What To Own This Cycle?

I ultimately think that Bitcoin, the benchmark, is going to lead us a lot higher, and so we'll probably get an alt season in those memeable assets. The question is which assets and when, and the final thing I'll say on that topic is that the opportunity cost of holding the wrong token is very high right now.

Today is a good one because we finally had a little bit of movement in the market. We were going sideways for a bit, sort of chopping around that $118K–$120K zone, and then we scared the shit out of everybody by dumping hard over the weekend. People are kind of freaking out on the timeline a little bit. It's not so bad this morning, this nice Monday morning, because we bounced back a little bit. But Jonah, are we supposed to be nervous right now?

1. Will H2 Be Bullish?

Nah. We're not supposed to be nervous. Come on, permabull here speaking. I think, honestly, here's what I think.

There is a lot of amateur hour going on on Crypto Twitter. It's kind of comical. I think that most people, myself included—not to be an elitist or anything—when they start trading, their only framework is green candles are bullish, red candles are bearish, right? That's it, and most people look at daily charts with daily candles. So, you see a few red candles, you freak out and sell. You see a few green candles, you get greedy and buy. That's human nature; that's how everybody starts off as a trader.

2. Ads (Kraken OTC, Katana)

I think this latest wave of buying that took us up to $118K attracted a new retail user base, a new wave of 17-year-old crypto gamblers who were onboarded by this momentum, and they're learning how to trade for the first time. What we're seeing is sort of the fledgling price action of people who don't really know what they're doing. Also, people have gotten into the mindset of DCAing steadily into crypto over the course of the last few years. Now we're on the highs, everybody who's ever bought Bitcoin is in the money, and people don't really know what to do next.

To your very wise words, Avi, we never really stabilized on all-time highs. We certainly didn't this time. We retraced back to $113K on data that's really not that meaningful to the long-term thesis. I think it was some payroll data, some Trump-not-chickening-out stuff. We'll talk about all the macro reasons why we retraced shortly, but ultimately, what really matters to me is that I think a lot of participants either bought fresh coin on the highs or added leverage to their existing position on the highs, which is a greedy thing to do.

This little flush down to $113K kind of reset the clock a bit and cleaned out some unhealthy positioning. To finish the thought, the people who are scared right now are scared for reasons that they'll have totally forgotten about if we're trading at $118K again. This is all temporary to me. What do you think?

I'm with you. I think what ended up happening is that the market itself got a little bit over its skis. There was a lot of exuberance. People were talking about how things like Solana and Sui, going all the way down the risk curve, were getting treasury companies; you were having altcoins pumping across the board while Bitcoin wasn't going anywhere—it was going sideways. I think you just needed to flush out a little bit of the leverage and exuberance that was in the markets.

If you go and actually look at the open-interest charts and the funding rates, they came down from where we were even just 5 or 6 days ago. If you go to July 23 through July 28, you're seeing funding rates generally continuing to be above baseline. You saw a buildup in open interest despite no move in Bitcoin, and that tends to be a bad sign. If you're seeing people pile on leverage into something and it's not going up, maybe it's time for a little bit of a breather.

But I think this is not a structural change in the market. Everything that we've talked about for the last 3 months, 4 months is still there and still looking good. We're seeing that now with the bounces coming off the lows. ETH is up 5% today, and it's almost back at the highs. It basically retraced 70% of the move already. Bitcoin's lagging behind a little bit, but altcoins are also bouncing back nicely.

I personally just think that we're going to get these tiny little shakeouts, and that's okay. The equity markets also can't be understated as being a part of that. You saw rattling over tariffs, which sent down the S&P 500 3.5% from the highs, and now the Nasdaq is up 1.5% and the S&P is up 1.3%. This just happens sometimes, and this is not a time to get worried.

I think we're still on track for my broader idea: we get a crazy move into the end of the year post-summer. I think August can be a bit slow. I wouldn't take out any major crazy trades in August, but September, October, and November, I think we're going to see some pretty crazy action in the markets.

