AI 紧张情绪、加密现实主义、隐私币与交易教训

Good stuff is going up over time, and bad stuff is going down over time. It's becoming like the stock market: if you make money, if you're a good product, if you're growing, you go up. If you don't have that, you go down. Most of the stuff in crypto doesn't have that, so it goes down.

All right, guys. Welcome back to another 1000x podcast. I hope you didn't miss me too much in my absence, but we're back and better than ever. Bitcoin defended $100,000, and the markets are ripping on the news that the shutdown might be ending.

Yeah, things are starting to look up. Even in my time off, I'm a horrible addict—truly horrible—when it comes to this stuff. I can't look away, so I was checking prices, staying abreast of Twitter, and people got really bearish, Jonah.

1. Avi’s Viral Advice

I think you talked about this with Max on the previous podcast, but this move has really tilted people. We basically sold off in a straight line from $125,000 to $100,000, and it seems like, for a 20% move, we shook out a lot of people. Sentiment was pretty dire, wasn't it?

2. Crypto’s K-Shaped Market

I think people are still all-in on crypto. A lot of the community on CT has 100% of their personal accounts invested in crypto, which is probably the right trade if you can stomach the volatility and you're mostly in Bitcoin. But if you're in altcoins, you're rinsed, and the stress level is high.

3. Tariff Refunds?

I feel like people have accustomed themselves to this trajectory of 3 years of up only, and now we're kind of sideways to small downs. That's messing with people's minds. But you mentioned the shutdown ending; another thing that could end is the tariffs.

Yeah, that's kind of the thought that was running through my head. Is it better for us to keep the tariffs and have Trump hand out a tariff dividend to retail, or is it better to hand that money to the reasonable, level-headed people in charge of running businesses?

My answer is, it might be better for us if we keep the tariffs, because if you get airdropped a $2,000 tariff check, you're probably putting that straight in the market. It's a decent amount of money.

Yeah. It's like COVID 2.0. I think Trump's not trying to distinguish between rich and poor, either. It's just, like, here's whatever it works out to—$700 for every man, woman, and child. This is ridiculous.

Yeah. I mean, what's amazing is how much money the tariffs have made without tanking the economy.

Yeah.

Right. We don't know for a fact that it won't have a long-term impact. We might not see the impact for another 2 or 3 years if the tariffs stay in, as businesses potentially don't reinvest cash because they don't have it.

4. AI Nerves & Market Main Characters

All that cash might have gone to reinvestment—building new warehouses, whatever. For God's sake, Ford needs that money to burn. But at least right now, it's collecting a lot of money, and it's not tanking the market because the entire market is AI. The whole market, everything—

Everything is AI. It's the Sam Altman burn-a-ton-of-money trade, which recently has been making me more uncomfortable.

He's such an enigma. We're solidly in the middle of the trade, it seems.

But it still makes me nervous. Does that make sense?

Yeah, it makes me nervous, too. He's the main character not just of his space, which is AI, or perhaps broader tech; he's the main character of the entire American economy right now. It's kind of a little bit like the way Sam Bankman-Fried was the main character of the entire economy back in 2021, when people were asking, “Hey, is crypto the future?”

OpenAI's revenues are between $10 billion and $20 billion. They're talking about spending trillions. There's a lot of unfulfilled promises in there, kind of like crypto had a lot of unfulfilled promises when FTX was painting its logo on that arena in Miami—or stadium, or whatever.

The vibe is very similar for me between SBF and Sam Altman. Obviously, both Sams had legitimate, very impressive business careers before their current end-state gigs. Sam Altman's a little bit more real. I mean, I wouldn't say a little bit; he's a lot more real than Sam Bankman-Fried, right?

He's accomplished; he's run Y Combinator. It's not a small thing.

Sam built something real, too, before he hyper-gambled it all into oblivion. And yes, I agree with you: Sam Altman is more real than SBF. But still, when they interview him on television—okay, fine, he's not swaying back and forth from overdosing on meth like SBF was, but he's still like, “No, no, I definitely didn't murder that guy.”

Yeah, definitely didn't kill him or have him killed, or, you know, “How dare you accuse me of that?”

I mean, kind of a weird thing to ask in the middle of an interview, to be honest.

Hey, what happened to that guy who disappeared? I mean, look, that's getting into conspiracy theory stuff. If I'm interviewing him, I'm probably not asking that question, but—

Why? I just want a character who's legitimate and normal. Yeah, neither of us are, clearly, and our listeners hate it when we try, but why can't we get a main character who's both legit and normal? Do they always have to be this freakish?

I don't think normal people get into positions of power like that, except for maybe Jensen Huang.

He seems about as normal as it gets for running the largest company in the world.

He's just a guy who worked at Denny's and now he's the richest dude ever.

I think it has to do, maybe, with how quickly it all happened. He had 20 to—I think 20 to 25 years of reasonable wealth and running a reasonable business, and that probably gave him good grounding for this mega shoot-up.

Whereas somebody like—well, Sam Altman's younger, but definitely someone like SBF—was just catapulted into absolute insanity at a very young age. I mean, younger than I am now, and I still feel pretty young, but I'm 30; he was 27 or 28. You're not equipped to deal with these kinds of things at 27 or 28, I think.

