Plasma 的100亿美元上线、ASTER交易思路、DAT内幕整顿与 Jonah 的 META 论点

1. Ads (Kraken OTC, Peaq)

If the financial ecosystem gets built on top of this, there is stupid, silly upside for this project. I think it’s super exciting, and the team gets it. They incentivize people by letting the community get in and make some money, as opposed to what seems to be going on around the world in other contexts, which is the team just dumps on the community and uses the community as exit liquidity. So this team is building for the long run.

Jonah, it’s good to see you. How’s your week?

Good to see you, too, man. It’s been a good week. It’s been volatile—just watching my crypto bags erode some value, then gain some value, then puke. I’m trying not to focus too much on it. These are times when I like to pull back and try to think about the bigger picture rather than trying to analyze every heartbeat with my fingers on the pulse, panicking about every gap between every heartbeat in the market. I’m not that dialed in right now.

We had some Jewish holidays, and I just turned my phone off for a couple days, then turned it back on to see Plasma, our favorite. Avi, how about that one?

Oh my God. Unbelievable. They pulled off something that I thought just wasn’t able to be pulled off, just because so many people had failed at it. I think, across a lot of different launches, people have tried so many different mechanics. People have tried airdrops, points, and all these different mechanics to get their launch of a platform off to a good start. Plasma kind of just nailed it; they had all of the incentives lined up.

If you look at it, there’s $6 billion on Plasma now because of the incentive program that they’re running. I think one thing that was really exciting about Plasma is that they’re in their own little world of being the stablecoin platform, and I think that provides them a lot of value just in itself, being something novel within crypto. People were nervous about this lockdrop and that everyone was going to sell. It turned out it was massively underpriced.

That was what I was talking about before when I was like, “I’m super bullish. I’d like to buy if we trade down a little bit.” That turned out to be a good trade if you bought in the $0.65–$0.75 area, and even in the $0.80 area when I was saying, “Hey, let’s wait for a pullback for a little bit.” That was a great trade.

Plasma is now trading at $1.25. It’s a $10 billion valuation, which means that it has huge shoes to fill. But the team, by all accounts, has pulled off an extremely competent launch. They’ve just done very well.

Yeah. Overall, the billions of dollars on Plasma itself are huge. I think when you get momentum like this in the beginning, it’s just go, go, go. I think that Plasma could easily be a $20–$30 billion protocol in the next year, as long as they keep firing on all cylinders.

I’m still a holder. I’m still bullish. Things are looking good for Plasma, which is kind of interesting because the rest of the market is not looking as good.

Yeah. On the last podcast, what did we say, Jonah? Bitcoin was trading at around $113,000, about where it is here. I said, “Look, I’m getting a little nervous for the market, getting a little bit cautious, specifically on the large caps like Solana and ETH—basically everything outside of BTC.” I think we both agreed, “Hey, maybe we could see BTC trading down to $105,000,” but in that scenario, where BTC trades to $105,000, alts are just going to get absolutely hammered.

What ended up happening is Bitcoin traded down to $108,000, which was not a huge move, and then bounced back, which was also not huge. But everything else got crushed. From that point, Solana went down almost 15%, ETH went down 10%. Alts kind of across the board got crushed.

Now we’ve rebounded a bit, but really just Bitcoin, Plasma, and Aster have done well in aggregate, and I guess BNB came back. BNB came back a little bit, but basically, I don’t think much has changed in terms of my general outlook for the next few months. This is still range mode. What are you thinking?

2. Plasma Launch

Yeah, I feel similar. Let’s talk about Plasma for a second. This team is just executing on all cylinders, right? In terms of partnerships, I think they’re linked up with, for starters, Tether and Bitfinex. I think the founders of Tether are deeply involved in Plasma, so that’s a great start. I think they have a partnership with Binance. They’ve got EtherFi, USD₮0, and Peter Thiel is in it.

This is just one of those projects that you occasionally come across, maybe once a year, that’s kind of anointed to succeed. Overall, I’d say I’m a pretty crappy venture investor, but one thing that I’m learning from Plasma—like, you and I obviously had a mark-to-market grand slam on this one, a 100x-er—it feels like what I’m kind of learning is a framework for angel investing.

If you’re getting a look at something because of who you are or your pedigree—in our case, a podcast or experience in crypto or whatever—you’re kind of in a lucky position, and you should take those deals. Meanwhile, if you’re being asked to fund a project without the right pedigree just because you’re friends with somebody and a friend of a friend is recommending an angel investment, I tend to lose on those types of investments.

At that point, the waterfall of people who would invest in the project has already either passed, or the project has been run through and looked over—whatever you want to call it—and that’s sort of anointed to lose. So this one, I feel very lucky to have been able to put money in. It’s kind of the first angel investment I’ve made that’s looked like this, and I think it offers a good blueprint for avoiding bad angel deals.

