寻找加密货币的下一个大交易｜1000x

The amount of effort I had to put into figuring out these fucking settings—Jesus Christ.

We’re technical people, Avi. We try to move money around internet protocols. This is low stakes.

I know, but honestly, it’s easier to use crypto than it is to use Twitch to livestream. This is the biggest bull case ever for crypto.

I agree. Who’s building livestreaming on-chain? Because this is a fucking disaster.

There is no bull or bear, although I did get a dog, and his name is Baloo.

I think it’s pronounced Baloo.

It’s the bear Baloo from “The Jungle Book.” Baloo.

And he’s got “The Jungle Book” wallpaper behind him, too.

Mm-hmm. Hold on. Come here. He wants to say hi to everyone.

Hello, Baloo. Hello, Baloo, Mr. Jungle Book.

Yeah. It’s B-A-L-O-O.

Baloo.

I just got him. He’s 3 months old.

By the way, if this were 6 months ago, Baloo would be a meme coin already. Can we kick off with whatever’s going on with Pump.fun?

What do you mean, whatever’s going on with Pump.fun?

1. The Meme Coin Insider Game

I’ve seen a lot of stuff on Crypto Twitter about how the founders of Pump.fun are earning a lot of money, and something about how nobody who uses it makes any money. I’m not sure I agree with that, but it seems to be a little bit of a scandal, which I think is inappropriate because obviously, if you create a meme coin, you’re not creating a business. There’s no pretense around that.

Mm-hmm.

Have you seen some of the hatred and loathing around meme coins and Pump.fun recently online?

Yeah. I mean, the reality is that all of these things are just for insiders. Using Pump.fun, very few people actually make any money. It’s only the coin creators who make money.

Yeah.

The people who buy are just trying to pump lottery tickets. Murad has kind of gone off the deep end a bit in terms of tweeting about meme coins, but he is a good trader, and he has some really good points.

What’s up, buddy? It’s honestly safer to buy a meme coin that already has an established, crazy community than to try to gamble on something that’s sub-$1 million market cap. It’s really, really difficult for any of these things to meaningfully break through.

A lot of people have strategies to actually trade these things. During the last market, a lot of people would write programs to automatically scan every new contract being put out, see if the contract is a rug risk, see if a bunch of new coins are potentially going to be created, and score them. They would assign a score to each new contract that came out.

Mm.

Then they would make bets on them. If you don’t do it in an automated fashion, I think you’re basically in for a losing battle.

Yeah. My experience with meme coins was that I never understood Doge when I was a professional crypto trader. I didn’t touch it because I didn’t think I could justify to my backers losing money on a dog coin. I didn’t really participate in the early memes.

Pepe came out during this nuclear bear market where it was very hard to trade memes. Again, if you’re investing $10–20 million of somebody’s prop-shop TradFi money in a frog coin and you lose half of it overnight, it’s pretty hard to justify those losses and keep your job. So I missed Pepe.

Then, during this meme coin frenzy, I was more of a solo, personal trader. I just opened Twitter one morning, saw Boden, started laughing my ass off, made a bunch of money on it, and got out 50x higher than where I got in.

But I don’t think that’s most people’s experience with meme coins. I think most people’s experience with meme coins is getting shilled a bunch of garbage, trying to chase the next big winner, losing, and not having caught WIF, Boden, Pepe, Doge, or SHIB in the early days.

If you don’t catch one of these early, it’s just this random-noise thing. It’s very hard to trade a meme coin once it’s already a mega-cap. You have to catch it early, or you kind of have to stay away. What do you think?

Once it gets to the mega-cap world, like Pepe or WIF, I think about trading these as buying them for leverage during periods when I think Bitcoin can outperform.

The most instructive thing you can do with a WIF, a Pepe, or any of these coins is look at the 4-hour chart—or even the 1-hour chart—going back 3 or 4 days. If it’s started to bottom out on the BTC pair and you’re bullish on Bitcoin, too, you can actually short BTC and buy these coins.

I think that makes more sense if you’re trying to trade these things. Instead of becoming an instrument of, “Okay, maybe it’ll 10x, 100x, whatever,” they become a very good levered-beta play on BTC. That’s how I treat them once they get above $1 billion.

When Bitcoin traded at $50K or $52K and we were buying, it was like, “Okay, maybe you buy some Popcat, maybe you buy some things that seem like they’ve bottomed out against BTC as a levered-beta play.” But I would never really hold these things for a 3x at this point. It’s just not the market environment for it.

The only time you’re going to see these crazy moves from memes that are over $1 billion is if Bitcoin is at $90K.

Okay, that’s interesting.

