贵金属 Alt Season、补涨交易、Bitcoin vs Gold、加密已死

What’s going on in gold has triggered a cascade. It’s like alt season in precious metals right now.

The fact that this is running and everyone is focused on this tells me that metals have successfully penetrated into retail trading, and we’re probably baking a lot of retail price action into gold, right? And that’s a little bit scary for the short term.

Oh my God, Jonah, what a week. What a weekend. [laughter] It’s unbelievable.

1. Metals Alt Season vs Bitcoin

When we talked about being bullish commodities and being bullish metals and all this stuff, I mean, even then, every day that goes by, I am reminded how early I sold out of silver. I can’t take credit for any of this, because 3 months ago, 4 months ago, I was telling everyone I really liked silver. Silver’s great. And then I proceeded to tell everyone I’m out of silver at like $60, and now it has literally—I booked a solid 50%—and it’s literally doubled since then. It’s unbelievable.

And now it’s trading like the crypto markets. What we’re getting is a run into all the secondary metals. It’s like Bitcoin: gold rallies, and then ETH rallies, and then altcoins rally. And we’re getting that now in metals, which is very funny.

You’re seeing palladium do very well. You’re seeing platinum do well. Copper looks like the next one. I’ve been a big fan of copper. I’ve talked about it on the podcast before, and it’s mainly because of its industrial uses and the fact that there is increased demand for copper reserves now, especially as the world fractures and people have to fight over their rare-earth mineral reserves. Copper is not really a rare-earth mineral, but it’s a very important material, right?

The only thing that I’ve really stuck to, because it’s so hard—I don’t know about you, Jonah, but it’s so hard for me to hold on to assets like this. I think it’s very easy to trade. Maybe “easy” is the wrong word, but it’s much more comfortable for me to be in a trade than it is for me to be an investor in these things, with the one caveat being rare-earth minerals and the REMX ETF that I’ve been talking about for a while, because I do think that’s a megatrend.

Man, I feel like my entire feed is now commodities. But you’re seeing a generational run here, right? Have you seen this before?

All right, so let’s talk about a few things here. First of all, my face is melting off here, too. I’m just watching the gold chart, thinking to myself, “WTF?” I’ve got a lot of thoughts about this, so I’ll just lay them all out in no particular order.

The first is, I said it before, I’ll say it again: in commodities, with the possible exception of gold, high prices are the solution for high prices, right? New supply is going to come out of the woodwork. I did say before that I’m not touching this because, while I think we’re in the 8th or 9th inning, sure, the price can double or triple in the 8th or 9th inning, but it’s very hard to top-tick it, get out of all of your risk on the highs, and capture that.

It’s usually tempting to hang on, and then you end up getting mulched on the reversal. Basically, the way that you successfully trade the 8th or 9th inning of any commodities blowoff top is by having some sort of tether linking—not crypto Tether, but just a metaphorical rope—linking you to a thesis about this. Right now, I don’t think I have one of those.

What’s going on in gold has triggered a cascade. It’s like alt season in precious metals right now. It’s a mix of CTA buying, sovereign manipulation, and retail panic. That’s what’s going on in precious metals, and it’s hard to decide when that’s going to end because, in my personal life here, I’m not running Commitment of Traders data or monitoring CTAs.

Wait. People do that?

Oh, yeah. Oh, yeah.

You mean they pretend not to be active traders and then—

Entire consulting firms are built on this. People will say, “I used to work at a CTA, and now I sell CTA predictive telemetry. I can tell you what their positions would have been.”

All they’re doing is they’ve got some LLC, or their grandma has an LLC, that invests in Winton. Then Winton will send its futures report, and they’ll just go and model it and re-report that, right?

If you’re not doing that kind of stuff, and if you’re not modeling retail panic and ETF OI, I think it’s pretty hard to tell when this bubble’s going to pop. I just don’t care.

Also, to your point about gold being the new crypto, my friends who were asking me about buying Bitcoin a year ago, after the Trump election, are now like, “Gold is the new Bitcoin. Silver is the new Ethereum.” I’m reading this in my chat with them today.

There’s nothing wrong with that. It’s basically retail FOMO. But to your point about investing in REMX or investing in gold, I too find it very difficult to invest in precious metals for one very specific reason.

Unlike Bitcoin, where I have this sort of grand macro thesis that this is going to become the alternative reserve currency of the 21st century and I want to ride that megatrend, there really is no megatrend in gold or silver. Since the Iron Age, people have been hacking each other to pieces with metals, and this isn’t a new thing.

The vision for $100,000 gold just isn’t there for me because I don’t understand why it would happen now and why it didn’t happen a while ago. So they’re not really investable asset classes. They’re tradable asset classes.

