Solana vs Ethereum: Which Should You Own? | 1000x

Not to make this comparison—but I’m going to make the comparison because why not—it was consensus that Ripple sucked 4 years ago, 5 years ago, and 6 years ago. And then it was true: It just sucked. It never got adoption, it never got picked up, and it never worked.

It’s not improbable that ETH becomes the Ripple of this cycle, where everybody thinks it’s going to pump because it pumped really hard last cycle. Ripple pumped so hard in 2017 that it ripped everybody’s face off, and then in 2021 it literally did nothing. When you have all these people who have made money on Solana, I don’t know why they would come back to ETH.

this episode is brought to you by perennial Finance the onchain defi primitive redesigning derivatives for the defi native you'll hear more about perennial later in the [Music] show welcome back to another episode of 000x We are back online after our in-person discussion at GAS, which was really fun. Jonah, I really enjoyed speaking with you in front of that audience. That was a good test of our ability to perform in front of a couple hundred people.

It was awesome. Thank you to everybody who came. The room filled up early in our conversation, and we had some good vibes in there. It was good to see people actually showing up for a crypto conference feeling bullish and excited to be in the space for a change after a very painful bear market.

I thought that was a really nice indication of where we’re at. It was also very institutional, just in general. The quality of the people I talked to, the quality of the builders, and the quality of the investors—all of them seemed to really understand and know what’s going on in the space more than they have in the past.

The market is definitely getting a little bit smarter, which is either a good thing or a bad thing, depending on how you look at it. It’s always nice to be trading against a stupid market, so I think it’s a little bit of a double-edged sword. But it was good to see that the industry itself seems to have grown up a nontrivial amount over the last 2 years.

I think we’ve learned a lot of lessons. I didn’t see too many shorts in the audience or onstage, which is always good.

One thing that struck me about the conference, Avi, was that you had people in there who—it feels like the last couple of bear markets have filtered out grifters and the get-rich-quick scammer type. This crew seemed like a genuinely curious, more institutional crowd.

That’s the nature of this conference. It’s for TradFi—it’s the bridge between TradFi and crypto. The people there weren’t hardcore anarchist Bitcoin-class-of-2011 crypto enthusiasts. They were more like people who maybe got their feet wet in 2021 and stuck with it, a mixture of tech people and finance guys who are trying to bridge capital from TradFi into crypto, which I thought was pretty interesting.

We were talking about this just before the podcast. After the conference was over, we went to the Ethereum dinner. There was an Ethereum dinner and a Solana dinner. Maybe it’s because I faded Solana at $180, but we didn’t get to go to the Solana dinner.

I’m sorry about that, Avi. I’m sorry you got dragged into my shit show there.

Look, you fixed it. You got in at $30.

I did. Not enough. Never enough, unfortunately.

I think the Ethereum dinner was interesting because it feels like there’s a lot going on on that chain, and a lot of hatred, FUD, and fear going on inside of crypto about ETH. ETH should be performing right now, and it’s not. We got a little look behind the scenes at what’s coming at the dinner. It’s pretty interesting.

I do think that ETH has been really destroyed. It’s not a matter of thinking—I know. I can see it on the chart. You can see it from the community and across the board.

You have all these L2s struggling really hard to get any uptick. Obviously, you have Arbitrum, Optimism, and zkSync, but people have really just forgotten about ETH in a big way. My personal view is that it’s really hard for that to change unless you get an ETH ETF approved.

I was unfortunately incorrect on my last calls. I thought that after the Bitcoin ETF, the narrative would switch very quickly to an ETH ETF. It did for about 6 days, and then everybody decided that the ETH ETF wasn’t going to get approved, so ETH started trading really poorly again.

The issue is that ETH has always been the chain where the real projects build and go. The DeFi projects of the world and the RWA projects of the world all like Ethereum because Ethereum signals a little bit of institutional strength. It has a little bit of an institutional bent to it and a more grounded, less pie-in-the-sky bent because it’s been around so long and it’s the number 2.

The reality is that’s just not what’s interesting to people right now. It’s not what’s interesting to investors. There’s nobody putting their money into things being built on ETH, and that’s making it really hard for ETH to succeed.

It’s also one of those things where the risk profile of ETH is way too similar to Bitcoin right now. If you can imagine Bitcoin at $150,000 and ETH at $10,000, the difference in return isn’t that big between the 2 in the eyes of crypto people. The difference between a 2x and a 3x—how much does this really matter when you have meme coins popping off 100x everywhere?

That’s going to dampen your interest in ETH. I’m getting increasingly nervous about ETH. I was bullish for a bit in the beginning, as the ETH narrative went away, but I stepped away. Now I don’t even know when I would step back in. I don’t know if you have a different take.

