kel - 如何在不使用杠杆的情况下取得成功

Yo, yo, yo. Mr. Kel XYZ, what’s up, man?

Hi, we’re alive. How are you doing?

I’m doing good, man. This is a special day. I wasn’t sure we’d ever have this opportunity. Thanks for agreeing, man.

Yes, thank you for inviting me.

Okay, I won’t make you start with an introduction, but a very short one. Then we’ll need to talk about important market things. I think most people here know you, but some may not. Could you briefly tell us when you started trading and when you got into cryptocurrency?

I mainly joined Messari in 2021 as a research analyst. In 2020, I became very disillusioned with all traditional political, economic, and market systems after COVID and started looking for alternative ways of thinking. That’s what got me into cryptocurrencies.

1. welcomed to crypto by Iron Finance

I saw crazy things happening almost immediately. You know how Mark Cuban lost an incredible amount of money on—what was it called? It was a fork of Luna on Polygon—TITAN.

I bought it for maybe $1, sold it for $50, and thought, “Oh, I’m a genius. I am a value investor.” For 1 night, it was $60. Mark Cuban writes for Substack, and I thought, “Hey, this is crazy.” Then, overnight: zero.

That was a moment for me where I was just starting out, but that volatility pointed to another level of opportunity, I think. So, yes, I was at Messari, and then I went on my own.

I forgot that the Messari Mafia is madness. I completely forgot about this. TITAN lore.

Okay, so you’ve been through a few cycles now, and you actually came into my sights in 2024. You’re still here in 2026, posting about one of my favorite coins. How have you managed not to be disappointed—or, on the contrary, disillusioned—with the long-term potential and purpose of cryptocurrencies from the 2020-to-2024 cycle and up to the 2026 cycle?

2. the tech finally caught up

There were definitely periods of frustration, that’s for sure, including now. But the funny thing is that now, compared to 2024 and even 2021, there was a very cultish optimism in 2021 that was really more rooted in individuals than in technology. The tech debates were just a shadow that allowed people to worship Vitalik, Su Zhu, or whoever it was at the time.

In 2021, it was very iconic. It was blind optimism. In 2023 and 2024, despite the markets doing really well, it was for very pessimistic reasons, not technological ones. It was, you know, Trump was going to invest in a Bitcoin ETF and buy Bitcoin with U.S. Treasuries, and venture capitalists were bad, so memes were going to be really popular.

All these theses turned out to be true from a financial point of view, but they weren’t very optimistic from a technological point of view. So let’s fast-forward to today, 2026. In fact, I think the level of pessimism is very high, although the technological level that we can delve into is starting to rise a little bit.

I think we’ve started to move out of the period where there were no use cases for cryptocurrencies and into the beginning of a new period where we can see some really meaningful change. It’s kind of the opposite of the last cycle. It’s as if the 2 things have completely switched places.

Yeah. The last cycle, I think, was a bit like the cycle of nihilism. All this is, of course, complete nonsense, but they’ll still bring it up.

3. the edge is the crowd's bias

So how did you behave? I call it a cycle, but the last couple of months—and specifically, what’s your mindset going into this? What do you think matters? How do you think the cryptocurrency scene will develop in the next 1 or 2 years? How do you assess the market in its current state?

I think the main question for me is always: Where is the biggest misunderstanding in the market? If you can successfully answer that question, typically by examining your own internal biases, then you can find something that’s far ahead of what everyone else has, because ultimately, everyone has the same information.

Everyone now has 4 bots targeting all the data feeds from 1,000 different providers. Even if you don’t do that, you get to your goal pretty quickly. So what’s really important is that when everyone has read all this information, you ask whether there’s any bias causing them to misunderstand it. If you can identify it, you can identify greater opportunities.

For example, Zcash is currently the most popular cryptocurrency. Everyone on Twitter is saying it’s the next Bitcoin and so on. But if you, including me, had thought about buying Zcash a year ago, you would have felt like an idiot. You would have thought, “Why am I buying this coin? It was the laughingstock of crypto for 10 years, surviving the craziest bull and bear markets, and was completely irrelevant.” Buying it would really have made you feel like an idiot.

But that was bias, you know? So it all comes down to looking for these biases in the market.

I saw a tweet from what I think was MoonOverlord, who has been around for a while. He’s still active, and he basically wrote, “For the new generation that doesn’t understand how ridiculous the Zcash situation is, it would be like ADA, Cardano, going up 1,000-fold in a year right now.”

Beyond imagination. Beyond the point where it even makes sense. It’s one of those things that doesn’t even make sense. So when you see that, and we can talk about the Zcash thesis, I’m curious how much the discussion of who’s involved, who’s talking about it, and how common it is on Twitter affects your psychology of position management.

Interesting. I think there are 2 levels here. The first is creating a position, and the second is your approach to managing it.

