比特币即将突破新高吗？| Will Clemente

Ethereum— is that the XRP of this cycle, or is it finally going to perform at some point?

No, I think Ethereum's screwed. I tried to give ETH/BTC a shot, especially around the ETH ETF launch, and got toasted on that. You just have to look at the SOL/ETH chart. Knowing how reflexive these assets are, it's hard not to be bullish SOL.

Yeah, dude, ETH is completely and utterly fucked. I've been saying this for so long, and I will continue to say this. Done.

Avi actually talked me out of my ETH. He literally ruined my day, and thank God he did.

All right. We're live, everybody. Welcome back to another episode of "1000X." The usuals are back, myself and Avi Felman here.

We are joined by Will Clemente, co-founder of Reflexivity Research and a very big name on crypto Twitter. We are thrilled to have you, Will. Thank you very much for joining.

Thanks for having me, guys. I listen to the show every single week, so it's great to be on. I apologize that I can't show my beautiful face to the listeners, but unfortunately, my Wi-Fi is equivalent to a potato right now. I'm running on Helium Wi-Fi, so we'll see if I can get the camera on at some point.

It seems to be—

That's all good.

—a disease that this podcast inflicts upon guests and hosts alike: terrible Wi-Fi—

I mean—

—and internet problems.

Jonah, wouldn't you think, given this is a crypto podcast and Bitcoin's above 70K, everybody can afford a good internet connection and a good camera? I don't know.

Anyway, Will, thank you for being you and for showing up here. Do you want to tell us a little bit about how you got into crypto and how you ended up becoming the Michael Jackson of crypto Twitter?

I don't know if I would say all that, but yeah, I could give a little high-level background. We can get to the doxxing part and the pros and any cons to that, because I've found that it goes both ways.

1. How Will Found Bitcoin

I originally got into the space at the beginning of 2020. If we take a little bit of a further step back, at the end of 2019, I was in college and needed some beer money in between semesters. I was working an overnight stocking job at an arts-and-crafts store called Michaels. Some people on the East Coast of the US may be familiar with this store.

I came in at 2:00 or 3:00 in the morning. It was a brutal shift. There were 3 other people there. You tend to get some interesting people that you aren't having the greatest conversations with, because it's the night shift at Michaels. I was losing my mind. It was 8 or 9 hours overnight, and I was coming in at 3:00 in the morning and leaving at around 10:00. I would unload the truck and stock everything.

So I started listening to podcasts. At the beginning, it was just brain rot—Joe Rogan conspiracy theory stuff. Then I thought, "Maybe I'm going to try to learn a few things. Maybe I'll make a couple dollars." I started listening to generic investing stuff.

I started with all the Warren Buffett value-investing material. Shout-out to a guy named Preston Pysh. He runs a podcast called We Study Billionaires. I literally started at the first episode and listened all the way up to episode 100 or 150 or something. I fell in love with a lot of the traditional value-investing stuff: Phil Fisher, Ben Graham, all those guys.

I've got this big, fat Security Analysis book behind me on my shelf, which is just a paperweight now. I tried to do mini discounted-cash-flow models at my desk in college. It never went anywhere.

Very shortly after that, COVID hit. Obviously, there was a big drawdown in all asset prices during COVID, followed by a pretty quick recovery. At the time, I was very bamboozled by why asset prices were going up while the economy didn't seem to be in such great shape.

I figured out that all this stuff was driven by liquidity and the amount of monetary units in the system. I came to the conclusion that the thing you wanted to own in that environment was Bitcoin. So the very small amount of money that I had at the time, I started putting everything into Bitcoin.

I then transitioned from working at Michaels to working at Target, doing the in-store shopping orders. I would go around Target fulfilling the orders while listening to Bitcoin and investing podcasts. As I was dollar-cost averaging my very small position into Bitcoin, I started tweeting about my thoughts on Bitcoin.

I think I got on Bitcoin Twitter, or crypto Twitter, in June or July of 2020. I was just relentlessly bull-posting. I wasn't saying anything groundbreaking, but I continued to post on Twitter. The account started to blow up.

I put out an article about why Bitcoin was a great macro asset and debasement hedge. That started to get picked up by a couple of people in the Bitcoin-maxi circle. Preston Pysh, whom I mentioned, gave me some love early on. Then Anthony Pompliano, or Pomp, asked me to come on his podcast.

I had around 5,000 followers. I went on and basically gave the Bitcoin thesis. I kept putting out a bunch of content, and obviously Bitcoin went from 8K to 60K–65K within a matter of months, as soon as I had gotten on Twitter. I had some great tailwinds for the account.

Toward the back half of the year, into 2021, I started thinking, "I think I have the big picture of what's going on here, just in terms of debasement driving Bitcoin. This thing is clearly here to stay."

Then I started thinking about how I could maneuver a little more tactically and maybe make some money in this market. I lost a ton of money at the beginning trying to trade my own PA. I'm still figuring it out today. It's not that long ago that we're talking about.

Through 2022, I ate some glass, obviously trying to trade as the market proceeded to go down only. Toward the back half of 2022, I decided to launch Reflexivity, the research firm that I'm still helping out with. We recently got acquired back in February, but I launched the research firm with Pomp.

The thought process there was that we had a competitive advantage in terms of the distribution of the 2 of us and our social presence. I was able to utilize that to build some early partnerships and eventually build the firm out. We had a couple of great early analysts.

Filipe Zhao, who's now at Blockworks, is one of my favorite macro guys. I found him early on. He had this banger thread that brought a bunch of eyeballs to his account, so we brought him on. He was a contractor for us doing some macro work.

Knowhere, whom I know you're very familiar with, is a really smart guy, around my age as well. I think the firm became pretty well known for putting out some decent thought-leadership work. We worked with a ton of crypto protocols, and we also launched an events business earlier this year.

Like I mentioned, we got acquired back in February, so I'm still fairly involved with the business, making sure that everything's running day-to-day. Other than that, that's how we got here. I'm also generally managing my own money in the background.

Yeah, I think that's a good background. One thing that I always found interesting about the way that you came into crypto is that you're pretty young. You're probably the only person under the age of 30 at this point who got into Bitcoin first.