Yeah, it's actually common across all markets to have a very quiet August. Participants are out in Long Island, on the beach eating lobster rolls; they're not necessarily at the desk trying to make their year. From September through December, basically, I think it's an old adage that you're supposed to expect slow price action and gappier moves in August.

But, just zooming out more broadly, I totally agree with your point. Bull markets tend to get volatile as you hit the seventh or eighth inning time-wise, and in crypto, the eighth inning of time in the bull market is probably the second inning of price, because most of these big parabolic moves occur at the very end. It would be a shame to freak out and sell all your stack because Bitcoin went down $5,000 a token off of all-time highs and the red candles made you bearish, but you had no other rationale for selling, and then it just pumped straight to $140K to $180K. That would be something to kick yourself over.

3. Crypto Exchanges

I'm not personally doing that. I don't see any reasons to get long-term bearish, at least until the midterms, which is another year-plus. One other feature that we should talk about: shameless plug here, the 1000x agent alerted me to the fact that I hadn't really been watching the ETF flows, but apparently there were $1 billion worth of outflows between last Thursday and Friday. Do you think that's retail just exiting Bitcoin in frustration, or do you think it's an unwind of a basis trade, because, as you said, funding rates have come off?

It's a combination. I think it's one of those things where the ETF tracks Bitcoin's price now, and that's kind of just what it does—or what I'll say is, it drives Bitcoin's price. When you see $812 million of outflows and you see that the Bitcoin chart went down, I think it's very reasonable to assume that people holding the ETF chucked out some Bitcoin, right? And that's why the numbers used to be, in my opinion, a better predictor of future price action of Bitcoin, but they're not amazing.

It's not really that useful today because it just tells you what that day's price action is. The reason is that there was a growth rate to the Bitcoin ETF. There was new capital coming in that was completely underallocated to Bitcoin, and it was shifting over into this structure. Every day, there was going to be more and more of this sticky capital being added to the ETF. I think the rate of sticky capital being added to the ETF has slowed dramatically. Now a lot of the ETF capital that you see coming in and coming out is traded capital.

So, you see what I'm saying? The inflows and outflows, instead of being just net additions, are most likely just trading now.

4. Ads (Kraken OTC, Katana)

Yeah. In the vast majority, it doesn't really mean anything, right? If $812 million comes out, that $812 million probably came from people who are actively trading this ETF and will buy back in when either it gets back to where they sold and they FOMO in, or it goes down to where they expected to rebuy. This is mostly trading capital now.

5. The ETF Impact On Bitcoin

Yeah, that makes sense. I didn’t know what to think about it because the ETF used to lead Bitcoin. Now it either reflects what’s already going on or lags as a result of active capital trading the basis. Basis is, when Bitcoin rallies, basis goes up; then arbitrageurs buy the ETF and sell futures to capture the basis. So it’s kind of a knock-on, lagging effect. It seems like less of a signal.

Moving over to ETH for a second, a lot of people have been looking at the ETH inflows, which I don’t have in front of me right now because I’m an idiot. There have been some substantial ETH inflows into those ETFs and an institutional narrative. One thing that I’ve noticed, and that I also wanted to chat with you about, is that the ETH/BTC chart looks a lot like the BTC chart. Is ETH—

What? What are you talking about, Jonah?

If you overlay the 2, today we’ve got a big green candle on ETH/BTC, and we’ve also got a green candle on Bitcoin. So basically, what I’m asking is: Is ETH just levered Bitcoin right now? The answer is probably no, but to me, if ETH/BTC goes up when BTC goes up and goes down when BTC goes down, ETH is just trading like high-beta Bitcoin.

I think that’s fair, but what’s interesting about when you say “beta” is—well, let’s isolate that, right?

Yeah.

