市场更新：Bitcoin上涨、Zcash ETF、Bessent受挫与NVDA财报

Let me just rant for a second against the financial influencer community. Maybe this will result in some beef.

We love a good beef.

Why the fuck would you listen to somebody who's never actually traded? This is something I don't understand about financial media. I do not know why people listen to them. They act like they know what they're talking about, but they have never made any real money.

It's kind of like taking advice at the gym. You have Schwarzenegger—1970s or 1980s Schwarzenegger—and then you have this waifish dude, and you ask the waifish dude for gym advice instead of Schwarzenegger. To me, that's kind of what people do when they tune into these podcasts run by non-traders. It makes no sense to me.

Jonah, what's going on?

Avi.

That music always gets me hyped. We are here today looking at a crazy market. Bitcoin has almost touched $80K since we last streamed. The AI trade came off a ton. The Nasdaq is off a few percent from the highs.

1000x is in a brand-new office space, and Jonah is seemingly in a cave. What are you doing?

1000x for the win. Yeah, you've got some pretty cool stuff going on behind you there, Avi. What is that?

Yeah, so—

New York Harbor?

Let me catch you guys up, because sometimes I get on a call with people, and they'll look at me and say, "Is that Miami behind you?" And I just want to smack them in the face. You think we would move to Miami? You think I would be in Miami of all places—the place where the most important person you're going to meet is the owner of a car dealership? Get out of here. I don't know.

Miami's a dump. I can't stand Miami. I think it's a wannabe L.A. It's basically for East Coast people who are sick of the cold. If you get to go to Miami, that's considered a win because it's not cold there. But not cold isn't necessarily a good thing. The Kalahari Desert isn't cold, and the swamp isn't cold. Miami is really the swamp.

To me, it just feels like living inside an armpit down there. It's so sweaty.

Yeah, no, I agree. Look, honestly, if you are optimizing for weather, you're doing something completely wrong with your life. I personally think you've got to optimize for the people around you.

Also, if you don't experience the cold—if you don't go through a negative-2-degree day with wind chill blasting in your face—how are you going to generate any sort of constitution? How are you going to be strong? We all need more hardship in our lives, and that's why I think people are kind of weak these days.

That's why crypto traders are strong, because, man, have we gone through hardship. Have we felt the bear market? Have we felt the wind? Yes, we have.

Are we coming out of the wind, Avi?

Are we coming out? Is it springtime? Is it springtime for crypto in Germany?

It's springtime in crypto. It's springtime in crypto.

It's a reference to, "Is it springtime? It's springtime for Hitler in Germany." Have you ever watched The Producers? It's a Woody Allen movie.

Yeah, yeah, it's hysterical.

It's a great, great movie.

"Springtime for Hitler."

If you haven't seen it, you've got to watch it. But, Jonah, we have so much to talk about. There's a lot going on, but I want to start with Bitcoin.

1. Bitcoin's Lockout Rally

What a rally off the lows. This is what we call a lockout rally—something that pumps so hard off the lows and really doesn't give you that much time to get in. You kind of have to keep buying the highs; otherwise, you get left behind. The way that I view this type of market is that it's a prize for those who are patient and a curse to those who flip around. So, a prize to people like Jonah and a curse to people like me.

In general, I don't know, it's looking quite good out there. I think the market has finally reached a point. We've talked about this on previous podcasts, and I think we were both pretty constructive on Bitcoin on our last pod. I was very constructive on gold, with Bitcoin as a corollary. I was very constructive on Robinhood, basically because I thought the market was setting up for the 2 criteria that I was looking for in order to turn bullish on financial assets like Bitcoin and gold—these debasement-trade assets outside of equities.

The first was that the equity markets cool down and equity vol comes off. You saw the AI trade start to show cracks, and then it fully collapsed. Now we also have Bessent pushing tons of capital to basically protect our yields. To me, that signals that we're heading back into a world where money printing is going to be a primary driver of returns for at least 4 more days. You kind of need to pay attention.

These are really the 2 reasons why I've been constructive on BTC. We're finally turning a page. For a very long time, the equity markets were driven by what was perceived as true productivity and actual innovation. AI was expanding, and revenues were going through the roof for these chipmakers and for companies like AI, OpenAI, and Anthropic.

We were in a period where it seemed like real innovation was the backbone of returns. That's not a really good market for things like gold and Bitcoin, because gold and Bitcoin are an expression of monetary irresponsibility. When you have real growth, you don't really have any irresponsibility to point to, because you can spend, and if GDP outpaces that spending, then you're in a good spot.

Now that growth has come off a little bit and we're slowing down, you're getting people like Sam Altman going on David Senner's podcast—which is a great podcast, by the way—basically saying it's taking a lot longer to integrate AI than he expected, really because of human nature. Sam Altman doesn't really know a ton about human nature because the guy's a robot, but it's slowed down. The pace of acceleration has slowed down.