I feel like everyone else who got into crypto got into altcoins, at least on the younger side. You normally see the Bitcoin-maxi side as the guys who got in in 2013, or as older, more conservative people. So you started off basically only buying BTC, if I remember correctly.

Can you tell me a little about that? Obviously, given the time that you got in, you must have been exposed to altcoins, but why did you end up focusing so heavily on BTC?

It's funny—I mentioned Filipe Zhao. Obviously, we've become pretty good friends, and this is something that we relate to each other on because he was also originally in the value-investor bucket.

I think that goes to show that there's something to be said about understanding the way investing is supposed to be when you have the correct cost of capital, and all this stuff is in a wonky world post-2008 because of all the inherent manipulation that's taken place within our monetary system. That has messed up the way investing has worked and the way markets have moved.

I think when you come from the perspective of how investing is supposed to work, then you understand why it isn’t that way. You come to the conclusion that all this stuff is messed up because of the shenanigans around monetary policy. Then you come to the conclusion that this is why you want to hold Bitcoin.

2. Bitcoin Maximalism Breaks Down

I’d say where I mid-curved it early on—and this is my bone to pick, if you will, with a lot of the Bitcoin maxis—is that I think a lot of them mean well. Obviously, I was originally in that camp of thinking everything but Bitcoin was a scam. I obviously no longer think that’s the case, because a lot of the stuff is not worth anything.

But even if you do, the same properties that would be conducive for Bitcoin to do well over perhaps a decade- or two-decade time horizon are the same things that you need for a kind of speculative mania. One of my favorite books about crazy periods of financial turmoil is When Money Dies. It’s about Weimar Germany, when the mark basically went parabolically worthless and had hyperinflation.

Everyone’s probably seen the chart of the mark measured against gold. Obviously, gold went to the moon in mark’s terms, but another aspect that’s very loosely talked about—or strategically not mentioned by a lot of the Bitcoin-only crowd—is that you also had this tremendous period of financial speculation. That’s just a byproduct of wealth inequality: people feel like they can’t get ahead, and the prices of everything are going up.

Obviously, I’m not saying that we have hyperinflation in the US or that I think we will. But as people get further behind and wealth inequality increases, driven by poor monetary policy, the people who own assets see those assets continue to go up, while all the people who don’t own assets continue to get further behind. That type of dynamic encourages more and more speculative behavior.

That was the moment for me when I said, “If I’m a little more cynical, not only is this the same thesis that I’ve applied to being bullish on Bitcoin, but that should also apply to a lot of the speculative activity within the broader crypto market as well.” I do think people are generally trying to build good things, and there are some interesting things going on. But even if you were to take that out—let’s say it was only meme coins and nothing else—I still think the same backdrop that’s conducive for Bitcoin should be conducive for alts. It took me a good year and a half to come to that conclusion.

That’s a really interesting take. A couple of things to unpack there. The first thing is how you learned to trade and invest from podcasts. That’s something I wish I’d had available to me when I was 19. I, too, picked up Benjamin Graham’s The Intelligent Investor, and it fried my brain after a couple of pages, so I turned it into a paperweight.

But I couldn’t listen to an executive summary or hear it debated back and forth between people on Spotify back then. To me, that hammers home the idea that financial education is much easier to digest through podcasts than pretty much any other format. So shameless plug for everybody out there: keep listening to the "1000X" podcast and podcasts like us. I really appreciate hearing that, and I also appreciate that you listen to ours.

One other thing you said that interested me was that a value-investing framework helped you hold on to Bitcoin. I thought that was interesting because most value investors I talk to think that Bitcoin produces no income, so it’s worth $0 a token and should go to $0.

But I think what you probably did was take that value-investing framework, assign some really high value to Bitcoin because you saw it as digital gold before the rest of the world did, and then ultimately recognize that the real juice in the value-investing framework Ben Graham and Warren Buffett set forth is the idea that you should ride a trade until it converges with your perception of fair value.

When I was your age—well, I was a little older than you, actually—but when I was younger, I would buy Facebook for $19 a share, sell it at $30 a share, and high-five myself for making 50% on my trade. I would never think that something like this could happen.

In the spirit of riding trades, you mentioned that you’re now not really a maximalist anymore. What are some of the other spaces, sectors, tokens, or things that you’re applying this mentality to? Where are you riding the tiger, basically?

Yeah, for sure. Before we move on, on the first point, I totally agree. I mentioned this on the podcast before, but I think especially in crypto, there’s such an openness to share insights with people you don’t know and reveal some of your edge to people you don’t know.

Getting active on Twitter and having some ability to filter out total LARPs and people who only halfway know what they’re talking about—I use Twitter as a screening tool, to an extent. Podcasts, going back to 2021, Up Only was lovely, and I would religiously listen to every episode of that. I think this podcast has taken Up Only’s spot as the premier trading podcast that everybody listens to.

I also got active in Telegram and built a group of friends to navigate the markets with. I totally agree that the ease of access to information is greater than ever, broadly, for almost any discipline outside of maybe engineering or the medical field, especially with trading or investing. But I think that’s amplified even more in crypto.

3. Solana Leads The Altcoin Trade

To go on to the second question, I think there are a couple of plays that have been and continue to be quite obvious to me, going back to the middle of last year. Some of these are probably not going to be that controversial. The first is Solana. Solana has just been the barometer for all the activity going on with meme coins and all the speculation there.

I also think you generally have this cyclicality embedded into the minds of the people participating in crypto. I think Solana is the ETH of the last cycle; it’s very much been ingrained into a lot of people’s brains. Being in the camp of reflexivity, if you just look at the SOL-ETH chart, the momentum is too far gone at this point. I’m not saying that SOL can’t go up, but I don’t see any logical explanation as to why SOL won’t continue to outperform ETH.

So I like SOL a lot. I’ve also been pretty vocal about Coinbase since late last year. I went pretty long on longer-duration calls on COIN around $70 in October of last year, and I still hold the thesis I had then, which is basically that Coinbase is generally a venture-style play.

It’s probably the most venture-style play in public markets since Tesla 10 years ago, because they’re launching several different verticals within the business that didn’t exist in 2021. They really laid the groundwork for those throughout the bear market of 2022 into 2023.