I have a slightly different take. I’m a long-term ETH bag holder. I got in at a good price and I just haven’t really sold. It’s pretty much the only token I’ve held for the long haul.

I’ve had some short-term wins in other things, and I’ve done right with Bitcoin as well, but I did really right with ETH. I think the reason I’ve held ETH through this cycle is partly laziness. There’s a bit of laziness attached to holding something and never selling it, but also because I believed it was good diversification from Bitcoin.

I’m as bullish as ever on Bitcoin for all the reasons we’ve hammered ad nauseam on this podcast. ETH, I thought, was sort of the DeFi L1 where serious people build serious projects, just like you said.

Solana has really shown up and become a performant place to deploy a decentralized application, and serious people are building there for sure. I guess that’s kind of scary for ETH, but at the same time, I think maximalism is stupid.

When I bull-post ETH on Twitter, the Solana people say really nasty things. But I think it’s possible to envision a scenario where both tokens drastically outperform Bitcoin. Neither of them has breached its all-time high from the previous cycle yet, while Bitcoin has.

Both of these alt-L1s can definitely go up quite a lot from here. I think there’s a scenario where Bitcoin rallies 2x and ETH does a 5x. Here’s that scenario for you, Avi.

You develop a meme-coin ecosystem on Base that attracts people. It’s already kind of happening. You have 2 casinos now. The Wynn isn’t the only show in Vegas, right? There are a couple of places where you can go gamble. It doesn’t all have to be on Solana forever.

So you get your meme-coin casino. Then something that nobody’s talking about right now is games. Animoca shilled us the Parallel trading card game back in November. What if one of those things just lands on ETH?

All those projects are distributed across different L1s, but I think ETH has a couple of interesting ones, including that one, that could pop off. Those are kind of call options.

Ultimately, I think the big one is TradFi settling things onchain—tokenized funds. You and I both agree that crypto is a better way to move and spend value than TradFi rails. I think tokenized funds are a massive use case that nobody’s really paying attention to.

BlackRock’s BUIDL fund is at around $300 million in assets now. Then the final thing is the ETH ETF. BlackRock filed an application for an ETH ETF, and the final approval is due from the SEC this May. Their record for ETF approvals is something like 800 yes and 1 no. They know what they’re doing.

You make the biggest returns when you buy stuff that everyone hates. You don’t make the biggest returns when you buy hyped, amazing narratives after they’ve just gone 10x. I think this might be a good contrarian opportunity.

At the end of the day, the issue is that there’s just no narrative for Ethereum. You outlined several potential narratives that could materialize. The RWA narrative could come up, which is very reasonable, because if institutions are going to work with a chain, it’s very likely going to be ETH first and everything else second.

But that’s just not what people are interested in right now, and it’s not driving any real value to the chain. I think this is more of a slow burn.

When you step back, it goes back to risk-reward. At the end of the day, everything in trading is risk-reward: What’s the upside versus the downside?

The issue is that there’s no pie-in-the-sky case for ETH.

I just named a couple of pie-in-the-sky cases.

In terms of price, though. I think $10,000 or $15,000 isn’t enough to get people interested.

The way I view this is that if you want ETH exposure, the best way to do it is 1 of 2 things. Either you buy really high-end NFTs that are doing well, or you buy the L2s on top of ETH that you think are going to benefit.

For example, Base could be a catalyst for ETH. If Base really picks up, then it could be a catalyst. But what we’re seeing is that Solana is doing such a good job recapturing flows.

Over the last 2 weeks, a lot of flows went out to Base. But over the last 5 days, a lot of those flows left Base and went right back to Solana. There’s no stickiness right now among the ETH L2s.

The concept of decentralization just doesn’t seem to be entering people’s minds in the same way it did in 2021. There’s a lot less idealism this time around. 4 years ago, you still had a little bit—I mean, not a little bit. 4 years ago, you had a much larger libertarian bent to crypto. Now you don’t really have anything.

If I’m thinking about constructing a portfolio and you’re bullish on ETH, I still don’t think you buy ETH outright. You buy ETH beta that can do well in a couple of different scenarios.

You just have to avoid the trap of getting stuck in ETH, because it’s possible that all of this stuff comes together in 2 years. But if Bitcoin is going down when RWAs are taking off on ETH, I don’t think that’s enough to keep ETH high. That’s the issue.

You touched on something in the middle of that that I think is valuable to dissect. It’s not just that the ETH bag holders and the ETH ecosystem people aren’t in the right nightclub or at the right party right now, which is Solana. It’s more that this is happening while they’re getting decimated on their NFTs.

