New Bitcoin All Time High, What's Next For Crypto? | 1000x Live

No matter what you type in that chat, the answer is probably, “It’s going up” at this point. You can say ENA, Lido, Eigen, Aave, Doge, whatever it is, because of the capital flows that are about to come in. Even USDT is going to go up, guys. USDT is going to hit $2, right?

I’ve started messing with leverage for the first time in my PA. I’ve been breaking my rule. I thought I was max long, like, 6 times already, and I just keep getting longer because the price goes up. I keep getting longer because I add more fiat into this and get more convicted, and then I get longer because I decide to use some leverage.

I’m just getting increasingly degenerate with this because, at this point, I really do think we’re going to take off. I don’t really see why this rally would stop. I don’t.

We’re live. We’re live, and Bitcoin’s fucking ripping. We’re going up, and we’re all going to fucking make it.

We’re going to Valhalla.

Remember when I said, when I finally capitulated on being bearish, “You just got to be max long”?

You know what?

And we’re live.

It was kind of timely capitulation, right at the end of an 8-month-long, range-bound boredom fest. You were like, “All right, that’s it. I’m long.” And then, boom.

Yeah. Basically.

God candle.

And now I’m just going to stay long and close my eyes. If you’ve been long for a while and you’ve made a ton of money, maybe you should just clip some profits. But honestly, the next 4 years of our life are going to be pretty fucking fun, Jonah.

You can just see the moment in the charts where crypto got legalized across the board.

Crypto is legal now. That’s all I have to say. Don’t overthink it. Crypto is legal now.

As a side thing, I got this tablet.

Oh, you’re one of those people.

It’s called the reMarkable. You write on it, and it’s kind of like paper. I take notes.

No, I know what it is. My tenant who stole from me left one in my house, and then I sold it on eBay because I thought it was stupid to have to pay for something that’s basically paper.

Yeah.

Which is basically what it is.

Yeah, but it’s useful because you get to keep all of your notes in one place. What I get to do now is click around and go back to the notes that I took on the podcast where we discussed the Trump election, which was all of them.

1. The Election Trade Pays Off

The number-one thing that I kept saying—which, by the way, I did not do—was that you should buy all the SEC coins. The moment that you think Trump will be elected, you just buy all the SEC coins. I had UNI, Aave, and Lido, and they’re all up infinitely right now. So that was great. If you listened to my advice and did that, you made a lot of money.

Basically, right after—as the odds went up—there was actually a delay. UNI, like—

Look at Uniswap. It’s up, like, 30—

Yeah, exactly.

35%.

It just went straight up.

Avi, can we victory-lap for a second? Remember all those people who kept telling us on Twitter that the election didn’t matter that much, or that this was a fade? This wasn’t a fade. This was as real as we said it was going to be. So I do think we should pat ourselves on the back for that.

Now, I think the real ballsy call was Trump winning, right? Normally, you’re not supposed to bet on a coin flip like this with serious amounts of your capital. But for me, what made this a little bit more comfortable was the idea that pollsters cannot adjust for people who don’t respond to their polls.

There’s sample bias in the people who won’t respond to a poll, in that Trump voters are less likely to respond than non-Trump voters. If you’re a pollster, there’s no way to adjust for that without committing malpractice. You could say, “In 2016, my Trump estimate was too low by 7 points. In 2020, my Trump estimate was too low by 4 points. So this time I’ll just do my poll and then adjust it up by 4 to 7 points.” You can’t do that. That’s malpractice.

To me, given that there’s literally no way for people to adjust for Trump’s outperformance in polls, I was just going to do it myself. I was going to commit the sort of pollster malpractice that they can’t commit. That’s what got me comfortable with being long crypto.

I don’t know. There was a surprising amount of FUD out there on Twitter about how, even if Trump won, it wouldn’t matter for crypto. Now you can see that the space is only beginning to rally. This is the beginning of what I think will be a pretty solid trend. What do you think?

I agree with you. I think we’re going to be trending for—obviously, there are always going to be ups and downs, but if you ask me where we are in 3 months—

Are you drinking wine right now? I should crack open a beer.

Yeah, dude, come on. I didn’t have any champagne, so I just picked this bottle of wine.

Yeah, I’m going to—

Go get one. I’ll monologue or something.

I’m in Puerto Rico right now, and the only beer I have is this shit-tier beer called Medalla.

Do you think this is—

It’s Abbie’s. It’s like Bud Light, but slightly better.

Go get it.

I’m going to drink my Aquafina. I’m going to be healthy so I can laser-focus and make some fucking money in this market. This is a great day, Jonah.

This is— I’m so happy.

Across the board, this is the most fun that I’ve had in a while. I basically just checked out up until the election, and now I can check back in, look at things, and figure—

I’ve been pretty checked in.

I’ll tell you one thing that I wish I had done, but didn’t do—and I did a little bit of it, but in bigger size—the DOGE trade was so obvious. It was so obvious to go long DOGE versus ETH. You could have put that on in huge size.