In trading, you have to, as you know just as well as anybody else, sociopathically disassociate yourself from the money that could have been made if only you’d hung on, for reasons that you don’t even really want to understand or can’t understand or articulate right now. Does that kind of make sense?

Yeah, it makes sense. I think my approach, and the reason that I was so adamant that these things were going to do well—and then they performed beyond any reasonable amount of my expectation—is because I do believe that there has always been a place for a non-sovereign currency. This is one of the whole reasons that I invested in Bitcoin in the first place, right?

Specifically, non-sovereign currencies become more valuable when you have competing countries, when you’re in a multipolar world. If you’re in a unipolar world, like the United States was for many, many years, you don’t really need gold. You don’t really need non-sovereign currencies because you can trust that the dollar will be relatively stable.

You can park your assets in one place. You don’t necessarily have to diversify because you can feel confident that the U.S. stock market is going to do well, that the dollar is going to do well, and that things are going to be reasonably stable.

When you get into a multipolar world, I think the world just inherently becomes more unstable, and you get these massive rallies. These rallies can last for years and years and years and years.

One example of this is when you look at gold starting to rally again after 2 decades of U.S. stability, from the ’80s up until 2001. Post-2001, gold puts in this immense rally as people start getting nervous again about the place of the United States in the world. Is a post-9/11 world really a safe place?

I think it took a long time, until after the financial crisis, to really assuage those fears. Then you get a decade again of relative peace, and then gold starts to go up again, in no small part because of the rise of China and all of these competing forces. Then, after Russia invades Ukraine, you start to really see the thesis.

It’s basically the same thesis for Bitcoin as it is for gold. You want to be able to put your money in something that a government can’t control, that the government cannot use to inflate its way out of a debt crisis, right? You’re not going to be at the brunt of the government trying to fix a problem.

You own this asset to diversify your portfolio. That’s the whole thesis behind Bitcoin. It’s the whole thesis behind gold. Really, Bitcoin just co-opted the gold thesis and said, “Wait a second. Bitcoin is more valuable because we’re digital, because we are not a physical commodity, and a physical commodity obviously has a tremendous amount of drawbacks.”

You can’t transport it easily. If the world starts collapsing, you don’t want to be carrying around $1,000,000 of gold. It’s a lot easier to take it from somebody. And so then you also have this narrative for Bitcoin that we’re in a new age, where we’re a better gold.

I think that in recent months has been challenged a lot because, obviously, gold has been ripping, silver’s been ripping, and people just don’t really care about Bitcoin. They don’t really care about these other crypto assets. My view is that, for now, these rallies—I get this question a lot, right? People get on the podcast and they ask me, “Avi, are we going to see the metal gains roll into Bitcoin?” And my answer is, I don’t know.

No. I don’t know. But I don’t think so, because I think that the type of buyer of these metals right now—yes, we’re getting a lot of retail, and that’s what’s going to cause this blowoff top—but retail’s probably going to get burned on this metal trade.

2. Ads (Kraken OTC)

They are. Now, this is a really important point, right? The type of person to roll profits into Bitcoin probably buys silver at $97 and then sells it at $80 on the way back down.

3. Metals FOMO, Long-term Thesis & Catch Up Trades

Nobody who’s talking about trading gold or thinking about FOMOing into gold here was long gold from $800 an ounce, right? These are all just people that are contributing to this giant god candle. They’re latecomers.

Here’s a thought experiment. For everybody out there who’s worried about metals running away from them and wondering whether or not to buy gold here, let me share my screen. Check this out. How does this chart make you feel, Avi? Does this make you feel a burning sense of regret and shame and desire all at once?

A little bit. I wish I had been able to pick a bottom on that. But that chart’s way uglier than the gold chart, to be completely honest.

You know what this is? This is natural gas. Natural gas blasted in the Northeast of the United States, where you’re probably huddling inside right now trying to avoid it.

The commodity community basically bought a bunch of natural gas going into the winter on the basis of a bunch of natural phenomena and forecasts that suggested we were going to have a really cold winter. Then we had unseasonably warm weather across the United States from mid-December until mid-January, and then this cold blast kind of came out of nowhere. Now we have what ultimately is a 150% rally in less than a week.

The market was obviously caught short on the lows after the unseasonably warm weather, but everything that I’m saying right now doesn’t really make you feel like you missed out because you’re not a weather modeler. You’re not somebody who follows natural gas. Natural gas is notoriously quantitative. The competition is insanely extreme. It’s hard to trade, right?

Everybody in commodities has a little bit of a hat-tip level of respect for natural gas traders. These guys are real cowboys, and they do a lot of work, and it’s hard. So it’s not really a retail thing to trade.

