是时候买入回调了 | 1000x

I see all the bearishness and all the calls for freaking $30K. The only thing I can think of is that everybody was so giga-bullish at $70K that nobody could conceptualize the idea that this thing would draw down—not that much, really, just 20%. Now that we're down 20% off the highs and entering levels that we've been eyeing for a very long time, everybody decides to get fucking bearish.

I think the world has to get ready for a little bit of a shift in the market over the next 3 months. There are going to be a lot of hated assets that probably do well over the next 2 months. I think it's time to have some fucking balls and buy ETH.

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We're live. Welcome back to another THX Boys. We are so close to my target; I felt like I was going crazy, Jonah. So I've been telling everyone since $70K that we're going to reach $55K, and now we're at $57K. Everybody's claiming that you've been bearish forever. You're always like—

I've never been bearish.

No, I felt bearish at $70K. Now we're at $57K, and I'm telling you it's time to be bullish. Let it be known that I'm not always a bear. I just happened to be a bear for the last 2 months. This is not my natural state of being. I'm obviously a bull; I'm a natural bull. I want shit to go up.

You absolutely nailed it. You got bearish on the dead-bull highs, and from the sounds of things, you actually acted on it. You sold a fair amount of crypto.

Yeah, I did. I tried to get everyone else to sell crypto, too. I said, “Guys, listen: very rarely in my entire life have I seen Bitcoin go sideways for so long in a bull market and have that not be distribution.” It's almost every time.

What gave me pause was that last summer we chopped around $40K for about 3 months. If you lightened up there, hoping for a dip down to $20K, you wouldn't have gotten it. You would have missed this whole 2x move, so I was afraid of missing a parabolic rally.

You mean $30K, not $40K.

$30K, apologies. I misspoke. We chopped around $30K for a while, but that was very different because it wasn't after a parabolic rally or after we broke all-time highs. It was after a very long bear market.

The way I think about it is always in terms of risk-reward, and in terms of value and momentum. At $70K, most people's targets were $100K, which isn't that far away. It's actually pretty close—a 50% move. What are you looking for? You're looking for a 50% move higher, and where do you stop out? Basically, $50K.

I don't think Bitcoin was enticing enough at $70K to get a bunch of people to come plow into it, because a lot of people only had that $100K target. It needed to go to an area where people felt like there was value.

There are really only 2 ways for Bitcoin to run. Either you have crazy momentum and crazy FOMO, and people just keep piling in—that's how we get these all-time highs—or, once you get to all-time highs, the momentum doesn't stick and you start to go sideways. People become a little more rational and fearful in their allocations, so they wait. They're saying, “If we're going sideways, I don't need to FOMO in right now.” A lot of the FOMO buyers drop out.

Then you have to say, “If it's only a 50% move higher to your target, that's not super attractive.” But now we're at $57K, maybe $55K. That's almost a 2x move to your target. I think these are much better levels for value buyers to step in. When momentum is gone, the only thing that saves you is value, and we're getting pretty close.

I'm buying ETH here. I'd definitely be buying here. I'm buying ETH, I'm buying BTC, and I think you can buy some memecoins again. I actually really like Arweave.

Why Arweave?

They're going live with a lot of stuff. Their AO token is going to be their first major project launched on the Arweave network, which is interesting. They're pivoting away from just being a file-storage solution to having a broad-based network that's more like Ethereum, where you can actually build things on top of it.

Looking around, things like Arbitrum are starting to look interesting. Today, ETH is down 4%, while ARB is down 70 basis points, and it has collapsed about 60% to 70% from the all-time highs. Actually, from the all-time high, it's down 58%.

There are certain things that are starting to look appetizing, and now is not the time to be fearful. Now is the time to accumulate. That's my personal view. Be greedy when others are fearful, said the great investor Avi Felman.

The way I've looked at it is that I'm not as active as you, as we all know, so I try to avoid overtrading. I try to avoid chopping in and out of things because, frankly, I'm just not as good as you at that.