I actually still think there’s a really good trade in DOGE. It came off the highs a bit. I wasn’t like you; I didn’t position aggressively before the election betting on a Trump win.

What? You talked—

Yeah, I didn’t. I was positioned aggressively, not because I felt 100% that Trump was going to win, and not because I looked at the data and thought, “Oh, I think Trump is going to win.” I just thought there was a very easy trade.

If Trump wins, everything just giga-rockets. At the time we spoke, we had already come off the highs a little bit, so I thought that even if Kamala won, I could get out of my trades. That was pricing in a little bit of a Kamala win.

So for me, it wasn’t, “I’m going to go giga-long because I’m confident that Trump is going to win.” It was, “I’m going to go super-long because there’s good asymmetry.” What that means is that the concept I had of being giga-long probably wasn’t long enough.

What happened that night was that when the Florida results came in and Trump outperformed in Miami-Dade and just crushed it, I thought, “All right, it’s over.” In my mind, it was over at that point.

That’s what did it for you? So that’s when you bought?

That’s what did it for me.

Where was Bitcoin trading at that point?

It had just broken—I think it was just above $70,000. I doubled down on Aave at $144, and I doubled down on DOGE at $0.18. Those were the levels that I cared about.

What ended up happening was basically Trump—

Aave—we called that. We called Aave on the pod. We’ve talked about this.

We did. Multiple times. And here’s the thing: this is really good not just because Trump won, but because a lot of very pro-crypto candidates won. Across the board, the crypto candidates did well.

2. Crypto Becomes Legal

What we’re looking at right now is the embrace of crypto by our political system. We’re looking at a nonzero chance that a strategic reserve of Bitcoin is created over the next 4 years. I think it—

By the way, let me just put it out there: if a strategic Bitcoin reserve is created, it’s $1 million per token. Every country is going to create one. It’s going to be like lemmings following America into that mentality. It’s going to replace gold, basically, on central banks’ balance sheets. $1 million per token.

It’s going to be unbelievable.

Yeah.

We’re gonna win so bigly that you won’t even know what to do with yourself.

Even if that doesn’t happen, Brian Armstrong tweeted, “Welcome to the new members of America’s most pro-crypto Congress ever. 219 pro-crypto candidates and counting have now been elected to the House and Senate.”

Avi, dude, we’ve been in an industry where we’ve made some money, and that’s great, but people have vilified us for being in it. It’s considered a disgusting gambling habit—not even a hobby. It’s a habit.

But now it’s becoming legitimate because this is economic freedom for people. This is the internet of value. This is obviously better technology than the existing payment rails. All of the disruptions that this technology has created via Bitcoin are now being embraced by the mainstream.

Sure, there’s no tangible application for that yet because these things take time. But markets price the future, so I don’t think it’s too early to get excited about this. I really think you need to start buying now.

I’m starting to get friends reaching out to me, like, “Hey, I bought my first Bitcoin. What do you think?” They’re saying, “I want to accumulate a stash.”

Even my hardcore Kamala-supporter friends are like, “Yo, I think Trump’s gonna maybe turn America into 1930s Third Reich Germany. If I wanted to get all my money into Bitcoin to move it out of here…” Even those kinds of conversations are happening. So I think most people have been black-pilled on Bitcoin, and it’s kind of important to—

I agree.

…to price the future.

I 100% agree with you. Bitcoin is obviously a huge winner. But everything is gonna be a huge winner. And this isn’t getting priced in fast enough.

Yeah.

It’s already alt season.

Is ETH an alt?

So there are 2 things I wanna say here.

Yeah.

One is, I like ETH now. For a short period of time, I think ETH can do well.

The main reason is that I think what you’re seeing right now is that there’s gonna be very little hesitation when it comes to allocators. People are just gonna start allocating.

People are gonna buy ETH because it exists. It exists in the form of an ETF, and it’s easy to buy. There are gonna be people who can’t buy anything that doesn’t trade on the stock market, and then they’re gonna buy the ETH ETF. It’s trading at a premium today for the first time in a very long time.

I think ETH beta coins—Lido, Eigen, and Aave—are gonna do well because now they can operate in a regulatory-friendly environment. You’re not worried about the overhang. It’s invigorating, right? There’s a sense of momentum now that people are gonna work harder on building good products.

People are gonna be more interested in using crypto and DeFi. Somebody said ENA as well. Yeah, I like that.

3. Altseason Starts Now

Basically, the issue is, guys, no matter what you type in that chat, the answer is probably that it’s going up at this point. You can type basically anything there. You can say ENA, Lido, Eigen, Aave, Doge, whatever it is, because of the capital flows that are about to come in.

So don’t churn too much.

Even USDT is gonna go up, guys. USDT is gonna hit $2, right? I think my target for USDC is $10, because some idiot’s gonna come in and buy it at that price.

Wait, are you joking, or are you talking—? Yeah, okay.

For a second, I was like, hang on, hang on. I’m the one drinking here. What was that?

Winners, average winners.

Look, guys, what you have to understand is that we are a small circle in the world. We can all agree with each other and still be right. That’s what happened in 2021. Shit just went up in a straight line, and everyone was bullish for an extended period of time because there was new money coming in.