I put so much money into angel investments over the years where I haven’t had any insider reason to be part of the deal. Realistically, I was just a checking account. Here it feels different. So that could be a starter framework for investing in these things.

3. Lessons from Plasma Success

Now, in terms of how Plasma will succeed in the long run, the rise of Tron to move Tether is really important. It tells you 2 things. The first is that ETH is just too slow and too expensive for the world of stablecoins, and L2s kind of aren’t getting the job done—ETH L2s. The second thing it tells you is that the backers of Tether don’t want to put all their eggs in Tron’s basket. They don’t want to stake the future of Tether on Tron. They want to build their own chain.

That’s kind of a theme we’re seeing across all of crypto. If a product has a real, valuable reason to exist, the founders are going to build their own chain rather than just toss it on somebody else’s chain. This didn’t happen on Solana; this is happening on its own.

There’s going to be competition. There’s another chain called Stable, from some early Plasma founders who peeled off out of Plasma over some disagreement, and they are launching their own chain. That one may succeed as well. Tempo, the Stripe–Paradigm vehicle, may succeed. I think the world can exist with multiple stablecoin chains.

Ultimately, if there’s a fee-free Tether transfer chain that’s backed by Tether and Binance, that could easily become one of the world’s serious major banking systems right there. And the upside for that is—maybe that was kind of the promise of Ripple when it launched back in 2013—maybe the upside is $300 billion, which is roughly where Ripple’s market cap has hit recently. So there’s a ton of upside for Plasma. I’m not calling for that, but you can definitely put your dough into this and feel good about it.

One question I have for you, Avi: I saw some screenshots on Twitter of people 400x-ing their money on the Plasma launch. To me, that seems a bit spurious because I thought likely Cobie’s Echo.xyz presale occurred at a $500 million valuation, which would imply something like a 20x to 30x from here. What am I missing? Was there a way to get in at a cheaper valuation that we just missed?

On that point, I’m actually not 100% sure where those numbers are coming from. It’s possible. To be honest, I didn’t pay super close attention to the Echo sale. I just wasn’t in it, other than noting that it sold out extremely fast.

I thought one thing that was really funny was when likely Cobie said, “Hey, just because this thing did really well doesn’t mean angel investing is free money.” He basically came out and said that because I guess it’s like the lottery-winner syndrome.

Somebody you see making a lot of money on something, you're like, “Ah, okay. I guess I can make a lot of money on this thing, too.” And then you go in not realizing that might have been luck.

Although what I will say is that the Plasma team, like I was saying in the beginning, sort of did everything right. They managed to message it. It was the right messaging to the right people. They didn't oversell too much, and the reality is that their end goal is pretty massive.

Jonah, as we both know, I don't know if you saw the headline that USDT just raised or is trying to raise $20 billion at a $500 billion valuation.

I saw that.

To even have an active raise of $20 billion is not a joke. You're not going to raise $20 billion just from crypto people. You're going to be raising $20 billion from a variety of different people: probably a lot of TradFi people, probably a lot of banks, and probably a lot of people who are instrumental to the systems that you're actively trying to replace.

The world is trending in the direction that we all got very excited about 5 or 6 years ago. We are now truly building the new banking system. What is happening right now is that the idea of the parallel banking system is actually in action, and crypto is fulfilling that.

4. Creating a Frictionless System

So what are the components that we need for this? We need a platform that exists outside of the banking system, right? We had that from the beginning. We had Ethereum, we had Solana, and we've had the platforms, but we also need the outside money on these systems. That's what's currently happening, and this is where I think Plasma can do a lot.

So with Aave on Plasma, for a long time, just in general, if you wanted to use Aave, what were you using it for? You were using it exclusively to borrow and lend crypto, specifically crypto. I don't know if you just saw, but Galaxy tokenized its shares. Its shares now trade on some level as tokenized assets.

Over the next year, over the next 2 years, that tokenized-asset world is going to grow and grow and grow, and more of the assets that you and I and other people hold in our day-to-day portfolios are going to be tokenized. You're going to be able to borrow against these assets on a platform like Aave.

As a personal example, this would be great because I have a brokerage account with Chase. If I want to borrow $1 million against my portfolio, I have to call up my banker, fill out a bunch of forms, and borrow $1 million, even though it's overcollateralized by a substantial amount.

Once the majority of my assets can be represented in an easy and frictionless way on-chain, I see no reason why I wouldn't just move that all on-chain. Then, if I want to borrow $1 million to go buy a rental property or go do this or go do that, guess what? It's 3 clicks, and I have the money. Then I can go spend it immediately.