I'm not fully allocated to crypto. I'm not 10-out-of-10 max long. The way I view this pullback is that, for those of you out there who are in my shoes and still have some cash available to deploy into crypto, these are the types of levels where it might make sense to buy. You don't have to feel bad about not having top-ticked it like Avi did. You can say, “All right, bust out the shopping bags,” and start nibbling on interesting things. Maybe diversify into some new tokens.

One of the things you learn on a trading floor is that you don't really learn how to trade something without skin in the game. I like the idea of buying some of these forgotten tokens, like Arweave and Arbitrum, that haven't gotten a lot of love recently amid this boom in L1 and high-performance tokens. To me, that's a very good idea, Avi.

As you can see, I'm kind of chilling right now, touching a bit of grass. Are you touching that grass, Jonah? Where are you right now?

I can't quite reach it from here. I'm in LA, but you have a nice Hollywood view in the background. It's an outdoor office.

New York is great, too. I'm trying to stay cool throughout this sell-off and not puke anything, which, when you're not fully allocated, is extremely easy.

What I read on Crypto Twitter is this overwhelming doom scroll of panic, fear, and vomiting of tokens. I can't really identify with that because I don't trade on leverage. As we recommend again and again on this podcast, don't invest more than you can afford to lose.

It seems like people really invested more than they could afford to lose because, on what should be a fairly routine bull-market pullback, the community is getting rinsed. That's not good. Friendly reminder to the community: don't invest more than you can afford to lose. There's nothing out of the ordinary about this. During the 2021 bull market, Bitcoin pulled back like 60%, so this is nothing compared to that.

I think people just got really complacent, Avi. Now is not the time to be complacent anymore. Now is the time to go hunting, in my personal opinion. There are a lot of very good trades out there.

I'm doing more crypto studying than I have in a long time.

That's good. What are you studying?

I'm studying some of the newer chains. I like your idea of revisiting Arweave, and we talked a little bit offline about Blur. I'm also trying to get myself up to speed on Berachain, the drama around EigenLayer, what Telegram is doing with TON, and some of these newer projects.

For the longest time, it was just bear market, down only, and then Bitcoin was the best risk-reward by a mile. Now we're starting to enter the phase of what I still think is the bull market where it gets dicey. We could go down a lot or up a lot from here, and you're going to start to see real dispersion between the shit and the amazing stuff.

I think alts are starting to look tasty for the first time since maybe late 2020.

You say that, but every altcoin—including memecoins—ripped 1,000% in the last month.

I consider the memecoin space as a whole to be an alt—a kind of alternative use case for crypto, this on-chain casino that Solana nailed. Solana dominated it.

I don't really view WIF as an alt. I view it as a chip in that casino.

I guess that's fair. Really, what you're saying is that the alts—the actual projects that are building—are starting to look tasty right now. You think that in the second leg of this move, something like Blur could radically outperform in the second half as people try to actually bid value.

I could see that happening. There are all sorts of things that happen in this type of market that make it worth looking around.

I'll give you an example. ETHE is back to, I think, a 27% or 28% discount, which is crazy if you're bullish ETH/BTC at all. I think the best way to express this is just to buy ETH. It's a bit of an election play because, if Trump gets elected, we almost certainly get an ETH ETF. If Biden gets elected, it's a little more dicey, but I still think that, given that basically the same arguments apply to ETH as apply to BTC, and it doesn't seem like anyone is really supportive of the SEC's mission to classify ETH as a security, it makes sense to allocate.

That's an interesting trade right there that I'm definitely looking at. I see all the despair, all the bearishness, and all the calls for freaking $30K. The only thing I can think of is that everybody was so giga-bullish at $70K that nobody could conceptualize the idea that this thing would draw down—not that much, really, just 20%.

Now that we're down 20% off the highs and entering levels that we've been eyeing for a very long time, everybody decides to get fucking bearish. Not only that, but ETH/BTC is up 1.93%. I think the world has to get ready for a little bit of a shift in the market over the next 3 months.

