油价冲击期间如何配置仓位

What's up, Jonah?

Yo, we're live. It is a great day. I got to see Trump threaten to end civilization. This is something that I never really thought I would see coming out of the presidential office.

Yeah, it's the second time we're at this. It's like a biblical statement. It's the second time he's done this, though. I think he threatened to totally destroy North Korea during his first presidency, which, if you take that literally, would be pretty drastic.

You have to separate what Trump says from what he actually does. He is a loudmouth, he loves himself, and he says a lot of crazy stuff. “Grab them by the pussy” was one of his viral moments. This is another one: “End civilization.”

1. Impact of The Conflcit in Iran

I think he's doing the thing where he comes out with a crazy statement and then ends up settling for something far more normal. But the thing is, this time he doesn't have that much time. That's really the key issue right now. He keeps giving us deadlines for Iran to back down.

By giving deadlines, I mean he's doing what Obama did in Syria in 2014, where he draws this red line. If the red line is crossed and nothing happens, that gives the other side basically all the power in the world to continue to do whatever the hell they want to do.

That's really the issue that we find ourselves in right now. Short of boots on the ground, it's very difficult to see an end to the war. I was under the impression that what Trump was going to do was have the balls to go all out. I guess the answer is, we'll see. We'll see what happens in a day.

But if he keeps pushing this deadline forward, which I wasn't necessarily expecting him to do, one, it just creates an overhang over the market. Today, the Nasdaq is down 1.2%, the S&P is down 0.8%, and the market is basically just ranging right now, waiting.

What we have right now is that we've contained the downstream effects. If the war ends without much more damage to oil refineries and without much more damage to general infrastructure, we're probably going to be okay. We're probably resuming the bull market.

If we continue to see bombardment of oil infrastructure, if we hit the power plants in Iran and they come back and eliminate the Qatari oil fields, that's obviously going to be really bad for what everyone's worried about right now, which is stagflation: the roaring back of inflation and the muting of growth.

And the growth—where is it? Really, the growth has mainly been coming from the Magnificent 7. The Magnificent 7 is also cutting a bunch of jobs. If we get into this world where we have rampant inflation because oil is going up and increasing input costs everywhere, and even in our growth sectors we're getting job cuts, what is the Fed going to do?

The Fed is supposed to cut rates in the face of job loss, and it's supposed to raise rates in the face of inflation. What do you do when you get both? It's a tough situation for the Fed to be in. It's also a tough situation for the U.S. economy to be in.

Basically, my hope here is that we really do take this seriously and we go in, because otherwise we might be in some trouble.

Yeah, I think so, too. I think you've phrased it pretty well. There are a couple of comments I would add. The first is: Does Iran have the capability to take out other regional production assets?

No one cares about Gulf refineries—Persian Gulf, Arabian Gulf refineries. It's whether they have the capacity to take out infrastructure. Can they do what they did in 2019 when they hit Abqaiq? Can they destroy Qatari gas fields? Qatar actually doesn't have a lot of oil. Could they destroy Saudi oil fields? Could they destroy Basra in Iraq? Could they destroy the terminal where all the boats load?

If that stuff starts happening, you could see $200 oil, and it would be crazy. Maybe I'm a little bit tainted because, during my professional oil trading career, pretty much every single war was an excellent fade. Ukraine obviously got out of control, but if you had the balls to fade Ukraine, you got absolutely minted.

There was really no Iran conflagration. There was a brief standoff between Iran and Israel in 2024 where it was tempting to buy oil when it broke briefly above $90, but then it retraced straight down to the low 60s in a straight line. I'm tainted because everything has been a “nothing ever happened” trade for a very long time.

If something happens, sure, you get hosed if you fade it quickly, but if you take your time and fade it intelligently or express your trade properly, fading is always the right trade. Commodities are mean-reverting assets. We've said it a thousand times: high oil prices solve high oil prices.

