这是加密货币的终局吗？

Is this the end of crypto?

Yes, it's the end for a lot, if not most, of the tokens in the space. It's over. If you happen to have product-market fit, if you built something that people want and that runs on a blockchain, there's a lot of upside. So, this is the end of crypto as an asset class. Crypto is dead. Long live crypto.

If blockchain legitimately reduces costs and increases net-income margins for a business, if blockchain rails do something more efficiently than whatever's out there right now, and if users want it and rip it out of the hands of the creators of that thing, that will work. So, crypto is dead. Long live crypto.

We are now in a world where what matters, as you said, is real product. What matters is: are you building something that people are going to want to use? Are you building something that makes money? For too long, crypto has been of this mindset: I can exist for an extended period of time in the dream world. That's just not true anymore, because now we have things that are existing in the real world, printing cash, and growing their revenue 10x year over year.

In the memory world, in the world of space, in the world of defense, people are really building these incredible companies. I think people are tired. People are very, very tired of the dream. They want to see the reality.

1. Saylor's Egg Man Problem

Oh, look at that. Literally just in time.

Guys, I was about to go live by myself. I was going to talk to you guys from my beautiful house here in Washington, D.C., back visiting the parents and performing some sonly duties, but still live-streaming here for you today because the markets don't stop, so we don't stop.

Money never sleeps.

Money never sleeps. Jonah and I are here to talk to you about a variety of different topics today. Wow, so much has gone on in the markets. We have the Iran deal going down. We have the S&P and Nasdaq back at all-time highs. We have everyone still running into memory stocks. We've got the Korean stock market ripping through the roof. We've got Bitcoin doing absolutely nothing. We have Hyperliquid at all-time highs. Happy Friday. What a week. What's going on?

Oh, man. Yeah, I'm a little overwhelmed. I'm starting to get a little nervous about the AI bubble. I think I'm going to start lightening up on some more. Well, actually, I haven't really lightened up on equities. I yeeted out of a bunch of Bitcoin, but—

Why'd you yeet out? I mean, people are pretty excited about Bitcoin going up half a percent today. Why are you yeeting out?

I yeeted out more than 10%. I think we discussed it on last week's podcast. The main thing was that it was underperforming in a way that freaked me out. Much like we like to buy strong horses and buy the strongest horse, the fastest horse, in a market that you like.

In terms of macro assets, the interest-rate trajectory was starting to shift from, “Obviously, we're going to be cutting back down to 0,” to, “Uh-oh, maybe we're going to hike.” The other thing was that the market—it feels like activity has declined to the point where the only active trader to speak of is Michael Saylor. I've never seen anything like what he's doing in anything other than tears.

I thought, “You know what? I didn't sell all my Bitcoin. I sold maybe a quarter of it just to rebuy it lower.” The way I sold it happened to be tax-efficient for something that I was trying to do in my personal life. Basically, it was an opportunity to avoid a bunch of long-term capital gains because I sold GBTC—a lot of GBTC.

That was possibly the best trade I've ever done in my life. I was sitting on a lot of unrealized gains, and I had a tax out. The market also looked shaky. I'll probably plow dry powder, fresh capital, back into Bitcoin once Saylor's done blowing up.

I think he's going to blow up. At this point, I think there's no way this pans out. He raised a bunch—I think he raised around $2 billion—to cover his interest expense for a couple of years, and then instead he used it to buy back some of his debt.

Just for the record, I think Saylor's a really intelligent guy who's come up with an incredible way to monetize this Bitcoin strategy. I think the issue is that he is now the only person in this market.

Yeah.

This is something that we've talked about before, but, Johnny, do you remember the egg-man analogy?

No.

I've told this story before on the podcast, but for the newbies, basically, the way this goes is that it's an apocryphal tale on a trading floor. You tell all the new guys about it.

Back in the day, there was a guy who was really bullish on eggs. He was like, “I want to buy as much of the egg market as I possibly can.” He goes to his broker and says, “I want to buy 100 lots of egg futures at 150 per.”

The broker's like, “All right, 100 lots. The entire market's 100,000 lots; it's nothing. Go ahead. Go buy some eggs.” So, he buys 100 at 150. He wakes up the next day, and eggs are at 185. He's like, “This is brilliant. Let me buy 5,000.”

He goes in and buys 5,000 at 185. The next day, he wakes up, and eggs are at $3. He's like, “This is brilliant. I'm going to buy 50,000.” His broker's like, “Wait a second. You're now half the market.”

He's like, “Don't care. Buy 50,000.” He wakes up the next day, and eggs are at $6 a share. He's crushing it. He's like, “I want to buy 200,000 lots of eggs.” The broker's like, “That's bigger than the market.”

He says, “I don't care. Put through the order.” He buys 200,000 lots of eggs. He wakes up the next morning, and eggs are at $12. He has 265,000 contracts of these eggs in a market that trades 100,000 a day.

He finally goes to his broker because he's realized he's made a lot of money. He says, “I need to sell these contracts. Get me out of this egg position.” His broker looks at him and goes, “Who am I going to sell them to? You're the egg guy.”

That's basically, again, a story that was apocryphal on a trading desk but might actually end up being true, especially as Saylor starts to talk about, “Hey, maybe I need to actually not just buy Bitcoin. Maybe I need to use some of the money we're raising to buy back debt. Maybe I need to use some of this money to actually finance all of these obligations that are likely coming due in a year.”

It's a little bit of a tough environment, I think, for crypto people, because Bitcoin has led the market for a very long time, and now it's no longer leading the market. Now we have a lot of other assets.

