承担100万美元风险，博取4700万美元 ETH 收益 — Koolkrypto

Yo, yo. Hey. How are you doing? How are you, dude? Nice to meet you.

Yeah. No, no, I've been watching your broadcast for a while now, but unfortunately the market is sickening, right?

I know you joined at a somewhat uncertain time, but I said, “Look, we have a sick guest. Distract us a little and learn something new.” You were on my feed recently. You're in the sun, and you did it quite impressively. Options trading, right?

It's funny—the first time I traded the markets was when I was about 16 years old, in the training room, trading options on Webull. To this day, I really don't know very much, so I'm glad to meet you and talk to you. Would you like to briefly tell us about yourself? When did you start trading, and what do you focus on?

Of course. I started dealing with cryptocurrency very early, back in 2010 to 2014. I mined Bitcoin, and then DeFi became my real introduction to cryptocurrency trading.

I wasn't really trading back then, so it was quite difficult for me, like everyone else on BitMEX at one time, on perps, and after the liquidation, et cetera. Options are actually a fairly new phenomenon for me. I didn't trade options very much until almost the end of last year, or the beginning of this year.

That's when I came across Derive—one of the best places, or almost the only place, to trade options on the blockchain. I started buying Derive when it was trading at $0.04. The market cap was around $50 million, and I thought that was ridiculous for the only real place to trade options on the blockchain.

Yeah, that's funny. Could you show me how you traded derivatives? Just walk me through the trade, because I don't know much about it.

It's funny that the hottest trade right now is in the perp meta. I think everyone is just talking about perps, and then suddenly there's Derive, a crypto-options platform. I actually got this from Tulip King. I didn't even know what it was before Tulip King started trading it nonstop, and I've seen a lot of your tweets. I know you post some P&Ls, too. So when did you come in? How did you trade this? Why did you trade it?

Are you talking about Derive, or the actual trading of Derive options?

Derive first.

Yes. Like I said, it was trading at around $0.04 to $0.05, and its FDV was around $60 million. Incredibly cheap.

It was an incredibly well-built platform. I was familiar with them back when they were Lyra. People have been trying to create on-chain options for 3, 4, 5 years, but without success.

Then it seemed like a lot of people, like Flood and Jez and a few other very influential guys, planted this idea in everyone's minds that options were just outdated. So you had this really good trading thesis, in my opinion, which was to trade against consensus and valuation, while everyone thought, “Options are obsolete. They were completely surpassed.”

All of these options projects were trading incredibly cheaply. I think a lot of people don't realize that options require a mature market to exist. All this hedging flow has to happen somewhere, and it was bound to happen.

It's like a guy is selling you a call option for an $80,000 Bitcoin, right? He has to go and hedge the delta he's selling you. Delta is exposure, and all of this needs to happen, especially for on-chain options to actually exist.

Most of these market makers are still hedging on Binance or Bybit, but more and more of them are hedging on Hyperliquid, Lighter, and so on. For there to be a good on-chain options market, there just had to be a mature enough market.

Everyone somehow took an analogy that I used: with options, it's like a guy who goes into his third year of high school at 5'5" and comes back at 6'5", having just had a huge growth spurt. That's what's happening now. Everyone has been joking around with options for so long because they naturally mature a little later than other markets.

That's a pretty sick analogy. Can you explain how bullish you still are on Derive? How high do you think it can go?

You see, I hate target prices. I commented on that, too. Someone asked me, “What's your target price?” And I said, “On Hyperliquid's TGE, my target price was $20.” We got to $20. I thought, “This is going to go up to $60.” We got to $60. I thought, “This is going to go up to $100.”

This isn't the kind of thing where you're constantly moving the goalposts, and this isn't revisionist history either. I have inflows and trades, as you know, and I place those trades to back them up.

It's about the same here: it really depends on the path. You need to watch it mature and see what happens in the market. Today's numbers are screaming that it's much higher, but at the same time, in 2 or 3 months it could be something else.

A lot of people don't realize that Derive is only seen as an on-chain-options play. What if it were seen as an Ethereum mainnet derivatives play in general? That would be a much easier estimate—practically 10 times larger at this point, right?

Setting a firm target price is difficult, but I think options and perps shouldn't be trading at the ratio they're trading at right now. I don't think Tulip King has a good way to phrase it. Why do people say that a fourth- or fifth-best perp DEX is more valuable than the first-best options DEX, and potentially a spot, options, and lending DEX? To me, this is just madness.

So I think it's a little higher. But everything can change.