As far as creating a position is concerned, the question of who is involved in it isn’t part of my approach. Don’t get me wrong, that’s a perfectly valid point of view, but it really depends on who you know and how much you’re willing to trust their word.

You meet some guy in Dubai who says, “Hey, I’m going to buy Zcash’s whole yard.” You can believe him if you think he’ll do it, but he’s just some guy from Dubai, right? I don’t have those advantages. I know a lot of really good people who I think are very strong, but that kind of game isn’t my style.

I think to create a position with confidence, you have to really understand what’s going on. Fortunately, we live in an era where we can get all the information we need pretty quickly, so we need to form our own beliefs to withstand volatility.

To deal with it, I think the best thing to do—or at least, that’s what I try to do—is say, “80% of this position is not a long-term investment. This is a long-term bet. I’ll treat it accordingly. I won’t touch it. I won’t think about it. If it grows 10 times, great. If it falls by 90%, that’s also great. It’s not part of my active process.”

The other 10% is where I try to squeeze out a little bit of psychological advantage by saying, “People are maxed out on long positions.”

Yeah. It’s like a triumphal march on the clock: selling when the trumpets sound, buying when the blood flows.

4. making it without leverage

So, with this particular position, how much of your trading style is based on the belief that this thing is thematically underrated? You’re going to buy on the spot market and hold it for 2 years, but today it goes up 20%, the chart looks good, and someone is committing some crimes. You want to participate in the crime, so you buy with leverage.

It’s definitely the first—about 98% the first. In general, I try to avoid leverage. Even though I’m very familiar with the platforms as an analyst and as a potential investor, I’m not an active leveraged trader.

Right. Because when I started in the crypto industry, we had some of the greatest leveraged traders in the world. The industry is shutting down one after another, and we’re talking about billions of dollars. For example, Su Zhu on Twitter?

Su Zhu, Alex Weiss, and even those you don’t hear about anymore are using leverage one way or another, through criminals or someone else.

Yeah, I mean, their assets went from $5 billion to $80 billion, and this guy is using leverage—supposedly a billion dollars in dog money—and he was right, you know?

So when I see someone at that level, with so many funds and so many random anonymous people that you don’t even hear about anymore, I won’t even name names. If they’re going to trade with zero leverage, I personally don’t feel the need for it.

Of course, you could say that if there’s momentum, I need to catch it or strengthen it with my purchases in the order book. But in general, people who have made a lot of money in various industries, including this one, tend to be people who, through luck, skill, or some other means, figured something out relatively early and found a way to hold on to at least a significant portion of their assets.

For example, even if you had 100,000 bitcoins when they were worth a penny, you didn’t actually need to hold them, and you probably didn’t. But even if you just kept, let’s say, 100 bitcoins and lost the other 99,900 in a boating accident or something similar, that would still be significant.

If you’re some random guy, you have to understand that these guys are just random guys. For example, they try to order ecstasy for $30 on the darknet. You understand how much this depends on the generation you’re in, you know?

My style of work is that there are certain beliefs about the world. You need to find a way to align them with valuable beliefs that are about to go out of fashion. If, for example, Bitcoin goes into crisis mode at the same time that sovereign debt also goes into crisis mode, maybe private Bitcoin has exhausted itself in a way it hasn’t exhausted itself in the past, right? That’s when you can make a profit using borrowed funds without the risk of collapse.

Wait, if we extrapolate your 100,000 Bitcoin analogy, your price target for Zcash looks terrible. Explain it to me in more detail—the psychology of entering a trade and how you think about it.

5. everyone underestimated HYPE

I just think that we humans systematically underestimate exponential growth over time, and compound-interest growth over time. We’ve all done it countless times. Even with hyperliquidity and the biggest whales on the timeline, you had all these CT guys who were like, “Hey, on November 29, 2024—Thanksgiving night—I’m taking a break from my family turkey dinner,” or at that point, because it was already late in the U.S., “I’m taking a break from what I’m doing on Thanksgiving night at 2:00 a.m. to sit down on my laptop and buy a coin. That’s a crazy idea.”

People were very optimistic, but they still underestimated it. Ninety-nine percent of my friends still underestimated where she would end up today. Who knows where she’ll be in 5 years, right?

How do you deal with this?

For example, if it goes from $2 to $30, then to $8, to $40, to $20, to $90, and maybe that’s just the beginning of the story, right? We need to figure out a way to get that right tail and say, “Hey, what is this? If at some point in the future there are coins worth $1 trillion, which I think is quite possible—and we can discuss this too—there will be coins worth $1 trillion. How do I prepare for that if I potentially own one of those coins now?”

I probably won’t use long-term leverage. The hype around it is just incredible. I remember the target price for a quick buy and quick sell of BNB was about $100 billion, maybe give or take. You always give a target price that you really shouldn’t achieve. So, if your goal is $100 billion, you sell it for $20 billion, right? You sell it for $25 billion.