So, you put out some great advice for 20-somethings, Avi. That's the most viral thing you've ever tweeted.

It is the most viral thing I've ever tweeted. Look, it doesn't hold a candle to your story about whatever happened that I won't repeat, that all of our listeners know about, that I can't repeat for legal reasons, apparently.

We can talk about it. We just can't go into details, according to my legal team.

Well, that's where you get into trouble. Anyway, it was good. It was one of those tweets that you just fire from the hip. It takes you 28 seconds to write, and you send it off without thinking about it, and then you come back and you're like, “Oh, wow.”

I didn't spend time crafting that tweet; that wasn't a crafted tweet. It was a spoke-from-the-heart kind of thing where you just put it out.

Right now, I was dealing with something not related to the markets at all, in any way, shape, or form. Some people were asking me, “Did you get liquidated?” I'm like, “Did I get liquidated? It has nothing to do with the markets.”

But I have been thinking about this kind of stuff, and I think it's useful because I've seen so much consternation and sadness on the timeline. I thought it would be useful. I think a lot of these people who listen to the podcast, or are on Twitter or in crypto, are younger—probably below the age of 30—and life is long.

But you have to attack it properly. I definitely took a very unconventional path to end up where I am; I just went straight into crypto. I really do think the most important things you can do are the ones that I talk about: taking action.

Read as much as you can and network as widely as you can, but make sure you don't dilute yourself into thinking that your network are your friends. Your friends are your friends, and your network is your network; they're 2 very different things.

You're a role model, Avi. People really loved your advice. It's good. I recommend everybody go check out Avi's most recent viral tweet.

If you're going through any kind of liquidation, financial or otherwise, go read this tweet and think deeply about it. It also helps that our audience is probably a lot of twenty-somethings and, according to my Twitter analytics, 98.9% male.

Yeah, this is very male-oriented advice, to be completely honest. This is not particularly female-oriented. It can be. I just think that most of the women I've come across in my life don't have the same goals as men.

I think, in aggregate, men are more likely to read this, because men are often more delusional than women. Your average 22-year-old guy thinks to himself, “I'm going to become a fucking billionaire and destroy the world and rebuild it in my image.”

Women tend to be like, “Hey, that's probably not going to happen, so let me focus on reality.” But change does happen. There are a lot of women who do amazing things and change the world, and so this advice can be for them. But I did write it from the perspective of a male.

5. Crypto Realism

Yeah, I loved it. I think women having realism versus men being delusional is probably a theme that applies to the conversation, just bringing it back to crypto, on Crypto Twitter right now. It's also probably why women consider crypto trading to be the 3rd-least-attractive trait in a man, in front of only—

Dude, I thought it was gambling and pornography.

That survey had to have been produced by a hater. I don't believe you, because when I talk to women and tell them I trade crypto, you should see the reaction.

When I flashed my Solana Seeker last night at Bungalow, they didn't know what it was, but once I was done explaining it to them after 3 hours, they were like, “Wow, man, you're so cool.”

I mean, yeah. Basically, the crypto market's in for a bit of realism right now. I saw this amazing Glassnode chart. I'll try to pull it up so that they can put it in this recording, of OG selling, and basically this tweet around the Glassnode chart. There's basically a huge concentration of OG selling right now, like there's never been before.

So, a lot of us dreamers in crypto who believe that Bitcoin's going to a million are running into this wall of reality hitting the market, which is that a lot of big wallets are liquidating—big wallets that haven't really done anything for a very long time. Whenever that happens, there's this fear like, “Hey, am I missing something? What do these early visionaries of Bitcoin know that I don't?”

My argument, which we talked about a couple of weeks ago, is that just because OGs are selling doesn't mean that this thing's going to stop. Basically, this is an IPO moment. This is what the tweet said: It's an IPO moment where Bitcoin has just IPOed, and now a bunch of early insiders are transferring wealth to new entrants.

That doesn't mean that the price can never go up again. Plenty of publicly traded equities, Nvidia to name one, can 1,000x while their stock is available for anybody to trade. This isn't even the beginning of Bitcoin. This is the beginning of the beginning. This is the road to infinite capital coming into the space.

There's going to be a ton of dispersion over the course of this process. Bitcoin is a sure bet that I'm willing to gamble a tremendous amount of money on, for me anyway. The problem with the rest of crypto is that you can go horrendously wrong now.

6. Ads (Kraken OTC, Peaq)

It's not like we're just having everything-goes-up-only altseasons now. We're going to have a few winners, and most tokens are just going to go straight to hell. But to Max's point from last week, shorting is also an extremely perilous, fraught game.

7. How to Short in Crypto

Yeah. In order to short, you have to be extremely tactical. You have to be a trader. You can't invest in a short, right? You can invest in a long, but you can't invest in a short.

What do I mean by that? Well, a few things. You can look at metrics to go long. I mean, I was just looking at this earlier. Outstanding loans on Aave are hitting all-time highs. Maple Finance keeps sucking up capital, and they keep growing.