I mean, it's really incredible. The frictionless systems are being built, which is why, again, I'm super bullish on things like Aave. SYRUP has actually come off a lot since the highs, but I'm super bullish on things like SYRUP, super bullish on things like Aave. We're literally watching, with our own eyes, the new system being built, and it makes a lot of sense to try to take advantage of that.

Yeah, I agree. One thing about what you just said: you said if you want to borrow $1 million, you have to fill out a bunch of forms. I have the same private bank as you do, probably. I had to fill out those forms once and then wait a couple of weeks, but now I can do it with a few clicks inside that platform.

Technically, I could just wire myself $1 million from my private bank on margin, collateralized by my equity positions in ETFs and stuff. So it is pretty frictionless already there. What I will say is, let's say that my bank is overcharging—charging a crappy interest rate, right? If I wanted to move from my bank to another bank that charges a more favorable interest rate, that's another 6 weeks of pain and forms and whatever.

I shouldn't have to fill out forms in the first place. They have my assets. Why do I need to fill out paperwork? They can liquidate me if they want to. It should just be a few clicks. The funds are already in the vault, basically their vault. That step could be eliminated by crypto.

But the real one is that borrowing rates for people like you and me and everybody else who's listening will go down if there's competition. Right now, the big moat that these banks have is that once they have your assets, there's so much friction associated with pulling your assets out of their platform that they can get away with charging you too much for FX transfers, collateralized loans, mortgages, and all this other stuff.

That's why every day you get another piece of junk mail from Capital One or Citibank, basically trying to acquire you as a customer for a stupid price, because they know that once you're locked in, they can steal from you for decades. That, I think, is a big unlock for crypto.

5. Ads (Kraken, Peaq, Katana)

I think Plasma does offer a platform for all of that. Why couldn't all of this stuff occur on Plasma? There is a pretty accretive mechanism to the XPL token. I think basic USDT transfers are free, but if you wanted to structure something more complex, like a smart contract, a protocol, or a loan, or some other type of overcollateralized or undercollateralized transaction, then I think you end up spending some XPL and burning some XPL.

I forget exactly how the mechanics work, but I think if the financial ecosystem gets built on top of this, there is stupid, silly upside for this project. I don't know. I think it’s super exciting, and the team gets it. They incentivize people by letting the community get in and make some money, as opposed to what seems to be going on around the world in other contexts, which is the team just dumps on the community and uses the community as exit liquidity.

6. Aster Trade Ideas

Let's talk about Aster quickly. I put out a trade idea that I don't have the balls to put on in size, but I still think it's a good trade, and I want to talk to you about it. Just looking at the chart, though, I think Aster's topped out at $2 a token.

I think you're supposed to deposit some collateral on Aster, short the Aster token with leverage, and then cover it lower and generate a bunch of points for yourself by doing that. Make some money on a trade. I'm torn about this one. It seems like an obvious trade, but my conviction isn't high enough to put serious capital into it, and so it's not really worth it for me yet. What do you think of that one?

I think it's a good trade, personally. My initial thinking was that Aster could really rip because it was kind of the thing of the moment. And it did: from when we were talking about it, it went from $1.40 to a little bit over $2, and then it sort of topped out there.

Then everyone's attention left because of Plasma, and Plasma did so well that people stopped paying attention to Aster. What is very clear is that this product isn't as good as Hyperliquid. It's not as good as what else is out there.

What it does have going for it is at least the pseudo-backing of CZ and all of the Binance criminals around it, which always makes me very nervous. I don't like to play those things from the short side.

When you have somebody who can crime you and destroy your trade, it's generally not good to go up against that because I think it makes it psychologically difficult to hold on to a trade. That's an underappreciated part of trading: is it psychologically easy or hard to hold on to this trade?

There's this great quote from a guy who used to trade the pits in Australia that I've talked to you about, the Ride the Comet guy. What he says is, “Research is great, but research is a crutch. Research is there to help you, but you already know what the trade is.”

What he meant by that is that you can do a little bit of research—even a few hours—and get a good sense for whether something is a good trade or not. A lot of these bigger hedge funds and guys will spend 40 hours on a research report for a trade that, realistically, they probably could have understood in 4 hours. But they spend those 40 hours on it so that they can build a really strong foundation and not get shaken out of the trade when it goes against them.

That's a big reason for it: so psychologically it's like, “Okay, I have faith that we really covered every base. I had 90% confidence in this trade with 4 hours of research, but the 40 hours got me to 100%, and that's going to keep me in the trade for a long time, even when it goes against me.”

And so that's kind of what I think about Aster. It's hard to get to 100% on a trade like that, which makes it very easy to lose, right? You can imagine you short it here and then it goes up 10% or 15% against you and you have no idea why. There's no reason for it to go up. You're just like, “Am I going to get caught in a short squeeze?” And then you close out.

