《加密货币仍是最好的交易吗？》

The markets are telling you, “Show me the global economic collapse, otherwise I’m just going to keep grinding higher.” Basically, cash is trash. The S&P is the real denominator of American savings now, and Bitcoin is the risk asset that you could take a bath on, but probably won’t.

1. Can BTC Breakout?

Anyway, guys, welcome back to another 1000x podcast. It’s been a fun week. A lot of new headlines, but the market’s been pretty stable so far. Jonah, what say you? What have you been looking at?

2. The Crypto Exchange Wars

It’s not the kind of market where we have a whole bunch of new news factors or price action to talk about, but Bitcoin’s hovering near the highs. I keep thinking to myself: a wise man named Avi Felman once told me, “BTC never stabilizes on the highs,” right? It never just ranges at all-time highs. It usually busts through them and goes way higher, or it nukes and goes way lower.

The logic behind it and the technicals behind it are debatable, but whether or not the logic is recursive is kind of irrelevant because it’s true. So basically, are we just going to sit here and trade sideways, or are we going to rip, or are we going to puke? It feels like we’re definitely not going to trade sideways for much longer. I don’t think we’re going to puke, so I’m strapped in for a rally.

I think there is some dismay that I do want to discuss. It feels like there’s a lot of dismay in the, air quotes, crypto trading community about how there’s really nothing to do in crypto anymore other than be long Bitcoin, Hyperliquid, and maybe some low-FDV tokens that are in the RWA space, because that’s where there’s some potential. But it feels like most of crypto is dead and it’s not coming back.

So other than maybe being the short leg for your Bitcoin trade, what else is there really to do? Also, the best short leg in the world is the dollar. Holy crap. After this Big Beautiful Bill got passed, it feels like the dollar’s on a one-way train to zero. So, long BTC/USD. Is there anything else to discuss in our space? It feels like that’s really the question.

What’s kind of interesting here is that the answer—my answer—is no for right now. I will say, just talking about Bitcoin for a second, I want to talk about trading this thing.

From the lows of about $100,000 at the end of June—June 22 is when we had that little wick—we had a pretty big liquidation where we got rid of about 20,000 coins in open interest on futures. We’ve added basically all of that back, and so there is still a reasonable amount of leverage in the system.

One thing that concerns me is that we’re ranging at the highs despite all of these treasury companies attempting to buy Bitcoin hand over fist. The question is, if that can’t break us higher, I mean, there’s clearly a ton of supply around these levels, and maybe we need a little bit more time to range.

If I’m looking at a similar fractal to last time, it’s very, very, very rare that BTC ranges at the highs for an extended period of time and then actually breaks up. Normally, what you see is some sort of downward movement in BTC. I’ll show you what I mean on the chart over here.

So, Jonah, you see this chart?

Yeah.

Generally, when Bitcoin does this thing—we’re looking at a weekly chart here, and you can see it even a little bit better on the daily—when we start to range sideways at the highs, you can see it happen from November 20 to February 24. Normally, you get some sort of breakdown before you continue to wash out the leverage in the system. Kind of the same thing happened in 2024: you see this long period of range, and then you sort of break down.

That’s because generally, when you get a range at the highs, you lose what drives Bitcoin up. And what drives Bitcoin up, as I’ve said on the podcast before, is 2 things: value and momentum. People don’t find $108,000—above $100,000 is probably not value for Bitcoin—but at least there was a solid amount of momentum for some time. But Bitcoin’s lost that momentum.

When Bitcoin loses momentum, it tends to retrace a little bit. Maybe that’s a dip back down to $95,000, which wouldn’t be so bad and which I think would be amazing. If I could buy at $95,000, I’d be buying at $95,000 hand over fist. Maybe it’s this $90,000 to $96,000 area, and I think you need a little bit of patience here.

Basically, I don’t think you should be buying a tremendous amount here if you’re not already allocated to Bitcoin. In fact, if you’re allocated to Bitcoin, maybe start chopping some off. And this also has to do with some of my equity views, but just looking at the Bitcoin chart, you tend not to go sideways for a long time without a selloff.

But do you want to sell Bitcoin, or do you want to sell some other crappier crypto asset, like WIF or Cardano, which underperform? You definitely want to short the other crappy assets. With that being said, sometimes you can’t do that in size. What I would want to do here is buy BTC and short Cardano.

This type of setup is a very good setup for a long BTC, short alt position, because BTC tends to sell off a lot less than altcoins sell off in this market environment. Now, again, with all that said, if you are, for example, a Robinhood trader, a stock trader, and you trade Bitcoin and Ethereum only, go ahead. Maybe cut some out of your BTC and ETH here, because it’s just rare that Bitcoin goes up without sustained momentum, and right now we don’t really have anything on the horizon.

