How Much Crypto Should You Own? | 1000x

Jonah, you pissed off everyone again.

I did it again. I literally set everyone's hair on fire on Twitter.

Ansem ratioed you so hard.

Everybody ratios me. I just put my thoughts out there. I'm getting good engagement for the 1000x podcast, but at the same time I'm thinking, “Jesus, people are ruthless out there.” People just love to hate you.

This isn't a new thing, Obi. This precedes crypto, but they love to hate you, so they keep you around. The more that I watch you interact on Twitter, as I've seen your account grow, it just gets better and better.

All right, guys, welcome back to another episode of 1000x. We are at $42K on Bitcoin, which was everybody's price target a month ago. Now that we're here, what do you do?

Stay tuned. We will not be answering that question for you, because that is financial advice. Hopefully, by the end of the conversation, you'll know even less than you knew at the beginning.

Should we jump into it?

Yeah, let's jump into it.

Here's what happened with my tweet. I was talking to some friends from outside the crypto world. Yes, those people exist. We were talking about how crypto's sending, and they're like, “Isn't it dead? I thought crypto was like 2021, and then it just ended.”

I was like, “What are you talking about? The price of Bitcoin just hit $40K. It's going bananas.” I asked, “Do you own any crypto?” They said no.

It brought me back to this institutional saying that a good percentage of your portfolio to hold in crypto is 2%. That's what responsible financial advisers recommend to responsible clients who are looking to preserve wealth and take a little bit of risk.

But if you go out on the street and ask 10 people whether they own any crypto, I think you're going to get 5 to 7 noes. I was thinking, “Let me send out something targeted at those nocoiner people. If you're not uncomfortably long—meaning 5% to 10% of your portfolio—and you're going to feel stupid again, like you probably did during the last 2 bull cycles in crypto…”

But I posted it in the wrong place. I posted it on Crypto Twitter.

Yeah, that was the main issue. Your audience is just a bunch of degenerates. When you post something like that, look, I think if I had 10% of my net worth in crypto, I would feel horrendous, because I did at one point and I felt horrendous. Then I dove into it full-time, and I still felt horrendous, because it fucking went to zero.

But if you believe in this shit, it's not enough. If you really believe in this stuff, have 80% of your net worth in crypto. Fine. Rip it.

I don't think at any point in my life, since I discovered crypto, I've had less than 50%, except in 2022. Even then, when I say crypto exposure, I still had a bunch of USDC. At all moments of my life, I've had more than 50% of my net worth in crypto or on crypto rails.

That's interesting. Everything's so much easier. For example, I'm going to Miami this weekend, and I needed to rent a place. Guess what? I paid for it in USDC.

The best part was that the guy sent me a wallet with a linked ENS. I won't dox it, but it had Shiba Inu and ApeCoin in it. I almost felt like I should reach out to this guy and be like, “Dude, let me help you. Subscribe to the 1000x podcast YouTube page. Buy some Harry Potter Obama Sonic 10 Inu. Come on. You're in last year's shitcoins.”

I saw a new one. It's spelled “FRO,” but it's probably pronounced “Frog.” Fro is accurate.

Meme coins are popping off. You have Big Time ripping. ORDI is such a good rip-fest, because it's the Bitcoin meme coin. So many things are happening on Bitcoin right now. People are actually trying to build, Bitcoin NFTs are popping off, and meme coins on Bitcoin are popping off.

I really do think people thought that move was priced in, but I don't think it's priced in. If you spend the next 2 weeks of your life looking at 3 different areas—we've covered AI a lot, and I'm still very bullish on AI—but if you cover AI, things happening on Bitcoin, and NFTs on both Solana and Ethereum, you're going to have a really good time over the next 6 to 12 months.

We're at the point of the cycle where Bitcoin needs to fall apart for alts to run. You need Bitcoin at $38K, down 10%. Bitcoin at $35K in the weeks after that, if Bitcoin stabilizes, is actually when alts tend to run the hardest.

You might get caught on a leveraged drawdown if you're overlevered—if you're one of the degenerates who got really mad at your tweet because you were 300% levered and then got taken out on a 10% move. You obliterate your portfolio. But if you survive and find the right areas to allocate to right now, this is the freest money you're going to see in a long time.

Not financial advice, but this is the market dynamic where you 3x in 2 weeks.