But it's very hard to build conviction in a trade like that. What's the conviction that you have? That's what I would say when you're trading in general: always think about that.

Yeah.

Yeah, I always think about that, and—

Go ahead.

No, I think it's just important to keep that psychological point, which is why I wouldn't necessarily short it. What maybe you do is you long HYPE and short Aster. But anyway—

Yeah, I mean, I guess the risk to shorting Aster is that CZ and the crime family, if it goes too low, just paint the tape and make it go higher with all their money and short-squeeze you. That's kind of why I'm not doing it.

I think a lot of times when you debate a trade with a friend, there's a very unhealthy tendency in crypto, being the Gen Z online degen asset class that it is, to describe that debate as “midcurving” it. But I think that's an unhealthy cycle to get caught in, Avi.

7. Aster vs Hype vs The Rest

When you're analyzing trades, it's healthy to ask yourself, “What would I do if I short this thing with 2× or 3× leverage, with a sizable nut as collateral, at $2, and it's trading at $2.50, and CZ is euphorically bidding it and posting about bidding it on Twitter? How are you going to feel? What are you going to do?” In this case, because I have no framework to cling to other than it looks like it's topped out at $2 based on the current level of interest, which could totally change, I'd probably trade poorly if CZ were lifting the $2.50s.

It wouldn't be the first time that CZ has—I don't want to accuse him of manipulating a token—but had an impact on the price of a token. FTT comes to mind. These things can be influenced by sizable capital flows. We're not talking about Apple stock here.

Oh, speaking of Apple stock, I do want to shill Meta later in the podcast for a non-crypto bet. But we're talking about micro-cap assets in the grander scheme of things. I think it's much safer to get into something like Plasma in a presale, when the founders are behaving in a way that telegraphs confidence, rather than betting with leverage on something that's super volatile.

My gut tells me that this thing is going 40% lower, and it could be a great way to farm points. Long HYPE versus short Aster is an interesting idea. I just think that Aster, in its early days—in the airdrop-farming period—could perform in a very bizarre, decorrelated way, even from Hyperliquid, because, as we observed last week, the volume-to-open-interest ratio is so ridiculously high on Aster and so idiosyncratic that clearly what's going on is just airdrop farming.

To me, Aster feels a lot like Friend.tech. There's an enormous frenzy of activity when there are points, airdrops, or money to be farmed, and then, as soon as the incentive structure goes away—which it obviously will—it just goes back to a ghost town kind of thing.

I also think that if you want to get long CZ, just get long BNB. If your take is, “CZ is really good for this coin,” guess what coin he's best for? It's BNB. So maybe just size it up.

8. Tether Raising at $500B Valuation

One of our commenters had a really good message here, too: the Lighter TGE is coming in December. I think that's generally going to be bad for other assets in this space because the DEX trading space is so highly competitive. We've talked about this on prior podcasts, but every few years, no matter how big the lead looks, it's not actually insurmountable because it's very easy to switch where you trade.

I do think that both HYPE and Aster may have a problem there. But I agree with you that Aster has a much bigger problem because they don't actually have any real usage.

I don't think HYPE has a problem, for the same reason that Plasma doesn't have a problem with the competition. There are 2 prongs to my thesis. Prong 1 is that the team is just cracked in both cases—HYPE and Plasma. They're top-notch, S-tier. Use your way of describing them: best of the best.

The second thing is that they got their community rich in both cases. HYPE has minted people. Plasma has minted people. Those communities will remain loyal because they're rich, and they're going to pump the project. You need a community to succeed in crypto. Just look at Bitcoin. Bitcoin is the ultimate community-building asset.

Even the Donald is part of our community now. He's a Bitcoiner. He's an influencer. It's not just likely Nayib Bukele, the president of El Salvador, anymore. These communities expand and attract new influencers. That's how crypto works. It's a community incentivization and community-building mechanism, philosophically, underneath all this other blockchain [__]. That's what it really is.

Aster is not building a community. It's a cult of personality, kind of like LaunchCoin was around that likely Pasternak guy, except this time it's CZ. He's a better personality to form a cult around, for sure, but this isn't a community.

And the team itself—if CZ were saying, “I'm abandoning Binance entirely. I have no interest in that. I'm not doing anything else. I'm just going to focus on beating Hyperliquid at building a perp DEX”—maybe there would be a story here, especially if they'd gotten a broader group of people in at a presale and were charging lower fees than Hyperliquid. But they're not, and that didn't happen.

So I'm more sanguine on the long-term prospects. Also, like you said, Lighter and all these other competitors are going to show up. The perp DEX world is going to end up looking like the centralized-exchange world, where Binance had 80% or 70% of the market share and everybody else was in a rock fight for the rest of it.