Like Ty says, Zcash is $20,000, but in the video he says, “I’m selling it for $5,000.” I’m not 100% sure about $5,000. Without a doubt.

The excitement is interesting because I think a lot of people are saying to themselves right now, “If I had hyperliquidity, this would be the easiest trade of all time.” But even the biggest hype mongers—the ones everyone knows as favorites—didn’t make it to $97 without selling, not even close. They didn’t make it to $50 without selling. Everyone was selling throughout the entire rally.

And if we reach Zcash, then it is possible after that, but how do you stay at the level from $3 to $20, to $8, to $40, to $10, to $18 or $22, to $60, to $40, to $90? How do you do this in 2 years? Especially when everything else is growing too.

6. building the conviction to hold

This is always the hardest part for me. I have a position that I really believe in, but it’s been in a range for 3 weeks now. Robinhood is up 30%, pump funds are up 30%, and Liters are up 4x. How can you stand all this noise around you?

You need to have confidence to hold on. There’s a great blog my friend Connor wrote—say hi to him. He’s also on Twitter.

Hell yeah! Hell yeah! He loves it!

This is a short post. You can probably read it faster than LM can assemble it. It’s called “The Belief That One Should Stick to a Strategy.”

With every successful investment, you have to accept that it will have periods of relative underperformance. If you can’t accept that, just accept that you will never make a good investment, period. Once you understand this, you can start looking for successful investments and scaling them correctly.

I’m not a guru. I don’t want to sit here and tell you that I got all my money into the hype at 270 and sold at 97. I’ll be... I’ll be somewhere else. I’ll tell you this. Ultimately, you have to have some part of your book where you say, “Hey, I’m not going to sell. I’m not going to actively manage this part of the trade.”

Because if everything really goes as it should, then this relatively small part of the book will expand dramatically. The upside potential is so high when you trade technology, whether it’s cryptocurrency, AI, biotechnology, or other topics we can talk about.

7. the full ZEC bullcase

It was witty. I like it. Even the best of them have periods of relative decline. Fine. Can you just give me the exact thesis? Why Zcash now, and why are your targets so ridiculous?

I would probably say that, when it comes to targets, I try not to create a false sense of attachment to where things might go.

What does that mean?

The connection to that is, let’s say I’m going to say live now, “Zcash is going to $1 trillion per coin.” I really believe this with all my heart. Then, as you said, even if the price gets close to my target, because of the strong psychological anchor, I will not act on the new information.

This is what happened in the last cycle. Bitcoin rose to $100,000 and then fell to $70,000. “Oh, I’m long with leverage,” even though you were already long throughout the rally. This is how people who invest very early in all these assets in different industries end up not making a lot of money, because they have false anchors and so on.

But I think for Zcash it’s all about ideas. As I said, there are no wrong ideas. Well, there are some really bad ideas, but mostly they’re ideas that just didn’t live up to their time, especially when it comes to startups and big tech projects.

For Zcash, there are many different tailwinds acting simultaneously. Once the price starts to rise, it becomes very reflexive. This is a classic example of a self-fulfilling prophecy.

The 3 main factors that I see are, firstly, the fear of surveillance—the fear of what you saw on Twitter. Nothing too crazy. There’s also the fear of capital controls: the fear that the EU, the U.S., the CCP, or governments around the world are, at a minimum, dramatically increasing tax risks, knocking on your door, sending drones or something, or just deleting your Fidelity account, whatever it is.

These things sound crazy, but even in the United States, which is widely considered the freest society ever created, they banned the storage of gold in the 1930s. They changed monetary policy dramatically, which hit people hard who, for example, saved dollars, and convinced the whole society to save dollars. So it’s possible that government risks may increase, or be perceived as increasing, over time.

At the state level, they can, for example, mess everything up. I don’t know if you can swear here.

You can.

Secondly, Bitcoin should have been the subject of this discussion, but there’s an atmosphere of stagnation around it. People are unsure of the ability or willingness of Bitcoiners as a group to implement the necessary features to prepare for such a future, whether it’s privacy features, quantum-resistant features, or the existing problems that come before that, like how we’re going to deal with fees and all that stuff once inflation is over.

All of this is kind of hushed up, and then along comes Michael Saylor, who, admittedly, posts hilarious memes about McDonald’s Bitcoin, like fried Bitcoin.

Why do you say that Bitcoin is fried?

You know, jumping from a burning cruise ship. How else could this be interpreted?

The main asset that has occupied this information space is perceived as weakening, and in fact it is weakening. If you compare the discussions around Bitcoin in, say, 2017, with what awaits us in 2027, it’s like night and day.

Yes.

So, yes, Bitcoin is weak. Governments are weak, or perceived as a threat, and that’s starting to show in reality. You see Bostic come out and say, “I’m going to cut rates at a minimum,” and the next day rates come down again and yields come up again. He comes out and makes a bigger statement—up again. It’s like, “Wow.”