Now we're back to the Treasury and the Fed driving the markets and dictating direction, and that is a very good place for Bitcoin to be. Are we going to keep going in a straight line? We'll talk about that in a second, but I've just monologued for 7 minutes, so I want to hear your take.

2. Debasement Drives Bitcoin

No, I think it's a really good take. To the extent that the market has gone from fundamentals to technicals—or maybe from micro fundamentals to macro fundamentals, depending on your perspective—it's semantics. Basically, we were being driven by the AI trade, by Micron earnings, by all of this new AI economy shit, and now it's become a macro play again.

I haven't heard anybody articulate it that way, but it is very true. They're literally doing yield-curve control. Bessent is buying the back end.

I have a bunch of thoughts on this. Currency debasement is an irreversible trend. The genie has been let out of the bottle. You cannot put it back in. This is why I sit on Bitcoin holdings and do nothing about it.

I did sell some on the way down. Those sales are still slightly in the money. I'm debating whether or not to buy them back, because, technically speaking, it's going to be hard for Bitcoin to break $100K and rip through it. I still think Saylor is a huge overhang. I do think he's bigger than the market, and he will be the big seller going forward.

So there's a little bit of an internal debate there on Bitcoin. But over a 3- to 10-year period, we're going to hit $1 million per token.

Debasement is just yet another piece of evidence that currency debasement, yield-curve control, and monetary gerrymandering are going to be the modus operandi, whether it's Republicans in charge, like Bessent and DJT, or the Joe Biden brain trust that did basically the same thing and printed trillions during COVID. This is just fiscal and monetary profligacy.

The government is in a very weird spot, right? To this point about it not mattering whether Democrats or Republicans are in charge, inflation occurred during the Biden administration partly due to COVID, but greatly due to insane money printing. Donald Trump got elected on the campaign promise that he was going to tame it, and he hasn't, right?

Iran is a little bit of a factor, but not really. Oil is up—what?—like 40% versus where it was when he started? I guess it's 30% higher than when he got elected.

And far below where it was during the Biden administration—

Yes, and that's—

We literally started a war with Iran, a major oil producer. The Strait of Hormuz closed, and oil is below where it was during the Biden administration.

Yeah, and that's only a fraction of CPI, so I don't want to monologue too long. I'm just ideating around the fact that, despite all of the things that have happened, Trump has been unable to tame inflation. You could blame the Iran war directly on him, but it's not really contributing that much to inflation.

But he has to do something, right? The administration has to do something. This is top of mind. So the last thing that they want is a stagflation scenario, where the currency continues to lose its value and the economy stagnates because AI cools off and yields go up, and people pull their money out of the stock market and put it into bonds.

So they're starting to do yield-curve control, which is, again, all roads lead to debasement, all roads lead to higher Bitcoin over the medium to long run. That's kind of where we are. Just before I break this off, I do think the Druckenmiller op-ed that was written by AI was an op. I don't think Druckenmiller actually disagrees with Bessent. Those guys are boys. I have it on good authority that this is something that's a little bit more engineered. I think there's going to be a big short squeeze in the bond market soon.

3. Bessent Druckenmiller Bond Fight

What's interesting about that op-ed is that the markets haven't really reacted in any meaningful way, right? The yields have not moved, despite the fact that people are obviously nervous about intervention. So I just want to take a step back for a second. What exactly happened between Bessent and Druckenmiller?

For those of you that don't know, Druckenmiller is famous for being one of the architects, along with George Soros, of the destruction of the pound. In 1992, what happens is that both Bessent and Druckenmiller are working at the Soros Fund. Druckenmiller really uncovers this idea that the pound was effectively being pegged by the Bank of England, and they were intervening in the markets quite a bit to make sure that their currency didn't get out of control.

The thesis was that if they put enough pressure on the pound, then the pound would break and devalue significantly. So they did a lot of research into it, decided to put on a massive bet, and ended up making billions of dollars betting against the pound. It's now known as the breaking of the Bank of England, and the 3 characters—Soros, Bessent, and Druck—are sort of credited with this trade.

When you look into it, though, Bessent was actually just an analyst at the time. He was tasked with researching the real estate market and finding the cracks in the real estate market, so he wasn't really an architect of the trade. But in theory, he would have learned that intervention doesn't work.

If you look at the history of intervention, it almost never works, because intervention is predicated on the idea that the market is wrong and it needs a nudge to snap the traders who are currently wrong out of their current mindset and start to think, "Okay, well, maybe I need to reposition. Maybe I need to do something differently."

Now, I don't think that the market is wrong. There's kind of nothing that tells me the market is wrong. Why? Because corporate bond rates are tied to the long end of the curve, and you have hyperscalers taking out significant debt to go build data centers, and that should, in theory, push up rates. If these hyperscalers are taking out billions and billions and billions and billions of dollars of loans, rates should go higher. I think that's generally accepted.