There just isn’t enough money to actually push them up there. The idea of holding a meme above $1 billion right now, in this particular market environment, if you’re a trader, just doesn’t really make sense.

You should be trading them and using them in the way that they’re meant to be used, which is to trade. There are actually a lot of really good pair trades in the market right now, personally.

So hold on. Before we get there, let me just try to understand this correctly. Let’s say that I’m fairly convinced that the crypto market is going to take off to the upside in the next 1, 2, or 3 weeks, and Bitcoin is going to go to $100K.

You’re saying that instead of buying Bitcoin for a trade, I should buy Popcat, WIF, or something that’s an established meme. I should buy Pepe or Doge because it’s going to go up way more than 60%; it’s going to go up 5x, 3x, or 2x. Is that the argument?

When you’re bullish for a trade and really convinced, this is cheap leverage with limited downside. It’s call optionality.

Look, I’m never going to tell you that there’s limited downside to buying a meme coin.

Yeah.

At the same time, it makes sense to use them to trade when you’re bullish. There’s a lot of asymmetry there. Something like a WIF or a Popcat, on the initial move out of a bottom, if you’re trying to bottom-pick, can basically go up 40% or 50%.

As was just pointed out, you can’t get liquidated on the position if you don’t actually use leverage. If you have $100 and you buy it, you’re getting asymmetric leverage on BTC, which is why people buy them. If you haven’t been doing that, you should at least look at it.

Yeah, it’s like a call option.

Yeah, exactly. It’s like a call option, but I’d say it’s like a 3-day call option that doesn’t have any theta to it, either.

Yeah, no theta, and the liquidity is amazing. It’s not like you have to call up QCP and get ripped off to trade this call option. You can just buy Doge and have a much more efficient expression of that sort of nonlinear payout.

Exactly.

And I like that.

That’s what I use them for. When I get bullish, it’s like, “Okay, let me buy some MOG, WIF, Popcat,” all these random things.

I don’t buy the small caps, and I would never even mention anything small because I don’t want to cause any trouble. But the things that are over $1 billion, for sure, that makes sense.

There was a moment when I went into Avi mode in my crypto trading career. There was a moment when it paid to get long low-market-cap meme coins, and that moment was when meme coins were having their arrival, right?

There was WIF that had just hit. There were a few other big ones, and then it was kind of like the entire world was investing.

The money fire hose was pointed at this space. Everybody was lighting up a Phantom wallet. Everybody was buying. That moment is done. That doesn't mean meme coins are dead. That just means that you have to update your process for trading meme coins.

So, Avi, I really appreciate that, because my process for trading memes felt like it was, “Okay, the fad is happening. Profit from the fad. All right, the fad is over. Get out.” But no, you've identified a new way to think about this stuff, which I think is super important. And you know what else is bullish? Baloo slobbering all over your white muscle shirt.

Oh, he's a very bullish dog. What can I say? Even though his name literally means bear in Hindi.

Mm-hmm.

But he's a very bullish dog. He's 3 months old, and I'm going to teach him how to trade crypto soon.

Did you get him with your girlfriend, who's now your Twitter photo?

I did. Yeah. That's the new PFP.

2. The Crypto Breakout Setup

Wow. Amazing. Do we have any broad views about crypto at the moment? I feel like I've been pretty convicted that it's going to break out for some time now. I've been kind of wrong. It's still locked in this—earmuffs, Baloo—dogshit range, and I'm starting to lose faith that we're just going to go vertical in the near term because I think there's so much election overhang, which I really do believe is important for crypto.

However, there are all these good tea leaves appearing in the market. The first of which is that, despite what should be bearish news, like Kamala in the lead and rumors that she's going to appoint Gary Gensler as Secretary of the Treasury, all of this horrible stuff, crypto's performing, right? You have price action strength against weak news. Also, NFTs aren't rallying, even though people are saying NFTs are back. They're not back yet; they're just clearing. You're getting liquidity.

It's kind of like what happened in 2008 during the housing crisis, when real estate was in free fall and nothing traded, and then suddenly a lot of stuff was trading. That was the first thing that you saw before a 15-year-long giga-bull market in real estate, which is similarly illiquid to NFTs. Now CryptoPunks are clearing. You're seeing 15, 20, or 30 of them trade per day. The floor is leaking upwards. There are signs, but we're still in this range. I don't know, Avi—are we about to break out to the upside, or is it still complacency?

Okay, well, you just said a lot.

Yeah.

And a lot of really interesting things in that.

Yeah.

The first thing that I'll say is that I've been waiting for mid- to late August for a very long time, and it's mid- to late August, and nothing has changed except prices have gone lower, which is, again—

Yeah.