We have a blueprint for how the perp DEX space is going to play out. I think Hyperliquid is the Binance of on-chain trading, and it will eat most of the pie. Whereas if you zoom out to the stablecoin space, the addressable market is multiple hundreds of trillions larger than the market for online perp trading, and that market can support multiple participants.

I guess that's why I think Plasma has so much room. They're just as cracked as the Hyperliquid team, but they have so much more room to fail, even though they probably won't.

I guess my 1 question for you that I forgot to ask is: why is Tether raising money? They're raising $20 billion. Don't they, like, lose $20 billion behind the cushions of their couch on an average Wednesday? What are they doing? Why do they need that? Is it just a rubber stamp that they're worth a lot?

Here's my conspiracy, and we'll see it after they actually raise the money and announce who they raised it from. My conspiracy is that they need allies and that they already make a tremendous amount of money. They probably don't need the money, but what they need is access and allies, and 1 way to do that is by letting people make money off your product.

So if you have this killer product that's minting money and you want to go worldwide, you let the Saudi investment fund into your product so that it can also mint money off your expansion. Then maybe more oil gets settled in USDT at some point in the future, right? I think that's probably 1 of the major reasons they're raising.

It's, I think, a very smart thing to do. I think it's the right thing to do. The other thing is that their plans are pretty large for the future.

Right. Their plans are measured in centuries.

They view this as the moment. They basically have 3 more guaranteed years of expansion, to the point where they can't ever be shut down. In 2028, who knows who wins? Whether it's a Republican or a Democrat is a toss-up. So I think they know that they have 3 more years, and that's it. They just have to move as fast as they possibly can and get as many people on their side as they possibly can, so that they're indestructible come 2028.

It might not matter. Maybe the Republican gets in charge and Tether just keeps cruising, but I think smart people cover their bases.

9. Democrats, Politics & Crypto

You mentioned something that's a great tangent into the macro space. The most important chart, in my opinion, for all risk assets, especially crypto, is the Democratic Party net favorability rating. I forget where I saw this chart. Okay, let me share it. Hold on. I'm going to try to share it with the livestream here: share screen, Chrome tab, share.

Just look at this. This is a freaking dumpster fire. For those of you listening on audio, this is the Democratic Party favorability advantage. The baseline is zero: favorability over the Republicans. The chart starts in 1992 and finishes today.

10. Kids Are Disgusting

They've spent most of the last 40 years above zero, meaning people are either kind of coin-flipping between them and Republicans. I guess at the peak, right after Obama inherited the financial crisis from George W. Bush, 2 wars, trillions of dollars of debt, and all those problems, it peaked out at +37% over the Republicans. It's only been negative twice: once during the rah-rah post-September 11 era, from 2002 to 2004, and the other time is now.

To me, this chart tells you pretty much everything you need to know about the future. I want to get your take on this, Avi. Macro-wise, I maintain the thesis, broadly speaking, that until a political movement stops us out of our trades, this thing is just going to continue to run.

In the current paradigm, no politician of either party has the mandate or the hutzpah to reverse the tens of trillions of dollars worth of stimulus or the migration of risk from the corporate balance sheet to the United States Treasury balance sheet. Nobody can unwind that because of the financial consequences unless they have a mandate to do so. So far, nobody is being elected with that mandate.

But what's going on under the surface is that the Democratic Party, in its embrace of AOC and likely Zohran Mamdani, is clearly migrating toward a stance that embraces the mandate to unwind stimulus, unwind financial gains, and redistribute wealth. That's what the Democratic Party represents now, love it or hate it. As soon as the favorability rating reflects that the general, normal American public loathes that stance, given that this is now the stance of the party, the centrists have been politically assassinated, and all that's left is democratic socialism, once that favorability rating starts to tick up—or, worse yet, crosses back above zero from where it is now—then that tells you that the American population is ready for a financial change of gargantuan consequences.

That would be disastrous for crypto holders, equity holders, and risk holders. It might be okay for gold holders, especially physical gold bar holders, if you want to flee the country and not have your assets requisitioned. That's what I'm looking at, and that's how I'm thinking about it, and that's why I think we're in the clear until at least 2027. What do you think?

Look, you never know. I think that's really the answer: you never know. The reason that you never know is because things change like that. For example, likely Zohran Mamdani is not by any means associated with the Democratic Party right now. The Democratic Party is actively working against Zohran Mamdani, and he has a tremendous amount of popularity.

Elaborate. I didn't realize that. Go into more detail.

He's running as a Democrat, but he has support from AOC, and that's basically it. There's no top brass in the Democratic Party, and Bernie Sanders—the actual core of the Democratic Party—is not supporting him at all in any meaningful way.

Bill Clinton endorsed him.