I would like you to explain the psychology of how you exit trades with a high level of conviction and how you think about raising your target prices. I do it, too. I had a target for Zcash, and then it broke $1,000, then $1,200. You see all the flows consolidating the Bitcoin-to-Zcash ratio, you start to see it develop, and you start changing your goals.

How do you think about exiting a huge trade that has gone up significantly, by many percent, in your direction, while the thesis gets stronger as it goes higher?

That's a great question, and it's something I'm also working through. Often, a price increase actually strengthens the thesis. It's almost like a bell curve, where eventually it reaches a tipping point and you think, “Okay, people are getting a little too euphoric. These valuations are no longer justified by fundamentals.”

This is actually a more interesting question for you regarding ZEC because, with ZEC, it's such an impulse trade.

Yes, that's right.

For me, it's at least an opportunity to look at the fundamentals and say to myself, “Okay, you know what? The revenue they're generating is no longer supported by this valuation.”

But with ZEC, it's a kind of consensus impulse, which makes it much harder to know when to exit a trade like that. It's hard to even think about because all the numbers are fake, right?

Yeah.

In a lot of ways, I think revenue is what limits your growth potential, whereas the multiple can get so ridiculous that you think, “Okay, this thing is damn well overvalued.” You have preliminary estimates and the stock market to anchor your sales, but in a crazy bull market, that's a bit limiting.

For example, Hyperliquid can't achieve a thousandfold increase in revenue. Theoretically, it cannot achieve this. But it's all like a Silicon Valley meme from the show where we're always talking about going from revenue to income.

To income.

Yes, exactly. So ZEC people can say $20,000, and that's not unreasonable, because who cares? There are no multiples to really nail it down.

Yes, exactly.

As for these more fundamental types of income, they are much more tied to revenue. I would even say that many people make the mistake of looking at current income and overestimating it, as opposed to the actual growth potential.

This is an important point that I'm trying to convey to many people. The sector hasn't really grown that much in the last year or so. Hyperliquid's options volumes are not really growing tremendously, and I think they will grow. For example, in 2027, it's quite possible that the volume will grow by 50% or even 2 times in total.

On-chain options, however, are ridiculously early and are indirectly on their growth curve. It's quite possible that the volume of on-chain options could grow 5, 10, or even more times next year.

So it actually deserves a token like Derive, which is growing into a ridiculously large TAM, to have a much, much higher multiple placed on it. That's as opposed to Hyperliquid or Lighter, where they trade at pretty similar multiples, and you know when they're overvalued or underrated. They have lower and lower limits set on them.

They don't necessarily have the same growth trajectory as on-chain options right now. If you view Derive as a turbo bull, who is the marginal new on-chain-options trader?

Is it every guy?

Yes. That's actually what's particularly exciting. As I started implementing more AI and things like LLMs into how I negotiate my trades, it made me incredibly better. As I said, I wasn't much of a fan of options before this.

Hmm, I think this is one of those things where there’s such a strong tailwind for options traders that everyone is creating these agents and dashboards that abstract away a lot of the horrible interface and user experience of options trading and make it much easier. We’ll get to a point where someone can express their opinion in simple language: “I think Bitcoin will fluctuate between $85,000 and $90,000,” or “I think Bitcoin will go up to $100,000, but will be capped at $100,000 and will not go above it.”

All of these are trades that you simply cannot express through perps, but can only explicitly express through options. I think a lot of people who are into perps will realize that options and perps are actually quite similar. They’re very complementary in use, and you should use them together right now.

For example, if you have a huge long on ZEC right now, you can buy $1,200 put options on ZEC to protect yourself from getting liquidated, rather than delaying the sale if there’s some new hack where they say, “Oh yeah, maybe there were some tokens that were minted by the previous team.” They really complement each other, and I think a lot of people will figure that out over the next few months.

Good. You just touched on this, but if I’m pretty new to options, I generally understand the concept of convexity and how it works. Can you give me an example of why you would use an option as your trading tool?

Hypothetically, my friend has a huge net worth and is long ZEC at $1,350 with 2x leverage. Why would you buy $1,200 put options instead of buying or entering a short?

Because it’s a completely different perspective, isn’t it? Put options are insurance. You don’t think the price will drop, but you buy insurance in case it does. With shorts, you now just have a clean short. I would never want to be short ZEC, but I think put options on ZEC are more interesting because then you have a very fixed downside.

For example, those $1,200 put options will cost you—I have no idea; I’m not looking—but let’s say $50 or whatever. That’s your maximum damage. You buy 1,000 ZEC put options and think, “Okay, cool. If the price goes up to $2,000, I’ve lost $50,000, and I know exactly what’s happening.”