—what I was waiting for. The reason that I was waiting for this is because I think that Jackson Hole tends to be an event, especially over the summer. People want to de-risk. They don't want to think about the market. They want to step away. If the Fed hikes a little bit extra, there's probably going to be some nervousness in the market for about 3.5 seconds before the market moves on and starts to go up again. People just tend to step away during August.

Now, come September—Q3—what you're going to see is everyone comes back from vacation. Everybody says, “Okay, now it's time to actually do the things that we were thinking about over the summer. Let's start allocating to BTC, start allocating to ETH,” because there are these ETFs, right? I think that a lot of people who you would've expected to allocate to an ETH ETF or a BTC ETF just haven't, because you're not going to do that in August. I do think there are genuine flows that are going to come in in September.

I think an additional point that I didn't consider back when I first said this, because I didn't know Joe Biden was going to step down, is that Kamala has decided to step up and try to run for president. Kamala's having her DeSantis moment, right? Everybody's talking about her. She's new, she's different, she's not Trump, and she's not Biden. The media's pushing out this campaign.

The reality is this woman is a terrible politician. She is so uncharismatic and so unlikable that, once the public gets to know her more, I really think they're going to get rid of her. They're going to say, “There's no way we're voting for this woman,” right? She's just not a good politician. She's not very smart either. I'm not even super Republican. I just can't stand the idea of this woman becoming president, and I know a lot of people who are even Democrats who feel this way. They're like, “There's no chance.”

I do think that as Trump's odds go up, as we pass Jackson Hole, and as we get closer to September, you start to get inflows into BTC. BTC has actually been lagging equities. Equities have retraced the entire sell-off. BTC, not at all. You have to ask yourself why.

It's because there are no real allocations right now. Also, if you look at open interest and funding, it's all come off. It's all neutralized. People are starting to short, and everyone that I talk to is sidelined. People have raised cash. The moment this thing starts to go up and get away from them, I think all the shorts cover, I think all of the cash comes in from the sidelines, and we're back at 70K quickly. Then we probably have an October and November that we're very happy about.

For the time being, I don't know exactly when this is going to happen. It's possible that we trade down to 57K in the next week. I don't know. All I know is that if I buy 58K, 58.5K, or 59K, I'm probably going to be pretty happy in a month.

3. Tron Finds Product Market Fit

In the meantime, to try to scratch that trading itch, there are a lot of really good trades in this market that I'm personally looking at. Tron has been talked about a lot. I didn't realize that it generates the most fees of any L1 blockchain over the last 90 days. They're starting to lean into the meme coin game. This is probably going to last another 6 days, and then everybody's getting out, but it's a good trade for the time being. You can pair it against ETH if you want to hedge market downside.

Same with—

I don't like any L1 other than BTC, ETH, and Solana for a time horizon longer than 3 months. I could see how you could have views on Tron for a few days, but to me, Telegram—TON—is the most interesting mega-cap coin, and it hasn't budged since March. It's unchanged. If that thing isn't rallying, I'm struggling to understand how any of these other L1s will rally. Telegram actually has applications being built on it that have product-market fit.

The one thing that I was discussing today that's interesting is that USDT on Tron is used pretty significantly across the board. If you want to go rent a Ferrari in Dubai, you can actually pay for that with USDT, but it's going to be on the Tron network. If you want to go—

Wait, why not ERC-20?

I don't know. I can't tell you why. I just know that they prefer Tron. I got a really interesting DM that says there are a bunch of people from Iran who live in North America who use USDT on Tron to send money back and forth. I probably should report that to the FBI, but I just heard about it, so I haven't had time to do that yet.

Hmm.

The other thing that's true is LatAm. I just saw a comment about this, but when I was in Colombia, you could pay for a bus. If you wanted to rent a car for 6 people, one of those Mercedes things, you could just do it in Tron. It generates a lot of fees, so I think people are starting to wake up to this.

The one thing that I'll say is, again, this is all hindsight. I didn't have a position in Tron. I barely own any of this thing. I probably should buy more. If you look at the chart since May of this year, it's just up only. Basically since December, it's up only. Even against ETH, since the bottom on May 27 on the ratio pair, it's up 120%.

It really just took off in the last couple of days, actually.

Mm-hmm.

Wow, this is pretty nuts. I haven't paid any attention to Tron.

Right—

To me, the Justin Sun peacocking PR thing was sort of like, “Oh, you're just trying to be a protagonist. You're basically the next SBF or Do Kwon or whatever.” I just kind of ignored it. It was a bit cringe and retarded, but at the same time, yeah.