Look at what's outperforming right now in this dump. Those are going to be the things that start to do well after doing very poorly before. There are going to be a lot of hated assets that probably do well over the next 2 months. I think it's time to have some fucking balls and buy ETH.

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All right, let's get back to the show.

I'm starting to get bullish on the entire Ethereum ecosystem. You and I had that protracted debate about Solana and Ethereum, and I continue to believe that the Ethereum ecosystem is going to perform.

I see a lot of FUD on Twitter saying, “Name one thing that ETH does better than any of the other blockchains out there.” I think that's a stupid argument, and I want to debunk it right now. Bitcoin doesn't do anything better than any other ecosystem, either. You can move money around faster on pretty much any alternative L1 than you can on Bitcoin, but that doesn't mean Bitcoin is irrelevant.

When you're talking about tradable software that's ultimately very complicated and difficult for most people to understand—and difficult for even experts to trust—battle-tested code is a moat. Bitcoin is battle-tested. Ethereum is battle-tested. Even Solana is becoming battle-tested.

The peak in Solana, the memecoin boom, coincided with congestion issues that led to some doubt about the performance of that chain and ultimately a sell-off. I'm not saying the 2 were related; it was more of a broader market sell-off. My point is that ETH is a decentralized computer that hasn't broken yet, and that's really important to a lot of people who don't necessarily need their transactions settled in milliseconds. Maybe they need them settled in seconds, as with financial applications.

Everybody goes back to Larry Fink and BlackRock, but let's take Fidelity, another large institution. If they want to settle something on-chain, they probably don't mind if it's on ETH or an L2 on ETH instead of Solana. They don't require transaction settlement speeds to be faster than Ethereum can provide.

What matters to them is security: knowing that their transactions will show up on the blockchain the way they're supposed to, and knowing that there won't be some sort of interference from hackers or a breakdown of the code. That's why I think we can start to expect a longer tail of applications—especially financial applications—to be deployed on Ethereum in the near future. That should lead to a bull run, or outperformance, for that chain because of the moat it does have: the fact that it's battle-tested.

Does that make sense to you?

I tend to agree with you. There's a lot of value in ETH being the second-largest asset by a wide margin and having held that position for a very long time. But the reality is that crypto natives don't care about this, and crypto natives have really driven the market, apart from BTC.

You had all the Boomers in Ohio buying a bunch of Bitcoin in their brokerage accounts, and then you had the crypto-native people doing everything else. I really don't think it's going to change much until you get more institutional access to Ethereum specifically.

In the short term, what I've realized is that the market also trades on narratives. Bitcoin had the halving moment; it had its narrative. Runes tried a few things, Stacks had its Nakamoto upgrade, and all these things happened for BTC. Now they're over. There's really nothing else on the horizon for Bitcoin that can get people super excited about it.

There are certain things for ETH that will get people very excited. We can talk about EigenLayer. I think they messed up their airdrop, but I still think it creates a bit of a wealth effect. At the end of the day, it's a new primitive.

Just quickly, before we go to EigenLayer, I do want to make one point about what you said. Sorry to interrupt, but I do think there are major geopolitical catalysts for Bitcoin in the short run. There's no blockchain-native catalyst; I agree with you there. I just wanted to make that quick distinction.

I would agree with that. There definitely are geopolitical catalysts. Hopefully we don't experience them, but they exist. You can see it in gold.

There's been a pretty large dispersion between Bitcoin and gold, but if the world heats up, I think that correlation will come back eventually. It was strong previously.

Within the actual world of crypto, the only things that have any meaningful narrative or meaningful drivers for liquidity flows right now are ETH and the ETH ecosystem, and then memecoins. That's really it.

My take is that it's probably time for people to start rotating from ETH into BTC. I also think that the relative strength of ETH in the downturn is going to draw people back into it.