Base is a great example. It would be interesting to hear the earnings call after we get off of this and see if maybe they’re touting Base pretty hard. But now that seems to be the premier ETH L2.

There’s the custody stuff, their stake in Circle, the wallet-as-a-service offering, and the staking stuff. There are several different verticals within the business that have slowly diversified it away from just being an exchange. Now I think you can see it as somewhat of a crypto super app, if you will, or somewhat of an indexation play on the broader crypto space, excluding Bitcoin.

I also like MicroStrategy. I like it even more after Saylor just said he’s going to buy $42 billion of Bitcoin. I haven’t looked into that or what that even means, so maybe Avi, you’ve looked into it a little bit. But I think the thing with—

Well, I can tell you MicroStrategy is down a lot after hours because obviously this means the stock is going to hit the market, right? He basically sells MSTR to buy BTC. That’s effectively what he does.

Right.

I think the premium should converge a lot if he’s announcing that this is his plan, but we’ve all said that before because he’s tried.

He's basically done this in smaller size, and the premium just stays where it is, which is kind of interesting. So I don't know how I feel about MSTR. It's funny: going into the ETF, it was such a consensus play. I believed it too—that the MSTR premium would shrink—and it just hasn't. It was just blown out; it just keeps going up. It's one of the mysteries of the market.

I think it's this positioning thing. We had Quinn Thompson, our crypto investor, on, and we talked about this on the last panel of the day. It's one of those things where the premium, in a lot of people's eyes, shouldn't exist, and so you have a lot of these strat-fi funds that are going to come in, short MSTR, go long BTC, and keep getting blown out.

I think you may have this dynamic where people keep trying to step in and basically play that convergence, and then perpetually keep getting blown out. So I think there's some kind of positioning stuff there that makes MSTR pretty interesting. But regardless, they're basically a leveraged, yield-generating ETF, and then you get these positioning-targeting shenanigans that may be sprinkled on top. So I like MSTR as well. And then the other one—

Hold on. Quick question on that.

Yeah. Yeah.

I haven't done the work on MSTR, but to me it looks like another financially engineered, GBTC-like equity phenomenon, where there's just this lurking risk that I don't know how to quantify or understand. Anywhere where there's a premium and, like, locked BTC that you can't really redeem as a shareholder—are you at all worried about that, or am I just being irrational here?

They can't keep issuing equity if there's no longer a premium, right? Because basically what Saylor's doing is, anytime it trades above the value of Bitcoin, he just dilutes the shares back to whatever the par value should be with BTC.

We did a deep dive into the debt structuring of MicroStrategy. I haven't looked in a long time. I don't own MicroStrategy, but I do generally like it. We did a deep dive back at the end of 2022, when everybody was saying that Saylor was going to get liquidated. We basically said the only debt that was at risk was the Silvergate loan, and he ended up actually making money on that.

I think the way that the debt's structured, as long as the software business is able to keep paying the debt payments, then they're fine. So I guess you technically have risk there, but obviously, if Bitcoin keeps going up, then it's fine.

The other big one on the crypto-equity side has just been a lot of these miners that are transitioning to AI stuff. Obviously, with the build-out of AI infrastructure, people need power, and a lot of these Bitcoin miners have not been doing well or generating a lot of shareholder value. In a lot of cases, they've just been diluting their shareholders into oblivion.

So I think a lot of these Bitcoin miners are becoming very compelling as a play on AI. We've talked about WULF before in the Nigerian Delta Avengers group chat. Avi shared a very detailed thesis. I didn't do nearly as much work on the play as him. I just rotated all of my COIN calls from last October into WULF at 4.20 or 4.30, and that's done nicely so far.

A lot of the other ones look nice as well. I don't know if we're able to screen-share, but if you just pull up a lot of the charts for some of these Bitcoin miners, a lot of these look pretty crazy on weekly and monthly time frames.

Yeah.

I really like WULF a lot. I'll say that the WULF thesis for me hinged more on a very specific site that was being underappreciated on WULF, which I think is par for the course for miners in general. People just don't study them enough and don't actually understand their businesses enough. There just isn't a tremendous amount of coverage, especially of the lower-market-cap ones, on Wall Street.

You end up with situations where you have a site that you're building out that's going to double or triple your capacity to mine Bitcoin, and that's just not priced in. That's kind of what's happening with WULF.

Generally, that's my play when it comes to crypto equities: look for things that people have overlooked. If you're looking for beta, you can look in crypto in general to get beta. Maybe you just want to keep money in a brokerage. But at least with miners, it's about finding those specific edges, which is why I still like WULF a lot: you found a specific edge in WULF. I do think, across the board, mining is just such a tough business.

Yeah.

It's just so cyclical. There are only a few months at a time, maybe a year, when you actually end up really profitable as a miner, and then everything just readjusts itself, either because Bitcoin prices collapsed or a ton of new mining machines come online. It's such a tough business to hold these things long term.

I think some of the financing stuff that wasn't around in the 2017 cycle took out maybe some of the capital-intensive, cyclical nature of how Bitcoin mining and the cycle around it are supposed to take place, and the capitulation around inefficient miners. I think there was a lot of excess that was able to stick around after the last bear market that, without access to financing, a lot of those firms maybe wouldn't have made it through the bear.

So, interestingly enough, in 2022, when I was Mr. White Collar Professional Crypto Guy and it was my full-time job, I was asked to speak at the executive offsite of one of the major miners. I'm not going to dox that particular miner's name, but basically, I went and talked to them about my views on crypto. Then there was a Q&A where they were explaining their strategy, and I got a little peek under the hood.

This was obviously one of the most successful miners, if not the most successful for a while. What blew my mind was that the way they deal with that cyclicality is essentially by accumulating gains from holding onto Bitcoin, not selling all of their Bitcoin during those run-ups, and then attempting to lock in profits near local peaks or tops.

Then, obviously, on the way down, they're financially buttressed because they've achieved greater returns from riding the upward waves than from constantly mining and selling, mining and selling. When I heard that, I was thinking to myself, “Okay, you guys are obviously very good at this, but you're valued like a stable business, yet you're actually a trading company.”

A trading business should be valued at 2 or 3 times earnings, right? But you're investing in a trading business at, I don't know, whatever these things trade—like 20 times earnings or something. So, to me, I thought that just sounded like a bad investment.