But if you have a short position on ZEC and it goes up to $2,000, you’re actually in a short position, not just hedging against risk. You have no upside potential. This is a way to preserve some of that upside potential.

As I mentioned, the whole point of options is that you can make a huge number of different transactions. You could sell 1,000 call options at a $2,000 strike for the end of the year and use that premium to buy a few put options at $1,200. That would probably be pretty neutral.

Essentially, you’re capping your upside at $2,000 and your downside at $1,200, while still getting all the upside up to $2,000. That could be a very attractive trade for someone sitting on a stack of coins who’s a little scared of the market right now and thinking, “Okay, $2,000 could be psychological resistance.”

It’s a very attractive trade, and it’s something you just can’t replicate on a perp basis, because with perps you only have delta. You’re either long or short.

Thank you for that. You posted, by the way, that you had the first derivatives P&L card I’d ever seen. They used to be really bad, but they made them a lot better. I started showing some because one guy said something like, “Nobody who’s set up with Drift actually uses Drift.” I thought maybe it was the other way around—that I’m quite optimistic, and I’m one of those people who actively uses it.

You posted this on August 28, a while ago. I understood the essence of the ETH move from $2,000 to $2,400. Just the main points, because I’m cutting this down now. You posted this long post—I read it earlier in the stream—and you posted this $1.5 million P&L. The call spread play is a monster.

Can you tell me about this trade, specifically the psychology behind options versus perps, what you bought, what vehicle you bought, what options you bought, and why you traded that way?

Of course. ETH had a very similar thesis to the much larger Bitcoin trade, which was worth around $3.5 million. It seemed like the major crypto assets were trading pretty similarly, but it was still the same thesis.

Basically, during the summer, all the regular traders go on vacation, on their yachts or somewhere else. Trading drops, and then volatility—which is how options are priced—drops sharply. In late July and early August, volatility was trading between the 1st and 5th percentile levels over the last year. It was incredibly low.

That means people were predicting an incredibly small move in Bitcoin and ETH. Bitcoin was trading between $60,000 and $63,000, oscillating back and forth for weeks, almost months at that point. ETH was moving from $1,600 to $1,800.

You were essentially getting a very cheap lottery ticket. I bought these call spreads at $2,200 and $2,400 when ETH was probably trading around $1,680 or $1,700. I was probably scaling into the position, but I don’t remember exactly what the price was.

The bet was that ETH could rally and have another leg up. I didn’t know if I wanted to be in a long position that could just go down to $1,200 or something like that, but I was pretty sure the bottom was already in. I liked what was happening with Saylor, and I liked what was happening with the market in general.

I wanted really convex, asymmetrical upside. I didn’t want to increase the upside from $1,800 to $2,000 like other people had done. I wanted to increase the upside from $2,000 to $2,400, which is a much bigger move.

It was trading so cheaply that you could use leverage like crazy. I’ve used a lot of these call spreads that people see me doing, like the big $5,000–$7,000 call spread that has become very popular. You essentially get extremely high leverage with incredibly fixed and low downside risk on the part of the market where you want that exposure.

For example, if you said, “I think ZEC will go up to $2,000,” it might be much more profitable to buy a $1,600–$2,000 call spread right now than to just hold spot. If the price drops significantly, you have a much smaller chance of losing, but you’re essentially locking in all this upside leverage.

Can you explain how theta decay works? How much time did you have for ETH to move before you cut the position?

People are very afraid of theta decay in options. It really accelerates in the last week, especially the last few days before expiry. Obviously, it accelerates during the last 2 or 3 weeks as well; it starts to become more and more pronounced.

Generally speaking, I’m not a big fan of zero-DTE options. There isn’t a lot of liquidity in cryptocurrency options right now, and that’s not exactly how I think it makes sense to trade them. I tend to hit the market more often for 30-, 60-, and 90-day options—at this point, more specifically for 30 days and much less for 90 days.

Theta isn’t a big deal. Obviously, you pay theta for the value of the options to fall if they’re very far out of the money. That’s not too different from the funding rates on your perp positions. If you’re very long, you’re still potentially paying 11% per annum, or something higher.

Make no mistake, theta should probably be higher, but it’s weird. It’s hard to compare these things directly because theta is more like your maximum loss. When people talked about my $5,000–$7,000 ETH call spread, they would say, “Theta will eat you alive.”

But theta is a loss. If ETH ends at, say, $2,000 in March 2027, then the entire amount I lost—the million dollars I invested in it—is all from theta decay. So it’s weird to double-count that theta. It’s like you’re losing money on theta, and it ends up being free. That’s why it ended up being free, right?