So what you need is for Bitcoin to form a base. It basically needs to range longer, form a base, and create a psychological floor level in people before it can start to rip. Or some good news needs to come out. Some new large buyer needs to come into the market and announce that they’re coming into the market. Otherwise, I’m a little bit skeptical on Bitcoin strength at these levels.

That has to do a little bit with my equity view, because I’m starting to get a bit nervous on equities heading into this August deadline for the new, quote-unquote, Liberation Day tariffs. I think that the market has done extremely well. It has rallied basically in the face of it all.

Trump has delivered on everything that he wanted to deliver on from an economic point of view, but he’s done so because Wall Street views him as a chicken, and they don’t actually believe that the tariffs that worked as a negotiation tactic with some people—but the larger tariffs that he’s pushed off and said, “If you don’t come to the table, then we’re going to slap these on you”—are going to happen in any meaningful way right now.

3. Ads (Kraken OTC, Katana)

But as we get closer to the date, there’s an interesting thing in trading. When you think about risk parameters, you think, okay, how far could it go down? But also, how long do I have to hold the trade for? As we get closer to August 1, it actually makes more rational sense to take the view that maybe these things will stick, because then you actually have to hold the trade for less time. So I think people start selling as we get closer to the date. It’s my personal view.

4. Is Crypto Still The Best Trade?

Yeah, I think you’re right. Before we get into this tariff stuff, I want to ask you a quick question on Bitcoin. We talk about long-term holders selling and these vehicles that are buying. What are the OGs that you know from your network doing in Bitcoin right now?

I don’t know that many OGs, but the ones who I talk to are still holding on, right? I’ve talked to other guys who know other OGs, and these are the big whales who owned hundreds of millions or maybe over $1 billion worth of BTC that they accumulated way back when for a few tens of thousands of dollars.

Those people—basically, people that I’m connected to either directly or 1 step removed—aren’t selling.

I'm curious if you've just anecdotally heard anything about that community selling here?

Yeah, I think—I don't know. If you've held Bitcoin from 2011, or if you got into Bitcoin in 2011 or 2013 and you haven't sold a cent of Bitcoin since then, you're a freaking fanatic, and you're probably not selling it ever, no matter what.

But I know a lot of people from the 2015 to 2017 class who got into crypto taking a nontrivial amount out of Bitcoin and just sticking it away in cash or buying equities with it. I personally made a move where I divested a reasonable amount from crypto because I was so heavily invested in crypto for a very long time. You start buying equities, you start diversifying out.

The idea of diversification is spreading rapidly right now through the circles that I came in with, which, again, are not the OGs—not the 2011 or 2013 crowd, but the 2015 to 2017 crowd. I think there's a desire to reduce the volatility of the portfolio and an understanding that Bitcoin no longer has an insane risk-reward relative to other assets that you can buy.

It has a better risk-reward than 99.9% of assets listed that you can trade, but it's not like 100-to-1 anymore in the same way. For example, there have been plenty of stocks that have outperformed Bitcoin from the FTX lows. I think that got into people's heads: if Robinhood can go from $7 to $100 and Bitcoin goes from $15K to $100K, Robinhood has outperformed in that scenario.

It was a stock, right? Obviously, yes, there's crypto exposure there, but at the end of the day, it's a real company with a real business making real money. I think a lot of people—at least my people—are saying, “Okay, I'm willing to sell down.”

Are you willing to share any broad details about the amount of diversification that you did? You don't obviously need to go down into dollar detail, but maybe percentage detail?

I went from 95—I mean, post-FTX, I went from 95% in crypto. I'm saying, I actually took my net worth up to about 95% exposure to crypto around FTX. Then 2023 was probably at 70%, 2024 was probably at 50%, and now I'm at 30%.

Yeah, I'm similar. Basically, where I see this asset class going is, I can't think of anything better to invest in than Bitcoin by a long shot, like you said. But putting 100% of my money into crypto feels like insanity to me. It just feels like the wrong risk profile, since I'm trying to preserve some wealth.

It's not even about preserving wealth. I think that's a huge part of it, but for me, it's about what I want to invest in to actually make money. So I pulled money out not just to stick it in equities, but to invest in specific equities like Rocket Lab, RKLB. I want to own that. I want to own that thing. I want to own robotics. I want to own this robotics company that I did a private round in.

So I want to pull out some money to put some there. I want to own more specific assets now. I want to put my money in [likely Palantir]—well, not now. I think Palantir is a little bit overvalued now, but I've been doing a lot of private investing.

Sorry, go ahead.

Yeah, I guess what I'm specifically saying is that I view other good opportunities out there in this world.