Their Bored Apes are going to zero. Their Pudgy Penguins, their Squiggles—all of this stuff, like the meme coins and the moonshots of the previous cycle, the Moonbirds as it were, are all either getting rugged or bleeding down to zero.

I think the only reason why EtherRocks and CryptoPunks have survived this onslaught is because the token standard for those projects predates ERC-721, which is what Blur effectively prices. You have this engine for flooring NFTs that’s just destroying value across the ETH ecosystem at the very same time as people are 1,000x-ing their cash on Shark Cat, Cat Face, Handsome Cat, Moon Dog, and Dog Moon on Solana.

That’s great, but again, I feel like the best time to get into these narratives is on the lows, not on the highs. ETH is hated. Maybe this is the time when you should be looking to add.

All of this meme money that’s theoretically getting made on Solana—I’m heavily invested now in Jeo Boden. I’m overinvested, and I need to get out. I’m overinvested in Jeo Boden, and I have a little allocation to Monkey Haircut, Shark Cat, and a few others.

It’s cool to watch those coins go up, but I haven’t sold anything. If everybody went to take profit, we’d see very quickly that these 100x or 1,000x gains on paper are actually more like 2x to 3x for the early people and negative 50% for the late people.

We’re in a tricky part of the cycle here. Volatility is picking up, it’s unclear what the next narrative is going to be, and if you’re right, Avi—if all of these big ETH wins land in the middle of or after another bear market, then who cares? But if they land in the next year while we’re still pumping, it could be ridiculous.

this episode is brought to you by perennial Finance brenal is quickly becoming one of the go-to derivatives platforms and liquidity layers for all of defi so let me tell you a little bit about them there are kind of three things you need right when you're thinking about a place and a platform to trade on first one great trade execution second one low fees and third of course an onchain permissionless platform and perennial Nails all three of those buckets with the launch of perennial V2 they've made all of that possible by introducing a ton of new features such as B oracles which reduce trade execution to seconds lower fees competing with major centralized exchanges and minimizing fees for both takers and makers fully modular markets which allow the protocol to support any price feed out there and fourth cash settled right the trades are cash settled in USD not in crypto perennial allows you the trader to gain access to deeper liquidity with only a fraction of the tvl how it works is that perennial enables a two-sided Market made up of both Traders and liquidity providers right Traders deposit the assets to get leverage exposure while liquidity providers provide these pools of capital to earn fees for taking the other side of the trader position brenal allows you to trade crypto hers FX and coming soon nfts and more backed by some of the best investors in the industry perennial is a must checkout platform if you're a crypto Trader go check them out by clicking the link in the description give thousand XM credit go check out for any you're going to love them all right let's get back to the show

It’s hard to say, because the reality is that now, when you have all these people who have made money on Solana, I don’t know why they would come back to ETH.

Have they crystallized it, though?

Even if they crystallized it, maybe they just take it out, or they wait for something else. There’s no reason to come back, especially now, because it’s not like you’re stuck on Solana in the same way you were back in the day. There are so many off-ramps. You can go straight to any exchange and deposit the Solana USDC that you’ve minted.

That value will leave Solana if there’s something to buy on ETH. There just isn’t anything to buy on ETH right now. Half of the value in Solana is probably wealth that came in from ETH and Bitcoin.

That, for sure. The question is whether it’s been lost forever. My bet is that a nontrivial percentage of it has.

We just need BlackRock to file the ETF—and, I mean, approve the ETF. That’s it. At the end of the day, that’s the only thing that’s going to save the ETH-BTC ratio right now, unfortunately.

You just have no meaningful adoption of anything being built on ETH, except for all the shit going on on Base.

I take your point. I’m not denying that it’s bad right now on ETH. The ETH dinner was a little bit gloomy, even at an otherwise very happy conference.

But let’s say that it’s consensus that ETH sucks, it’s consensus that the ETF is going to get denied, and it’s consensus that Solana is the new L1 where serious people build serious stuff and serious people build fun stuff.

What if the SEC just gets “dadded” by Larry Fink again and an ETF for ETH gets approved? No one expects it or is paying attention. Then a bunch of retail that isn’t on Crypto Twitter and doesn’t know or care about crypto-native narratives says, “Let’s buy some ETH.”

You don’t want to be short ahead of that. It’s a contrarian trade.

I agree. You don’t want to be short ETH. You probably don’t want to short ETH, and I also think that spread trades are really mid-curve in this market right now.

I think there’s a lot of alpha in being directional—in just picking a direction and sticking with it.

My hesitation comes from the fact that even if we do get a pop from the ETF, it’s probably going to be short-lived. There’s only so much allocation.