Obviously, the Treasury—the Trump administration—does not want that to happen. So what Bessent does is intervene in the bond market, basically throwing away all the lessons that he learned while shorting the pound. Druckenmiller sees this and comes out and says, "Have you lost your mind? Do you not remember that intervention never works?"

That's my take on it. I don't necessarily think this is an op. They may or may not be boys, but I do think that it's very possible for them to have differing opinions and to come to different conclusions.

Now, Bessent goes on CNBC and says, "I have asymmetric information. The market has bad information; I have better information. That's why I'm intervening in the markets." That's his take. Obviously, he's not disclosing that information, because I don't necessarily think that information is real, right?

You would think that if he genuinely has information about the bond market, then that would probably be the best way to calm market fears: to actually go out and release that information. So I do think that Druckenmiller saw something that was out of the bounds of what he would have expected a protégé of his to do—somebody that understands the market—and he just decided to write an op-ed.

I think thinking that it's an op is maybe being a little bit too conspiratorial, but let's unpack what they're trying to accomplish, right? We're heading into midterms. You don't want rates out of control. You don't want the market to crash. That's obviously going to look bad for the incumbents and look a lot better for the challengers.

Basically, what he's trying to do is just make sure that up until the midterms occur, we have an economy that's chugging along. And chugging along it is, by the way. Retail sales are up, wages are up, and the bottom half of the K's wage growth is actually outpacing the top half of the K right now. Things are looking good.

They don't want that to fall apart. The S&P is kind of on the highs. The Nasdaq is close enough to the highs—nowhere near bear-market territory. And now they're intervening in the markets. That, to me, makes me nervous for equities over the course of 3 months.

That means that it's probably good for Bitcoin, and it's probably good for gold. But the question always is: Has that already been priced in, right? Bitcoin's up 25% in a few days. Equities have languished and haven't performed particularly well after this intervention. So the question is, have we already priced that in, and are we sort of on to the next thing?

That's really what I wanted to dive into today. But that's my take. I do want to hear from you, Jonah. Why do you think it's an op?

Well, first, can I pick apart a couple of things that you just said and debate them with you?

Sure.

Okay. So you said that 30-year Treasury yields are tied to corporate bond yields. That is undeniable, for sure. But then you linked it to hyperscalers. Those guys—the useful life of a GPU, you look at CoreWeave earnings calls or just listen to the chatter online about it—there's an active debate out there over whether the GPU useful life against which you can take out debt is 3 years or 10 years or somewhere in between, but not longer than 10 years.

If you said a GPU's useful life is 10 years, you're an extremist in the tech community. The consensus for most people is something like 3 to 5 years. Again, I'm no interest-rate trader, but 30-year yields aren't really based on 5-year yields. They're loosely related to 5-year yields, so I don't think that Bessent is manipulating the long end of the curve to try to counteract some sort of debt-issuance phenomenon in the 3-to-10-year yield bucket. That wouldn't make sense to me.

The other thing is, if a bunch of corporates take out 3-to-10-year debt, that does not impact US Treasury yields. Basically, a corporate bond yield is composed of 2 components: the US Treasury yield, which guides all yields, and then a credit spread on top of it.

So if a bunch of hyperscalers issue billions of dollars of debt against their earnings that are basically being driven by the GPUs they bought, that would widen the credit spread, but it would have no impact on the US Treasury yield underneath unless there was some sort of sovereign-sized crisis brewing, right? So, do you disagree with any of that? You're on mute, sir.

No, I don't disagree with anything that you've said so far.

Okay, cool. I did want to put those little asterisks out there. But the reason why I think it's an op is because Druck—GOAT that he is—if he had a disagreement with Bessent, my inside baseball suggests that he would not make it public, and he especially would not make it public with a casually AI-written op-ed in The Wall Street Journal. That's just off-brand, right?

If he had a problem—and I'm sure they disagree all the time—I bet their Signal chat is active, right? You don't need to go and parade that in front of the entire world, especially in such a bizarrely manufactured manner.

Druck is one of the most articulate market minds in the history of markets. He doesn't need to ask ChatGPT to write an op-ed for him. To me, something feels blasé and casual about this, and I think it's probably a way—

If I had to guess, I would say that in the smoke-filled back room where these guys hang out, the discussion was probably like, "Scott Bessent has to do something for the midterms." It's going to be of questionable economic value but maximum political value.

So rather than having everybody just sort of fall in line, maybe you manufacture a bit of controversy or disagreement, just so that the markets community doesn't seem like it's in the pocket of the Trump administration. Just to make it seem—to separate the commercial reality from the political reality. That's my thinking. It's too weird otherwise.

Yeah. Look, I think that Druck—the way that he approached it—was definitely odd, but odd only from the perspective of him being so public about it. The question is, where was he before, right? So if we're going to go down this line of thinking, I think the steelman is that he hasn't said anything before.