I think new money’s about to come. Now, please remember this: alt seasons only last 3 weeks, because what ends up happening is that they go up so unfathomably high that they overprice themselves immediately.

If Dogecoin trades at 65 cents in the next 3 weeks, that doesn’t mean it’s going to $1.80. That probably means you wanna sell. That’s just my take. They just tend not to last.

Even Bitcoin, right? You look at Bitcoin price appreciation, and it all happens really fast.

I think we’re in the second inning of one of those parabolic moves.

But it all happens really fast.

Yeah.

And then everyone revises their price targets higher. Bitcoin will go to $120,000, and then everyone will call for $250,000, and then $120,000 will be the top.

Yeah. Maybe that’s the 1000x podcast heuristic: when the market’s just rallied a lot and the average pundit on Twitter is calling for a 2x to 5x from there, you’re supposed to take some off.

Yeah.

But the market hasn’t rallied a lot yet. It went from $70,000 to $76,000.

Basically, what I’m saying is: right now—

A massive paradigm shift.

Focus.

Yeah.

People keep saying that I don’t sleep. Now, I just wanna put this to bed, guys. I sleep a solid 5 or 6 hours a night. Come on, that’s fine. I sleep, but thank you guys for caring.

The rest of the time, who knows what I’m doing? But I do sleep. Do I have any concerns about an FOMC putting a halt to this run for 3 months?

No. We’re not talking about the Fed right now. We’re still talking about the political implications of this. We’ll get to the FOMC. Let’s talk about the political implications of this.

Let’s talk about how to make money.

Yeah. I’ve got a few ideas.

I think this is key. Not to give out specific items, but I do think that SOL meme coins are just gonna continue to rip really hard. I think there’s gonna be a tremendous amount of capital allocation to these things, and I also think that we’re looking at a revival of the stuff that was hated for a bit. If you look at DeFi—

Eigen.

Yeah. A lot of the things that were heavily shorted are gonna rip because basically nobody wants to be short in this environment.

4. The ETH Solana Rotation

That brings me to why I think ETH/BTC is gonna do well. I think that everyone uses ETH as a hedge, and so a 20% ETH/BTC move is not off the table. In fact, I think it’s probably likely that in the next 3 weeks, ETH/BTC moves up 15% to 20%.

Sorry if I’m wrong, but this is my take.

I agree with everything. I think ETH/BTC might pop. But I think we should be looking at SOL/BTC.

I don’t think there’s anything on ETH that you want to do with your ETH right now, whereas on Solana, there are all kinds of opportunities. As a crypto native, as a degenerate gambler, there are all kinds of opportunities inside of Solana.

Unless you think there’s gonna be a major catalyst that drops for ETH in the next 2 months, where BlackRock just straight-up announces that they’re gonna be deploying something insane: migrating their back-office solution, Aladdin, to Ethereum, and all of Wall Street’s gonna be using it to settle index trades—that seems unlikely to me.

I wouldn’t wanna bet on ETH going up, even if they did say that. I think SOL/ETH is gonna outperform, which means that everything you just said about ETH/BTC is true, but you will make more money if, instead of buying ETH/BTC, you buy SOL/BTC.

Also, you’ll have Solana bags to go and mess around with meme coins when you want to. You’re not gonna go buy an NFT right now, are you? There’s too much opportunity to lock your dough up like that.

I’m telling you right now, I think that SOL/ETH has topped—

Oh, okay.

—for the next 3 weeks.

For the next 3 weeks?

Right.

Because honestly, I was a big Solana hater. You convinced me to start rotating some ETH into Solana, and then I tweeted something out—I think it was 1 or 2 months ago—where I—

That was basically the end of my rotation. Most of what used to be ETH is now in Solana, less a CryptoPunk, of course, and I’m very happy with that trade. I was hoping to ride this for at least 6 to 12 months. So you’re bearish? You think it’s topped for 3 weeks, but what do you think on a longer timeframe?

I still think over the next year, sure, you’re probably going to see Solana outperform. With that being said, I’m bullish on ETH. Really, it’s 3 pieces. One is that everyone used ETH as a short leg, and nobody wants to be short crypto right now, so that’s all going to unlock.

Yeah.

The second is that I think this brings in new allocation into crypto, especially from TradFi people who are going to allocate to ETH as part of a portfolio. The reason you didn’t see a ton of that, in my personal opinion, prior to the ETFs is because a lot of the ETF flow was coming from people who were betting on the election. They were traders, and they were using BTC to trade. I think what we’re going to see over the next few weeks is long-term allocations actually coming in as people make a strong bet on the future of crypto, and that’s going to include ETH as part of their portfolio.

I see what you mean.

And then the third is that it’s a momentum thing. I’ll paint it like this: ETH/BTC is the lowest it’s been in 3 years, I think.

And it’s not flatlining here. It’s trending lower. You’re talking about catching a falling knife.