I also think that a lot of people in the TradFi world are very comfortable with BTC, and they’re still less comfortable with the idea of ETH. Still, not to make this comparison—but I’m going to make the comparison because why not—it was consensus that Ripple sucked 4 years ago, 5 years ago, and 6 years ago. And then it was true: It just sucked. It never got adoption, it never got picked up, and it never worked.

It’s not improbable that ETH becomes the Ripple of this cycle, where everybody thinks it’s going to pump because it pumped really hard last cycle. Ripple pumped so hard in 2017 that it ripped everybody’s face off, and then in 2021 it literally did nothing.

Yeah, it went to around $3, didn’t it?

But it went from—I mean, it basically 10x-ed, and that’s it, which is nothing.

I think you have a scenario where ETH is caught between a rock and a hard place. The only thing that can save it, I think, is a really phenomenal user experience on an L2.

You need Arbitrum, Optimism, and zkSync to have the best user experience by far. They have to beat Solana. You have to have people come back over.

The other thing is that Solana has now proven that one of Ethereum’s biggest moats has eroded. What was one of the biggest moats for ETH? You had to program in Solidity, and the vast majority of people in crypto knew how to program in Solidity. They weren’t programming in Move, and they weren’t programming in other languages.

Now that doesn’t matter. So many people know how to program on Solana. So many people know how to program in different languages that are used in crypto. There are a lot of people coming into this space who are developers and never need to learn Solidity anymore.

If you want to launch a project, you can just stick with a language that’s more common. That moat has been eroded. The moat for the EVM has also been eroded because so much volume is happening off of Ethereum.

Ethereum no longer has the moats it used to have, which makes me think that it’s now just a trading asset. You can long it when you’re bullish on ETH for the next 2 or 4 weeks, but I’m just more bearish on Ethereum over the long term than I am on Solana.

This is what I actually said on the panel, and that was maybe the most talked-about statement. Everybody else came up to me afterward and asked why I was so bullish on Solana and not as bullish on ETH.

I was never a Solana guy. I wasn’t somebody out there from the beginning saying, “Solana, Solana, Solana.” But what I’ve seen is that ETH has had an inability to execute, and the L2s building on ETH also haven’t been executing particularly well, no matter what they say.

You kind of have to reevaluate your opinion at a certain point and realize that these guys haven’t been able to bring real volume and real people to their platforms. Solana seems to be doing a better job at this. It’s captured the zeitgeist of retail.

At the end of the day, institutions go where retail is, because that’s where the money is made.

Solana is definitely doing an amazing job right now. I’m not going to debate that. But do you really think ETH isn’t bringing over real volume and real people?

Let’s talk DeFi for a second. Here’s another way you know. Some of my friends are onchain traders—serious, professional, robotic onchain traders. Here are some anecdotes from the onchain world of providing liquidity in DeFi.

Apparently, the whole MEV sandwich-party situation on Ethereum ended when a major—let’s call it a major on- and offchain market maker—decided to lay off their risk onchain at the mid. They’re showing up at every market that used to be super wide and tightening it up.

They’re saying, “We’re long Doge from this centralized trade we did, so we’re going to offer Doge at the mid onchain.” Apparently, that’s killing a lot of the fat and the edge on Ethereum.

Meanwhile, Solana is this crazy money party right now if you’re there to make money in WIF and BONK and all this fun stuff.

Part of me thinks that says nothing about the volumes or the people. Volumes on Uniswap are enormous. I don’t have this committed to memory, but I think they’re outpacing any other DEX.

I’m not saying there’s no volume. But if you look at the TVL of Ethereum and then the volume on Ethereum, it still pales in comparison to 2021.

Despite the fact that Bitcoin has passed its all-time high, you’re just not seeing the activity that you would expect. Things like Solana are seeing much higher volumes and activity than they saw in 2021.

Not much higher, but they’re trending up nicely.

I think what you’re left with today is this bad taste in your mouth of, “Okay, ETH just isn’t doing as well as it was 3 or 4 years ago,” in terms of projects, volume, and activity. You would think that in a crazy market like today—in an insane market like today—it would have spread more.

Maybe I’m wrong about why, and it’s just that we still haven’t seen retail come in in full force. Maybe crypto people just aren’t interested in using Ethereum. Once retail starts to come back in, which probably requires Bitcoin to be closer to $100,000 and flirting with that level, then maybe you see volume come back to ETH.

What’s interesting to me is that even today, with prices at all-time highs, people excited, and things happening in the crypto world, your average market participant who was around in 2021 isn’t here right now. They’re still not here.

I can’t really put a finger on why, and I don’t know if they’re going to come back. But I do think it boils down to the fact that it’s very, very difficult to replicate a COVID effect.