Why is he coming out right now, writing an op-ed in The Wall Street Journal just as Bessent is intervening? I do think that, yes, obviously, they probably do talk, and they've probably had conversations behind closed doors. It's certainly possible that what's happening is they're trying to create some sort of disagreement here. But I don't necessarily understand why Bessent would want somebody as legendary as Druckenmiller to come out so publicly against his actions and basically reprimand him. I just don't necessarily think that makes sense, because interventions are based on strength. You have to really believe that the person running the intervention knows what they're doing, has information that you don't have, and can accurately make a bet that the market is incorrect. Having one of the greatest investors of all time, AI or not, write a reasonably compelling article as to why they're wrong doesn't necessarily seem to help his cause.

It wasn't that compelling, though. That's my point. It was slop. If you have the GOAT produce a weak-ass argument against your intervention, that almost strengthens the case for intervention in a weird way.

I don't disagree. Maybe we can poke through the arguments, but I don't think that just because it's AI, it makes it slop. This is an important point. I think that AI is bad when it's used for thinking, but it's not bad when it's used for writing, especially for people who don't necessarily have the skill or ability to articulate themselves clearly. It's a difficult thing to do. That's why we celebrate writers.

When you look at what Druck says about why he used AI, he literally said, "I'm—you know, I switched out of English for a reason. I became an economics major for a reason." He's an early adopter of AI, and if he uses it to articulate his thoughts properly, I don't view that as slop. There's a huge difference. I got in an argument on Twitter with somebody about this because I tweeted that out. There's a huge difference between prompting your AI and saying, "Generate arguments against intervention." That's bad.

A better way, which is fully acceptable in my personal opinion, is, "I think intervention is bad because of XYZ reasons, ABC. This is my logic. This is my thought process." You can even do it in a stream-of-consciousness manner: "Turn this into an article." That's fine, because all you're doing is using AI as a tool to generate an articulate way of expressing yourself, as opposed to using AI to do the thinking for you. This seems to be the latter, not the former. This seems to be Druckenmiller using it as a tool as opposed to using it as his brain. That's fine. That's compelling. I think that makes total sense, and you can absolutely do that.

I personally don't. Why don't I do it? Because I think it degrades my thinking.

You're also an excellent writer.

I appreciate that. I don't know if that's 100% true, but I used to write a newsletter. I think we're actually going to bring back a 1000x newsletter at some point, so stay tuned for that. I genuinely believe that that's acceptable and okay.

Moving forward, I do think that it's obviously not great for the markets. But this is a classic problem that we run into: Every time I've noticed people get nervous about the deficit, spending, or intervention, it does, on the other side, resolve well. Nobody cares. People have been talking about the deficit since the '90s. One day we'll have to pay it. One day the bill will come due, and Taleb will win and go on Twitter and talk about how he's up 7,000% after losing all of his money 18 times. That'll be fine, but I don't necessarily think that that's right now.

I do think that we're still going to be able to grow out of this. But at least in the short term, what it presents us with is a bad narrative for the markets and a little bit of fear. That fear will prevent investors from allocating super heavily to equities until we get to the other side. We probably need to see yields stabilize and come down for at least a month.

Things move so quickly now, Jonah. It's kind of unbelievable. We cycle through narratives so quickly. The most recent move in the AI market basically played out over the course of 3 months, and we're just seeing the market continuously speed up and hop onto the next narrative as it appears. I do think that it will probably pass, but maybe for the next few weeks we're going to see strength from Bitcoin and gold, and then eventually we'll rotate back to the equity markets, and the equity markets are going to do well. That's really my take: just maybe some caution in the equity markets for the next little bit.

4. The Zcash Privacy Trade

I still like my Micron. I like my HYPE. I like my Bitcoin. I know one of my buddies out here in Los Angeles made decent money on Zcash, too. That one's starting to grow on me, honestly, as time goes on.

With the narrative switching back and forth, I honestly don't know if the average person, the average listener, or even the above-average person or listener can profit from narrative rotations. I can't help but wonder if, when the narrative isn't pointed at your asset of choice and the spotlight isn't shining directly on it, the right move isn't just to use that as an opportunity to accumulate rather than attempt to day-trade things as the narrative heats up, get out of them as the narrative cools off, and move into the next asset class as the narrative heats up there.

I think Micron, Zcash, Bitcoin, and HYPE are all going to be fine over the long run. Your entry price is really what matters, and the easiest thing to do, frankly, is to pick your spots and buy when the narrative is focused on something else. Obviously, now is not the time to invest in Zcash.

I don't know. What's interesting with Zcash is that, first of all, we had the ZCAF ETF launch, and that was very good for obvious reasons. It traded about $15.5 million the first day it came out, compared with Solana in October 2025. The BSOL ETF traded about $55 million the first day it came out. Obviously, I think the crypto market had a lot more attention back then, in October 2025. Not only that, Solana had a $100 billion market cap, which is much greater than Zcash's market cap. So as a percentage of market cap, they're about equivalent. Zcash was actually a little bit better in terms of volume.

