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Six months ago, nothing was happening on the network, but now it seems that more and more centers of activity are gradually appearing. When I think of other periods of true on-chain activity, they always occurred against the backdrop of a real-world wealth-creation event on the network.

It seems like you'll always have another chance to buy. Ideally, one day such a chance simply won't exist. I think that's when the hype arises, and people who have been eyeing certain assets are forced to catch up, which creates a reflexive effect. There simply comes a moment when moods change.

To me, it looks a bit like September–October 2023. This is a really good time to get back into the process and be active. Certain clusters begin to appear, and alpha can be found there.

1. Is On-Chain Finally Coming Back?

I want to start with a general question, okay? Ceteris, you wrote a rather provocative tweet about this massive wealth-creation cycle that we may be on the cusp of. I want to start with that: Is on-chain back, or do you believe we are on the cusp of a major cycle of generational wealth creation on-chain?

Yes. Of course, the tweet is a bit exaggerated, but I sincerely believe that on-chain has been showing very good signs lately—over the past month or two. If you think about the market structure since October 10, everything froze immediately after that date, and only HYPE was an exception.

HYPE was literally the only asset in 2026 that was successful. Then Venice started participating, right? Zcash appeared as well, and Zcash has also begun its comeback. Those were the 3 major plays at the beginning of the year: Zcash, Venice, and HYPE.

Meanwhile, the underlying assets were feeling pretty bad. Bitcoin, ETH, and SOL are still down more than 30% this year. You started with these 3 assets, and although HYPE is an on-chain exchange, people buy it mostly on centralized platforms. They just get price exposure to HYPE.

With Zcash, the situation is similar: you just get price exposure. Maybe you put it in a shielded pool. As for Venice, yes, there is an application, but nothing special happens there on-chain. Again, many people buy it simply for the price exposure.

Some use DEXs and other things, so this option is probably the most “on-chain” of the 3. Lately, though, you see a lot of new things happening. I think what made me become much more optimistic about on-chain was the “FWA” that was the main reason for my change of views.

I believe that over the past few months, Meteora has gained momentum again for more interesting token launches. But I think FWA is the first truly new kind of on-chain gaming experiment we've seen in a long time.

Then there's all this hype around Pump and FOMO, which I'm not really into, but if you look at Pump's revenue, they're doing really well. FOMO has been performing extremely well, and now there is a bit of a battle going on between them. Pump pays many traders to switch to them.

Pump's graph looks good, and it seems like it's starting to get a lot of volume. I've talked about this a little bit: it seems like the “green shoots” and the scale of what's happening have been gradually growing over the last few months.

Six months ago, no one was doing anything on the blockchain, but now more and more centers of activity are emerging. Some of these areas are gradually developing. The Robinhood network apparently shows pretty good usage metrics.

There are many platforms that work well besides FWA, and you've even seen something else. I don't know much about this Stomp [?] brokerage project, but there's something else going on there. So now you're seeing increasing interest in on-chain activities.

Cryptocurrency is such a reflexive asset. You hear about people putting money back into on-chain for the first time in a long time. I just feel like we're seeing a lot of good, constructive signs.

We definitely don't have a huge influx of new users. For the most part, this is already existing capital. I think FOMO is probably attracting a few new people because FOMO is very aggressively promoted on Instagram. That's their model for attracting new users, so this could be an influx of new participants.

Mostly, though, it's available capital, but that's going to happen all the time. There are just a bunch of stablecoins on the network. I'm pretty optimistic about all of this.

FWA is what excites me the most. It's interesting to see how the project reacts after the initial wave of powerful incentives, isn't it? I think there was a big risk that everything would completely die down after that big wave of stimulus.

Of course, commissions fell significantly, but yesterday was the highest-commission day in a long time. This guy entered his rare Pokémon Mewtwo card into FWA, right? Someone who had disappeared from the radar for more than a year is now back.

These interesting individual sellers are starting to wake up. Again, the fact that people are building around FWA is a very good sign.

I understand that feeling, but I'm less optimistic about it. I just don't know. Maybe this time is different. But when I think about all the other times we've had real explosions of on-chain activity in the past, they were against the backdrop of real wealth-creation events on the network.

For example, ETH in 2020: I remember buying it for $150–$200, and a couple of months later it was worth $400–$600. There was the “summer of DeFi,” then NFTs, and ETH skyrocketed to $2,000–$3,000. You had this huge wealth effect from the massive growth of ETH, and all that money flowed into other interesting projects at the time.

Then, a couple of years later, the same thing happened with SOL. After FTX, SOL traded at $20–$30 for months, fluctuated back and forth, and then suddenly took off from $20 to $100, $120, or $150 in 2 or 3 months. Then you saw everything start to explode on SOL.

You also got that nice Jito airdrop. I had friends who put 1 SOL into Jito or something and received an airdrop worth $15,000 or $20,000 at one point. There were these massive, massive, massive wealth-creation events through the native token, and I just don't see that dynamic this time.

