Is It Time to Rotate Out of Crypto?

The equity markets are up. Gold is ripping. Everything is ripping except for Bitcoin, Ethereum, Solana, and crypto. To me, that suggests a little bit of weakness—or, actually, not a little bit, but a good amount of weakness in the market. I think up until this morning I was a little more bullish. But when you see a divergence like this—when you see SPY up 0.5%, the Nasdaq up almost 1%, and Bitcoin down or not moving—you have to start thinking, okay, does this mean we've run out of buyers?

It has been a reasonably uneventful week. A little bit of chopping here and there for Bitcoin. Both bulls and bears got excited, I think, over the last few days since we last recorded. But overall, basically, things are at the same price. The one notable exception in terms of movement was Solana, which had that great rally up from $200 to $250, now back down to $231. I don't know, Jonah, what are you thinking? What excites you in the markets right now?

1. Diversifying Out of Crypto

You know, it's funny you said “uneventful week,” and I guess if you just look at the price action between the last time we recorded and today, I kind of agree with you. It's funny, though. I got my start in content creation long before this podcast. I would put out internal notes to people at Goldman, people at Vitol, and then at DRW; I started tweeting it, which is kind of how we ideated on this podcast together. Basically, you did the same thing: you started in newsletters.

2. Long AERO, Short ENA

Nobody wants to read a newsletter that begins with, “Hey, nothing happened,” right? “Oh, it's just a boring market, sideways. Zzz, zzz, zzz.” That's how a lot of people at Goldman would put out notes: “Oh, snoozer again,” and you just wouldn't read the rest of the note. So I challenged myself in my career to say, look, I'm a professional trader. I'm sitting here all day. I have to be able to find at least something that matters in order to produce content that gets me interesting conversations and trade ideas and whatever. I found, just by setting myself that challenge, that markets are always interesting, even if the benchmark isn't doing something that'll get you rich or make you poor. There's always something—you just have to dig a layer or 2 deeper—and there's always something awesome going on.

So I think that's what I tried to do. I guess we could start with the entire internet clowning on me for putting out a pair-trade idea that I was thinking through as I was digging through the layers of the onion. I was like, “Why don't we look at long AERO, short ENA?” I'm a little bit of a boomer in this market and not very good at social media, so I definitely put myself out there in a way that set me up to get eviscerated by the online trolls. I got dragged through the mud in a way that hasn't happened since I put out that Solana bear tweet at $30—or $20.

I was thinking about shorting ENA against Aerodrome, and then a day later I was like, you know what? Based on what I've learned from this tweet, I'm not going to do it. Best expression: long Aerodrome. That's the kind of thing that I like to look at when the benchmark isn't moving. Maybe we should talk through that trade a little bit, because ENA ripped a couple of days after I put out the tweet, but so did Aerodrome.

What's interesting is that it ripped specifically because you got unlucky. It ripped specifically because of a DAT. It ripped because it raised money. One thing that I found really interesting is that a lot of people got very angry with you over the idea of shorting something, and that, to me, tells me it's overowned.

Think about this: a lot of the people—no shade to them—are the VC crew. A lot of the people probably were in ENA, have been in ENA for a long time, were trying to be involved at the ENA DAT, knew that it was coming, or something like that. I don't know. It's very funny to me to watch how angry people got.

To be completely honest, I didn't love the comparison. My take on your thesis was that I didn't love the comparison between the 2. The idea of putting up Aerodrome and shorting ENA, to me, felt like 2 completely separate trades because they're not really in the same bucket. So, do you like longing Aerodrome? Yes. Do you like shorting ENA? Maybe. But I do want to talk about the way that you put this trade together.

When you talk about it, let's start with Aerodrome. Why did you like Aerodrome? It fits the venture-bet framework: $1 billion effective valuation with potential for multiples of that, a clear big vision, a huge total addressable market, token economics that align, buybacks, volume ratio, and a model Wall Street can plug into. A lot of those things seem to also align with Ethena, but the thing that stood out the most to me was the valuation difference.