You know, you're obviously, by the way—

—can't deny product-market fit. This is the thing, Avi. I'll let you go in a second. I just wanted to put this out there. There are green shoots in crypto right now. Product-market fit seems to be blossoming everywhere, and I don't want to sleep on it.

Like Polymarket: product-market fit. Memecoins: product-market fit. Tron and EVM, apparently: product-market fit. NFTs—I guess you had product-market fit in 2021, but they were priced wrong. Now you've got product-market fit, and it's priced attractively. Something's happening here.

I don't know. There are all these little corners of crypto that are attracting usage in ways that we haven't seen before, and I wonder if it's going to lead to the disconnection from equities to the upside that you mentioned earlier. As we've discussed on this podcast 1,000 times, that is the FOMO moment. That's when institutional and retail money—fresh retail money—just piles in, not the same washing machine of retail that's been in here for 5 years.

4. Crypto Rewards Catalyst Traders

I agree with you wholeheartedly. That's why I'm bullish longer term. The way that I section out my trading, just to take a tangent here, is that I have my fundamental core positions that I've done research on, that I really like, and that I want to hold for a long period of time. I have my long-short book, where I put on things either for beta trades—for example, if Bitcoin sells off a ton, I might buy a ton of BTC, ETH, or SOL. And then I'll short. This is where all the shorts, like StarkWare, Worldcoin, and Sui, that I've discussed on a bunch of podcasts go.

And then I have my real now book, where it's generally just catalyst trades or narrative trades. I always, always, always pair catalyst trades and narrative trades. The reason I always pair them is that, inherently, you don't want to take a market bias in that trade because you're betting on a catalyst, an event, or a narrative.

Are you long Aave versus short Compound or something like that?

Something like that. That would've been a great trade; I didn't do it. These are 2 massive assets, so I don't feel bad about talking about them. CZ is getting released from jail in 40 days, and I guarantee you that 2 weeks before he gets released, everyone's going to be talking about BNB. BNB probably goes up a ton.

Yeah.

I'm long BNB/BTC because the chart looks good because of that. As I said, it's not massive—

You know what I love about what you just said? That trade makes so much sense. If you discussed a trade idea like that in the commodities market, you would get laughed out of the room because the underlying fundamentals don't allow those things to happen.

But in crypto, you can literally say, “CZ is coming out of jail. No one's talking about it. He's probably going to do something. Maybe it's BNB-related. At the very least, there'll be a narrative. It should pump.” And you're right—you're dead right. Those sorts of trades work.

It's super exciting, and that's what I love about crypto trading. There's a lot of interesting blockchain tech going on, a lot of interesting ways that this technology can help move money and create the internet of value. But from a trading perspective, crypto trading has this beautiful thing where, for certain tokens at certain times, you isolate out just the psychology—the psychological element of trading—and you can separate everything else, all the broader market fundamentals, away and just get long BNB because CZ is getting released from jail and actually make money on that.

It's such a unique market in that respect. In every other market, those trades have basically been arbed out by machines, but not in crypto.

Somebody mentioned that the BNB-CZ trade is crowded. I disagree. It's up 15% off a 5-month low against BTC. I don't think that's crowded. It hasn't even reached the highs of this year against BTC. I don't think that makes it a crowded trade personally.

Hal or Fujie, I'm sorry. I love you. I don't know how to pronounce your name. If we weren't so terrible with tech and I didn't want to fuck anything up, I probably would have brought you on because I really like you, Fujie. Sorry.

How?

Yeah—if we weren't so terrible with tech and I didn't want to fuck anything up, I probably would have brought you on because I really like you, Fujie. Sorry.

Fujie.

I don't quantitatively hedge the positions because it's really difficult. Those ratios are inherently unstable, and we just don't have enough price history for me to effectively do that. For example, the correlation between 2 assets might be 1 for 2 weeks and then go negative. It's really tough in crypto, and I've just noticed that there's a tremendous amount of instability in these ratios.

The best thing that I try to do is calculate the beta to the asset and think about how the market environment would affect that. Then you can come to your conclusion. You can either do 1-to-1, maybe do a little bit more, or maybe do a little bit less.

What I don't do, for example, is say, “Okay, well, the position has gone up. Now let's rebalance to make sure it's still a beta-adjusted hedge.” I don't do that because it's very unstable.

Yeah, you need a machine to rebalance those trades for you.

Yeah, exactly.

So you don't have to do it yourself.

5. AI Runs Into Electricity

I think that right now, the other trade I kind of like is the AI trade. NVIDIA went up the entire way back. It's up 30% in 5 days, and AI coins haven't really done much. I think that if Bitcoin gets above 60 and holds, you probably get a resurgence of that narrative.