I do think that previously it was quite difficult for investors to get access to this privacy narrative, and that indicates to me that Zcash could see substantial flows over the next 1, 2, or 3 months. From a pure trading perspective, a pure chart perspective, Zcash broke out of a bull flag that had lasted for an extended period of time—3 months—on the Zcash chart. We established a base at around $400 to $450, finally broke out, and immediately went to all-time highs. There's a ton of selling around $840. That was sort of the peak of Zcash, and we've traded off a lot. We're trading at about $770 right now.

But $770 is actually the prior all-time high. What you'd like to see, especially in a bull market, is a rejection that isn't followed by a substantial crash. We've actually established a new base now above the all-time highs for Zcash. This is kind of happening with Bitcoin, too. You get this liquidation short squeeze above $80, a ton of sellers come in, we fail to break, we trade down to $77, and now we're trading at $79.50. We're actually holding these levels.

There aren't a ton of panic sellers in the market. There aren't a ton of people trying to offload their Bitcoin or Zcash. In a more bearish market that didn't have supporting flows, if you were looking at a market trading exclusively on liquidations, what you'd likely see is a move through $80, a pullback on Bitcoin, and then all of the people who didn't sell above $80 would start to panic. They're not super confident in their long-term positions. Maybe they've already made a little bit of profit and want to take it, and they just come in and basically nuke the chart. They destroy it. We're not seeing that.

We're seeing supportive flows. We're seeing people willing to hold on to their positions. Even in the face of equity weakness yesterday, with the Nasdaq down, Bitcoin still didn't collapse. To me, this indicates that we're actually in the early innings of the trend, and we can probably trade to $90, $95, or maybe $100. Personally, in my heart, in my gut, and in the data, I don't believe that this is the start of a new bull trend quite yet.

But I'm happy to ride it up until the market looks euphoric, up until funding rates come up a substantial amount, up until open interest really rockets through the roof, and up until altcoins start flying like crazy. Even now, altcoins are down 3% to 10% across the board on a moderate pullback from Bitcoin. That is a very good sign. That tells you that capital is being allocated where capital needs to be allocated for a sustained run.

So I'm constructive on Zcash, I'm constructive on Solana, and I'm constructive on Bitcoin. I'm bullish on gold, and I'm not bearish on equities; I'm neutral on equities. This is how I'm positioning. There are obviously a couple of sectors that I'm quite bullish on, like biotech. Uranium is doing extremely well, and I think it will continue to do well. We'll talk about NVIDIA earnings in a bit, but I'm actually kind of bullish on NVIDIA as well—

I am too.

Going into earnings.

5. Ride The Megatrends

I think it's fine to buy the highs of something. Brad, I'm sharing my screen here, if you don't mind throwing it up on the old, the old... Yeah. Anyway, I subscribe to the Daily Shot. I recommend that all of you too. What's great about it is that it's visual. It's like the TikTok for financial professionals, but with actual data, right? Instead of reading newsletters, you can just look at charts, and a picture's worth a thousand words, right? So—

Yeah.

In today's day—

Is that a good business idea? Should we start TikTok Finance—like finance for TikTok? Just an entire app that you scroll through every single video, and it's just financial influencers yelling at you about what tickers to buy.

We kind of did, except it's just us. I don't know if you want to include other financial influencers in there.

Honestly, let me just rant for a second against the financial influencer community. Maybe this will result in some beef, but why would you listen to somebody who's never actually traded? This is something I don't understand about financial media. I look out there and, obviously, I think Ansem and his new buddy say some total clown-world stuff.

Respect to Ansem, though—that guy's actually traded. His new partner, the dude with the tattoos, I think is a LARP. But Ansem, maximum respect. The rest of the influencer community—guys who put on suits and ties and stuff—I do not know why people listen to them. They act like they know what they're talking about, but they have never made any real money.

It's kind of like taking advice when you're at the gym. You have 1970s or 1980s Schwarzenegger curling 100 pounds on each arm, and then you have this waifish dude. You ask the waifish dude for gym advice instead of Schwarzenegger. To me, that's kind of what people do when they tune into these podcasts run by non-traders. It makes no sense to me.

I'd put 1,000 times more weight on the Druckenmiller AI op-ed—conspiracy theories or not—than I would on any of these financial influencer shows. That, of course, does not refer to the 1000x podcast. You and I have been in the arena for—

Unfortunately, I put my money where my mouth is, which sometimes gets me punched. But that's the fun of the game, Jonah. That's the beauty of it.

That's what it's all about.

Being in the financial octagon.

We are here in the trenches with you. We are here to show you the path to escape the permanent underclass.

That's what we're doing.

With us. Hold our hands. Come on the journey.

Good shit. Hop, hop on board.

I mean, sometimes I make millions of dollars, sometimes I lose millions of dollars, but in the end, it's just fun.

That is right.

