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You guys are just not appreciating what's happening right now. You guys are not appreciating that the sitting president of the United States of America has said that he cares about the price of Bitcoin. You are not appreciating the fact that the potential incoming Treasury secretary owns a ton of BTC, likes Bitcoin, and wants it to go up.

You are not appreciating the fact that Michael Saylor has seemingly created an infinite money glitch where he just gets to buy more Bitcoin by selling overpriced stock. You guys are not appreciating the fact that we just punched through all-time highs. We're above $100,000, and retail is still looking at where to buy.

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All right, welcome back to another THX podcast. We are glad to have you here. This has been such a fun couple of weeks. Jonah's been working his ass off—not trading, but being a new father. Yeah, for the third time. That's why we haven't had a podcast in a while. He's finally pulled himself away from diapers and throw-up to grace us with his takes on the crypto market. Thank you for doing that. I know it must be really tragic for you to talk about markets instead of picking up poop.

Yeah, I definitely wish I was scooping poop right now instead of talking about crypto. But you would be surprised: during some of those 3-hour in-between, bottle-feeding scenarios, I'm just lying on the couch trading crypto on my phone.

Crypto is a very easy thing to hypergamble if you have even a little bit of spare time. It's not like it's really ripped me away. In fact, it's kind of drawn me closer because I don't really have much else going on other than tending to this little guy while he's awake and then staying up all night trading Solana versus Ethereum like a total jackass when he's asleep.

So, that aside, why don't we kick this off with Bitcoin trading at $18,000 a token? What is going on? Where are we? What is happening? Is this real? This is crazy.

What's going on is everything that we've been talking about on the podcast basically since the Trump election. You guys are just not appreciating what's happening right now. You guys are not appreciating that the sitting president of the United States of America has said that he cares about the price of Bitcoin.

You are not appreciating the fact that the potential incoming Treasury secretary owns a ton of BTC, likes Bitcoin, and wants it to go up. You're not appreciating the fact that Michael Saylor has seemingly created an infinite money glitch where he just gets to buy more Bitcoin by selling overpriced stock.

You guys are not appreciating the fact that we just punched through all-time highs. We're above $100,000, and retail is still looking at where to buy. I'm getting pings now daily about what crypto people should buy.

I had an ex-girlfriend reach out to me—someone I have not talked to in a very long time—and she asked me for crypto advice. It did not end well. She was definitely reaching out about crypto, not about me.

She skipped straight to, “What should I be buying?” It was, “Do I buy XRP? I saw that it's trading up 10x from the lows, but it could—I don't know, I saw this tweet that said it could…”

Yeah, I'm getting those too. I can't tell whether this is a top signal or whether it's just the beginning of this massive tsunami of inflows.

I'm still bullish. I think it's the latter. People call it price discovery on crypto Twitter. I always like trading lingo. Price discovery can go in both directions, right? It's when you're trying to find a new equilibrium price after some news has come out.

I guess that's the mode that we're in, and I don't think we really can know until institutions start deploying. They tend to deploy on a fiscal-year or quarterly basis. Maybe you'll get institutions deploying the way they do with commodities.

Commodities are my lens for most of this. The way it works with the GSCI or BCOM, which are these 2 big commodity indices, is that if they get a bunch of new cash from investors who want to own commodities, they'll start deploying the cash. It used to be pretty much the first business day of the new year, and they would deploy it for the first 5 to 10 business days of the new year.

Then everybody would front-run that, so they started to get a little smarter. They would deploy a little bit after Christmas just to get ahead of it. They would basically start a few days before the new year and then go a little bit into the new year.

I honestly don't think it's that much more complicated for Bitcoin. If a bunch of people are going to start deploying, usually over the last 2 Januaries you've seen inflows. This time, I think that now that people have the confidence that the incoming administration actually doesn't want to kill crypto with all of its heart and soul, that confidence will translate into some inflows.

That inflow will probably take the form of dollars getting swapped for Bitcoin on the first business days of the new year.

I think you're right. What really helps me is when I map out the participants in the market and try to figure out what each of their goals are, where money might be coming from, and where money might be coming out of the system.

We'll start with the obvious one: Michael Saylor. Michael Saylor has been buying $500 million of Bitcoin a week. He has about $8 billion left to buy on this ATM that he's got, and he can't actually sell shares or issue more converts starting in January because there's a blackout period.