5. Trading Trump 2.0

Okay, so now we've got to talk about the tariffs. I think it's very interesting that we sort of closed the book on where Bitcoin's at right now. I do think we get a small pullback. Maybe it only goes to $102K, maybe it goes to $97K, maybe the pullback's to $105K—but we get a small pullback.

Alts will drastically underperform on that pullback, and then I think it just keeps chugging again. I don't think the OG community is going to sell so much that it keeps a lid on Bitcoin. I think most people agree, even long-term holders, that this is still the best risk-reward of any asset class out there.

You said it best: maybe it's not the most contrarian bet of all time like it used to be, but it's certainly still way better than SPY.

100%.

But you mentioned some interesting macro stuff about Trump chickening out and Liberation Day Part 2 starting in August.

I don't think it's possible to chicken out from a stance that you never really had to begin with. There's posturing, and then there's actual policy. When people say Trump always chickens out, I think the reason that's kind of a red herring is that he never actually commits to any of these extreme policies. It's usually just posturing to anchor a negotiation.

That's entirely rational, and that's what people do in all sorts of business negotiations. Anybody who's ever haggled to try to increase their signing bonus or their salary for getting a job—anybody who's ever read [likely Kahneman and Tversky], or Thinking, Fast and Slow, these Nobel Prize-winning economists who write books about this stuff—knows that anchoring is a thing.

You anchor a negotiation way in your favor before it begins, and then what seemed maybe a little bit out of the question suddenly falls within the Overton window. You can negotiate toward an outcome that's better for you because you've anchored it to begin with. This is just Queens, New York-style real estate haggling played out on the global stage.

So no, I don't really think he's chickening out. I don't think he ever intended to install a tariff policy that dooms the stock market or the national economy. I think he's just saying ridiculous stuff to freak people out.

I think it's all the economists, pundits, and people like Larry Summers who are chickening out when the anchoring piece of the negotiation gets discussed. Then suddenly they just disappear into the ether when the outcome is stocks at all-time highs and tariffs are sort of what they are. They're not really hurting America, at least not yet.

Where I think this is all going to land is somewhere rational, and I think the market is finally sniffing that out. I called it early. I called it in April on the lows.

You called it early.

And now the market is just doing what big macro markets do after a couple of these. To make an analogy, this is how dollar-yen used to react back in 2010 and 2011, when Kim Jong-un would fire off a nuclear test or an intercontinental ballistic missile. The yen would tank, the dollar would rip, and dollar-yen would explode on every single one of these rocket tests.

Then, after a couple of them, the markets just stopped moving. It was like, “All right, show me the nuclear war. I'm not going to move.” This is just what markets do. Oil did it with Israel and Iran, and now equities are doing it with Liberation Day 2.0.

The markets are telling you, “Show me the global economic collapse. Otherwise, I'm just going to keep grinding higher.” I think the S&P is the new dollar and Bitcoin is the new S&P. Basically, cash is trash. The S&P is the real denominator of American savings now, and Bitcoin is the risk asset that you could take a bath on but probably won't.

It's funny—I feel like Trump has said this without necessarily directly saying it. For example, the $1,000 in the S&P for every person born in the United States: if this were 30 years ago, what would have been said is, “We're going to put $1,000 in a CD, in a bank account, for you at the government interest rate for the whole time.” And Trump's like, “No, no, no, no. S&P.”

I think that actually had a little bit more significance than people gave it credit for: he understands that wealth should be denominated in the output of the country, which is contained in the makeup of the companies in this country for the most part, other than government spending, which is also increasing.

It's really interesting because he has said, “I'm tanking the dollar.” He wants to make U.S. exports more competitive. So what's going to happen is that the dollar is going to keep coming down, and that's going to be very good for Bitcoin in the long run.

With Trump, he's the headline president. You don't know what's going to happen next. He's probably going to shake it up a little bit, so you have to pay attention. There are going to be some good trades in here.

As a trader, one thing that I just recently did to protect my portfolio and basically give me some wiggle room if something does break is buy some puts. You can always sit there and say, “All right, here are all the reasons why I'm not going to freak out about Liberation Day. Here are all the reasons why it's going to resolve itself”—the same reasoning as last time.

But last time something broke, and that provided a ton of opportunity.

And you do need to look forward to these types of events and say, “Okay, well, even if I’m wrong and it doesn’t play out, shouldn’t I give myself the optionality to play some sort of breakage?” Why put myself in the position where I can’t play the game, right?

Since last April, what have we been sitting here and saying? “Look, these headlines are nonsense. This Iran war is nonsense. Everything’s going to be fine. Markets are going to keep going up. Just stay invested.” That’s been the consistent take of ours since Liberation Day. I’m saying now, because of this, for the first time, I’m telling you guys, “Hold on. Maybe you can actually try to capture some sort of event here that will give you something big.”