I think there is an alpha component here. The reason that there’s an alpha component is because of these treasury companies that are buying up a ton of ETH. There is a world in which Bitcoin goes sideways to slightly down and ETH dramatically outperforms. If Bitcoin stays between $112,000 and $118,000 for the next month, it’s very possible that ETH can put in 15% to 20%, even if Bitcoin is down 2%. In that case, I wouldn’t necessarily call it beta, right?

Obviously, I think if Bitcoin goes up, ETH is going to go up more. If Bitcoin goes down a lot, I think ETH is going to go down a lot more. But there’s also a middle zone where I think ETH does well, specifically because there are a lot of treasury companies coming online for ETH. They’re not that big yet, but they will get big, they will get structurally important, and they will blow up at some point.

I’m saying it now, but ETH is in a good spot when it comes to flows and technicals. I took a beating publicly on the last podcast because people were like, “Well, haven’t you been bearish on ETH for a really [expletive] long time?” My answer is still yes. But I admitted it last time on the podcast when I was talking about how good ETH looked from a technical perspective. I missed it.

I think ETH has probably looked good from a technical perspective for a while, in hindsight, and I was too stuck in the fundamental-analysis zone that I think we’ve both been harping on for a while. What’s happening now is purely flow-driven. It’s purely the fact that people see ETH as a secondary catch-up trade, and it has a lot of these exogenous treasury companies coming in and buying it.

What’s actually hilarious to me is that I’ve been pinged a lot recently about these massive shorts on ETH. Have you seen that CME chart?

No.

The CME shorts on ETH?

If you can share it, that would be great. But if you don’t have it, no worries.

Yeah, it’s phenomenal. Hold on. CME Ether short interest. Basically, it’s insane. There’s a lot of short interest on the CME when it comes to ETH. I think people looked at that and they’re like, “Well, it’s time to squeeze the [expletive] out of people,” right?

Yeah.

It’s kind of funny to me personally, because I know that the vast majority of these guys are delta-neutral. They’re capturing a basis trade. But crypto is a meme, man. Let’s not over-intellectualize it sometimes. There are moments where it just acts purely as a meme. If enough people are looking at that and going, “Well, short interest and treasury companies are buying. Time to buy this,” and ETH continues to be strong off the lows, I think that’s meaningful.

One thing that ETH has always struggled with is being strong off the lows, at least over the last 3 years, when ETH/BTC has been going down in a straight line. Now ETH is bouncing pretty aggressively. It just shows you there’s life and interest. To be honest, I don’t own any ETH right now, but I probably should reallocate a little bit for the trade.

While you were talking about that, you were getting me bullish on ETH, and I was thinking, “How much ETH do I want to buy?” I don’t want to have to sell Bitcoin and realize a tax gain to buy ETH when it feels like ETH is just for a trade anyway. Maybe the right way to do it is to buy some ETH on leverage against the rest of the portfolio, because we did retrace just a little bit.

Just get a little bit levered long ETH with Bitcoin as collateral—Bitcoin that I have on exchange. It feels like it is time to get long ETH for a trade. You mentioned that if we go way up or way down, ETH is going to trade as beta to Bitcoin. Maybe it moves 10% for every 5% move in Bitcoin, but within this more reasonable band, it just steadily outperforms.

We’re seeing that play out on the charts over a 1-month time span—not over a 6-month time span. ETH/BTC is technically solid, as you said. Maybe it is time to just—if you want to buy the dip—use some of your existing bags as collateral against a leveraged position buying a little more ETH. I think that might be a good trade.

I kind of want to do it, even though I feel disgusting being long ETH, because it’s such a mega-cap asset. It’s not like a 10-bagger or even a 5-bagger; that’s just not on the table, right?

I mean, it’s just a trade. You’re taking advantage of what I personally view as irrational exuberance in this market. I was on a podcast with our favorite guy, Santi, a little bit ago, and Santi made a very good point. He said, “This is an institutional cycle.” I think that was very astute.