If you look across the board, Jonah, you've always been ridiculously bullish. I think I've been much more cautiously bullish than you, but inflows into ETP products are picking up, CME futures are still buying, and crypto-native leverage is basically nonexistent.

You have altcoins doing well, but not crazily well, so I wouldn't point at the market and say there's immense froth. I'd say it's like a poorly made cappuccino: a little bit of froth.

I've been ridiculously bullish, but I haven't been ridiculously bullish on the things that have gone parabolic. I wasn't ridiculously bullish on Solana. I wasn't ridiculously bullish on Stacks or the Pudgy Penguins. We got bullish post-Anatoly; we got super bullish.

I wasn't bullish at $8, $10, or $15. Back then, I was thinking, “Solana is just reeling right now. Is it even going to participate in this next upswing, or is it going to be like Polkadot or NEAR?” Actually, NEAR just ripped. Everything's ripping.

The point is that I was bullish on the slow stuff, and now I feel out of my element. My old TradFi brain can understand Bitcoin and ETH, and now I can understand Solana because Anatoly held my hand through it, but I can't get my head around some of these altcoins and believe in them enough to throw serious money at them.

You don't need to believe in them, Jonah. You just need to know that people are going to gamble on them.

Think about this argument for AI. Nobody knows how to value anything related to AI. Nobody. OpenAI was valued at $80 billion—$90 billion before they lost their CEO. Nobody knew how it was actually going to make real money at the end of the day. They just believed that if you had technology powerful and strong enough, and a dream big enough, you'd make a ton of money.

Crypto is the epitome of “have a dream big enough and you make money.” Not only do you have real AI products in crypto, like Akash Network, that are actually solving a problem, but the upper bound is, I dare say, unlimited.

Combine that with the fact that it's the only way for your average person to bet on AI. There's NVIDIA, but I guess that's priced to the moon.

How big is NVIDIA? A trillion?

A trillion one. It's huge—like the 4th- or 5th-biggest market-cap company.

I'm not talking about betting on AI derivatives. There are a lot of ways to bet on AI derivatives. How do you bet on AI products?

You could buy Microsoft, but that's again a derivative. You could be an accredited investor and invest in a Silicon Valley-style startup fund. What's a pure play? I want to invest only in an AI product, other than Akash.

Livepeer, for example. You have these things in crypto. NEAR, maybe to some extent, although that's more of a derivative play.

Unlike the GameStop Reddit situation—and yes, GameStop is running again and the Reddit crowd is back—these tokens are actually attached to projects that could, in theory, deliver value one day. It's not just a bunch of random dudes in their basements, or their mom's basements, trying to squeeze a hedge fund out of a short.

These projects in crypto could have utility.

That was such a good sign in hindsight for crypto. I'm looking at the GME chart: it ripped from $12 to $17, and then Bitcoin broke out.

I think we were betting on Bitcoin breaking out regardless. What I like about this rally, Avi, is that I feel kind of smart again. I don't feel stupid anymore. I feel a bit vindicated.

Obviously, you know from the internet that I haven't just 5x'd my net worth. Not much has changed, but I feel vindicated, and I think a lot of people do. You can see it in the responses to this tweet. It pissed everybody off.

Suddenly, everyone's got their confidence back. They've got their swagger back. We're not just this ragtag group of people who get made fun of by our friends and relatives anymore. This shit is sending, and it shows no signs of slowing down, because we still haven't de-bottlenecked the institutions, which will ultimately be more interested at these prices than they would be if we were festering sideways on the lows or near the lows.

That makes me want to sell, but I get it. The moment you start to feel, “Okay, I was right. It's working,” it's easy.

Putting the memes aside, it's a little hard to fight the flows at this point. I don't know where Bitcoin is going to go. It could range between $38K and $42K, sell off down to $35K, or go to $48K.

I'm just not in the habit of selling Bitcoin during parabolic advances until you get a crazy move. You get a nuts move, and then what you do is barbell it into alts. You hold some cash to buy stuff for the inevitable drawdown, and then you rotate into things that just haven't moved aggressively.

I'm waiting patiently, but I have started buying the most hated coin in crypto, which is Ethereum. People really hate it. I can tell. I love it, but the mentality and narrative around Ethereum right now are so downtrodden.

ETH maxis are nowhere to be found. Everybody's rotated to Solana, or they're buying Bitcoin. Across the board, everybody's focus has shifted off ETH.