6. Most Projects Don’t Need A Token

I mean, obviously, the market gyrated a little bit with Israel-Iran, but we both—I mean, you were saying, “Watch oil,” and I was saying, “Iran can’t fight Israel.”

Yeah, no, it’s totally true. I think basically where I’m at with all of this is: what’s the real catalyst for Bitcoin? We can talk about stocks in a second, but what’s the real catalyst that’s going to send Bitcoin higher? I can see 2 of them. Catalyst number 1 is a steady, ongoing source of flow, and catalyst number 2 is more of a point-in-time thing.

We’ll start with the point-in-time thing. I forget his name. I’m embarrassed. There’s a young guy in the White House, not David Sacks, but the other crypto guy in the executive branch, who’s responsible for talking about the Strategic Bitcoin Reserve. He just keeps going on every media channel and speaking at every conference he can, saying, “There’s big news coming out in late summer, early fall. We’re going to be adding to the Strategic Bitcoin Reserve. Prepare yourselves for it. We’re going to be freeing up capital somewhere to buy BTC.”

I’ll send a few tweets out later. We can put them in the show notes, but there’s that guy. I don’t know how much credence to place in it, but if the SBR does start accumulating, look out. Bitcoin is just going to go parabolic.

The other thing is that we are—and I’m not even talking about rate cuts—in a situation where everybody who’s had anything to do with crypto or ever tried investing in crypto has finally woken up to what the no-coiners were saying way back in the day: there’s absolutely no realistic reason to have a token unless you—I guess you could buy it back, and that’s kind of like shadow equity. So why not just issue equity? Maybe it’s clunky or whatever, but unless you’re creating an equity-like instrument with your token, kind of like Hyperliquid does, there’s no reason to have a token, right? There’s no reason to launch a token.

It’s all—I don’t want to call it all a scam, but governance tokens, tokens that are just meme coins, and tokens that have the same name as maybe an interesting business but no financial relationship to it—these tokens don’t need to exist, right? The market cap of those tokens is in the tens or hundreds of billions of dollars, and people are finally figuring this out. You know, it’s called the revenue meta to some; others are just giving up on altcoins and the idea of an alt season.

As that happens, I don’t think that money leaves crypto. I don’t think people are going to sell their shitty altcoins, give up on everything altogether, and have no exposure. If you’re far enough out on the risk curve that you’re holding Celestia, Polkadot, Cardano, or whatever, I think eventually you’re going to rotate it into Bitcoin. So I really do think there are going to be steady inflows into Bitcoin coming from other altcoins, and BTC dominance will continue to grind higher, as useless a metric as that has become.

Yeah. What’s been nice to see is how terrible a lot of these assets have finally started to perform. All these assets that we’ve known for a long time are kind of useless and don’t do anything.

One thing that’s completely collapsed in on itself is the crypto VC game. I think crypto VC was super predatory. You can always make an argument here that a tremendous amount of crypto is predatory. I was personally never on the VC side; I was always on the trading side.

But there was something I really didn’t love about the VC side, which is that it was predicated on the premise—it was just predicated on getting into things really early by pricing them super low and then selling a very tiny amount of supply at extremely high, inflated prices to the public, by selling them a vision and a dream of something that, honestly, most of the VCs that invested in it didn’t even believe. They just kind of knew they were playing the game.

I think there are some VCs. You know what? One person I’ll call out by name as somebody that I respect on an intellectual level, and I think he actually genuinely believes in things and does a lot of homework, is Chris Prinski. I think that guy’s really, really smart and a talented guy.

But I think the general crypto VC game has been one of trying to get in at very low prices and then sell very tightly controlled stuff at high prices. That game is totally over. That’s done. I don’t think that’s a serious game at all anymore. It’s just about liquid trading, trying to capture inefficiencies in this market, and buying good assets that are going to make money over the long run, which I think has been very, very good for the market.

In the last 5 years, Cardano has managed to stay in the top 10. I don’t think it’s going to be in the top 25 in the next 5.

So, let’s say that all of the junk finally gets cleared out. The moment we’ve kind of all been waiting for, right? It feels like the top 10 is going to be a couple of stablecoins and Bitcoin.

Yeah, I mean, a decent amount of that money is going to flow into Bitcoin, I think, and I think that’s definitely a tailwind for Bitcoin. But I also think a lot of that money is going to be taken to cash or placed in the S&P if they’re smart.

That’s where I disagree. I don’t think that money is going into cash. I think if you’re degenerate enough to have been invested in something like coin number 50 or 100 or even Cardano, you’re not just going to give up on crypto altogether and hold dollars as they spiral down the drain. You’re going to—I think Bitcoin is going to be the baseline. But who knows, right? Or maybe it gets cycled into Hyperliquid.