Until that blackout period is over in January, he's got about $8 billion left to buy. I think he's going to do that before the end of the year. He's probably going to try to speed up his purchases.

That is offset by the fact that people now know this. They know there's a limited amount of BTC coming from Saylor, and if you want to get out of your BTC positions, you probably want to do it with the Saylor bid. You don't want to try getting out when there's no support.

There's a complicating factor: these people also probably don't want to have to pay taxes on their BTC gains this year, so they might wait until next year. You also have retail slowly starting to trickle in. They're buying Bitcoin and basically buying all the Robinhood coins.

What's clear is that there still isn't a huge amount of retail in the market. A lot of this is just ETF buyers. It's a lot of middle-aged—literally middle-aged—people with big-ticket positions reallocating their portfolios to BTC. Retail is still not here in a huge way, except for the XRP chart.

Then January bonuses hit. I know that sounds like a meme, but it's really not, because at least 5 people have told me, “I have some money coming in at the end of the year. What cryptos do you think I should buy?” That's very common.

What you have is a dynamic where, heading into the end of the year, the bid for Bitcoin gets weaker and the bid for altcoins gets stronger. In my opinion, that probably causes a sell-off in BTC in the first 2 weeks of January and a massive bid for alts in the first 2 weeks of January, before Bitcoin continues to go up because of Trump administration actions.

That's my take. We're in a market where the focus is so clearly on BTC and there's a genuine, true, and strong narrative for this asset that's going to propel it forward. But there are also some technical factors that make me want to start selling some BTC and reallocating to alts.

If you're very BTC-heavy right now in your portfolio, this is a good time, in my opinion, to start scaling out and start buying some Solana, some ETH, and things that you really like.

Then you have to realize a big tax gain and pay it in April 2025 instead of April 2026.

I agree with you. Obviously, the big difference for me is that it doesn't matter as much for me personally. It's something to consider if it matters to you. You may want to sell on January 1 rather than late December.

A year of basically a free loan from the government is meaningful in a market that we expect to continue ripping like this. In other words, you would rather have that money in Bitcoin than in the IRS's coffers for that year, if you can.

So maybe the time to take profit, if taxes matter to you, is January 1 rather than late December. But if taxes don't matter to you, then I agree that the timing would be a little different.

That's a really good way of putting it. I didn't really think about it the way that you just outlined it, but it's true. If you're selling, your question should be: If I have to pay taxes in April of next year instead of April 2026, how much money can I make with that money in the interim?

Probably a lot. If you think that, with the money you would otherwise have to pay in taxes, you're going to have to—

The answer is probably a lot.

Yeah, you're right. It makes a ton of sense. The flip side of this is that the reason I said it doesn't really matter for me that much is because my trading book doesn't have that much unrealized P&L in it, because I constantly flip it.

Yeah, so mine has a ton. Because you're a holder, it matters what your unrealized P&L is, obviously.

Yeah. I mean, if you're an active trader, your unrealized P&L is probably pretty low because your book turnover is probably pretty high.

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There are factors that could make BTC dominance go in either direction. Let me give you a hypothetical scenario. January 1 comes, it's Michael Saylor's blackout period, and the Bitcoin buying kind of stops. Trump hasn't been inaugurated yet, the euphoria is over, and inflows disappoint, so Bitcoin levels off, just like you were saying.

What if alts nuke in that scenario? What if there's no big rotation into alts? What if the whole space just takes a breather and, for the first time in basically 2 to 2½ years, everything just gets cooked? Are you going to be dip-buying with both hands? Are you going to be focused on dip-buying alts or dip-buying Bitcoin?

I'm focused on Bitcoin. My bet is that BTC will probably top out anywhere from $125,000 to $150,000 this cycle. I just think at that point there will be so much unrealized P&L in the market and so many people who have bought in that it would take the S&P to really keep it going.

Over the next 2 months, my bet is that alts are just a much better, higher-Sharpe trade.

When you say alts, you're not just going to be going out there and buying an index of the top 1,000 shitcoins, are you?

Honestly, that's probably the best thing that you can do for yourself if you're not actually in the weeds. The reason I say that is because everything has a flavor-of-the-month quality to it. Very few alts will outperform over the course of the cycle. Generally, they outperform over a period of 2 to 3 weeks because they're the hot narrative of the time.