On that, before you go on, just 10 seconds. Obviously, I used an analogy that made you uncomfortable earlier, but what I wanted to say was: whether or not Michael Saylor is of sound mind, he is trading like somebody who isn't, and he is the market, which is just an untenable situation for me.

I maintain my $1 million price target for Bitcoin. That doesn't mean that I have to eat shit right now while whatever's going on with him—the probability of it unwinding spikes. I do need to lighten up and trade around the position. I'm obviously still quite long Bitcoin, but I don't need to be as long as I could possibly be.

Trading around a position is often a way to make 50% to 100% more money on the trade than if you just set it and forget it.

Honestly, I worked at Lehman Brothers. Obviously, I had to unlearn a lot of terrible, bearish lessons.

Did Lehman Brothers teach you lessons that you think were bad?

Oh, tons. Everybody who came out of Lehman had this permabear syndrome because Lehman was the one that went bankrupt, and everybody who tried to buy dips lost all their money in Lehman stock. A lot of the guys that I worked with at Lehman are permabears, and they've suffered horrendously ever since.

Even I was a little bit tainted about taking risk, and I was all in cash until basically 2017, when I started investing. I was that damaged that I missed out on the 9-year rally of the stock market. Then, obviously, 2020 happened, and I got that dip down to 2,400 in Spoos to buy.

I got back in, but I missed out on a lot. Lehman damaged the shit out of us.

The problem with Lehman is that it also taught some valuable lessons. The “get bullish on the lows” thing—it taught you some bad lessons. It made people permabears, but the good lessons that it taught you are that financial overengineering results in tears, right? Reckless risk behavior results in tears.

We saw it in the CDOs, the CDO-squareds, the subprime mortgage-backed securities, and the Archstone real estate deal that Lehman did on the absolute dead-ball highs that went horrendously pear-shaped. There are so many examples in financial history of people getting overleveraged, basically on a prayer that the underlying asset continues to rally through all-time highs.

Saylor's doing that. This never ends well. Saylor will not be a trillionaire. He is the egg man. He's got to sell it at some point if he wants to survive, or he has to keep borrowing against it.

And unfortunately for Michael Saylor, he cannot weather this volatility, and he's now become too big. It used to be a fun movie to watch on the side. Now it's depressingly relevant. I just cannot see this going well.

Yeah, I think it's tough. I think you've kind of nailed it. The main issue here is that there's no off-ramp. I think that's what he's trying to figure out right now: How could I get off this side? Can I exit this effectively? I think that's what he's talking about when he says, “Let me inoculate the market with some of my market sells.”

This guy is in a tough position, and the rest of the market is in a tough position. The good news, Jonah—the good news here—is that there are other things in crypto that are doing very well and that Bitcoin is no longer the star of the show. I think one thing that's sort of broken in the world of Bitcoin, outside of just Saylor, is the fact that gold ripped so incredibly hard that we had so much price appreciation from commodities, and inflation started coming back a little bit. The Nasdaq is absolutely ripping.

Bitcoin used to have correlation with tech stocks, and then it used to have correlation with commodities, and then it had correlation with gold, and then it had correlation with M2 monetary supply. Now it has correlation with absolutely nothing but itself, which can be a good thing, but at least for now, there's just no interest.

What I see is, if I'm trading BTC, I want to look for a double. And a double right now, because it was so difficult, I think, to get above that $85K level, I think people are probably looking at $100K right now. The best risk-reward for BTC is probably buying it around $50K to $60K per coin, at which point I'm going to get back in the market.

You heard it here first. I'm buying Bitcoin at $50K—probably, let's call it $50K to $55K a coin—and outside of that, I'm not particularly interested in touching BTC.

Did you just bring that up? Obviously. How much do you love me?

2. Is This The End of Crypto?

Not a lot. I don't actually even know who this guy is, so I'm sorry. I reserve my love for people that I know deeply, that are close to my heart. I don't know that guy.

Yeah, who's that guy? I don't ever remember grabbing cocktails with him.

Definitely not in Jerusalem, of all places.

No, not there.

That was a night.

3. The AI Bubble

Now, what I want to talk about really quickly is the fact that there are assets that are doing really well. This is the thesis that we've had for a very long time: It's the assets that are actually producing revenue.

When we're looking at what's doing well, Hyperliquid is obviously doing extremely well. Everyone's been talking about Hyperliquid. Hyperliquid just hit $67. It's crushing it. PURR is absolutely crushing it. Basically, everything that is actually making money is crushing it.

You're looking at something that I do think probably has some capped upside here because it is already so large, but it tells you a little bit about the state of the market, Jonah. When you have something like Hyperliquid that is the best-performing asset in crypto, this thing is just ripping it. It goes from $22 to $66, pulls a 3x, and everyone is talking about how they've made so much money.

Do I need to remind you that Intel went 3x in a month? This is the state of our industry. I'm so sorry to say it, but I think Hyperliquid was probably more of a conviction bet. You could size that one.

I did. I can't believe my luck.

Because I think it was very, very obvious that there was a market inefficiency that people weren't taking as seriously as they should. Right now, you see the CEO of ICE talking about how they're taking Hyperliquid very seriously, and that means that you probably can see $150 HYPE by the end of the year. I wouldn't be shocked, and you can have a reasonably high conviction.

But still, that's a 3x. That's what Intel did in a month. That's what SanDisk has been doing, you know, [__] every 2 weeks.

We didn't call SanDisk. We literally called Hyperliquid in the low $30s on the show a couple months ago. I bought some. I'm buying some. I'm not the greatest short-term trader, but to me, this was obvious.