The valuation difference was massive, and I think that's what it boiled down to at the end. If you go to Ethena and look at this thing—just pull it up—the fully diluted valuation is $11 billion. $11 billion. That is freaking insane for this type of product, which we have seen multiple times implode in on itself. It's been tried multiple times. This one caught on; this time, it really caught on. But I do think that that's a pretty absurd valuation given what I think it's up against.

Nobody really cares about the whole decentralization aspect of stablecoins anymore. There are hundreds of different chains that are trying to launch to capture the stablecoin market at this period in time. Ethena, I think, introduces an interesting product. It's growing. People are putting money into it, but $11 billion is just an obscene valuation for this thing.

Guess what their revenue is.

I'm on DeFiLlama, looking at Ethena's annualized revenue.

Tell me, Jonah, what is it? What are we looking at?

$28 million on an $11 billion FDV. Aerodrome's FDV is about $2 billion, but because so many tokens are locked forever, I actually think the market cap for Aerodrome is probably a better metric than FDV. Aerodrome's annualized revenue is $178 million. So you're looking at a big multiple of Ethena's revenue and a fraction of the market cap, FDV, whatever you want to call it.

Well, we have to look into that more: mostly with DEXs, when revenue is quoted, it’s not actually collected by the DEX, right?

That's fair. If you look at USDe, just what it's collecting from yield is huge. I need to do a little more deep research on the tokenomics, but basically, they are both DeFi products, and my macro thesis is that if you're investing in sort of pre-mass-appeal DeFi products, what does mass appeal look like?

I totally get that a restaking engine is different from a DEX on Base, so you have a very solid point there. They're not—it's not an apples-to-apples comparison, but they're still both pieces of fruit, right? We're not comparing apples to tractors here.

Basically, I think the valuation difference, like you said, is important to focus on. As DeFi goes mainstream, what do you want? We're all just crypto VCs floating around out there, and we're able to trade these tokens, unlike actual Trad VC, where you can't trade the underlying equity. So what do you want to bet on? Do you want to bet on something that Wall Street can plug into?

To me, Aerodrome is a story about—it's not just about new token creation or memecoins. It's about new market creation, right? Prediction markets, commodities on-chain—I think a lot of this stuff will be settled by an AMM DEX. Aerodrome is, in my opinion, the best-architected AMM DEX. As new markets proliferate, I can see that project capturing more and more of the addressable market.

Whereas with Ethena, I still think there's too much of a hangover from Anchor Protocol and the 2008 global financial crisis, which is really a credit crisis, for Wall Street to feel comfortable with a restaking engine and putting institutional capital into that. So valuation difference, addressable market, and institutional adoption all line up well for Aerodrome and poorly for ENA.

So I put that out. The timing was terrible, but to my credit, I didn't short ENA. When I put on a trade, I tweet, “I just bought this,” or “I just sold that,” or “I just did this pair trade here.” I was just like, “Here's a trade idea. What do you think?” The feedback was interesting. Maybe since we're in a bull market, it doesn't make sense to short something even if I don't like it. So just be long Aerodrome. That was the takeaway.

The internet called me a liar and a loser and all this stuff, which is fine.

3. Ads (Katana)

But that’s what we do on the 1000x podcast. We come up with ideas in public, put them out there, and share what we’re doing, so our necks are out there and exposed to flak from the internet. But I still think it’s better to discuss these things rather than pretend we’re always right and only talk about the victories. Here I was—the timing was poor on ENA for sure. I own that.

However, to your point, the AERO/ENA pair is indeed up since I put out the tweet, and who knows, maybe it’ll keep going up. I’m not going to short, though. It’s not up trivially; it’s up like 20%.

Yeah, that ratio. There was a dip right after, which makes me think that the hate was astroturfed by ENA shills, because you put out that tweet and then 2 days later they announced a massive DAT that’s a sizable portion of their float. It’s like the entirety of Crypto Twitter is on this trade. They were all riding it because I assume there was some level of information that was leaked before this, and it went up.

So I think a lot of people—even felt astroturfed, because I don’t think your points were particularly off. On a long-term time horizon, I think all of your points hold true.

