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Alts or Bitcoin—which does better this cycle, risk-adjusted, Sharpe, Sortino?

No, just give me a straight answer. Which one—a basket or Bitcoin?

Bitcoin. Don’t talk about any of that stuff. I don’t understand what you just said.

Okay, well, alts are high beta, and I think that’s going to do well. But I think the optimal portfolio is a barbell Bitcoin-memecoin portfolio: 85% Bitcoin, 5% Slerf, 5% Zyn, and 5% dogwifhat, or whatever.

How do you pronounce that?

WIF.

WIF, not “with.” I like Jeo Boden. That’s mine.

No need to get political.

No, this is not a political statement.

Joe Budden is very different from Joe Biden.

All right, guys. I’m really excited to do this because this is a panel, but this is also the first live episode of the 1000x podcast. I’m very lucky to be crashing this episode with hosts Avi and Jonah. Could you give a little introduction for yourselves?

Sure. Hey, everybody. I’ve been recording the 1000x podcast with Jonah for the last half a year, courtesy of Blockworks putting it all together. For the 6 years before that, I was investing professionally in cryptocurrency and digital assets—first at Wave Financial, then I ran the liquid book over at BlockTower for about 2 years. I also had the amazing experience of starting up the crypto division at a traditional fund called GoldenTree, which is a distressed-debt asset manager that made its foray into cryptocurrency.

I worked there for about 2 years helping them start up. Through my journeys, I met Jonah, and we decided to start a podcast where we could just talk at each other for 45 minutes to an hour because we were doing that anyway. Now we’re here onstage talking to you guys.

It’s very hard to get Avi on the phone unless it’s a recorded podcast. He’s a podcasting-type of person, but if there’s alcohol involved, it’s easier for him.

That’s what I was going to say. There might have been 1 or 2 missed podcasts because we were out drinking.

For both of us. I’m Jonah. I’ve been a trader for 18 years. I ran the oil-derivatives book at Goldman Sachs, then I was a partner at Vitol for 7 years. It’s the world’s largest oil-trading company. After that, I had the privilege of running trading at Cumberland, which is the cryptocurrency arm of DRW, and that’s where I met Avi. We were at Crypto Bahamas together—a bit of an ill-fated moment in crypto’s history—but I’m happy to be back at the conference.

What happened in the Bahamas?

First, I just want to say I’m very happy to see at this conference a lack of shorts. At Crypto Bahamas, there were probably far too many. People seem like they’re put together, and this is an indication that our industry has grown up a little bit, which is always nice to see.

Absolutely. No flip-flops allowed. A man should never show his bare toes. That should go unsaid.

Fellas, I’m really lucky to have you here. I’m going to resist for as long as I can asking you guys about meme coins, which is of course what we all want to talk about. Why don’t we start with this classic question that people tend to ask themselves around this time: Where are we in the market cycle?

We’ve had the Bitcoin ETFs, we’ve had some price appreciation, and we’re looking at alts running a little bit. Maybe it feels a little bit different from previous all-time-high breaks. What do you guys think?

1. The Bull Market Begins

I think that in all markets, not just crypto, you tend to start the bull market when things get volatile. I could characterize the last year and a half as a bull market—a steady grind upward—but I would say that was more of a recovery phase from the extremely painful bear cycle of 2022. I wouldn’t really call that the bull market.

In keeping with the title of this panel, “How to Trade the Upcoming Bull Market,” I think we’re just getting started. As markets really start to enter the price-discovery phase, especially to the upside, they get very volatile. I think we’re out of the high, sharp, steady grind upward and into a phase where we start to get savage pullbacks, bull traps, bear traps, and the type of price action that you might have seen in the Nasdaq in 1999, crude oil in 2008, or crypto in 2021—where Avi Felman was trading some of those all-time highs, followed by 70% pullbacks, followed by all-time highs.

Yeah, it’s kind of interesting. For the first time ever, we have a different setup for the bull market. In all previous cycles, you had a bear market that was really solved by the halving, which brought interest back in. Generally, what you’d find is that 4 to 6 months after the halving is when Bitcoin managed to reach previous all-time highs.

This time is different. This time, we actually got to the previous all-time highs and surpassed them before the halving. What that tells me is that this time is a bit different. There are different factors at play, the environment is different, and the industry is more mature than it was previously. It’s also very unlikely to follow the same predictable patterns that it had for the last 3 cycles.