They're actively not helping him. I don't think Bill Clinton endorsed him. They're actively not helping him because they're nervous about what he represents for the party.

It's very possible that you see AOC in 2028 get out there and try to disassociate herself from the Pelosis of the world, who I think are really the people getting those numbers down. The Pelosis, likely Hakeem Jeffries, and the mainstream Democrats are the reason that number is so low.

The 2 big ones—he has been endorsed by Clinton. He got endorsed by Vice President likely Kamala Harris, New York Governor Kathy Hochul, Bernie Sanders, of course, but who cares, and Senator Elizabeth Warren. Did he get endorsed by Pelosi or any other mainstream Democrats?

I don't think so.

See, I'm just quickly checking. Oh, I was wrong. Sorry. Bill Clinton did not, and Nancy Pelosi has not. So I was wrong. Okay. Yeah, you're right. Sorry. I'm glad we cleared that up.

To round out the political discussion, you never know how people identify or what happens in the next 4 years. What if AOC or Elizabeth Warren comes out and says, “I don't agree with the Democratic Party. I'm going to run,” and AOC runs as an independent and somehow that generates a lot of interest? You just never know.

I think the huge dissatisfaction with the Democratic Party is just how useless they've been, because they've been completely and utterly useless. But that's really good for us. Going back to crypto for a second, that's really good for us. We're going to really benefit from these next 3 years until something major changes.

If AOC and Bernie branch off from the Democrats and create their own party, the second you read that, you wire your net worth to your exchange of choice and lift as much crypto as you can, because that means that the Democrats are basically going to be likely Ralph Nader for 12 years, and it's going to be full-on likely World Liberty Financial, Trump-style bull crypto corruption for at least a decade. I don't know.

I've had this cough that's been nagging me. When do you have kids, Avi? When you have kids? I got kids.

Well, I mean, it goes away for about 2 weeks, and then it just keeps coming back. Basically, what’ll happen is my daughter will go to preschool, take off her shoe, lick the bottom of it, then sneeze into somebody else, who will just sneeze back at her, and then she’ll come home. Kids are freaking disgusting.

Why are your kids licking their shoes?

I’m being unfair to her. It basically says she’s willing to take risks, right? What does it taste like? Maybe it tastes like a lollipop, maybe not. One way to find out, right?

At this point, she’ll come home and breathe on me, and I’ll just get it. It’s never a full cold like the kind you get when you’re 30 years old and only interact with adults. It’s a quarter of a cold. So I’m constantly clearing my throat, constantly under the weather, and just hoping I can make it through an entire podcast without my respiratory system breaking down. Having young kids is so brutal.

11. Update to the $NAKA Trade

Yeah, I can’t imagine it. In a few years, I’ll join you, but for now, I’m good. Anyway, what were we talking about before? What I did want to talk about, because a few people have been asking me, is that it’s good to share our Ls so that people realize we’re not here scamming you like other people in CT, just pretending that we win all the time, which happens to most people.

We don’t. This Nakamoto trade that I posted has not worked out particularly well. Jonah and I talked about buying DATs at a discount to their BTC holdings when they were down. At the time, Nakamoto was at a discount to its holdings, but it wasn’t a massive discount. I think it was a 15% to 20% discount, and that obviously has expanded a decent amount. I think Nakamoto’s down maybe 20%, maybe 25%, since I bought in.

There’s a great post by this guy named CryptoBrandon, who did a little bit of math, and I retweeted it. I went through and checked the math, and it was pretty solid, I think. Basically, what you’re looking for is a 30% to 40% discount. I think that’s really good, and that’s kind of where it is right now, at 1.15, with Bitcoin at 113.

I probably pulled the trigger a little too early on that trade. I think I bought in at a discount that just wasn’t enough; I was getting a little too excited. I made the cardinal sin of getting too excited about a trade that I had planned out in advance. Instead of waiting for it to hit the level that I probably should have waited for—which is this 35% discount, where it is right now—I bought in at a 15% discount. So, obviously, now I’m down on that trade.

What I do in those situations, when I lose but my trade is not necessarily invalidated, is just size it down. I basically sell half of what it was to cap my loss on that trade but to keep me in the trade, because I still don’t think it’s a terrible trade right now. I just got in a bit too early and risked probably too much capital. That’s how I deal with those trades: I size them down.

Where I would be invalidated on this is if we spent a month below a 30% discount. I’m not super confident that we get a closing short squeeze anytime soon, because I think what actually ends up happening is that over time, more DATs are going to end up at discounts. So you probably have an increasing supply of things that you could buy at a discount, which makes this one instance of a substantial discount less attractive.