We've been hammering on this show for over a year that the thesis is a K-shaped recovery. Things that make money will rally. Dogshit will go to zero. Most of crypto falls into the latter category, sadly.

So, just to answer the question in the banner at the bottom of the screen—is this the end of crypto? Yes, it's the end for a lot, if not most, of the tokens in the space. It's over. If you happen to have product-market fit, if you've built something that people want and that runs on a blockchain, there's a lot of upside.

This is the end of crypto as an asset class. Crypto is dead. Long live crypto. If blockchain legitimately reduces costs and increases net-income margins for a business, if blockchain rails do something more efficiently than whatever's out there right now, and if users want it and rip it out of the hands of the creators of that thing, that will work.

Crypto is dead. Long live crypto. If you're sitting there building a DAO right now to buy the Constitution from Ken Griffin, it's over. If you're building something that has potential, like Fund.xyz or Plasma, or tokens tied to Hyperliquid, I honestly don't even know anymore.

Crypto to me isn't a thing. It's just—what is your product? What are you making? Do people want it? Yes or no? If no, forget about it. If yes, maybe there's a trade to do.

You're on mute somehow. Oh my God, how did that happen?

Now, what I will say about this is that we are now in a world where what matters, as you said, is real product. What matters is: Are you building something that people are going to want to use? Are you building something that makes money?

For too long, crypto has been of this mindset: “I can exist for an extended period of time in the dream world.” That's just not true anymore, because now we have things that are existing in the real world, printing cash and growing their revenue 10x year over year over year.

In the memory world, the world of space, and the world of defense, people are really building these incredible companies. I think people are tired. People are just very, very, very tired of the dream. They want to see the reality.

I think that's why I'm so bullish on the equity markets, and I'm so bullish on the things in crypto that basically serve a real customer base, like cards, like Hyperliquid. Hopefully, we'll get some stablecoin growth soon. Maybe Sky will be able to come back.

I think there is one area that's underserved now, and that's the OG cypherpunk thesis of private currency, where you can hold your wealth outside of the system. Now that Bitcoin is no longer really that, I think that's one reason why Zcash has been doing so well: It's sort of taking up the mantle of that thesis for Bitcoin.

We no longer have a totally unco-opted currency, because Bitcoin has been taken by the Wall Street banks, really integrated into the financial system, and has not been acting in the way that it should be. Now people are allocating to things like Zcash.

I think one potential trade that you might be able to take out is, if you've been heavy in Zcash, you probably can rotate a little bit of those gains into Monero. Monero's really lagged behind, and Monero's really the asset that a lot of these people actually use, which I think is kind of interesting.

Zcash is sort of the hyped asset. Monero's the used asset. If you're bullish on that thesis, it's probably time to allocate a little bit to XMR.

Overall, this is good for the space. As you said, I think crypto sort of needs to die and get washed out. What we need is a reallocation of capital. We need people to come and make sure that Cardano is not a top-20 asset.

Make sure that Ethereum—I mean, even Ethereum is doing very poorly now. You saw our favorite people over at Bankless finally sell out of their Ethereum. It's because there's no way forward now.

I think that's the part that is really tough: There's really no way forward, because the idea of decentralized, censorship-resistant platforms is dead. It is completely, now 100%, co-opted by Wall Street banks that are using this technology to increase their efficiency and increase their bottom line.

That means that you, as the investor, can go ahead and invest in those things that might be able to help them increase their bottom line. For example, Robinhood is potentially working with an Arbitrum-based chain to build a back-end financial system and run tokenized securities on their own chain.

Maybe you want to go buy Robinhood, which, by the way, has been doing really well, and I want to speak about that in a second. But what you have now is no interest in these decentralized systems, and so the trade-offs don't make sense anymore. Because if you remember correctly, the trade-off always was: we're going to build a decentralized system that might be slower and less efficient than your centralized systems, but that means that you're always going to own your assets, and you can take your assets and move them around any time you want. You're not going to be beholden to somebody gating you.

We've sort of given up on this dream, and that's why I think the Ethereums of the world are no longer potentially valuable. Whereas Solana, for example, might be, because it can be centralized through its node operators if it gets enough of the big guys running nodes on it, and its technology is already proven out. It has a network effect. You might see uptake from Solana, whereas Ethereum, I think, unfortunately, is just too far on the decentralized side, which, again, is why people are selling out. That's why people are disillusioned with it.

4. Decentralization Barbell

The way I think about this now is that you really have to consolidate your assets into the things that are going to be part of the future. My recommendation to a lot of people over the last 1 or 2 years, basically since I exited crypto full-time and now do equities and all these other things, is that you probably don't want more than 20% of your net worth in crypto anyway at this point. Of the 20% that you have in crypto, you need it to be in things that are making money. That's really where I am.

Outside of crypto, we'll talk about the other stuff soon. I want to talk about the Iran deal for a second. But, Jonah, I don't know if you have any takes on that.

Yeah, I have a lot. Brilliant commentary. Couldn't have worded it any better, even if I tried.

I think the first top-of-mind take is that it's pretty amazing how this sell-off hasn't been as violent as previous winters in crypto. It's pretty much broken people. I think there's been a huge exodus from crypto and a huge disillusionment. Even Vitalik is like, isn't he moving to China to write haikus or something? He's just clocked out. That can't be bullish for ETH, at least, but even just thinking a few steps beyond, he's probably disillusioned with what's going on.

I think the insight you just shared that resonated the most with me—which was brilliant—is that I think we've kind of arrived at the right level of decentralization. There is a Cypherpunk community. It's sort of a barbell, right? There's a community that is going to want total decentralization: Cypherpunk, stateless Bitcoin. It will become an alternative reserve currency at some point. I put that over on the extreme end of the decentralization network spectrum in terms of what society wants and needs.