It's unclear where this would happen. I don't know if it should always be like this, but that's how it was in the past. I'm not so optimistic about how long this will last if everything else remains the same—if BTC just trades sideways and falls by the end of the year.

I don't think that will help everything else perform well. I like a few things. FWA is cool, and there are a few interesting moments, but I don't have this deep feeling that everything is going to explode on-chain right now.

There is definitely no clear wealth-creation effect like the one you're talking about. Even if Bitcoin, ETH, and SOL go up from here, it's still not the scale we've seen in the past, right? This is something that just won't happen.

2. Who Buys Bitcoin Next?

I don't see any kind of resurgence in the on-chain world, but that doesn't mean there won't be good opportunities. You need the wealth-creation effect, or some reason for people to bring assets on-chain. The whole idea is that you just need more free money.

It's either wealth creation from a new asset, growth from an existing one, or some reason for people to continue putting money on-chain. Saylor's BTC sales are pretty insignificant. I don't think they necessarily put pressure on the market.

He must have been making about $100 million a week for the last couple of weeks, so it's not significant. He mostly just dumped stocks to replenish his cash stash. I think this is actually constructive for Bitcoin.

He's practically a nonfactor. Leverage has disappeared from the system, and Saylor as a big seller has disappeared from the system. It would take something more serious in the public markets to force BTC lower.

Other than that, if stocks just fluctuate, I don't think Bitcoin will drop significantly. But the main question is: Who is the next buyer? That's also visible on the chart. It seems to me that every Saylor sale in the last month or two has simply been ignored. It doesn't really move the market.

Yes, I agree. It's simple: the sales weren't meaningful enough. When you see 2 sales of that size relative to common stock, a pile of cash, or its liabilities, you can safely assume that there simply won't be any significant BTC sales in the future.

I even wonder why he's selling at this point. If he makes half a billion on common stocks and then $100 million on this, what's the point?

SOL had that chain halt today, and it didn't really fall, right? It went down a bit, but not in a way that seemed existential. I think this is another reflection of a broader apathy toward sales.

I really think you're going to have these individual winners that will grow, just as you did at the beginning of the year when the underlying assets were not performing well. The point is to position yourself correctly around them, because they are much smaller and will depend on catalysts.

You have to get out of them on time, which is the most annoying part. Buy-and-hold is no longer a very effective strategy. You have to actively trade, because it's like musical chairs, and there aren't that many chairs left.

You have to place sell orders earlier than you probably would like. Part of the idea is that it feels like you'll always have another chance to buy. That was a major theme for some time. Ideally, one day it simply won't happen.

I think that's when this hype occurs: the chart just creeps up, and people who have been eyeing certain assets are forced to catch up. That's how it becomes reflexive, and in this way you can get the effects of creating mini-wealth.

As for moving things to the blockchain, I always like new ways of implementing things. I hope that after the incentives are over, the fees at FWA will increase. It seems to be something like $35,000 per day after incentives. So what does this mean? About $10 million per year in revenue. $35,000 times approximately, right? I don't know how much of that the protocol gets, but these are still good revenue numbers, and I think it's an interesting way to bring RWAs to the blockchain.

Regarding profitability, Koshill Tori Port is already operational, and it's possible to get an 11.5% return organically, without any incentives. This is simply a currency carry trade in U.S. dollars—a dollar-hedged carry trade—and you can get 11.5% organic income. I think this reflects some apathy in this area, along with perhaps concerns about attacks on many of these protocols and an expectation that they will become more secure.

In any other environment, you would see TVL rising rapidly. I think that's a bit of a timing signal for risk appetite. There will be other idiosyncratic plays while the broader market is currently stalled, and I'm ready to talk about some of the other tokens I'm betting on.

I've mentioned some of them before, but it takes so much money to move the underlying assets that there's a certain negative reflexivity: everyone understands it, so they're less likely to buy them. Therefore, you need to look for opportunities in smaller-market-cap assets that are large enough for funds to enter, but small enough that they can still grow significantly and create opportunities for multiple returns.

I definitely think that large assets are not interesting to forecast right now. I have no interest in that at all. In general, I look at the market and try to pay attention to small- and mid-cap assets and what is emerging right now. I don't see the point in worrying about whether you hold ETH or SOL, because one of them will simply outperform the other.

But if the market is growing, Bitcoin, ETH, and SOL are highly dependent on each other, as they have been for the past 6 months. If they start growing, that's kind of a bonus for everything else. You can take this as a nice boost for everything happening on-chain, right? Activity on the network is likely limited until large assets start growing, but the opportunities are still there. When they go up, real madness can begin everywhere.

That's exactly how I see it. But then again, we haven't seen good performance in certain sectors for a long time, right? For example, the FOMO chart looks pretty good, right? As of this tweet, it's up to 81. I knew about FOMO a few months ago, but I haven't seen it talked about as much as it has been in the last few weeks.

Again, we've already mentioned some other things, so more and more charts are appearing that look promising. This is even without accounting for large assets.

That's right. I think the most interesting thing about FOMO, related to the pump we were talking about, is its distribution strategy. I know several regular people who found FOMO through TikTok, for example. They're targeting a whole new audience, going back to the idea that a lot of things here still operate on a PvP model.