The one thing that I'll say is that WULF has done really well. Oh, wow, that's crazy. I just mentioned WULF, and then somebody typed WULF. WULF is doing really well. Druck bought, Soros bought, and I think it's still underpriced. I've held that position for months at this point. I've been accumulating it for a while. I really like it. I really like the management team. I like their expansion plans. I like their cost of capital.

Why? Just for the people who aren't versed on this, what is WULF and why do you like it? What's the elevator pitch?

Long story short, WULF was a Bitcoin miner. They're also signing contracts to build AI data centers. They basically have a very good plan to expand, and they have a very low cost of electricity. They're moving into providing HPC compute for people who need it.

Yeah.

I think they're going to do very well here.

Okay. So a lot of miners—let me just poke one hole in your thesis. A lot of miners are pivoting to AI.

And they're all crazy incompetent.

The miner space has ripped. P/E ratios are high. I don't have my Bloomberg in front of me, but they're high. So why WULF? Why is WULF priced for a rally? Is it a pure narrative trade, or do you feel like WULF lagged and they have a better plan?

I didn't want to get too into the details here, but they basically have a site called the Lake Mariner site, and it is an extremely valuable and underappreciated asset on their balance sheet. It's going to take a while to convert it and actually provide these services, but I don't think the Street has quite appreciated how much they're going to be able to provide from that site. It hasn't really been talked about enough.

Yeah.

That's why Druck and Soros are coming in. I also think the management is really good. Those guys have been in the electricity business for 30 years, and you can't really say that about any of the other miners. I think the management team is just a lot more competent. That's why it's really my only—it's the only miner that I hold.

So it's like our new Coinbase that we should look at in TradFi markets as a kind of crypto proxy/AI proxy. Interesting. Okay. Here's my take on this. You mentioned the word electricity, which I'm really glad you brought up, because I have a take on this. Basically, I think that the way AI is going to scale—

Mm-hmm.

The way that it's going to consume compute is, at first, the demands of AI search, which consumes something on the order of 10 to 100 times the energy of a regular search. I think that at first, centralized providers of compute, like WULF, OpenAI, and Google, will be able to keep up because these operators can source the GPUs and the silicon they need to run our current level of humanity's search needs.

But as the volume of queries that the world currently pipes through Google shifts from Google to AI engines that contextualize the search and consume 10 to 100 times the amount of energy that Google does per query, I think that, basically, centralized operators are no longer going to be able to handle it. They may be able to source enough semiconductors to handle the compute, but they won't be able to power them in a cost-effective way. So basically, my thesis is that it's going to be electricity, not compute, that drives AI into the world of decentralized computing, i.e., crypto, basically.

And I think that Bittensor—Chief, you know, shilled us on this—the more that I do my homework on Bittensor, and I don't like adding core positions without doing a lot of work, the more work I do on Bittensor, the more I'm like, I think this is the platform that's going to provide compute in a year or 2 years when the query volume for AI goes exponential.

And just to finish out the thought, every schmo is paying for electricity in their apartment. They're not going to notice if their GPU consumes a little bit more. So I think that basically the way that AI queries need to scale is a horizontal problem.

Horizontal scaling means that every Joe out there is mining a little bit of TAO, trying to earn a little bit of this distributed computing revenue that's going through the internet. It's not necessarily a problem that can be solved with vertical scaling, where one operator just buys all of the GPUs and sources all of the power.

I think the GPUs will be available in significant quantities to centralized operators, but electricity will not, right? It's too complex. You need the electricity problem to be distributed. So I think that it's actually a commodity question that's going to cause AI to go decentralized.

And I think that Bittensor will benefit not because of the compute necessarily—the compute is there on Bittensor or in centralized modalities. It's really the power that's going to force AI into the land of decentralized computing. It's a nuanced take, but to me, it's crystal clear as a commodities guy.

Yeah. I mean, that makes sense to me. I don't really know how you draw the connection between the decentralization of electricity—or the decentralization of AI being driven by electricity—and how Bittensor necessarily benefits.

Yeah. Basically, what I'm saying is there's going to be a baseline network of providers of powered compute for AI queries. That's going to be a network of centralized providers that we've discussed already. But then, when demand exceeds supply, you need some sort of marginal producer of powered compute to come online, and that marginal producer is probably a random guy somewhere in the world, right? And I think that—

That is fair. I mean, regardless of how this specific thing plays out, I'm fairly confident that over the next 3 weeks you're going to see a resurgence in people betting on AI, just because of how well NVIDIA did and the fact that people haven't really caught on to that in the crypto markets yet. Even today, AR is up a ton, doing very well relative to the rest of the market. I think you can run all these as pair trades.