People are too afraid of theta, and they also don’t realize that you can be on the opposite side of it. You can be the one selling these call options to people like me and profiting from theta decay. You can just take the opposite side.

That’s why I think people are overly afraid of theta. If you look at a graph of what theta decay looks like as it approaches expiry, it becomes quite parabolic during the very last few days and the last week or so. It’s not that scary until then.

I feel like this is a huge blind spot in my game. I don’t even have this in my options toolkit. What do you think is part of the options stack? Is it mandatory for every trader to have this in their repertoire?

I think it really comes down to people defining their thesis a little better. It’s like having an extra tool in the toolbox, and often an even better tool. Perps are an amazing thing, and as I said, they complement each other. You should trade them together.

But if you tell me your thesis is, “I think ZEC will hit $2,000,” and you have a certain time frame, especially if you have some kind of catalyst for that, then you can structure an options trade around it.

Let’s say your thesis is that Democratic socialists are vastly outpacing everyone else in the polls, billionaires are very afraid that this is going to become a big “eat the rich” movement, and all their assets are going to be confiscated. You think ZEC is going to make big moves by the end of the year. That’s a complete thesis that you could have.

I'm not saying that's my thesis, but it's a thesis you could have, right? Let's say you think that by the end of the year, ZEC is trading at $4,000. A perp long position is not really a very good way of expressing that point of view. For example, buying ZEC calls deep out of the money, with strikes at about $2,500 or $3,000, is much better because you can get huge leverage that you just wouldn't be able to maintain at 1x.

If you try to buy 10 or 25,000 ZEC calls that are very deep out of the money and try to do it at 1x, you're going to get liquidated at about a 1% move, right? Assuming the account sizes are relatively the same, that makes it easier for you to stay in the crazy growth potential, but you also take more risk because, theoretically, ZEC could grow significantly less than your target.

You can reduce the leverage of your net long position in options. Maybe your upside potential is lower than the ultimate profit and loss, but you still get out of the game if you let that option expire worthless. I wouldn't say one is less or more risky than the other because, technically, as far as options go, you have a fixed risk. So if ZEC drops to $800, you will only lose what you thought you had invested in it.

It's not so much that one is riskier than the other. It's more that you can individually adjust your risk parameters to make this particular trade fit your preferences.

Yes. And an even better example is a $5,000/$7,000 ETH call spread, which everyone is invested in. They see it as something like, "I'm risking $3,000 to make $150,000," or, "I'm risking $1 million to make $47 million." You know exactly what you are risking and what you can earn, unlike perps, where the risk can be unlimited in both directions, right?

If you have a 10x position, you may be right about the direction, but the problem is that you are path-dependent. ZEC is actually one of the best examples of this, with all the panic about coins being minted. A bunch of people went bankrupt or were just plain broke because of this whole event.

If they had a long position and were absolutely right that ZEC was going to go up, but they got bankrupted, it doesn't matter, right? They have no more money. But if they had ZEC at the end of the year, they wouldn't even notice it. It didn't matter to them because everything recovered so quickly.

How often do you trade only perps or only options? Or, like I said, do you use them together?

Yeah, it really depends on the situation. This is even more complicated, but I'll try to simplify it. When I buy an ETH call option, for example, at $3,000, ETH doesn't have to go above $3,000 for its value to increase. When ETH approaches $3,000, its value still increases quite a lot.

Even though the price is going up, I can short ETH to lock in some of those profits. If the price falls again, the value of my option has decreased, but now the short position actually made me more money than the option's value decreased. That means they should be used together. This is how options market makers actually trade these things.

For the average user, it's incredibly easy to combine them into one account. They can be used either for hedging and increasing security, or for ridiculously asymmetric trades, like the extremely deep ETH call spread that everyone's going crazy about. Those are two very different use cases for them.

As I said, they are a much more flexible tool than perps.

Dude, I think your positions would be 10% more expensive if I hadn't seen Aerodrome's bull post.

You see, it's funny. Aerodrome gets a lot of hate, and people need to understand that, in reality, the options thesis and the Aerodrome thesis are somewhat similar. I have to clarify that a little bit.

A lot of this stems from the fact that I think Uniswap ridiculously overcharges LPs. Regarding the fees they take, it's about 16% to 25% of what they take from the LP, right? At the end of the day, LPs are just selling options, essentially.

If you are providing LP in the range of $1,600 to $2,000 on ETH, you are essentially short $1,600. This is not ideal, but it's close enough to being short a $1,600 put option and short a $2,000 call option, where you have no exposure above and full exposure below, right?