This is an institutional cycle. What assets appeal the most to institutions? This is not a crypto-native cycle. The crypto natives are not winning this cycle by any stretch of the imagination. The memes are getting clobbered left and right. The only winners have been Bitcoin and these public companies—big winners.

ETH is the second-most institutional asset, for better or for worse, just because it’s the second-oldest useful thing that exists. What’s the third? Ripple. You have to understand where the money is coming from and what they’re going to buy.

If we agree—and you might not agree—but if you agree that this is an institutional cycle and they’re buying “institutional” assets, then you probably want to own a portfolio of Bitcoin, Ethereum, and Ripple until those flows subside. What do you think of that?

It’s hilarious. While you were talking, I just YOLOed some ETH on leverage. I honestly buy it.

Jonah, where do you trade, by the way?

My favorite liquid exchange is Kraken Pro. Now that I live in the US, I like it. I’ve tried a few independently. I like Kraken because you have ladders for stablecoins that are independent from each other. It’s not like beginner-mode [expletive], where you have just 1 USD-denominated line item like you do on Coinbase. You can trade USDT, USDC, and Tether versus dollars.

Why does that matter to you?

Sometimes I just like having everything listed separately. Maybe it’s an artifact of my time on the OTC desk at Cumberland. I don’t like having the exchange manage risk for me. It feels more organic to have all the assets listed as what they are. It feels more professional. It treats the user with more respect than simply saying you shouldn’t care whether you own Tether or USDC, whether it came in on Solana or Base, or whether it’s cbBTC or BTC.

Let’s just say it’s Bitcoin or it’s dollars. Especially after the deep depeggings that occurred in 2021, I feel like part of my lizard brain isn’t flashing warning signs when I can see what assets I actually have on there, as opposed to not.

The other thing I like about it is that it’s never gated my assets. With Coinbase, you dump $300,000 on there, and they’re like, “You can withdraw $8,000 until your KYC has been reapproved in 14 days.” That was a dealbreaker for me, so I switched to Kraken.

Coinbase is unavoidable because if you’re doing anything on Base, which we are, it’s a better bridge than most of the bridging sites people set up. I don’t know why these bridging sites that people set up are so sketchy-looking.

Crypto has a naming problem: crypto people and crypto founders can't just name something Citadel or Bridgewater. It's always something like Fartbridge.xyz or Pissant Pissantbridge LLC.info. Somehow, it just doesn't feel good bridging lots of assets from Base to the mainnet using one of the random bridging protocols. I prefer to just bridge on Coinbase and deal with their gating problem.

Anyway, I use Kraken for most of it. When I lived offshore, I used Binance, but now I live in the United States, so I feel like Kraken's the legitimate U.S. exchange. Anyway, that was all a tangent, I think.

No, that's fair, because I haven't actually done an exchange review in a while. I also use Kraken, but that's mainly because I just hate the Coinbase interface.

Me, too.

I literally just can't stand it. I haven't actually gone and done a survey of exchanges in a while. I probably should.

I like Kraken. I guess there are bigger exchanges like Binance and Bybit that are offshore. I know Binance's UI really well.

I also, unfortunately, know Binance's UI very well.

Yeah, I do not have access to it. It's just off.

Is Binance going to come back?

I don't know. And even if it does, it feels tainted, you know. I just wouldn't want to use it.

I think it is back. To me, there are 2 U.S. exchanges, and Kraken is the only one that doesn't disrespect your intelligence every time you log on.

So that's why I use it. It's a good UX. It actually feels like Hyperliquid copied Kraken. When I've just looked at the read-only version, the sliders, the interaction, and the different tabs are all very similar to Kraken. Not that I would ever use Hyperliquid as a U.S. user.

Binance is kind of different. It's more for the Asian brain, not for the American brain.

There's actually a time way back in the day when I think you could still switch the settings—or maybe it was automatically set when you were in Asia—when Binance had red when things were going up and green when things were going down, because in Asia, red is good.

Red is lucky.

Yeah, red is lucky.