It will seem obvious in hindsight when the Bitcoin ETF comes out, or once Bitcoin's priced in. Maybe we trade to $44K before the ETF, and that's the price-in. Then people are just going to talk about the ETH ETF. That's next.

If the ETH ETF allows you to stake ETH, it becomes an insane product. It's an ETF that gives you upside to crypto while also giving you yield. This thing is going to go parabolic, and for some reason people aren't talking about it.

I'm probably early, which is why I'm happy to be buying over the next 2 or 3 weeks, maybe a month. It could go sooner depending on price action, but at some point that narrative shifts. I think that shift happens at some point in the next 6 weeks. Then ETH is at $3K before you blink.

Everybody who was trashing ETH, who was on Team BTC or Team Solana, is going to flip over. I hold no ill will toward people who flip like that. I flip like that.

In order to hold a position for a 2x or 3x, you sort of need to convince yourself that you do like it long-term. A lot of these people are memeing around. They don't actually believe it anyway.

A lot of Solana bulls I know would have looked me in the eye 2 months ago and said, “Solana is the best thing that has ever been built. I can't imagine owning another L1. I can't imagine ETH ever doing well again. SOL is…”

Then Solana 3x's, and the good ones are looking at me and saying, “I don't really have that much on Solana.”

You do, and Solana is one of those coins that you can actually believe in, even on the lows. However, I built my TradFi career by trading around my position. You don't have to be all-in, flat, or short. You can love something, watch it rip, and not really see why it ripped so much.

It shouldn't be a debate about whether you sell or don't sell. You can peel off 10% or 15% of your position and take a little bit of profit. If it keeps going, you're still long, and if it goes back down, you just buy it right back.

It's a good way to generate some returns around things that go up and down. Apparently, Crypto Twitter now thinks crypto can only go up, but the memories of the collapse are still fresh for a lot of us.

If you're undecided about your position, you can always tailor the size of it. There's no shame in that. You don't have to be out or tweet, “I'm 115% all-in,” and beat your chest. You can quietly do something smart: sell a little high, buy a little back low, and keep going.

I wouldn't be selling Bitcoin or ETH right now. With Solana, I'm mulling peeling a little bit off my position. Like you said, this was a narrative-driven rally. It went 8x from the lows, and there's still not a ton going on.

I believe in the promise of it, but I'm debating whether this is the right price to remain as long as I have. Maybe it's time to take a little bit of profit and trade these things around. If people rotate into ETH, maybe Solana will come off a bit. I don't know. Don't kill me, Solana fans.

Ultimately, when you evaluate the reward, you also have to think about the risk. If you're going for a 2x on something and you're looking at ETH and Solana—Solana in the $60s and ETH around $2,000—the risk with Solana is way higher.

There's no doubt about that in the short run. It's just a more volatile token. There are metrics of realized volatility, and Solana's volatility is through the roof. ETH is a lot more stable, so your risk is lower if you go into ETH at this point.

Some of the ways people are emboldened right now go beyond just reading Crypto Twitter. NFT prices are going crazy. Pudgy Penguins 10x'd. This is what people do when they start to feel like they have a little extra cash and they're ready to gamble.

The ETH market cap is about 8.5 times larger than Solana's fully diluted value, but the ETH NFT market cap is about 20 times as large as the Solana NFT market cap. I think the crossover between people likely to pour a lot of money into NFTs and Solana is much higher than the crossover between people likely to buy a bunch of NFTs and own ETH, other than the ETH whales who are going to rotate some of their profits into ETH NFTs.

I think a lot of the new money is coming into Solana NFTs. To recap, I was bullish on AI, and now I'm bullish on Solana NFTs: the Chads, the Seagulls, Mad Lads, and others.

For a trade, or for the next 6 to 12 months, you just hold them. When you wake up and the first thing you do is refresh your portfolio, and it's up 20%, and it's the 8th day in a row that it's up 20%, and you're dreaming of buying a private island, that's when you sell.

That's my mentality for this market right now. This rally is so powerful and strong. It reminds me a lot of 2020 and 2021. It pattern-matches nicely.

The way this ends is with a bang. What probably ends up happening is that it looks a little bit like 2021, where it's more of a rounded top than a complete blowoff and collapse. I think the reason you don't get those complete blowoffs anymore in a market like this is that there are too many larger institutional participants that move a little more slowly than they did in 2017.