It’s super difficult to replicate that effect, where everybody was inside, nobody had anything to do, and everybody was online 24/7. It’s going to be hard to get back to where we were in 2021.

You have to at least think about the idea that there might not actually be retail coming back this cycle. If that’s the case, what do you want to focus on, at least until we get to $100,000 and things get absolutely nuts?

You’re focusing on the crypto-native stuff and Bitcoin. This has been said ad nauseam, but I still think it’s true, because you can’t really make a strong bet on when retail is going to come back in.

You can front-run meme coins, and that’s just onchain degeneracy, but you can’t make as strong a bet on NFTs, games, or some of the more serious stuff. To your point about Bitcoin, though, I’m hearing some interesting anecdotes from the oil market. They’re not going away.

The recent one—and I heard this from a very credible source—is that PDVSA, which is a major Venezuelan state-owned oil entity and refiner, is offering discounts on export cargoes if the buyer pays in Bitcoin instead of dollars.

Seriously?

They’re sanctioned, right? That’s why.

That’s right. They’re sanctioned. They basically can’t get banked with dollars anymore.

The sanctioned Venezuelan oil trade—half of the world’s oil comes from sanctioned countries. That’s an exaggeration, but at least 20% of the world’s oil comes from sanctioned countries. That’s more than 20 million barrels a day, and a barrel is 42 gallons.

It’s an ocean of oil every day coming from sanctioned entities. They have no dollar banking. The United States is just the worst.

If you’re Venezuela and you want to sell your oil and receive dollars, you have to wait 17 business days for those dollars to hit a shell company owned by a shell company owned by a shell company. Or you can get your Bitcoin in 15 minutes.

Maybe retail isn’t coming back to mess around on Aptos or play games on Avalanche, but there is money coming into this. It’s just different money.

But that sounds like it’s just all Bitcoin money.

Exactly. Bitcoin money.

I think that’s probably the main difference. This money is very unlikely to travel to other sectors.

Correct. The BlackRock Bitcoin ETF money isn’t going to travel to ETH either. But you were the one shouting at me that eventually it does move over, so I don’t know.

Maybe the ETH community is just too wounded from the NFT carnage and the lack of sandwich fun and all this other stuff to get excited about degeneracy, while the Solana mafia is on a high for obvious reasons.

I was screaming that it was going to rotate over to altcoins in general from the people who already hold BTC. What’s clear to me is that crypto natives are just going to rotate to meme coins, or crypto natives are going to buy DeFi.

The one thing that is maybe changing my mind a little bit happened today. We’ll see what happens with the airdrop from Wormhole. The airdrop from Ethena was really good, and you’re going to have these large events where real products that are building real things actually generate interest.

I’m watching this closely, because if Ethena really takes off, or Wormhole really takes off and does well and sustains that performance, then it might catalyze a move toward real projects.

Maker has done very well. What could happen—and this is me playing devil’s advocate against myself—is that people take profits in meme coins and move into these more interesting assets. That then catalyzes a run and a boom of capital in projects that might actually do well.

One thing that could happen is that Dogwifhat sells off by 80%, but it sells off because all of that capital is moving into “safer” assets, which you would probably expect at some point.

Does an airdrop actually kick-start an ecosystem? Will Wormhole take off because of the airdrop?

It’s possible. More importantly for Wormhole, if you’re not allocated to Solana right now, you probably should be allocated to Solana right now, because it’s going to create a lot of wealth for people.

Everybody is going to take that Wormhole money and buy Monkey Haircut or whatever, and that’s probably going to be a very big boon for the Solana ecosystem.

It’s kind of the same way that when AVAX announced that it was going to have a fund dedicated to buying meme coins on AVAX, everybody wrote it off, and then all the meme coins on AVAX did really well.

That’s how I feel about Wormhole. It’s telegraphed, and everybody sort of knows this, but I genuinely don’t think there has been enough front-running flow yet.

When’s the Wormhole airdrop?

That’s a good question.

While we’re talking about Solana, one of my favorite analysts in the Solana ecosystem is 0xGumshoe. You should go check out the 0xGumshoe Twitter account. They did an interesting analysis of airdrop price action.

Basically, what you’re supposed to do is farm the airdrops that you know are coming, slosh a bunch of money around in those systems—Wormhole and whatever—get your airdrop, sell it immediately, and then buy back down 80%.

That’s a good trade. Don’t hang on and get caught holding the bag. Go to 0xGumshoe’s account and learn how to trade an airdrop. I wish I had known that last cycle.

That’s interesting and fair. I’ll go check that out. 0xGumshoe—what a good shout-out.

See, I follow Solana Twitter. I like it. I’ve got some Solana. It’s fun.