At that point, I was thinking, it's great to be them. They get that richly valued stock. But as an investor, you're basically investing in a trading business. Now, post-AI, these guys basically just opened a new business line, so they can do the Bitcoin thing but also earn consistent money from whatever they're doing for AI demand.

Maybe it's a more diversified, better investment now. Back in the day, though, I just felt weird about it. That's not to say that it isn't an incredible beta trade to crypto, and Avi's played that really well. I just couldn't wrap my head around it.

Yeah, I generally agree. I used to think of Bitcoin miners as just beta to BTC, but toward the back half of last year, they very clearly weren't trading like that. I think a lot of that was just the miners continuing to dilute shareholders.

The green-light moment for me—the light-bulb moment for WULF—was when I read this investment-banking report from Cantor Fitzgerald. They basically looked at the multiples that were put on the traditional Bitcoin miners, valued as Bitcoin miners, and compared that to some of these data centers being used for AI.

There's a re-rate trade just from the transition in how the market is pricing these things categorically as an operating business.

4. The Election Becomes A Bitcoin Trade

I guess just pivoting back to crypto for a second, though, markets are getting interesting. Markets are getting about as spicy and exciting as they've been in—what do you think, Avi? Maybe since March? February?

Yeah.

Definitely since March. I was just reading the MicroStrategy announcement. This is pretty nuts: $42 billion—

It just feels like—

—capital plan—

There’s so—

—$21 billion—

I’m literally like—

—at-the-market equity offering.

Oh, and all the money’s going—

Is it just a fluff headline, or is there actually some merit?

That’s a little bit of what I’m trying to read and figure out. But that’s what it says. Look, it says, “Announces a $21 billion at-the-market equity offering,” which generally means that they’re raising money to buy BTC with that, right? I mean, they want to raise—

That’s a lot of money.

The thing is, they’re announcing a strategic goal of raising $42 billion of capital over the next 3 years. Now, here’s the question: Do we know how much they’ve actually raised? Okay, yeah. So in Q3 2024, they raised $2.1 billion, right?

That means, if you expect them to keep going at the rate they’re going, they would raise $25 billion over the next 3 years. So what they’re really talking about is about 100%, a little bit less, I guess an 80% increase in the pace of what they’re already doing. You can basically say MicroStrategy is doubling the speed of its Bitcoin buying. That’s really what the announcement is. It’s a big headline, but the $42 billion headline sounds a lot more insane than it actually is when you think about it.

Yeah.

Still, they’re doubling the pace of buying BTC. That’s pretty substantial. I’ve finally been bullish for a bit. The biggest question, which I’ll pose to you, Will, is: Of the Bitcoin that’s been bought heading into the election, how much of it is sticking around, and how much of it is coming out?

Yeah. This is the whole giver debacle from the last episode. I tend to have a bit of a bullish bias when it comes to Bitcoin, so keep that in mind when it comes to some of these things, if I’m being completely honest.

On a net basis, there’s going to be more capital that comes in and buys BTC on a Trump headline because of the DOGE effect, as you mentioned, just in terms of him mentioning it. But then that decays over time. More broadly, I think it’s the perceived regulatory clarity and perceived decline in career risk brought on by the president and vice president both endorsing it, relative to the amount of buying that comes in and potentially selling the news. That’s where I stand.

I don’t really think the election entirely matters. There’s probably a bunch of vol hedging, especially in equities, that will come off on the backside of the election and can fuel asset prices higher. Even if Kamala wins, I think you get a dip on BTC, maybe it flushes out some leverage and then you buy that dip. It’s less clear. But I’m not really concerned about BTC as it pertains to the election.

At a high level, I think I’m a bit more long-term in terms of how I position myself, especially relative to you, Avi. But regardless, I think the deficit widens, no matter which of these 2 gets into office. I think the number of people talking about the deficit as a tailwind for asset prices is incredibly bullish for Bitcoin.

Over the last 2 or 3 months especially, it’s been PTJ and Druck coming on and talking about basically shorting sovereign debt and longing hard assets. They sprinkled equities in there because they kind of have—or benefit from—that tailwind as well. I think that’s tremendously bullish for Bitcoin.

5. VC Alts Face Their Test

Where I’m a bit more stuck in my thought process is as it pertains to alts. I’ve highlighted this on Twitter: 3 big categories of assets that I liked 2 or 3 weeks ago. One was Bitcoin, just as a debasement hedge. The second was these miners transitioning to the AI/HPC stuff. Those 2 subcategories have done quite nicely so far. There’s the meme coin stuff too, but that’s just a smaller portion of the portfolio. You just hold the assets that you like.

The third big one has been that I’ve liked alts, especially some of these VC alts that have gotten beat down and really hated heading into the election. My confidence has definitely gone down on that, given the price action of how these things are trading with the election a couple of days out.

But some of these assets that did quite well in the back half of last year into Q1 of this year tend to see follow-ups in the next leg up if they moved on the first major move, at least in terms of majors. I’ve been eyeing some of those things. I’m getting pretty close to my invalidation on some of those assets, in particular TIA and Sei.

We’ve talked offline about the TIA one, Avi, and today’s price action hasn’t been that surprising based on the unlock taking place today. But with something like that, I think you’ve got to look at what OTC activity is taking place, how it has traded into the unlock, and all those factors. Then you sprinkle on top of all that the price action from Bitcoin.

I’m leaning into the camp that I don’t think this is a super-bearish unlock. Again, I’m getting pretty close to my invalidation on the idea, but I think a lot of these things are probably trading higher in the next couple of months.

I guess my big controversial take, if I were to have one—because I don’t think mentioning Bitcoin, MicroStrategy, Solana, or Coinbase is that controversial of a take—is that I don’t think all of the VC alts are entirely screwed. I’m obviously bullish on meme coins. I’m not saying that Murad copied anything that I’ve said in the past, but I was talking about a lot of these things months back, in March and April.

I went on Pomp’s Pod, which may be the last podcast I’ve done, and talked about the bullish case for meme coins. I don’t think they’re going away. There are a lot of valid arguments around, obviously, the markups on the private side and the float dynamics with all the alts. We’ve heard about all that stuff.