That's when you get the more rounded tops, like in 2021, where you blow off, come down, come back up a bit, and then meander sideways. It took basically a full month to top in 2021. I think you'll see something similar here.

I disagree. There's obviously a lot of buying going on right now, and people are emboldened. You can't fight the flows—that's what we always say on this podcast—but right now there aren't a lot of sellers.

I think the music is going to stop when the institutions finally have this gateway via the ETF. The ETF is going to bring in a ton of capital, and I think it's all going to go parabolic very quickly when that happens.

In the absence of a major use case that's bringing in tens or hundreds of millions of actual end users to use products built on top of crypto, I don't think you're going to have this steady buying going on. I think what you're going to see is another casino-style speculative frenzy like we've seen, without any fundamental sustenance or follow-through.

I think it's going to go parabolic, and then at some point the price is going to be quite high, the music's going to stop, and it's going to collapse back down, kind of like spring 2021, until it finds buyers again.

In order to level off at fresh highs, you need a use case. Right now, the only major use case crypto is serving—except for Bitcoin—is as a speculative mechanism.

I think we're talking past each other. I'm not saying it's going to level off. There's definitely going to be a crash. The question is how quickly it all falls apart.

In 2021, it fell apart in about a week. Bitcoin was down 70% in a week. It literally hit $20K and then completely collapsed.

I think it's going to be less violent, mostly because I think the run-up is less violent and the type of participant is less violent. They're less emotional, although they're still very emotional.

I do think there's going to be a tremendous amount of allocation post-ETF, given the way this market has traded. The ETF is going to open capital flows for Bitcoin because of the ability to borrow again. Portfolio margining for institutions will make it cheaper to buy Bitcoin.

It's going to get so much cheaper to buy Bitcoin. One of the ways people are buying Bitcoin right now is through MicroStrategy. That's why MicroStrategy always rips.

Here's an interesting thought: once the MicroStrategy premium to BTC really converges, that's when we start to level off. Saylor is incentivized to keep ramming as much capital into the market as possible by selling these super-overpriced converts and buying BTC.

That trade gets a lot worse for him once the premium comes in. As long as that premium remains high, you can sell expensive and buy cheap, and he's just going to keep doing that day after day.

Another weird little basis trade.

Yeah, but it's for sale.

I get it. The big narrative shift between this budding bull cycle and the previous one is that the fiscal and monetary situations are about to become more accommodative again. That's similar to 2020 and 2023–24.

What's really changed is that, unlike the previous cycle, the infrastructure layer is robust now. Distributed computing and decentralized trust are a robust, well-built product this time.

In the past, it had the prospect of becoming a robust, well-built product, but people were still paying $300 in gas to buy an NFT. Now there's block space available. Solana has worked through its kinks. Bitcoin has established itself. The infrastructure works this time.

I think Bitcoin is going above $100K in the next 3 years, but in order for us to get there, it's not just going to be an ETF. An ETF isn't a use case. You need somebody to use this infrastructure in a brilliant way that sucks in tens or hundreds of millions of people without them realizing they're using it.

Is it decentralized compute for AI engines? I have ChatGPT on my screen all day asking it questions. That compute isn't free. Is it going to be decentralized compute? Is it going to be Helium, Hivemapper, or any of the things we talked to Anatoly about?

It's going to take one of these things, and then crypto is going to be very sustainable at a higher price. I want to maintain sobriety around this ETF. It's not a “sell all of your bags on the news” thing, but I think you should take some profit on the news when the institutions can come in.

Do you think that—

Everybody thinks that—

Are you kidding me? I don't know. I pissed off a million people on Twitter with the whole “sell the news” thing.

The whole world thinks that the ETF is a sell-the-news event. My gut feeling is that it either rips for 2 weeks to a month afterward and then falls apart completely once people are convinced of the new paradigm, or it takes people out beforehand.

Maybe we top in the next 2 weeks, and then the ETF gets approved on the 11th, but by then it's too late and momentum has shifted. I put the probability of both at 50/50. I also put a probability on it topping on the day of the ETF.

I'd say my probability distribution is 40% that it dies early, 40% that it rips afterward, and 20% that it dies on the day.