Yeah, I mean, there’s one thing—or honestly, I want to find a reason to just own a ton of BNB. Is Binance being good the reason? I don’t know. Binance keeps growing. It’s like one of those things: I want to learn more about Binance’s plans to take over the world. If they introduce stock trading, they could really blow up as a company.

They’re not founder-led anymore, though. That’s the problem. Jason Yanowitz was tweeting about this: once you lose the founder, you lose the vision and you end up with value extractors. Maybe Satya Nadella is a sort of one-off example of a non-founder that led Microsoft.

Well, it’s just Microsoft, guys.

Yeah. I mean, the thing is, I don’t expect Binance to be a force to be reckoned with without CZ. The game is just too competitive, right? You know, let’s talk about Hyperliquid and Robinhood for a second, like 2 founder-led exchanges that are really competing right now. I think they’re going to eat Binance’s lunch, but the question is, do they eat each other’s lunch?

And there’s this big debate going on, as crypto as a meta kind of dies: does decentralization still matter, right? Insofar as Robinhood has a bunch of TradFi users and can onboard them with crypto bells and whistles fairly easily, and Hyperliquid’s kind of coming from the opposite end of the spectrum, do they meet in the middle? Does one beat the other? I have kind of a non-consensus take on this that’s sort of bullish Hyperliquid.

I think Hyperliquid is going to do just fine, if not beat Robinhood. The reason is that, even though it’s not the most decentralized blockchain in the world—it’s been criticized for not having enough validators, blah blah blah—it’s still a lot more decentralized than Robinhood. So you could probably build applications on top of Hyperliquid with a lot more confidence than you could build applications on top of Robinhood.

Also, fees are a lot lower on Hyperliquid. Robinhood charges around 10 bps per crypto trade, which is still substantial. I think it might be almost 10x what Hyperliquid charges. To the extent that decentralization is still more trustworthy and carries lower rug risk, it may be that we see financial applications getting built on top of Hyperliquid that are more interesting than those being built anywhere else, and that’s why I think Hyperliquid may end up winning.

I don’t know, though. I haven’t really formulated this view, and I’m not sure that it’s an investable thesis. But we should at least talk about Hyperliquid versus HOOD, because these are the 2 founder exchanges that are really ripping right now. You’re on mute.

Yeah, I think it really just has to do with fees. It’s fees and marketing at the end of the day. The argument about decentralization was an argument that people would use for Ethereum, and I don’t think either of us would necessarily agree that decentralization adds a tremendous amount of value to Ethereum versus Solana, for example.

So I’m skeptical of the argument that decentralization is going to help a business like Hyperliquid succeed. What would your argument be? Why would the centralized nature of Robinhood hurt Robinhood, and the decentralized nature of Hyperliquid help Hyperliquid?

You’re right that decentralization didn’t save Ethereum. People don’t care that much. Maybe Solana is a little more centralized than Ethereum, and Solana took off under Ethereum’s watch.

I just don’t think there’s a clean spectrum like that. For a developer, there’s a big difference between building on a decentralized platform versus building on your own chain, which is just me hosting a Google spreadsheet. Something that’s centralized—like a ledger that’s centralized, with me using my private Google password to host 1 shared Google spreadsheet and you putting your entries in it—is a lot scarier for a developer to build on than something that’s actually decentralized.

So I think maybe I would rephrase it from “decentralization matters” to “some decentralization matters.” You don’t need to be ridiculously decentralized for it to matter. You can just be kind of decentralized.

Going back to the Hyperliquid versus HOOD thing, I’m arguing that a developer ecosystem—a financial application ecosystem—may indeed flourish on top of Hyperliquid, whereas that’s less likely to happen on HOOD. If you develop on HOOD, first of all, I have developed on HOOD before as a market maker in their ecosystem, and connecting to their APIs involved back-and-forth with a super-incompetent tech team and just a generally slow, iterative process.

Meanwhile, building on Hyperliquid—I’ve never done it, but from the people I’ve talked to, it’s fairly straightforward. All the docs are out there. It’s open source. You can just create DeFi money Legos and stack them on there. If your product has demand, great. If not, whatever. But you’re not worried that the rules of the game are going to change on you.

So basically, where I’m going with this rant is that if you’re a software developer or a financial ecosystem developer, you’re trying to link things together. Let’s say you’re doing something that some guys I talked to recently are doing, which is building a basic off-ramp. You shoot stablecoins in there and spend with a Visa card on Apple Pay or just at the grocery store, and it draws from your stablecoins.

You can put Tether on Tron, USDC on Solana—whatever you want—into this wallet, and then you can just spend out of it. I feel like an application like that, just an off-ramp application, 1 of 1,000 different financial applications I can think of, I’d much rather build that on Hyperliquid if I wanted to connect it to liquid markets—volatile markets like the S&P or whatever—than on Robinhood.