It depends. I always think about, “What's my core? What do I really like? What do I think will benefit over a long period of time?” Either it's undervalued relative to current metrics, or I think the market will allow it to grow a ton.

My answer to that right now is 3-fold. Dino coins that are going to get an ETF are actually a pretty darn good bet. I like XRP, and I like LTC. I like SOL. Litecoin just sent it—it candled just a couple of minutes ago. Obviously, I like ETH, even though that has an ETF. I just think it's going to get inflows.

Then there are things that I think will be the flavor of the month for a long period of time, which is AI. I think all AI coins that actually have a good, usable product will do very well.

Then there's a subsector of that where it's basically just products that I think are doing really well, like Hyperliquid and Virtuals, even though Virtuals is technically under the AI segment. It's just doing really well.

Everything outside of those categories I don't view as a long-term hold. I view it as a trade.

There's so much to talk about in what you just said: which alts do you pick, how long are they going to rally for, and talking about Hyperliquid and Virtuals. We have to touch on the AI agent that we're working on.

I guess let's start with an area where I have a different perspective than you. I do not think buying an index of the top 1,000 shitcoins is a good idea. My take for this cycle is that we're not going to have an altseason.

There will be altcoins, many of which we've discussed on this podcast, like Aave, which will perform. But I don't think that most alts are a good bet. You look at some of the alts that theoretically meet your criteria, like Telegram's Toncoin, and they're just flatlining.

I don't think that buying the index of 1,000 alts would work very well this cycle like it did in 2021. Instead of having an altseason, this time we're just going to have an AI season.

I think that any coin, whether it's great or absolutely useless, with an AI theme attached to it is going to have some point during the next 3 months where all of that crap just 10x's. I don't know what reason—probably because it's under-owned, probably because there's a narrative, and probably because there will be some excitement about agents using crypto to transact.

It'll kind of be like the seed-stage VC excitement that people felt about ICOs in 2017. Our boy Chief said he's unironically studying the ICO bubble and the 2017 cycle to prepare for what's coming in early 2025. I kind of agree with that.

I think the way it's going to take shape is AI coins. AI is this new technology that people are excited about. Chatbots are real, and AI is transforming society. It's clear that the internet of money will intersect with artificially intelligent agents.

Those things are already sending out tweets that are going viral, and they have tokens attached to them. It's all kind of cool, but it's hard to articulate in very clear terms how it's all going to work out, fit together, and translate value to create wealth for individuals like you and me.

Before that is clear, I think all of that stuff is just going to moon. I think it's going to go bananas. I don't really want to waste my time with DeFi or narratives from 2021, or most altcoins other than the ones we talked about that are obvious—like the ones Gary Gensler's lawsuits targeted.

Aside from a couple of obvious alts, like the XRP of the world, I don't really care. If I'm going to go crazy on stuff without thinking too hard, it's going to be things like Virtuals.

You have to think about what the asymmetry is, right? When you're talking about altcoins, a lot of people will buy altcoins to get beta on an underlying related asset.

You buy a bunch of DeFi to get beta on ETH because you think ETH is going to do well. You can buy Stacks or RUNE or something BTC-related to outperform BTC if BTC goes up.

That trade doesn't really work anymore. I think some people are still stuck in that mindset of, “Let me buy this to get beta to this underlying asset.” If you think an asset is going up, just buy it. If you want beta, buy more. That's the way I would think about it.

You're very likely much better off if you think ETH is going to do really well and there's going to be an ETH rotation. Why are you buying a ton of DeFi when it can go down as much as it can go up? Just buy ETH, the thing you actually think is going to do well.

There are obviously exceptions, because there are some things that you think will do better under ETH but have some asymmetry to them. Maybe that's a Uniswap or an ENA. These coins might have some other narrative pushing them forward, and they're going to benefit from the price of ETH going up.

You can say, “Trump is buying ENA. Let me buy a ton of ENA.” ENA is benefiting from the bull market because funding rates are going to be elevated for a very long period of time, and that's going to radically improve their product. Therefore, I'm going to go ahead and buy ENA. That's great. I like that.