If you get a strong reversal in a bullish market like this, people are going to hop on that momentum. It’s like a self-fulfilling prophecy until people again realize that ETH is probably not going to be used a ton, and then it comes back in. But that’s good. I mean, a 25% move, which is what I’d be looking for—if we can get above 0.4, maybe 0.45 on ETH/BTC, I’m out.

I think that’s a really good idea. I have a new framework for evaluating alt L1s. I guess you could call ETH and Solana L1s at this point. My framework for evaluating L1s is something I’ve been spending a lot of time on.

I used to just think, “Okay, fat protocol thesis: ETH plus L2s are an ecosystem. Solana’s an ecosystem. Where’s the dough going to go?” If it goes to Polygon or Base, it doesn’t matter. That’s all value accrued to ETH.

What I’m realizing is that what really drives token pricing is how big of a wallet you’re going to maintain in the ecosystem in order to facilitate what you want to do. To me, the reason why Solana has pumped so much and outperformed ETH so much is because, in order to have fun with Solana and use Solana for what Solana is good for right now, you need to have thousands or tens of thousands or hundreds of thousands or even millions of dollars of Solana on that chain so that you can quickly rotate it into and out of meme coins, which are ultimately trades, right? They’re not investments.

For ETH, during 2021, you had that big-money rationale when people were buying Fidenzas, EtherRocks, CryptoPunks, and stuff. But if the whole “ETH is back office, ETH is the global settlement layer” thesis is true, yes, that’s bullish ETH, but what does it mean realistically? It means that institutions will probably just need to have gas fees available to settle stuff on—well, let’s call a spade a spade—they’ve got to settle stuff on Base, right?

So maybe people are going to be settling massive amounts of microtransactions on mainnet? No. If you’re just trying to hold some bags to pay for gas, Base is pretty cheap. I think it might even be cheaper per transaction than Solana, so you don’t need to hold a big wallet.

I don’t think there’s anything going on inside of ETH that’s going to require new people to come into the ecosystem and acquire tons of ETH in order to do what they want to do on ETH. Whereas with Solana, because I think this meme coin thing is just the beginning of basically disrupting the total addressable market of the global lottery system, I think, among other applications, Solana’s probably the better play for an L1 over the course of the next—again, longer term, medium to long term.

Yeah. I mean, look, I don’t think we disagree. I think this is just a question of—

Yeah.

A question of timeframes. Now—

I was just pontificating. I agree with you on the short term.

Okay. And not to debate L1s, because I think that both are going to go up. It’s just a matter of timeframes. This is the type of market where it’s about maximizing, right, and also not getting shaken out.

Yeah.

It’s what I was saying earlier: if I go to my list of things that I look at and ask what’s going to be up in the next 2 or 3 weeks, I think the answer is basically everything. The question is, what’s going to be up the most? That’s really what we’re trying to figure out right now.

I’ve started messing with leverage for the first time in my PA. I’m using mild leverage on Bitcoin, just because I think Bitcoin’s going to have the best Sharpe ratio in crypto. So I feel comfortable levering up a little bit.

I’ve been breaking my rule. I thought I was max long 6 times already, and I just keep getting longer because the price goes up. I keep getting longer because I add more fiat into this and get more conviction. Then I get longer because I decide to use some leverage. I’m just getting increasingly degenerate with this because, at this point, I really do think we are going to take off.

I’ve thought that since before the election because of my view about how polling is done. So I don’t really see why this rally would stop. I don’t.

There are really only 2 reasons. The first reason why the rally stops is that people get over their skis, right? You see funding rates go through the roof for a week, you see people chasing random shit, and you see multiple days of altcoins and memes trading more in volume than their market cap. It’s probably a good sign to start taking some profit off the table.

Also, very likely, what you’re going to see close to the top is things going 100X. New launches are going to start coming out. People are going to start creating coins again, and these things are going to go 100X really quickly. Then you probably want to say, “Okay, let me get some money off the table.”

Nashty brings up a good point. If the missiles start flying, that could be an unexpected retracement. I think we should probably do an oil corner at some point on this podcast, as euphoric as we are, because this election means big stuff for geopolitics and macro, and it could cause some turbulence for our sector in Bitcoin. So we should talk about that too, but—

Dude, I genuinely don’t think Iran’s going to do anything now. Now that Trump’s in, they’re going to be way too scared to get hit back really hard.

Yeah, but Israel is empowered, right? So if Bibi takes out Kharg Island or a couple of refineries or something, oil’s going to do something, and I think that could create a little bit of—

I wouldn’t fade it. I wouldn’t anticipate a risk-off move by selling my Bitcoin or selling my stocks here. But I’m just saying, you don’t want to get too levered because there’s going to be—

Yeah.

Volatility to the upside.

I think you know oil better than most. If Iran’s oil gets taken out tomorrow and the price spikes, there’s a ton of excess production available. People can respond. It’s not like we’re running up against the limits of the amount of oil that could be produced. Saudi can just start pumping more.

That’s right. Iran’s entire production could get plugged in by Saudi. However, if their entire production gets taken out, they could shut the Strait of Hormuz, and 30% of the world’s oil flows through that strait. And they would.