I wouldn’t have to interact with developers and get people to agree to expose APIs, negotiate privacy, and blah blah blah. It would all just be there. So, some decentralization matters, but the purists who believe that you need Ethereum-level decentralization to incentivize developers to build dApps—I think that’s been effectively disproven as a fallacy.

Yeah, I think that makes sense, and I buy the argument. I just think that for them to compete head-to-head, it really comes down to fees. It’s fees and marketing at the end of the day. Robinhood is very easy to use. Hyperliquid is also easy to use, but I actually think Robinhood is much easier to use.

Yeah, Hyperliquid is way harder to use for a consumer than Robinhood. Way, way harder to use. So it’s really for hardcore crypto natives, and Robinhood is encroaching on their territory in a way that Hyperliquid isn’t really encroaching on Robinhood’s territory.

1 thing I get nervous about for a lot of these crypto exchanges is whether you can do everything in 1 place. 1 of the things I hate about crypto is how fragmented my life gets, how many different wallets I own, and how many different places my money gets to.

That has been the edge for a very long time: you had to track all these different chains, figure out how to move money from here to there, and then figure out how to buy this asset that was supposed to 10x because it was the new Uniswap on Avalanche 7 years ago.

Anyway, consumers want to be able to do everything easily in 1 place, and Robinhood is by far the furthest along in terms of that. That’s why I’m super, super, super bullish on Robinhood.

Also, they have great promos. I had a stock portfolio with Fidelity, a bunch of my equities there, and then I came across one day that Robinhood was offering a full 1% on my entire portfolio if I just moved it over to Robinhood. That’s a huge deal.

Yeah, it was insane.

So obviously I was like, “Okay, I’ll just move it to Robinhood.” There’s no downside to moving it to Robinhood. I moved it there, and life has been pretty good ever since because it’s easier to use than the Fidelity app.

Although it is more fun to use, which makes me take more trades. It’s crazy how dopamine can just hijack you like that. You like to think that you’re this rigorous, emotional guy, and then you’re like, “Wait a second. Why are my trades up on Robinhood versus Fidelity?” Oh, because Fidelity sucks and Robinhood doesn’t.

7. Crypto's Attention Rollercoaster

So then it makes you think: How many of these trades am I taking because they’re good trades, and how many trades am I taking because I want to feel something? But that’s a whole other discussion.

One of the things I’ve done to try to prevent myself from trading too much is that, for equities, I use J.P. Morgan, and they have this horrible trading experience. Especially for fixed income, if you want to roll a T-bill, for example, it would take Albert Einstein an afternoon to figure out how to do it, and me much longer.

Basically, I just call them up.

Can you just call them?

Yeah, so I call them up. They hate me because they’re like, “Why aren’t you just doing this yourself?”

I call them up and put in an order, Gordon Gekko style. I whip out the cordless phone with the antenna, dial the banker, and say, “Hey, you’re my execution trader. Roll the Treasury bill to the next month. What’s the yield?” You get that feeling of power and relevance for a second.

More importantly, talking to another person about your trades—even if they’re not judging you or schooled in risk and reward, upside and downside, and stuff—it still makes you think twice.

You’re telling me they don’t judge you when you call them up and give them your latest wacky plan, like, “Hi, can you put more of my life savings in IBIT? Do you have any levered options yet?”

They don’t. I’m sure they’re judging me, but they’re trained to speak to me like I want to be spoken to, so I don’t feel the judgment. I still know it’s there, and that alone keeps me from doing too much stupid stuff.

Imagine, Avi, if you had to call an execution trader to buy meme coins last summer or the summer before. Imagine if you were like—

Well, I did. The craziest part is that I had my analysts as my execution traders, and I didn’t do any of the execution. So I would just call and be like, “I need to buy some BONK right now.”

Yeah. Get me Zen. Get me $1 million worth of Zen.

Dude, ZYN was crazy. That was a token. A thousand bucks into that thing went to 150.

That was insane. Wow. I mean, then I sold it at like 90. Anyway, you never count the highs.

Oh, no. You got out. I put 2 grand into this token called Solana and Porsches last week. It's this horrible, stupid memecoin that takes all the trading fees, which are egregious, and pays them to you every 5 minutes in the form of tokenized S&P 500 ETFs.

So, yeah, it was a memecoin.

How was it done?

I bought into it at a $100,000 market cap. I'm going to tell you the story. I bought into it at a $100,000 market cap about 6 hours after it launched, and I thought, "I don't have a lot of downside from here. It's already got some people talking about it." In one of the chats we're in, some guy was just like, "Hey, I bought this shitcoin. What do you think?" I looked at it and thought, "Okay, I'll YOLO 2 grand in there."