The thing is, you get paid these LP fees as long as you're in that range, right? So you're just expressing your point of view through options. But Uniswap takes a huge chunk of those fees. I think that if there's a place in the market where there's likely to be a compression of fees, it's not from Hyperliquid to Lighter, where they raise the price by a point or two or something. It's where Uniswap takes 16% to 25% of your LP fees.

I think the Aerodrome model is better in this regard. I also think Uniswap has made a huge bet on the Robinhood chain explosion and memes. For me, it's really a one-two punch.

I wouldn't be surprised if, in a month, AERO is trading at $0.50 and UNI is trading at about $6 or something. So I'm structuring this as a pair trade because I'm more inclined to think that UNI will leave AERO behind and there will be some kind of mean reversion on this pair, as opposed to it being a clear naked long on AERO, which I still am to some extent.

I like it as a pair trade, especially because I think UNI is far exceeding expectations.

I think if you could convince the founder to never tweet again, you would hear about it three times as much.

No, I actually agree with you to a certain extent. I think he would agree with you, and the team would agree with you, that their communication around everything—even the Biden laptop situation, and everything that has to do with Base and Base in general—was bad for the branding and the communication.

Coinbase in general, in my opinion, is just a ridiculously poorly managed company, and Robinhood is eating their lunch right now. So it seems like there are some risks in this deal.

I will say that, yes, I think the main catalyst for them is the expansion of the Robinhood network and the ETH mainnet, and stopping being so beholden to Base. In my opinion, this is kind of nonsense for them.

What do you think about this?

By the way, thanks for that. I think this is a pretty good thesis, but the one that interests me the most, and that I find the most controversial, is ETH to $7,000. Can you tell me about that?

It's interesting because a lot of people haven't really read carefully enough. For example, Tulip King says that ETH is worth $400 or $200.

Yeah.

Yes. Zero, in fact. We actually agree more than we disagree.

There's a lot of nuance here because the whole reason for this type of trade is that, in my opinion, ETH is at a tipping point in its valuation. It's either going to trade like a terrible tech stock that's not generating much revenue, or it's literally going to be the internet of all money, where all finance happens. At this point, there really isn't any middle ground, is there?

If we had governments issuing bonds and all of their stablecoins were on Ethereum, ETH would deserve to trade at a pretty high premium. I actually think that in his argument about Solana being worth $6 or whatever, and ETH being worth $200 or $400, ETH is somewhat unique in that. He might even agree that ETH is kind of a terrible short if its cash premium is going to zero from ETH and Solana.

That's a scary short. By the way, I would agree with that.

Yes, exactly. I'm not a big fan of Solana, and we could look at that separately, but I think for ETH specifically, there's this really powerful tailwind of tokenization, which is a huge thing.

It's also one of those things where, just like your Uber driver knows XRP and owns it, ETH is the one for institutional guys. They know Bitcoin, they know ETH, maybe some of them know Hyperliquid, and maybe one or two of them have heard of ZEC or something like that.

For them, if they think tokenization is going to get a bid, they will unfortunately buy Coinbase shares and a bunch of ETH, right? I'm not saying that's necessarily right for them, but that's what they would do.

By doing this as such a deep out-of-the-money call option, specifically as a call option spread, I have so little downside. If ETH goes down to $400, I will only lose the $1 million I invested in this trade. But if ETH goes up to $7,000, I will make $47 million.

That's the definition of asymmetry and convexity. If I held $5 million of spot ETH from here, then, great, if the price goes up to $7,000, I'll make $10 million on top or something. That's cool. But if the price drops to $400, I lose most of it, right? I'm losing about $3.7 million or whatever.

By doing this as a deep out-of-the-money call spread, I'm actually making the same point as him: ETH could crash massively, reprice, and start being valued more like Hyperliquid or Lighter, like Jito or Drift, or even like these income-generating tokens.

Or it deserves a pretty big premium. I wouldn't even say a cash premium. I would rather say that it's essentially this entrenchment, the moat, and the Lindy effect that it has, and this L1 aura that only it really deserves and no one else really deserves.

And so it's one of two, and that's why I structured the deal that way.

How do you position yourself on Coinbase stock?

I don't touch them just because—no, damn it, no. I think they're incompetent as a company. I think they did a terrible job. They lost a huge lead, in the style of 27–3 or 20–3, in cryptocurrency. But again, if institutions are really betting on cryptocurrency, they'll just buy Coinbase stock because that's what they associate with cryptocurrency. And so it's a little scary to be short, but I don't touch it.