Where do I see us today? The ETF was obviously the big catalyst, and it brought in a lot of inflows very early in the beginning. But we’re still early in the process of Bitcoin penetrating as an institutional asset. Most of these asset issuers—most of these ETF issuers—are still in the process of ramping up their marketing and outreach. I’d say, if I were to guess, they’re about 20% deployed, so we still have 80% to go.

With that being said, Bitcoin doesn’t take that much money to move, in the grand scheme of things. Ten billion dollars makes an incredible impact on price. For the last 10 years, people have had this crazy, outlandish target in their minds: Bitcoin at $100,000. Couldn’t we get to $100,000? Can we get to $100,000? That sort of sticks in people’s minds. Now that we’re at $60,000, $70,000, $75,000, we’re almost there.

I think what we’ve done is completed the first phase of the cycle, where we’ve had the catalyst, the interest, and the explosion. Now the hard work begins. There’s probably a little bit of a slog: Will we break $100,000? Will we get past $100,000? What happens after?

If you look back, this started in 2021. Since the $20,000 level broke in December 2020, every time Bitcoin has made a new all-time high, it hasn’t gone parabolic. In 2021, every time it made a new all-time high, it would actually pull back a little bit, chop around, grind, and have these pullbacks and issues. People would be happy to sell when their target was within sight.

I think we’re done with the first half, and we’re in for a little bit of churn right now. Then, over the next 6 to 12 to 18 months, we get the inevitable ratcheting up of the marketing from all these ETF issuers. A tremendous amount of new capital will come into the market, and we’ll be off to the races. It’s probably going to look a little bit more stable than previous cycles. I don’t necessarily think we’re going to get another 85% drawdown—maybe a 50% to 60% drawdown.

That was a really helpful framing for me, because one thing that’s been confusing me a little bit is my mental framework going into this all-time-high break. I remember watching the price in December 2020. If you go back and look at that fractal, it was hovering around $19,000, and then it just blew through and doubled, going to $40,000 in about a month.

That was the time when it felt like, “Oh, my God, it’s on.” That’s when I feel like retail came back to the market. We felt that in our business; it picked back up. It just didn’t really feel like that this time. Do you think there’s basically some sort of triple-top-type dynamic—not literally a triple top—but that we got the easy gains, people are more willing to sell at this point, and there’s a lot of actual work that needs to go into taking us to that next higher level?

I think the key here is that the market is comprised of a very different type of individual than it was in 2020. In 2020, it was a lot of retail and a lot of fast-money types. When you break an all-time high in that particular scenario, you just generate FOMO. People think, “I need to get into this thing. It’s going to run away from me.”

Ever since Bitcoin became more institutional—which I’d say actually happened in mid-2021—you saw a lot of these larger buyers come in, a lot of these higher-net-worth family-office-type people. These are guys who are going to sell at plus 100%, buy at minus 25%, and dampen the volatility of this asset class.

You’re probably not going to see an all-time-high break followed by a crazy parabola, because the type of person in the market is exponentially more willing to sell an all-time-high break than they have ever been in the past. It makes sense to me that it wouldn’t go crazy parabolic right after.

2. ETF Buyers Remain Unclear

This is something that I’m struggling with. What you can’t see behind the ETF flows is who’s buying. You don’t know whether it’s hedge funds, massive retirement systems reallocating a piece of their portfolio, commodity traders or producers, sovereign governments—it’s confusing.

With crypto, you can track it. You can say, “This is a whale wallet that has been in for a long time. It’s been here since the beginning.” Everything on-chain is a bit more transparent. At least you can follow the breadcrumb trail to some sort of truth about who’s buying and selling. You can see right now that, whether it’s the Grayscale trust or long-term holders, people are selling Bitcoin to effectively BlackRock’s IBIT. That’s what’s going on right now.

What I can’t figure out is who’s behind all this ETF buying. Is it little retail investors buying $10 worth of crypto and then selling it 3% higher and chopping around? Or is it new whales, new family offices, new major institutions, and corporations? I’m struggling with that, so I’m watching price action very closely right now.