This time is weird because I think everybody, from Donald Trump all the way down to little old me, believed that this would have played out the way Venezuela played out: a surgical strike, massive technological asymmetry between aggressor and defender, bad guys losing Hollywood-style very quickly, good guys winning with minimal casualties, and there you are.

Honestly, just stepping back for a second, I really do think this is a just war. I think it is important not to allow jihadi, suicidal, apocalypse-worshipping death cultists to obtain nuclear weapons. We can debate the timing and the execution of this operation, but in general, I think the risks of inaction outweigh the risks of action.

We could have had a wide-open Strait of Hormuz for another 3, 6, 9, 12, or 24 months—whatever it was—until Iran got nuclear-tipped ICBMs that worked. Then I think you would have had the whole world economy held hostage, with much higher stakes, potentially forever, over grievances that are impossible to solve without pretty much everybody converting to Islam.

I have nothing against that religion. I'm more just talking about the particular strain of it that the Ayatollahs worship.

I understand why this happened, and I understand why Donald Trump did what he did. I guess where we're all scratching our heads now is how it can be that, with all of the world's most advanced aircraft carrier systems, radar airplanes, and crazy technology pointed at this relatively thin choke point, a few dinghies, a few sea mines, and the odd cruise missile that shouldn't have been allowed to be operational at this point can keep the Strait shut.

I think what the Citrini article that came out—which we should discuss—suggests is that it's actually not as shut as it looks, which is my hunch as well. I think oil is telling you that. If this choke point were actually 100% shut off, I think oil would already be trading at $200 a barrel.

It kind of is in certain locations. You read stories about the Philippines, Mediterranean jet fuel, and European airlines shutting off certain flights because they can't afford to run them profitably anymore because of jet fuel shortages. There are all sorts of weird, random product shortages and inefficiencies, but I'm still of the notion that oil has a way of twisting people's arms.

If you stick around at these prices, enemies will link arms, sing “Kumbaya,” and reopen the Strait. But I've been wrong so far, so I guess it's still a waiting game. I don't know. What do you think?

I think a big part of it is what you said. It's also that we really did think—me, you, Trump—that it was going to look a little bit more like Venezuela. I think that came down to a fundamental misunderstanding of the structure of Iran, how long they had been prepping for this moment, and how many people they had in reserve.

Think about it. If I were to tell you, “Okay, you've taken out 40 of the top leaders of Iran”—for any country, I come to you and say that. I say we took out the top 40 people in Venezuela, or the top 40 people in Cuba, or the top 40 people in basically any country. Take out the top 40 people in the U.S. What's going to happen? It's going to be chaos.

Maybe not in the U.S. I think we have a lot of contingencies and backup, but I do think that Iran, for a smaller state, was able to actually hold together better than people necessarily expected.

I think that's really the crux of the issue: Even though we have complete air superiority and have been demolishing their stockpiles, they're still able to inflict damage. That, I think, is also just a consequence of the nature of war.

Five years ago, prior to the Russia-Ukraine war, war was a lot more symmetric, right? You inflict damage with heavy artillery, you inflict damage with tanks, and you inflict damage with fighter jets.

You inflict damage with ballistic missiles, and all these things cost a lot of money. You inflict damage, of course, with troops, which cost political capital and a lot of power.

Now, post-Ukraine, Iran was supplying a substantial amount of drones to Russia, and through that exercise, I think they learned the ability to conduct very asymmetric warfare. That's another major issue. So then the question becomes: How much does this impact the markets, how long does it last, and what do you do as an investor when you're faced with this?

Well, number one, as you said, oil is a commodity. Commodities—except gold and silver, which I'm not going to consider commodities, though some people do—solve the problem themselves when they get too expensive. People simply don't buy them and stop using them, and/or production and supply come online 10x.