12. Investigating DAT Insider Trading

The other thing I’m watching out for is that there are—and this is pertinent to you and your love for likely Ethena—they’re investigating DATs for improper trading. The SEC just announced this investigation. I’m not saying I know anything with 100% certainty. What I’m saying is, it’s very odd how all of these tokens went up and then a DAT was announced. Very odd.

So, yeah.

So, I guess what I’m trying to say is that with these investigations, some of the altcoin DATs are probably the most at risk. With Bitcoin DATs, you can’t really front-run a Bitcoin DAT. They’re not going to buy or raise enough money to really move the price of Bitcoin. Even if they raise $5 billion, Saylor, when he buys $2 billion, barely moves the price of Bitcoin these days.

So, yeah, my AERO/ENA trade that I got so much loathing for—trade idea, I should say—is up like 40% since I put it out there. I wish I’d put it on. I still have AERO, but that’s down. I should have had the ENA short.

Basically, these DATs—the official headline is, “SEC and FINRA reach out to crypto treasury companies about leaks and unusual trading before announcements.” It’s so bad, obviously. The last thing you need if you’re a brand-new DAT is an SEC lawsuit. Those things are expensive. Your legal bill is going to be like $10,000 to $50,000 a day just maintaining that. It’s so bad.

These DATs, they’re not like—it’s not like Microsoft Corporation converted into a likely Ethena DAT and they’re using revenues from sales of Microsoft Office to fund Ethena purchases. These are just companies spun up out of nothing. They have no revenue, and they just have a bunch of clown-shoes investors willing to buy a dollar’s worth of likely Ethena for $2 via a DAT instead of buying a dollar of Ethena for a dollar on Coinbase.

So it’s kind of like these things are a house of cards in the altcoin world. I’m not talking about MicroStrategy, or Strategy, or whatever it’s called. I’m talking about the altcoin DATs. They will be forced to sell the altcoin, right? They’ll be forced to if the legal fees stop them out, if they get a cease-and-desist or a Wells notice that actually has enough weight behind it to stop them out. They will sell tokens because they’ll have no other choice to stay alive.

Or maybe they’ll just say, “This isn’t worth it. We’re going to unwind this whole thing and go do something else. We’ve been in business for 30 seconds. We don’t want to spend the next 6 years tangling with the SEC. We may just comply and stop doing what we’re doing.”

For sure, there’s been some insider trading and front-running, which is blatantly illegal. If the Trump administration’s SEC is investigating a crypto project after all of the carte blanche they’ve handed out, there must be—there’s probably something very real behind this. So I would imagine you’re going to get an altcoin DAT apocalypse.

I guess it’s tempting to look at Plasma outperforming other alts and be like, “No, I can make money trading altcoins.” But I do think that a few altcoin DATs blowing up could lead to a broader altcoin sell-off, just correlation-wise. I don’t really see it being like just a few DATs blow up and only those tokens go down and the rest of alts rally. When money is getting lost in alts, everybody in alts kind of loses.

13. What’s the Trade?

Yeah. I think that’s fair. Unfortunately, that’s been true with the market more recently. Alts have just not been doing well. What’s been doing well are all these crypto stocks: Galaxy is up 10% today, HOOD is up 10% today, and gold has just been on an absolute tear.

I’m still very, very long gold and silver and miners and everything. What was really funny is that everything I talked about on the last podcast went up way too fast. Uranium, the rare-earth minerals, gold—all this stuff just continuously ripped, anywhere from 5% to 10%.

Meanwhile, crypto’s sort of gone sideways, but Bitcoin’s starting to look better now. I’m just looking at the chart. Whenever you get a drop like that—like that drop from 113 to 108—and then just an immediate reversal, that tends to indicate strength in the market.

In the beginning of this, I said, “Hey, looks like we might range for a bit.” I still tend to hold that. By range, I mean 108 to 120 looks like a good range. So maybe we can get back up to that 120 level.

I do think that if the market rallies here, Bitcoin is going to rally first. We’ve actually had a pretty good period of alt season, where a lot of individual alts ran really aggressively. ETH ran really aggressively. Solana ran really aggressively. Then you had these individual pop-ups.

Now Bitcoin’s leading the market again. Bitcoin’s up more than ETH, more than Solana, more than XRP, more than all these other alts, which to me is a sign of strength. That’s a thumbs-up.

That's what you want to see in a strong market. So maybe I'm wrong. Maybe we do run, but I think if we run, then Bitcoin's it. Bitcoin's going to run, so I'll probably rotate back a little bit to BTC.

14. Ideal Crypto Investment Product

I had an interesting idea for a crypto investment product. Basically, there are a lot of projects out there with gigantic treasuries—hundreds of millions or billions of dollars' worth of their own token. Obviously, they're bullish on that token; otherwise, they wouldn't have created it and held on to so much of it. But I think it would pay for a lot of those projects to diversify, and I think the product they should diversify into isn't just BTC.