If you're online, a lot of capital just goes around in circles, as it has for the last year or 2, and we need to attract new users and capital. Is FOMO one way to do this through its distribution strategy?

My concern about the on-chain renaissance—or the potential start of a new bull market—is that a lot of it still seems focused on what was the main thing in previous cycles. Let's say FWA is basically around NFTs. Now we're moving more into collectibles and physical assets, which I think would obviously be a very bullish signal. But all this hype around FOMO is still just meme-coin trading. It's not necessarily creating new or exciting assets, and that's where I have trouble seeing it.

Then we move on to Robinhood Chain, if you have any thoughts on that. Like FOMO, Robinhood is again going after large segments, particularly the retail market, that may not have historically been on-chain. I can understand the argument that it might bring more money into the system, but it's not something new or especially innovative that I think will appeal to the masses.

“Pumping” and FOMO will always be PvP in nature. If you trade meme coins, it's purely PvP. But what this shows me is that there is an appetite among people who want to trade cryptocurrency again. Even if it's a lot of these stupid meme coins that have been popping up lately, it shows that the appetite is coming back, right?

Sometimes you get completely new things, experiments, and projects when there's a little momentum, because developers have more incentive. There's more capital ready to test and leverage them. If you released a cool new product in February or March, it would be much more difficult.

There comes a point where the mood changes. The mood hasn't changed at all, but over the last few months, I feel like there have been some signs that things are starting to look better. Even if “pumping” and FOMO aren't new, it's still speculative capital trading them for whatever reason. This is an indicator worth paying attention to.

Why?

Right. The World Cup is over. People need a new gambling venue.

Yes. By the way, Kalshi's revenue or volume doubled during the World Cup. So now they look like they're going to do about $40 billion in volume on that basis.

Yes. I mean, those kinds of valuations are just crazy to me.

For example, yes. I think you still get these opportunities in small- and mid-cap assets, but I don't think you can expect a steady move until BTC goes up.

I was talking to someone whose opinion I trust—I won't say who—who was in the East on business. He basically said, and this is going to sound ridiculous, that there's some group of “old” billionaires and BTC miners, mostly Chinese and other Asian people, who are all convinced that there's going to be a pump in early October. These guys could actually just throw $1 billion into the market, something like that.

They were saying, “Where did you see all this money coming from?” Like a coordinated pump. No, something related to a holiday and some other nonsense. I don't know. This sounds really stupid, but the problem is that it can become a self-fulfilling prophecy if enough people with that kind of capital actually believe it.

If most other people had told me that, I wouldn't have even thought about it, but he wouldn't have made it up. Yes, there's a new moon in October. The new moon is before the harvest moon. Reverse 10/10.

That would be ridiculous, honestly. I know Trump is trying to push some tax breaks before the midterm elections, like a capital-gains tax cut or something else that he's been considering. I forgot whether I saw the ad, but who knows if it will actually pass.

3. Where Does Crypto Value Accrue?

An inflation-adjusted capital-gains tax doesn't really apply to me because, well, I guess it does for something like Bitcoin. But for boomers, just imagine: you've been holding onto something for 30 years. Imagine. Let's stimulate some sales here. I think it's interesting.

I came across this and want to know your opinion. The ARK team prepared an analysis comparing the revenue generated by on-chain products—such as Hyperliquid, L1s, and L2s—with what they call off-chain revenue generation, meaning more centralized companies like Coinbase or Binance.

It turned out that off-chain or centralized companies generate almost 9 times more revenue from the cryptosphere than on-chain products. This got me thinking, and I'm interested in hearing your thoughts, because I believe it relates to the topic of the on-chain renaissance and what it might mean.

Another conclusion is that being closer to the consumer, to the real user, is exactly where the greatest value accumulates, right? Take Pump or FOMO as a great example. Even if these products become popular, how much of that value will actually go to major projects or other protocols? I think the chances are pretty slim, or at least I don't give it much importance, and this analysis helped bring that to the forefront.

I'm interested to hear your thoughts. Is there a main conclusion here, or did we already know this and now just have written confirmation of it?

Honestly, I don't see anything special about it. I mean, there's a significant concentration here, right? Binance, Coinbase, and Tether, of course.

But on a case-by-case basis, I would be interested to know about other private companies and how high the concentration is there. Is it really a mix of many players or just a few big ones? Obviously, they should be smaller than the smallest company identified in the analysis, so there can't be too much concentration there.

But I think it's quite logical, right? These exchanges have been around for a very long time. They've built a huge user base, built banking channels, and done everything else. It makes sense that they're at the top.

If they were new centralized companies that came out this year and were printing money like crazy, I would be a little worried. But they've been around for about 10 years. Plus, they've been huge beneficiaries of regulatory arbitrage over the last 10 years, right? Now that's no longer the case.

Well, yes, at least on this scale. I don't think it matters. I don't think the relative size matters because you have to weigh it against how long they've been around. At the same time, of course, Tether makes a ton of money, but the value it brings to the ecosystem is also huge.