My point is, no one should FOMO in the retail world. No one should FOMO over gold, just like you wouldn’t FOMO over natural gas. Sure, you could have more than doubled your money in a week, but calling it is very hard.

Honestly, I think the real head fake with gold, and the reason why I give myself a pass on not riding that wave, is because, number 1, I still think Bitcoin’s going to $1,000,000, and it’s a much better risk-adjusted return over a long period of time. Number 2, gold was a risk-off asset until Russia. The paradigm shifted in a major way, and it was not obvious to anyone until recently that the paradigm had shifted.

If you were investing in gold, you were betting that stocks would go down. And this is obviously one of the most bullish possible backdrops for equities that I’ve ever seen, especially now that rates have topped out and they’re coming down. So it would have been a real contrarian bet to bet on gold. That’s why I’m not too upset about it. I think there will be other opportunities.

And no, gold profits will not flow into Bitcoin. What’s going to happen—and then we’ll talk about your chart that you just posted here—is that gold and Bitcoin have 2 very different investor bases. All of the rallying that gold is doing now will be a slow bleed over the next 3 decades into Bitcoin as boomer gold bugs die and Gen Z, Gen Alpha, and millennials start to take power and rotate.

That’s when the rotation will occur—basically, when millennials run the world instead of boomers. They’ll hoard Bitcoin instead of gold because it’s obviously a better alternative reserve currency for 100 reasons than gold. But that’s my rant on that.

I think if you look at your chart there, it didn’t really start to take off. The paradigm shifted—it stopped becoming a risk-off asset in 2023, which was the little heads-up—but it didn’t really start mooning until mid-2024. What do you think?

Me personally, I am very, very, very bullish on gold still. The reason is because I think this is a multidecade-long thesis, and I have for a while. I’ve been pounding the table on this. Over the next 10 to 15 years, the world will continue to fracture. The world will continue to become more territorialized. The world will continue to move into spheres of influence. People will become far more protective over their resources.

There will be no hegemonic power, and that, by definition, is going to make the fight for rare-earth minerals more intense. It’s going to make the fight for energy independence—like building nuclear power plants—more intense. It’s going to make the fight for gold reserves more intense, which is one reason why gold is going up.

Silver, to me, is the retail asset, right? So if you ask me about gold, ask me about uranium, ask me about rare-earth minerals, ask me about copper—ask me about the things that are genuinely needed in this new type of world—I’m bullish over a multidecade-long time period. I think they all deserve a place in your portfolio.

Not only do I think they deserve a place in your portfolio, I think that you should be at least 15% to 20% in these assets for an extended period of time, if not more. REMX, which I’ve been talking about for quite some time, is just an amalgamation of mining companies that pull these rare-earth minerals out of the ground, and it’s based in the United States. likely USAR did very well recently.

A lot of these things have done extremely well recently, and that makes right now a difficult time to invest, because right now there’s a tremendous amount of retail exuberance baked into the prices of all these assets. If you look at silver, how much has it gone up in the last few months? Since the breakout, it’s up almost 300%. That’s expensive. All those poor women out there buying jewelry—it’s getting expensive out there for them, right?

You look at gold—how much is it up since the breakout? Silver’s done it much faster. And that’s the part that worries me: when you get these massive candles, when you get this expansion, you see how it’s slowly climbing up and then the candles just get bigger and bigger and bigger and bigger, even on a percentage basis.

I don’t want to buy that. Who wants to buy that?

But that, to me, suggests, hey, look, silver, as a latecomer—as something that doesn’t necessarily have the geopolitical tailwinds that everything else does—the fact that this is running and everyone is focused on this tells me that metals have successfully penetrated into retail trading, and we’re probably baking a lot of retail price action into gold, right?

That’s a little bit scary for the short term, but for the long term, if you buy this and you wait 2 years, gold’s probably higher than $5,000. That’s my guess. But it doesn’t necessarily mean that you’re supposed to be buying right here. You were supposed to be buying before.

Now, if you want to take the trade, there are some good catch-up trades, right? For example, let’s just go to REMX. This asset right here, the rare-earth and strategic-metals ETF that I’ve been talking about for a while, genuinely has reason to go up. And it’s not just retail. It will continue to go up as these companies expand and start digging more out of the ground. And the US, at some point in the next 6 to 12 months, probably ups its investment in companies like this.

Because it's very strategic for the US, and we still haven't even gotten close to where it opened up more than a decade ago. Stuff like this is still interesting to me. Stuff like copper.

It's still interesting to you because there's still an actual thesis there.

Uranium, for example—global uranium ETF and miners. This chart is phenomenally interesting to me. I'm still very long uranium.