That's possible. I don't think Saudi is at maximum peak capacity right now, probably not even close. So obviously, what's going to happen is, once we clear the next month, maybe 6 weeks, of this, I think there's probably not a lot of political capital in the United States to keep this going past another 2 or 3 weeks. I think that probably gets reined in, and then what you see is massive increases in oil production. And so then—

One quick note on that: Saudi is currently producing the most. It is currently exporting the most that it can. Saudi is connected to the Red Sea and to the Arabian Gulf, and it has what's called an East-West pipeline.

Saudi probably can't export much on the east side because that's choked by the Strait of Hormuz, which is severely constrained. However, that pipeline is probably maxed out at roughly 4 million barrels a day to the west, so Saudi is probably exporting as much as it can out of the Red Sea.

Unfortunately, its maximum export capacity is something enormous—like 10 to 12 million barrels a day. So it can't export even close to what it would be able to if both waterways were open. But if both waterways were open, prior to this war, Saudi was probably producing about 2 million barrels a day below its maximum production point.

Saudi just came out and said—I believe it was yesterday—that as soon as this war is over, it is going to max out to re-stabilize oil markets. If you quickly look at the oil chart, there was a wick, I believe on March 9, all the way up to $120. If you treat that as the high point, oil has basically been unchanged for the last month. We've been in this price range for a month already.

There's a lot of hot air and freakouts going on online and in the news media, but in general, prices have ultimately stayed where what should be a $50-a-barrel oil price has stabilized at around $110 for a month. Given the circumstances, that's more stable than I would have expected, frankly.

Well, I think a big part of that spike, which we've talked about before, is what we're trying to figure out: Why did oil do what it did? What you keep telling me, and what people keep telling me, is that every single person in the oil business thought that fading would be a good idea.

That spike is probably the result of a lot of people coming in and trying to fade the move and then getting blown out. When that happens, you go to irrational prices. I view that as an irrational move solely due to positioning. That entire move was solely due to positioning.

It was a bunch of people who got really short oil, including the Vitols of the world, maybe the Glencores of the world, everybody, and the Goldman Sachs of the world. They and their traders all got blown out and carted. Everybody except for Andrew Ross, as we discussed. And so—

2. What’s Driving The Oil Volatility

I'm sorry. Go ahead.

No, what's crazy? Usually in these situations, you have 1 or 2 hedge funds crushing it. Ninety-five percent of the market is losing. This is the kind of move you get when the consensus trade is blown out of the water.

You get orderly moves when everybody's winning, and you get super-disorderly, wild moves when most people are losing and panicking. Usually, the contrarians are winning when you see price action like this. That's 5% of the market, or 2% of the market. Everybody else is losing their shirt.

The people that always win, Avi, are the physical guys, right?

Because physical guys are long volatility for free through the contracts they have that pay them more when things get hairy. However, this is probably the first time in my lifetime where the physical community is getting nuked.

The reason is that the very volatility they should be profiting from is embedded into physical contracts, and they're unable to perform on those physical contracts because of a clause called force majeure. Force majeure, for those who aren't aware, is embedded into every physical contract. It says that if there is an act of God or something similar, there is no physical long and no optionality when futures rip 100%.

Yeah, that's treacherous, Avi. It's ugly right now, and that's adding to the volatility because they have to buy back.

People complain about auto-deleveraging in crypto. This is the biggest form of auto-deleveraging that's ever existed. They close out one party of a trade and then say, "Good luck" on the other. So not only is every hedge fund stopping out of the trade—are these people not auto-hedged on the other side?

No. Basically, if you're long—

I'm talking about this: If you're buying from Qatar, you're short oil. Is Qatar not long oil and selling to you? They're selling their oil. They're long the contracts. In theory, you could just cross the contracts with the other person.

So Qatar—again, a terrible example, because it doesn't have much oil—but let's just say it has a little. Let's roll with this. Sorry.

You know, for your average 95-IQ human, which I am, oil and gas are basically the same thing. I consider myself to be a relatively balanced, normal, undiseased person, but I have a certain type of autism when it comes to commodities, and you just witnessed it there.