I genuinely think the reason ETH is going down less than BTC is very simple: BTC went up more than ETH, so there are fewer sellers of ETH. But psychologically, what that does is prime new buyers. They see it outperforming to the downside and think, “Maybe it'll outperform to the upside.”

It probably isn't because there's a substantial amount of buyers of Ethereum. It's more likely because there's a lack of sellers relative to BTC. There are a lot more people willing to sell BTC than ETH right now.

Imagine ETH does outperform to the upside. Let's say Bitcoin goes back to $100K—that's about 70%. Let's say ETH/BTC rallies back to its prior level. You could get a quick little 2x if you buy some ETH right now, without that much risk. If you buy ETH, you might get even more.

ETH is the trade. I couldn't agree with you more. We just saw this Grayscale trade play out in Bitcoin, so why on Earth wouldn't it play out in ETH? You can do this from your brokerage account. You don't need to be 3 layers of abstraction into some restaking protocol to capture it.

It is amazing how the market will give you the same opportunity over and over again, with the same fucking narrative. It's, “Gary Gensler denial, blah, blah, blah.” Come on. We've seen this movie already. We literally just saw this movie. It had the same movie stars in the same movie.

Genuinely, the discount right now—I don't have my Bloomberg in front of me—is about 25%. Last time I looked, I think it was 27%. It was 8% 2 months ago, and now it's widened back out. If you're bullish on ETH, what a great way to allocate.

I was super-bearish on L2s, but watching their relative strength during this drawdown and realizing that they've been absolutely nuked, they've been nuked relative to everything. If ETH/BTC goes up 10%, these things are probably up 30%.

You could obviously just buy more ETH, and that's more liquid, but I'm noticing that a lot of these coins didn't go up that much in the run relative to BTC and ETH. There aren't that many people left to sell them.

Arbitrum had a little pop, and then it went straight back down. Now it's trading where it was in the summer of 2023. It's basically back below those highs—actually, far below them. It's back in that range.

BTC doubled during a period when a lot of these things were flat. I think that just means there aren't that many people left to sell.

You make a great point there, and it dovetails with something I heard when I was working at Cumberland that I wanted to share. One thing that used to frustrate me when I first got into crypto was that failed projects don't go to zero. Cardano and Polkadot, for example—in my mind, these things should be worthless crap, but they aren't. They're still worth billions.

Let's say that some worthless or seemingly worthless project went to zero, or very close to it—just a few tens or single-digit millions in market cap—and then there was some promising development on its roadmap. The risk-reward would be outstanding if you bought it at such a low valuation, after it had already proven itself and had a history.

But I found myself unable to do that with these tokens that, as you just mentioned, have flatlined and underperformed but are still worth billions or tens of billions, or in certain cases more than $100 billion.

I was talking to Don Wilson, my former boss, about this. He's the CEO and founder of DRW. I was expressing frustration about wanting to buy rebound narratives in the altcoin space but not being able to justify the existing valuation. He looked at me and said, “Jonah, tokens don't file for bankruptcy.”

These things aren't going to go to zero. They just find equilibrium and stabilize when all of the sellers with liquid supply are out. What you have to assess is whether there will be ongoing supply whacking the market—for example, if the foundation is structured so that it's long a ton of tokens in escrow and keeps unlocking them on some schedule, or if there are VC unlocks.

He said, “Just be careful. Avoid the freight trains.” But in certain instances where there isn't an avalanche of tokens about to hit the market, you can feel comfortable getting long stabilized old stories at what seems like a high valuation. They'll pump again when the narrative comes back.

To me, a light bulb went off. I've been in TradFi for too long, but this makes sense. You can step in at what seems like a decent valuation for something that's been underperforming. It's not going to go to zero. Tokens don't file for bankruptcy. As long as the future looks bright and there isn't a big VC bag about to get dumped on your face, you're good to go.

You make a good point about Arbitrum. That might be one of those projects—maybe not Polygon, but Arbitrum.

I don't know, because I haven't spent enough time digging into their future plans.