But then there's not—ETH is kind of almost there—but there's no market for that, right? What the world is looking for out of blockchain, aside from the Cypherpunks and Bitcoin as digital gold, what people want out of blockchain, and what institutions and commerce and capitalism want out of blockchain, isn't radical decentralization. They want a shared ledger where there's some kind of mutual transparency. Everybody can go on to Solscan and have a look at what happened on Solana. There's a bit of communal trust in the asset, and it's decentralized enough that somebody can't just literally turn it off and rug everybody.

But it's not so decentralized that you trade off all the efficiency. I think Solana and Hyperliquid kind of show us what capitalist society and capitalist systems are looking for from blockchain. They're looking for a little more transparency than, “Hi, I'm a new startup. I'm a complete black box. I'm just going to maintain ledgers for you, and you have to hope that I'm okay and doing what I say I'm doing.” Just a bit of decentralization is the right amount, without much of the quality and performance trade-off.

I think Anatoly really got it right. Give the guy his flowers. I think Hyperliquid's Jeff Yan really got it right. Between there and Bitcoin is kind of Death Valley, and no wonder Vitalik has thrown in the towel. What he built doesn't matter. It's what's being built on top of it that matters, like Arbitrum and Base. Arbitrum and Base are basically at the same level of decentralization, and the decentralization-performance trade-off is like that of Solana and Hyperliquid, in my opinion.

You saw what Arbitrum did when there was that Kelp DAO hack, or maybe it was LayerZero. With some of these systems, there are just funds and arbitrary people making arbitrary decisions. So, to me, just to close the book on this comment, it's pretty clear that crypto is now a barbell.

There is radically decentralized stuff that fits those niche use cases, plus one big use case, which is alternative money for Bitcoin. Everything else needs to be pretty freaking performant, with some transparency and shared governance. That's about it.

Beyond that, I don't really have any more comments on crypto, other than the second something seems to be getting uptake, buy the token. You could get it. We got a two-bagger on Hyperliquid in about a month and a half. Just keep doing that.

Also, VVV did really well from when we brought it up. We were actually pretty late to that. I'll give a shout-out to the guys that interviewed them. I think Roll Up interviewed them a while back. They did a good job getting them early.

But I think, again, there is alpha here. The alpha is that there aren't that many people with this mindset paying attention to crypto and allocating large amounts of capital. So if you, the investor—you, the listener of this podcast—want to go through the top 300 assets and figure out what's actually making money relative to its market cap, and then reallocate your capital to those things, you can probably find reasonably high-conviction places to put your capital.

That's a little bit of what we try to do here. We try to bring to your attention what's actually making money and what's actually doing well, so that you can allocate your capital. This is really an exercise that I think would be good for you, the listener, to take: just go through the top 300 to 500 assets. What's actually making money, and where should I be allocating my capital? What could be a good consumer product or a product for business?

Right now, a lot of the best products in crypto are actually equities, right? So you have Coin, which is doing well. You have Robinhood. Actually, Robinhood's kind of an interesting one that I wanted to talk about. Its price action has been really good over the last 3 days, and I think it continues. It continues very specifically because it was tied to the price action of crypto for a long time.

It had revenue misses, and we talked about this on a previous podcast, but it had revenue misses tied specifically to its crypto sector. It had a massive beta to Bitcoin. Finally, it's broken away. And why has it broken away? It's because of what we've been saying this whole time: they're going to make efforts and strides to move away from crypto, which, by the way, a lot of people are doing.

If you look at Robinhood, what have they done effectively? They're integrating AI agents, number 1. They're allowing AI agents to trade natively on their platform. That's insane. You can hook up Claude to your brokerage account and have it do a lot of the analysis and actually execute for you as well, which is kind of insane. That's the next stage of evolution. That's a competitive advantage for Claude.

Robinhood is doing well in addition because they allow Trump Accounts to be built on Robinhood. Trump Accounts are 6 million accounts that are being funneled all toward Robinhood. So they're basically getting—think about this—the first allocation to the stock market that you probably have as a child now is through your Trump Account. You're going to be a lifelong Robinhood customer because of these Trump Accounts.

What you're looking for as an investor is always spots of inefficiency. If you see something that is tied to a market but is breaking away from that market, and that market has been holding it down, that is an interesting place that you might need to look into.

When you look at Robinhood, everyone was really nervous about the crypto revenues, and now Robinhood is absolutely crushing it because people realize, “Oh, wait a second, they have all these business lines not tied to crypto, and those business lines are actually doing well.” That was evident, actually, in the earnings reports, where the revenue from equities trading was going up while the revenue from crypto was going down, but Wall Street, for some reason, is behind.

I think it has something to do with the fact that Wall Street is still not able to understand what is happening in the world of AI as quickly or as natively as we are, as the people on the ground who are actually using this stuff. They get it; they just can't. As we talked about in the past, exponential adoption of technology is incompatible with the Wall Street research community.

For anybody who missed the episode we did on that, I don't want to sound like a broken record, but the sound bite is: If you're a research analyst and you make a bold call and you're wrong, you get fired. If you're a research analyst and you make a consensus call and you're wrong, you keep your job. So, there's a fundamental misalignment of incentives between the research community and the risk-taking community.

This is one of the biggest sources of alpha for retail investors, right? All the research guys are like, "We're overweight Micron. We think it could appreciate 25% in the next 5 years," and you know it's going to appreciate 100% in the next 3 months. I'm just pulling numbers out for the sake of example, but that's probably the most bullish any of these analysts can get away with without getting fired. It's still so far off from reality.