The one thing I’m curious about is this: You talked about the barbell strategy, where you hold Bitcoin for obvious reasons and play the meme-coin casino for obvious reasons. Are you starting to lose hope that any of the stuff in between those 2 extremes is going to start to emerge and generate value?

If it does emerge, are we going to be too late? Is it going to be the 2028 cycle when real shit starts to take off? I’m getting worried.

I don’t necessarily think it’s going to be that long. I think we are going to see real things take off. I just don’t know if you’re going to be able to make money on them in the short term.

That’s why people are so interested in meme coins. That’s where the money is made.

For example, take an RWA platform that tokenizes a bunch of assets and enables the trading of all these assets. How much is a platform that issues tokenized products actually going to be worth? That’s the question.

The platform for facilitating it?

Do you mean the application or the L2?

I think the L1 is what benefits. I believe in the fat-protocol thesis. I don’t think it’s been disproven. If anything, I think it’s been proven.

If you have these tokenization rails getting built, that means millions of new ETH wallets getting created and funded with ETH, and millions of institutions having to buy ETH to support all of this and pay gas.

I disagree, because I think a lot of these applications are going to happen on L2s. There’s just not going to be that much demand for ETH generated, because these L2s are going to have very low fees.

Then I go one step further and think about the applications themselves. Are the applications going to generate any value? How much is Aave supposed to be worth? How much is Compound supposed to be worth? How much are these platforms supposed to be worth?

When you can value them like a real business, the answer is not very much.

I’m still stuck on the idea that you can make a lot of money investing in good products in crypto if you invest at good valuations. This is obvious, but if you can do pre-seed or angel investing, if you can get your money into a fair launch or an early product with a great team, then you can make a lot of money if it’s a good product.

It’s probably a safer bet. If you can invest in a cutting-edge lending protocol at a $25 million or $50 million valuation as it comes out, maybe it gets to $500 million or $600 million. You’re probably not going to lose that much money if it’s run by a good team.

In contrast, it doesn’t matter how good the team is behind a meme coin. You can easily lose money if there’s no appetite for it. The upside just isn’t there in the same way.

That’s why crypto-native people aren’t going for it. But I still think it’s a slow-and-steady-wins-the-race situation. If you want to build wealth over time, you’re still supposed to invest in good products in crypto, sit on them, and not think about them.

Then you can have some sort of meme allocation. But in aggregate, what’s happening right now is that the interest just isn’t there.

At the end of the day, we’ll see. Bitcoin sold off 5% today, which is a pretty big move for BTC. We tried to get through the $73,000 level, then we tried to get through $72,000, and now we’re back at $66,000.

I think we’ve both been bullish but a little more cautious around these levels in the short term, because things did get very overheated and there is a lot of open interest in the market.

At this point, I’m seeing so many indications that are bullish for BTC. The geopolitics in general are phenomenal for Bitcoin. The world is becoming a much more dangerous place, and more than ever I want to hold on to BTC for the long run.

I agree. We were chatting about this offline. Everybody holding BTC on a cold wallet should educate themselves on downloading the private key and spending it if Ledger or Trezor disappears.

You should really learn the mechanics of what you’re holding, because increasingly it looks like we live in a world where you may just need to pack up your stuff in your little go bag and move.

There are reports about Iran potentially launching rockets at Israel. Nobody wants that. Even if you don’t care about the Middle East at all, or it’s not part of your reality, that’s just going to draw in a lot of problems.

The geopolitical aspect of Bitcoin has never been more relevant, especially in the developing world.

The meme-coin thing is the best casino in the history of the world. Your odds are better than betting it all on double zero. I get that, and we don’t need to beat a dead horse, but everything else in between is a bit of a head-scratcher.

Both of us tweeted out asking what we should talk about this week. Should we do a lightning round where I ask you questions that people replied to yours, you ask me questions that people replied to mine, and we try to answer in short little sound bites?

Yeah, let’s do it.

Avi, what do you think about the death of NFTs? Why aren’t NFTs doing well?

I think Blur brought in—you know how Cardano doesn’t go to zero? Blur made the bad NFT projects go to zero. The fads go to zero.

Blur brought liquidity in and made it possible. Anything that was blur-able got blurred. That obviously didn’t hurt the best projects or the grails. A CryptoPunk traded for $16 million 2 weeks ago.

I think that’s why they’re getting torched, because finally somebody figured out a way to devalue worthless things.

I also think that meme coins took the wind out of the sails. Meme coins are the NFTs of this cycle, right? They offer community, they offer outsized returns, and they’re highly correlated to the performance of the base asset.

All of those things are reasons why people bought NFTs in the first place. People were using NFTs to massively speculate on them, and I think what ended up happening is that meme coins took the wind out of the sails for those guys.