People with real money, right? Everyone on CT—Caleb XYZ[?] and all these other random people—they don’t have a penny to their name. People in these markets have enormous wealth. It’s incredible. It’s a completely different matter. One such person could destroy all of CT and everyone CT has ever known. Nothing would have changed, right?

When a situation like this unfolds in these markets, the idea arises that there’s going to be some inflow of funds from those markets into these markets for the following reason: “Hey, I don’t want to hold these Treasury bonds anymore, and I don’t want to store a bunch of gold in a vault in another country and all this other stuff.”

So you’re going back to the original idea of Bitcoin. Beyond capital flight and surveillance risks, there’s a perception that fiat money is essentially a scam. The markets will reflect this someday. Perhaps that day will come today. If this is true, then the influx of funds will be very significant. Very significant.

So, if you put all this together, you get your thesis, Zcash. At the beginning, you said that people greatly underestimate the ability of assets to compound. Why do you think this happens, and how do you explain it?

It’s just a biological pattern. We’re programmed to think linearly. We wake up, we go looking, we go hunting. I eat, I spend X hours hunting, and I get Y. It’s a very linear relationship.

At the biological level that influences our psychology, there’s no sense of exponential growth. Such ideas simply didn’t exist. Therefore, we need to fight this one-sided dynamic.

With overly active management, going back to your point about leverage, people say, “This market is going to go up 20%. Should I invest in it?” You can make crazy amounts of money, even with a small amount of capital, if you catch this rise and use it to profit from the next move. The volatility will be insane.

But usually those who earn that kind of money feel very rich. It feels like a huge success overnight. “Oh, fuck, see? All these guys bought new Rolexes, new M4s, or a new helicopter.” It’s as if you need to adjust to your existing level of wealth.

But if you look at the bigger picture, we were talking about hyperliquidity, right? How many people used the HYPE? Even I know that I’m guilty of this too.

That’s why I know it so well. I go on stage and say, “HYPE, local peak, $30,” and I turn out to be right, and the price drops to $8. But who made more money from all this? Probably not me, and probably not the person who says, “I was short at $30, took profit at $20, and I did this, I did that.” The guy who probably made the most money was the one who said, “This thing is going to get a lot bigger and will keep getting bigger one way or another. Let me find as much money as possible for myself, for my partners, or from people I can raise capital from, and I will constantly buy it over and over again.” Because the exponential growth potential still exists.

I think Flood talked about this too. People are underestimating the right tail of the result for Hyperliquid when it made that deal with Flowdesk, it seems. I think he explained it in detail, so you should check out that discussion thread. You’ll see what I’m talking about.

That makes me think, “Okay, you came to that conclusion because you’ve made mistakes before with High-8 and stuff like that.” Then you make this great point about Zcash. Very well said—quite laconic and concise. So how will you manage this from now on? And if you don’t want to share your portfolio, you don’t have to, but as a percentage, how much are you invested in Zcash for crypto risk? This is a significant risk.

As far as crypto goes, it’s basically the only coin I hold.

This is the only coin you hold?

To a large extent, yes. There are other things too, but I really try to apply the philosophy of, as Warren Buffett said, “If you could only make 20 investments, you would be completely different.”

This is a quote from Jazz. I’ll actually try—let’s edit the podcast. Famous investor Jazz once said, “If you could only make 20 investments, I think that’s something to keep in mind.” It’s not something you have to strictly adhere to, but that mindset—if I can nail a few big investments and just hang in there for dear life—that’s actually a much better way to live my life, right? Instead of trying to catch, for example, 20 coins.

I respect all of these bets, but I just don’t see them on the same level of capability, so I stay away from them.

Yes. What’s interesting about this cycle is that there are two sort of contradictory forces: a full portfolio of really good altcoins that people are extremely confident in, which I don’t think existed in 2024. SOL, for example.

No. There were a few places like that, but that’s all. Before the hype, there was no bullish sentiment toward altcoins. There were no altcoins at all. It was a kind of cycle in the blockchain.

I remember you from the AI season, from a16z with AI, and from many other places where you played very well during that period. So, fast-forward to 2026, and there are two opposing forces: altcoins with a full portfolio—DEXs with a fake account, HYPE, privacy, NEAR, and that’s the whole list. There is Venice, and there are quite a lot of them.

There’s Pump.fun on the blockchain. There are quite a lot of interesting places. And then there’s this thing where they’re publishing profit-and-loss reports in social trading on the blockchain, like they’re competing with each other, and there’s a whole huge community that’s formed around that. I know it’s slowed down a little bit now, but we had ai16z. For us, everything happened on SOL.

There’s a Pump.fun app, a FOMO app, and a lot of stuff like that—Phantom, a lot of social-trading apps. It’s just a completely different world. Assets feel much more divided than they did in 2024. In 2024, you traded on the blockchain and then bought SOL. It was the same thing.

What is the Zcash ecosystem like?