But can you say, “I'm going to buy any list of DeFi tokens, like 1inch, because I think ETH is going to do better”? Why would you do that? It just doesn't make sense to me personally. There has to be some underlying reason.

For Uniswap, there's a great reason: it's going to get un-sued by the SEC. That's the token that's getting-un-sued narrative. You're not buying it because you think ETH is going to go up. You're buying it because the SEC is going to change, and hopefully the actual value of the product will deliver value to the token because of that.

That's really the key.

You can come up with these ideas, but I would stick to this: If you're bullish on ETH, buy ETH. If you're bullish on SOL, buy SOL. If you're bullish on BTC, buy BTC.

I think that, because of the flow of buyers and the type of buyers in this market, you're better off sticking to meme coins or AI agents, which I'm actually super bullish on.

Yeah, we have to talk about AI agents. Before we get into that, there's more stuff to talk about. I was going to say, memes have been doing really badly. It just seems like there isn't that much interest in buying these things right now.

You look kind of across the board, and they're all off 50% from the highs. They didn't bounce with BTC even though BTC went up. It just seems like they're over-allocated. I don't know if you have that take.

Yeah, no, I do. It's less about memes coming off. I think the casino—the game at the casino—has shifted a bit from the pump.

Pump.fun-style memes or topical political memes—the Peanut, the Boden—are something a little bit different, right? So guess how much Pump.fun volume is down since the highs.

I don’t know.

It’s down 50%. Graduating-token volume—tokens that make it out of the bonding curve—is down 48%. Trading-bot volume is down 56%, and only 1% of Pump.fun tokens graduated last week. During the peak of the mania, I think it was closer to 10%, although I’d have to double-check.

Basically, what these stats are telling you is that it’s less about, “Let’s go buy every random meme coin that our boy Ansem decides to tweet about.” Instead, there’s a little bit more thought going into the memeing. What I mean by that is, it’s not just loading up a Phantom wallet and buying some memes on Solana. I think what we’re seeing now is that the shift happened with ai16z and GOAT, right? People are looking for memes with a little bit more substance behind them beyond just one stupid picture.

A lot of this AI memeing is happening on Ethereum and Base, so maybe that’s part of why you’ve seen Solana underperform Ethereum recently. I think a lot of that casino capital is just migrating to another chain. I see tweets all the time asking, “How do I bridge from Solana to Base? How do I bridge from Solana to Arbitrum?” This is happening. Capital is just moving around.

It’s not that the appetite for gambling has gone away. There’s only so much of this style of memeing you can do. The style of memeing has changed, not memeing itself. Does that answer it? Is that a—what do you think?

You’re on mute.

One thing that I’ve definitely noticed is that, in the past, the memes were created within crypto and then disseminated throughout. That’s not necessarily true, actually. I guess Doge was the dog in the meme, and somebody created that.

What I’m trying to articulate is that memes have a community behind them. They have content created, and oftentimes that content is created outside of the meme circles and then adopted by the meme. That’s important, because you need to generate a community. That’s why you constantly see memes launched in crypto about TikTok stuff, like Chill Guy.

It’s rare that you have these crypto memes explode, because you need consistent content creation in order for these memes to actually do well. You need a community manager and people posting pictures. It’s still a lot of work to get these things off the ground.

What I like about the AI agents, which is what you were alluding to and what’s taking some mindshare away from memes, is that you can have automated content creation. You can have an automated marketing team by creating a Twitter account with an AI behind it and telling it to consistently put out memes in line with your token.

I think the future of memes very much looks like that, because it’s also easier to believe in than a team of people. It’s like, “Okay, we’re creating this AI to pump our meme. It literally never rests. It’s around 24/7 to put out content, engage with people, and grow this thing.” Why would I trust a team of humans to do that when they can just get sick of it, rug the project, move on to something else, or not put the effort in?

I totally get it.

I think this one-shot approach—“Let’s build a meme on Pump.fun and see how it goes”—doesn’t have enough there for people to invest in. But the hyper-gambling attitude is still abundant, and that’s why you and I have gotten a little bit involved in the Virtuals ecosystem.

I’m so bullish on the VIRTUAL token. I think the ecosystem itself is interesting as well, because it allows people to create memes with automated content backing them, as opposed to just one picture and a team. On that note, maybe we should talk about the THX agent we launched.