To make that more useful and concrete, I would basically be chipping away at exposure as things get out of hand over the next 1 to 2 weeks. Then what kicks off the crazy rally, Jonah, is a really good first-day inflow into the ETF.

If you get that, you can make the case that there are going to be a lot of inflows coming. Really high inflows on day 1 are probably reasonably indicative of how it's going to go over the next week or so.

What about lackluster inflows? What if it turns out like the ETH futures ETF?

Then it just falls apart, in my opinion. Fucking impossible timing. I don't know.

I feel like we're all going to be staring at our screens very intently during the 2nd week of January. January 5th to January 10th is when you're supposed to be stuck in front of your screen, waiting for that headline to hit.

Between now and then, to heck with Christmas and Hanukkah. Pick that low-hanging fruit in these rotation trades. Pay attention to Crypto Twitter and rotate into things that haven't quite popped yet but will.

STX has been so annoying, because we've held it for a while. I'm actually very bullish on STX as a concept. They have their Nakamoto upgrade coming in Q1, which is going to make the entire layer very fast.

They're going to open up sBTC, synthetic BTC, which will derive security from the main Bitcoin chain. You'll be able to mint hundreds of millions of dollars' worth of it. Exchanges are signed up to work with STX on this.

I think it's a great derivative play on BTC, but it had gone sideways for so long. People are finally starting to wake up to it. I think Hal put out a nice thesis on this if you want to read it. It's on his Twitter page.

I'm pretty bullish on general BTC beta still.

Speaking of BTC beta, RUNE went bananas. It went from $1 to $7. RUNE is this weird binary thing where it's either worthless or it rallies parabolically when the rest of crypto is rallying parabolically.

It went to $11 in 2022 when Bitcoin briefly breached $40K, and then it gapped down to basically zero when Bitcoin went below that level.

RUNE is a weird one. The claim is that it's the 5th-largest BTC exchange. I believe it. They do a lot of swaps, have a reasonable amount of TVL, and the product actually works.

They obviously got attacked a bunch, and I think it just has a very scammy reputation surrounding it. Those tend to be the coins that run the hardest: things that have some semblance of a real product but are still viewed as very scammy.

What that creates is a cult around that particular coin. It creates very strong hands. At a certain point, everybody has avoided it because they thought it was scammy, and now that it's proven itself to at least work on some level, people start rushing in through the gates and it becomes a frenzy, as opposed to a slow buildup.

I honestly don't know much about RUNE. We could pick a few coins for the next podcast and deep-dive on them. We could host a segment called “Scammer or Not a Scammer.”

I love that. A lightning round: scammer or not a scammer?

Why don't we talk about how much crypto you should own at these levels? Should we try to think through what a good crypto holding would be for different types of people and lifestyles?

You said you rarely own less than 50% unless crypto's on its knees. I own significantly less than 50%. In 2022, when crypto was getting smoked—call it the end of 2022 or early 2023—obviously my holdings have rallied quite a lot, and I've bought more.

We're weirdos. We're not normal people. Let's say you're a nocoiner. You completely don't get it and think it's all just a big casino.

Exactly. It's a casino. Casinos are valuable.

Let's say you find crypto stigmatizing. Do you think the average person on the street should hold a portion of their life savings in crypto, even if they don't believe in it 100%? Do you think it's part of a well-rounded portfolio?

One hundred percent. The way I view it is different from the argument some people make that you want to hold an uncorrelated asset, or an asset whose diversification helps you grow your portfolio. You can reallocate during times of stress from an asset that's doing well into an asset that's under stress, assuming the asset under stress is undervalued, and the rebalancing will work itself out to give you a better result over time.

Some people try to make that argument for Bitcoin. The way I think about it is that this is a genuinely undervalued asset class. You look at everything in crypto, and I think on a 5- to 10-year horizon it's undervalued.

I don't think I can make a strong or significant argument from an overall portfolio-construction standpoint for why you should hold it. I think you should hold it because it's a good investment.

I can make a portfolio-construction argument. I think the minimum amount of crypto that every person in the world should hold—with the exception of Baby Boomers and older, and I'm talking about the Baby Boomer generation, not crypto boomers—is 5% to 10% of your portfolio.

They're retiring. They're not trying to build wealth at this point. They're trying to take money out, spend it, or give it to their children.

If you're younger than that generation, you should hold a minimum of 5% to 10% of your portfolio in crypto. That's not investment advice; it's just what I think.