4. Larping vs Trading

In fact, Aerodrome has amazing tailwinds behind it, specifically because of this new Base integration on Coinbase, which is dope. Shout-out. You can actually see our 1000x coin on Coinbase now, which is kind of fun. It’s like everything got pseudolisted on there, which is interesting and, I think, super bullish for the general market. I think that’s really good.

But people, look, the internet loves to get mad. The internet loves to come after its victim of the week. They love to call people liars and call people this and call people that. The reality is, if you go look at Twitter, very few people are fully doxxed and sharing their trades.

Yeah. Most of the people who are sharing their trades hide behind avatars. I mean, you can verify everything that we’ve done in our careers, and we’re happy to be here. I will say, sometimes it gets to me. It’s a bit annoying, but the best you can do is just laugh. The reality is, it’s good to have these conversations out in the open.

It’s good to get torn apart or celebrated, or whatever it is, because that’s the only way that you learn.

Especially if you get torn apart on things. I think the amount of hatred that came out for ENA, and all these people writing theses, probably stopped you from putting on that short.

Yeah. Although, to be fair, most of the hate came out after the DAT got announced and ENA popped. Before that happened, these trolls were pretty cowardly, even though they’re anons. Like, 90% of the vitriol came after I was proven wrong by a few percent on a trade I didn’t even put on, and publicly didn’t put on because of what I learned from putting out the idea. So I think people are very quick to celebrate small victories on a short time frame.

You don’t make money hopping in and out of trades and doing this with your entire portfolio, right? Maybe you can make a little bit of money day trading some of your portfolio, but realistically, the time frames that we talk about when we discuss these trades are weeks or months, or with Bitcoin, years. So if you’re going to call me horrible names and tell me that I’m the stupidest person in the world because something goes 10% in my face after I talk about it, I’m just going to block you. If not, let’s have a meaningful conversation.

I think part of the reason why this podcast gets listeners is because we have those trading-floor conversations that most people can’t access. We’re trying to create that trading floor for crypto, and I really value intelligent criticism like what you just laid down on the table there. I want to debate ideas. I don’t want to debate my IQ level with some anon.

So, yeah, let’s keep discussing trades out in the open. Even when the benchmark isn’t doing something interesting, as we saw from this AERO/ENA debate, there’s always a little truffle if you dig below the surface. I mean, there’s tons of stuff like this. Crypto’s getting interesting. Beneath the benchmark layer, there’s a lot going on.

5. Ads (Kraken OTC, Peaq)

My question to you, Avi, though, is: if the DAT is what moved ENA, and the DAT is what moved SOL—Solana—if and when Aerodrome gets a DAT, is it just a DAT market, or are there other catalysts that could cause us to be interested in ecosystems here, or is it just about these DATs?

6. Is Crypto Cooked?

I do think the DATs—what’s really nice is that they’ve sort of faded into the background, which is great. They still obviously exist, and they’re pumping out capital, but I think with this most recent move with Solana, they’re getting front-run pretty aggressively because there’s a lot of leakage in this market.

For example, the Solana DAT—there was a huge amount of debate, including on this podcast, about what’s happening with this DAT. In the beginning, when I went on Threadguy’s podcast and I said all these Solana DATs are buying SOL tokens, that was true at the time for everything besides the Galaxy DAT. I actually mentioned that on the Threadguy stream. If you look at the full clip, I said, “I don’t know about the Galaxy DAT. I don’t know what it’s doing.”

Then on Twitter, I clarified later, “Hey, it looks like there’s a reasonable amount of cash.” Then I came back on the podcast and talked about the cash and talked about how SOL is probably a good long to $250, $260. And guess what? SOL went from $194 when I mentioned that exactly to $250 and is now back down 10% at $232. I’m out of that trade. I got out a little early—I got out at $226 because I took the 15% move. I was like, “All right, that’s enough. Time to get out.”

And that’s what these DAT trades are being used for right now. They’re being used to front-run the flows, because I do think that there’s a little bit of decaying demand from TradFi just across the board. You’re seeing it in inflows into the Ethereum DATs; you’re seeing it in inflows into the Bitcoin DATs—there’s a little bit of waning interest—and a tremendous amount of front-running. The game has become known, which makes it a lot less interesting to play. There are a lot of tools for tracking DATs, and there’s a lot of leakage, so I think DATs are going to fade a little bit.