We launched THX on Virtuals as an experiment. Obviously, it’s going straight to zero. You shouldn’t buy it with any expectation of financial gain. It’s just a rendition coin, and it’s a terrible idea, but it’s still fun to experiment in crypto because you learn stuff. It helped me, for example, get my head around Virtuals and look at this $2 billion FDV token and think, “This seems like a 10-bagger to me. I’m going to get involved.”

I think one of the biggest issues with traders in general in crypto is that they don’t actually touch the products or use them. I’m not always perfect at this, but I make an effort to engage with popular products in crypto, use them, and actually see how they operate—what they’re good for and what they’re bad for.

When we were discussing what was going on with Virtuals, we thought, “Why not make an agent?” We did, and then the group chat found it basically immediately and pumped it up to $6 million FDV, which was nuts because the thing is really stupid right now. That forced our hand into figuring out how to actually make it valuable, because we don’t want to abandon it now that so many people are in it.

The experience has taught me 2 things. One, people are still rabid about new, innovative tech in crypto. When something cool is built, people go crazy for it. We’ve lost sight of that sometimes. You think, “Whatever, it’s just whatever’s going up at the time,” but when something is genuinely cool, people care.

The second thing is that Virtuals is really fun. It’s really fun to try to create an agent, make it do what you want it to do, and see if you can make it into a better, smarter version of yourself. The Virtuals tooling stack is great so far for really basic stuff.

For more complicated things, I think it’s still way behind custom frameworks. It’s very obvious that it’s way behind custom frameworks like Eliza, the ai16z framework, and all these other things. The issue is that those products aren’t particularly friendly to noobs.

In the future, they will be. That’s how you know you’re early, though, right?

It’s the same thing as if you wanted to launch a token 4 years ago. You couldn’t do it unless you knew how to code. You had to program in Solidity; there was no way around it. You needed to hire somebody who could do it.

It wasn’t difficult. It was basically a bunch of copy-and-pastes, but you still had to deploy it. It took some level of technical understanding to get these things off the ground. That’s where I feel like we are with agents right now.

We’re not at the boom period yet, because it’s still hard to make something useful. But over the next year, it’s going to become increasingly easy to make something useful. It’s going to become increasingly easy to make something that’s better than a human at running marketing, creating content, or building a community. That’s when it really takes off to the next level.

I’m buying the dip in Virtuals today. I’m eyeing it with intense interest. I hope it comes down even more so I can buy more.

I’m hoping it comes down more, too, because I want to buy more. I’m so bullish on this thing because I could totally see it becoming an absolute killer app for crypto: using the community-building power of a token plus the virality and ease of use of an automated, always-on marketing agent.

We’re so early. For people who haven’t played around with it, Virtuals has a sandbox where you can deploy an agent. Once it passes the bonding curve because of investment, your token is live. You can create a Twitter bot—or, in the near future, a Telegram bot—that behaves and tweets and messages the way you want it to.

You fill out what is effectively a rudimentary questionnaire describing how you want your bot to behave, and then you deploy it. It’s really stupid at first. You tweak your questionnaire, and it gets slightly less stupid, and so on and so forth. Eventually, though, you reach a threshold that you can’t pass. The bot still isn’t good enough at what you want it to do for you to be happy.

At that point, you have to write your own agent with custom functions and links to news feeds, token prices, or, in our case, podcast transcripts. We want it to sound and think and tweet like we do, but all the time—to provide takes on tokens, crypto markets in general, and macro and crypto analysis 24/7, 365 days a year.

We have a tremendous amount of content to train the agent on because we sit here and talk to each other every week, and it gets recorded and transcribed. We also have a community that we can use to crowdsource ideas on how to make the bot better. We have all the ingredients we need to make it good.

The thing is, we’ve reached the threshold for how much you can do without actually writing code. The next threshold you have to cross has a much lower bar than what it would have taken to deploy a token 4 years ago. You don’t need to know how to write Solidity. You basically need to upload a JSON file.

For those who don’t know, JSON is basically the kind of language that APIs use to communicate with other computer languages, like Python. You need to upload a JSON file with your custom functions and your calls to a server that you could set up with parsed transcripts or ideas about how to give the bot context.