I can tell you one thing: the team is still working. If the team is still doing things, I think that all they need is an adjacent narrative. If ETH/BTC goes up, maybe you should start looking for things like Optimism and ARB.

Maybe Lido, too, although I'm still a little nervous about that one because I think the supply issues are still pretty prevalent there.

Overall, what we're probably going to see is that new coins were good in the first part of this cycle, but new coins probably start to be bad soon. The reason they start to be bad is that there's a crazy amount of supply coming online for a lot of them.

They were good because they launched with a low float, and now that's coming to an end. Unlocks are starting to happen over the summer, and VCs and early investors are going to start to dump. I think a lot of these new coins are probably going to be in trouble.

By “new coins,” you're not just referring to shitcoins that people minted on Pump.fun?

No, I’m talking about Sui, SEI, all of these—the TIAs of the world. Maybe they’re good projects, maybe they’re not; it actually doesn’t really matter. What matters is that they have a very, very low float and that it’s going to be very difficult for people to get out of these positions. There’s just going to be a ton of supply that hits the market, and these are probably very good shorts.

One thing you might be able to do is go long things that don’t have supply issues—go long Solana, go short Aptos, or short Aethir. Run that pair trade. That’s actually kind of interesting to me. I think what you’re looking for is things that don’t really have supply issues, and you’re trying to find the massive unlocks.

Over the next little bit, Solana has the opposite of a supply issue. It has a deficit of tokens because FTX swallowed up so much of the liquid supply that people thought they had. Now it’s being recycled in the form of multiyear-locked Solana that people want to hold on to for long-term reasons. In terms of bag reloading at current levels, you’re just re-adding stuff that you sold higher.

So you’d be bag-reloading. For me, it’s just bag-adding. I would say Solana, or locked Solana if you can get it, along with a few Ethereum ecosystem plays and some meme coins that have staying power. That’s already starting to look like a pretty decent little nugget that you might be able to earn a decent return on.

Yeah, I would agree with that wholeheartedly. What was kind of interesting about the Solana deal is that it’s a great deal because you can hedge out some of it through perps. Let’s say you buy Solana—I think it cleared at $64—and then it’s trading at $123. You’re actually getting double the yield on your capital committed.

If Solana yields 7%, you’re getting a 14% yield. If Solana goes to $600 in a crazy world, you’re getting 70% in yield, because even though these tokens are locked, you can still stake them. You still get emissions. That’s one of the secrets of VCs and these locked deals: you really just lower the cost basis.

A lot of people will run these deals behind the scenes. Maybe I shouldn’t be voicing this too publicly. I hope the VCs don’t send any hitmen after me, but you’ll have your big L1s go to somebody and say, “Hey, we’ll sell you $50 million of this token, or $20 million of this token, at a 70% discount.” Then you get to stake it and receive all the yield from staking, so it really reduces your cost basis even more.

The reason they do that is basically just to funnel more cash in, and then you distribute it to your average person who doesn’t know this is happening. If you’re an average person who isn’t really in the smoke-filled back room, one thing you can do to avoid some of the deleterious impact of this on your net worth is stake your tokens. Don’t just hold spot—stake your tokens.

The reason is that one thing we used to say at Cumberland is that staking tokens isn’t really earning yield; it’s just avoiding the inflation you would experience if you didn’t stake. It’s a form of inflation avoidance, not some sort of—you get it. The other thing I’d say is that if you really want to avoid it, be very wary of high yields from L1s. Also, make sure that the L1s you’re looking at don’t have super-concentrated nodes.

Don’t just stake thoughtlessly. If there’s a high yield, there’s a catch. Equally, if there’s a normal yield in the 5% to 10% range, then if you’re not staking, you’re getting diluted, and if you are staking, you’re just treading water. Ultimately, staking also prevents you from overtrading. It makes you think twice and adds another layer of complication before you go churning in and out of tokens.

Again, unless you’re Avi Felman, active trading is really hard at best and really wasteful at worst. I like staking because it makes me think a little more before I go and do something.