Now, gold and silver again, this is tough. This is tough. This is not as easy as it should be. When I look at it, here's my cope: it doubled. Bitcoin doubles for breakfast—sorry, gold doubled. Great.

Not for a while. I mean, look, the issue with Bitcoin that we're all unfortunately aware of, Jonah, is that, first of all, this is the ugliest fucking chart I've ever seen in my entire life. This is not great.

No, it's not the ugliest chart you've ever seen in your life. Come on, dude.

This is pretty damn ugly. I'm not going to lie. Look at this. It's ugly, but there are uglier charts.

4. Bitcoin vs Gold

You know what? The reason that I say it's one of the ugliest charts is because when a chart looks ridiculous—when a chart is so ugly that you have to say it's the worst chart in the world—then it's actually pretty good.

But you telling me it's not the ugliest chart that you've ever seen in your entire life tells me that it is the ugliest chart that I've ever seen in my entire life, because it's still interpretable by somebody else as potentially not that bad. I mean, look at this monthly. You get up to 98, you can't break through. We're back below 90. We're languishing.

We're sitting right on this trend-line support, and that to me suggests we're in a very dangerous spot. We consistently see selling from the OGs. We consistently see a lack of interest in Bitcoin. Metals have really sucked everything out of the room.

What I'll wait for is, let's say we get a massive down candle in gold and Bitcoin starts to do well. Then that gives me a signal: hey, maybe I need to get into Bitcoin. But for now, I'm throwing my hands up and saying, back to no man's land. Probably if we get anything below 80, that's an amazing buy. But right now, I'm throwing my hands up because Bitcoin's really languishing.

Yeah, it's languishing. I mean, gun to my head, if you buy gold at 5,000 or Bitcoin at 88, I think you buy Bitcoin at 88. But, again, I have more of a long-term horizon than maybe most people have patience for. I just can't stomach the idea of buying gold here, hoping for a 2-bagger, when I could buy Bitcoin and hope for a 10-bagger over a similar time horizon.

No, I don't think gold is going to moon straight to $10,000 an ounce. At that point, you get too far above here and people will be pawning all of their gold. There's supply. There's real supply. There are big gold OGs, too, who would sell if you go too much further.

There's precedent for it. Just do the long-term chart of gold—can you pull it back to around 1900 or something, logarithmically? Yeah, there's precedent for it, like 5x-ing over a decade or 2. But you're on mute.

Look at how well gold has done since the turn of the century. It's pretty nuts, huh?

Well, during the 2000s, that was when the stock market did nothing.

No, but I mean, look at this. It went 20x, dude. That's unbelievable.

That is pretty unbelievable. Do you think it's going to 20x again? I don't. Not in the short run. Well, look, if it makes you feel better, let's see from the start. It's outperformed the S&P pretty tremendously, actually.

If you include the recent price action, definitely. Yeah, I mean, it's dramatically outperformed the S&P. It hasn't as dramatically outperformed the Nasdaq. I mean, this is S&P versus Nasdaq, but you can see the Nasdaq was at 5.86x, and gold was a 20x-er.

So really, what it tells you, Jonah, is this: the US has produced some of the greatest, most world-changing companies in the world and continues to. We've created a tremendous amount of wealth for people in Silicon Valley through these tech companies, and even then, investing in tech has underperformed that silly little yellow rock. How insane is that? It is. You buy a silly yellow rock—

That looks really shiny that everyone likes—

—and it outperforms an amalgamation of the top 100 tech companies. How crazy is that? Now, obviously, it hasn't outperformed every tech company, right? Facebook has outperformed it, Google has outperformed it, but generally, I'll say that it's amazing that this yellow rock is and continues to be so captivating to people.

Jonah, it kind of blows my mind. As somebody half Indian, I do understand it. I do get it.

I feel it viscerally.

We're very—

We're very attracted to shiny things. We like them. We enjoy them.

So, the Jewish side of me is not a huge fan of gold [laughter], because fractional-reserve banking and all—we like that.

Yep.

But I don't like the gold standard. It's why we sank the Titanic. I'm just kidding, guys. [laughter] [gasps]

Yeah, I mean, look, the thing about gold that kind of boggles my mind is: how would you—what does it actually mean, functionally, to use gold as a reserve currency? It can't be stored on a ledger. You have to fly bars around, and it's just so difficult.

I get that we're debasing the dollar, that we're punishing people for holding dollars, and that we're punishing countries for holding T-bills, taking their money away and taking their dollars away. So I get that they have to put it somewhere, and they're putting it into gold.