Even the NFT projects doing really good work—Pudgy Penguins is actually building a real brand. I saw them in a department store. They’re building a real brand, and I think they’re going to be around for a very long time.

The issue is that crypto-native people just aren’t buying them, and those are the only people interested right now.

I do think there’s probably going to be an NFT renaissance at some point in the next 6 months. That would be my guess. I like holding on to good NFTs—Squiggles, Pudgies, and obviously my rock. I think CryptoPunks are going to do well.

I think we’re going to capture the culture again at some point in the future. It’s just a matter of time. For now, they’re not going to give you crazy returns. I really don’t think Blur hurt NFTs as much as the market says it did.

I think it hurt them at the margin by providing liquidity, as you said, but I think the prices would have been reached anyway. People would have sold anyway. It just would have taken a while—a slow bleed instead of a quick price discovery followed by equilibrium.

Here’s one for you: Price targets for potential dips to buy and levels for taking profit. These people just want a plan, huh?

I actually think the $66,000 level is a good level to play for a bounce. I think it’s very likely that we range between $60,000 and $70,000 for a bit.

My view is that you probably should de-risk a little bit around $70,000. What you see in the chart and the market is that when we first hit $73,000, we sold off hard back down to $60,000. We came back up, and now we’ve rejected again at the $70,000 level.

Normally, you want to look at the daily chart. Starting on Monday, March 25, you see a green candle with a wick. The next day there’s a wick, then the next day there’s a wick, and then the next day there’s a wick.

You get 4 different days in a row where you can’t break through a certain supply level. That should tell you, “Maybe there isn’t enough buying pressure to get through this level. The crazy bid that occurred before isn’t here anymore, so I should start thinking about de-risking.”

Now you have an even greater reason to de-risk. I think it’s possible that we could trade down to $52,000. If we trade to $52,000, I’m buying this shit. I’m going ham. I’m going shopping at $52,000.

We have a few things happening. One is that we finally have our first lower high. If you look at the chart, you’ll see that pretty simply.

The second thing is that we’re in the process of breaking the trend line that’s been active since $40,000. We’ve been steadily climbing, and what these 2 things are telling me is that we finally reached a point where people are willing to offload enough supply to counteract the inflows.

Bitcoin can get very reflexive on the way down. There are a lot of people sitting on unrealized profits right now. When you look at a market like this and think to yourself, “It’s going to be pretty hard to get over $73,000,” that makes the risk-reward really bad for holding.

You generally tend to drift toward places where it’s difficult to figure out the risk-reward. Right now, it’s easy. The next real support level is at $53,000. There’s kind of one at $62,000, but it’s been tested too many times, and I think a lot of people already bought those levels.

The area that makes the most sense—the area where it’s difficult to determine whether the risk-reward is good or bad—is smack in the middle, around $61,000. You have the $73,000 top and the $52,000 bottom, so I think we probably end up there for a while. We probably get stuck there for a bit.

I have a slightly different take, and I think that’s super interesting. You were the voice of reason when we hit all-time highs. You said it probably made sense to take a little off and trade around the position. I was just euphorically bullish. I didn’t expect this.

To the downside, if we trade down to $50,000, it’s time to go shopping. You close your eyes and buy with both hands around there. If we’re down at $50,000, maybe you try to buy some Solana if it’s around $150 or something.

I don’t know about ETH. Bitcoin and Solana are probably what you buy.

To the upside, I thought you were Mr. ETH bull. What happened? You don’t want to buy any ETH?

I don’t know. I bullied you too hard.

You may have, dude. I’m long enough that you’ve scared me. I’m definitely not selling any ETH, though. I’m just hanging on to that one.

I think Solana—I’m underallocated. How about this? You buy Bitcoin, and you buy things that you’re underallocated to.

If you’re long to your ears in Solana and don’t have any ETH, maybe you buy some ETH on a pullback to $50,000, as well as Bitcoin.

To the upside, I just think it’s insane to sell before the halving. We got our answer on why it’s wicking. The government has shown up with its Silk Road Bitcoin, and it’s funding America’s operations, paying for bridges that fell into the water, government salaries, and so on.

The Silk Road Bitcoin is hitting the market. It seems like they’re sending it to Coinbase. Ultimately, you’ve got a big seller, but you’ve also got lots of buying. The market is caught between a rock and a hard place.

Then the halving is coming up, and the miners are going to have literally half as much selling to do. Stock-to-flow dynamics should bring us to higher levels.

I don’t really have a take-profit level in price space. I have it in MVRV Z space.

MVRV Z, for those who aren’t aware, is a z-scored metric—essentially a number of standard deviations—where you look at the market cap of Bitcoin divided by the realized cap. The realized cap is defined as the price at which all the UTXOs were spent, a volume-weighted realized price.