My hypothesis is that it’s a new long-term-holder base. It’s either long-term holders who are in GBTC because it was effectively discounted Bitcoin, rotating into something with lower fees to hold on for the next $100,000 of price action; your mom and your dentist stowing it away in an IRA or a 401(k); or some other retirement account. That’s my thesis. I think these are long-term holders.

What’s scary to me, as a long-term holder myself, is the idea that these are weak hands—that this is fast money. If we see 3, 5, 10, or 20 days of consecutive outflows at 10% below the new all-time highs that we hit recently, I think we’re going to be in for some of that insane bull-market volatility that’s going to shake a lot of people out at an unfortunate, worst-possible-time kind of moment. I’m doing my best to hang on.

I think that, as we analyze the nature of these ETF inflows, ultimately flows aren’t a use case, but they are effectively the validation of Bitcoin as a store of value, which is the ultimate use case for crypto right now. As we analyze how these new participants come in and treat this market, I think it will determine a lot about how much volatility we’re going to see over the course of the next 12 months.

Actually, I’m curious about this audience. How many people here own the Bitcoin ETF? Raise your hand. Does anybody?

I own Grayscale. Does that count?

Grayscale counts.

How many people here own any crypto at all?

Wow. I’m so proud of this audience. This is a beautiful representation of who the ETF buyers are. It’s new money. Look at all the people who own crypto, and only a few of them own the Bitcoin ETF. We’ve got some champions out there who bought the Bitcoin ETF, but I think that perfectly encapsulates who’s buying it. It’s first-time buyers of crypto. It’s new capital coming in.

My general take on this is that if you’re buying the Bitcoin ETF, it’s not necessarily because you want to buy Bitcoin for the quick pump or the quick win. If that was your incentive, you probably would have figured out how to buy Bitcoin on Coinbase. It’s really not that hard.

I think a lot of these people are your dentists, your registered investment advisers, your slow money—people who aren’t going to sell at minus 15% or minus 20%. They’re buying Bitcoin the same way they buy the S&P 500. It’s drilled into people that if you buy the S&P 500, you don’t sell when it’s down; you just hold for 30 years.

If that’s the case, the portfolio is insanely bullish. You have your structural seller—the miners—and they’re going to have 50% less selling to do in a month. Stock-to-flow doesn’t matter whether you’re talking about Bitcoin or bananas: more buying and less selling means a higher price.

Does the halving still matter? Is it still relevant?

3. The Halving Cuts Supply

I think so. I’m a commodities trader, and I think about it in terms of producer flow every day. As a commodities trader, you see producers extract oil from the ground and sell oil derivatives, which pushes the price of oil lower. They’re locking in their cash flows. Miners do exactly the same thing.

I’m struggling to understand how, if you literally told every producer of crude oil in the world, “Your wells are depleted by 50%. You have 50% less crude oil, and you’re doing less selling,” that wouldn’t lead to some sort of crazy rally. That’s how I’m thinking about it. Maybe it’s the wrong mental model.

I think you’re right. To preempt a question that a lot of people ask—how do miner flows matter if they’re not that large an aggregate percentage of Bitcoin volume?—the price of Bitcoin is based on the marginal buyer and marginal seller. Miners basically have to sell to fund their operations.

This flow is coming in, and when people know that flows are coming in, that impacts the way the market trades. I think even a marginal reduction in known, choreographed flow into the market will change the way the market reacts and will be bullish for the market. Even if it’s not a large percentage, it is meaningful.

The second thing is that the halving always brings attention, and crypto, for better or worse, thrives on attention. That is the key driver of crypto across every asset you’ve ever looked at: how many people are looking at it at any given time.

Bitcoin is one of those funny assets where it just gets more valuable as it goes up. The more people accept it, the more other people are convinced to accept it. That’s just the nature of the asset. As attention is paid to Bitcoin, the fundamentals go up.

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You made a good point about the marginal buyer and where the marginal token exchanges hands. As these ETFs drink up more and more of the available supply of coins, there’s a smaller and smaller subset of tokens available for transfer. It’s possible that the first $10 billion of ETF inflows drove the price up by roughly $30,000, while the next $10 billion could drive the price up by $60,000. There are fewer tokens available for sale; they’re just sitting in an ETF instead of in somebody’s laptop at the bottom of a landfill.

4. Bitcoin Rotates Into Memecoins

What do you guys think about this idea? I’ve heard it a couple of times now. It came up on the Bitcoin ETF panel this morning.