Basically, Qatar's oil—Qatar has zero oil. They have a lot. They got a little. They got a little. Okay, so let's say that you are Glencore. Let's walk through the anatomy of the trade, because this is important. This is what's happening in markets right now.

So everybody understands why, if a hedge fund came in short oil because everybody thought that oil was going to $50 because the oil market was oversupplied, every hedge fund stops out of its short trade. We all—and by the way, I have to look at the exact statistics, but billions and billions and billions of dollars poured into short-oil ETFs.

Yeah.

Which again tells you it wasn't just hedge funds on the trade. It was almost normies on the trade, too.

Yeah. A lot of people, I think, realized—because if you remember back in 2022, before you get into this, and this is why pattern matching can be difficult and can't be the entirety of your trade. You can't just match this pattern to a previous pattern.

Every other time something like this has happened, people were talking about $200 a barrel of oil when Russia invaded Ukraine. People were talking about a massive oil spike, and guess what? Literally nothing happened. People attempted to use that to paint the Iran situation as the same.

One difference is that we don't have the president of the free world threatening to nuke the country that they're currently at war with. I think that's rattling markets a little bit today.

More generally, Iran has had an actual stoppage in shipments right now. Whereas in Russia, it seems like what ended up happening is that Russian oil still hit the market in the exact same amount, just under different names.

Russia-Ukraine was a perfect example of high prices solving high prices. The whole world was like, "We're not going to touch Russian oil. We're not going to fund this new campaign against Europe, the first campaign since sort of World War II, right?"

Then oil hit $140 or $147, or wherever it topped out, and a few countries—particularly India—were like, "Okay, we're going to buy all the Russian oil we can. Sorry, I'm not sorry. We're just not going to go into a great depression here and have everybody starve to death."

Again, high prices solve high prices in commodities. But what's going on here with the price action? The implied daily move, Avi, is basically this: There's an options market, and the implied daily move—the price of options—tells you how much the market expects the price of the underlying thing, whether it be Bitcoin or oil or whatever else, to move per day.

The July straddle is pricing a $6.50 move per day in the price of oil futures, which is ridiculous. In a normal market, it's basically $1 a day. So oil right now is roughly 6 times as volatile, or more, than it should be in a normal environment.

Why is that? It's because most of the community is sidelined. Retail is getting stopped out, per your comment about short ETFs. Hedge funds and other speculative players with no actual physical business are getting stopped out.

Normally, the people who should be dampening volatility are the physical traders. They're like, "Ha ha ha, look at me. While the world, while Rome burns, I'm profiting." That's usually how it works in physical communities. I've seen it a few times, and it's pretty awesome to watch these guys basically rooting for society to collapse while they simultaneously get rich, because that's when you have the most spending power.

That's literally the antifragile nature of trading, except here, because of force majeure, what's going on is—imagine Qatar signs an agreement with Glencore for Glencore to buy Qatari oil. We're sticking with Qatar because they do have a little oil. Glencore is now long a bunch of oil. They're taking delivery of however many barrels a day forever, or for some 2-year term or something.

They're not just going to stay long the price of oil, buy from Qatar for $80 a barrel, and then, let's say, the price sells off $5 a barrel before they end up selling it to a refiner. They're not just going to say, "Oh, well. Oh, shucks. I just lost $5 a barrel on this cargo. I'll make it back on the next one." That's not how it works. They basically hedge that by selling either swaps or dated Brent or futures, or some combination of financial instruments, against the physical oil that they're long.

So, when Qatar taps Glencore on the shoulder and says, "Hey, I can't get insurance to put this cargo through the Strait of Hormuz," or Glencore basically has some force majeure invoked along the chain—I don't know the exact mechanics, to be honest—but basically, then the company that's long physical, let's say Glencore, long physical and short financial, is no longer long physical. The physical contract has effectively disappeared because of force majeure.

This happened to me once in my career, when I had a pipeline that got basically destroyed and then mined, which made it very hard for technicians to get in there and repair it because there were landmines. I was just left with the financial hedge, and the physical position was gone.