In my opinion, they did a terrible job on their platform, their UI, their UX—everything. They did a terrible job.

Are you net short Solana? Is this your most confident short position?

I wouldn't say that's my most confident short position. It's more because I think Solana is in this really awkward position where I can almost see them a little—

Yeah. It's kind of an island, isn't it?

And on the Robinhood network, I actually made quite a bit of money because I backed Solana when it was around $65. I bought a bunch of $100 call options that are expiring now, and I recently sold them all. They printed something incredible for me, and I had a very long position in Solana at that point because I saw the trend of spot RWA tokenization and how much it was growing.

I thought, “Oh, this is a big prediction for Solana. Maybe Solana owns spot and Hyperliquid owns perps.” But the problem with Solana, and specifically the Solana Foundation, is that they're really trying to conquer and build this ecosystem that's very curated. They're trying to conquer Phoenix for certain purposes, unlike Pacifica, because Phoenix is like that.

And it's one of those things where not only do they have the same kind of moral-hazard situation as Base, with some of their failures, but Solana doesn't really have the kind of robust neutrality that Ethereum does. Ethereum, for better or worse, has tried really hard not to conquer and not pick winners and losers. It's just a blank canvas that people can build on.

I wouldn't say the Solana developers feel the same way. I would say they're very clearly trying to pick winners and losers. And so I actually think Solana is most likely going to have the tulip mania situation that he's describing, where I think Solana should be trading closer to the revenue multiple than Ethereum is—much closer.

And if you start trading Solana closer to the revenue multiple, it's going to get very, very dark, very quickly. Solana has already lost on perps, and I don't know if they're going to get that back. Solana is going to lose on spot rails on the Robinhood chain, and I don't know if they're going to get that back.

If they lose on all these different things, then I don't really know what niche Solana has. They're even going to lose a little bit on memecoins to get the chain going.

So if they don't really have any of these key things and it's just traded as crypto beta—“Bitcoin is up, Solana is up; Bitcoin is down, Solana is down”—then, yeah, that's an amazing short position. I don't see how they're going to fix that.

I'm not optimistic on Solana. Yesterday, I was talking with Mando about how Zcash is interesting because it's the only coin that has a price target of, like, 20x. Then we talked about how a lot of these other coins are thinking, “Oh, Bitcoin could go back to $100,000,” or even some of the hype targets that I think are insultingly low, like HYPE to $115.

I'm like, “Dude, remember how to dream, Solana? Maybe it'll go back to almost $200.” I don't even see people calling for that because I like the way Trump commented on the all-time high—“never”—as if it were almost a slur, like the bulls in giga-Solana thinking it could go back to $200.

I think it's a slur that we're saying here that we think we could go down about 50% from the previous all-time high or something right now. It drives me crazy.

And the funny thing about ZEC is that it's absolutely correct. But I would say that for Zcash, it's both a bullish scenario and a bearish scenario, and I'm pretty neutral on ZEC. I've been in and out of that trade a few times. I'm pretty much out of it now, unfortunately.

But I think the bottom line is that it's kind of like what we were describing earlier: it's basically pure mania at the moment. It's the fastest horse in cryptocurrency, and that's pure momentum and sentiment. That means it's completely, infinitely bullish.

Anyone who's left holding it should have those 20x views because there's no fundamental bottom for ZEC, as we've seen before in its history. There's no bottom in revenue. There's no fundamental bottom, and that's one of those things where you can't say it's some kind of tech trade, because Monero has been around for a long time in terms of—

Yeah, it's not exactly like that.

It's not that it's necessarily better in terms of privacy. There are about 7 people in the world who understand quantum resistance, and it's a very fancy thing that people are using. But it's not like that either. It's literally just that it's the hottest beta play, the fastest horse in the race right now, and everyone wants to get in on it, which is totally fine.

That makes it a good trade, but it's also one of those things that makes it scary because, as I said, there's no real bottom line. And if you start to have something like tulip mania—a South Sea Company-type situation—where a few big ones, or a lot of big evangelists, are billionaires, you can see how it happens.

For example, we played poker with some of these people. They cheat, and it makes sense to them. They're very concerned about protecting their wealth in the future. They're very concerned about privacy. It's understandable why a lot of billionaires are optimistic.

But you get into this interesting prisoner's dilemma where a couple of them start to get a little bit carried away. What does that look like? Garrett Bullish just decides, “Yeah, I'm going to get rid of 300 million ZEC right now.”

There's no Hyperliquid fund like a relief fund that's buying a couple million ZEC a day. There's no bottom line. So that's what makes it unbearable. There's no lower limit. That's what makes it such an interesting trade in both directions.