People are going to realize, “Okay, this is going to slow down.” The trickle of money into these things is going to slow down, and so I think what you’re going to see is some level of reversion. Right now, I’m a lot more interested in the stock market and the things that are popping off organically in the stock market than I am in crypto. I think gold continues to outperform. I think uranium outperforms a ton. I think commodities outperform crypto probably for the next—

You say commodities outperform crypto. Which commodities?

Specifically copper and uranium.

Okay.

Miners.

Most commodities, I think, will drastically underperform crypto.

I’m talking about over the next 2 to 3 months.

Okay. Galaxy stock’s on a tear. So, I mean, you’ve got some equities there—some crypto-adjacent equities to trade.

Galaxy stock’s on a tear. Tesla’s on an absolute tear. Elon’s buying stock for the first time since 2020, which is nice. I think that crypto is probably—we’re probably in for a snooze, would be my guess, for the next 2 to 3 months, maybe a little bit of reversion.

I mean, if the DATs aren’t taking this higher, you have to ask yourself, well, where’s the new—where’s the money going to come from? Who’s going to be allocating into crypto right now? The answer is, I don’t think anyone. I think people are going to wait.

I think in terms of momentum, the whole momentum-and-value framework, we've gone sideways for enough time. I thought that we were going to get a little bit more of an oomph. We were going to get a lot more excitement back into the market, but it looks like excitement has died for the time being.

Especially today—today is really when I started forming this thesis in my mind—because the equity markets are up. Gold is ripping. Everything is ripping except for Bitcoin, Ethereum, Solana, and crypto. To me, that suggests a little bit of weakness—or actually, not a little bit, a good amount of weakness in the market.

I think up until this morning I was a little bit more bullish. But when you see a divergence like this, when you see SPY up 0.5%, NASDAQ up almost 1%, and Bitcoin down or not moving, you have to start thinking, okay, does this mean we've run out of buyers? Does this mean that people don't really want to buy Bitcoin at $115,000?

I thought up until even this weekend I was more bullish because we were still on that uptrend, and today is making me a little bit more nervous about the market. In the short term, I think if you had asked me 2 days ago, “Hey, are we going to $150,000 first, or are we going to $100,000 first?” even though that's a completely asymmetric trade, I would have said probably $150,000. Now I'm like, I don't know. I'm flip-flopping a bit on my bullishness because of the price action today.

Maybe I shouldn't be. Maybe I'm reading into it too much. But if you look at ETH, for example, we just printed a lower high, right? ETH did not get back up to that $5,000 level. We got up to $4,800 and then sold off 5%. The market's slowing down a bit.

It's slowing down since when? Like, when was it fast to you? Since which point has it slowed down?

I mean, since August. Over the summer, we were moving aggressively still.

I guess we had a nice run from the tariff lows. We're not punching new highs, right?

Yeah. Basically, the market moved fast during the election after Trump won. That was a nice rip. Then we got a nice rip after the huge puke. So there was some adrenaline there.

I think we're going to get another nice rip. I really do. I think it's just going to be more sideways price action, and then we're going to get a rip. But to me, crypto—and this is a positive feature for crypto, not a negative feature—is an episodic macro asset, like commodities. That's how it looks to me. That's why it looks so familiar.

And what does that mean? It means that sometimes it trades like the euro. Sometimes it trades like the stock market. Sometimes it just completely dances to the beat of its own drummer. I worry about crypto when it's correlated one for one with equity markets.

To me, that's bad. That means that you get none of that asymmetric upside associated with the technology; you get all of the downside of macro fears. That's when crypto's correlated with equities. It kind of feels like bad times.

Right now, it's dancing to the beat of its own drummer, to use my episodic analogy. What that means to me is that we're in a bull market for risk assets more broadly. They're not always going to trade tick for tick with each other like they do during violent bear markets.