So, then what do you do? You have to get out of the financial hedge because, if you're Glencore or Vitol or whoever, you're not necessarily comfortable just wearing a gargantuan naked futures position while oil is moving $6 to $10 a day. You can't stomach that volatility. You get stopped out. Your hedge isn't a hedge if there's no underlying position to hedge, right? It's just a spec position now that you don't want.

So, that's another reason why oil is moving so much. All these physical guys are just getting tapped on the shoulder by the risk management team and getting stopped out of these trades. They'll have to put them all back on again as soon as the contracts come back into effect, which will accelerate the pace at which oil tanks when this eventually resolves itself.

But in the meantime, what the price action tells you is that, A, no one is taking risk; B, people are getting forced out of whatever risk they have; and C, the collapse is going to be very fast when the situation ultimately mean-reverts, which I fully expect it to.

This is the end of my rant. I know I've been talking for a while. Basically, what's going to happen is, like you said, the entity that stopped out in the previous war scenario in Ukraine was India. They were like, "All right, that's it. We're taking the Russian oil." China had been taking it the whole time, but India was the one that capitulated, and, to some extent, Europe as well.

This time, the entity that's going to capitulate if oil stays up here for too long is, I think, Donald Trump. He can't stomach a gas crisis like the one in 1979. He will find an off-ramp that makes him look less bad than a gas crisis, and that off-ramp will be taken. That will be the end of this. So, if you can stay solvent until then, you're good.

3. Positioning During an Oil Price Shock

I do not expect a nuclear war in Iraq. I do not expect a prolonged, boots-on-the-ground, Iraq-style conflict. This is going to wind down. There's zero political will for an elongated boots-on-the-ground conflict. I think there is still political will, as Trump says, to "bomb them back to the Stone Age" for the foreseeable future.

4. How to Get Long Stablecoins

So, I think what's probably going to happen is that we are going to hit the power plants. We are going to hit some critical infrastructure in Iran. We are going to try to force them to come to the table because, as much bluster as Iran likes to give, if we do hit their critical infrastructure, I think they end up coming to the table.

The reason they think that we won't is because, historically, the US has been beholden to international law and beholden to its allies. But what the US is realizing from this particular dynamic is that Europe is no longer a real ally of the United States in any meaningful way when it comes to fighting against China.

That's really because Europe, as much as it has its economy tied up with the US, also has its economy tied up with China. It kind of has to play neutral. If it doesn't play neutral, then one part of its economy or the other collapses, and I think it's going to try to thread that needle.

That's one of the reasons why Europe hasn't really come out in strong defense of this war with Iran: It's now stuck in the middle. It also doesn't have the political willpower to actually increase its defense spending. So, what you're going to continue to see is American defense spending far outstrip anything that Europe could do.

Now Europe has started to become irrelevant on the world stage because of its decision-making to effectively remain neutral and not ally with either the US or China. I think this probably gets worse over the next 5 to 10 years, not better. Europe doesn't come to us unless, of course, we manage to score continuous, decisive victories against China. Then perhaps it comes back to us.

So, long story short, I think this war—we have political capital for the next 2 to 3 weeks to get this done. We're probably going to hit their infrastructure, and then we're probably going to come to an agreement. Once that happens, oil probably comes in a ton.

Yeah. And at that point—

Everything else rips. At that point, we have to think about what is going to happen with the markets. What is actually going to happen with the markets?

There are fears that if oil comes in a ton—let's say oil comes in from the $115 that it is now to $80—that's still much higher than it was before. So, the question is, are we going to see growth come back? Are we going to start to see the Mag 7 start to perform well again? Is investment going to come back, and are we going to have enough deflationary gains from AI to offset the inflationary pressure from oil? Or are we going to go into this stagflationary environment?

That's really the question that we have to answer, because it matters a lot as to what you buy. There's a world in which, let's say, oil doesn't come back in, but the Fed has to cut rates because the employment numbers and the manufacturing numbers still look bad. I want to be as deep in gold as possible.