Then it immediately 30xed, right? So I'm like, "Wow, great." Every 5 minutes, it's dropping more tokenized S&P 500 into my wallet. I'm like, "This kind of meets the current xStocks meta. This is great." This thing went back to zero. The chart is ridiculous. Let me pull it up. Hold on. It literally went back to zero in less than 72 hours.

Did you sell any?

Yeah, I did. I put in 2 grand and sold when it was 2 grand, so I didn't make or lose anything on that. I got $1,000 worth of tokenized S&P airdropped into my wallet—just other people's trading fees. So I guess you could say I made 50% on this trade. I made $1,000 in 3 days.

The reason why I brought this example up was not to brag about making $1,000. That's not why we're here listening to this podcast. Last summer, this up-and-down would have lasted more than 3 days. It would have lasted 3 months, right? Crypto participants are so fed up with memecoins that even when there's something really interesting that perfectly captures the current meta—this is definitely the most talked-about memecoin for a day right now—the cycle just comes and goes before you can blink.

To me, that tells you there should literally be a skull and crossbones logo on any token that isn't actively buying back tokens with business revenue. Any of this other stuff is just—we're so firmly into recognizing revenue as the meta of the time. There is no other meta. Everything is a Ponzi if it doesn't generate revenue. I think that's the unfortunate reality that we've all come to.

So, on the next pod, what we should do is gather up some interesting companies that we're looking at and run through them with people.

Yeah, but what's a little sad is that a lot of people made the memecoin meta their personality and their game. Now that the game is slowly dying—

You can still make money, as evidenced by what you did. If you get in luckily at $100K and flip it at $1 million, you can make $25K to $50K here and there if you size it correctly, I guess.

Yeah. I could have made money. I just hung on too long. It didn't occur to me that this was going to last less than a week.

8. How To Trade This Market?

One of my favorite metas was when new chains were launching their EVM-compatible versions. This was way back in 2021. BNB launched an EVM-compatible version, Avalanche launched one, and then they started creating clones of Aave on these platforms. You would go over and buy them at a super-low market cap, and everything on Avalanche, because they announced incentives for the pools, would pump 10x over a period of 2 weeks.

These things would last 2 to 3 weeks. Basically, altseasons would last 2 to 3 weeks, and now altseasons don't last at all. I think we're more honest about what we're doing here, which is just playing a little game.

But isn't that trading in a nutshell?

One of my new favorite metas is this treasury company stuff. Did you see Hyperion DeFi?

No, I'm not following these treasury companies. They're too scammy for me.

So, Hyperion DeFi went up 50% today. It's crushing it. They're going to be buying Hyperliquid, and they just keep going up, which is funny because Hyperliquid itself isn't going up, but the thing that's buying Hyperliquid is getting a lot of hype.

Ominous.

Ominous. Yeah.

And, by the way, Circle—I crushed that trade if I could have sold the calls. I wasn't able to sell the calls because I needed them to be covered. Didn't we talk about it on the last pod? Did I not call the exact pico top on this thing?

Yeah. That was the day it topped.

Circle's trading at $200 now, which is 30% off the highs. It hit $300 when we talked about it.

I think the Coinbase-Circle pair trade that we talked about has done pretty well. Let me quickly check where Coinbase is trading. Yeah, Coinbase is on the highs. Circle's 30% off the highs.

There are things out there. You just have to act fast and be decisive. I don't know. Maybe as we close out the podcast here, it would be good to talk about how much easier it is to just ride a trade for 5 years, like Bitcoin, than it is to tactically time in-and-out points, like I tried and failed to do on one of these random shitcoins, or like you maybe tried to do on Circle options.

It requires so much focus, decisiveness, and commitment to just be like, "I am now going to restructure my portfolio in such a way that I'm going to deploy tons of assets into a slightly exotic structure, like Coinbase-Circle, selling Circle calls, or HOOD versus HYPE." What's the best trade you've ever done in your life that wasn't a straight-up buy BTC and ride it for a decade kind of trade? What's the best pairs trade you've ever done? Can you think of one?

I can think of a ton. We could do a whole podcast on the trades that I've taken and the ways I've structured them. One of my favorite trades I've ever done was realizing that a tremendous number of people were short Bitcoin in July 2021. I would come in on Fridays and just buy insane amounts of calls. It was a very thin book, and shorts started getting obliterated. Bitcoin went from $30,000 to $40,000. I think we made $200 million on that trade. That was a phenomenal trade.

Then there are all sorts of stupid trades. Another recent good trade that I put on was on Liberation Day: buying a bunch of gold, selling all of my equities for gold, and then rotating it back to equities at the bottom.

Yeah, that's good.