Am I going to be upset? I'm more of a medium- to long-term conviction person. In the short run, you may be right. You're worried about the short run; you said it out loud. You could be right. Maybe this is the wrong asset to hold for a while.

But given my desire to be long Bitcoin over the medium to long run, I take heart in the fact that this isn't just levered equities right now. I think what's probably going on behind the scenes is a scenario where institutional adoption is just a slow drumbeat that's in the background.

I don't like the All-In podcasters. I think they're kind of arrogant to the point of it being a detriment to the podcast, but they do produce some pretty insightful content. They just had their conference. You listen to the Vlad Tenev interview, or whatever, and the lady who runs NASDAQ—I forget her name. All they're talking about is blockchain, tokenization, and bringing money on-chain.

So that's why I'm thinking about Aerodrome versus ENA. That's why I'm thinking about medium to long term. Where's the next buyer going to come from? DATs are like a sugar high, right? That's it.

It used to be in 2021 that the sugar high was just retail people getting crypto-pilled and lifting VCs out of their bags. DATs are the version of that at today's institutional scale. But none of these sugar highs are going to keep taking the market higher over the medium to long run.

Over the medium to long run, you kind of need institutional participation on blockchain. That's not going to happen all at once in this FOMO-driven frenzy of capital allocation without thinking about it. It's not a white-hot mania like VCs betting on AI right now or VCs betting on crypto in 2021.

It's going to be more like what happened to the NASDAQ from 2000 to 2025, where you just have this gradual appreciation of Amazon's market cap from a few tens of millions to trillions, right? So I think that's what's going on, and it's hard to fade something that powerful in the long run.

Over the short run, though, it does seem like the part of your book that you allocate for active trading—maybe you're not supposed to be taking short-term bets on crypto. Maybe you're supposed to be betting on putting your money behind Elon Musk and buying Tesla, or putting your money behind Mike Novogratz and buying Galaxy.

Yeah, I just think we're in decorrelated land right now, and that's probably a good thing.

Yeah, it's a good thing. But we're traders at the end of the day, and you're talking about Bitcoin. Let me put something to you. Say Bitcoin pulled back 15%. Where do you think Solana goes? Where do you think Ethereum goes? Where do you think these other assets go? Down more than 15%?

They come down a bit. I think that, based on just how the market is trading right now, I'll look to see tomorrow. I have to check a few more statistics, which I'll do live with you right now.

It is looking a little bit more nerve-wracking to be in altcoins. It's looking a little bit more nerve-wracking to hold any sort of leverage. If you're actively trading, it's probably time to bring down sizes on alts.

You could wake up and get caught, I think, on a bad down day, and I would probably want to get out of the market if you're looking at, hey, let me try to punt some of these Solana coins. Let me try to punt some of these Base coins. Maybe it's time to tamp down on that activity and concentrate any profits and winnings into BTC because the market is slowing down.

What really has me nervous is the lower high that we just experienced on ETH, and ETH is the bellwether for the alt market. I think when ETH does well, the alt market does well, and right now it looks like ETH is struggling a bit.

You could have made that argument in May. I'm not saying you're wrong, but let's just debate it for a second. In May, ETH was around $2,600. It peaked out at $2,800, then it puked on nothing down to $2,100 and forged a lower high at $2,400.

You could have made that exact same argument then, right before it gassed up to $5,000 a token. I'm not saying you're wrong. I'm just saying the most recent analogy for a lower high in ETH immediately preceded a face-ripping rally.

Now, you're right about one thing: the market is becoming more uncomfortable, and in my opinion, that's because there's a tremendous wealth transfer going on from basically everybody to DATs.

Just to clarify, the last time I saw a lower high happening on ETH in market structure was June 16, which then preceded a 20% drop. And yes, it doubled. There's still a 20% drop that occurred before then.

Yeah.

And if you're a trader, you want to try to avoid being in an alt for that 20% drop because they're going to be going down 50%.

Yeah.

I do think, in general, as an active participant in the market, it's like, okay, well, let me diversify some of my crypto into the other stuff that's doing well right now. Like I bought, as I said on the previous podcast, my portfolio is gold and uranium. I actually, just on Friday, added more Robinhood stock, and I bought Tesla for the first time. I got super lucky this morning with Tesla up 4%. That was cool.