You guys like the traditional way these cycles tend to play out: Bitcoin moves first, followed by a strong spot rally, then rotation to ETH, then rotation to alts, and eventually whatever JPEG or meme coin signals the end of the cycle. This usually takes about a year and a half.

One theory being discussed quite a bit right now is that maybe this cycle is different. Before, you could put your Bitcoin on a crypto exchange and then very easily transition into ETH, altcoins, or whatever. Now, these things are locked up in an ETF and held at Charles Schwab or Fidelity. Maybe some of that capital is simply going to be stickier there. What do you think about that?

I’ve always wondered about this, because it is a new dynamic. The reality is that even though the new money coming in is unlikely to rotate out of Bitcoin because it’s held in the ETF itself and not on exchanges, you still get rotation from crypto-native individuals who already own Bitcoin and these other assets. They’re going to rotate, but that’s actually what’s creating the dynamic right now.

You’re not seeing movement into things that are fundamental. You’re not seeing a lot of the older L1s, DeFi applications, or things that people last cycle would have looked at and said, “This is a good project. It produces cash flows. It’s kind of interesting. Maybe I should buy it. Maybe it’ll go up.”

The reason that happened last cycle is that nobody had any idea what they were doing. These were all new people in the crypto world. Now you don’t have a tremendous amount of retail; you have a lot of crypto natives. What crypto natives know is that the things that go up the most in bull markets are meme coins.

You don’t have flows into the fundamental projects from more conservative buyers, because the conservative buyers are now in the ETF. The people who are really willing to go down the risk curve are the people who already own crypto, so they’re rotating into these meme coins that go to a billion dollars in 2 days. Obviously, that will end in tears, but it’s fun for the time being.

The middle section is left out to dry until you either get more retail coming back in or enough people get burned on meme coins and decide that they want to be allocated to the industry. Maybe then they’ll say, “I should actually buy something that works.”

I was one of those people who got toasted on the L1s in the last bull market, trying to play the altcoin space on the basis of what I perceived to be fundamental value. I thought, “Look at this blockchain. It has sharding, and that’s so much better than where Ethereum is right now. It’s 2 years ahead of Ethereum, so let me buy that.” I underperformed ETH by 99% with that mentality and accumulated a lot of simulated P&L until I finally decided to collapse the whole book into GBTC.

If there’s one thing I deeply believe in, it’s Bitcoin. This was just deeply discounted Bitcoin. I could do legal analysis, talk to lawyers, and conclude that in the foreseeable future it would convert to an ETF and I’d get the discount back. I could hold on to it in a way that I wouldn’t get stopped out. That worked.

On the way back up, I became one of those people who just dismissed altcoins altogether. Avi, thankfully, one of the benefits of podcasting with this guy is that you learn things. He’s been through a few of these cycles; he’s a veteran, and he absolutely nailed this.

There was one episode where I tried to say, “This is just a pure-play, hold-on-for-dear-life asset class. Bitcoin is going to a million dollars per token, so why should we worry about anything else?” Avi just started shouting at me. He was absolutely right.

Ultimately, this asset class will be taken to higher heights by proper use cases and people adopting the technology, which is far better than traditional rails for moving money. I can attest to that from my career.

In the meantime, it’s less important to try to come up with TradFi compartmentalizations of value, earnings per token, tokenomics, or any of that. You should try to follow the flows. Right now, ETF flows are driving Bitcoin, cultural excitement and the zeitgeist are driving other elements of the space, meme coins are being driven by that, and there’s an AI theme driving the tech sector.

Elements of the tech sector do drive elements of the crypto sector because, ultimately, much like oil was in its early days, crypto is tradable technology. You follow those narratives, and there are short-term profits to extract. I put on my meme-coin hat and just went off the rails recently, so it’s a little tough to focus.

I tend to agree with you, Avi. Ultimately, we’ll be validated by a use case. Perhaps that use case will come about as a result of higher prices, and we should stop tearing our hair out in the meantime.

There’s something funny about meme coins. I’m also on the fence about them. Are they positive? That’s still to be determined. But they have at least 25% or 30% of something that feels pretty true. It feels a little bit like a middle finger to the people who are fundamentalists and do this type of analysis. Doesn’t it feel like that a little bit?