This is by far the largest stablecoin, the most liquid, and so on. So I don't see a particular problem with this. I would think worse of it if they had a coin, right? Then it would be a little worse. But they are all purely centralized, and they've been around for quite a long time. It seems logical to me. There's nothing overly negative here.

Well, there is BNB, which has shown itself to be cool.

Yes, true. Very cool. Although this thing surpassed almost everything. It was amazing. If you bought it when it came out, you should have held onto it for a whole decade.

Yes, the buy-and-hold strategy really works.

I remember during the last cycle I was thinking, “What kind of scam token is this?” That was probably the biggest crypto mistake I've ever made.

A lot of people say, “Yeah, I had BNB for $3; I sold it for $8 or so.” I remember it traded in the $3 range for quite a long time.

Yes, dude. I remember buying it for $14 or something and then selling it after making 3x and thinking I was cool. Although a lot of the things they did were complete nonsense. For example, their token burning. They were just burning tokens that were never put into circulation, and it didn't seem to do anything.

But you can bet they would eventually sell off if they were unlocked.

No, the biggest thing I missed was the amount that CZ was holding that was actually off the market, right? The circulating supply was much smaller than I actually thought. He probably just bought a lot with all those profits, right?

Yes. The thing is, he didn't need to sell to make money because it was very profitable. The combination of him owning so many and never having to sell, right? The price doesn't lie.

The chart doesn't lie. This is one of the best charts in crypto. How are things going with Tron right now?

Also one of the best charts in crypto. It takes everyone out.

Really? I thought things were going a little worse, man.

For example, the maximum drawdown was about 3%.

Yes, actually not. But this is absurd.

Well, activity on the platform was also very high.

It's just crazy when all these stablecoin networks come out and people are still paying $1 or more in fees to use Tron to transfer Tether.

Yeah, it's one of the most popular deposit options—Tron USDT—for a lot of casinos as well.

But again, the point of mentioning the chart was more about whether it makes you question or become more bearish about where exactly the value is being created. These companies have been around for a long time, but it's been proven over the years that that's where the most profitable business models are, and they're not necessarily on-chain. It sounds like this is a dud again, or maybe not as interesting as I first thought.

It also raises questions about Tron, the new L1 for stablecoins. Take something like Tempo. If you're Visa or Stripe, that's another big question around the growth of on-chain activity, because stablecoins have clearly proven that they have product-market fit. It's one of the best products that's come out of crypto.

4. Majors vs. Small Caps

This is one of the few truly bullish charts that you continue to see. But the value capture by these big companies that are leveraging this and moving more of their payments and transactions on-chain, even with all these agentic moves, is a lot of what's happening on platforms like Tempo because they have distribution. I find it hard to see the logical connection as to why this is a bullish signal for ETH, SOL, or the major projects.

Perhaps the conclusion of this conversation is that underlying assets are simply no longer interesting. If you're still playing in this world or you're on-chain, then the “majors” are just not the place to be.

Yes. I mean, what's your goal? If you're trying to diversify your portfolio, you're not really going to do it with SOL, ETH, or Bitcoin. I'm curious how big capital thinks about L1 networks.

They are complex. They're complicated because you can't say they have less downside risk. It was the same thing I said about memes and everything back in 2024. All these coins will still sink by 80%, right?

So I might as well choose what has the highest growth potential at the moment, right? If my risk of a fall in the “majors” is, say, 40%, 50%, or 60%—and that's easily possible—then fine. I'd rather take on an extra 15% risk if I can get at least a few multiples of potential profit, which you won't get in the “majors.”

There are simply more interesting things to buy based on market cap and volatility profile than Bitcoin, ETH, or SOL.

100%, 100%. Like I said, there are some interesting things with lower capitalization.

Certainly. But if you're buying something with a market cap of $500 billion or $1 trillion, there are now more interesting and better options that have the same profile and would fit your portfolio.

Yes. If your strategy is to hold the “majors” until the market turns, then it's better to hold the S&P or something similar until the crypto market turns, and then, if you want, do something else.

Hmm, yes, they do look like “no man's land,” but we've talked about that a lot.

I think the main question is whether it is possible to take a lot of low- or mid-cap projects. I don't just mean meme coins. Can you take MetaDAO, FWA, Grass, Venice, Zcash, or some other mid-range projects?

Lighter, I guess. These things can show themselves well?

I think they can perform well. I just don't think that your growth potential is generally limited, right? Because if everything looks mediocre, the underlying assets are crap, and you're just looking for an impulse trade or something, what grows? Everyone just flocks to the same thing.

To your point that you made earlier, Yan, I think you're going to have to sell a little earlier than you'd like because the conditions are not conducive to, say, hitting $100 on the hype and doubling from current values until the market in general starts trading better, right?

Crypto revenues need to increase at least a little bit for all of this to really work again.

Therefore, I believe your upside potential is generally limited when Bitcoin, ETH, and SOL are trading poorly.

I see them as a barometer of what can generally be expected in the market.