Zcash and ai16z are like we’re in two different worlds. Bitcoin maxis and blockchain traders are that different—two completely different worlds.

How do you see events developing? What do you think about the blockchain situation in 2026, given that you performed very well in 2024? How do you think these processes will develop?

8. onchain asset quality isn't there

Frankly, I think it’s too early to draw conclusions on many issues related to the blockchain. Don’t get me wrong. This was really my main activity, because in blockchain, speed and the ability to match patterns are very important.

If you can beat the Twitter consensus and the more daring funds, you can make some really impressive profits very quickly because, like with AMMs—automated market makers—liquidity is low and people start to invest. We’ve seen that. Even ai16z has far exceeded my expectations.

I agree, by the way.

Me too. It was just crazy, wasn’t it? But even that level of euphoria, if taken for granted, still feels like a kind of continuation of the euphoric roller coaster.

Between 2021 and 2024, while we saw lower overall peaks, it was still only a shadow of 2021. And now, in 2026, at least my impression—which may change—is that there have been no new innovations that would lead to this level of capital inflow at the technology and product levels.

New platforms have emerged that are much more interesting and easier to use, such as FOMO and Phantom, and so on. But the quality of blockchain assets has not yet made a leap that would feel like something new.

That’s why I think you’ve seen all these stories with ai16z, where people are comparing Punks to memecoins and AI to Virtuals. Frankly, I hope they turn upside down. I hope it’s crazy. I hope it happens.

But so far we’re seeing significantly lower highs even for these instruments compared with, say, the ai16z token when it first had this big run-up. It seems like in 2 days its market cap went from $1 million to $700 million.

That’s a good point. So even that hasn’t happened again yet.

We might just be in the early stages. But at this point, I think the final decision has not yet been made.

Do you think this will happen? Do you think we’ll reach a point where onchain, as a vertical investment platform, is sustainable forever and breaks through these ceilings, or will we just continue to see lower highs?

I think there is a certain level. I think they have eternal popularity. There are people who clearly like this network. As long as players are enjoying the casino, the casino stays open, right?

Whether it becomes the next MGM or something else, that requires impressive growth. I don’t know. Again, I’m a little behind the times. I’m not that old, but I’m not a freshman in college either, right?

If there are freshmen in college who want to trade memes, then I’ll rescind all of these statements. But I feel like the people I talk to around the world—I don’t talk to a lot of young people—and I don’t feel like they think that meme trading is super cool.

I don’t know how much of that growth can actually be seen in trading the same memes, repurposed for 2026, 2027, and 2028. But I think social trading is a reality.

But you want to see a synthesis of these two ideas, to look at the situation from a Hegelian point of view, based on your philosophical views. You want to see social trading that is very meme-oriented and very blockchain-oriented.

You mentioned earlier that many of these, so to speak, not very competent fund managers are more focused on technology platforms, precise returns, pseudo-intellectual theses, and the like. What really needs to be seen, at least in my view, is a meeting somewhere in the middle, where all these people in these markets are taking huge positions—even retail—huge positions in Sandisk, yield and oil, Zach, anyway.

It’s also funny to watch: “Who is this guy? He made like $50 million off of Zcash, right? And he sold Lao Wang.”

Lao Wang.

Yes, Lao Wang. So, I think in my projected future, something similar will drive the growth of platforms like FOMO or competitors, as opposed to blockchain.

I mean, these profit-and-loss statements are just stupid. You’re scrolling through Hyperliquid P&Ls like HyperDash. Some of these P&Ls are $15 million. To do that on the blockchain—it’s like, “Oh my God.” To go from zero to $1 million on the blockchain is probably fast. This is probably the fastest way on the blockchain, but with $1 million on the blockchain, it’s like being in crypto chat rooms.

I also have to say, I don’t even know how well you pulled off this deal, but I think it was 3 dinners ago that I called you Kel, the head of the conspiracy. Your trading idea was a little lighter, about dollar-for-dollar, maybe $50. It was a really good idea.

Yeah. I also thought it was a bad idea because you said it was too, too cheap compared with HYPE.

I’m like, okay, whatever. And you traded well?

In fact, I didn’t trade very well. I had great buying experiences.

But going back to my belief, when I look at the money that I want to put into cryptocurrency, I have Zcash, as we mentioned, and I feel like that’s important whether this idea turns out to be right or not.

This seems like a very compelling thesis that the market can psychologically buy into, and there is a very clear wall of psychological anxiety that comes from past cycles. Those who have the most money have the biggest bias against it. So that’s the biggest source of cash flow, right?

Compared with the broader market, which I felt was more in the technical-analysis-and-sentiment camp, this market seems to have bottomed out. I don’t really believe in the competitive perspective.

I think you—so I wrote an article about Trade XYZ, and in it I described some of the competitive dynamics of platforms in general. There’s an article called “The Gorilla Game” that I think people should read if they trade in the tech sector.