Then central banks buying gold leads to this sort of propagation out the risk curve, like what we've seen hundreds of times in crypto, where Bitcoin rallies, then the majors rally, then the alts rally. That's what's happening here. Central banks are buying gold, then retail panics and buys silver, palladium, and platinum. Then auto producers who actually use platinum and palladium get caught short and have to buy more. I've seen this ripple effect happen in commodities before.

So what's our blue-sky scenario? Gold just keeps rallying forever because it's been rallying and de-dollarization, but we don't have a price target or an outcome target. No countries will ever be doing global trade denominated in gold. It just doesn't—I guess Venezuela and Iran—

It's not about that, Jonah. I guess what it's really about is central banks around the world understanding that they need to have vast reserves of gold to shore up their own currencies.

Think about it: this is what's happening in Europe right now—the divestment from US Treasuries because of the erratic behavior of our administration. People have to find somewhere to put their money, and they don't want to put it in their own Treasuries. That's the whole point: they're trying to diversify, right? They want to have something stable so that if their currency ends up facing trouble, they're not going to face a doom loop.

If the eurozone only holds Treasuries issued by the ECB, or they only own Treasuries issued by any country in the EU, and then the EU starts facing a crisis, well, guess what? All their reserves spiral at the same time that their currencies are spiraling, and they just completely and utterly fuck themselves.

So really, what they need is a noncorrelated asset. For a long time, that was US Treasuries, and now people are saying, “Hey, time for me to get out. I want to go buy some gold. I want to shore myself up.” You know what? They're not doing that with Bitcoin.

One reason why Bitcoin is not going up is because, look, retail in aggregate actually is pretty smart. Obviously, they make mistakes, but they know what game to play, right? They go where the game's hot, and right now the game is hot in metals.

So everyone and their mother, including us—if you remember, if you take a big step back, a long time ago we were a crypto podcast, in the eons past. We used to talk all about this thing called cryptocurrency. And now, what are we going to say, Jonah? What are we going to—I'm going to tell you guys, “Hey, guys, there was this meme coin called Penguin that went up because there's a penguin that's going viral.”

Should I be talking to you about the viral penguin?

There is no viral penguin.

Should I be, or should I be talking to you about the political and socioeconomic state of the world? [laughter]

There's a Jaden Smith callback in case anybody didn't get that.

I was just ranting. Go ahead.

5. Precious Metals vs Other Mega Trends

I love that you're waxing philosophical on geopolitical topics because that's my wheelhouse. I love doing that. My point is—

Also, this penguin thing has done very well, by the way.

Well, we'll get to it in a second. My point is not that you shouldn't invest in gold or that you should. My point is that I use the natural gas example to say just because something doubled doesn't mean that you're a shitty trader or that there's a humongous opportunity.

The reason why I'm sidelined and why I'm focused on other investments right now, other than precious metals, is that I like them; they have my attention. I will buy a pullback on gold. But the reason why I'm not tearing out my hair over this or actively trying to buy here is because I cannot associate—I understand why gold is rallying from a broad geopolitical perspective, but I cannot associate a price target with some specific outcome.

Yes, central banks are holding gold, hoarding gold, but there's literally a multi-millennium history of oscillation between central banks hoarding gold and central banks ceasing their hoarding of gold. It just goes back and forth. So I don't know when they're going to stop, and they may have stopped already, and this may be retail follow-through. I don't know. They may start selling at some point. They do that sometimes, too, because, to your point about central banks being there to shore up a currency, what does it mean to shore up a currency? It means you sell gold to buy the currency. So this isn't a forever trade. You just have to be careful.

No, it's definitely not a forever trade. And even to point out, I think that, in terms of time—I don't know about price, because things get really nutty in price—we're definitely pretty close to a short-term top. I wouldn't be surprised to see silver pull a negative 15–20% day at some point. I'm not touching silver.

But what I am doing is saying, look, the beast has been awakened. There are obviously some assets out there that I think are going to do very well that we've talked about at the beginning of the podcast. Just to repeat, the rare-earth mineral plays like USAR and REMX—these ETFs, or REMX is an ETF—but anything to do with national security and commodities, I think, is an extremely interesting place to put your money. Not financial advice.

You know that I have my money—if you go look at my Robinhood right now, I've got a decent amount of money between uranium and these things. Gold and silver—I don't own silver. I obviously own a little bit of gold. It's part of the portfolio. But I don't have a trade on right now. I'm not sitting here saying I'm betting on gold to go to 5,500 in the next month. I'm not saying this is going to continue right now, but in 2 years, in 3 years, in 4 years, I think gold is going to be much higher than it is today because of all these megatrends that we're seeing.