I'm watching employment numbers and inflation numbers like a hawk because, if the US dollar comes under pressure because of this, I'm watching gold and silver for another massive rally. Potentially, this is the rally that takes us to $6,000 or $7,000.

If what we see in the numbers is that oil comes in a lot and inflation remains reasonably stable, then I'm all in on US tech stocks because I think those guys are going to rip. It's a no-brainer.

My portfolio is constructed to think about the 2 different scenarios. When you're constructing a portfolio, obviously you have to weigh the probabilities in your mind and then try to create a portfolio so that you get paid out on the asymmetries.

The way that I've been thinking about it is that, generally, I think it's more likely than not that the war ends, oil comes back in, and tech stocks absolutely rip. I can hold those in spot and then also hold some gold calls on a 6-month time horizon. If 3 months go by and the data doesn't come through, I'll probably flip them to 12 months.

The core is US tech stocks because I'm more bullish on that scenario happening. The smaller subset scenario is that inflation does come back, and I want to have gold in that world because I think that you can easily get $6,000 gold if central banks start buying up gold post-war again and your average investor starts buying up gold post-war again to hedge against a US dollar decline.

Yeah, it's kind of an interesting feature of the market that central banks are not hoovering up gold on this dip.

And it's probably that some of them have been selling gold to shore up their balance sheets.

Precisely.

I think that's what's keeping gold down right now. Gold is kind of a reflexive asset, like Bitcoin, in that sense, and I think what we're learning here, which I think is super interesting, is you have gold, which should technically be performing in a crisis, but it's not. That confirms my hypothesis that gold switched from being a risk-off asset to being a risk-on asset somewhere in the middle of the Ukraine war, for reasons previously discussed. But I think what we're learning about gold is that once it's a risk-on asset, governments can't dip-buy it the way that they dip-buy commodities and pop-sell commodities. So, like you said, gold is no longer a commodity. It's basically a financial buffer that governments sell when they're afraid they may have to subsidize gas prices to prevent civil unrest.

But when times are good, they're busy hoovering gold on the highs because of some de-dollarization narrative that may or may not play out over a 50-year time frame. So gold is really something where you have alpha as a retail trader: dip-buying and pop-selling. It's not something where you should be going all-in in the eighth inning of a rally, per my comments when we were in the eighth inning of that rally. So that's my 2 cents on gold. Back to oil for a second: you mentioned thinking in probabilities.

I don't think we can get stagflation without a prolonged commodities crisis. A prolonged closure of the Strait of Hormuz would probably lead to stagflation. In fact, it almost definitely would. I think there's a 90% chance that doesn't happen. I would say a 10% chance we get prolonged-crisis stagflation, and a 90% chance this resolves itself within a few weeks.

And barring stagflation, to me, I'm a bit more of a medium- to long-term time-frame kind of guy, because as I get older and grow more gray hairs, my excitement level about day trading and short-term trading wanes.

I thought you looked like a young, sprightly chicken to me.

Thank you. I appreciate that.

You're looking a bit as old as I am alongside me, Jonah. What are you doing? Come on.

Well, Nicholas Bernoulli in the chat here said that my facial hair is a war crime. What's a bigger war crime: what Trump's about to do to Iran or what Jonah's doing to us?

[laughter]

I mean, what are they calling it on Twitter? They're saying, “Happy, happy bridge and power plant day.” Yeah, for those who celebrate. For those who celebrate, happy, happy Jonah facial hair day. How's it going? Am I looking at the right guys? Greta Thunberg is very, very pro-power plant these days. If it's Iranian power plants that are threatened, Greta Thunberg's all for them.

But back to what I was saying. Basically, I think I'm not trying to buy Mag 7 and then just sell it out. For me, SPY is just a better-hedged version of Mag 7 with slightly less volatility. So SPY is something I'm dip-buying right now. I had been dabbling in Hyperliquid; I got distracted and haven't really done anything in the last week because of Passover.