Basically, it breaks down how these platforms compete, what the levers are, and what you should look for to assess whether it’s going to be a winner-take-all market, or whether you should invest in some of these competitors because maybe the market isn’t that mature yet.

One of the things I'm looking at is that, as you know, there was a lot of talk early on about the sensitivity of Hyperliquid markets to fees: competitors would come in and lower the prices for their services, leading to a significant loss of trading volume and market share. But in reality, the opposite happened, right? They introduced priority fees, and consequently, the number of users paying at a higher rate increased. Lighter came out with zero fees but failed to capture as much market share as it could have.

So with Trade XYZ, I was very hesitant because I couldn't sit there and say, “I kept trading when it was a dollar, and now it's 90 cents, so I'm going to double it.” Management was tweeting in a weird way, and although they fixed it and have now restored most of the positions, it seemed like management was acting weird back then. The zero-commission thesis didn't work out so well.

Yes, I wouldn't say it was an impressive deal, but the idea was great.

Great idea, that's for sure. I'm going to read The Gorilla Game: Picking Winners in High Technology. Hello, hello, LBO. He got me hooked. What? This is great.

By the way, the thesis about commissions is very interesting.

I just like using Hyperliquid. I just pay the commission. I enjoy using it. I don't know. Changing the trading platform when you transfer money is a strange thing. I don't really jump from one DEX to another or to other trading platforms just because I can save a little bit. I feel comfortable with my money; I just like using it. It's very sticky, that's for sure.

Okay, another vertical that you've talked about a lot, although you've been tweeting less lately, is the future of AI, and in particular, the decentralized AI vertical in cryptocurrency. Pluralis is something you've mentioned a lot. I don't know if you like Pendle. I know Tulip King likes Pendle. I think it will be hosted on Lighter, by the way. I don't know if it would be cool if that happened.

TAO, you may have really liked it at one time. Conceptually, it's a cool vertical. What stage of growth do you think it's at? Has your opinion of it changed for the better or for the worse? And what do you like?

9. betting on decentralized AI

I think at best it will be something similar to Pendle in 2023. In 2023, there were a lot of DEX coins, some of which were quite popular and had a cool audience, such as GMX. There were competitors such as GNS. There was dYdX; it existed. But the real winner was Hyperliquid, which at the time was a pre-launch token and had virtually no traction.

In 2023, it wasn't widely known. I first heard about it—I don't know how early I was—but all of us at Messari learned about Hyperliquid through friend.tech. They placed it in the top 10 friend.tech accounts list. It was possible to buy Hyperliquid shares using this index, so that was how I first learned about Hyperliquid.

But the point is that in the AI space, you have an existing set of coins. There are existing protocols and some pre-tokens, like Pluralis, if they decide to go that route. Ideally, the idea is to stimulate computing resources that, for various reasons, remain unclaimed and direct those resources toward valuable computations or the training of valuable models.

This thesis, I think, is very compelling because, for many reasons that I can list in any level of detail, there is a lot of unused computing power in the world at different times and for different reasons. As for Pendle, in this case, these resources don't even necessarily have to be unused. Their ultimate goal is to be able to do AI and mine Pendle at the same time, without additional costs compared with a regular operation. This is their holy grail.

So, yes, I think at best Pendle can achieve that. If they can get some kind of reflexive process going with their currency, and people start paying for computations using their token, or their token is seen as something similar to, say, DM, then it can be used to pay for future computations. There are various design options that, at least as far as I understand, are not yet fully defined for Pendle, Pluralis, and Bittensor.

As far as Venice goes, they seem to be buying their own computing power now, so all these names, scopes of operation, and strategic decisions that may or may not lead to really big winners are still very open and uncertain. But I think it's a place where, if you have the research skills or the desire to learn, using the knowledge you gained in your master's degree, which can help you figure all this out, you can see unlimited growth potential in a new sector like perps, which was relatively unexplored in 2023 if you knew the right places.

Do you think the base case is that there will be a winner in this vertical?

I think the base case is probably that, frankly, nothing will win. For protocols before they have tokens, there's always a chance that, if they're really good, they can just issue a token. They can also be really good and decide not to do it for a variety of reasons.

Prime Intellect and Nous were very crypto-focused for a long time, and their communities were filled with crypto investors, but they eventually sort of moved away from crypto for various reasons. So the same thing could happen with Pluralis; that's still in question, right?

As for existing tokens like Pendle, TAO, and so on, they have very ambitious plans. But there's no guarantee that those ambitions will be realized in a very technically complex task, when you're trying to combine 2 very technically complex industries with a viable token and all the self-fulfilling prophecies, both up and down, that come with having a viable token.

Frankly, I think the base-case scenario is that nothing works. But the upside potential in more optimistic scenarios is so high that it's still worth it. That's why we're talking about this here, you know? This is my opinion.