I think the big argument against the idea that none of the VC alts are going to do well is that people who are allocating capital want to have a thesis. With the L1s, you can make a strong argument that there are some commodity-money-like properties to them if it’s something like SOL or some of these L1 tokens.

But even regardless of that, I think people allocating capital generally want to have some type of fundamental thesis. Even if it doesn’t fully have merit, they want to feel like they have something to hold on to, to sleep at night, that gets them through the volatility.

I think there will be a lot of guys around my age who maybe have money to just mess around with, who are going to punt meme coins and just buy and hold meme coins. That is 100% going to take place. But I also think there’s going to be a good chunk of new people who onboard who are going to come in and say, “Hey, I want to have some type of thesis,” whether it’s the network activity of whatever token this is associated with, or some type of story that I can paint to say, “Okay, this is why I’m justifying holding this thing over the next 3 to 6 months.”

Yeah. I think that’s a great point. Your whole sleep-at-night heuristic for why somebody would want to hold a token is really important, right? I think that’s why people feel comfortable investing in L1s. We don’t even need to make the case for Bitcoin; that’s obvious.

But ETH and Solana—if you’re younger than 30 and you believe that decentralized computing is going to exist in one form or another sometime in the distant future, you can definitely sleep at night holding ETH or Solana. That’s definitely going to be the commodity base layer for some sort of application stack someday in the future.

I think the problem with altcoins that are a little bit further out the risk curve than ETH and Solana is that it's like, how do you sleep at night holding one of these coins with a high FDV and a low float, wondering whether it's even going to be legal or not? And I think the whole altcoin thesis behind maybe a Trump victory would be: if Trump wins, crypto becomes legal. Right now, it's kind of illegal. I'm borrowing words from Chiefing Za [?], friend of the pod. He said that, not me.

But it's sort of true, right? Trump wins, crypto legal. Crypto legal, apps on crypto legal. I wonder if it's more complicated than that. So obviously, you have to pick and choose, much like meme coins, right? You can't buy everything that comes out of Pump.fun.

But certain things—maybe Helium; we joke about it all the time on the pod—but maybe things like that, DePIN, maybe Aave. There are a few of these things that, as soon as they're allowed to eat the markets that they've basically already disrupted, they just will. And then you're looking at some pretty insane valuations.

I don't know. I'm too nervous to catch a falling knife in that sector. I lack the confidence, so I'd rather just wait to buy stuff on the way up. If Trump wins, I'm going to be pretty locked in in December, watching what outperforms and buying the highs for a momentum trade in a couple of different crypto assets. What do you think?

Yeah. I think I'm getting pretty close to my invalidation, I would say. I guess I won't call out my exact invalidation based on price, but on a more qualitative basis, I think if Trump wins—which I'm in the camp that he wins—I think maybe there's a microbubble in Trump-winning expectations, and they've gotten a little ahead of themselves, but I think he's going to win. If these things continue to trade as weak as they have been after the election, then I'd probably cut all this stuff, and that'd probably be my invalidation there.

But I'm with you. I don't think it makes sense to hold a lot of this stuff if Trump doesn't get elected. I also don't know if, if Trump gets in, these things have sustained moves, but I would suspect that you probably get a good multi-week trade in a lot of alts on the back half of that, just because they've gotten beaten down so poorly.

I think there's a good amount of shorts built up on some of these things, and on a relative basis, I think they're fairly underowned. But by no means am I shitting on the meme coin thesis, because I have a decent meme coin allocation myself.

Yeah. I'll just echo that statement right there, which is that alts are primed. I think you have to think about the psychology of why they're not moving as hard right now, and it's because Bitcoin's about to do one of 2 things. It's about to break out of a range that it's been in for 8 months, in which case it probably has a pretty significant and quick move to the upside, and when that happens, it sucks liquidity out of the system.

Or Bitcoin's going to break down from the high of this range and probably not fall to 70K, but probably fall back down to 65K, which is a reasonably significant move. So what am I trying to say? I'm trying to say that this area is a pretty unstable price.

Alts do best when Bitcoin ranges at a good price and people feel safe. That's why alts can actually do well. Bitcoin doesn't even necessarily need to be at a high price. Alts did really well when Bitcoin got above 60K. It's just, okay, we think now that Bitcoin's above 60K, it's not going to go back below 60K for a while. Maybe it'll range here for a bit, and that'll give time for alts to go.

Right now, everyone's betting that Bitcoin's going to make a really big move. So I don't think alts are going to do much until a big move happens. But what has proven to be the right move almost every time is, the moment that Bitcoin puts in a fat candle—a 5% candle above the range, a 10% candle above the range—and alts haven't moved, you just start buying alts.

Then you wait a week, and even if the first 2 days are still bad for you, by the end of the week everything's up 70%. So that's my thought process behind how to buy alts and memes, or how, at least.

I want to hear what memes Will holds. I like that thesis, by the way, Avi. I'm going to do that because I'm wondering when to rotate, and maybe you're right.

Yeah.

I was going to wait for alts to make new highs and then just buy them, but I like your way better.

Will, how do you invest in memes?

Yeah. Just to touch on that thing with Avi real quick, I think one of the most interesting charts to me is looking at total minus BTC, SOL, and ETH market cap, and it's pretty remarkable that Bitcoin is a hair away from all-time highs, yet this is down 50%. So I'm with Avi, and I think if Bitcoin puts in a god candle, then you probably start to see a rotation to some of these things.

6. The Meme Coin Playbook

On the meme side, I think there's kind of 2 ways to play the memes. At this point, I agree with a lot of what Murad said, in the sense that the new memes are very tough because they don't have the price history and the distribution that's going to allow them to see these really crazy moves higher. So you generally want to look at memes that are older, 6 months or older.

If you just want exposure to memes and you don't really care—you just want exposure to the subcategory in your portfolio—and you've got more size, then you probably just buy the giant winners, because they're probably just going to reflexively keep trending higher. Or the other way to play them, I think, is just buying things that you like, and maybe you have somewhat of an edge if you're younger in understanding culturally.