Just to take a step back for a second, the move into decentralization, I think, is always going to be forced by costs. That's why people are doing it: in a globalized world, it makes sense to be able to run things in a decentralized manner.

And in a world where technology allows a human to do more and more every day, the leverage that you get from using a computer today is way more than using pen and paper 200 years ago. You can do a lot more; an individual human can do a lot more.

So when you think about something like providing—I’ll use Helium as an example—it’s been beaten to death, but it’s sort of coming back now. It was never possible before for an individual person to provide wireless services simply by buying a piece of hardware. It just wasn't possible; that technology didn't exist. And so now that it does exist, you can provide lower-cost services through decentralization because it's easier for one person to provide that service as technology improves.

Yeah.

And this is also what AI is doing, right? It allows one person to provide a service that they couldn't necessarily provide before, which makes sense for a marketplace to be decentralized. You can go out there and, instead of having to aggregate a bunch of people in one area, get the same output from individuals who are all over the world.

So it just makes more sense. Again, that's one of the reasons that I'm super bullish on Helium. Like I said, I love Helium. They're actually adding something like 400 subscribers a day right now.

What?

They—

Really?

Yeah, 400.

Are you serious? Where?

Yeah, I'm just making sure that I got the numbers right. Year to date, Helium Mobile has added almost 80,000 new subscribers, which is crazy. AT&T and Verizon have added about 550,000 new subscribers.

So Helium is already onboarding 13% of all the subscribers that—

To me, that's—if this had more green shoots, if that headline had hit the market in 2021, Helium would be up a bajillion percent on it. And now people are literally so jaded with crypto that they're just like, “Show me that Helium has disintermediated AT&T, and then maybe we'll consider buying the token,” you know?

Right. Well, it's totally outperformed the market, I will say that, and it's one of the things that I'm most proud of holding because I actually think it's solving a real problem in this world.

6. L2s Cannibalize Ethereum

I'll say that somebody asked a question here: “Brother, your Wormhole and stuff are going to zero.” I agree.

I hate Wormhole.

I mean, bridges and L2s are basically going to zero.

It's infrastructure no one wants or needs. There was an undersupply of block space and an undersupply of infrastructure for 10 seconds 3 years ago. That era is over. Now you have an oversupply of block space.

The world is like, “Okay, so it's nice that you can bridge from L1s to L2s. It's nice that the Across Protocol is there to help you get your assets onto Base cheaply from mainnet.” But in terms of cross-chain protocols, man... Dude, the re—

The reality is nobody cares.

Yeah.

And L2s are cannibalizing ETH, and I think we're just going to see activity congregate onto specific chains. So things like Solana, TON, maybe Ethereum, although, again, I'm still bearish on Ethereum just generally. I think the user experience is pretty bad.

Over what—

Over what—

Should I sell all my ETH and just rotate it into TON and TAO?

My personal view is that there's no reason to hold Ethereum anymore. We've talked about this. I don't want to rehash it.

No, we've actually talked about the opposite of that. We've talked about how ETH is hated and it's coming back. We've never said that it's over, you know. That's a spicy—

No, every time I've made this argument, I've said that ETH is bullish in the short term because of flows, but over a long period of time, I'm very bearish on Ethereum. This has been a very clear stance of mine from the beginning.

Yes, it can do well because of flows over a 6-month timeframe, but over a 5-year timeframe, I see no reason to hold this thing personally. So, yeah, I just see it losing really badly because, again, its user interface is not great. The lack of leadership, I think, is very worrying. It's a completely decentralized network, sure. But if there's nobody... Bitcoin doesn't depend on BD as much because basically, what you have to do with Bitcoin is what gives it value is you buy it and you hold it. So if I go to people and I say, “Hey, I bought this thing. You should buy this thing because it's a digital gold, because it'll protect you in times of inflation, because it'll do all these amazing things for you. It'll save you if you need to flee in the middle of the night because Jew hatred is getting too much.” You just have to buy it. That just gives it value. Ethereum needs people to build on it in order for it to have value. And if you don't—

People are, though. They're just building on L2s.

Well, kind of, but even L2s are going to cannibalize ETH, and I think L2s will cannibalize—

Stablecoin market cap is at all-time highs. I don't know what percentage of stablecoin transfers occur on Ethereum or in Ethereum L2s, but I would guess a significant percentage of them.

Polymarket, I guess. There’s plenty of stuff going on.