We’re so early that the world hasn’t really figured out how to design effective agents. Maybe people talk about Zerebro, AIXBT, or Athena, but I could very easily see every podcast having an agent that helps listeners and community members think about topics related to the podcast that the podcasters don’t actively discuss.

It could answer questions in the mindset of the podcaster. That’s just one example because we do podcasts, but I’m sure this concept is universally applicable. Linking it to value is a great way for community members to contribute and get rewarded appropriately.

I’m stupidly bullish on Virtuals for that reason. It’s not financial advice, but at $2 billion FDV, it seems like a no-brainer.

The only point of caution I’d make is that it’s very easy to be the category leader if you release a product that doesn’t exist. But once you release it and it’s very good, other copycats will come along.

It’s actually probably likely that you guys weren’t the most competent; you just had the best idea at the right time. Is there a network effect there?

There’s no network effect with an AI-agent creation platform.

You’re right. There’s no network effect because the AI agents all exist by themselves. There’s only the tooling. What’s the easiest platform to use? I think that’s dangerous.

That being said, this area is so small that I would advocate buying a basket of the stuff that’s good. If something better comes out, buy that, too. Keep adding, because my bet is that this sector is going to explode. I don’t necessarily know what the winner is right now, but the sector is going to explode.

AI season is the new alt season.

I really like it. Right now, Virtuals is the best because it’s very easy to use. The only issue is that it’s on Base and Ethereum.

Getting stuff from Solana to Base is not fun, but it’s possible. Crypto’s user experience is still terrible. You basically have to use Coinbase as your best gateway and your best portal.

Coinbase also has a way of being a little stingy with your funds. You send stuff in, and they hang on to it for a few days. They don’t let you send it out. It’s a little annoying. It’s not my favorite place to do crypto.

I agree with you. It’s not great.

The one thing that’s very clear to me, based on what’s already happened and the products that have launched, is that 4 years of innovation have been held back by regulation. People just weren’t interested in creating new and better products for crypto because they didn’t know if they were going to get sued for it.

Why work on improving the UI of crypto? If you have a great idea, why launch a project to improve it if the SEC can put you in jail?

Chris Dixon was talking about this regulatory jail. We listened to a keynote at Permissionless where he said that every builder in the a16z portfolio who’s working on crypto is doing something else right now because they don’t want to spend the next 5 years in court.

What we’re going to see, even in the first year, which is going to be really fun, is an explosion of new products. I urge all of you to try them out. Spend 5 minutes every time you see a new product that looks even vaguely interesting. Click around it and try to use it. Use $50 if it’s possible. If it’s not on Ethereum, use your time wisely.

It’s probably much better spent creating a list of 100 projects and then using them than reading 100 tweets. That would be my guess.

I’m going to go play with this thing now. It’s so fun to tell it what to do. It’s already getting better, and it’s going to keep getting better. We’re going to keep working on it.

If you like our podcast and want to help make this agent work and try this experiment with us, reach out. We have a couple of chat rooms open. We can't wait to work with you guys. We're going to source it from the community, and hopefully this bot is just going to get better and better.

I’m really bullish on our bot. I wasn’t in the beginning because it was a mistake and an experiment, and I thought it was just a joke. Then a bunch of people started messaging about how to improve it and how to actually make it useful.

I now believe there’s a great use case for having a bot that analyzes CT and tries to find opportunities in the noise. It has a Telegram bot, and we’re going to make this thing a personalized trading assistant.

You can talk to it about your trades, and it’ll say, “Why did you do that? Did you think about this or that?” I think that’s actually really useful. If you think of a trade, it’s like, “Maybe you should check the distance from the most recent MAs. You should check the funding rates on this thing. You should check the order books on this thing. By the way, this is what they are.”

It could literally be like having a trading assistant or trading analyst in your pocket that gives you advice on how to structure a trade. You could say, “I really want to buy this asset here,” and then tell it why. It pokes holes in your thesis and explains how you should think about entering it from its perspective. You might buy it versus Bitcoin, for example, because crypto could go down.

That’s the end goal: How do we create something that both finds opportunities and helps you refine your own? It’s very possible, and it’s really cool.

I do this to myself, and I’m sure you do, too. Whenever you come up with a trade, you try to think about what else you should be looking at. Instead of sitting there for 10 minutes trying to think about everything, ask the bot what else you should be thinking about.