If they fall or go sideways, volatility is low, volumes are down, and there are alternatives like AI—the AI sector—where you can get 10% moves on Micron shares, which are worth $1 trillion. It's the same size as Bitcoin, but at least you can see the movement, right?

Well, while this is happening, altcoins and the like have less chance of significant growth.

Everything boils down to flows. Everyone will pay attention to flows much earlier than usual. If Bitcoin is growing, here's a hint: no one is looking at valuations. This “animal instinct” is taking over.

Of course, yes.

I mean, the main feature of Bitcoin has always been its volatility.

That's right.

And now it has simply completely disappeared.

It's literally hanging around. Bitcoin's daily trading range is—I swear, every time I look at the price, it's the same.

Yes. It's just a 2% range on average, except for the big sell candles.

But just look at this sideways trend starting in June, or whenever it was.

Honestly, since February, since the beginning of the year, the price has actually been the same. It rose and fell a little, but it was essentially the same thing.

Yes, I think you should accumulate altcoins that you find very attractive at a certain level and then just wait, because when the market turns around, everyone will catch up. So you have to save up and wait.

And yes, I completely agree with the idea that Grass is one of those projects, because few things are being built right now, and even fewer are in niches where you can realistically expect further growth. For example, they plan to receive $70 million in revenue this year and $40 million in operating profit, with a market capitalization of $310 million. But 30% of this belongs to the fund.

So count somewhere around $215–220 million. Besides, the unlocking for investors ends in October. So this is just a case of accumulating and waiting.

You also saw that ETH had some pretty strong momentum, but I think it's running out of momentum right now.

It has, yes.

5. Crypto vs. AI

It comes down to the same dynamic that Saylor and I talked about: Who is the next buyer?

You've seen some growth in ETF flows, but I've had a few conversations where so-called institutions, or big traditional money, are still hesitant, partly because Bitcoin has performed very poorly and there hasn't been a lot of hype or volatility lately, as we've discussed before.

Crypto has gone from being something of a “frontier” where everyone should be, to something less interesting even for traditional financial conversations.

It just became less interesting.

So the view of ETH as an asset with a higher beta than BTC is still quite widespread because no one has done any in-depth analysis. This narrative holds up, even though it looks a bit outdated.

Maybe not. We'll see if it comes back.

But I think that's still a very common view among many institutions.

On the issue of volatility, we talked about this on the last show. Again, you can look at AI infrastructure. Look at what neocloud services are doing now. Some of them showed crazy earnings reports this week. The memory market has calmed down a bit, but companies like Micron are still extremely volatile and continue to attract a lot of speculative capital.

My final concern, perhaps—I don't want to sound pessimistic—is that crypto is now at a critical, almost urgent tipping point, where some major catalyst is needed to radically change things for the better. That is, prices should rise in the near future, because we haven't yet seen a new wave of the most interesting assets that will become available for public trading, right? Take robotics, for example. Look what happened with Unitree's IPO. How great was the demand—even higher than during the SpaceX IPO.

So we have a whole robotics sector that, aside from, say, BOTZ, has little direct public access to investment right now. It's hard to find direct public access to investment in this area. Many such companies will soon go public. There are other large, growing industries, such as the defense industry. You understand that Anduril will eventually go public. There are many familiar names and potential catalysts for a new wave of speculative capital inflows.

Therefore, in my opinion, crypto's appeal is difficult to justify unless volatility returns and a catalyst appears that will change the situation.

Yes, my only argument would be that the things you mentioned will unfold over quite a long time. Of course, Unitree is an example of a quick exit, but some other companies will not go public for a long time. There are certain barriers for ordinary retail investors to trade private assets. So they have to look for alternatives, but I think there is still enough capital in the tech giants and the Magnificent Seven to absorb the volatility.

I think the bottom of the market will be determined not only by those who firmly believe in Bitcoin. I think it should be pushed by people who look at the price of $60,000, see Saylor selling and everything else, and think, “Okay, what are the risks and prospects if I try to make a little money?” Then short-term speculation can turn into something long-term.

I just think you usually need really strong nerves and confidence to kick off a bull market. I'm skeptical that it's going to happen anytime soon. I think any movement above the $70,000 mark is just speculative behavior that provokes an influx of additional capital, right? It becomes a kind of self-fulfilling prophecy, or maybe an impulse trade that feeds itself, right?

Yes, I understand your point, and I think that's what I was getting at: What is this window of opportunity? When I say an immediate tipping point, I don't mean that this catalyst has to appear next week, but think about the period closer to the end of the year.

Maybe our views differ here, but I think we'll see more of this again. I think Unitree is just one small example, but when you see this kind of public demand for access to these kinds of things, it can definitely start or accelerate conversations about these companies going public in this sector, right?

So will we see a whole wave of these events by the end of the year—more like a 2027 question, but that's a window of time, right? Let's say about 6–12 months. I see another wave of such large companies emerging over the next 6–12 months.

And again, if you think about the fact that capital is fungible and a lot of crypto capital is going into AI, what could potentially bring it back? It's a kind of counterargument: A slowdown in AI will bring a lot of speculative capital back into crypto, but a slowdown in AI means there's nothing else more attractive than crypto for that capital to go to.