Going back to general trading, when you have a significant percentage of your investment in ZEC, what do you spend your mental resources on during the day to avoid going crazy in the market? Do you just read and study? How do you use your resources? After all, you're not actively managing your ZEC position. Sure, new information comes in and you might update it, but there's little active management. You have a lot of mental resources that are idle.

It's like computational theory. Somebody says, “Hey, if you want to pay me for this...” Well, it's basically just sitting there, man. Anyone can pay me extra money; I'll take it. Send me your tokens. I can sell them, but no, I think you need to keep yourself busy. That's the most important thing.

Secondly, we live in an era where there are many different sectors and topics, both within and outside of cryptocurrency, and it's worth taking the time to understand them better. I also just love reading, and I think it helps me develop abstract thinking, which complements or even defines my specialization. So I just like to read different things—science fiction, philosophy, all that culture-war nonsense.

I listen to what Nick Fuentes says and what Hasan Piker says, just to get a sense of the atmosphere in those different areas. You can collect any rare books. I now have a large collection of rare books.

Yeah. I have a good rare-book dealer in town if you'd like.

Yes, I have. Do you have a collection or not?

No, no, no. I haven't collected anything, but I bought some. My friend really loves history. They have rare books, rare artifacts, and all that stuff. So I went into this store. He's a big history buff, and for his birthday I bought him a signed photo of Gorbachev and Reagan.

This is so cool.

Overall, yes, this store is pretty cool.

This is so cool.

Do you have any goals as a trader? Do you see yourself trading forever?

I don't think so, but ultimately you have to manage the money you manage to save. To some extent, you can stick to the safe option, or the option that feels safe, like putting all your money in the S&P 500 and walking away, as Warren Buffett advises. But I just don't know how much I believe in it.

Maybe I'm just infected with the infodanger that crypto enthusiasts have when they think America is always 10 years away from real, actual stress. Ten years go by and the market is much higher, right? But I think a strong case can be made that a certain level of stress in the market justifies actively managing a certain percentage of your money.

I have some experience investing in Solana, Hyperliquid, and Zcash, where I understand that, while I'm far from a god, I can actually find places that significantly outperform expectations. So I think that's why I continue to actively manage my money.

But trading forever—I don't think that's an inherently valuable proposition in terms of life and lifestyle. So I don't think I'll be doing this for the rest of my life.

Fair. Why do you consider yourself a good trader? Why do you think you've achieved success as a trader?

I think I just like reading more than other people. I'm not the best, however you put it, but I believe I have a very good ability to generate ideas compared with the market. If I look at my history, I like the way I generate ideas. I think the quality of the ideas that I really focused on was good.

There were misses, and I made mistakes on some things, even on things that inspired me a lot. But overall, sitting here and talking about, for example, Solana in 2023, the whole industry considered it a zero project. Obviously, this wasn't true.

Hyperliquid, the day before it launched, was considered forgotten, but a lot of people on Twitter are now saying that this is going to be the next GMX, the next…

They thought it would be Arbitrum L3. They thought it was going to be the next dYdX. dYdX famously went up in the first month and then basically dropped to zero. These ideas are hard to come by, and I think that’s the whole point.

I’ve managed not to be the best dealmaker of all time. My trade execution is probably at a B-minus level. But idea generation—I don’t want to overestimate myself, but I think it’s not quite S-level, but pretty close. At least for crypto, I don’t think there’s been any major platform in the last 4 years that was significantly overvalued that I wasn’t publicly involved in early on: Solana, Hyperliquid, Zcash. I spoke about all of this very publicly.

Anyone who knows me knows this, so just read more and come up with good ideas. This is it. This is my game.

Okay, I’ll let you go now, but can you name the 5 best books on finance? We’re big fans of finance books here.

Yes. Frankly, I think the advantage is on the side of science-fiction books.

Okay, can you name both kinds of books right now?

I’ll give you a mixed list.

Okay, okay.

But I need to think. I need to think. I showed you “Reminiscences of a Stock Operator,” “More Money Than God,” and “Market Wizards,” but it’s hard to read “Market Wizards” in one sitting. I also showed you “The Devil Take the Hindmost.” The last one is a good book.

It’s hard to read. It’s difficult to read.

Oh, don’t read it.

Don’t read it. It’s just—okay, I’m not a fan of audiobooks. I have never listened to an audiobook in my entire life except for one, and that is “The Devil Take the Hindmost.”

Seriously?

I’m sitting here trying to read it and I’m dying. It’s very difficult to read.

No, no. Don’t read it.

It’s not like I’ve never—okay, that’s not true. I read it twice, but I probably listened to the audiobook from start to finish 100 times.

100 times?

Because—well, listen. Audiobooks on YouTube are free. It turns out there are awards for people who work with audiobooks, and there’s something like a LeBron James among audiobook narrators. I was trying to figure out why I liked this audiobook so much, because I hate audiobooks. To be honest, I hate audiobooks. I read e-books or paper books.