So, anytime anything exponential happens in the world, the analyst community is going to get it wrong. Trillions of dollars of passive capital are allocated on the basis of research recommendations by people with the exact same upside-down incentive structure. That opens up this Grand Canyon-sized arb that you can capture as a retail guy or gal.

Yeah, and I also think that what's really nice now is that, because of AI, you have this incredible ability to do research on things that you could never really do research on before, or that would take you an extended period of time. I think this is actually going to further the bubble in many ways, but it's also going to give us insight into when that bubble might end.

When I think about bubbles and the way that they progress, this AI bubble that we're in, how are we, Jonah, as investors, going to figure out when we should lighten the load? I take my lessons from crypto. The way that crypto has always worked, because it is a retail-heavy, extremely volatile, and irrational market, is that the big money comes in and buys the big assets.

The big assets do extremely well, and then the mid-tier assets go up. Once the mid-tier assets go up, then the absolute junk starts to fly. In a different era, it would be very difficult for retail to figure out which assets are nonsense—what assets are actually going to benefit from AI but are so downstream that you're probably not going to see large asset managers allocate to them.

AI makes it very easy. I can now go into Claude and type in, "What are the bottlenecks for AI?" It's like, "This paste is used to secure fiber-optic cables, produced by this one company that's a $45 million market cap. Maybe you should buy that thing."

It doesn't actually work particularly well, or the margins are terrible and the business is bad, but the thing starts to go up anyway. So, basically, what I'm doing is watching to see if that junk is rallying. We're starting to see some stupidity in the market.

I'll give you an example. There is this one trade that I took out called ILMN. ILMN is a stock on the list of companies going to China. It's up 22% from where I tweeted about it, for no reason. No reason other than, I think, that it got introduced to retail as the stock whose CEO is on a plane with Trump going to China.

It's things like this that start to make me a little bit nervous about the market, combined with the inflation numbers, to the point where I'm still 50% cash because inflation numbers are coming up. The way that I view this particular type of market is that you want to start buying the things that haven't necessarily run yet but are in these verticals. You can probably make a lot of money very quickly with a short amount of allocation.

I'm quite literally half cash, half stock right now. My stock is comprised of things that haven't really run yet, that I think will be good for the current themes. For example, Palantir hasn't run. I think it's off a decent amount from the highs of October of last year, and I think Palantir probably takes a bit of a run.

Now, for a fundamental reason? No, but because it's an AI defense stock, and both defense and AI are sort of hot now. This is the way that the market is trading. If I'm right and Palantir goes to $200, that just reconfirms my suspicion that the market is in a crazy place and that we're probably going to need a little bit of a cool-off before we get to the next stage.

So, basically, I'm looking for these stocks, like Palantir and ILMN, that have these narrative plays to them. But I'm also holding a lot of cash because, if we do end up collapsing, I do want to be able to reallocate to the Nasdaq and the S&P, which, unfortunately, are at all-time highs right now if you're not allocated.

We're starting to see some potential cracks, I think, in the market. Maybe this is us just being stuck, because I did offload a little bit 2 weeks ago. Again, this is one of the hardest things for a trader to do: I offloaded, the market went down, then came back up, and is now past where I offloaded. I was right for 10 days, and then I was wrong.

I'm trying to really fight that bias, but I do think the best way to allocate right now, given the volatility in the market, is to have cash and to have allocations not just to the Nasdaq, but to the high-growth, high-beta stocks that are driving this rally. Now, potentially, allocate to the stocks that haven't necessarily run yet, that sort of fit in that world. That's what I'm doing.

I like that. I'm getting nervous, too, just like you. You look at tweets about the San Francisco real estate market, and you look at Peter Thiel, the guy who's usually right about these big societal shifts, who just moved to Argentina because he's worried about the United States.

I'm not going to sell equities because Peter Thiel moved to Buenos Aires, but this is the guy who said they promised us flying cars, and instead we got 140 characters. Now Elon Musk is literally catching skyscrapers falling out of the sky at the speed of sound with chopsticks and no damage. That's happening, and Peter Thiel's like, "All right, I'm out. Get me out of here. I don't like it anymore."

I'm like, "What? No, this is your dream coming to fruition, bro. You've got the Donald, the J.D. Vance, the flying objects. What the hell? Why are you moving to Argentina now?"

My equity—the piece of my portfolio that I told myself I would have in stocks, which is most of it, frankly—is fully allocated. I have not sold stocks, to speak of. The big sale was crypto at slightly higher levels: Bitcoin in particular, not HYPE. But maybe I should sell some HYPE, actually, now that I think about it.

I don't think it's necessarily a bad idea to sell maybe a little. I mean, people are going to absolutely skewer me, but this is actually a good way to figure out if things are overheated. You should sell maybe 20% of your HYPE position, Jonah. That's the way that I would think about it.

And yeah, maybe. I probably will after this podcast, actually. I would sell it during the podcast, except trading HYPE involves wallet connections, which are more annoying to do while you're trying to talk about stuff.

The thing about the stock market that worries me the most is that I'm worried it's purely technical. It's not fundamental. It's just rallied too freaking hard, right? It's too white-hot. We could talk about the Iran deal. We could talk about geopolitical risks, but whenever anything goes this well, you're supposed to trade around the position.

Something's wrong here. It can't continue like this. There's just too much money being made. Maybe the thing that breaks it is all these IPOs happening. Actually, no. Investors can't even really dump in the immediate term. They have a lock-up period. This could squeeze further.