Are you a big poker player?

Very. Yeah, actually, that's how I met a lot of really good people in this industry. I play against a bunch of pros too. The pros that I play with would say I'm bad, but they'd also say I'm scary to play with because if I try, I'll be good.

For me, it's more about causing maximum pain to my friends at that moment. I'm just having a lot of fun. But no, I would be very confident if there was a crypto poker tournament, like at Token2049 or something.

Why are you better than pros? That's great.

I mean, I think poker players actually turn out to be incredibly smart people for the most part. A good poker player is almost always incredibly good at trading. Most of them are also very deep into crypto. A lot of the best traders you'll find in crypto are also very well-known in poker. So there's just a lot of overlap here.

Some of the guys I play with have millions of dollars in lifetime prize money from tournaments and cash games. For me, it's a good way to bond, to play some of those games. So it makes sense in everything I do.

I'm a pretty casual poker player, but I watch a lot of poker. I'm obsessed with Alan Keating.

Yeah, Alan Keating is just the GOAT.

I would say he's obviously many times richer than me, but he and I probably have a pretty similar play style: extreme aggression, just trying to ruin people's days and not caring what cards you're holding.

I can narrow it down, and I'm sure he's actually pretty good. I have a few friends who have played with him in person. He's like that, but I've also heard he's an extremely nice guy, which is nice. It's quite annoying. Some poker players are so rude to the staff or under-tip them, but he's so unreasonably nice to people.

Who do you think is the most talented professional poker player?

It depends on whether you're talking about tournaments. There are a few guys who I haven't seen play cash—probably Phil Ivey, lifetime, to be honest. As for him, he's like that, to be fair. There's a lot of other guys too.

There are some other guys who play online who I probably have a lot of praise for, but there's just a big difference between online and live games.

What's your background? Did you work at a trading firm before?

No. Like I said, I've been mining Bitcoin from 2010 to 2014. I started on a completely different path from trading—mining Bitcoin.

I didn't really trade. There wasn't really anything to trade back then. It was just spot trading, so I wasn't thinking about selling. I was just thinking about holding and mining as much as possible, trying to buy more graphics cards, basically.

From 2015 to 2017, I was kind of behind, and I was just thinking about running another business. But when DeFi came along, a light bulb went off in my head. I was like, “Wait a minute, this is the future. This is it.”

I could collateralize my crypto, borrow against it, get a loan at 2%, invest it in my business, take out a business loan, and buy more crypto. I thought the best thing I've ever done was realizing where the industry is now. Finally, I feel like it's taken us so long to get to this point.

I think the industry is finally moving in a direction where decentralized finance is no longer a meme, but actually a potentially positive thing for the world. I love watching the derivatives story happen, for example. Even knowing the team, they've suffered for 5 years straight trying to build products like this, and there are so many teams like Fed Crypto [?]. It's not just options.

Now that we've finally gotten to this point, I think it's the very beginning of adoption, and we're finally starting to get high ratings. It's so nice to see some of these teams that have been so steadfast and stuck with it all these years finally being rewarded for it. It's a good time for the industry.

What do you think about Hyperliquid?

I love it. That's where we made most of the money. It was a huge profit-and-loss deal for us. I think we made about $28 million on Hyperliquid, between the fact that I held the airdrop for the most part until now and generally being a huge HYPE guy. Like I said, I wanted to have as much HYPE as possible while it was growing.

I think Hyperliquid is what cryptocurrency was always supposed to be. To be honest, I was also extremely bullish on perps before Hyperliquid. Before that, with GMX, dYdX, Gains, and Synthetix, I was long on a lot of these tokens, thinking that perps were kind of the future. They were a very good tool.

I was wrong on a lot of them, too. Hyperliquid was the one where I finally got it.

When you say “we,” who do you mean?

I run a fund with another partner. I just say “we” because we run ours. It's not just me; it's like saying “plural.”

What are you guys holding right now? You really like ETH. You like AERO. You like UNI, I guess—or you don't like UNI. You're short UNI and long AERO?

Yeah. Long AERO, short UNI is one trade. We still have a bunch of HYPE. We still hold a bunch of LITs. Derive is a huge position, and Kinetiq is a big position for us, too.

Kinetiq. I'm pretty bullish on Kinetiq right now, I'll tell you.

What's the thesis on Kinetiq? I don't do target prices, but how big do you think it can be?

It's trading at about $0.34. I don't really look at the prices right now, so is there a market—

I'm not sure, but yeah, it's about—

Okay, great. It's trading at about $0.34, right?