If their entire production was taken out and they were an animal backed into a corner, they would. They export 1.6 million barrels a day. They produce more because they consume it domestically. Saudi plus the others have 2 to 3 million barrels a day of spare capacity, so Iran’s production is not an issue.

But if Iran prevents everybody else—including Iraq, Qatar, and Saudi Arabia—from exporting oil, and suddenly the world is short 30 million barrels a day of oil instead of 1.6 million, then the entire economy collapses, right? So that’s probably not going to happen.

But if there’s even a 5% chance of it happening, which is kind of on the table if Israel takes out Kharg Island—which they’ve stated they’re interested in doing—then you’re going to see volatility. So don’t get too levered is my point. The last thing you want if you’re a crypto trader—and just hear me out—the last thing you want is to be 5 to 10 times levered.

There’s some geopolitical volatility that leads to Bitcoin volatility. You get liquidated, and then the market just fucking melts upward and 5x’s, and you can’t participate because you’ve lost all your money. So don’t do that, right? Some mild leverage is appropriate, I think.

Yeah. Look, I’m not as concerned about these geopolitical shocks as you are, right? In terms of what’s going to stop this rally, I’m 95% sure that it’s going to be people getting ahead of themselves and really adding on a ton of leverage, right? What ends up happening there is that people see that and go, “Okay, time to cut my positions.” The market gets flooded with supply, you get a ton of liquidations, and that kind of crushes the momentum, right?

Not a lot of leverage yet, per Velo Data.

No.

Our favorite.

Nothing.

Yeah.

I actually love this comment: “Is Avi on Adderall or coke or both?” I’m on green-candle P&L.

Oh, my God. Dude, how good does today feel?

I love the fact that green P&L and a good day can make it seem like you’re on stimulants. I didn’t even have coffee today.

Really? I’ve been up since about 4:00 in the morning following this. Yes, I’m feeling very good. I had a coffee, though.

Yeah, I mean, look. My view right now is that nothing is ever going to go up in a straight line. The reason I don’t like leverage is because who knows? If we trade 72K from here, I want to be able to add. I don’t want to be nursing my wounds, right?

The issue with leverage, in my personal opinion, is that it makes trading too path-dependent, right? You can be right on a 1-month time horizon, but if you’re levered and you’re wrong for 3 days and it goes down a lot, you might panic. You might cut your positions. You might be taking too much of a hit. And so then you actually take yourself out of the game, right?

That’s why I don’t love using leverage in these particular types of scenarios, where I tend to only use leverage when I think things have really collapsed. I use leverage in an FTX-type scenario. I use leverage when there are a tremendous amount of liquidations, and I’m using leverage for a very short time period, right? I want to use leverage to catch a mean reversion.

Anyway, long story short, I forgot my train of thought. This is a great market environment, not just for crypto, but for everything. And why? Because what a lot of people don’t recognize is that one of the reasons the economy did so well from 2016 to 2020 is that when Trump comes in, one of the first things he does is cut a ton of regulations, and he allows businesses to make more money.

He cuts taxes for businesses, too. That makes stocks go up and makes me—

I think regulations are actually even more important than tax cuts.

And regulations have been a killer for crypto in particular. Obviously, it hits oil, it hits banking, it hits everything, but for crypto, we were at Permissionless. The people there can’t even build what they want to build because they’re going to be stuck in court for 5 years. The whole industry is on pause.

5. Deregulation Unlocks Innovation

And that is, in my personal opinion, the single worst thing about regulations: it stifles innovation. Why? Because if you’re building something in crypto, you don’t know if what you’re building is going to land you in jail, like you said. So you just end up not building anything. You just go, “Okay, I don’t want to touch too much. We kind of have this product right now. I’m not going to be too innovative. I’m not going to do anything too crazy.”

Because what if I do this crazy, cool thing, and the SEC comes after me, or the government comes after me? I don’t want to deal with it. And so what it does is it stifles innovation, because people aren’t even in the mind frame to think about it, right? You don’t think you’re going to—

It’s not just building; it’s trading, too. We’re not allowed to trade perps in America. You’re not allowed to create a crypto trading company in America. Part of the reason why these massive basis arbs exist is because most legitimate TradFi companies can’t just buy spot and sell futures, because they’re worried they’re going to get taken out by the SEC.

All of that’s over. Gensler’s going to get fired on day 1. It’s over. This is literally a paradigm shift. Donald Trump ran on a #PumpYourBags platform, and at least last time, he kind of followed through on some of his promises. It would be weird if he suddenly just decided to go anti-crypto at this point.

We basically have to bet—so I’m a little different from you. It’s good on you to pick bottoms with leverage. That’s a very dangerous game. For me, I pick—this is kind of my first time using decent leverage in crypto. Usually, I use it in commodities, but when I use leverage, it’s to express a view when I think the underlying asset is going to perform very smoothly, with a high Sharpe and low volatility. I think that Bitcoin fits that description right now.