It’s kind of like Nvidia. Nvidia is a great company, but it’s trading at about 50 times revenue. Is it a great business? Is Nvidia’s business real? Are we all sitting around wondering whether it’s really trading on fundamentals? I feel like that’s what meme coins are putting their finger on.

No, but I’ll say that this is infinitely better than it was 6 or 7 years ago. Back then, some guy would be sitting in his basement and launch an ICO. He’d say, “This ICO is going to revolutionize everything, from your fridge to airplanes to your shoes. There’s going to be IoT everywhere. Your whole life is going to be incredible. Buy this and you’re going to become super rich and live on Mars.”

Now you buy something called Slerf because it’s funny. They both accomplish the same thing, which is that they go up, but at least one is telling you the truth. You’re buying it because it’s funny.

They don’t always go up.

There’s a little bit of a difference. I actually view this as a more straightforward, more honest version of crypto than it was before.

5. Crypto Splits Into Two Worlds

The way I view crypto is that there is genuine, real technology here that is going to change the world. How that’s going to be implemented—how stocks are going to be represented as tokens, whether they’re going to trade on blockchains—is still an open question. My bet is 100% that in the next 10 years there’s going to be a tremendous amount of revolution in backend infrastructure.

You guys are already getting bored, so this is the thing that’s going to be amazing technology, but it’s going to be very hard to speculate on. It’s going to be built out by large institutions. They may or may not actually need a token. Your life will be better, things will be more interoperable, and you’ll be able to send money overseas more easily. But is there necessarily a way to make money on that other than betting on the companies building it out? Maybe there’s no token associated with that technology.

Then you have the crypto world. There are going to be some tokens that provide critical infrastructure to L1s. For example, liquid-staking tokens might be very beneficial and accrue a ton of value over the next 5 to 10 years. Then you have Bitcoin, and you have some L1s that will capture some value.

But in my personal view, a lot of these tokens won’t necessarily generate value. I think that’s actually what the market is saying: There’s going to be a lot of institutional interest because this technology is real, but most of these tokens aren’t going to be valuable in the future.

Bitcoin is going to be super valuable. Some L1s, some L2s, and some infrastructure-layer projects are going to be super valuable. What is the rest of crypto? It’s a wonderful, massive casino.

The casino world generates $100 billion a year in revenue, so that’s obviously going to be a big sector. I think that’s what the market is saying right now. That’s why a lot of the things we view as fundamentals aren’t picking up. Does a borrow-and-lend platform really need a token? Maybe, maybe not.

I think you’re striking on a really valuable point there: The casino industry has some value to it, and we shouldn’t dismiss it. What’s refreshing about this cycle is that people in the institutional space—people who wear suits and ties and work in crypto—will admit that it’s a little more fun to light up a Phantom wallet and gamble on some of these zeitgeisty memes than it is to go to a depressing casino and pull the arm of a slot machine.

That’s okay. We’ve accepted that as an industry now. The future of crypto, to your point, might be a little distracting or upsetting to the builders in the space who are in the trenches writing code and trying to build difficult products and complex services that use this amazing technology called blockchain.

It might be annoying to them that meme coins called Slerf can thousand-X overnight. But one of the powerful things about learning from the success of others and the success of things going on around you is that I would hope builders in crypto gamify more elements of the products they build and make them more exciting to use than our current infrastructure, which is slow, boring, and not necessarily rewarding from the perspective of the user experience.

One of the reasons I’m so bullish, aside from the halving and the geopolitical tinfoil-hat stuff that I could bore you with for hours, is that we’ve broken through that barrier of good user experience in crypto recently. Did I expect it to be meme coins? No. We were all expecting games, decentralized physical infrastructure, and real-world assets. We thought this would be the cycle when Uber drivers used Hivemapper to build a real-time visual representation of planet Earth.

That will probably happen, but meme coins happened first, and the user experience is amazing. Let’s just celebrate that, I guess.

The first step is certainly bullish for the price.

This conversation is important for investing because you have to understand what you’re investing in. When you put money into crypto, what are you truly betting on?

Look at all these AI crypto applications that are popping off. There are actually non-crypto versions of these applications doing 10 or 20 times the revenue of decentralized projects that rent your GPU. That doesn’t necessarily mean these things won’t go up. If you look at the broad swath of investing in AI, there’s really no way to invest in it except for Nvidia, unless you’re investing in private companies. That’s why a lot of these AI coins are popping off so heavily: People are desperately searching for a way to bet on what they perceive to be the future, which is AI.