Given that I believe this is transient, all that matters to me is that I think this is transient. If I'm wrong about that and this results in a prolonged oil crisis, I'm going to lose a lot of money, or I'll at least have missed out on some big opportunities, and I'll have some pretty serious mark-to-market losses versus what I would have had if I didn't believe that.

So, given that I believe this is transient, I'm basically analyzing long-term mega-trends and just asking myself, “Is this giving me an opportunity?” The best trades I've ever done have been when I'm getting an opportunity to enter a long-term mega-trend, like GBTC in late 2022 after FTX. Am I getting an opportunity to enter a mega-trend for reasons that are somewhat exogenous to the mega-trend? Here, AI is definitely generating a lot of economic side effects, a lot of economic activity, and a lot of deflation. I think that, given what society appears to be prepared to spend on computation, I'm not going to say exactly what I'm doing because this podcast is about teaching you to fish, not about giving you specific fish and feeding you for a day, but to feed you for a lifetime.

If the mega-trend that I see is that humanity is just going to spend more on compute than before, I'm looking at ways to gain exposure to that, and some of them are discounted right now. The simplest one is Micron stock, but we could look beyond that to a thousand private investments.

I've been banging the drum on compute, robotics, whatever. I think I've been banging the drum on Intel for a long time.

Yeah. So there are those types of things. I think something that you can stash right now—Intel, by the way, has performed extremely well off the lows. Something you could stash right now on the back of Iran volatility that has nothing to do with Iran, and not have to look at for a year because you're in it for the long haul, is kind of how I would want to play any investment going into this.

I would not want to sell oil futures because of the volatility. You could get stopped out. The market can remain irrational longer than you can remain solvent on that one. But getting long defensible stuff that's getting hit because of Iran seems like a great idea.

I do think that whenever you get a war like this, or just general market downturns, what ends up happening is that people start focusing on the short term far more than the long term, because, for good reason, there are a lot of short-term opportunities that exist in the market. But that also means that capital can sometimes get reallocated away from the things that are good and growing and doing well and have a very, very bright future to these short-term opportunities, where people are just flipping in and out of coins and stocks and whatnot.

And so now I think what you're trying to say is that this is actually a really good time to go shopping for those mega-trends, to go looking for those assets that might be potentially overlooked, that people aren't getting into right now because they're far too focused on trading the short term. And this is a phenomenon that exists all the way from the smallest retail fish, all the way up to the largest hedge fund.

And so when I look at the market and I think about, okay, well, what are people overlooking right now? What is there to find in this market? I keep coming back to crypto, actually, because it really just has been so beaten down over the last 6 months. Basically, from the highs, people have, outside of our tiny little circle, literally nobody is paying attention to crypto at all. And I think this is actually providing some opportunity in the market, not just in Bitcoin. There are other coins that are starting to look good today.

I've got one for you. Here's one for you. If you believe—as I was just about to say, I was thinking the same thing right as you said it—crypto, and basically stablecoin payments as rails for the global economy, is another mega-trend that's just as strong as compute, right? Compute spend. What about Stripe?

You can buy that on the private market at a $90 billion valuation. That company, if you believe that payments—that agents will pay agents—and the payment volume via those types of rails will just 10x, why not just lift some of that? There are all kinds of ways to get exposure to these mega-trends while other people are distracted by Iran.

I agree. Actually, one of the most interesting things that we saw at Davos was an interview with the Western Union CEO. Did you see that?

Yeah.

People were talking about how stablecoins were going to kill Western Union. He was like, “Wait, wait, hold on. Hold on. Hold on. 1 second. We have the best distribution when it comes to payments—cross-border payments, bar none. Everyone uses Western Union right now. And the reason everyone uses Western Union is because we can instantaneously move capital from the United States to Nigeria like that.”