Back to this chart. Today's Daily Shot, something that you should all subscribe to if you care about being a thoughtful trader, says, “A reminder that the key to wealth compounding over the long run is to avoid catastrophic losses.” It proceeds to show a series of equity charts. This is the U.S., just up and to the right forever. This is Germany. Obviously, they had a little hiccup in 1945, when some stuff happened.

Yeah, what happened in 1945 exactly?

I don't know. I forget. I learned it in history class, but it's eluding me at the moment.

Something, something Theresienstadt. Anyway.

Russia's an interesting chart because it's just a disaster. There's not even a line between the Bolshevik Revolution and Boris Yeltsin. China is kind of the same thing.

Basically, what I'm trying to get at with these charts, Avi, is pick your megatrend and just ride it. Don't be in and out, because when you're in and out, you risk selling the lows, and that is the biggest risk to not compounding your wealth. U.S. equities since 1870 have been a 1,000,000x, right?

An equivalent framing of this debate would be that if you had $1 in the year 1870, it would be worth one one-millionth of what it's worth today—one one-millionth the spending power. That's why when you read Huckleberry Finn, they're living large on 10 cents when they find it in that riverboat or whatever.

Basically, my point here is to identify a megatrend and roll with it. Don't sell dips. If you'd picked Russia as your megatrend, you would've been screwed. If you'd sold a dip in 2008 in the U.S. chart, you would've been screwed.

So, zooming way back out here—I'm going to unshare my screen now—what is the megatrend of our time? AI is a megatrend. NVIDIA and Micron are going to be just fine. Zcash privacy may indeed be a megatrend. That one's a little more speculative. Bitcoin is absolutely a megatrend.

You have to avoid selling one of those little blips in the midst of your megatrend, and equally, you have to avoid going all in on a megatrend that actually isn't a megatrend. Those are the 2 rules of the game that I'm attempting to play, because these days I have less time to trade actively.

I'm trying to not trade, but pick my spots better and ride the biggest waves, and not get shaken out when there's a little problem. That's sort of my lens that I'm working with here.

6. Trade Against Your Instincts

I could not agree with you more. But this is also why picking your spots is so valuable. Basically, we are on the precipice of extreme change in this country and in this world because of AI and government action. Your job is to take the other side of panic.

Whenever things look scary, that's generally the best time to go put your money to work. Whenever things look massively euphoric and actually feel very safe, that is the point of maximum uncertainty and danger. You need to really understand this in order to be successful as a trader: you cannot just buy and sell when it feels safe or dangerous. In fact, you need to do the opposite.

You need to employ the Costanza rule, which is literally to do the opposite of your intuition and the opposite of your emotions, because otherwise you end up in very tough spots.

Why is it named after Costanza?

I think there was an episode of Seinfeld. My old boss at GoldenTree and I came up with this rule, and it was all him, because I've never actually watched Seinfeld, and I'm probably not going to. I've heard it's dated.

Costanza has terrible instincts, and so, in dating, he decides to do the complete opposite of what he thinks he should do, and suddenly his life becomes way better. He's talking to way more women. I have no idea if this is true. This is just my interpretation of what happened on the show because I've never seen it. But this is what I assume happened.

Most of you, candidly, have terrible instincts. Very few people have good instincts. Very few people have a good gut read on things. Why? Because when you feel emotion, it hijacks the prefrontal cortex in the brain, and it literally shuts off your decision-making capabilities. So, instead of acting on data and your principles, you start to act on pure emotionality.

Humans tend to be risk-averse when they're highly emotional. When you're scared, you tend to want to protect yourself, and when the market's down, it activates the part of your brain that feels literal fear. In order to remove that fear, you remove yourself from the markets. You sell. You stop seeing that red piano.

This is why reps are so important. This is why athletes consistently train, right? It's muscle memory. That's why people take batting practice. It's muscle memory. That's why people take 100,000 shots in basketball. It's muscle memory.

That's really what trading should become as well. When you feel panic, your muscle memory should be to do the opposite of whatever you think you should do. Really lean into that. That's one of the most important things that you can do as a trader: get control over that.

You look at what happened with the memory trade, for example. When the story starts coming out about Aschenbrenner blowing up, people start to get really nervous: “Oh my God, how much further could it go? How many more liquidations are there?” Blah, blah, blah, all this. And the reality is that was the stone-cold bottom, and we went straight back up.

Obviously, there was quite a bit of retracement across a few assets, but most assets are much higher from that. If you look at DRAM, I think it's up around 20% off the lows. Intel is actually one of the worst-performing assets off the lows. Sorry for all those Intel heads. It will come back. I am very constructive on Intel, which we'll talk about.

Me too.

I basically 100% agree with you. It's about picking your spots. I do think that sometimes, when it feels scary to the upside, that's often when you should allocate. That's what I think is happening with a lot of people in Bitcoin right now.

I'm not advocating for you to go all in. I'm not advocating for you to put your entire portfolio into BTC right now. But if you're fully on the sidelines, I am advocating that you think about allocating to this trade right now. I do not necessarily think that this is a long-term move where we're going to $140K, but I do think there's a reasonable chance that we trade at $95K or $100K in the next 6 weeks, and that's a trade that I think is good to take.