I agree with that, but are these projects really going to be it? Maybe some of them, maybe not. You have to understand that a lot of these things 5–10x because there was no other place to put that capital. Sometimes that happens in crypto. It’s so easy to attach a token to whatever hot industry exists at the time.

If you know what game you’re playing, you can play that game and invest in it. But don’t get suckered by it. Understand that it might not be real. Then there are real things out there.

I think a lot of the infrastructure we’re going to use will be built on platforms like Ethereum, Solana, and Avalanche. There are going to be real applications deployed on these layers, and that means they’re going to generate value. There are real things in crypto, but sometimes it’s very easy to get confused about what is real and what isn’t. Some things might sound real and turn out not to be, while other things are real.

Why else, other than a high-quality L1 like Ethereum or Solana, would you try to launch a global, decentralized GPU-rental project? I know Stanford did it in the ’90s with the protein-folding project, but these days, how would you do it?

6. Currency Debasement Drives Everything

There’s a lot of real stuff going on; it just takes so much time. To bring it back to your question about weak hands versus strong hands, one unlock for me was looking at a lot of these tokens. Many of them won’t be around in a couple of years, and some of them will be.

The underlying driver that’s making Bitcoin go up versus your favorite meme coin is the same thing: currency debasement. In my perspective, there’s too much money chasing too few things, and people want to speculate.

Jonah, on an episode of 1000x, you had this great example of how, once you identify the driver of a trade, you have to figure out what structure to use. You gave the example of a guy who goes to Japan and figures out how to structure a very clever trade.

For me, you could look at these things very logically and pragmatically and say, “If I think what’s driving everything right now is this overwhelming currency debasement, maybe Bitcoin is the safer thing. But I could take a little bit of risk and punt on some of this other stuff as well.”

I think the guy who structured the Bitcoin trade the best in the entire world was Michael Saylor. What he’s done is a beautiful feat of financial engineering. The fact that he now has this perpetual debt-printing machine that he can use to buy more Bitcoin is a testament to his financial engineering, more than anything else.

There’s still a huge premium on the stock relative to the Bitcoin they hold. I thought that would go away after the ETFs launched, but it has hung on, which is pretty crazy.

It’s 100% true that this is a response to currency debasement. We saw this in Nigeria a few weeks ago, where they’re now trying to completely ban crypto. The first 3 months of the year had been very bad for the naira, the Nigerian currency. It basically went from 900 to 1,500 per dollar, and they’re in trouble. They realized that crypto was exacerbating the problem.

That says 2 things. First, people genuinely do flee to crypto during times of stress in some places. When you see it in one place, it’s pretty easy to say that if this happens in the next country, people will look for examples of what they should do. Then it becomes mimetic and can reinforce itself.

Second, governments recognize this and know it’s going to be a problem. They’re worried about it. When I see Bitcoin, crypto, meme coins, and all this other stuff going up, I think it’s in no small part because of those fears.

Not to get too grandiose about where we are in the world, but we’re in a weird spot. There are a lot of strange things going on and a lot of dangerous flash points right now. I think that’s one reason Bitcoin and cryptocurrency have been doing so well, and one reason there was an urgency to get a Bitcoin ETF approved. The people pushing it understand that we’re going into unprecedented times.

It belongs in an institutional portfolio because while it may not be a good inflation hedge or even a good leveraged Nasdaq proxy, it is certainly a debasement hedge.

In countries like Nigeria, where I used to deal with physical crude oil, or Ankara, when Turkey’s central bank started cutting interest rates to combat inflation—an insane policy like that—or Argentina, where you have hyperinflation, if you’re an ordinary person trying to store value, there’s not even a debate about whether Bitcoin or Ethereum is a better place to hold value than the local currency.

If you’re a Turkish person living in Turkey when Erdoğan is instructing the central bank to cut rates to combat inflation, and there’s hyperinflation and a black-market foreign-exchange rate alongside an artificial, government-approved market, you can’t just put your money in dollars in a JPMorgan Chase checking account or HSBC. Tether is a great place, or Bitcoin.

Ultimately, I do think crypto—Bitcoin specifically—is a monetary and economic system in a box that is better than at least 50% of the world’s fiat currencies, both as a store of value and probably as a means of exchange, too.