L2s can take off. L2s can get interesting activity, but they’re going to cannibalize ETH. This is what we’ve been saying—or, you know, I’ve been saying—for a very long time. A lot of other people have been saying it, too, and everybody kind of ignored us. Everybody who was invested in L2s kind of ignored us.

But the reality is that L2s cannibalize activity on ETH, and they don’t provide enough fees to ETH to make it worthwhile.

Yeah, they—

So I—

But L2s are uninvestable, too, so L2s just kind of play spoiler, right? Their own tokens suck, and they make ETH less valuable, is what you’re saying.

L2s are like RFK or Ross Perot. They just spoil it for the main guy and then make him lose.

So basically, what you’re saying is I should eat my CryptoPunk and move all of my other Ethereum assets into—

I like NFTs. NFTs are great, but only the ones that have real history and real provenance, like your CryptoPunk—

Cultural relevance, as they say.

And cultural relevance. If it’s culturally relevant, sure. My EtherRock, like Rock83, will be culturally relevant forever.

Wow, this comment section is great. I think this Twitch setup headache was worth it. This is fun.

It took me so long to figure it out, but I finally figured it out. The tech setup was a nightmare. I don’t know what I’d rather do: have Kamala be president or go through that tech setup again.

We have a guy on here—

Both equally horrible.

—who’s literally offering to be our new engineer. This is awesome. Anyway—

Yeah.

—like—

I mean, this guy—

Back to—

7. The Macro Bull Case

I mean, I’m down. See, the thing is, just to talk about the general market one more time, because I see somebody wanted to hear about that, my view is that we’re going to have a great, great, great year.

Just to talk about the equity markets for a moment, people are worried about whether, at Jackson Hole, maybe they hike 50 basis points. It doesn’t matter, because what matters is growth. What matters is the data. What matters is inflation, unemployment, and earnings. This is what matters.

And I think at this point, the Fed raising 50 basis points—the room-temperature take is that the Fed is made up of these very smart guys, and they know something that we don’t, and so that’s why they’re raising 50.

Cutting. Cutting.

Hold on—the Fed is made up of these very smart guys, and they know something that we don’t, and so that’s why they’re raising 50.

Cutting.

Yeah, sorry. Yeah, cutting. I keep saying “raising” because—yeah, my bad. Cutting. So that’s why they’re cutting 50, because these guys are—

But the reality is they’re not, and they’ve proven that they’re not. Real money doesn’t even follow that anymore. It’ll be a blip. The only thing that will really change this is a deep recession, in my personal opinion. That—

That’s not coming.

And that’s not coming. Based on the data, that’s not coming.

Basically, what it would take for a big recession to come is policy error. You would need Kamala to get elected and institute price controls. You would need Trump to get elected and put 80% tariffs on auto imports or something crazy. You would need policy error to cause a recession at this point, or a massive commodities supply shock, which I don’t think is going to happen.

I think Iran wants détente. I think Russia and Ukraine are more likely to end the war next year than not and flood the world with hydrocarbons. Honestly, I just don’t see a recession. I’m a macro bull right now. I like all equities, especially on dips.

I think that against that backdrop, and against the backdrop of rates going down, the macro tailwind for crypto just looks insanely good. But when I say crypto, I really mean Bitcoin.

What I’m worried about when I look at my portfolio—the potential toxic risk—is whether my ETH allocation, which is substantial, is going to become a flaming pile of elephant shit, or whether it’s just going to skyrocket past Bitcoin, go straight to $10K, and outperform like crazy on institutional adoption with a friendlier SEC.

To me, it feels binary. I don’t know what’s right or wrong, and I’m getting a little uncomfortable with that piece of my portfolio. I’m thinking—I go back and forth. Some days I’m like, “Trump’s going to win. The SEC’s going to get friendly. Institutions are going to start settling in. ETH is going to the moon.”

Somebody said that 50 is needed—

And then other days I’m just like, “Why do I even own this thing?” I want to get out of all of it and rotate it into other things that I’m more excited about. What were you saying? Somebody said what?

Yeah, sorry. Somebody said, “25 bps unless NFP is shockingly bad. Why is BTC underperforming both the Nasdaq and gold?”

First, BTC really never follows gold. It follows gold over very short periods of time, but it doesn’t actually—if you look up correlations over a month-to-month time frame, it doesn’t really follow gold. It mainly follows the Nasdaq.

The reason is because there are fewer people looking at crypto and less allocation into crypto than there is into equities. A lot of the people who sold crypto sold and are just waiting on the sidelines right now because there’s a lot—most people don’t have a mandate to be allocated to crypto, whereas people have a mandate to be allocated to equities.