Examples of this for me have been things like XIN coin. I've been pretty vocal on XIN. I originally bought XIN at a million-dollar market cap just because I like XINs, and it's a very culturally acceptable thing amongst people my age. It's associated with this huge shift toward based culture with people in their early 20s, and so I think ZYN is kind of an embodiment of that. There's been some recent talk about Tucker Carlson having his own ZYN—

What did you say? What culture? Based culture?

Explain it to the olds like me. Just break it down. What is it?

Based culture, yeah. Candidly, I think it's just that people have shifted more toward a lot of conservative values culturally. I think the pendulum has just swung so far to one side that now it's starting to revert back the other way. Maybe it's just my microbubble of people I hang around with, but it seems like there's a big shift back in that direction.

Tucker Carlson has now launched this pouch, and he was saying that XIN's PMI donated to Democrats, which isn't true. I think that's an interesting play on the cultural zeitgeist of people my age.

Another one is GIGA. That's been shilled by Murad, and obviously has done very well. I think the Giga Chad meme resonates with people our age and that kind of based culture.

The other one I like, which I fumbled very poorly, was Lock In. That's just a saying; everybody my age says, “Lock in.” You're like, “All right, I gotta lock in.” I tend to think that MOG can do fine, but nobody my age really says MOG. The MOG people are a complete cult; they spam you on every post. But nobody my age says MOG. Everybody says Lock In.

I originally bought a bunch of Lock In at 4 million. It ran to 20 million, and then I puked it as it rolled over. It went down 80%, and then, of course, after it went down 80%, proceeded to run up 50x to where it is now. Even though I don't hold any, I'm not a salty bagholder, so I still support that meme. I like it.

I like the memes that I feel like I can resonate with, because I feel like I have an edge in being able to identify them. I think this is going to sound a little wonky, but people who are generally younger and grew up on social media—things like, especially, Vine, rest in peace, Vine, or Instagram—you have to really be aware of a lot of these social trends because they turn very quickly.

People in my generation—I mean, every generation has sayings and phrases and things like this—but I think the memetic cultural aspect of it is even more relevant with younger people. So I think you've had to develop this eye for that type of stuff.

I think younger people probably have a bit more of an edge in identifying these things. The other reason—and maybe I’m biased—I like memes that I think people around my age will resonate with is that I think guys who are 18 to 25 are probably going to have more money than any other subcategory of younger people who are punting memes.

These are guys who might be frat dudes or people on investment banking desks and trading floors. I think they’re probably going to be more apt to punt some decent-sized money—$5,000 or $10,000, or something—into memes. So that’s why I like them as well.

I guess what really caught me about that was, “Invest in the memes that resonate with you.” I’ve only made money on one meme, but I did really well on it. It was Boden, and that’s kind of a meme that appeals to people like me and slightly older people.

I don’t understand the whole Gigachad-based culture stuff, but listening to you talk about it, I can see 100% why that, or XIN, or anything else would resonate with you. Young crypto-conservative culture—I guess I’m sort of in the middle-aged conservative culture—but we use different language.

I can totally understand now why you would buy one of those things at a $1 million market cap. That’s awesome. I guess the takeaway for listeners should be: invest in what resonates with you if you’re early. If you’re late, then you’re just somebody else’s exit liquidity.

I mean, it has to resonate with you and with the rest of the people. I don’t know if you’re 75 years old and something resonates with you, that’s going to catch on in the crypto world. So it’s best to talk to people younger than you every now and then, Jonah.

That’s what I’m here for: Grandpa Simpson to weigh in on this stuff.

I do think, generally, stepping even further out, that the animal memes are very difficult. Unless you’ve got a cult holder base, as Murad likes to talk about, with maybe something like Pepe or Popcat, I think it’s really tough for any animal-related meme to get escape velocity because there’s just nothing that’s tying you to the thing.

Not to shill XIN, but, for example, I just use XIN. I have a positive dopamine association with XIN because it’s a nicotine pouch, and I want to hold it. Or look at all the “lock in” guys in the chat, spamming, “Let’s lock in.” It’s a cultural thing that they feel the token somewhat gives them an entrance into, or amplifies—a cultural thing that they connect to. I think that’s really helpful.

Do you guys hang out with each other? Do you have meetups or something? I don’t know.

I haven’t done any meme coin meetups yet. Avi, I’m not sure if you—

I’m at zero, and I don’t plan on doing one anytime soon.

The EtherRock meetup, maybe.

I’m not a huge fan of crypto meetups in general.

Meme coins just enrage people. They piss off non-crypto people so much because, if you think about it, 50 years ago, with a government job, you could have a house in the hills in California or someplace nice. If you were a doctor or a lawyer, you were crushing it.

Now, if you’re a doctor or a lawyer, you live in the exurbs, and it’s the $ZYN coin people who are living in penthouse apartments in the middle of New York City. It’s ridiculous. I guess it is a kind of generational counterculture.

I tend to be more on the receiving end of the anger from the people who aren’t “in that culture.” They’re more like, “Oh, you’re in crypto. What the heck?” and they complain to you about it. But for you guys—for you youngsters—it’s literally a way to develop a parallel track in life and earn some serious cash if you’re early on one of these things.

Jonah, do your friends bet on sports avidly?

They used to, big time. I think a lot of them have calmed down now because your risk appetite for YOLOing $15,000 into the Bears game dissipates as you get older, hopefully—if you haven’t hyper-gambled your way into elite status and ended up as a wage cuck, which is where a lot of people end up just by the luck of the draw.

7. Retail Money Wants In

With people my age, almost everybody I know bets on sports, or at least all of my non-crypto friends do. It’s a very widespread thing. To take it even a step back, I would say there’s a dopamine epidemic among people my age.

You can just log onto your phone and get access to infinite amounts of dopamine, and I think it’s fried the dopamine receptors of everyone my age, including me, who’s glued to Twitter all day and checking every tick of Bitcoin even though there’s no reason for me to be doing that.

I think that’s driven people to be predisposed to want to punt on memes as well. Then you add to that all the hyper-speculation-type attributes that the monetary backdrop has been conducive to. I think if very avid sports bettors start to get a taste of meme coin gambling, that could be quite a catalyst for retail money to come in.

For now, a lot of my normie friends are putting 15-leg parlays on every other night. I think a lot of people now have this mindset: “I’m not going to make it from my job. I have my job, and that’s how I generate my cash flow. Then I’m going to make it by doing something on the side.”