But the reason that I did that is because I diversified a little bit out of crypto, and I think I'm going to do more this morning just because I think that we're going to enter into a slower, slower period. I do think that these other assets—the world has converged. We are no longer beholden to only investing in crypto. We're able to invest across the board and get similar-sized returns, actually, which is kind of insane.

If you look at Ethereum, people were really getting gassed up about ETH from the lows.

Right now, that’s about a 3x off the lows.

Yep.

Yeah, it’s about a 3x off the lows. Robinhood did the same thing. Robinhood actually went more—it had a 4x off the lows from the tariffs.

Yeah, these are all coin-like returns that you’re looking for.

7. Ads (Kraken OTC, Peaq)

Yeah, it’s literally like altcoin-like returns from assets that actually have real revenues. So that, to me, is compelling enough. That’s why I started dabbling elsewhere. Also, by the way, I’ve shifted some of my capital, but I think right now, the way that I view the market is it’s going to be slow. So I think you can take a little bit of a break here.

I mean, I like that we’re kind of pivoting the podcast to talk about a broader spectrum of things because as crypto and TradFi converge, which was the dream for us all along, the risk-reward starts to become comparable in both spaces. But I guess, to my earlier point, there is a wealth transfer going on in crypto, which is how all transitional periods work, right? There’s usually a wealth transfer going on.

So the wealth transfer is going kind of from OGs, VCs, and people who are in at low prices to DATs. And the real question is, for crypto—then we’ll get to non-crypto in a second—who are the DATs? Are they steady hands or are they paper hands? Will they hold these assets, or will they be forced to puke them out?

In the short run, I don’t see the DATs puking assets. So this wealth transfer, while it results in sideways price action, which is unencouraging in the short term, is actually basically a scenario where tokens are getting locked up. Tokens are going from the hands of people who want to sell to the hands of people who just want to hold. These DATs, they’re treasuries; a treasury is not an active vehicle, a treasury is a vault.

So, you know, I see 2 scenarios. One is that the DATs blow up and we’re in for very bad times in crypto if they’re forced sellers, because that’s where all the marginal buying is coming from. So if they flip to selling, which has scared me at one point in the past, I’m not scared right now, it’s going to get really ugly. Then, if not, it may just be enough of a sugar high to carry us through to the medium to long term, where you have just that gradual, steady drumbeat of buying for reasons discussed earlier. So that’s that wealth transfer going on.

I agree it results in a dearth of short-term opportunity while the wealth transfer is occurring and the price action is sideways, and it feels risky because of the lack of momentum—you need momentum in this asset class. It’s big. But then, equally, there’s another wealth transfer going on at the more mega-macro scale, which is from boomers to Gen Z and millennials. That’s going to be the biggest wealth transfer in the history of humanity, as that inheritance—the tens of trillions of dollars worth of it—gets passed down. And that’s from a no-coiner generation to a crypto-pilled generation. So I think those will be steady, very long-term inflows as well.

I need to get more active in the stock market. I rarely trade crypto-adjacent stocks. Sometimes I’ve dabbled in things that we discuss on this podcast. I’ve certainly dabbled in GBTC and ETH. Those are 2 of the best trades ever. But uranium—I guess not a stock. Sorry. I would say Tesla: I’m not there yet. I feel like that space is too competitive. I don’t like going head-to-head with RenTech on short-term trades. I can’t quantify or qualify my edge.

What is your edge in trading those stocks? If you could help me understand it better.

I think my edge is just thinking a little bit more long term about the narratives that could emerge and trying to place bets that allow me to hold these things for a longer period of time. So, for example, my time horizons on these trades are anywhere from 3 to 12 months.

My entire portfolio right now is just Nasdaq, S&P—which I don’t need to explain to you; let’s just index—HOOD, because I want to bet on the increase of gambling culture around the world. I think HOOD is doing an amazing job at capturing that, and I think it will continue to be the winner. Revenues just continue to grow. They’re launching a social feed, which is going to bring people in for gambling. Huge.