I remember those days.

You know, it's funny. Asia is just another planet. If we have any Asian listeners, respect to you guys. For example, our housekeeper here is from Bhutan, and I got back from a month in France. She was looking at me and said, “Wow, you gained weight. You got really fat,” but not in a disparaging way—in a congratulations, well-done kind of way. It must have been a great vacation.

I was just like, man, it's like red: up is red, down is green. What is wrong with me? At first, I was confused, and then I realized it was a compliment.

Wait, you're Bhutanese? But isn't Bhutan supposed to be a ridiculously happy place? Aren't they always talking about it? Gorgeous country.

One of the happiest places on Earth.

It's a gorgeous country. Happiness is what they brand themselves as. In Paro, in the main intersection, they don't have a streetlight. They just have a guy in a full police outfit, in 110-degree, 100% humidity Southeast Asian heat, with white gloves, directing traffic around.

It's kind of a police state. Then you go hike up into the mountains, and it's just a bunch of monks and goats and spicy food and incredible temples. It's awesome. It's one of the most beautiful countries I've ever been to.

Their king is the 5th-generation king. They call him K5. He has his own whiskey. It's called K5. Highly recommend it. Delicious. It's another planet.

If I lived there, I'd trade on Bybit, but I live in Los Angeles, so I trade on—

I trade on Kraken.

Yeah.

Anyway, fair enough. I do miss Bybit. The thing I really hope comes—which is going to catalyze a whole other type of run, perhaps among altcoins—is U.S. access to all sorts of perpetual swaps and leverage.

Yeah. Cross your fingers, Jonah, that $HYPE is tripling when that happens. That is your big catalyst for Hyperliquid.

Oh, man. But speaking of Hyperliquid, is Hyperliquid over? People don't really care about it anymore. What's going on?

People have moved on to Galaxy and other memes because there have been a few red candles. Everybody's just forgotten why they're long Hyperliquid.

The nice thing about Hyperliquid is that when people trade on Hyperliquid—which presumably they're still doing—tokens get bought and burned or locked away in some vault. You don't need the timeline to be full of orgasmic excitement for Hyperliquid for the token to go up. You just need the exchange to survive, and it obviously will, given the conversation that we just had. There aren't a lot of choices for people out there, especially in the no-KYC space.

To me, Hyperliquid is this magical combination of an incredible exchange and incredible user experience. It's kind of like a mixer for people who don't pass the KYC test for, let's assume, legitimate reasons. Maybe they don't have a driver's license or a passport. They're just unbanked.

Anyway, it's a great product. It'll keep buying tokens. It's not institutional, though—not at all. It will become institutional when perps are made legal in the United States. Then everybody will just connect to it, and it'll probably become some sort of liquid backend for finance in ways that centralized exchanges can't, because they don't have open architecture.

But my one concern for Hyperliquid is that access to the U.S. market and legalized perps may also come with KYC requirements, which could nuke a lot of its—

6. What To Own This Cycle?

Yeah. No, I think that the market has just moved on from things that make sense, and we're now punting things that are fun and memes.

Yeah. I mean, if you look at the market right now, what is really pulling the 5–10xs? Like I said, these treasury companies, but you're also getting 10% moves.

What I will say is that Galaxy does have value associated with it, but I feel like people are trading it like a meme stock.

The way that people are touching it, they're trading it like a meme stock. It's gotten a lot of interest. It's kind of whipping around. People are calling for 5–10xs on it, basically because of a data center that they bought that is now transitioning to AI, which was a great purchase by them. Well done, Galaxy. That's going to confer a lot of value, and they've got a good core crypto business.

But, yeah, I feel like people are punting around crypto stocks like meme stocks now. Another great example of this is Coinbase. This is clearly not a fundamental trade.

On Wednesday, June 18th, we're trading at $254. One month later, we're up 72%. On July 18th, you're up 72%. That's the top. Then you're down 30% 3 weeks later.