I'm getting uncomfortable. I'm feeling queasy. We accurately called on this podcast that we were in the eighth inning, but most of the rally occurs in the eighth or ninth inning. In terms of the time of the rally—the number of days that we're in the bull market—we're definitely toward the late stages here in terms of time.

But in terms of price, most of the rally occurs in the eighth or ninth inning. So now we're probably in the middle of the eighth, and I'm like, "Wow, this is going really well. Wow, look at my portfolio," but also, "Uh-oh. When's the last pitch? When's the game over?"

Let's figure out what inning we're in. For those who don't know anything about baseball, there are 9 innings in a game.

Sometimes.

Sometimes you go into extra innings, but I don't think this is an extra-inning game. There are 9 innings, so you basically have 9 shots on goal to score some runs. And I think we've taken no goal, but yeah.

Sure. Whatever you want to say, Jonah. What I will say is that I think we are close. We're probably in the seventh or eighth inning.

But the thing that you have to understand is that when you get close to the end, that's when the most exponential and crazy moves occur. So it's very difficult to say we're near the end in terms of time, because you might not be near the end in terms of price. These are 2 different axes, right? You could be 1 month from the end, but quite literally 100% away from where the top is going to be.

It's your job as an investor and a trader, if you're trying to actively time the market, not to get shaken out by those moves and to understand how you should be allocating. When volatility is high, the value of cash is much greater, because if you wake up and the probability—I mean, volatility is just the probability of a certain price being hit at any moment in the future, right? If something is extremely high-volatility, then the probability that it's down 20% in the future is much higher than if the volatility is low, right? Just basic math.

Your job as an allocator is to understand that when volatility is high, when things like Micron are going up 20% in a day, the value of your cash exponentially increases. If it goes up 20%, it's equally as likely to go down 20% at some point in the future, and you want to be on the other side taking advantage of that volatility.

5. Memory Supercycle & IPO Top Signals

In the last innings, when volatility is the highest, you want to raise cash, but you don't want to be completely unallocated to the markets. What you want to do is be in those names that are going to benefit the most from the last innings, which unfortunately in the past used to be crypto, and now is more likely memory, AI, and potentially defense stocks as well.

Although, we have to see exactly how the Iran war deal plays out, which I do want to talk about for a second, because it's become much less important in the markets over the last 6 weeks. The markets are basically saying, “We don't care what happens in Iran. We don't care what happens with oil,” because so much money is being poured into this AI buildout.

The specific data, which is kind of crazy, is that we're seeing DRAM contract prices surge 95% in Q1 of 2026 versus Q4 of 2025. Basically, the supply-demand gap, according to Goldman, is going from 3.3% to 4.9%, which is the most severe memory shortage in 15 years. Obviously, memory 15 years ago was not the memory market of today. We're looking at potentially a 130% increase in these prices by the end of 2026.

That's why Micron is up 19%. That's why SK Hynix is up. If you look at it, it's insane, but the Korean stock market, driven by SK Hynix and Samsung, is actually outperforming the S&P in the last 10 years.

Let's call a spade a spade on that one.

All of that is being driven by the same degen Korean gamblers.

Well, I don't know about that, but it's being driven by the same leveraged degen Korean gamblers that borrowed money to buy Luna on the highs, too. I don't know what's going on over there. Maybe they just like a different culture, but, yes, Samsung and SK Hynix are the winners. Luna was a winner over there, too, at one point. Maybe this is a top signal.

It's possible. It's possible. All I know is that we're going to have to be careful moving forward, but for now, it does look good.

Stay allocated in cash and stay allocated to these high-demand memory stocks, and I think the memory supercycle continues. What I'm hoping for is that we get some sort of scare in the market, and potentially Kevin Warsh comes in. He's being hit now. As we've talked about on previous podcasts, I think Kevin Warsh is going to be a reactive guy.

If he gets hit with hard inflation numbers again next month, we're probably going to see rate-hike prices go up on those contracts even more. That's going to spook the market a little bit, and hopefully we get some of this unwind in the insane leverage that we're seeing in the Korean market and the U.S. market, because retail is a large part of the market.

Look at the SpaceX IPO. Instead of allocating 10% to retail, the SpaceX IPO is allocating 30% to retail. The reason they're doing this is because they know that retail will pay the spread far above and beyond what institutional investors are going to do, and we're probably going to have a massive pop on day 1 for the SpaceX IPO. That capital is probably going to run somewhere.

Once that SpaceX IPO happens—hear me out, Jonah. I'm having this idea right now. The Coinbase IPO in 2021—I’m totally blanking. The Coinbase IPO was in 2021, but I do remember this: It marked the peak of the crypto market.

All of that money lined up for the Coinbase IPO got extremely excited, and then the market ended up exploding. So I think it's highly likely, if not almost tautological at this point, that the Anthropic and OpenAI IPOs will mark the top of the memory boom. What do we think?

Big IPOs are usually the top. Producer Brad did a poll asking the audience if they think Michael Saylor will blow up. 67% said yes. There are all sorts of top signals around. There's Michael Saylor, and there's the SpaceX IPO.

The only thing that I think is still consistently bullish about the AI bubble is the fact that—actually, it's not Nvidia stock, basically. Nvidia stock trades at a rational P/E multiple. The memory stocks trade at a somewhat rational forward multiple.

If you look at projected memory demand, it is vastly undersupplied by supply. China has started flooding the market with cheaper DRAM units, but there are tremendous switching costs, and it's also geopolitical. Can you talk about that for a second? What do you mean they're flooding the market with cheaper DRAM? I thought that was just not really possible.

No, it is. In terms of high-quality, high-bandwidth—the best memory modules—they're made by 3 companies: Micron, SK Hynix, and Samsung.