8. Gold, Uranium & Tesla

I own gold because I think that—and this is like a 5-year bet—I mean, gold and silver specifically are no-brainers, man. The world is trending into a more fractured state. The dollar is down a huge amount against other currencies this year. People don’t trust the US to be leaders anymore because the US doesn’t want to be a leader anymore. It wants other people to take care of its own problems. And so, the idea of a dollar-dependent world is just not true anymore.

There’s a chart published today that the amount of gold warehoused in Shanghai has literally 7x’d in the last year. That’s going to continue, and it’s going to continue across the world. You’re basically front-running the biggest DAT in the world, which is the central banks accumulating gold. And that’s going to bleed over to silver.

Uranium—I’ve talked about this thesis before, a while ago, but uranium, I’m super bullish on. Specifically, 1: dude, just look at the chart. But from a geopolitical perspective, resources are getting more highly sought after, because in a world where free trade breaks down, you don’t want to have too many dependencies on countries that could turn against you.

That’s what a lot of leaders are thinking longer term right now. They’re thinking, okay, well, we need to—we can’t rely on Russian oil, or we can’t rely on oil from Kazakhstan. We need to be energy independent, and nuclear power is the best way to do that. It’s been held back for a long time because of politics specifically, and you’re seeing that change.

You’re seeing Canada change its tune. You’re seeing Germany change its tune. You’re seeing all these countries that used to be against nuclear energy changing their tune, thinking, okay, maybe we should actually invest in this because it’s the only way to be energy independent for countries. And especially, this is true for countries that don’t necessarily have direct access to other resources. Basically, you just buy and stockpile as much uranium as you possibly can right now because it’ll last you forever, and you want to start generating electricity within your own borders. Very simple stuff. I think renewable energies are going through the roof because of this.

Yeah, I think so too, mainly on the uranium part. I think it’s a change in politics. Which ETF are you long?

URA.

Okay.

And then I’m long Tesla because I think there are no other public companies on the market where you can get access to the robotics revolution. People are going to crowd Tesla again because it’s the only robotics play, right? It’s going to be the leader in terms of robotics in the future. Every other robotics company is private. Tesla is not. Buy Tesla.

Yeah, that makes sense. I mean, Tesla—I agree with it as a vibes play. Humanoid robotics is going to be the biggest product ever, and Tesla’s kind of the only pure-play expression of it. So it makes sense to buy the dip you get in Tesla stock when Elon flames out in politics and buy it on the humanoid robotics trade.

What else are you going to buy? Are you going to go on Forge or whatever second market and try to buy some Figure stock or some weird Chinese humanoid robotics company? No, Tesla’s the only pure play. And they already have a good business with the cars. So, yeah, totally, totally agree with that.

9. Edge in Equities

To your point about your edge in equities, if you’re trading short term, I think we agree there’s no edge. If you’re holding for the longer term, which is what you said your edge is, you do have an edge over institutions because you can weather bigger drawdowns.

You don’t have a risk manager tapping you on the shoulder and telling you that you have to sell, or threatening to fire you or replace you if you underperform some benchmark that the manager or LP has in their head. So, as a personal investor—and I would call this investing, not trading—you do have a mega-advantage over institutions, including for things like Tesla.

Tesla is one of the most liquid, well-publicized, highly available, informationally available securities in the world. You can just say, “On vibes, I believe in humanoid robotics. It’s going to be bigger than the analysts think.”

Another edge that you have is that a Tesla research analyst working at Morgan Stanley—they’re herd animals, right? If they put out some price target, even if they’re saying, “Very strong buy, Tesla will go up 100% this year,” even if it’s some crazy call that they’re betting their whole career on, it still could be way too low.

As an equity research analyst, that career is a very risk-averse career to follow. You’re not taking any risk; you’re making recommendations. If you really stick your neck out there and you’re wrong, you get fired. But if you’re in line with the pack, you get to keep your job, which is how the risk-averse people who go into research jobs think anyway, right? Research is not for the doers; it’s for the recommenders.