I think it just needs to be rewritten. Are you familiar with Aphasia or Allesium [?], the L2 that they're adding to Hyperliquid?

It's confusing.

Yeah. HyperEVM has been a complete failure. I just don't see it lasting long. I don't see a world where Hyperliquid is the definition of what cryptocurrency is—everybody knows it, everybody uses it, everybody trades it—and there's no ecosystem around it. That's just a bet I can't make.

HyperEVM itself, with its small-block architecture and everything that goes with it, is slow. The team doesn't really pay much attention to it.

That's actually a good example of why Hyperliquid probably takes, or will take, so long to build options natively. It's a team of 12 people. They're focused on building the best perps platform in the world, but they don't really have the time or resources to build the ecosystem, build options, or build all these different things.

Kinetiq is stepping in to build a much more performant L2. This is probably one of the first times that an L2 is actually very active on the main chain. It's using HYPE as fuel and burning a bunch of Kinetiq and HYPE together.

I also think that the founder of Omni is probably one of the best founders in the industry, especially in terms of understanding the vibes and the users. I really like what Jeff says: if you want someone to build perps for you, you want it to be Jeff. No one understands microstructure better, with his HFT background and everything else.

But if you want someone to build a community for you, I would probably put the founder of Omni on the same level as one of the best, if not the best, founders who deal with this. He has a very good understanding of the community. While the current HyperEVM is lacking in vibes, I think it's going to undergo a huge change, and that's something that a lot of people don't appreciate very well.

I haven't had anyone come around on Kinetiq yet. I like the thesis. By the way, that was cool. I appreciate you coming. We're going to have to do this again.

As a final sign-off, give me a market forecast for the next 3, 6, 9 months, or a year. Where do you think we are in the cycle? How crazy do you think it's going to get? Where do we go from here?

I think we're in for some anxious moments. You can see it already: headwinds, war headwinds, all that kind of stuff. I wouldn't be surprised if we're a couple of weeks away from some local peak, but I don't think it matters much. I think we've bottomed out. I personally wouldn't want to bet on any new lows from here.

Cryptocurrency is about to massively rethink this whole tokenization thing. If you were one of those guys who was like, “I'm going to sell my Bitcoin here and try to buy it back at $78,000,” good luck, buddy. I hope you do well. But for me, I'm just going to accept it. I'm happy to trade around it, but I'm happy to accept the dip—10% to 20%, even 25% to 30%—if I think that a lot of these assets are potentially going to fall 10% to 20%.

Not the big ones, but some of the smaller ones that I'm talking about. That's one of those things that I'm quite happy to hold. I might be a little bit more risky as we get closer to the end of the year and the election. I think there's a certain confluence of potentially negative catalysts here.

But especially in the first quarter of next year, once we get through those things, I would put it this way: we have all these outstanding debts now. We have the war in Ukraine, we have the war in Iran, we have rates going crazy, and we have all these things. We just add clarity; we're going to fly.

Most of the things that could happen now are essentially the cancellation of those outstanding debts. The war in Ukraine could end, the war in Iran could end, the price of oil could go down—all these different things. It could get worse. But generally speaking, if most of these things dissipate, the bullishness that you see right now is nothing compared to where people could be.

It's so strange to talk to people right now. Bitcoin is at $88,000 or something—it's like $86,000 or $85,000 right now—and we're acting like we're at $150,000. We're so far from the all-time highs in the majors. The real growing secondary assets, like zero-denomination securities and derivatives, all these things that we just talked about, aren't even being priced in yet. Pricing has barely started to happen for a lot of these things.

Like I said, we're looking out 6 months, 9 months, or 12 months, and I'm extremely, extremely optimistic. Three months is always a chop, honestly. It's hard to say, and it depends a lot on the trajectory. We'll just adjust as it comes.

That was very well said. You got over my wall of anxiety. Basically, terror is built into the price, so the only thing you can do is expose it.

That was cool. Thanks for coming. Is there anything you want to shill? Something like a Substack or podcast?

I don't have one.

Is there anything you want to shill?

No, nothing specific. I like to anti-shill in general. Some people have almost started investing in my deals without even looking at them, just saying, “Kool-Aid Man was right a couple of times. Let's just buy his crap.” I'm like, no, definitely make sure you do your own research.

It's the same thing I said on another podcast I just did: people need to start believing again. People are such losers, and it's killing the atmosphere. Start believing, raise your price targets, and believe again.

Dude, you're awesome. Thanks for coming, dude. I really love you. Nice to meet you.

You're welcome. Have a great time.

This guy is just awesome.