So hopefully—maybe what we should do, Jonah, I mean, hear me out—maybe we should just talk about how amazingly bullish we are on silver and then go short it, because if we just talk about how it's never going down, it probably goes down. What do you think? Shorting silver?

Man, that is—you've got to have some balance sheet to suffer the drawdown that may happen if you short it. I'm not a precious-metals guy. I don't know how to time this. Wouldn't it be easier to just buy the catastrophic dip whenever that happens than to—

The issue with silver is I just don't like silver's valuation. It's so far divorced, in my personal opinion, from what it should be that I cannot bring myself to—

How do you value silver? How do you even have an idea? Educate me. And again, I'm a commodities guy. I'm supposed to get this. How do you educate yourself on what the appropriate valuation for silver is?

This is very simple to me personally. It is that gold is actively being bought by central banks. Gold is actively talked about and owned by a tremendous amount of the population that views it as a store of value.

Yeah.

Silver is not. Silver has a much more flawed market in terms of—I mean, central banks are not buying this thing. Governments are not buying this thing. It kind of goes up because gold goes up, and then sometimes it even goes up more because it's smaller and a bunch of people that want to gamble and speculate push this thing up.

So my view of silver is that it's a phenomenal trading instrument. It's an amazing instrument for gamblers. It's retail's favorite thing to do, I guess, to buy if gold goes up. But the reality is that at some point it comes back down, right?

And I think that somebody says silver is used in missiles. The use case for silver in industrials is far, far, far smaller than uranium's use case in national security. The percentage of silver supply pulled out of the ground that is used in national-security use cases is very tiny. Uranium is super high. Palladium is much higher. All these other rare-earth minerals are much, much, much higher, which means that a tremendous amount of silver's valuation is solely due to speculation and people buying it.

Now, of course, it is used more than gold. Absolutely, it's used more than gold in industrial use cases, but gold is also being accumulated by central banks specifically for the use case of being a reserve currency. So that's why I say—and I think it's sort of indisputable—that silver is really just a trading asset, and that's why I think that it comes down at some point.

I see. So when you look at silver, you're not looking at it as, like, oh, wow, there's all this demand from the spoons market and Judaica lifting silver here, and so my valuation target is whatever. You're more just like, okay, this could literally be a memecoin. I'm just going to use my value-and-momentum framework to trade around silver. I'm just going to look at the chart and kind of—

I think that's about it.

Yes, 100%. But I don't know if value or momentum—value doesn't really work for silver—

Because what the hell is value? It's really just momentum.

So let me talk about CTAs for a second. Again, CTAs are driving a tremendous amount of this price action. CTAs are very active in precious metals.

6. CTAs, Shorting & Metals Top

What is a CTA? It's a commodity trading adviser. What does a commodity trading adviser do? They literally run moving averages on every single asset, from lumber to silver to the stock market to the bond market to Bitcoin. They have 3 different speeds: basically a short-term moving average, a medium-term moving average, and a long-term moving average.

When the asset price is above the moving average, they're long. When it's below, they're short. That's literally it. And they'll have 3 different signals per asset because of those 3 speeds I just described. It doesn't really work. The Sharpe is pretty low for any given asset. But if you have it across 100 different assets, your portfolio return starts to look kind of decorrelated, decent, and interesting.

That's what big companies like Winton, Lynx, and Aspect will do. CTAs move the shit out of commodities. They're tremendously impactful in oil and gold and silver and stuff. So if you're getting a big move like this, all the CTAs are going to be max long and buying more and stopping out all the shorts, and now there's no one left to sell.

However, whenever the buying stops, whenever the music stops and the price starts to dip below those moving averages, the CTAs will go and turn around and sell the vast pile of gold and silver that they've amassed, and platinum and palladium. Look out below when that happens. I've seen that happen 1,000 times in other commodities.

So basically, at the end of the day, you're right: toss out value. This is just a momentum asset. If the momentum is up, you can get cute and probably scrape a few points of return here and there. And when it turns, maybe that's when you get short.

When it starts to careen lower, maybe what you do is go on your TradingView—to the point of the 1000x podcast being actionable—and pull up a 50-, 100-, and 200-day moving average in your TradingView. The second you go below the 50-day and the 100-day, maybe while you're still above the 200-day, maybe that's when you flip short silver, just waiting for the utter collapse of the house of cards.

Until then, I probably wouldn't touch it. I certainly wouldn't short a rally.

No, I think you're right. Generally, the best way to short is not to short into strength. The classic smart-trader way to short is what all the big guys use when they're entering shorts.

Retail doesn't do this, which is why it works, right? Retail loves to short these extensions and then just get blown the [bleep] out. But after silver collapses—which we both think it does at some point—there's normally some sort of bounce.