“But why can we do that? We can do that because we have a tremendous amount of capital tied up in these matching pools. So when you give us dollars, we have a pool of dollars and we have a pool of Nigerian naira, and we automatically switch between the 2 because we already own both. Then we can pay out the naira super easily to whoever's on the other side.”

“Now, with stablecoins, if I can do that instantaneously just because of the technology, I don't need to have that pool of billions of dollars sitting in the middle. So I can go take that pool of billions of dollars and buy my own stock.” I mean, I don't know if he'd actually do that, but it was a good point: these stablecoin companies are going to make a lot of payment companies more efficient. And they're actually going to lower the cost for a lot of these companies.

So not only can you get access to stablecoins through buying Circle, right? You can get access to stablecoins through buying payment companies.

Maybe it’s Stripe. Maybe it’s Western Union. Maybe, actually, that’s something I should probably spend a lot more time on over the coming weeks: figuring out which companies are going to benefit the most from stablecoin integration.

I think Stripe.

Yeah. You think Stripe? But why do you think Stripe?

The Irish kids who run it are the smartest. They acquire stablecoin infrastructure. They incubate it. They’ve got their Tempo. They bought Bridge. They’re already processing most of the payments.

You think Western Union’s distribution is good? Stripe’s distribution is way, way better.

Yeah, they’re completely different businesses, though, right? Western Union is for remittance payments. Stripe is for companies accepting payments. But the general point is taken.

I’m not saying it’s one or the other. I’m just saying I think that if you believe, as I do, that more value will end up on-chain—stored on-chain, transacted in one way or another, touching a chain—I think Stripe is better positioned to capture that entire value stack than pretty much anybody else because they kind of own e-commerce.

To me, Stripe is like Amazon when e-commerce was 5% of commerce in the early 2000s. Amazon was 100% of e-commerce, and you could just ride that wave via Amazon stock. I feel like efficient API-based payment is 5% of payment right now. A lot of that will end up being on-chain, and Stripe is 90% of efficient API-based on- and off-chain payment right now for commerce.

That piece of the overall commercial pie is just going to grow. So I feel like you have an Amazon.com-like play here that is crypto—not just crypto-hedged, but basically crypto-native—in 3 different ways at this point, with Tempo and Bridge and a few other integrations. Ultimately, it’s a wave you can kind of ride now because you can buy Stripe in secondary markets.

Yeah. I think the key to everything right now, and a good note to end on, is that you can definitely focus on short-term trading, and there are short-term trading opportunities right now. But I think the market, by virtue of everyone being focused on the short term, is overlooking a lot of really good things that are happening. Namely, the fact that we just entered into a massive war and Bitcoin has barely gone down. Ethereum is actually up. Solana is holding steady.

Actually, today, Lighter is up 5% on Bridge Day, no less. So I think we’re probably going to see, over the next 1 or 2 months, a resurgence in crypto. I know we’ve been calling for this for a while—for about 2 weeks now. I think I’ve been saying, “Hey, I think now is the time people are going to start buying crypto again.”

I’ll end with this: It reminds me a ton of October 2020, when bad news comes out. BitMEX is being investigated by the CFTC and the SEC, and Bitcoin just refuses to go down. Now, basically, from the top at 125 all the way down here, any piece of bad news is sending Bitcoin down 5%. Every piece of bad news is flushing people out of the market.

Now, if you get a war and Bitcoin can barely go down, the question is: Who’s left to sell? Right? Who’s left in the market that’s willing to toss out their BTC? I don’t know. It doesn’t seem like there are that many people.

Before I interrupted you and said that I thought Stripe looked potentially interesting, you were going to mention some other tokens that you thought were good value here because you said crypto’s a megatrend. I’m looking at crypto, not just BTC. And then you were about to mention some altcoins. Which ones, other than Plasma, which is up 6% today because our buddy Zahir is joining? Props to you, Zahir.

Well done, Zahir. It’s been great to see that going.

I love it. Cool. All right. Well, great talking to you as always, Avi. Don’t snooze on Hormuz. All right, guys. Take care.