That was predicated on not believing that these tariffs would last, but believing that there would be a short-term movement that I could take advantage of. A lot of my earlier trades were based on market structure, and a lot of my current trades are based more on headlines and trying to understand what's going to happen, plus market structure.

Even recently, on Liberation Day, I got long because of market structure. I got long 2 days after everything went down together. Liquidations are over. We're stabilizing a bit, getting the last sellers out. Now let's get back in—that kind of move.

There's a really funny trade that I took back in 2021 on this thing called Fantom, which had a ghost as its mascot. It's still around; it changed its name. I literally just had a massive brain fart because I own this thing.

Anyway, the thing that used to be called Fantom had a ghost as its mascot, and so every Halloween it would go up. I would put on a pairs trade—I called it the spooky season. I'd buy some Fantom a week before Halloween and short some Avalanche, and that trade would work.

More recently—I mean, over the last 2 years—a lot of it has been trying to find token unlocks, shorting the stuff that sucks, and buying the stuff that doesn't suck. One of my favorite trades I ever did was in 2014. Oil was steadily grinding lower because shale was hitting the market at scale for the first time, and the market was digesting it gradually.

So it was a really steady trend down, and oil market participants were panicking about this shale. They were buying lots of puts, but the market was going down slowly, not quickly. It was just grinding lower, grinding lower every day.

What I would do was this: I had an amount of oil that I wanted to be short. I had a sort of target delta position that was basically the most I could stomach within my risk limits at Goldman. Then I would sell puts because people were just bidding them to the moon. I would basically oversell spot on top of selling the puts to preserve that delta, so that by selling the puts, I wouldn't get myself less short.

I would maintain the short that I wanted, be short puts, and it worked great. I would collect theta, I would collect expensive vol, and I would profit as the market was going down. It was this kind of double whammy.

I'm wondering if, weren't it for the fact that Bitcoin vol is so low right now, there's kind of the same trade to do in the opposite direction. It feels like it's pretty unlikely that Bitcoin is going to rip higher, but it probably will grind higher over the next 1 or 2 years.

Maybe it's possible to do the same thing where you just buy spot and sell calls, or overbuy spot and sell calls, so that you have your target delta position and collect theta as the market goes up slowly.

Yeah, I mean, I get nervous around this just because when Bitcoin moves, it really moves.

Yeah, it goes. But as you said, I'm actually slightly bearish, and I mean, this is actually a good time from my perspective. Like, if ever there was a time to sell Bitcoin calls against your spot length, now would be a good time.

Mhm.

Structurally, it's a good time. Vol-wise, it's probably 5 out of 10, but flat-price-wise, it's looking attractive. So maybe that's something to do.

I guess we have to get a little more into the weeds to extract extra alpha out of this market, because we're not just going to be able to buy ZEN and have it 70x on us.

Okay, that's fair. I'm trying to think. I'm looking because I was trying to find the vol. What's the vol right now? What are we looking at, Jonah? Double-check.

Somewhere around 30%, if I had to guess. Let's see: BTC implied volatility. I haven't traded Bitcoin options in a while. You remember when Bitcoin options would consistently be in the 80s?

Yeah. 35%-ish, or 37% for a 30-day ATM. It's just too low.

I mean, here's the thing, though: it's not too low. The market has changed. I feel like I lost a child.

It's low relative to how it used to look, but it's still probably high relative to realized daily volatility, right?

Yeah. The market's just not moving.

This is another thing you learn in commodities markets. Sometimes it pays to sell vol on the lows of a long downtrend in vol, just because spot vol is even lower. The fact that people have recency bias and think of vol as, “Oh, it should be higher,” doesn't mean that realized volatility in front-end options is going to be higher. It's just math. It's not about reversion to some historical mean. It's about what's realizing in flat price versus what the implied volatility is.

I think now might be a sneaky time to sell some optionality in Bitcoin.

Well, you know what? I know what I'm doing after this pod. I'm going to go take a look at that, and then on the next pod I can come back and tell you guys what I did, which will depend heavily on what the market does because I have to keep—no, I'm just kidding.

How are you beating the heat, Avi?

In the Hamptons, man. It's not so hot out here, actually. It's like 85—or it's like, sorry, 75.

75 feels cold compared to what it's been like recently here in France. This place is just roasted.

Yeah. You guys didn't want to take a trip out to Saint-Tropez?

There's nothing interesting in Saint-Tropez for a married guy, Avi.

No, no. Saint-Tropez is for unmarried dudes.

Okay, fair enough. I thought it was for a good, nice little family-vacation-type vibe.

We live in the nice little family area. Saint-Tropez and Monaco are where you go to pop bottles and see the sights.

Yeah, fair enough. Well, I'll leave you to it, then. Enjoy the sights, Avi.

This is a place. Enjoy the Hamptons, Jonah.