Sure, you can probably get higher absolute returns investing in Doge or investing in something else, being very active, and paying short-term capital-gains tax. But if you just want to sit on your hands and hold something for a year, the absolute best P&L-per-unit-of-volatility return—your best Sharpe ratio—is going to be in Bitcoin.

I don’t think there are going to be very big drawdowns at this point, and so I think it’s okay to lever up a little bit now. I think we should all feel like we have permission to expect the market to rally gradually or even rapidly and steadily, primarily because of this new regulatory paradigm and this new set of congressional members that are going to attempt to create something for crypto that just hasn’t existed. And there’s so much potential under the surface, Avi. There’s so much value to be unlocked here.

Also, I remember you said something very powerful that resonated with me when we first started doing our podcast. You said, “I’ve been in crypto since, I think it was 2017 or ’16. I’ve been told that crypto is a scam every single year except 2021.” And then in 2022, you were told it was a scam again.

I’ve experienced the same. I’ve either been in crypto and been told that I’m working on a scam, or been on the outside looking in, thinking it’s a scam, for every single year except 2021. And for the very first time since 2021, it feels like crypto’s not a scam anymore.

It feels like crypto will be accepted by the broader community as something legitimate because the United States will bless it, right? And I think that, more than anything, is a big deal.

Yeah, I couldn’t have said it better myself. This is probably the first time that crypto is going to be considered not a scam, and it’s not going to mark the crazy top. Because we’ve reached the point now where the sitting president of the United States of America has hinted at creating a strategic Bitcoin reserve, has spoken at Bitcoin conferences, went to a Bitcoin bar, and has made a transaction with Bitcoin.

Launched a DeFi project.

Launched a DeFi project. I mean, guys, this is unbelievable. In 2017, I remember seeing Bitcoin on the front page of The Wall Street Journal and thinking to myself, “Oh, my God, we’ve made it.”

Yeah.

Because it was on the front page of The Wall Street Journal. In 2035, you’re right, Sky Jones, maybe we do have a strategic Moo Deng reserve. Maybe we do. It’s possible. It’s not improbable, even. It’s very improbable, but that was fun to say.

Let’s talk for a second about what a strategic Bitcoin reserve would mean. Let me quickly explain this. Again, I love commodities. Bitcoin is a commodity. A strategic reserve for an asset is important because it serves more than just a monetary purpose. It’s not just meant to pump the price; it’s meant for an emergency.

If Donald Trump follows through on this promise to create a strategic Bitcoin reserve, it basically lends credence to the idea that Bitcoin is non-sovereign, global-reserve-currency-grade money of the same caliber as gold. And in an emergency where, God forbid, the dollar is degraded, or God forbid, our trading partners no longer want to use the dollar, we as a nation do not lose our potency. We don’t lose our international clout.

If this happens, it says that Bitcoin should eat market share from the dollar, the euro, the pound, the yen, and the won. And at that point, if we’re talking about the things you can count on one hand that send Bitcoin to $1 million a token immediately, it’s that Bitcoin becomes a global reserve currency.

Hydrocarbons get transacted in Bitcoin—$1 million a token overnight. And so, on sentiment alone, it should go there. That’s why I think it’s so important. It went from a 1 delta to a 50 delta in the last 6 months.

It’s genuinely unbelievable. Man, this is just so much fun.

Yeah.

I’m not gonna lie. This is just so much fun to imagine a scenario where that happens. Look, Bitcoin—we all know what the benefits of this thing are, right? This is what it was destined to be if it was gonna work. This is kind of how it had to go, right?

Yeah.

When I look at what’s actually been accomplished, it kind of feels like a simulation sometimes, because everything just worked out kind of perfectly for Bitcoin. What I think is very likely to happen over the next 4 years is that, if there’s even a hint that we’re taking this strategic reserve seriously, other countries are gonna move on it. Actually, in my opinion, if it does get established—if the strategic reserve actually gets established—the United States is unlikely to be the first.

Hmm.

Because what’s gonna happen is that other countries are gonna see that the United States is doing it, they can move more quickly, and then they will do it.

Yeah.

Right? And so the way that I view this is, by the time the United States announces it, it’s a continuation of a trend, and that’s gonna be next level and incredible. And so, yeah, the game theory—exactly—is so favorable toward BTC. There’s very little downside to starting it for a smaller country if you have a 25% chance in your mind that the US is gonna start it. Also, you adopting it and your friends adopting it is gonna make it more likely for the US to adopt it, right?

Yeah. It’s the ultimate meme coin. So maybe what you do is you have 50% to 80% of your portfolio in Bitcoin until it hits $100,000, and then you scale out as it gets there. Then what you do with the proceeds is have some in Solana, some in Ethereum, and some in meme coins.

6. SEC Coins Make Their Comeback

I really like your thesis about how these SEC lawsuit coins are gonna pump. They’ve already pumped a lot, but they’re coming off some pretty abysmal lows. Imagine if Trump shows up on day 1, pardons Ross Ulbricht, and then suddenly just installs a new SEC chairman within the first 6 months. The new SEC chairman immediately ends the lawsuits against Uniswap, Coinbase, Cumberland—name your company that they’ve just gone and sued. All these lawsuits are just a complete waste of taxpayer money. Hundreds of millions of dollars are getting paid out to lawyers in Washington, DC, for absolutely no reason. As soon as the market catches on to the fact that that’s literally about to happen, I think all of these coins are going up another 300%, right? XRP, even.