If you're building a data center, or you're just building any kind of board, you can respin your board if it's got Hynix chips. You can respin it with Samsung or Micron, and vice versa, without feeling too guilty about what you're doing. There's no sort of compliance or ECCN issues.

But then, if you try to respin it using one of the crappier memory producers, you're probably going to encounter circuitry problems. Electrical engineering—you bump up against physics, right? There's real fungibility with certain chips and a lack thereof with others. In the industry, it's known as FFF: form, fit, function.

Without getting too much into detail, China has other manufacturers. Micron, Samsung, and Hynix are not the only 3 companies that can make high-quality memory. They're just the big 3 that the West likes to consume.

If you're comfortable putting CXMT memory chips on your board—let me pull up the name here; it'll take me 3 seconds. It's called CXMT. Corsair is another company.

Right, CXMT. Corsair is funny. There was a keyboard company that I used to order my keyboards from—

Yeah, Corsair and CXMT. They're mass-producing probably fungible DDR5 right now, and DDR4, which the broader Western market is short on.

The question is: Is Google, Microsoft, or xAI going to just toss a bunch of Corsair DDR5 in their data center? Do you trust Chinese chips with that? Can you even do that? Even if, from an FFF perspective, it's fungible, can you toss it in the data center for political reasons, or are you allowed to for some sort of defense-pact reasons? Possibly not. Maybe there's a backdoor in those things. Who knows?

But look, there are risks, right? You pull up several indicators of GPU demand per hour. I could probably put an image on here. Hold on.

Hold on. Let's see what we got.

This is pretty relevant, so I think it's worth the slight annoyance of sharing a screen here. Brad, do you want to toss that on there?

Okay, this is the price of a B200. Here's the price of an H100. It's not up-only anymore, right? It may be that the spike is basically because this could have been a Blackwell-unique rollout where there was a shortage, and then Blackwell came out.

I don't know. I'm not super in the weeds of what data centers are consuming right now, but these charts to me suggest that these should lead memory prices, right? Basically, this is demand for compute—for AI compute, for inference, for training.

And if you're off the highs here, the next shoe to drop is that fewer GPUs get bought. The next shoe to drop is that you need less memory—memory goes from being, like, white-hot, 50% undersupplied, to maybe 40% undersupplied or something. I'm not quite the expert on this yet. I'm doing my best to get smart, but basically what I'm trying to say here is that there are a few yellow lights out there.

Maybe Microsoft won't swap their Micron DDR5 for Corsair DDR5, but maybe Volvo, instead of buying LPDDR5 for the latest XC90, will buy Corsair XC90 because Volvo is owned by Geely, which is a Chinese company, right? LP stands for low power; it goes into basically high-temperature, high-bandwidth, auto-grade applications powered by a battery and an internal combustion engine, instead of being powered by a freaking nuclear reactor next to a data center.

But it's still the same technology. It's still DRAM. It's still the latest generation of DRAM. So, yeah, maybe you'll get switching at the edge instead of in the data center, but that will ease demand. Basically, high prices are the solution for high prices. Memory is just a commodity like oil or gas. Before we end the podcast, we should talk about oil and gas, Iran, and the Strait of Hormuz, because that's super relevant to all of this, too.

But basically, my point here is that demand for compute is shown in the charts I just showed you to be able to sell off as well as rally, which is a first. Also, you're getting Chinese chips flooding the market, which will ease demand at the edge, if not at the core data center level. I'm not saying I'm cautious; I'm just saying the universe is showing you that prices can go both up and down.

6. Iran Deal

No, 100%. I think it's really important to pay attention to these leading indicators.

Yeah. Should we talk about Iran?

Yeah, we can talk about Iran for a second. Basically, the only interesting thing there, in my personal opinion, is the fact that the market just doesn't care, right? The market has said it doesn't really matter what happens in Iran at this point, as long as hostilities don't increase, as long as we don't get a wider regional war. It doesn't look like we will, because everybody's incentivized to get a deal done at this point.

I don't necessarily think that the people who are in charge of Iran—I think one thing that's been said that is probably false is that we've hardened the Iranians, right? We've hardened them. The reality is that their economy is a few weeks away from really terrible things happening because of the blockade of the Strait of Hormuz, and you've basically killed 40 of the top leaders, a lot of the hard-liners. While you may have hardened some people, the reality is that the people in charge right now, like the Qalibafs of the world, are actually more moderate than the old guard.

So I think what you probably end up with is a deal in the next 4 to 6 weeks, and you don't get a re-ignition of hostilities because everyone, again, is incentivized. The entire world is incentivized to have low oil prices. China is incentivized to have low oil prices. The US is incentivized to have low oil prices. The only people that want high oil prices are the Saudis.

Not even the UAE anymore, because the UAE is at war with Iran and it knows that high oil prices are a benefit—

The Saudis can't benefit right now because their oil's locked in the Gulf. The guy who's benefiting big from this—and his name is Vlad—

Yeah. It's Russia at the end of the day. And so my view is just, from a rationalist perspective, we will get a resolution, and that, to me, will not affect the market. This is what I think people don't understand: all of this is priced. This is all priced at this point. People are going to be shocked—your average normie is going to be shocked—when a deal is struck with Iran. It's possible the market goes down.

The reason that it's possible that it goes down is if the deal does not include the cessation of enrichment and it includes a toll on Hormuz, that is actually a net negative. That's a negative outcome. So the market may go down on a deal if the deal has those aspects to it. You have to pay close attention.