It’s the same thing as ChatGPT. I don’t necessarily take into account everything ChatGPT says, but it gives me a broader picture. If you have a business idea, put it into ChatGPT and argue with it about the idea. It’ll give you 60% genuinely good feedback and 40% complete nonsense, but that’s okay. It doesn’t need to be perfect or right. It just needs to give you a broader picture.

That’s really important with trading. If you have somebody or something in your life that can give you a broader picture of what you’re thinking about, it doesn’t necessarily need to tell you what to do. It can just say, “You haven’t thought about A, B, C, D, and E.” You go, “The first 3 don’t matter, but these last 2 are good. I didn’t think about them.”

It’s not just bots that do that. That’s what trading floors are good for. The reason you sit on a trading floor instead of sitting isolated in your own little trading cave somewhere in the middle of nowhere, trying to express ideas with your money, is that being around other people is good for trading.

It helps you avoid groupthink. A bot is 60% interesting ideas and 40% nonsensical garbage. That’s what people are like, too. When you sit on a trading floor and turn to the person next to you and say, “I’m thinking of buying fuel-oil cracks. Here’s why,” they could give you 3 reasons that are totally stupid why you’re wrong, and 2 reasons where you think, “Maybe I should do a little more research before I put on this trade, because I might have missed something huge.”

Groupthink is death in trading. Unfortunately, for a lot of people, sitting on a really nice, elite trading floor filled with smart people who follow the market just as closely as you do is a luxury that isn’t available. Frankly, that’s something a bot can help you with.

ChatGPT is awful for trading advice, though. Maybe we can train a bot with Llama 3, deploy it as an agent on Twitter and Telegram, engage with our community, and try to build a bit of a trading-floor experience for crypto that people can use—not to replace their thinking, but to augment it.

I’m excited about it. It’s fun, and it’s not a full-time job. It’s something we can side-hustle and work on together and document our progress. Because the use case is so clear, it’s impossible that this isn’t useful for other people as well, which is why I think Virtuals at $2 billion FDV is a steal.

I take your point about there not being a network effect for this one, but if people figure out how to launch projects with agents that are better than Virtuals agents, buy those tokens as well. Buy them instead, or buy them in addition. This use case is incredibly bullish.

That brings me back to your original point about your cycle-top target for Bitcoin being $150,000 per token. That was the top end of your range, and it’s only 40% higher than here. If there’s a Strategic Bitcoin Reserve buying hundreds of thousands of units of Bitcoin, agents are going viral, and crypto is legal, do you really think this whole market is going to rally another 40%, top out, and then go into another vicious, nuclear bear winter for 2 years?

Is that really all we have to look forward to, Avi, or do you think all this new stuff is going to propel us a hell of a lot higher than $150,000? Because I do.

One thing I’ve been batting around in my head is that there’s going to be a decoupling between Bitcoin and the rest of the crypto market. The reality is that, while they use the same underlying technology, they’re not really doing the same thing—other than Bitcoin and memes, I guess. Memes are basically just lottery tickets.

Bitcoin is a memecoin. Its community members just happen to be more prominent. They’re people like Donald Trump and Scott Bessent instead of you and me pumping some random shitcoin. You know what I’m saying?

I think that’s fair. That’s always been my take: The reason meme coins have value is that Bitcoin is basically just a memecoin. It’s a matter of social acceptance at a certain point.

Bitcoin has broken out to be about money. It’s genuine money. When people buy BTC, they think, “This is an allocation to my long-term portfolio.” It competes with gold. It genuinely is now an asset class, and I need to own it because in the future it’ll become geopolitically relevant.

That’s really the thesis for Bitcoin right now: It will become geopolitically relevant.

It already is. Central banks are keeping each other honest, and that’s why BlackRock just greenlit all of its RIAs to move from a 0% to a 2% allocation to Bitcoin. That’s ridiculous.

Before now, the thesis was a bit different. People thought it might become geopolitically relevant. It was underpriced relative to the probability of that happening. Now it’s at a price where it kind of has to become geopolitically relevant. It’s not going to stay here unless that happens.

Everything else in crypto—meme coins—are just lottery tickets. Maybe they go up, maybe they go down, and they eventually die, except for Doge. Outside of that, there are products: things that people use on a daily, weekly, or monthly basis.