I think that’s good. I think that’s very reasonable. Jonah, I have a question for you. When you look at the market today, obviously crypto is doing poorly, but it’s not just crypto that’s doing poorly. Traditional markets are also doing poorly.

I’m curious: Does a general market pullback seem likely in the future? Are you worried about that? Are you worried about the Fed messing things up right now?

What the Fed has done to fuck things up is already priced in. I’m not worried about them hiking more; that would be a real fuck-up. I’m not worried about that.

But yeah, this is yet again a “sell in May and go away” type of scenario. Everything from oil to Bitcoin to the S&P to the Nasdaq has come decently off its highs. What worries me the most about markets right now is the threat of a supply-side inflationary shock.

There’s the threat that you get a geopolitical event that spikes oil and gas, similar to the 2022 Ukraine war. Alternatively, there’s a chance that, let’s say, Trump is way ahead in the polls and starts announcing things like, “I’m going to forcibly have the Army deport 15 million people from the labor force,” or, “I’m going to hike tariffs on China by 30%.”

Then suddenly you become supply-constrained. There’s inflation in labor costs and inflation in the unfinished and finished goods that we import from China. Suddenly, the Fed has to start reacting and hiking rates, and the economy gets all gunked up.

Equally, I’m worried about a demand-side inflationary shock, where Biden is ahead in the polls and says, “Capital gains tax is going to be hiked to 45%.” If you live in a high-tax state, city, or area, your all-in rate is going to be around 60% on capital gains. Then markets move.

Ultimately, I’m worried that there’s going to be some sort of shock to the system coming out of policy, not the actual economy. Absent our geriatric leadership—which I find personally frustrating on both the left and the right—doing unpredictable, stupid things, the economy looks good to me.

I think the effect of AI as a tool, like these chatbots, is massively deflationary. Structurally, commodity markets are very healthy: robust supply and robust demand growth. There’s nothing really structural about the world economy to be worried about except for humans—erratic old fucks doing stupid shit.

Forgive my language, but that’s literally what’s stressing me out right now. We’re in this peaceful time, and then some obese guy in a dictatorship somewhere is going to wake up and start firing artillery at South Korea. It’s just people, man. People are crazy.

That is definitely a take. People are for sure crazy.

I understand that deeply. I do think, though, that it’s possible we get stuck in the trap of—let’s say, for example, the Fed starts to cut and inflation comes back. People are worried about hot prints already, and if the Fed starts to cut too soon and inflation starts creeping up again, then people start to worry that we’re stuck in a cycle of, “How do we control this thing?”

I’m not really sure how else to take the fact that the market is coming off now, because everything else looks strong. Companies look strong, earnings look strong—everything else looks okay.

I think you’re supposed to be long everything in most markets into this dip. It’s hard to close your eyes and catch a falling knife, but I think across all markets that is the right trade. If you look at it through a commodities lens, the world is growing quickly. We’re in the midst of a boom.

The big question mark is whether one of the relevant geopolitical actors will do something horrendous to fuck it up, kind of like Vlad did in 2022. I think the answer is no. You have to underwrite that possibility and sell that put, then buy your Bitcoin with confidence, your Nvidia stock, your Ethereum L2s, your Solana, and your Jeo Boden—not financial advice—with confidence.

You should do it in a size where you aren’t doom-scrolling and doom-posting on Twitter if you’re down 20%. Maybe this isn’t a time to be levered up. Maybe it’s a time to nibble with spot or smart plays like ETH.

I think the nibbling makes sense. I’m bullish, I like these levels, and I think they’re good. However, I’m cognizant that sell-offs tend to end with a bang. They don’t tend to end in a grind, so they tend to end in a down 10% or down 15% day.

They don’t tend to just go, “Okay, we’re down 5%, 5%, 5%, 5%,” and then suddenly we’re going back up. Despite the fact that I like these levels, I think that in a year from now, if you buy here, you’re probably quite happy.