You can look at those things and say, “Okay, well, the market might not appreciate it now, but if this keeps going the way that it's going for the next 6 to 8 months, I'll be able to eat the pain. If it goes down 50%, I'll buy more, and I can go invest.”

On the short side, freaking Cardano was like a $20 billion market cap for 8 years.

Like Tron, you know, I mean—

You really have to be tactical. You can't hold shorts in the crypto business. I mean, you can't really hold shorts in the equity business either now, because we're just in an everything bubble.

You can short them versus SPY, though, because equities do underperform the index. You can do pairs trades. Maybe that's what we should do, Avi. We should become like the Jim Chanos of crypto. We should just short—we should be long Bitcoin and short—

It's just too painful, because you can't short anything. The best shorts that I find tend to be low liquidity, and so you can't put on a tremendous amount of size.

Really, the only way—and going back to the tactical point—the only way to short effectively, in my personal opinion, is to have a good handle on flows. I've talked about this in the past, but if you can track down, “Okay, Worldcoin is getting $40 million a week dumped on the market,” you can take advantage of the flows.

But you have to get out when the flow ends. You're constantly monitoring, right? It's like, “Okay, well, I think a lot of people are going to sell this asset for X, Y, and Z reason over this X, Y, and Z time period. Therefore, I'm going to go short it and maybe buy some Bitcoin against it to reduce my risk profile in case the broader market goes up.”

That's the only way that I would ever short in crypto. That's how I short in crypto. I do take shorts when you're super tactical and you're like, “Okay, a piece of news comes out about an asset, and the asset's up 40%. That's insane. This makes no sense. I'm going to try to short it here and cover 10% down by the end of the day.”

Shorting news is actually a great strategy, but all these things are tactical. There will be no Jim Chanos, because it's way too easy for a total scam to just 5x. It's tough with unlocks, though.

Right?

No, but I'm saying that's the only way you could do it: by looking at VC unlocks.

Is there a way—I'm just brainstorming here. I've never talked about this or thought about it before. Is there a way to compile VC unlocks? I know some platforms have done it—the Tie, maybe Blockworks Research, not sure—where you just have all the VC unlocks lined up, and then you could create some systematic strategy that just shorts them versus Bitcoin.

You don't want to be short versus dollars in case crypto as a whole goes up, but you just short them versus Bitcoin ahead of unlocks and then cover like a week after or something. You could maybe build a systematic strategy around that and tokenize it.

It's hard to maintain. Part of it is that you're not actually sure when the VCs are going to sell. So you have to assign some sort of understanding to, “Okay, yes, this coin might have $1 billion unlocking, but how much is being sold?”

Yeah.

That is a question that requires work. It requires a lot of phone calls. It's pretty manually intensive. It's much better if you have analysts do it for you.

I just think that the bang for the buck for your average person out there, for the person listening to the podcast, is that he needs a short, man.

8. AERO/ENA & Hate Trading

If you're a sophisticated market participant—which you guys all are after listening to this podcast, of course—and you're trying to build a trading desk and revenue streams, if you're trying to turn trading into a business, then yes, obviously, shorting has to be an integral and core component of this, especially pairs trading.

There are good pairs trades out there. I mean, one of them, which you beautifully outlined, was the AERO-ENA trade. The VC unlock—everyone gave you so much shit. I want to hammer this into people's heads: the more hate you get for taking a trade, almost always, the more directly correlated it is with the quality of the trade.

And it's not like it's a truly stupid idea, right? You built some sort of model; you actually thought about it. If you put in effort, you think, “Okay, maybe I have a good trade thesis,” and you put it on Twitter—

And you just see it getting ripped apart: “No, no, I like this more now. I like this way more.”

Right? Unless somebody tells you, “Oh, you're wrong because you miscalculated this.” Right? Then find it.

But the ENA shorts are out in force, and guess what it's done? Nothing. VC unlocks: zero additional uptake. No one cares. I guess people like to hate on me and say, “Ansem replied to my tweet.” I just wrote a tweet: “ENA,” with a picture of the chart puking. He wrote, “Bottom.” Okay, Jonah is a counter-indicator, whatever.

The reason why I like Aerodrome and not ENA is because one represents institutional uptake and more assets getting traded on-chain rather than less, which is a theme I can get behind. The other is basically a protocol that's linked to that and performs when there's more TVL. In order for there to be big TVL, you need big institutions to park big capital on that platform, which no institution will ever do because it's, one, a public protocol. It's not private like one of the much-vaunted privacy chains proliferating these days. The other thing is that the yields just aren't good enough for institutions to take that much risk.

9. Ads (Kraken OTC, Peaq, Katana)

Also, with Aerodrome, you're looking at a 1 or 2 billion valuation. This thing's like 5x that. So that's why I think, in terms of what's going to stick for DeFi versus what's not going to stick, Aerodrome is just a much, much better long-term play. So, full disclosure, I'm long Aerodrome. I have no ENA position because shorting tokens, like you said—even super-garbagey ones—requires more attention than I'm willing to give to crypto at this particular moment in my life. And so I didn't put on the pairs trade. I'm just long the 'Drome.

