Fed Holds Rates as Guests Push Tokenization and Crypto Midterm Turnout

Fed holds rates, markets had already priced it in

The Federal Reserve left rates unchanged, which the hosts noted prediction markets had put at roughly 90% likely beforehand. WisdomTree CIO Jeremy Schwarz said he did not expect Fed Chair to offer forward guidance in the press conference, comparing it to Jackson Hole: "he won't say anything... No forwards." Schwarz said his own read on monetary policy leans on economist Jeremy Seagull, who he said has graded the Fed highly under the current chair compared to a "D or F" for the previous one, and that the money supply data suggests "there is some pressure but not dramatic," unlike 2021-2022.

Schwarz downplays AI bubble comparisons to 2000

Schwarz, who co-authored the book "Stocks for the Long Run" with Jeremy Seagull, argued current conditions differ sharply from the dot-com era. He said the "expanded tech sector" in the S&P trades around a 22 forward P/E, versus triple-digit P/Es in 2000, and that the category as a whole sits near "a 30-year median." He singled out Tesla as the exception, saying it carries a valuation "like tech in 2000" at roughly 150-200 forward P/E, which he linked to bets on humanoids and self-driving rather than the car business.

"We say today is nothing like 2000." — Jeremy Schwarz

On AI's effect on jobs, Schwarz pointed to Microsoft's revenue growth outpacing hiring and said his own firm is a heavy AI user that is still hiring, calling productivity usage "very early days" rather than a sign of economic damage.

WisdomTree's tokenization push and on-chain finance bet

Schwarz said WisdomTree has spent seven years building its tokenization platform, WisdomTree On-Chain, including the consumer-facing WisdomTree Prime. He said he personally moved nearly all his spending, including his house, car, credit cards and taxes, onto the platform's tokenized money market fund, earning T-bill yield with 24/7 access and instant settlement. He estimated $8-9 trillion in US checking accounts earns close to zero interest, calling the gap for consumers worth "$350 billion."

He cited a Citi estimate of $3 to $10 trillion in assets potentially moving on-chain by 2030, and said WisdomTree already has over a billion dollars in its tokenized money market fund WTGXX. He expects tokenized ETFs to follow, serving holders who keep assets in wallets like MetaMask or Coinbase rather than traditional brokerages.

Schwarz on Bitcoin, SpaceX and portfolio allocation

Schwarz said WisdomTree has included Bitcoin in model portfolios and in its active commodity fund GCC, allocating 3-5% before Bitcoin futures ETFs were approved, funded originally from bonds rather than stocks. He declined to give a specific Bitcoin price target but said the firm views it as "a nice diversifier" and "a good hedge," with some models allocating up to 5%.

On SpaceX, Schwarz said it is a top holding in WisdomTree's space ETFs at around 15-17%, and that he expects SpaceX to eventually merge with Tesla, calling SpaceX's valuation "more reasonable than Tesla at the moment." He referenced comments from Elon Musk about scaling compute to 10 additional gigawatts, which Musk suggested could generate $500 billion to a trillion in revenue, though Schwarz noted "he's just throwing this stuff out there."

Stand With Crypto frames midterms as a test of the crypto voting bloc

Mason Lynaugh, an executive director at Stand With Crypto, described the organization's goal as organizing "tens of millions" of crypto-owning Americans into a political force that lawmakers "respect and fear." He said 222 lawmakers have submitted questionnaires expressing support for the industry, a figure he said is "over 100% increase from 2024," with a majority coming from Democrats.

"Stand with Crypto is the voice of the crypto voter." — Mason Lynaugh

Lynaugh said the Genius Act passed the Senate with bipartisan support "in the 60s," while the Clarity Act passed the House with a large majority but has not cleared the Senate closure vote. He said the bill is "not dead" and pointed to tight congressional races, such as one he said was decided by about 7,000 votes last cycle in a district with 8,000 Stand With Crypto advocates, as evidence turnout could swing outcomes.

Lynaugh on 2028 outlook and election technology

Lynaugh said Stand With Crypto currently counts 332 lawmakers as A-rated pro-crypto and expects roughly 70 more after the midterms. Looking to 2028, he said the goal is for the full presidential field to be pro-crypto and for the organization to keep elevating "human face" stories of founders and advocates meeting lawmakers directly, including trips to Washington DC with people such as a Plume representative he named as Teddy.

Asked whether blockchain could eventually run US elections, Lynaugh did not take a position on current election-fraud claims but said he wants regulatory clarity broadly so builders with ideas, including on election technology, are not left in "uncertain circumstances."

Hosts frame the week as a tokenization "convergence"

Hosts Rob and Andy opened by noting the DTCC's tokenization service had gone live "a couple of hours" before taping, starting with Canton and a network they referred to as Bizu, and framed it as significant because the DTCC underpins "90%" of the US equities market with "$13 trillion" in custody. They contrasted this with earlier pushback on tokenization from companies they named as Goldman, McDonald's and Coca-Cola, and said the DTCC's approach may succeed where a prior OKX-ICE partnership has struggled, though they offered no figures for that comparison.