No matter how uncomfortable that is for you, the reason is that Bitcoin, the benchmark crypto asset, is a proven debasement hedge. I see nothing but debasement in the future of the G10 economies, so every portfolio deserves a hedge against that.

Furthermore, I think it's important for everybody to have some exposure to emerging technology. Unfortunately, the venture-capital asset class isn't really tradable or accessible to most people.

Crypto is a way to gain exposure to distributed-computing technology as an asset class that you wouldn't otherwise have in your portfolio. If you do your research and pick decent coins, you could 1,000x some things. Even if you buy a broader basket of assets and dip your toes in on Coinbase, owning a lot of different tokens in small sizes gives you that exposure.

If you buy the S&P 500, you're holding a few megacap stocks and then a bunch of things that basically don't rally, like old industrials.

The second part of the argument is what I was trying to articulate. That's why I don't think it's a portfolio-construction argument. It's just that this is a good asset class to invest in because we both think it's undervalued.

The first part is correct. It is a good argument from a portfolio-construction standpoint that you'll likely own other things in your portfolio affected by debasement, and if you have Bitcoin, you will very likely outperform.

But that's a market call. A lot of what it comes down to is a market call in a way that I think is as defensible, if not more defensible, than the idea that the U.S. economy will grow over the next 20 years, that this will be reflected in stock-market valuations, and that company valuations relative to inflation will go up over time with certainty over the next 10 to 15 years.

That's what current portfolio construction is based on. The underlying assumption is that we're going to grow as a country, and that our economy is going to grow relative to inflation.

If that's not true, it all falls apart. The exception is if it falls apart because G10 economies have overspent their GDP growth. They've mortgaged 10, 20, or 50 years' worth of growth to fund the profligate spending that went on during COVID and shortly thereafter.

In that case, I think Bitcoin will protect you and stocks might not. That's why I agree that you can make an argument from that perspective. You can argue that it's not only a possible outcome but a likely outcome that Bitcoin will do well in the face of the actions G10 economies will have to take over the next 10 to 15 years.

The people who took these steps are the Baby Boomers, the octogenarians who run our economies. They don't care. They're going to hand off the baton pretty soon, so they can go nuts and party right now while the rest of us are left holding the bag.

I think it is important to have a debasement hedge, and I think that debasement hedge is linked to the rest of this emerging technology and all these other tokens. I think there'll be a buoy effect.

Ultimately, on the other side of that spectrum, if you're a working parent with 2 young kids, working a government job, in debt, with a mortgage, and you're 150% to 200% long crypto if you include your debt, I think that's pretty bananas. People need to tone it down.

Time horizon is super important here. It also scales with relative net worth. With everything in life, it's an IQ meme, but with net worth it's a net-worth meme.

If you have a ton of money, it makes sense to allocate a little bit more to crypto. If you allocate 20% and lose that 20%, your day-to-day life won't be greatly impacted.

If you have zero money, pick your moment and pick your time. A lot of people go 100% long because they don't have that much money. They have a job that doesn't pay much and don't have much in their bank account, so they view it as a lottery ticket.

Maybe if they put $1,000 into this thing, they'll make $5,000 or $10,000, and that will change their whole life. That's a huge part of why people get into this.

The middle of the curve is that you make $80K to $100K a year and put 1% into crypto. Those are the types of people we're talking about.

I would also advocate that if you have a long enough time horizon—if you can invest over a 5-year period and that money won't impact you—you should basically max out that allocation based on what you think you can live on.

Exactly. That's really the way I think about it. The key word you used there, Avi, is invest.

I know some good friends of mine who made a ton of money during the 2017 ICO boom, trading in and out of things on Poloniex and random shitcoin exchanges. Then they kept going and bled out.

It's important to keep a steady hand in this stuff. Just because you do well during one of these crazy bull markets doesn't make you a genius. You shouldn't overtrade and piss away what you've made. Once you've made it, you should try to protect some of it.

I agree with you wholeheartedly. What's interesting is what people spend their money on today. People talked about this a lot at the top of the last bull market, so I hesitate to bring it up.

You see it reflected in what people spend their money on. Hundreds of thousands of people have made a lot of money on crypto, and they spend it in interesting ways.

Luxury spending obviously went way up alongside crypto, although I think those 2 things are 90% correlated simply because the overall market went up. A lot of people who buy crypto tend to spend their money on things like Miami real estate and supercars.