I don’t know if that’s always been around, but it’s very prevalent among guys who have just gotten out of college and who I’m friends with. Maybe it’s just that age. Sports betting is definitely one where people are like, “All right, I make money, and then I’m degenerately gambling it on sports.”

Some of the more prudent friends are putting it into something like the S&P, but they’re cognizant that it’s going to take decades for them to really make it in any sense doing that. My point is, I think a lot of that money will come into the meme coin stuff.

Your point is so valid. When I was your age, the side hustle wasn’t really a thing. Maybe 1 out of every 50 people had one, but your career was where you were on track to go in life.

Now, I take your point: everybody does seem to have a few side hustles and ways to earn money in untraditional ways. I also had my first big dopamine kick from a meme coin, hitting a 50-bagger over the course of a few weeks.

I had been investing in venture capital deals and trying to be smart and trade my way around my whole career, and then suddenly a stupid coin that looks like a shitty cartoon is a 50-bagger—the best VC investment ever. Once you hit one of those, it’s impossible to go back.

I tend to think it’s worth it to take, especially if you’re under 25 and probably not trading with crazy size, 5% or 10% of your portfolio and try to gamble on memes, or try to hit on a meme. If you don’t, worst case, obviously, you’re down 5% or 10% on your portfolio. Best case, you’ve doubled the entire portfolio.

I think that’s probably how a lot of people coming into the space think, and that’s at least anecdotally how a lot of the people I’ve gotten into the space have thought.

Just a question from somebody who doesn’t really have friends who bet on sports a ton: there seems to be a difference in mindset, or maybe I’m misinterpreting it. People who are gambling on sports—they can make some money. It’s a little bit of a side hustle.

But people who are buying meme coins are trying to hyper-gamble and really make it. Are people who are betting on sports taking 1,000-to-1 payouts, really trying to make it? I don’t know.

I'm asking a question.

Yeah. No, these are crazy. It depends on the person. Some are very tactical and trying to compound small wins. But a lot of my friends will show me on the phone, “Hey, I’ve got a 12- or 15-leg parlay.” They’re trying to turn 25 bucks into a grand or 2 grand or something. It’s very much this YOLO kind of mindset.

Okay. Yeah. I mean, it would be great to capture that.

I just don’t think they know that crypto exists, right? I just think they don’t even know. It’s still early enough. I don’t even think they know what a Phantom wallet is. They don’t even know that this stuff is out there. People think it’s so difficult. There’s such friction to getting involved with it that they’re just like, “Oh, I’m familiar with doing this.”

Mm.

But I think it only takes 2 or 3 screen recordings of somebody’s MetaMask or Phantom wallet on TikTok or Instagram to go viral for a ton of this money to start flowing into the stuff.

Just thinking about 20 years ago, what people would’ve said if somebody was posting wins—posting screenshots of their bank account on the internet. It would’ve been the most cringe phenomenon ever. Maybe that’s why people want to be anonymous. They want to do that, but they don’t want to dox themselves.

I think it goes back to this make-it culture. There’s this mindset of, “I’m not going to make it with my normal job, so therefore I’m in the trenches with all these other people.” Then, “Hey, I’ve clawed my way out.” It’s signaling to all your other friends that you feel like you’re in the trenches with.

I don’t know. These meme coin group chats—I’m in some of them, and I can’t even open them up because it’s just a shitfest of the bottom-of-the-barrel, worst meme coins that you could think of. People are just dumping them on each other before the thing gets to a $100,000 market cap.

But there is somewhat of a culture of, “We’re kind of in this together.” People are sharing their plays and trying to get things together. I do think it goes back to this community aspect that really wasn’t brought on until social media.

It’s funny you mention it. Just talking about your generation, it’s kind of crazy. My former tenant, who shall go unnamed—and I’m going to say the word “allegedly” because he hasn’t been convicted of it yet, and maybe never will be, but probably will—allegedly stole $121 million from California state taxpayers. Instead of doing what he was granted to do with it, which was rehabilitate roadside motels and inns that had been abandoned during COVID and turn them into housing for the homeless, he spent it all on private jets and yachts, presidential suites in Tulum and Vegas and other places like that, and Paris. Handbags for his girlfriend, all that stuff.

Listening to you talk about your generation feeling like they’re not going to make it in their typical jobs, and then thinking about my tenant, who’s among that generation, I’m sort of like, “Oh, this makes sense.” But crypto feels a lot more legitimate.

Anecdotes aside, what happens to that mindset? If that’s already going on—if that greed, that hyper-gambling, that insanity is already going on—what does it look like if Donald Trump wins the election and, by December 31, Bitcoin is trading at, like, $110,000, and things are just popping left and right? What happens then? Does that draw in new gambling money? Are the Bitcoiners going to rotate out of the Curve? What’s going to happen? Because it’s possible.

I obviously want to hear Avi’s thoughts over my own on this, but I think with the meme stuff, $100,000 is probably a nice round number for normies to come in and start punting on stuff. If you just talk to somebody who’s not in the space, I think the average person has no idea that Bitcoin is back trading near all-time highs, and nobody’s paying attention. I think a lot of them have still written it off as a scam or whatever.

So I think $100,000 is a very nice round number. It also probably generates a tremendous amount of headlines in the media, and normies are going to read that and probably come in and punt on stuff. But as for the altcoin thing, I think it goes back to what Avi said earlier. If Bitcoin puts in a giant god candle, then people probably start rotating down the risk spectrum.

My view is very much in line with what I’ve said before, which is that we’re in for a pretty fucking great party if that happens. Yeah, for sure.

You’re, like, 8 out of 10 long? 10 out of 10 long?

At this moment in time, right here, right now, yeah, 8 out of 10. 9 out of 10. This just goes off of what I was talking about on the previous podcast, which is, I think if Trump doesn’t get elected, I’ll have time to slam out. But if Trump gets elected, this just turns into one big Dogecoin. BTC just turns into one big Dogecoin. So the asymmetry is there.