On Zcash, I think maybe we can get to $1,200 or $1,300. On ETH, I'm not super interested in trading it. I don't necessarily think it's an asset that has a place in a portfolio anymore, basically due to the fact that everything else is outcompeting it.

As a side note, I signed up for FOMO yesterday—the FOMO app. Jonah, you should get on.

Why?

Because it's the first social trading app I've used that actually had a very seamless onboarding and signup experience. You create an account, and you can link it to your X account. Because of Privy, it automatically creates a wallet for you that you don't have to manage. It's managed through your login, whether you use an email or X.

You log in, and I think it sends a notification to all the people who follow you on X when you log in. I logged in and, within 30 seconds, had 600 followers on it. What's really interesting is that for people who don't necessarily know how to trade meme coins, trade on-chain, or gamble effectively, you have full visibility into how other people who have been successful are playing the game right now.

I'm not an advocate for playing the meme coin game with any meaningful size. I treat it like a night at the casino. It's fun. It's a fun little activity to do. It's obviously exploding among people under the age of 30. People pass their time with sports betting. They pass their time with gambling. I mean, you pass your time with me, although obviously some people can hit it big.

It was an interesting experience because I logged on and there's still so much activity. There's a ton of money being made. There are a ton of people playing the game right now, and this is a good sign of health for the crypto ecosystem. It seems like people do have money, they're willing to spend it, and they're interested in it again. That bodes well for the next few months for BTC and, just in general, the alt complex.

I loaded my account with our 1000x token, which I think traded at around 1.5. It immediately went to 3 because a ton of people saw my wallet and bought it, and then it immediately came back down.

People are actively paying attention to what's happening now in a way that I don't think has really been the case for over a year at this point. When you're investing in the markets or trading, you have to understand where attention is going. At the end of the day, it's all about supply and demand, and for a long time, demand hasn't been there for these markets. There hasn't been a ton of interest. Attention is coming back, and with attention will come demand. To me, this is a very good sign of green shoots.

Yeah, I think so too. But I want to make an important distinction. You mentioned 3 different activities in what you just said: trading, investing, and gambling. I'm not accusing you of this—I know you know the difference—but nobody should ever put those 3 activities into 1 bucket. They are 3 very distinct activities.

Investing is very different from trading. Trading and investing are very different from gambling. I love the casino. I love Las Vegas. I don't love Macau, but I've been there. Basically, the gambling mentality should be that you win 1 out of every 10 times, or 2 or 3 out of every 10 times. It's not really trading.

Investing is very different—a fundamentally driven thing. It's supposed to be all-weather, and you're supposed to not care when you draw down because you have some sort of belief.

I want to share a list of trading rules. I just tweeted it out because what you were saying really inspired me to go deep back into my Gmail.

Pull it up, Jono. Let's see what you got.

I tweeted it out so that everybody can see these. They were sent to me by basically the best trader that I've ever met in my early career. His name is Steve. He ran the interest rates trading desk at Goldman, then he went to Element Capital and retired at the age of around 32. An absolute superstar.

He sent me these rules when I was about 3 months into VITAL, and it's a very long list of rules. I hope everybody reads it. 3 months into VITAL, I had my foot in my mouth. I was eating it. It was going very badly.

The time in your trading career when things are going the worst tends to be when the distribution of outcomes for your entire future is most binary. At that time, if I succeeded at VTAL, I was going to end up in a very good place in life, and thank God that happened. All credit to the man upstairs.

Had it gone badly, maybe I wouldn't have fallen all the way from the top of the tree down to the ground, but I would have hit a few branches and maybe clung to one, like, three rungs below Goldman, where I came from. I would have been earning something kind of mid, and I would have been—I don't know if “permanent underclass” is the right term—but it would have been bad.

There was a big, wide differential between the extremely blue-sky outcome and whatever would have happened if I failed. I was losing money and on the verge of getting fired. People were very disappointed that they'd hired me and spent what they'd spent to get me out of Goldman.

He sent me this list of trading rules at that time, and I remember this is the one that stuck with me the most. It resonated with something you just said. It said, “Create a mind like water approach to trading.” This is what Steve's list of rules says.

At the time, I spent a lot of time trying to understand what that meant. To me, this is the most critical trading rule there is. What does it mean to create a mind like water approach to trading? Not meme-coin gambling, not investing—a mind like water approach to trading.

I'll tell you guys what it means. What it means is you need to sociopathically disassociate yourself from the emotions of the P&L that's swinging around in front of you. You need to be just as at ease with losses as you are with gains. You need to have your process, and you need to be an entity apart from your P&L—not have it wrenching your gut and keeping you up at night when it's going badly, or making you feel super proud of yourself when it's going well.

The closest thing that I could liken it to is a rhythm, like in music. You need to just be vibing with the beat and doing what you have to do as the market moves for and against your positions.