Generally, what you see is that when equity markets sell off and then bounce, it’s very rare that Bitcoin outperforms that. It’s actually quite rare. What ends up happening is that when equities stabilize, then Bitcoin starts to rip.

The other thing is that Krüger said, “50 is needed now and 25 would be an error.” No. No. Just wrong. 50 is not needed now. Maybe—

No, I mean, it’s not needed with stocks back at the highs. If things look shaky, I think the Fed is much more reactive to stock markets than they’d like to admit, right? So maybe a week and a half ago, a 50-basis-point cut would’ve been more on the table.

I think that it’s an election year. I think that a lot of people are politically sensitive. I hate to keep banging on this election drum, but crypto has become an episodic macro asset, just like many other things that I’ve traded in my career, and I see all the hallmarks of it. You have to pay attention; otherwise, you’re going to miss opportunities.

To me, one of the biggest opportunities that I’ve seen this entire year was something that we shouted out on our Emergency 1000x podcast. Crypto and stocks nuked right in the middle of a very sensitive time for Washington, and they telegraphed very dovish things very loudly. It seemed like an obvious dip to buy across equities, crypto, and all risk assets. We shouted about it, and frankly, we were right.

I think you have to buy these dips in this particular election year. You just have to.

Yeah. The only thing that’ll destroy us is if Kamala puts in price controls.

Yeah.

Other than that, I think we’re good.

Policy error. It’s really the only thing that could cause a recession: just showing up and getting it wrong. Trump could do it, too, just to be totally bipartisan here. Trump could do something stupid—tariffs, getting too aggressive with it. Who are you texting?

My mother.

Because I hear you texting. I hear it: clickety-clickety-click.

She goes—

Whoop. So you’re like my mom, who has the sound turned on.

She goes—

Is she in the chat?

No, she’s not in the chat. Girlfriend. Who else? His girlfriend. What girlfriend?

Your girlfriend.

I’m not a doctor. No, she asked me today if I was going to quit because she looked at Bitcoin and goes, “Bitcoin’s under $60K. Are you going to quit? What’s going on?” Fucking hell. No, no—

Well—

—no med school yet. No med school. Unfortunately.

My wife’s like, “How much do we have in crypto again?” And I tell her the number, and she’s like, “What the fuck?” Like, “What are you—” You know, I get shouted at, basically. And that’s just how it goes.

Oh, look, they’re asking us personal questions. What did I go to college for? I graduated with a degree in chemical engineering and computer science.

Wow. I did economics and—

Chemical engineering. Oh, sorry.

I did economics and operations research, but no one knows what operations research is, so I just say statistics because it’s basically that, but with—

a little bit of engineering on top.

Chemical engineering was the worst mistake of my life, to be honest.

Why?

The whole reason that I went into it was that I was super, super, super fascinated with the way that water moved, and I wanted to figure out how to think about it. I remember taking the drain off your bathtub and seeing the swirl, and thinking, “Why does it do that?” So it turns out that the way you model the movement of water is the Navier–Stokes equation, which is literally unsolved.

One way of solving it is this thing called Newton’s method, where you iterate through a bunch of numbers to try to figure out what the actual answer is. So what I found out was—the whole reason that I went into it—they were just like, “I have no idea. It just does.”

Doesn’t it teach you to do the research, though?

But then I fell in love with thermodynamics, so that was fun.

Thermodynamics is great. I started in physics, too. I used to work at Lawrence Berkeley National Laboratory at the particle accelerator. It’s called the ALS, the Advanced Light Source.

One thing those subjects teach you is that they teach you to do your own research, work really hard, and actually try to solve complex problems by just sitting there and grinding it out, which is valuable even in crypto. The other thing those subjects teach you is just how much stamina you have to have in order to sit through 60 years of researching a question whose answer you may never find.

So I think a lot of people who start in the hard sciences end up in trading because they want a shorter feedback loop. They want to know whether what they’re doing is kind of working or not.

100%. The dopamine is great, and you still get to use math, and you still get to think about statistics, and you still get to solve complex problems. It’s just that you make a lot of money.

Yeah.

Or lose a lot of money, and then you just go back to engineering. Actually, I will say, if anyone here is studying in university right now, getting an engineering degree was the best thing I ever did for myself because it taught me how to think.

I probably wouldn’t have chosen chemical engineering because it was really, really fucking hard. But engineering just helps you think. Oh, hello.

Hello.

We have to go. My girlfriend is calling me.

Well, that's the end of the episode. Not financial advice. Love you all. Do your own research. We don't know anything. We usually don't either.

Yeah, I know nothing. All right, coming. See you guys.

All right.

Gotta go chop some grass.