I do caution that you should probably wait for something crazy to happen. If you really want to blow the nut right now, you should probably be waiting for something crazy to happen and then stepping in when you see all those liquidations.

What you’re supposed to be doing is buying all the things that you think are going to have a narrative over the next 6 months and concentrating your positions. That’s how I’m trading this market right now.

Some people do that with limit orders, and I think that’s very smart. I don’t like doing that. I don’t like adding risk with a passive limit order. I think that a limit order is a great way to reduce risk—take profit.

I haven’t done this because I’m lazy, but I should happily submit some $150,000 limit orders in Bitcoin. If you put in a passive limit order to buy, you’re saying, “I think that if BTC trades to $42,000, I’d like to get hit there.” I think that’s kind of a bad idea, because adding risk involves more thought and nuance than reducing risk.

There is a scenario where you could be delighted to add risk at $42,000 on a crazy, fat-finger-style crash that rebounds very quickly. Equally, if it’s trading at $42,000 because there was a successful 51% attack, you’re kicking yourself. I’m just using extreme examples to illustrate my point. I don’t actually expect that to happen.

What you just said, Avi, is definitely correct: You should wait for a crash to add, but you shouldn’t be passive about it. You should be checking Twitter frequently. I’ve found that Grok on Twitter is a great tool for getting smart on protocols because—

How do you actually use Grok?

I used it for the first time recently because I was frustrated. I love the way chatbots explain complex topics to me in ways that I can understand without having to dig through everything myself. You can Grok it easily—funny that.

The problem with GPT-4s and Claude 3s is that they’re not really up to date. They don’t drink from the Twitter fire hose. If you use Grok, the model is shittier—you can tell that you’re talking to something at a GPT-2 level of intelligence, or somewhere between 2 and 3—but at least you’re getting synthesized, spoon-fed English paragraphs about the latest and greatest in crypto.

It references the tweets if you want to do further research on your own, and I find that much better than digging through mountains of documents and logs, frankly.

Now is the time to be doing stuff like that. Maybe Grok is a good hack for studying altcoins in this market. I’ve got to start trying this out.

The market has moved so fast these days that it’s actually quite difficult to keep up with everything. You see something new every 30 seconds. I used to be able to go deep, and now I go broad, so maybe this is a faster way to go deep.

This is kind of interesting. I’m actually looking at this: “Give me the latest on this EigenLayer debate—social consensus versus AVS security.” Look, I don’t know if this is true, but at least I can see all the tweets and references, too. This is pretty good.

Yeah, that’s the point. I was struggling with it. I was like, “I can’t keep up with crypto. This is way too hard.” I need little shortcuts and hacks.

What Grok gave me—shout-out to Elon Musk—is an incredible source of information and news on Twitter. The funny thing about it is that with GPT-4, when you ask it questions about EigenLayer, it’s clearly hallucinating. When you ask Grok questions about EigenLayer, you know that it’s referencing the latest news about EigenLayer.

It coherently explained to me that EigenLayer is a protocol where you put in staked ETH and restake it in other applications and protocols across the Ethereum ecosystem, using stETH or other types of locked ETH as collateral. It also explained why there was a problem recently: There was a kerfuffle involving people trying to withdraw their stETH and getting charged large fees because whatever restaking was going on had some sort of penalty for early withdrawal, plus gas and all these hidden little ways that people got dinged for pulling their stETH and other staked collateral off EigenLayer.

That’s a coherently explained, quick paragraph or two on what’s going on there. It’s way faster than trying to dig into what the developers are saying about it and complaining at each other.

The great thing about Grok is that Twitter is so real-time that you don’t really know if everything is true anyway, but you have a gut feel for what to trust and what not to trust. That sort of chasm between what you know is ground truth and what you see on Twitter persists across Grok, so you can evaluate what you’re reading with the same framework you use to evaluate tweets.

That makes sense. I like it. I’m going to start using this. We should create a repository of all the things that we use to look at the market and share with our 1000x guys. What do you think?