I think that it's kind of cool, actually. The Aerodrome core contributing team—I think they're called Dromos Labs—are doing a big conference in New York. I'm going to listen to a few of the speeches live. They've got Vitalik there. Basically, I think the future of Ethereum is Aerodrome and Base.

10. Tough Market to be Long

Base isn't really something that you can profit from as an individual retail trader. You can buy Coinbase at a $100 billion valuation or wherever it's trading. You can buy the Base token when it comes out and potentially expose yourself to the downside of Plasma's XPL ICO, or you can buy Aerodrome, which I think is still ridiculously cheap relative to where it should be. So that's one of my—I’m long Hyperliquid. I'm long a few of these plays from lower prices that I think are great, but it's a tough market to be long lots of different altcoins. And so I think you have to tread really carefully.

I always used to hate it when people would say, “Oh, be careful with that idea. I hear what you're saying. I don't disagree, but be careful.” I used to hate that because it's so noncommittal. But in this case—

Whoever you were impersonating is the most annoying person on the planet. What kind of voice was that?

That voice enraged me, Jonah. I don't want to hear it again.

It's meant to enrage you, Avi.

“Be careful.” Yeah, yeah. Be careful, guys. Yeah.

Be careful out there. It's dangerous. You could lose—

You could lose all of your proceeds.

But all jokes aside, almost everything is going to get nuked in an extremely volatile, unshortable way. You're seeing it happen with NFTs, actually. The price of NFTs is converging to the price of normal art. There's no reason why a Da Vinci should be worth less than the entire CryptoPunks collection right now.

11. Buy the Good, Ignore the Garbage

And so that's happening, and you will absolutely see the network premium—whatever you call it—converge to actual realizable asset value for a lot of these chains over time, especially as creating a chain has become so commoditized and easy. It's not like Ethereum is New York and Solana is San Francisco or whatever. People can just build their own chain for whatever app they want to do.

Speaking of building your own app, I've got a lot of thoughts based on what you said, but one of the things that immediately popped into my head is that we talked about the death of crypto a while ago, and I think my theory is playing out now. We're seeing it happen in real time.

There's less correlation in the market. There's just less correlation. Good stuff is going up over time and bad stuff is going down over time, and it's becoming like the stock market. If you make money, if you're a good product, if you're growing, you go up. If you don't have that, you go down. And most of the stuff in crypto doesn't have that, so it goes down.

If you look at HYPE, you look at AERO holding, you look at Syrup—Syrup's a great example of this. Syrup doesn't even trade with the market. It barely trades with the market. It trades with the market in those moments where it goes down a lot, like when you get a liquidation wick. But that's why I view these prices here as just such a good opportunity to buy, just to buy and hold and get into the things that you like that are good.

Now, I don't think you should be scared. This might be controversial, but I don't think you should be scared of a drawdown. Even if Bitcoin goes to $80K, it's possible that Syrup, Morpho, or AERO—well, maybe probably not AERO, because it's more trading-related—will be up even in that scenario, in my personal opinion. It might not happen immediately, but if you look at a chart over a 6- to 12-month time period, I think that's very likely to happen. I think we're going to get one of those so-called K-shaped recoveries.

12. We Don’t Need Another L2

So now is the time to just go deep and dig into the stuff that matters. I repeat myself, and I say this on every podcast, but people don't learn. Everyone's freaking out about MegaETH, and MegaETH is yet another L2 that just so happens to have Vitalik's name attached to it. It doesn't matter. MegaETH—nobody will care about this in 2 years. I'm telling you now. I'm sorry. This is not because I didn't get an allocation. I barely even knew it was a thing until last month.

I just don't think the world needs another L2. I think the world needs products. The issue is not—and has never been—“Oh, we need to make this faster,” because there are applications that everybody would use if they were faster. The issue is building the applications that people want to use. Base is fast enough, right? You scale it up 10 times—who cares? That's my take.

Yes. I was waiting for you to finish. Yes, every single word of that—frame it and hang it in the Louvre, like—

Maybe not. I don't want it to get stolen.

And then it gets stolen, and then you get it back and you hang it again. I couldn't agree more. Basically, the reason why I agree is, first of all, even if the world did need another L2, L2s are uninvestable. We learned that from Polygon back in the previous cycle. No matter how hyped, no matter how many partnerships with Starbucks and whatever the hell else they did, the tokens just go down only. They're down and to the right.

Why is that? Because there's no shortage of block space right now. This is not Ethereum in November or May of 2021, when it would cost you $138 to execute a transaction on the mainnet. This is an era where there's just too much block space everywhere and not enough users. Basically, there are few people really genuinely trying to solve that problem.

So I think if you're going to go out the risk curve, invest in applications, and a K-shaped recovery is definitely how this is going to play.

A lot of people in crypto whom I talk to daily say, “Hey, Jonah, how can you still be so in love with Bitcoin at $100K? The upside’s just not there. There’s so much less reward. The risk-reward is so terrible, so I have to go out the risk curve to get bigger returns that I like.”

My response to them is, yes, the reward is lower at $100K than it was at $20K. We all know that, but the risk has gone down more than the reward has gone down. If your reward is potentially 60% to 80% lower, your risk is 90% to 95% lower. We’re not going to have a “Bitcoin goes away forever” moment anymore. There’s quantum, blah blah, but it’s just not going to happen, right?