It turns out that it’s essentially voiced by the LeBron James of audiobook narrators. His way of speaking is so British that you really feel like you’re there. You feel like you’re in the Roaring Twenties. You feel like you’re in Change Alley, among these guys in London who trade South Sea shares and all that.

I think “The Devil Take the Hindmost” is a must, at least for trading. For example, if you’re trading in high-tech markets or bubble markets, whether it’s AI and cryptocurrencies, or if there’s a biotech bubble—anything like that—“The Devil Take the Hindmost” is a must.

Fine. I just think it depends on who you are as a person, whether you need to move in a more psychological, more ambitious, or more performance-oriented direction when you read, right? “Thinking, Fast and Slow” is a psychological study of human biases that explores all these different prejudices. It’s not a perfect science.

Mm-hmm.

But I think reading this book really opened my eyes to the fact that I’m actually a bit of an idiot. I’m an idiot in the sense that people generally are idiots. If you can recognize these signs of idiocy, like the anchoring effect I mentioned and all these other biases, then you can counter them. But if you can’t recognize them, you can’t resist them. Do you know what I mean?

I think psychology is really important in the markets, and “Thinking, Fast and Slow” is, again, an extremely difficult, brutal read. But even just going to YouTube and getting a brief rundown of these ideas, if you’ve never encountered them, I think that’s valuable. I think it’s valuable.

Science fiction and trading. I think part of the reason I became fascinated with AI is because of the book “Daemon,” which is about an AI hacking corporations.

Yes, exactly—“Daemon.”

I don’t think it has had a huge impact on my opinion of cryptocurrencies, but it has had a huge impact on my opinion of augmented reality and virtual reality, which we haven’t really talked about. I think they’re going to be very successful in the next 10 years.

“Daemon” is a good book. “The Price of Time” is a continuation of “The High Price of Time.” “The High Price of Time” is about market bubbles, and “The Price of Time” is about interest rates. Given that we’re in a period of high interest rates, with bonds and all that, I think “The Price of Time” is a good book.

Yes. Honestly, I would advise you to read them.

I will read them. If they evoke a response, then they evoke a response. If not, then there’s a reason for it.

You should never force anything on someone. I love reading because I finally realized that I should only read what I like. This is a very correct opinion. If I don’t like something, I just stop reading it. It’s like, okay, this book is a masterpiece. Everyone says it’s the greatest book of all time, but I didn’t like it. I just finished it and moved on.

That’s how I felt with “Fooled by Randomness.” It almost made me quit reading. I hated that damn book.

And then you have something like, “What’s wrong with your head, guys? Is this a chat?”

I wanted to ask you about them. Are they special in some way? Are they very rare or very common?

Hey, chat, you need to use ChatGPT to find this. I’m not going to advertise to you all, man. I’m not going to advertise for you.

Hey, if you think it’s special, then it’s special to you. That’s what I wanted to say.

Cool. Kel, you’re the best, man. I know you’re a rare person. I think you’ve dropped some gems, and I really appreciate you coming, especially since we have similar assets. Do you want to finish with something? Also, do you want to advertise something—Substack, for example, something you’ve written, posts, a website, a product, a coin, a small-cap gem, whatever?

No, no, no. I’m not advertising a coin with a market cap of $100,000. I think there are a lot of interesting ideas. We live in truly interesting times.

10. alpha is hard to find

I’m reading this book. I just finished this book on antimemetics. It’s actually a good book. This is a really good book. It’s not science fiction and it’s not finance, but it’s called “anti-memeticist” Nadya Aspanakhova. Just search for “antimemetics, Nadia,” and it’ll come up.

This book is about ideas that are hard to find—ideas that actively resist being remembered.

Yes, exactly.

It’s based on a science-fiction book I also read called The Antimemetics Department Doesn’t Exist. It’s good, too, but you can skip it. The book I just mentioned explains how ideas go viral, and I think we have a virality-focused culture, as evidenced by all these platforms.

But in reality, where the alpha is, there are certain ideas that are hard to find when you want to find them. For example, Zcash is a great idea at $30. There’s a guy named Sasha who wrote a big dissertation on Zcash.

Yes. Well, you know, when the price was $30, right? I mentioned this before the stream because I was going to mention it. But it wasn’t that viral back then, right? That’s exactly when this idea is needed.

For example, you want to learn about memory stocks when SanDisk is $30, not when it’s $1,000, right? It turns out that you can approach these ideas systematically using what’s written in this book.

So that’s my theme for the show. Read this book. Zcash. Forget all the other books I mentioned—read this one.

Cool. Kel, you’re the best, man. I look forward to our annual stream. See you in 2027. You’re one hell of a cool dude. Thank you again for doing this.

2027. ZEC to ZEC to 20K.

I like this. I also have a target price. I knew this would happen. All the best, brother. With love.

Fine. See you.

Everything is fine. World.