I guess that's what I'm trying to say, or what I'm thinking about: How big a window is this where crypto can really shine and attract speculative capital flows again? I think we all agree that this is critical to any sustainable bull market going forward.

I think the catalysts needed are the ones that are likely to be painful for cryptocurrencies at first, right? This is when things don't go well in AI and the long-term deflationary benefits are exaggerated, which then brings back currency depreciation and hard assets as the direction of capital flows. That's when you can shine.

Yes, but I think there's just a general fatigue among sellers. Of course, there will always be people who eventually give up and go look for something else. But I think those who could act on a large scale have mostly already left.

So I don't expect a significant decrease. Sure, we could get down to the high 50s, but I just don't see anything that could push us into the 40s.

My thoughts on the return of on-chain activity are 100% intuitive. I just don't even know. To me, this looks a bit like September–October 2023, before Solana started to grow. That year was very unstable. Sol was very successful, then there was a delisting from Robinhood, the price fell, then it rose again, but then the fund started selling. It was bad, and at the end of the year it finally started to take off, and everything went up.

I support Jason: It is unlikely to come from Bitcoin, Ether, or Sol right now. I still think that many tokens have already become “ashes” forever, right? Yes, I won't name the tokens that became “ashes,” but that's about 95% of them, okay?

I still believe in it, but that doesn't mean you can't find a bunch of new things or things that actually show really good results. I think a good way to sum it up is that now is again a very good time, if you're in the know and understand what's going on, to be active—especially in the small- and mid-cap segment.

The buy-and-hold strategy we talked about, or simply owning the major coins, has exhausted itself, and there are no serious catalysts for it, at least in the short term. But now niches are starting to emerge where active trading in crypto assets allows you to get alpha, which wasn't the case even 3–6 months ago.

Yes. The market is much healthier than it was 6 months ago. So you're saying that, since it was February 6 months ago, despite the rally in late March, April, and so on, the market looks better now than it did before that rally began?

I think so. This growth was mostly due to Saylor buying a lot through Strategy, right? That is, nothing at all happened on-chain or anywhere else.

When did Strategy start growing? I'm trying to remember.

I mean, I think you can make the argument that Ceteris makes, right? Like today.

Yes, I think in February–March, right? Isn't this the same time that the events in Iran began? So there was a lot of uncertainty around this—what was supposed to happen with all this: oil, inflation, all that.

If you look at today, you can say, “Okay, we know the market has largely been through this.” You're not really seeing the impact that people initially thought—no recession fears or inflation fears because of this. So you have some clarity, more than in the first month or 2 of this rally.

I guess you could also say that Bitcoin has essentially been stagnant for 6 months now. So from a positioning perspective, all or most people who wanted to sell at these levels had the opportunity to do so. So I think that argument can be made. I don't think it's gotten much worse; it certainly hasn't.

I mean, yes. If you look at Strategy, scroll down a little, and click “Max” on that graph. In fact, it was March–April when Strategy actively used all its resources, and it was purely a Saylor rally, after which he had to recover.

Yes, but nothing happened. Not much was happening on-chain then. No, it was just hype. I remember because we had our February outing or something, where we were just discussing things and there wasn't really much going on. All we talked about was institutionalization and tokenized shares.

6. RWAs, HYPE & Tokenized Stocks

There's another side to this topic that we didn't talk about in this conversation but had mentioned before: RWA, or real-world assets. I constantly hesitate about them because, while they can be one of the biggest catalysts for on-chain activity, for me personally, they're not the most exciting thing. But I think they could be another potential catalyst if we're talking about them.

Let's say you look at the hype around xStocks, building spot volume for assets that people want to trade, and right now it's mostly stocks, like AI stocks. The ability to trade them in one place, in the same app—I see that as a potential catalyst.

This helps bring capital into the network, which is part of what is needed to create a bottom and sustainable growth: simply more money in the network, with BTC becoming a smaller percentage of the total on-chain value.

Isn't that right? I see it as similar to when Solana was going through its bull market, and a lot of our conversations were about the assets that people were going to Solana for—especially during the memecoin season, because that was the only place you could trade them, right?

It's like an exchange: You go to an exchange if it has an asset that others don't have, and you go there specifically to trade that asset. It's less about the venue itself, although it certainly benefits from that.

As for the Hyperliquid argument: If attention, capital, and speculation are still focused around AI trading—let's call it more broadly: neoclouds, memory, and so on—then if Hyperliquid can build a robust spot market for these assets, and you can trade derivatives and get leverage, Hyperliquid itself benefits from that.

There is a scenario in which I see it making sense for such a platform, or what could be a bullish forecast.

Yes, I agree with you. I was actually going to say that, in my opinion, Hyperliquid looks pretty good right now. I think something is coming together. You mentioned this whole xStocks story. HIP-3 enables fees, so deployers can now set fees for markets rather than just being in growth mode.