If it’s trading at $70K, every single person who missed the first 3 cycles is going to be buying with both hands—the people who get it now, which is basically the entire world. I just don’t think we draw down 30% from here. I’m willing to—I think if we were trading at $70K, I would allocate 80% to 90% of my liquid net worth to Bitcoin, unless there was something new that caused it, like a quantum hack or a 51% attack.

If it just traded down there on—

Oh, that wouldn’t be great. I wouldn’t like—

Yeah, I wouldn’t bid it there. But if it just traded down there idiosyncratically, with stocks at the highs because of OG selling, I would go all in.

Yeah, and I do want to make a useful point here for you traders out there: keep an eye out for the next time. This is a very different market. The participants in this market are much larger. They move slower, they are more methodical, and they are less prone to day-to-day FOMO.

When you think about it from that perspective, you kind of have to buy when you get these 2-sigma and 3-sigma moves, because the participants in the market now lighten up when stuff goes up 30% and buy back when stuff goes down 30%. Previously, for example, if ETH goes down—and I’m talking tactically, on a tactical level—if ETH goes down 11% in a day, you can probably buy at 10% down and feel very confident that, at some point in the next 3 days, it’s going to be higher.

That’s a good trade that I think market participants haven’t necessarily caught on to yet. People are now conditioned, and big money is capable of buying Bitcoin specifically when it’s down a lot. You probably don’t get 20% to 25% nukes per day. You don’t get those 3 candles in a row that go boom, boom, boom, destroying you.

I say this because ETH went down—I think it was, what, in 1 day? Basically, in 1 day it went down 20%, right into a support level at $3K. You kind of have to be buying at $3.1K or $3.2K for a trade if you’re a trader. You have to be thinking about this kind of stuff.

When you get those huge moves, even if it continues down, I’m just going back to the chart—even on October 10th, you buy the day after October 10th and you get a 20% move up right after. I think that’s what’s happening now. Even if you get these massive sell-offs, people are trained to buy the dip.

Previously, if you look at the charts from 2021, 2022, 2023, and even before, because it was so retail-focused, everyone would just rush for the exit at the same time. Unless you were already in an uptrend, once the downtrend started, you kind of just got out. You weren’t touching this stuff because retail was panicking and shoving everything out.

That still happens in alts, but it’s not going to happen in BTC and ETH, and even SOL to an extent, as much. That’s a trade I noticed that I’m sharing with the community.

That’s something I think you can pay attention to in the future. I used to hate buying dips in crypto because previously you never knew how far it could fall, as people just rushed for the exits on what is ultimately speculative technology of potentially not that much use to society.

Now that it’s clear that the world is going to run on blockchain and Bitcoin is going to be an alternative reserve currency, the question is when, not if. You can dip-buy. I’m revising my old thesis. I used to say, “Hey, wait for it to bottom out and to start smoothly grinding higher before you get in.”

Now I’d say I still have that thesis for alts—for most alts—but for Bitcoin, ETH, and Solana, the majors, you can buy a dip, even a violent one. As we saw on October 10th, you’re golden if you do that.

As far as the K-shaped recovery, I really like the confidence of a Hyperliquid or an Aerodrome, where the tokenomics result in higher prices with an exogenous buyer. Actually, less Aerodrome, but more Hyperliquid. You have fees that get used to buy and burn HYPE tokens.

It’s nice to have, instead of just VCs selling and retail or maybe some institutions buying, another buyer. You’ve got the foundation buying and burning, right? It’s nice to invest in those tokens on dips because it gives you confidence that you’re going to be able to weather a little more volatility, provided the product itself doesn’t die.

Where I take issue with certain crypto traders in the market buying all kinds of garbage right now on dips, or in this supposed mini-bear we’re in, is that I think a lot of these projects are just going to continue to sell off. Just because you aren’t comfortable betting on a million-dollar Bitcoin, which would be a 10-bagger—maybe you think it’s only going to $300K and you’re going to get out by $200K, and you still want to make 10x instead of 2x—you go and buy whatever the main character of the hour is shilling on Crypto Twitter, some memecoin or memecoin equivalent.

I think all of that trade is dead.

13. Zcash & Privacy Narrative

Well, you’re seeing the evolution of the trade right now with privacy. I think the Zcash rally—I was wrong about the legs. Specifically, what I said is, “I actually really like Zcash.” I think it’s a great—I mean, I’ve loved Monero, as listeners of this podcast know. I’ve loved Monero for a long time because it’s the one that’s actually used in privacy circles.

Now—

Zcash—the architecture of Monero is legitimately more private than Zcash. Zcash is—

That’s true?

Really?

I think that’s the opposite. No, Zcash’s architecture is more advanced than Monero, in that it is literally a blank slate: you can’t see anything. Monero uses obfuscation privacy, where it’s possible to crack it if you have huge computational resources. Nobody has proven that, but it’s not an impossibility. Whereas Zcash is basically impossible to crack.

The issue is that we didn’t actually know for a while if it was compromised because of the trusted setup. There’s actually a great Radiolab podcast about the trusted setup—I mentioned this. It’s super good. It came out in around 2021 or 2022 and talks about the origin of Zcash. I highly recommend you guys go listen to it.