This has nothing to do with crypto volumes or how much money Coinbase is making. That move is pure people aping in because crypto is hot and then aping out because there was a red candle. This is kind of a trading paradise right now if you're looking in the right places.

Circle, too. I mean, Circle, come on. Did we not call the exact top on Circle? Did we not say it's over for the Circle fanboys?

I personally also think it's over for the Coinbase fanboys. I'll buy some puts on that. I own some puts on Coinbase. I have for—

I think I bought them Friday morning.

Good to see that you're still active, Avi. You gave a speech a couple of weeks ago about how you were scaling back and getting more investor-like—more Warren Buffett-ish—but it's good to see that you still have the disease in your life.

No, I mean, I'm still a deeply diseased and sick human, which means that I need to trade in order to feel alive. I just don't feel the need to do it 8 to 12 hours a day, sitting in front of my desk trying to find every single trade. I guess it was more of a mental switch in my head where I told myself, “Hey, man, you don't need to capture every single trade that you could have possibly seen and understood. You can actually miss a bunch of trades and still end up making a lot of money in life.”

That was the greatest mental shift for me, and it's a super-privileged mental shift because, obviously, we've made a boatload of money, both of us trading, and so we can take that approach. That's why we're spending more time on actually building things right now. But, yeah, basically the way that I think about it now is that you take small swings where you think you have a little bit of edge, and then you take big swings where you have a lot of edge.

And you just continuously push the bar of what is edge a little bit higher.

Yeah. Over time, as you get more money, you just kind of push that bar a little bit higher, in my personal opinion. Obviously, you take flyers here and there. One flyer, for example, is TON. I took out a flyer on TON because I thought that it's almost unfathomable to me that they wouldn't try to do a treasury company for TON.

I think at some point it's going to happen, and Telegram is a good investment. If I sit back and ask myself what asset—any crypto asset—I could sell to public institutions on the public market, that's kind of it. So I did take out a little flyer on that one.

That's a good one. But, yeah, speaking about institutional assets, there are a couple of things to unpack there. The first thing you said about still trading but just not trying to capture every trade, I think, is very relevant because most people don't have 8 hours a day to try to scrape every penny out of the crypto market. Even if they did, the people who try just can't, more often than not. Maybe you could, but even I struggled with that.

So I think it's fine—you have to get comfortable with the idea of just missing most trades. Miss the small-margin trades and swing on the big-margin trades where there's a lot of juice. I think there's a lot of juice in—

Maybe. I agree with you. I think ETH could pop 30% in the next month while fuck-all is going on in the rest of the market, just from treasury companies lifting it, and you see it in the ETF flows.

Anyway, so there's that. The second thing is, you talk about institutional assets. You mentioned a few: Coinbase, ETH, XRP, and Galaxy. Let's throw in a couple of others, like Kraken, which could go public, and Bullish, which could go public.

I think we need to distinguish between institutional crypto and crypto that institutions will buy. Institutional crypto is everything on the list that I just mentioned. Galaxy is crypto x AI. Galaxy is an institution. Coinbase is institutional crypto. It's the OG institutional crypto. Kraken will be institutional crypto when it's tradable and public.

Ultimately, just because something is institutional crypto does not mean that institutions will buy that asset. In fact, the biggest bear case for Galaxy right now is that Jefferies and Goldman Sachs just initiated coverage on them. That's about as institutional as it gets.

What if—and I'm sure that their ratings will be good—Jefferies, I think, initiated it, or will initiate it, positively. Goldman, who knows? But let's say that these institutions just take a look at the financials, take a look under the hood in a way that retail won't, and say, “These assets aren't actually that valuable. Galaxy's priced to perfection. Maybe it'll go down. We initiate a bearish rating.”

I'm not saying that'll happen, or that it has, because it certainly hasn't. But that is a risk, right? Maybe you won't get tremendous institutional inflows.