You have to understand that the market is a weighing mechanism, and right now the market thinks that Trump is going to pull through or that it doesn't really matter. But if Iran sneaks through a couple of wins, like a toll on the Hormuz, or they will be able to continue to enrich uranium, and if the deal looks worse than the JCPOA, it's possible the market doesn't really do anything. It might even go down 0.5%. It's not going to matter for the long run, but it's not like we get a deal done and then, boom, we're off to the races. That's already happened. We've already experienced that. So that's the only nuance that I have there.

Okay, so let's go through the deal. My only comment, where I slightly disagree with you—I agree with most of what you said—is that if a deal gets done and it's even remotely sustained—if it's a 3-week ceasefire and then back to bombing, who cares? But if it's actually a real deal that lasts a while, oil is going to 50 bucks.

That will ease inflation. That will be extremely bullish for EM. We don't feel it here in the US because we're energy independent, but in India and the Philippines, they are furious right now with this war and with Donald Trump because their gasoline prices have gone parabolic. So, yeah, I think you could get just an easing-of-inflation-driven risk-on rally if oil nukes back down to where it actually should be because the strait is reopening.

And, by the way, it's not like production has stopped. There's an armada of floating storage trapped in the Gulf right now. All that oil is going to hit the market like a sack of bricks—and when I say the market, I mean the oil market. So lower futures prices equal lower inflation, which equals higher risk prices.

That's the only area where I slightly disagree with you. I think we should see a bump no matter what once the strait opens. But let's talk about what the actual deal is. So it's kind of phased: there's what happens in 30 days, and then what happens in 60 days. Let's just go through it. I'll give you my take, and then I'll throw it over to you.

Thirty days: it's all about maritime security and transit. The Strait of Hormuz opens—unimpeded, unlimited passage for international shipping; no transit tolls, no security checks, no naval interference. Mine-sweeping: Iran is legally obligated to locate and remove all mines it deployed in the strait within 30 days. The blockade is lifted, which lines up with what I just said.

The US lifts its blockade on Iran's ports so they can start doing whatever they need to do to get food and power into the country again. They've been struggling a bit with that. The US military maintains its current troop and asset footprints in the region, so no drawdowns under that sort of memorandum of understanding that's on the table right now.

Phase 2 is a 60-day window. The US will temporarily suspend energy sanctions on Iran. So now it's not just the floating armada of unsanctioned tankers that can slam the oil market; it's the NITC tankers holding all that Iranian oil that can slam the tanker market, too. This is really going to kick the nuts of oil. That would be, again, very bearish for inflation.

But Iran gets billions and billions of dollars from those sales. Still, there's a cash clause where President Trump stipulated a “no money exchanged until further notice” clause. So all of their assets that have been frozen remain frozen. They get a lifeline, but not all of their money back.

In parallel, there's a nuclear track for the current deal. The nuclear track is that, basically, Iran would pledge not to pursue, develop, or purchase nuclear weapons. That's probably the big sticking point. They would agree, under the first item of business, basically, to dispose of their existing highly enriched uranium stockpile, with future enrichment limits, not prohibitions.

That's why people on Twitter who don't like the deal are calling it a big L for the United States. But the reason why I don't think it's an L is that you can't officially end Iran's nuclear ambitions without total regime change, and you can't effect regime change without boots on the ground.

So, given, as we've described on previous pods, that a nuclear effort—a million things, a million stars—needs to be aligned, if you go and misalign 150,000 of those stars, there will be no nuclear bomb, and you keep those stars misaligned for some time. At the rate Iran's knowledge of physics and nuclear chemistry had developed, they should have had a bomb in the '80s or '90s.

It's basically a joint US-Israeli effort that's kept a lot of those stars misaligned. So if this deal throws a wrench in their plans and misaligns 15 to 25% of the stars that need to be aligned for them to have a weapon, then I consider the war a success.

I don't care if Kim Jong-un has a bomb. I care deeply if the ayatollahs do, because they'd actually use it. For the sake of humanity, I think even a partial deal is not an L. It's a W. So that's sort of my personal view on this.

It's a W from a geopolitical standpoint, and I think maybe we'll wrap up here with this. Everything is always a W for the United States. Everything. There's not a single thing that's happened in the last 250 years that has been an L for the United States, because we are the greatest country that has ever existed in the history of this planet.

We will continue to be, and all those other countries out there that think they have anything on us are just completely and totally, utterly wrong. You should never even think about going there, to these other countries.

USA, USA.

We will never lose. We will always be on top. Now, the stock market, on the other hand, might go down.

That's true.

[Laughter] And that's where we differ, right?

But if it goes down, it's good. It's good. Everything's good for the United States.

Yes.

Goes up, it's good. Goes down, it's good.

I think everything that you said is 100% spot-on. My point was just exclusively about the markets, right? I think we'll leave it as an exercise to the viewer.

It's Friday, so we're going to sign off. I hope everyone has a wonderful, restful Friday. If you're Jewish, Shabbat shalom; if you're not, have a great weekend, although I guess everyone can have a Shabbat shalom. Shabbat shalom, everybody. We love you whether you are or not, anyway.

Turn the phone off. Whether you're religious, not religious, Christian, Muslim—your phone's bad for you. Turn it off.

I actually agree with that. Next week, we won't be so click-baity if this doesn't work. If it does work, you guys are screwed; you're stuck with the clickbait.

This guy says, “I almost didn't click when I saw the YouTube O-face thumbnail.” I didn't like the O-face either.

I hated it. But you have to try things. You have to get in the arena; you have to try things. Yeah, okay, we'll have a more professional setup next time for you, Michael.

Yeah, thanks, Michael Smith. Thanks, Michael.

“Great seeing you, Avi. Take care, Jonah. This was awesome. See you next week.”