Zcash is very good technology. I’m a little ashamed of missing it because I’ve been such a fan for such a long time. It was just such a dog. But now I think it’s here to stay, right? It captured the mindset of people. It was ridiculously undervalued, really undervalued.

Maybe people start using it now, right? Because it captured the mindset, it is a good piece of technology. It is a good coin. It has good architecture. It should be used, as should Monero. These things should be used. I like the idea. I’ve always liked Monero, and I still own a little bit of Monero.

Yeah. I mean, I think the privacy narrative is really good. Where I was going with this is the trade has shifted, I guess. There’s still always the hot thing of the moment now.

Every coin that has ever branded itself as potentially tangential or related to privacy is just gunning for it. And that, again, is like the roulette. So it still happens. I think if you saw Zcash run up to $700, you should have been buying Monero.

You probably need to go buy all the other privacy stupid shit out there, like RAIL, that might run as a trade. But it's kind of like a better version of the memecoin trade, at least. At least it's not like a squirrel that's being pumped.

Yeah, there's a product. There's an idea at least behind it. I mean, most of these things are going to be completely useless, but that's my take. I'm actually quite happy about the privacy narrative.

Me too. I was chatting with a privacy expert, an internet friend of mine. His name's Smoke58, S-M-O-K-E-5-8. He's smart. I was just asking him about Zcash versus Monero, and he said:

“Zcash isn't the answer. It's riddled with holes. XMR, which is Monero—if you really want privacy, you can't hold that thing long-term. You just need to pass it through Trocador Aggregator as and when.”

So I guess there are always off-ramps. I don't know how right or wrong Smoke is, but basically, there are points of weakness and failure. If you really need to move money, you're still trading. Nobody owns Monero natively or earns it natively. You're probably putting fiat or Bitcoin into Monero or Zcash, so there's going to be a record of your transaction.

I'm a little skeptical of the privacy. If you want to spend it, you're probably converting it back into Bitcoin, Tether, Zcash—or, sorry, fiat—on some venue that will then have a record of who you are. So I'm not sure.

Sure. I don't know if there are ways around it, and I wouldn't advocate anyone to do anything. But I'm sure if you dig deep enough, you can find out how to do that.

To me, I guess there is another narrative of totally clean institutional privacy. My friends at DRW have been pumping Canton for a very long time. I wonder if that's an investable thesis. I feel like it's mostly for the VCs who have been in it forever, but I don't know. If you're on audio, I'm making a face right now.

Yeah.

I don't know.

No, either.

I think basically privacy is a narrative that will be investable. I'm just not sure that buying Zcash at the highs, if you missed it like I did, or buying Monero here, or trying to lift the asks on whatever Canton decides to launch, which is probably imminent, is a good idea.

I think it's probably going to look a lot more like what happened with Plasma, where stablecoins were a hot narrative. The investable retail asset prints at an insane valuation and it crashes 80%, and then you can probably buy it. So I think maybe a little bit of patience will pay here, or VC investing in new privacy narratives that are likely to blow up later. But your entry price is better.

I also think, just like, buy more Monero, man. You know where you can buy Monero? Kraken. Kraken trades Monero. So, if I were you and you want exposure to privacy, log on to your Kraken account. If you don't have one, make one. Go get one. Log in and buy some Monero. I know they're our sponsor, and I normally don't talk about this—I never do an ad read—but it is actually the only place that you can buy Monero that I know of that is not sketchy. So, they're responsive for a reason. They're not so bad, you know.

I'm just looking at Bitfinex for the first time in a long time. We have to talk about that on the next podcast, because what the hell is going on with Bitfinex? Shouldn't they be having some success because of Tether? What happened with the LEO token?

I had Bitfinex as an exchange filed away in my drawer under W for “who cares.” But as a Tether-related, Tether-adjacent entity, I'm obviously very happy for them and all of their families in Lugano, and all of their boat crews in the south of France. I'm sure it's a money machine because of Tether. Does it matter what they do as an exchange? Is that not what the real use case there is?

I mean, it's just that they're so tied at the hip. You'd think that Bitfinex—I just looked at LEO, their LEO token. It's been sideways for a full year.

Zcash was sideways for how many years before it suddenly—

It wasn't sideways. It was down, Jonah. It was just freaking straight down. That's what freaks me out about this privacy narrative. I was very early to the trade with my Monero thesis, but with Zcash, price is the only reason why there's a narrative.

You had the wrong coin. Price led the narrative with Zcash. Obviously, all of the big talking heads on Twitter are repping Zcash now and talking about it as being the next big trade because the price is up, not because they were particularly insightful or had any unique early investment in Zcash at the right time.

Anybody who was in Zcash died, and then it just festered. Then suddenly it ripped, probably because we're in a scenario now with the rise of socialism and the rise of global hemispheres where, if you have a lot of money or if you have very little money, there's reason to either hyper-gamble on the little-money side of the spectrum or hide your money on the high-net-worth end of the spectrum.