So, commissions on HIP-3 markets, which currently represent a huge percentage of total trading volume on Hyperliquid, will likely generate more revenue than they do now. Then there’s the story with Coinbase, Circle, and USDC, which takes effect at the end of the month. It’s what they call, I think, AQV2 or something like that, which essentially scales based on deposits rather than trading volume.

It diversifies commissions and redemptions, moving a little bit away from purely trading income. All of these things are coming together now. I think Yan is right that the sellers are exhausted. I don’t know if this means Bitcoin and other assets will immediately go up, but I don’t think there’s much downside potential. We’re now much closer to the bottom than ever.

I think HYPE looks pretty good. I think Lighter looks pretty good. I think this is probably the best narrative and fundamental opportunity that can be accessed in crypto right now.

The crypto market has historically performed well in the fall and winter. Of course, 10/10 blew everything up, but last year, things were going really well before 10/10. The fourth quarter is usually very positive in terms of net liquidity, and the Fed’s liquidity has been quite tight, especially since the beginning of the year.

The People’s Bank of China is starting to become more active, especially in recent weeks, but this has largely manifested through gold trading. Bitcoin has obviously fallen behind.

I don’t know. I think it all comes together. This is clearly not just a crypto story, right? It’s a trading exchange, so I don’t think it suffers as much from the general crypto apathy.

I don’t know. HyperEVM clearly wasn’t a huge success, you could say that—at least for now. People are building on it, so something is happening there. My initial thesis on Hyperliquid was that it would become something like what Binance could have become in its day. That’s the simplest way of thinking about it.

If HyperEVM and Hyperliquid succeed, you could get the same on-chain wealth effect that happened with Solana and ETH, and then you’d see an influx. So far, it’s not visible at all. Maybe this isn’t even the right mental model for what you might call the next on-chain renaissance, but I don’t think it’s completely dead. I think it could happen. It’s still something I’m hoping for, but I just haven’t seen it materialize in any way yet.

So, if this was your way of playing with Hyperliquid, you’re obviously not very happy.

I don’t know. I’m still monitoring the situation. I still think something could happen, especially if HYPE makes a crazy multiple and reaches, say, $150 or $200, and a lot of people show up with excess money that they don’t know what to do with.

With SpaceX at a market cap of $140 billion, it’s like: do you buy this, or do you buy Bitcoin for the next 5 years?

Honestly, you just take a 1.5x position on SpaceX and walk away. That’s all. It happened. It has performed very well after this recent series of unlocks, right? The earnings report was very good.

Only some traders do that. Most people don’t make decisions like that. Most large capital allocators don’t ask themselves, “Should I buy SpaceX or Bitcoin?” It’s more a question of, “Do I want to allocate some of my Bitcoin into this entirely separate asset class?” They’ll keep it at 1% or 2%—5% in ambitious cases.

I think the longer it underperforms, the greater the risk that you’re out of the game, because that’s the game all these institutions have to play, especially if you’re a portfolio manager. Sure, you can justify until you’re blue in the face why a 1% to 5% allocation to BTC makes sense, and 18 months ago it was much more interesting. But now, with all this other stuff, as you say, it’s not so clear-cut within our purview.

The longer your performance is worse than expected, the more closely you’ll be scrutinized to see why. Of course, people will ask, “Why hasn’t your strategy changed?” Beneath that, there’s still a significant portion of retail investors with substantial capital who can move the markets together. Their asset allocation won’t be as formulaic or mathematically optimized. It’s just going to be, “Okay, I have this portion of my portfolio that I’m going to put into risky assets.”

We’ll see. We’ll see how it all works out. It’s always useful to communicate like this, because even voicing my complaints or concerns, I’m always interested in hearing your opinion. We’re all trying to understand where it’s best to invest and where to focus our energy and efforts.

7. The FWA Experiment

My conclusion is that now is a great time to get back to work and be active, whether in AI and advanced technologies or in the crypto industry. As Jason noted, some promising directions are starting to emerge, but you need to be proactive and aware of events to get alpha. This graph may look crazy when we look at it next time. I hope so. Let’s see how it goes.

I went back and bought a little more, and almost broke even on 2 positions that had really screwed me up last time.

What was the average price during the game period?

Probably somewhere around $17 million to $20 million. That was a reasonable price. It has grown almost 2 times from that level. I also thought it was very interesting. Just when the mint ended and buying was turned on, the price jumped from $10 million to $20 million on that candle—you can see the big green candle on the left, a little further away.

Yes, right there.

No, on the left.

Left. Here. See? That big green candle that completely covered the previous one on the left?

The big one.

Left. Oh, this one. My bad. My fault. It was 10 times over. That was the turn-on candle, right? It immediately doubled in size.

Then a bunch of people said, “That’s it, I’m getting out of this game,” because they didn’t like that the founder didn’t put all the ETH into FWA at once, which I find quite strange. A lot of people criticized it. But what I like about FWA is that a token is a token. One hundred percent of the commissions are distributed: 40% to buyers, 30% to liquidity providers, and 30% is burned.

Of course.