It should be a product that's mostly BTC—basically, a portfolio that ranges between 75% and 95% Bitcoin, and then the remainder is a rotation through just high-quality altcoin narratives or L1 narratives, with a bit of discretion around it and the right managers. I think that should outperform Bitcoin over the long run and perform with Bitcoin over the short run. That's probably a treasury product to bundle together on—I don't know what protocol. Maybe you could do it on a protocol really easily, and then the managers, instead of charging 2 and 20, should charge 50 bips and 0, because it would just be an asset aggregation product.

I think that's a good idea. I think after this livestream, I'm going to go call them up.

15. Is the 4-Year Cycle Dead?

Yeah, let's do it and let them know. But what do you think? We got a couple of questions in the chat here. Do you think that the 4-year cycle will end by the middle? Is the 4-year cycle still a real phenomenon?

I refuse to answer this question anymore because we've answered it a lot. I think the easiest way to frame this is just go to the Bitcoin chart and look at it on the weekly. Put it in logarithmic mode and look at it on the weekly. The 4-year cycle is over. We've been going up in a straight line—not in a parabolic line—since the bottom of November 2022. It's over, in my personal opinion.

Yeah, this cycle looks nothing like any other cycle.

Yeah, it's different. I think this is the steady 25-year grind higher, and it would be a shame to stop out now because you think the 4-year cycle is over and then miss 21 years of greatness.

I mean, the chart just looks so radically different from the other cycles.

Yeah, I mean, it's over, man.

Yeah, it's over. Should I shill Meta before the show is over?

16. Jonah’s Meta Thesis

It's just a normal asset.

Can I shill Meta? Non-crypto bet.

Why?

So, I got into Meta around $500 a share. Very happy about it. This is one where you can commit big bucks. It's like Bitcoin, basically. It's something that you can get super confident in and pretty low risk to the downside. The reason why I think Meta is going to take off—we're not talking like 10x returns here, but I think it could be a 2- to 3-bagger over the next 2 to 3 years, which is damn good for a single-name stock, especially a mega-cap—is twofold.

I heard a really interesting Elon podcast recently where he said that if you 10x the compute for an LLM in terms of training it, it improves by 2x. So basically, your curve of investment to quality is logarithmic, not exponential. What that tells me is that Meta, given what they're investing, will catch up to the bleeding edge of AI, and then they'll have the biggest distribution funnel in the world for their LLM of choice. They'll probably open-source it and then use it to target ads better than anybody has ever targeted ads in the history of the world.

So basically, pillar number 1 of my thesis is that they're going to catch up on AI. They're behind right now, but it's not priced in. What's priced in is them sucking at AI, and what's not priced in is them basically being as good as ChatGPT, but free to use. Then you end up just dreaming about products because they've incepted you so cleverly, buying them, and then they get paid.

The second pillar of my Meta thesis is that I think there's like a 25% to 30% chance that their smart glasses become the new computing platform of the future—the new iPhone. I don't know if you've bought yourself the new iPhone 17, but it's the same as my 13 mini. My wife got a new one. I still have my 13 mini. It does the same fucking thing. It's crazy. There's no innovation there.

So if Meta produces a new computing platform—i.e., AR glasses that people migrate to—then they've just become the new Apple. That's like another $3 trillion worth of market cap that you tack on to Meta, at least, if not more, plus all the AI advantages and synergies associated with that. Right now, I think Meta is getting penalized for AI and penalized for their investment in AR. They're just like, "Oh, Zuckerberg's on some chasing-windmills, Don Quixote-style thing. Let's penalize Meta stock for that R&D instead of giving them credit."

He did do this already with the metaverse stuff, right?

Yeah. So I think that's what people are responding to. But that's where I think the market is being shortsighted. I think he's being penalized for 2 things that should reward investors bigly. And he's the only founder-mode guy left in the Mag 7. The rest of it is just being run by basically consultants.

Well, no, except for likely Jensen Huang.

Oh, yeah. You're right. Sorry, forgot that one.

But—

Yeah, generally agree with you. Okay. All right. Well, maybe I'll go buy some Meta. I'll have to take a look. Basically, I have Meta instead of the allocation that I would have put in the Nasdaq ETF. I have it concentrated in Meta, and I think that's smarter.

Because you think that they're going to massively outperform the Nasdaq in general?

Okay, I'm going to have to go look at my portfolio. Maybe I'll send it to you. You can be my consultant.

Yeah, love to debate these trades out in the open. That's what the 1000x podcast is all about. It was a great livestream with you, man.

It was a great livestream with you. Thank you guys for listening to us. We will be doing this every week now that we figured out how to livestream.

Hell yeah. Till next week.