Both of those play nicely into what Zcash's offering looks like. I think that's what's going on. But no one's talking about buying Zcash because of some fundamental new thing about Zcash. They're just talking about buying it because it's up. Whereas I think there's something a little more chilling going on in the backdrop, which is that we might be in for a world where your money gets seized. And that hasn't been the case for—

Well, that's not a good argument for Zcash. I guess what I'll say is Zcash is about appreciation. You can walk down the street and there's a beautiful tree—beautiful leaves, beautiful bark, maybe it has flowers sometimes—and you can walk down the street 150 times and never notice the tree. You could walk past the tree 1,000 times and not notice the tree.

But then, once you notice it, you're probably going to look at it every time. You'll be like, “Oh, that's a nice tree,” right? So you can ignore valuable things for a long period of time, but once you notice that they're valuable, the genie's out of the bottle. You're going to look at it every time. It's going to become part of the fabric of your life.

14. Buying & Selling Art

I'm always skeptical of this stuff. Anytime something pumps, I'm like, “It's going to go.” I don't think the privacy narrative is going away. It will die down. It will die down. It may take time, but people now know, “Hey, man, crypto is valuable for privacy.” It's reentered the consciousness. You can't stop looking. You're not going to stop looking at the tree, Jonah. You're going to keep looking at the tree.

For me, my can't-look-away-after-noticing thing was a painting that I got in my 20s. Also, advice for people in their 20s: don't buy paintings. Your brain changes too much, and then you get sick of them and want to sell them later.

Anyway, it has tons of logos in it, this big mist of logos. It was a Ryan McGinness, and one of the logos was 4 legs arranged in such a way as to be the Indian or Nepalese symbol of peace, which—

Is that a swastika?

It's a backwards swastika. Basically, the ends go to the left instead of the right. Once I saw it, after owning it for 3 years—it was a really tiny one—that's all I saw. I couldn't see the rest of it, so I had to get rid of it. But basically—

Dude, you bought a painting with a—what?

Yeah, man.

You bought a swastika painting.

We own our Ls on the podcast lately. I've been owning a lot of art-related Ls, including my CryptoPunk and this thing.

Oh, I can't—yeah, we didn't even talk about that. I can't believe you sold your punk.

I don't like it that much anymore.

Second of all, that guy reached out to me trying to get me to sell my rock, and I said, “Kick rocks. I'm never selling this rock.”

Well, you like your rock.

I love my rock.

I also think EtherRock is a better investment than CryptoPunks. The problem with CryptoPunks is that there are too many CryptoPunks.

Yeah, that's it.

And the EtherRock—

There's always going to be somebody cheating the floor.

EtherRock is the first NFT. How do people not understand how valuable this thing is? It's crazy to me. I mean, I guess I do understand now.

It's like $300,000, huh?

That's it.

Oh, man. I want a rock now.

You should buy a rock. I'm not going to sell it, but you should buy a rock.

Basically, for me, it was like—I talked about it a bit on the previous podcast. I didn't even like it anymore.

I don't feel cool rocking a punk as a PFP. I think it's a very 2021 meta that I don't think will ever come back. It's not cool anymore. It wasn't one of those things that endures across cycles. It was really a fad.

15. Lessons from Trading

That particular thing—“I have a punk as a PFP, which makes me legitimate”—now, if you have a punk as a PFP, you're almost illegitimate to the new crew of DeFi entrants. Like, what? Who? You don't want to show your face? Why? What's wrong with you? Or you think that's what’s interesting?

There are lots of reasons to love punks. I still love them. I wish I had a zombie as my PFP, but I think most of the collection is probably going to bleed lower because, like you said, there are too many. There's always going to be somebody selling one.

But more importantly than that, if you're hanging on to a piece of art you don't like, that's basically the same as hanging on to toxic risk, right? It's distracting. It ties up a lot of capital. In my case, it tied up the capital that I sold it for, plus the tax-loss harvest, because I bought it at higher levels. So, you know, I have mid-six figures of liquidity to invest in things that I'd prefer to own. In this case, I prefer to own Hyperliquid.

We're in a situation where a lot of people attacked me on Twitter, saying, “Oh, you lost money on this, so you're stupid, so why should I listen to your thoughts about punks?” The answer is, you shouldn't. My thoughts are just as random and chaotic and probably not that useful as anybody else's.

But what I will say is that I believe in surviving and thriving over the long run. When I say “never give up,” that doesn't mean ride every losing trade or toxic risk or piece of art that you can't stand with a swastika in it until the price is zero. You can't be that stubborn. Keep moving, keep moving. Keep cycling, keep thinking and rethinking. In this case, having a punk was doing nothing for me, and having that liquidity would do a lot more. So that's why I rotated.

I think, as a trader, the biggest and most valuable lesson it taught me is to have a memory like a goldfish. I said this on a podcast in 2021. I got it from Ted Lasso. There's this guy named Luke Martin who, on Twitter, is an awesome dude. I went on his podcast and he asked me, “What advice would you give a trader?” I said, “Have a memory like a goldfish.”

I totally disagree.