Maybe that bounce is, let's say, you collapse down 10% and then you bounce sort of halfway up that 10%. That's when you start shorting, when you retrace maybe half, maybe a third of that move. The reason that you like to short there is because that's when people get really, really, really bullish again. They're like, “Okay, that was the pullback. I'm in. This thing is going to keep going,” and then it collapses. You want that sort of confluence with the moving averages because you do want to see that momentum really, really roll over.

It's funny, while on this podcast, talking about metals, basically silver has collapsed. It's kind of fun. Yeah, somebody called it in here: “This podcast caused the top in metals. Good game, guys.”

Yeah, we crushed it. So, just to clarify, because I guess this guy was kind of tough—maybe it wasn't exactly articulated in the right way—but very specifically, what I said is that the price action right now, from the beginning, I think is extremely retail. The price action in metals—gold and silver—especially is super retail-heavy, super close to a top, and will probably get a massive pullback. That's what I said in the beginning of the podcast.

However, there are some metals, such as copper and rare earth minerals, and companies that mine these rare earth minerals, likely including USAR, and ETFs like REMX, and things like palladium and platinum, that I believe are good buys on a dip because I think that they fit into a 5- to 10-year geopolitical story that is playing out before our eyes.

Do I think any metal is a good buy right here, right now? No. Do I think that you should allocate to these if we get a pullback? I'm buying a lot more of these rare earth minerals. I'm absolutely buying a lot more. I'm buying more copper.

Basically, if you're going to invest in a non-revenue-producing hard asset or commodity, like—

It better be strategically important.

There had better be a supercycle thesis behind it.

I do not see a supercycle thesis in silver. Maybe there's a supercycle thesis in gold. I definitely see a supercycle thesis in Bitcoin, which is just generational adoption and an alternative reserve asset. I definitely see a generational supercycle thesis in copper and rare earth minerals. I do not see a supercycle thesis in platinum, palladium, or silver. So avoid.

Before we totally wrap it up, though, I know you have a hard stop in 10 minutes. Should we talk a little crypto here? The BitGo IPO didn't go well. There's a question of quantum risk hurting Bitcoin's narrative here. Should we talk about those 2 topics at all?

7. Crypto Is Dead But Here’s What We Like

Yeah, I mean, look, crypto's been kind of interesting because there have been a lot of—I think even on the way down, there have been some assets that have stood out to me. For example, SYRUP is up 11% today on a day when Bitcoin is effectively flat. I mean, it's up 2% or something like that. That's because it did sell off very hard from the top.

I think that people are dip-buying the assets that are good and produce actual revenue. I sent out a tweet, Jonah, a little bit ago that described my dissatisfaction, I guess it is, with the state of the crypto market.

I didn't see it because the algo doesn't show me crypto content anymore. I see everything you tweet except crypto stuff. Yeah, because the algo is completely siloed. But that's okay. We love you anyway, Nikita, even though you're a Russian Jew.

He's my kind.

Deep cut. That was a deep cut.

Yeah, so—wait, hold on.

Sorry. Go on. Go on. It's a hilarious statement you made. Continue.

It's a bit. It's a bit.

So—

We always have good bits.

So, okay. Crypto's dead. If you say you work in—

Radio, radio over the internet.

So—

I work in internet.

I work in radio.

So, saying you work in crypto is like saying, “I work in radio over the internet.” If you work with blockchains or move value on-chain, what does that make you?

Like, okay, so everyone's talking about crypto this and crypto that. The reality is that we've subsumed crypto into fintech. Crypto is fintech and fintech is crypto, and it's all just one big overlap at this point. Really, what you should be doing is building good products for a mass audience and leveraging whatever technology is useful to you.

The same thing, by the way, in my opinion—I'm paraphrasing someone who told me this—is going to happen with AI, right? In 5 years, nobody's going to be like, “By the way, I'm working on an AI company.” It's, “By the way, I'm running this company that does this,” and obviously it uses AI because everything is going to use AI, right? That's kind of the point that I'm making. Crypto is already there. We've already gotten to that point, in my personal opinion, and you should probably just admit that to yourself.

Now, with crypto trading, there is a collection of these companies and a collection of these coins that trade on places like Binance and Coinbase that are still not fully integrated into the system but at some point will either, A, die, or, B, become fully integrated into the system and you'll be able to trade them anywhere.

If you go to Interactive Brokers, you can go trade what is likely Solana, you can go trade Bitcoin, you can go trade ETH, you can go trade stocks, and at some point all this is going to come together in one neat little package, tied up with a bow. Call it a day.

All of the crypto things that survive—the tokens—will have to look like equity. They will have to have some sort of legally binding agreement with the purchaser. They will have to dedicate some revenue toward the token. Basically, these tokens will just become equities on a different tech stack. That's really what it is at the end of the day.