This is a threat to governments because it runs in the face of fiat money as an experiment. That experiment effectively started in 1971, when Nixon took the world off the gold standard. It went well for starters, but during COVID they started to abuse it. Pull up the M1 money-supply chart; the Fed has a great chart. The thing went parabolic, and I think Bitcoin should, too, as a result.

7. The Lightning Round Begins

We’ve got only a couple of minutes left. I want to do a quick lightning round with you guys.

Three years from now, what’s your price prediction? Where’s Bitcoin at exactly 3 years from now?

$59,872.90.

$250,000.

All right, big discrepancy there. Alts or Bitcoin—which does better this cycle?

Bitcoin.

Don’t talk about any of that stuff. I don’t understand what you just said.

Alts are high beta, and I think that’s going to do well. But I think the optimal portfolio is a barbell Bitcoin-meme-coin portfolio: 85% Bitcoin, 5% Slerf, 5% Zyn, and 5% dogwifhat, or whatever.

How do you pronounce that?

WIF.

WIF, not “with.” I like Jeo Boden. That’s mine.

No need to get political.

No, this is not a political statement. Jeo Boden is very different from Joe Biden.

All right, Jonah, what do you think—altcoins or Bitcoin this cycle?

I’m with Avi. I think you hold Bitcoin; that’s where you get steady gains. One thing I’ve learned from 18 years of professional trading is that it’s really hard to learn without skin in the game. I would say smart people should take some of their gains from Bitcoin, diversify, and try to learn by keeping their fingers on the pulse of a few different alt markets.

Alt-L1 trade—is it dead or still alive?

No, it’s alive and kicking. It’s just all new L1s now.

Indeed, because the thesis is: New coin is good; if it’s new, it’s good, and if it’s old, it’s bad. So we like new L1s in general?

I wrote the alt-L1 thesis off as dead, and I just couldn’t have been more wrong. Solana has done really well despite my best predictions.

I think some alt-L1s will eclipse Ethereum.

5 seconds on this: The user experience of alt-L1s has gone through the roof everywhere except Ethereum, so I think that’s what’s actually going to drive it. It’s genuinely fun to use Solana; it’s a genuinely good experience now.

In the long run, Solana or Ethereum?

Both of them.

I’m going to make you pick.

I’m pretty bearish on Ethereum, to be completely honest. This is coming from somebody who doesn’t even particularly like Solana. I’m more bearish on Ethereum than I am bullish on Solana, so I guess Solana.

I wish I could call a friend here and poll the audience.

I would say I’m bearish on Ethereum, too, only because I’m scared. But I would think that if institutions are going to settle assets somewhere, they’re probably going to start on Ethereum rather than Solana. If you’re BlackRock trying to put something on-chain, I think there’s life in Ethereum, and it’ll come through and become visible later in this cycle.

You have 15 seconds each. You have advice to give to people who are investing in crypto for the first time. What do you think?

Keep it simple. Don’t get freaked out. Don’t invest in anything you don’t know, and don’t overleverage yourself.

Having gone through the institutional crypto-trading apparatus, I would say that no asset class in history has been better optimized for your personal account. You don’t need to work at an institution to generate asymmetric, incredible returns in crypto.

The data is practically free. A lot of the providers sponsor this conference. Spin up a few podcast apps, spend $100 or $200 a year on data and TradingView, and you’re good to go. You don’t necessarily need to rely on this bucking bronco of a space for cash flow. You can play with it personally and extract value elsewhere.

I’ll second that. Some of the smartest, most well-rounded, and wealthiest people I know in crypto never worked for an institution or traded for anyone else. They just figured it out themselves, because everything is available for you to learn online.

If you’re intelligent and hardworking enough to go figure it out, you can. That’s the beauty of it. There are very few barriers to entry for the average individual who’s dedicated enough to come into this space.

If you’re a commodities trader and you want to trade Asian propane versus U.S. Gulf Coast propane, you can’t even get started without a million dollars a year in sunk costs for data, exchange access, credit lines, and everything else. Meanwhile, in crypto, you can start with a very small amount.

You can’t put on a Bitcoin-and-meme-coin barbell at an institution. That’s the real takeaway.

All right, guys. This is all the time we have. Give them a round of applause.