if they're operating on chain, and they can start moving into these like, uh, markets in the global South that otherwise were completely inaccessible without banking infrastructure.
You know RJ, we were talking about with our last guest the fact that fun strat Tom Lee, we were just putting a few of his quotes up there on the screen.
He's sort of positioning his take on E much in the same way that Michael Saler did for Bitcoin.
What do you make of kind of the bull case that Tom is really embracing and really I would argue, putting a lot of momentum, a lot of the conversation on Ethereum is coming from someone with such a high profile like Tom.
Yeah, um, I mean, I think, I think the bull case for E for, from Tom's perspective and from everyone's perspective, right, is that this is, this is basically the financial computer.
This is the future of where all finance will run, and it will run in this like open programmable way.
Um, right now, Ethereum is the best blockchain to, to capture this, right?
And you can see this from the fact that you have these major players moving on chain.
And so, so compared to something like the Bitcoin thesis where you're saying here is, here's this like reserve asset that can act as a, as a replacement to the dollar or something like that in the long run for, for the entirety of the world, um, you have this platform that is actually much more oriented towards a larger ecosystem, right?
The the entirety of finance.
It's a much, much bigger problem to solve.
How do you think it's scalability differs this time around compared to previous cycles we've had?
It really does, yeah.
I mean, um, this is something that that we encounter a lot at Everclear.
So Everclear is, is effectively like a clearinghouse that enables the movement of the settlement of large amounts of capital between blockchains.
And what we're seeing is that, um, as time has gone on, uh, the type of chains that are being launched have increasingly headed towards being Ethereum-based chains, what we call layer two chains, chains that are explicitly intended to scale Ethereum.
Um, this is a big part of, I think, what has changed shifted in the strategy of major financial players is that, um, players like Robin Hood and others are launching their own chains.
Um, that means they have their own kind of ecosystem that they can control.
Um, they have this, this like, they have the ability to kind of build an application, build an entire ecosystem of products.
Around it. um, and in addition to that, still interoperate with this base layer.
So you, you've kind of like solved the scalability problem of Ethereum by moving people onto many different chains, um, while also giving these FinTech layers and these larger banks and institutions the ability to have what they really wanted, which was control over their own ecosystem.
Break down for us, Arjun.
What Everclear does with Ethereum and what you're seeing in terms of institutional building on E.
Yeah, um, so right now, Ethereum, you know, as I mentioned, we're kind of scaled by moving into many different chains, right?
The whole ecosystem is like expanding to a larger number of sub chains that all operate on the same standards and can all interoperate through Ethereum.
Uh, but in order to do that with a good experience, you need institutional liquidity providers, um, like these are market makers and things like that, to be able to facilitate trades between these blockchains.
What E clear does is settle those trades.
So in the same way that, you know, when you, when you have, uh, uh, like financial, like when you have, when you have traders like trading on, uh, the New York Stock Exchange, those get settled later through the New York.
Stock Exchange clearinghouse, Everclear acts as a clearing house for Ethereum.
Um, we, we settle trades that are moving between chains, um, by netting off the flows, larger scale flows of all of these institutional players such that the total amount of funds that have to move through Ethereum itself is much lower.
This just massively improves the cost basis for, for people trading on these chains, right?
The, the costs on, on something like 1 to 2.
Absolutely, RJ, I don't mean to cut you off.
We've got to get to the bell.
Arjun Botani, thanks for being here as always, just moments away from the ringing of the opening bell.
More for that for you when we get back after this on Market Movers.