It definitely feels like we could be in for one of those nonsensical crypto rallies in some of these coins that have been beaten down for SEC reasons. Now, obviously, you’re gonna want to get out. You’re not gonna want to sit in those things when they have $50 billion valuations. But for a trade, those might be great pumps to ride.

Yeah. This is gonna be a time where you just need to stare at your screens, stare at Dexscreener, take in all the right information, be in the right group chats, and discuss with people. Just sit in front of your computer and do nothing other than stare at the markets, because you can make millions and millions of dollars.

How much of your trading capital is on-chain versus on a centralized exchange? This is something that I’m not really good at yet. I have most of it on a centralized exchange right now because I’m not meme-coining.

Yeah, I just have a slightly different situation where most of my capital is on exchanges for trading it, but I have a nontrivial portion of that capital on-chain as well—probably about 15%. That actually grew substantially because of Geco. I aped a lot of Geco, and that’s done nicely. Anyway, that was good.

I aped Geco and then sold it for a 20% loss because I was like, “This one doesn’t resonate with me.” Good job holding onto it.

Yeah. I still think that’s a billion-dollar coin. But I’m also kind of delusional.

You’re also Asian, right? It’s just something you can relate to more than me.

Kind of. Not really. I’m not that kind of Asian. The way I view on-chain, for me, is that I use it just to ape really small-cap cat meme coins, and then hold them and forget about them for a long period of time, and hopefully they do really well. That’s my on-chain strategy.

It’s very different from a lot of people’s on-chain strategy, right? People will actively trade on things like Hyperliquid and dYdX. People will have a substantial portion of their trading stack on-chain, and people will also be running different types of strategies on-chain. They might even trade ETH on-chain. For example, something like Neiro has done very well today. A lot of people might have bought that on-chain. But my wallets are almost exclusively for things under $50 million market cap.

Okay. So basically, you’re in it to invest in... It’s a perverse VC-style investing casino that you have going on. You’re basically just buying low-market-cap coins and then recycling gains into new low-market-cap coins on-chain. On centralized exchanges, you’re doing what I’m doing: the opportunity’s here—invest; this thing’s looking toppy—move into something with higher opportunity; and if I can’t think of anything, rotate it all back into Bitcoin.

Yeah.

Because you literally do not have $1 in fiat right now in your crypto allocation. This is just too good.

Yeah. One thing that I’ll say is that I think it’s really easy to lose money when your money is everywhere, and that’s why I don’t love on-chain.

Just repeat that. Everybody needs to hear what you just said. That’s so true. I’m gonna take that.

It is really easy to lose money when your money is everywhere because there’s just a lot of mental friction. For example, if you use Robinhood, Fidelity, and Coinbase, and have 13 wallets, with some in Solana and some on this chain and that chain, you just end up forgetting about things. You end up not managing all of your trades effectively, and everyone but the few most disciplined people on the planet who go check everything every day and monitor everything every day just ends up forgetting about things, missing opportunities, and losing money.

There’s no point in spreading yourself out unless you’re literally running a portfolio of VC-style bets. If you’re just holding a bunch of call options or throwing spaghetti at the wall—pick your analogy—then it’s okay to have a bunch of different tokens. But I think once you’re past $100 million to $200 million in market cap, you should not have more than 10 coins.

Yeah. I would agree with you. Is there anything the crowd wants to ask us? What else is going on? Talk about PNUT. Dude, I do.

Oh, that’s a good one. That’s a good one.

I love PNUT. I think PNUT is the perfect combination of a political meme and an animal meme.

I love PNUT.

It’s everything. I think it’s just perfect. I don’t actually own any. I need to buy some.

Me neither. I just think it’s a great meme. PNUT and GOAT are my 2 favorites right now. I think I can totally resonate with them.

Yeah.

GOAT just ripped again. This is why you wanna have capital on-chain. If I had a bunch of Geco, which I don’t, I would be selling some to buy PNUT and GOAT.

Here’s what I like. Honestly, I’m a lifelong Democrat who obviously got a little bit red-pilled through the crypto world. One thing that I love about this Trump win—and since we’re talking about PNUT, I feel like I can bring this up—if you’re in crypto, if you’re a crypto trader, doesn’t it feel like you’ve been a little bit gaslit for the last 4 years, like you’re participating in some underground terrorist economy of grifters and crime? That’s what everybody’s sort of branded our industry as, and now that it’s not that anymore, I think just that alone will bring in investment.

I think some of the memes, like PNUT, are kind of an outlet for that angst. The image behind me is from The Shawshank Redemption. The guy obviously has his moment at the end of the difficult period in his life.