The bull case for institutional crypto tickers like Galaxy and Coinbase is that the WallStreetBets Reddit crowd just decides to send it 10x because they can. I think, of all the different crypto institutional tickers—XRP, Galaxy, all of the ones you mentioned—Galaxy has the most potential to be one of these random meme stocks like Crispy Cream or Gamestock that just sends for absolutely no reason.

Well, I mean, it's got a great name. “Send it to the freaking galaxy” is phenomenal. It's great meme bait.

They've got a charismatic leader in Mike Novagratz.

I also think he's good. He's a good memeable figure to get out there, and he's very public. He's on CNBC every other day.

So they've got 2 boxes checked.

The 3rd box checked is crypto and AI. That's pretty solid.

The only thing we don't know is, are they actually going to deliver? Does it matter? Maybe not.

But the institutional money—if they really mess up, they're going to get a lot of people shorting them, and a lot of people are going to come in and try to hammer them. With that being said, it does seem like—and, okay, there's another, 4th box actually, that I just thought of—is that there are people out there who are making the fundamental case for it.

Even with GameStop, yes, it was a meme stock, but Roaring Kitty came out and tried his best to make a fundamental case for GameStop. That was actually very important to turning GameStop into a meme. This guy Duncan, who's actually a very intelligent guy and a good writer, has been writing a lot about how Galaxy does have the potential to really make a lot of money and might actually be undervalued. I highly suggest you read his stuff. He's got a lot of things going for him.

Yeah. Binary outcomes. Galaxy earnings coming up soon. I think the market will be focused on it. If they're good, I think you're going to see a lack of detailed analysis and just relentless bull posting and the thing maybe goes to $40 a share, up from $29 where it's trading currently as of this recording. Or it could trade down $5 or $6 and then it's probably a buy. I think Galaxy—you may actually have alpha if you're on Twitter all day or Reddit following this stuff, because that's the community that's going to determine price action.

They're kind of like a treasury company.

They're almost definitely going to go public. And, yeah, they're probably going to go public and act as a treasury company, and that might be a good trade. As you know, this market has now turned into a meme market. Our fundamental thesis be damned.

It will come back, and I think the projects that make money will win over the next 2 years. But the projects that are winning right now are the ones that have the most attention on them from the institutional side.

If Ripple Labs goes public, Ripple coin is going to the freaking moon.

Yeah. No, that’s true.

Okay. So, there’s a trade there.

Mhm.

And I guess that kind of brings us full circle. Maybe what these companies should do—just random dinosaur coins. Let’s take NEAR, for example. According to my sketchy online research, which I did in the last 10 seconds, NEAR has about $1 billion sitting in its treasury.

Maybe its protocol is pretty useless or just hasn’t been adopted, but that $1 billion could buy something valuable. Maybe you buy a medium-sized tequila company for that. Maybe you buy a company that produces widgets that people use in everyday life.

Maybe what happens is the phenomenon that we’ve witnessed with the treasury companies, where some pharmaceutical company with a pill that didn’t get approved just gets reverse-SPACed into a crypto ETH-buying vehicle. Maybe we’ll see something similar happen in the opposite direction, where companies whose tokens are useless but valuable, like XRP, NEAR, or Polkadot, start going and buying actual businesses.

They could use the money to become legitimate companies, just like Ripple did with Hidden Road, and assemble some sort of portfolio in a way that no one would have ever expected. I think what we’re seeing here is a trading-opportunity-rich environment where I think TradFi just doesn’t get it.

Maybe there will be some entrepreneurial, enterprising 1000x listeners who identify these sorts of opportunities and pick up a few scraps that become worth their weight in gold. It’s a complex landscape, and I ultimately think that Bitcoin, the benchmark, is going to lead us a lot higher, so we’ll probably get an alt season in those memeable assets.

The question is which assets and when. The final thing I’ll say on that topic is that the opportunity cost of holding the wrong token is very high right now. If you sit in XRP because you like it and it’s on the timeline, and you lose 35% on your investment instead of just holding Bitcoin, which is up 5% over the same time period, you have absolutely lost not just value through your XRP losses, but also the opportunity cost of the Bitcoin you could have owned.