There's a lot of consumption that comes out of crypto. In a world where Bitcoin hits $100K, I think that impacts the real-world economy a ton. It directs money flows.

That's hundreds of billions of dollars being whisked out of thin air. It would shift the power dynamics of society. When your buddy, who used to have less money, is suddenly 50 times richer than you and is splashing out, there can be jealousy and animosity.

It might impact voting and local politics. There's a lot of passion and fervor around crypto, both positive and negative. If Bitcoin went to $100K, it would be insane to see how society changes.

Any predictions? It wouldn't just be that the Lamborghini dealership sold out. I think other secondary and tertiary effects would happen.

One positive externality is that you probably get a lot of wild ideas funded. You'd probably have a lot more money going into longevity tech, and a lot more money from small angel investors going into tech moonshots.

You'll see a lot more of that in a world where crypto grants people a lot of money. I think OnlyFans is probably the best investment you could possibly make in that scenario.

That's kind of a crypto-adjacent platform, isn't it? I just think it's going to be really funny to see how that plays out.

Me too. One of the crazy things that would happen if crypto really sent it and people had all this money is that I see crypto as a community of misfits, true believers, and crazies, along with people who are extremely pragmatic and practical about ways that peer-to-peer value-transfer technology can improve their lives in the developing and developed worlds.

If crypto goes up, it empowers this group that's trying to make crypto happen. You have all these people busting their asses through every bear and bull market to build products that people want to use.

Except for Bitcoin, crypto hasn't really found its killer app yet, aside from maybe NFTs. But the richer the crypto community becomes, the more empowered and able it will be to enact its cryptographic visions of the economy of the future.

Take real-world assets, for example. An NFT deed to your house, or a tokenized—

All of that becomes much more likely the richer crypto people get.

Exactly. They'll be out there spending money on lobbying and making crypto happen. Or they'll make $100 million, go to their private bank at JPMorgan, and say, “I don't want to buy your nonsense through a brokerage. Sell it to me in token form.”

I feel like the crypto community will be more empowered to make crypto fulfill its promise, which is to replace this entrenched, shitty technology. As Anatoly said, software is eating the world. This is the financial software that's starting to ruffle feathers, which is why there's regulatory blowback and all these other problems as it tries to eat parts of the financial system.

The richer crypto people become, the more empowered they'll be to help crypto eat financial software and economies.

It's a good argument for RWAs: they're going to be forced into existence by crypto people anyway.

Anyway, Jonah, how has crypto changed your life?

Besides making me unhappier because of my lack of sleep and moving my family around 3 times?

I've been moving around long before crypto. I think crypto is fascinating because Solana was my best P&L trade. Ironically, it was my best P&L trade not this time, in 2021, when it really ripped. That was the first time I'd ever done a proper job on anything in my P&L, so it gave me some self-confidence.

I turned down 100 million XRP when Ripple Labs offered it to me in 2013. That would have been worth $320 million 4 years later. I could have started a trading company with that. It was a lot to offer you.

That was just their opening offer. I probably could have haggled it higher. The guys who took it started GSR, and they ended up getting seeded with $150 million. I worked for them when we were both at Goldman and GSR.

I bought a bunch of Bitcoin in 2013, paying about $700, and then sold it all at $400. Crypto has made me a better trader simply through stumbling, failing, succeeding, and missing things. It's made me a better businessperson and a better trader.

It's also introduced me to some phenomenal people, like you. It is a community of traders that cares. In oil, there are a few traders who care, but in crypto there are a lot of traders who care, and that's exciting.

It's a better community. It is a phenomenal community, and I'm very happy to be part of it.

As always, it's awesome chatting with you.

Great talking again. None of this is financial advice. It's more just spitballing. Thank you for joining us, and please do not take this as financial advice. We're both idiots. We have no idea what we're doing. We consistently lose money, and we just do this podcast to pay our bills.

If only it paid any bills.

Yeah. Do you get paid for this? I don't get paid for this.

Maybe Blockworks is keeping it all. We don't have any sponsors, though. Maybe that's why we're not getting paid.

That's a good point.

If you want to sponsor the podcast, don't reach out to us, because I don't think we're allowed to manage that. Talk to Blockworks, I guess.

All right. Good times, everybody. See you in 2 weeks. Adios.