No, no. Listen, listen. What do you mean by that? Look, in trading, if you lose, you just have to—you can't ruminate. You take your lesson and you move on. There's no room for rumination. You just have to forget. You literally just have to forget your losses. You should reflect on them. You should understand why you made the decision you did, but I've seen so many people get caught up and dragged down by their losses. I think the most important thing you can do is just say, “Okay, it happened. Move forward. It's done,” right?

Yeah. Forget your losses, but remember the lessons that led to those losses. Like selling my punk, it felt like a weight was lifted off my shoulders that I didn't even know was there. Suddenly, I'm free to do new stuff with that money.

Zooming way back out, advice for people in their 20s and advice for traders: the most valuable lesson you can learn from trading is how to change your mind. Most people remain a Democrat or a Republican for their entire lives. Trading teaches you to constantly question yourself and reevaluate things.

You have to. I mean, look, if a trade isn't going your way, you have to cut it. There's no option, and you can't feel bad about it.

Yeah.

There are so many trades in my life. Recently, I can think of a horrific trade where I bought Galaxy at around $23, and I sold it at around $23.50 because it went sideways. I was like, “Ah, I oversold this,” and it fucking went to $40.

Down to your target level, though. Where's it?

No, no. It's at $31. It's at $31. Trust me, it's not back down there. I wish.

I think $31 is a buy. I love Galaxy. Novogratz is going to crush it. He has already.

Novogratz has certainly already crushed it.

He's fucking going to keep crushing it.

He is. He is the definition of “crushed it.” That guy's the honey badger. He's fucking—he's a fucking honey badger. He's the king of honey-badgering around. He rocks a Luna tattoo.

Did he get rid of that? I don't know if he got rid of that, but whatever.

He said he kept it because he wanted to retain the lesson, Avi. He wanted to remember the lesson but forget the loss, you know.

Yeah. My mentality is forget and move on. You obviously keep the lesson, but I think there's also an over-intellectualizing of things in general. In life, people over-intellectualize a lot of stuff. One of them is, “Oh my God, you have to be super analytical about everything that you've done.” You can be reflective and analytical, but you don't have to write a thesis on every trade that failed.

It's funny you put it that way, because trading, you're just subjected to this constant mega-fire hose of information. You have to train yourself both to change your mind on the basis of what's coming through, but also to discard a lot of information that isn't relevant to the most critical stuff.

It gets me in trouble in my personal life sometimes. My wife will be like, “We're going out with Leslie on Wednesday night.” “Who's she?” She's like, “I told you 35 times it's my cousin.” I'm like, “Yeah, okay.” Maybe that isn't going to help me make money, but now I need to remember it. Trading is this weird semi-clinical problem, but it's also a superpower if you harness it properly.

It is absolutely the greatest thing—the greatest skill—that I have ever learned in my entire life: to compartmentalize stuff. It is so valuable because other people—I think especially when you're an emotional person—you just can't trade. You just can't do it. I give up. If you cry, if you go to a movie and cry, you're not going to be a trader. I'm sorry. If something bad happens in your life and it takes you a month to get over it, buddy, you're fucked.

Trading—this is a great speech, and I'll end it with this. Roger Federer—have you seen this?

No.

Sorry—Federer, not Nadal. Federer is giving a talk to a college, and he goes, “I won 80% of my matches, but how many points in all of those matches do you think I won?” The answer is 54%. He won 80% of the matches but only 54% of the points. It was barely a coin flip, basically, whether he would win the point or not. He became the greatest of all time by a razor-thin margin, right? He lost almost half the time. That's kind of what trading is. You're going to lose a tremendous amount of the time, and you're going to get kicked in the face and put on the ground. Okay, who cares?

I love him.

Yeah, he's awesome.

You just got to get back up.

Yeah, look, if you're the greatest trader of all time—Stanley Druckenmiller—I would guess he probably has maybe a 55% to 60% hit rate on trades.

I would say the greatest trader of all time is Jim Simons.

Okay, well, Jim Simons is different.

From the grave, but yeah, fair enough.

If I got a printout of the statistics of Renaissance, my guess would not be that they win more than 60% of their trades or 70% of their trades. My guess would be that they make a huge, tremendous amount of trades.

They win 60% of the time, all the time.

16. Final Thoughts

And they make a tremendous amount of money because if you win 60% of the time, that compounding is unbelievable, especially if you make a ton of trades, right? My other guess would be that their winning trades are much larger than their losing trades.

Yes. Win big, lose small. That's going to be my mantra downstairs at the roulette wheel in a few minutes.

Are you in Vegas?

Of course. It's a short drive.

What? You view Vegas on your computer, Jonah. What are you doing in actual Vegas?

It's true. I'm a boomer, Avi. That's what happens to people like me. Sometimes the urge just hits, and you have to go.

I appreciate it. I respect the old school. This was great, Jon. This was a really fun one.

This is awesome. It's good to have you back, man.

It's good to be back.

Avi's back. The market's going to rip. We're all going to get back. We're back. We're back.

The government's going to open up.

The tariffs are going to get reversed. The money is going to be raining from the sky. We're going to get stimmies, and crypto's taking over the world. So, I wouldn't be scared. I'm excited. I think this is the dawn of a new, steady bull market. Let's do it, Jonah. Adios.

Speak soon. Later.