These are treacherous times, so maybe it’s not a good time for active trading. Maybe it’s a good time to just winnow down, come up with your top 10 bets, and invest in the top 2.

I think there are a lot of trading opportunities happening right now. I wouldn’t say that this is the time to take your eye off the ball in terms of trading opportunities. They do exist. I just brought up 2, for example.

If you’re super bullish on the institutionalization and the fact that this is the “institutional cycle,” and you want to figure out what the institutions are going to buy, maybe you want to buy some TON or some Ripple as a trade. I would guess that September is going to be a big month for this stuff—definitely not August—so maybe you want to start chipping in now and then go harder a little bit closer to September, when Ripple probably announces.

I don’t have any information on this. I wish I did, but I don’t. I would assume that Ripple announces its IPO by the end of the year, and that would be a pretty big boon for Ripple.

But I do agree: if you go look at my list and see what’s actually trading well, there are some things. For example, Litecoin is trading very well. Litecoin went up 20% off of the weekend lows. That’s pretty freaking strong.

7. Macro Update

That chart looks good, I think, because people realize that Litecoin could also be rolled up into a treasury vehicle pretty easily, and that Litecoin is like the silver to Bitcoin’s gold. What was interesting to all of TradFi could very much work right now.

I was going to say this sounds a lot like 2014, when people were talking about ETH. People were like, “Oh, dude, there’s also another really cool one called XRP and Litecoin.” It feels like we’re 3 cycles ago right now.

Macro-wise, the setup is a lot more constructive, though, and fundamentally so, just because all of the different regulatory green lights that are flashing in Washington, D.C., are here. That wasn’t the case back then.

We’re about to be in full swing into a rate-cut cycle pretty soon. I think Trump firing the Bureau of Labor Statistics lady is a sign. The world of Twitter blew up over it. The liberals were very unhappy, conservatives were happy, just based on party lines, and nobody actually understood what happened there.

So, in your words, what happened there?

The jobs report came out. Trump didn’t like it. The liberal story is, “Oh, Trump didn’t like the data, so he fired the person who reported the data. It’s just like what Hitler did.”

The conservative approach is, “Well, it was a partisan report. The data was skewed, the methodology was flawed, so they fired the partisan person who’s responsible for putting it all together. Heads should roll.”

The truth is probably somewhere in the middle. Maybe there was a little bit of methodological skew. It was probably inappropriate to fire the person, but we live in an online, polarized world, so that’s what happened.

Basically, what it signals to me is that Trump is taking a more active role in things that are traditionally functions of government, where presidents have traditionally stayed away. I think that takes us one step closer to the appointment of Fed governors who are dovish because they’re dovish, not because they’re qualified, and maybe intervention at the Fed.

I think we have a massive set of green lights in Washington for crypto: the GENIUS Act, all the other random stuff, CLARITY, all this other stuff, executive orders, David Sacks, blah blah blah. Then there’s the other side of it: a more interventionist executive branch.

We’re heading into a rate-cut cycle, which is bullish for crypto. Getting bearish here because of a few red candles seems so stupid. I’m just watching this macro setup. The only thing, like you said last week, that could really send this thing into the toilet is, I think, a wild card out of Ukraine. Putin drops a tactical nuke or something.

Then—you saw the tweet by Dmitry Medvedev recently.

Which one?

The nuclear thing.

The back-and-forth between Trump and Medvedev happened, but Medvedev has no real power.

Yeah, so I don’t know. Anyway, I’m going to cross my fingers for no nuclear war.

I do, unfortunately, have to end this podcast, but this has been an absolute pleasure, Jonah.

As always, talking to you. I even YOLOed some ETH on leverage in the middle of our chat. I always learn something here. Thank you for making it good.

We’ll talk soon. Later.