This dissociative advice ultimately led me to success and helped me dig myself out of that hole. I think dissociation—mind like water—is a great approach to trading, not to investing or meme-coin gambling. Meme-coin gambling: just have fun. Investing: do the homework. Trading: have the process, dissociate yourself from the P&L, and adhere to it in a mind like water fashion.

I would obviously read the rest of these. It's a fricking incredible list. I hope everybody goes and checks out the tweet. That's what your little discourse there inspired me to repost for everybody.

When I first started at GoldenTree, I was given access to capital. Prior to actually setting up the fund and being able to invest that capital, I was asked to create a mock portfolio for what I was going to invest in when we finally went live.

I think that was one of the worst things that ever happened to me because what it forced me to do was take a position. They were asking me, “What are you going to do once you get the money?” At that time, it was right before the Ethereum EIP-1559 upgrade. I thought that the market was reasonably overheated heading into it, and we weren't really supposed to be shorting at the time.

But I almost felt this pressure to say, “Okay, I can find some good things to invest in.

I can figure out a way to make money in this market even if I think it's a reorg. What I ended up doing is, I think, I overallocated to Maker at the time. When we finally went live, I put capital to work because I didn't want to walk into Steve's office and say, "I'm not doing anything. I know you just hired me to make a ton of money in this market. I know you think that crypto is this crazy market where you put a dollar in and walk out with 2x the next day," because that's what was happening at that time.

I didn't want to say, "I'm actually going to do nothing for the next 2 months." And so I didn't fully allocate, but basically by the end of the week, I was down 3% immediately on the overall book. I spent a lot of time thinking about why that happened, and it really comes down to exactly what you said, Jonah. At that moment, I felt that there was a really binary outcome there.

If I came out of the gates and did well, I would buy myself a ton of latitude to do whatever I wanted. That psychological response of me allocating even though I didn't really feel like I should was me saying, "There's just a lot of asymmetry here. If I do well, then I'm going to do extremely well. I'm going to be able to do whatever I want." It sort of pushed me into that position.

Then we clawed our way back. We ended up doing extremely well over the course of 2 years. But it was that moment that taught me a lot about incentives and how incentives genuinely shape outcomes.

I think a lot of people tend to believe that I can logic my way through life and that I will just make the best decision at any given moment for P&L or for trading, but outside incentives do matter. That's one of the reasons I think that people who post a lot on Twitter tend to get stuck in positions, especially when they get a ton of good feedback.

If you post on Twitter and say, "I'm bullish," and you get thousands of likes, and suddenly the market turns against you, you actually have this psychological attachment to the idea of you as a bull. You don't want to disappoint your followers. You don't want to admit that you're wrong. And so even if logically you know that you should probably be shifting positions, you end up sticking to your guns.

I've seen this happen to a lot of investors. They have a position, it goes against them in public, and they double down on it because they don't want to be seen as wrong, which is why I always say, "I'm wrong all the time." Jonah's never wrong, but I'm wrong all the time. What I try to do is evaluate the data as it comes in and try to provide you with my analysis on that data.

7. Nvidia's Earnings Setup

I'll give you a trade here as an example of this. Nvidia, over the last 8 earnings—over the last 2 years of quarterly earnings—has basically sold off every time: 7 out of 8 times into earnings, even though it's beaten every single time. I think that has finally percolated into the broader trading community.

Over the last 7 days, Nvidia's been down-only into earnings. Before this, Nvidia would be up-only into earnings. It would always trade higher going into that earnings date. And so I do think that traders are a bit offsides here, and that if Nvidia does beat again, which I think they will because they consistently beat, analysts tend not to want to be overly bullish. It's actually better for the analyst if they beat than if they miss.

I do think that if they beat earnings, instead of a sell-off this time, because of the way traders are positioned, we'll see a pump. We'll see—I don't know if it'll be sustainable—but I think at least a 1- to 2-day rebound rally in chips, in Nvidia, probably in Micron, probably in Intel. And so I positioned for that. Let's see if I'm right.

But again, just going back to positioning and supply and demand, I think the market has gone too far to one side. They are betting that Nvidia is going to act like it always has with earnings, and they're not taking into account that there has been a substantial amount of de-risking, a substantial amount of hedging, and pods are not in these trades as much as they have been before.

And so there's actually room to beat and go up right now. Basically every trader I know is short, and that to me indicates that you might want to take the opposite side. Let's see if I'm right. We'll revisit on the next podcast.

That could be a good note to end it on. We're approaching the hour here. I just love that you're in it, Avi. This goes back to what I love most about podcasting with you: it's just like a trader call.

Yeah. Let's scratch that itch. Let's go do something today. I'm going to read through this entire list that you've shared with people on Twitter.

See you soon, Avi. That was a great one.

That was awesome.

Nothing said on the 1000x Podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of 1KX Media. Our hosts, guests, and the 1KX team may hold positions in the company's funds or projects discussed.