I actually think that would be fun. Maybe we can do a show-and-tell—go back to kindergarten—and say, “Hey, look at this. This is how I use Grok.”

What if we took the transcripts of all our podcasts and then had an AI agent create talks about the markets in our voices?

Wait, so what you’re saying is that we wouldn’t actually have to podcast anymore? We wouldn’t have to do anything?

Yeah, exactly. Honestly, that sounds pretty nice. These podcasts are great because we just show up here with zero preparation and shitpost with each other. I can’t really say it’s quite difficult to do, but it could be kind of fun to try. We could also get AI to create the videos.

What’s funny is that we say it’s not difficult to do, but we’re both seasoned trading veterans. I love talking markets with you. I don’t like talking markets with a lot of people.

It’s funny—I watch certain podcasts where people kind of like us try to have a conversation like the one we’re having, and it goes in one ear and out the other. Oftentimes, 2 traders talking to each other just sucks. Occasionally, though, you find your mojo with somebody when you shoot the shit and talk markets.

I’m glad I found you, Avi. This is definitely a valuable dialogue for me. I hope it is for you as well.

It’s definitely entertaining.

One of the things I experienced early in my career at Lehman Brothers was that you’d get banter on trading floors—a lot of noise, not a lot of signal. But there was this 1 guy—I’m not going to name him—who was basically the best trader in my product on the floor, the best credit trader.

You worked at Lehman? Crazy.

Yeah, I know—so long ago.

Back then, the way the phone systems worked at a bank—I don’t know how they work anymore—was that everybody had this giant, high-tech phone with 64 different phone lines on it. People could have conversations that they could make private, so if you tried to click into somebody’s line, you wouldn’t be able to hear it. Or they could make it public, where you could click on the button, pick up your headset, and hear what the person was saying and who they were talking to.

This amazing credit trader, who now works at Citadel, is a legend. He used to talk to this guy at Fortress every day about markets, macro, and credit. One of the fastest ways I was able to educate myself when I was 21 years old on a trading floor was by listening to his line. He would leave it public on purpose to try to get other people involved in the conversation.

It’s funny—that was an early form of podcasting. Podcasts didn’t exist back then, so if you wanted to get smart on trading and how to think about markets, listening in on somebody’s phone conversation about a market was basically the best you could do.

Avi, I feel like you and I recreated that, but thanks to Blockworks and streaming, we can share it with more people than just a couple of other randos on our trading floor.

That’s fair. That’s actually why I like being on a trading desk in general: You get to hear things that you wouldn’t necessarily hear otherwise. You hear a snippet of information, people screaming at each other about a trade they’re trying to get done, a deal, some flow—whatever it is. You get snippets of information that you can use to make money.

This is why I’ve never worked at a hedge fund. I work at Onyx now, and I’ve worked at Goldman Sachs, Vale, Cumberland, and DRW. When I’m on my trading floor and I hear an explosion of noise going on behind me, based on the location of the noise I’m like, “Oh, something’s happening in naphtha,” which is a product that you use to make plastic. The petrochemical space is kicking off for some reason.

At Vale, when there’d be a big kerfuffle down the floor, I’d think, “Those are the fuel guys. I wonder what’s going on?” Then you’d dig into it and realize that some freight lane had just been shut off by a bunch of rebels. The same thing happened at Cumberland.

I don’t understand how people work at hedge funds where they just sit in cubicles with no information flow, shouting, business, or anything, and then make money happen out of thin air. I’m personally better at monetizing information flow than just doing super-rigorously structured analysis. I do that, too, but it’s nice to have that trading-floor vibe. Podcasts give you a little bit of it.

Crypto is a more democratic asset class than oil because you can download a lot of information from the internet about what’s going on in crypto. You really can’t do that with oil. Our quote-unquote trading floor is Crypto Twitter.

Yeah, you just have to curate your feed so you don’t have too much nonsense.

Anyway, Jonah, get Grok. I think that was good. As always, Jonah, I love talking to you.

Likewise, Avi.