So you have a pretty strong net accumulation of value. The biggest risk for FWA is whether people will continue to actively use the product. You might say, “Isn’t that obvious?” But often in crypto, that isn’t the only risk. The project could be successful, but the token could simply be cast aside.

Other projects are currently being built on it.

Yes. For example, right now, if you want to be a liquidity provider, you don’t need an NFT. You can just deposit some ETH, and they’ll connect you with other NFT owners. You can get in that way. There are other pool games as well.

I think the main thing for FWA right now, when you think about its unique advantage over—

Yes, this is the same with FWAP, where you can have either an NFT or ETH. You just join, and they pick up the capital for you. But do you know what their main advantage is over all the other gacha platforms?

Curation, right? They can add anything there. It isn’t just some Pokémon thing. They can literally get any assets. I think the most effective thing for them would be to add some really famous art. I don’t know who the famous artists are now. I don’t know if Damien Hirst is still popular.

But they could get someone from Art Blocks to release new work right on the protocol. Then the only way to get it, instead of through a public auction, would be to play the game and win it. They could also launch an entirely new collection on the protocol, and the distribution of that would be really interesting.

I think so.

Getting some well-known assets that people like, such as this Mewtwo, would be interesting. This is the case I was talking about: the guy came back after a year-long absence, some OG ETH NFT guy, and this was his first tweet in a year—that he was adding this rare Pokémon to the game.

That’s their advantage: they can keep adding more and more. I don’t think people are too interested in 10,000 NFTs and friendship bracelets and all that, but if you start adding Charizards and interesting artwork, then, yes.

What proportion of their stuff is NFTs compared with cards like Pokémon cards, baseball cards, and so on?

Right now, it’s mostly NFTs. They have a bridge they work with that allows you to transfer NFTs from Solana to Ethereum, and that’s how people are adding them.

But people had a picture of an FWA asset the other day that he made, and he could have added it. I don’t know why he didn’t. Maybe because he doesn’t want to deposit ETH. Maybe there’s another way to set this up so other people can contribute.

Adding this to the protocol will stimulate spins, right? There’s an opportunity to get a bunch of unique and exclusive, one-of-a-kind items. We’ll see.

There’s a lot of interest in this. A lot of people are building on it, and it inspires me a lot. Of course, you still need to monitor how the metrics change daily. They fell a lot, but they were pretty stable last week, right? Yesterday was actually an increase compared with the last few days.

That’s about 30,000 to 50,000 per day. You have to pay attention to how it moves. They’ve burned, I don’t know, 6% of the supply at this point, right?

Yes. By the way, this dashboard is great. There’s an insane amount of data here. Some of it is simple, but if you scroll down, you can see the redemptions and everything else.

Scroll down.

Okay, maybe there. Yes. They burned 6.3 million tokens, right? There are 1 billion tokens in total, so that’s 6%. This is what they distributed between buyers and depositors.

If you’re a liquidity provider, the profitability is still not bad. Although, of course, you can’t just look at APY, because there’s a risk that your assets will be taken away early, right? But we’ll see.

There’s considerable interest in the project. Seeing others build something around this—that’s exactly what you want to see. I think many people, after they turned on purchases and everything else, thought the project was “dead” when the market cap fell to 5 or 6 million or something like that.

To see it being restored is encouraging. The founders have made many changes since then. From their perspective, they didn’t allocate tokens to themselves at launch, but they earned a bunch of ETH in fees early on through incentives. Now they’re putting a lot of that ETH into buying the tokens themselves, so they own, I don’t know, maybe 3% of the supply.

Now their interests coincide with the interests of the token. They had to buy it, although they bought it with incentive payments. In general, there’s a lot of good here.

I really don’t think there’s a lot of risk associated with the founder. This guy has proven that he wants to make this project big. I don’t think there’s too much risk in the token itself.

They could, for example, stop burning and so on, but I don’t think they will. If it loses its novelty—if they can’t add interesting assets, right? This is like what we talked about with L1 blockchains, right? Why does Solana show great results? Because it attracts the right assets to its network.

The situation is similar here. People just want to play these “gacha games.” They show good results. This is the only niche in crypto that has shown success over the past 6 months, so people want to play these games. They want these collectibles.

Can they get the collectibles that people want? That’s right. They have the opportunity to get any type of collectible.

I also think it kind of reinvigorated a lot of Ethereum NFTs and stuff, even for people who didn’t care about NFTs. It’s like, “Hey, this is the first thing people have been using Ethereum for in a long time, so let’s support it and try to help it succeed.”

It would be very promising if Tom Lee did something. I doubt he would, but why do you buy MrBeast, man? Better buy some Fake World assets.

It’s also a way to revive liquidity around some of these things, which I think is driving people to make deposits here. For many of those NFTs—not every collection, but many of them—the liquidity just dried up, and you couldn’t sell them even if you wanted to.

It’s much more interesting to have something like this that contains a lot of these really popular or really cool collectibles and NFTs from different projects than just one thing. The variety and diversity—that’s their unique advantage here.

Thank you guys for joining in and sharing your thoughts. We’ll be back soon with another such release.