Go look up the blog post. I don’t really know how to articulate it, because it’s a mathematical equation. It’s a really good predictor of cycle lows and cycle highs.

When MVRV Z gets to 7, that’s when I’m going to be selling assloads of Bitcoin. I see no reason to pick a price ahead of that. You have to watch where the transactions get spent so you can determine that realized value.

It’s definitely a good long-term approach. I think these metrics are good for trying to time cycle tops and bottoms. I’m not calling the top of the cycle by any means, but I am saying that the next 3 weeks are going to be pretty dicey.

If I were you, I’d consolidate my gains.

That brings me to a great lightning-round question. Someone tweeted at you: Where are we in the cycle?

We’re in inning 6. My guess is that we probably don’t get past $100,000 until the end of the year.

What ends up happening is that we have this selloff, which probably lasts for a month or 2. Then we make a run up to $80,000 to $95,000. I don’t think we break $100,000 the first time we get close. Too many people come in and sell off.

Then we get another few months of sideways action. At some point next year, we break through the $100,000 level, have a crazy run—maybe up to $120,000, $130,000, or $140,000—and then that’s it. Then we’re done.

That’s my bet.

Do the memes participate?

Once we break through $80,000, I think memes just continue to run for the next 6 months, with multiple 80% drawdowns in between.

For example, if Bitcoin trades to $52,000—which I think there’s a reasonable chance it does in the next 2 months—every meme is going to be absolutely destroyed. That’s probably a really good time to start buying them.

Interesting. Where does all the money get made? Which innings does all the money get made in?

A lot of the money was made already. I don’t think it’s crystallized—I think it’s still sitting there.

But we still need our crazy AI bubble. We need the first AI coin to hit $50 billion as people decide it’s the future. I think we need Doge to hit $50 billion to $75 billion. We need Doge to test its all-time highs, and then I’ll start thinking about taking a lot off.

I’m heavily fixated on MVRV Z-Score, but I’m sure there are better ways to do this. You probably know what they are.

This has been a weird cycle. The selloff was so ferocious, all-encompassing, and terrifying, sprinkled with regulatory jalapeños that burn your face off if you try to take a bite, and then it came roaring back so quickly.

I can’t help but wonder if this isn’t going to conform to the normal psychology of the halving and the 4-year cycle, 2 years of which are supposed to be a weird bull market.

This one feels like it could be a little runt cycle, characterized by crazy meme coins, followed by another selloff and apathy, followed by a plateau of enlightenment where real-world use cases start to take off.

I think that’s probably right. I tend to agree that we’re probably past the idea of cycles. We’ve graduated from this.

What we’re going to see is slow, consistent growth from Bitcoin over the next 5 years, with a lot of 40% drawdowns in between.

Long and strong. It’s the way to play it. Long and strong. Buy $52,000 with me, boys.

Maybe we could close on a brief anecdote. My one artwork splurge was from this guy Bran Symondson. He’s an ex-British Marine who got shot with an AK-47 in Afghanistan and is now an artist. He covers weapons with butterflies. They’re pretty awesome. Check him out—Bran Symondson.

He was asking me for crypto-trading advice, and my advice to him was to stick to what he knows. Don’t try to develop a side hustle like day trading meme coins or attempting to hop onto this or that technology narrative.

It got me thinking: How do we develop an edge as traders in this market? Ultimately, what I got him onto was memes, because that’s something he can understand as an artist. He can also sell his artwork for ETH or Bitcoin or whatever.

He should stay long because he understands price appreciation from developing artwork. I advised him away from all the software-heavy stuff in the middle—L2s like Arbitrum, Optimism, and Polygon—because he’s not focused on that.

Maybe as crypto traders, we should all try to find something we can relate to in order to trade it. There are so many little pockets of this space that are spooky and hard to understand.

My brain starts to melt with the AI and software stuff. I don’t get it. But holding on for dear life and the commodities angle—I can totally get that.

And memes, as a podcaster learning from you, Avi, we’re starting to understand virality a bit, so meme coins make sense.

I don’t know if I can follow that up with much. At the end of the day, I got into this because I think crypto has the opportunity to change the world. I do spend a lot of time thinking about the actual real applications of this space.

I’m just a trader, and I’m cognizant that my job is to make money. I need to go where the money is, so I pay attention, I research, I look, and I invest.

At the end of the day, right now I’m a trader. That’s why I’m not super invested.

Well, stay safe out there everybody. It’s getting choppy. None of this is investment advice. Be careful, do your own research. And Avi, great talking to you, man.

Pleasure talking to you too, Jonah. Take care.