I honestly think that those of us in the crypto space have been through a rough few years. If you'd invested at the peak of 2021 and held on—which many people didn't—you have, at best, broken even, right? So now is kind of the time when people are starting to feel a bit vindicated, and I think that the PNUT meme kind of encapsulates that zeitgeist. That's why I like it.

Yeah. I like it because it's a squirrel. But is that why you like it? That makes sense, bro, but it's also just a squirrel that got murdered by the Democrats.

I agree. I'm trying to find the address for this thing so I can just ape into some PNUT. I feel like it's big enough that I can talk about this.

Mm.

I feel like it’s big enough that I can talk about this.

You know what? This is a livestream. We don't have to be super structured. I'm going to buy some fucking PNUT right here.

Yeah, I'm going to buy some PNUT too.

Give me that PNUT.

No, give me—no, you fucking give me that PNUT.

All right. Give me the PNUT.

That's what I'm talking about. Actually, I gotta—

Oh, I'm happy.

—I gotta go to dinner in 5 minutes. I forgot about that.

Dinner.

Yeah.

Meaning you have to move more funds on-chain to buy more PNUT. Okay. Well, have—

Yeah.

— a nice dinner wherever you are. I know what you're gonna be doing.

I'm in Puerto Rico because I have property here, and it's really difficult to manage if you're not here every once in a while. For example, I'm trying to rent this place out, and the showers don't have hot water, so I'm trying to figure that out so that when I rent it to somebody, they don't call me in 3 weeks and tell me that there's no hot water. Anyway, it's not crypto and not your problem, but—

Sounds like you need to sell some of that GIGA and get a guy. You need a guy. If you have real estate, you need a guy.

Yeah, I do. That's the issue.

Oh.

But—

You're getting taken. Okay, fair enough.

The issue with Puerto Rico is—I’ll end with a story for you. Three years ago, when I used to live here, I was getting a generator installed for the house. I called the generator company and said, “Hey, I need this specific type of generator. Can you install it in the house? Can you install it here? I picked out an area for you; it’s all good to go.”

They came over, looked, and said, “Yep. We have it. Give me 6 weeks; I’ll install it, no problem.” Done. So 5 weeks later, since it was a week before the installation, I called them and said, “Hey, are you guys ready? In a week, you’re going to install that generator.” They said, “Oh.”

“That generator—the generator that you already paid for, which is supposed to be installed there? We don’t have that anymore because we installed it somewhere else, and that was our last one.”

I said, “Wait. Wait a second. The generator that I paid for, that you said you were going to install, that you said you’d slotted me for—it’s no longer there, and you don’t have any other generators on the entire island?” The guy said, “Yeah, sorry. That supplier’s out.”

So I asked a very simple question: “Do you have any other suppliers?” The guy said, “Oh, yeah, I do.” He hung up, called me back in 15 minutes, and said, “Oh, we found a generator from another supplier.” I’m just like, “You do?”

Oh, okay.

Well, thank you for suggesting it. Listen.

Why did I have to suggest to him to call another supplier?

If it makes you feel any better, Avi, I’ve experienced the exact same story as you with my place in LA, except replace the word “generator” with “fence”—or, you know, an iron gate, metal, aluminum, steel gate, whatever it is. The end of my story is sad because the guy didn’t end up finding another source of metal; he just disappeared into the ether. So may I humbly suggest paying half now and half later next time?

Yeah.

Yeah.

That’s better.

As traders, we’re so transactional. We’re used to stuff happening quickly, right? We don’t like to haggle with people, but that’s how most of the world works outside of crypto.

Just for anyone’s information, I think people are talking about this: there’s no capital gains tax in Puerto Rico, blah blah blah. There are good tax benefits. I lived here for 3 and a half years, almost 4 years. I loved Puerto Rico. I loved being a citizen. Obviously, I saved a ton of money, but I ultimately had to make the hard choice to move back to New York because my philosophy now is just: make more money.

Make more money.

Just make more money. If you’re moving somewhere to save on taxes, don’t. Just make more money.

Yeah.

I think that’s a better way of saying it: there’s no reason to move somewhere unless you really have a strong view that the next 1, 2, 3, or 4 years of your life you’re going to make a ridiculous amount of money. Otherwise, live where it makes you happy.

Yeah. Where makes you happy, Avi?

That’s a good question. Honestly, I do love Puerto Rico; I’m not going to lie. Now more than I did before, because I got into water sports and started off-roading, which is really fun, by the way.

Mm-hmm.

Like an ATV? Or do you just use a 4-wheeler?

I have a Bronco.

I’m sorry.

I have a Bronco. Super fun.

That’s awesome. I love the Bronco.

Ouch. What’s this? Hold on one second. Dude, PNUT’s ripping ever since we mentioned it.

Do we count as micro-influencers? None of this is financial advice. We don’t know what we’re talking about. We’re talking about a frigging PNUT coin. Don’t listen to us.

I don’t know if I can sell GECO for this. GECO looks like it’s about to rip. Anyway, I gotta roll. Love you, Jonah.

Love you, buddy. Congrats—

Talk soon.

—on surviving this. Not financial advice. Stay safe, you all, and do your own research. Good talking to you, Jonah.