Oh, sorry. Are you done, or should I interject?

Just 2 more bits here. Really, what you should be doing now, when you're looking at crypto or investing in crypto, is really just 2 things.

One, if a really [bleep] big meme comes out at any point and you're like, “Hey, I don't think this meme has percolated yet,” go on DexScreener and look it up and maybe buy a token for it, because Penguin just went from a $500K market cap to a [bleep] $100M market cap. So clearly there are some degenerates out there still.

Or 2, buy the revenue-producing companies when the market gives you the opportunity to enter them. I think Hyperliquid is bottom now. I think Hyperliquid makes a ton of money. I think we've worked through most of the supply. I think it's a great time to buy.

I love that one. The only caveat here, which I would say is different, is the privacy coins XMR and ZEC, because we're going to still have a tremendous amount of crime over the next 800 million years of human history. Humans will always commit crime, and humans will always need to figure out where to put that crime money.

While I don't suggest that you commit crime, I would heavily advocate that you don't. It's not good. Don't commit a crime. But maybe if you buy XMR, you can at least benefit from the people who are doing crime, which maybe you shouldn't do. It depends on your ethical stance on things.

Yeah. Crime. Such a double-edged sword, huh? There's—

Really just money in crime, and yet it's so ethically complicated. The whole crime thing. Yeah. How do I get long crime?

The way you get long crime is long XMR or Zcash. Here's the deal.

He's asking for local, like, localized crime investment.

Oh, localized crime. I guess maybe—speaking from personal experience, having been the victim of this type of crime—just go on the local government website and see what services they're putting out RFQs for, then fraudulently pretend to provide them and just collect taxpayer money.

There’s a lot of that going on, both with my tenant and apparently with a bunch of people in Minneapolis.

But yeah, just on crypto before we drop here, something that really struck me about what you just said, and that I thought was super relevant, is that it’s a dark time for crypto. A lot of people are either quiet quitting or rage quitting crypto right now, and for good reason. But I think the shining light that the space offers the world, aside from Bitcoin and seamless value transfer—even if that value isn’t pegged to the dollar, and even if it’s volatile—is that crypto is the best way to move value.

Chris Dixon talks about this in Read Write Own. It’s basically the token subsuming the LLC. One of my side hustles is starting to take off right now, anecdotally, and I recently incorporated a Delaware C corp to go capture it and capture the opportunity. In doing so, I have a really good legal team, and it’s going to cost me mid-five figures just to tailor all of that and align incentives properly.

Anytime I want to make a distribution or change something, it’s going to be another five figures and another dozen people DocuSigning things. Basically, what I’m getting at here is that eventually there will be a launchpad where you can create your LLC or your C corp and incorporate it.

Avi, you’re back. Basically, what I was saying was that eventually there will be a world where, if you want to spin up a company, align incentives, and issue tokenized equity—with several different types of tokenized equity to people, which would be like the difference between share classes, preferred stock, common stock, Series A, Series B, whatever—you could just use a launchpad that makes it as simple as clicking through a checklist and issuing the stock.

Basically, what it’ll do is disintermediate a bunch of legal bullshit and problems. It’ll make cash distributions at the appropriate time. It’s just programmatic equity. That’s what a token is. I’m really excited for that. I think that’ll be a megatrend in small and medium-sized businesses.

I just hope it happens soon, and I hope somebody actually builds that, offers value, and leads by example there.

I think this is what I mean by crypto eventually subsuming everything when it comes to fintech and just administrative stuff like this. I think it’s so much easier to manage tokens from a technological standpoint. It’s just that, from a legal standpoint, we haven’t built a social technology to manage what happens when you have a highly liquid asset immediately available to founders.

That’s really the core of the issue with tokens: There’s no obligation to make them valuable.

Yeah. When you fix that, the technology makes it super amazing. It’s the best way of issuing equity ever if you can fix the legal aspect of it, right?

Whoever builds that, will they say they’re working in Web3 or crypto? No, they’re certainly not going to say they’re working in computers or the internet either. They’re going to be just tech entrepreneurs, like everybody else.

I work in computers.

I use a keyboard to make dollars. Anyway, I hope everyone out there is using their keyboard well to do their internet job properly today.

Use your keyboard to work in computers.

Dude, I love talking to you, Avi. This is hilarious and useful, as always.

Don’t FOMO into precious metals, everybody. Please.

Don’t make the mistakes that everyone else is making right now. That’s what we’re here for.

Don’t make the computer mistake.

All right. This is great, Avi. I’ll catch you soon.

Catch you soon.

Later, brother.