Basically, there’s this natural arb for a trader to say, “All right, I’m going to take a 12- to 36-month time horizon. I’m going to stomach heavy volatility.” That already puts you ahead of most institutions. Then, if you want to get ahead of even more institutions, you can say, “I think the equity research analysts aren’t bullish enough because they’re not paid like that. They’re not incentivized like that.” So you do have an edge as an equity investor in that. As a short-term trader, I don’t know.

10. Trading Commodities

Now, the one thing I’ll say about the Global X Uranium ETF, which is the URA ticker, is that it’s very easy to get bullish on commodities based on a thesis, just like you got bullish on Tesla based on a thesis. But what I’ve learned in commodities trading with that kind of mentality is that, while we could be in a supercycle for uranium demand for reasons that you mentioned, you didn’t mention supply.

The one thing about commodities that equity and crypto investors always seem to forget is that if you want to be long one thing in this world, you want to be long human innovation, right? Human innovation has no stronger incentive than in the commodities supply space.

When some commodity rips, the producers will invent a way. I’m just going to give you the shale example. When oil started ripping during the Arab Spring, they invented a way to drill down a mile and then sideways 16 miles to suck a paper-thin layer of oil the size of Texas out of a Texas-sized, paper-thin field, like a straw with an L-shape in it. That’s crazy technological innovation. Never underestimate that.

Who produces uranium, right? Canada, Kazakhstan, Australia—you get some in Africa. If the price goes too high, these guys, these miners, will figure it out and make more.

But isn’t that the argument for why you buy miners?

Miners, yes. The uranium ETF itself, the underlying commodity—

I mean, URA specifically. I’m also doing this with copper, by the way. You always buy the miners, and that’s specifically because of the supply issue, right? It’s basically—

Oh, you’re right. Sorry, let me correct myself. It owns shares of uranium mining and nuclear-sector companies, along with some exposure to a uranium trust. Sorry, I thought it was just spot. I didn’t realize that it owned miners as well.

No, it’s mostly miners, in aggregate, with some spot. So when you say, “I own uranium,” you’re saying, “I own uranium miners.” And that’s exactly for the reasons that you discussed. I do think that these miners are going to end up making a lot more money over the next 5 years.

But it’s true—that’s why you have to be careful. The only asset that I can think of that’s not really true right now, at least, is gold. It seemingly seems like these companies can’t overproduce gold.

Yeah. Gold—you’re not just going to find gold. It’s such a mature market that you’re not just going to be able to produce more of it. It’s been more overexplored than underexplored.

One other thing that I’ve been meaning to look into is a rare-earths and minerals ETF.

Actually, no. I’m friends with a rare-earth physical trader, and that is some of the craziest business ever. This dude goes to the Congo for business trips. He goes into all the weird places to talk to all the weird people.

It sounds really sick, actually.

It’s cool, but I think what’s hard about it is that we muggles hear about rare earths when they’re hot: “Oh, there are supply-chain problems. Oh, China. Oh, hoarding EVs.” We hear about it when it’s great.

But when we’re not talking about it, or when it’s not on our radar, it’s vomiting hard, and there isn’t a lot of financial hedging that you can do if you’re in the space while it’s spiraling into the abyss. So it’s tougher business than it sounds. It’s just one of those illiquidly traded physical things that will moon and then dump, and then moon and then dump, and you lose a lot of hair trading that thing.

Yeah, I can see that in the chart, but it looks like it might be in a moon phase right now because of everything that we’ve just talked about. You need a lot of rare earths in humanoid robotics.

A lot of magnets, a lot of actuators, a lot of electric motors.

If this is now the rare-earth robotics podcast—

Aerodrome, ENA, humanoid robotics, rare-earth metals, uranium.

Yeah, we covered it all today. Did we cover the rarest mineral of them all, the 1000x?

I think somebody tapped in because, literally, in the last 5 minutes, the uranium ETF that we just discussed here went up 2%.

Avi Felman crushing it on air as usual.

11. Shipping 1000x Terminal

Unbelievable stuff. Anyway, Jonah, this has been a pleasure.

It’s been a pleasure, Avi. Great talking to you. Till next week.