In trading and investing, you always have to take into context where you are. If you’ve taken a bath over the last—if you got chopped up really hard in this range, then you’re probably not ridiculously long here just because you want to manage your risk. But if I’m closing my eyes and looking at this with a fresh set of eyes and saying, “Hey, I’ve never positioned in this before. Where should I position?” Yeah, I’m pretty damn long.

Yeah, I guess.

8. Leverage Shapes The Next Move

Can I just add to that? I think the only thing to be a little concerned about is some of the leverage. If you look at the beginning of 2021, we had this period where open interest just absolutely exploded. Then you had funding rates going back and forth from upwards of 30% all the way up to 40% between funding rates and the 3-month futures space.

I don’t know if we ever get back out to 30% or 40%, but my point is that, at some point, open interest is going to make significantly higher all-time highs than the peak of 2021, both on BTC alone as well as the aggregate open interest on all alts. Obviously, you get these crazy shakeouts that the crypto market is very well known for during those periods because the market is trying to shake out some of the leverage along the way.

But I think every few years—again, this is my second cycle, but it seems like every few years in Bitcoin, you get this kind of period where there’s a 2- or 3-month stretch where you just want to be long. Funding is just a reflection of everybody wanting to be long. It’s the price to be long.

Things can change, but as things stand today, I’m holding all my positions for at least the next couple of months here, and I don’t really intend on changing my net long exposure to crypto. I can either draw down, basically just chilling in spot, and then I have longer-dated calls on WULF that I’ve outlined, which obviously I can’t get liquidated on.

I have no idea if we see a flush-out or whatever. It’s plausible we could. But the bigger picture is the Fed. We all talked about how the Fed could raise rates and, including myself, psyoped ourselves out at the beginning of the drawdown after 2021. Then we were manifesting rate cuts for so long, they finally came, and everybody started saying that they were bearish.

The context of the rate cuts is what’s really important to pay attention to. The Fed is cutting into a strong economy, and then you’ve got some very well-respected macro figures coming out and basically highlighting the Bitcoin thesis in broad daylight—the thesis that people who have been advocates of Bitcoin have been highlighting for a decade.

We’ve got a lot of apathy in the market. People have lost money and gotten chopped up over the last 7 months. Every breakout has gotten faded, and I think that’s conditioned the market not to trust a move like this. But whether we get a short-term flush-out or not, I tend to think that I don’t want to touch anything for 2 or 3 months here.

So that's a nice segue into a little speed round for you, Will. We're gonna pepper you with rapid-fire questions. Avi, I can think of a couple. Let's keep the answers short.

Cool.

Take this moment to extract as much knowledge as we can from Will Clemente. So, first question: how long are you right now on a scale of 1 to 10?

8.5.

Nice. Okay, next question: what are your big tools that you use to trade and monitor OI and all that other good stuff?

Velo Data. Shout out to Velo Data.

That seems to be a popular answer.

I think Anthony was one of the first checks into Velo Data. He's been involved with them. And Pomp, you know, I was involved in an advisory role with Velo from the beginning. BitHedge is a great dude. Younger guy, super smart. Great team that they have there. So I'm super bullish on Velo. I think they're gonna be the dominant data platform for Bitcoin derivatives and crypto derivatives this cycle.

I think so too. Shout out to Velo. Okay. Scenario: Kamala wins, crypto nuked. Are you buying the nuke on the week of the election, the week after the election, or are you waiting?

I don't know. It's tough to say. It depends on how much leverage gets flushed out and where Bitcoin trades down to. But generally, I think you want to buy the dip even if Kamala wins on BTC.

I think so too. Another speed-round question. For somebody who talked about meme coins and is as into the space as you are, WIF: like it or hate it?

Yeah, it's good.

It's good. Okay.

What about Popcat?

Yeah, look, both of these, I think, fall into the category I mentioned. If you've got a lot of money and you want to buy memes, you come in and you're like, “I want to buy memes,” those two fall into the basket of the 3 to 5 that have a lot of liquidity, their own taxes, right? You could trade them on leverage. So I think those will keep reflexively getting flows from people who just want to allocate to memes, so that's probably fine.

Okay. Good answer. Ethereum: is that the XRP of this cycle, or is it gonna finally perform at some point?

No, I think Ethereum's screwed. I tried to give ETH/BTC a shot, especially around the ETF launch, and got hosed on that. You just gotta look at the SOL/ETH chart and, just knowing how reflexive these assets are, it's hard not to be bullish SOL/ETH.

Yeah.

Oh, dude, ETH is completely and utterly fucked. I've been saying this for so long, and I will continue to say this.

Avi actually talked me out of my ETH. He literally ruined my day, and thank God he did.

What's your favorite supercar?

I lived in Miami for a year and got to see some pretty cool cars. I'm not a big supercar guy. I like the cars that are a little more classy. I like the Bentley Continental. It's a very boring answer, but I think that's a nice car. The Maybach, I think, is a nice car.

I genuinely think, as a tangent, it is a complete farce and a lie that supercars cannot be classy. That's a Miami invention. If you go back to 2012 or 2013, look at the Ferrari 458. Look at it in gray. That is a classy car. It's not—I mean, it's a beautiful, powerful, aggressive car, but it's not a flashy Lamborghini. Same thing if you go back to 2006 and look at a Lamborghini Gallardo. It wasn't this—it's not flashy. I mean, it is obviously aggressive, large, and powerful, but it's not flashy. You're good at crypto, but we've got some stones—

Well, Avi, maybe after this cycle I'll get on the road with you. We'll see.

Will, last speed-round question. For the part of the podcast where we say that we're just idiots who don't know anything, and none of this is financial advice, why don't you turn on your video so that we can all prove that we interviewed the real Will Clemente, now that your Wi-Fi speed doesn't matter? There he is.

There it is. Nope. See? He's real.

He's real.

He's a human person.

He's real. Thank you so much—

He's real.

—for coming on the pod, Will. This was awesome talking to you. None of this is financial advice, obviously. Wow, what a fun one.

Thank you, guys.

Nice to set this up—

This was awesome.

—in the Niger Delta Avengers chat too. Thank you for being in there.

Yeah.

Hell yeah. Everybody's gotta get in there. Great group chat. Great energy in there.

Yeah.

All right, Will. Appreciate it.

All right. Thank you, gentlemen.

Thank you so much. Take care.