Using blockchain technology is better for certain things because you can transfer value more easily, engage with people more easily, and get buy-in more easily. That’s the big difference.

To me, that means that over time—not now, and not necessarily in a year, but maybe in 5 or 10 years—the holder base between people who own altcoins and Virtuals and the holder base of Bitcoin is going to diverge significantly.

The type of person who owns Virtuals is more likely to be a Silicon Valley, cutting-edge tech guy. That was true of Bitcoin up until the last year, up until the launch of the ETF. Now it’s almost a completely different holder base. These aren’t the same people anymore, and that’s going to decouple Bitcoin from the rest of the crypto market.

I totally buy that Bitcoin is a different asset class from the rest of the blockchain world and the rest of the tokens. Is your take that, at least as far as this cycle is concerned, Bitcoin is going to top out and then the other stuff just keeps sending? Or am I misunderstanding?

It’s 2-fold. One, Bitcoin can top out and altcoins can send very easily. The other point is that Bitcoin can run, as it has been running, while altcoins do poorly, as has been happening.

The point I’m trying to make is that you can have an extended period of outperformance from crypto projects if Bitcoin is going sideways or down. That’s probably going to happen at some point. You could see a world where Virtuals 10x’s and Bitcoin goes down 10%.

That type of price action does play out on very short time frames, but it could absolutely play out on slightly longer time frames.

You just said that the whole thesis for Bitcoin used to be that the market had underpriced the probability that it would become geopolitically relevant. I think the market is drastically underpricing how geopolitically relevant it already is and massively underpricing how geopolitically relevant it will become over the course of the next 4 years.

My Bitcoin price target is a multiple of yours for this cycle—call it a cycle, however long this bull market lasts before we enter a real, proper, crazy bear market where expectations shift from “good things for Bitcoin” to “crypto is dead; crypto is a scam” again.

Until that “crypto is dead; crypto is a scam” moment, I think we’re going at least somewhere between $250,000 and $750,000 per token. The reason isn’t just the Strategic Bitcoin Reserve. We’ve talked about this on previous podcasts: If there’s 1 Strategic Bitcoin Reserve, there will either be 0 or dozens of them.

I just don’t think the market has caught on to that, and that’s what makes me so ridiculously bullish. I don’t see Bitcoin as bifurcating from the rest of the blockchain space. I see it as a bellwether benchmark.

If that’s going on, it’s hard for me not to see some altcoins performing. I don’t expect the altcoin space as a whole to perform. I expect wild dispersion within the altcoin space. Certain sectors will go absolutely ballistic, like AI, while other sectors will remain flaccid or uninteresting. It’s the job of the individual investor to try to pick what’s going to go up and what isn’t and select cycle bags appropriately.

The other thing about Bitcoin that has me excited at the moment is the idea that institutional inflows are coming. We’re excited that Bitcoin is becoming geopolitically relevant, that there will probably be a bunch of Strategic Bitcoin Reserves, and that it’s becoming part of a retail person’s portfolio. It’s now okay to hold 2% of your portfolio in Bitcoin. That would have been unthinkable even a couple of years ago.

We should also bring up that $60 trillion worth of assets are getting handed down from Boomers, who are all no-coiners, to Millennials and Gen Z, who are all crypto-obsessed gambling maniacs. We live in a generation where you need to gamble a little bit in order to have a better life, whereas our parents didn’t. Our Boomer parents didn’t.

All of that is going to go into IBIT. That’s going to be huge. But all of that is aside from the fact that it’s now also okay for institutions to own Bitcoin.

That’s what I’ve been getting to this whole time. The institutions were supposed to be coming—the mantra of the 2021 cycle was “the institutions are coming”—but they didn’t come because Biden and Gary Gensler didn’t let them.

Now they can come. They can get involved. The Teacher Retirement System of Texas can hold 2% of its portfolio in Bitcoin. Yale can hold 2% of its portfolio in Bitcoin.

Why is the basis on Hyperliquid 20% for Bitcoin? Why is CME basis 10%? It’s because institutions can’t stomach obvious crypto-arbitrage trades. The word “crypto” is in it, and they don’t want to get stuck in court for 5 years.

Now that’s off the table, the wave of institutional capital that could flow into this sector as a whole is impossible for the current participant base to front-run. That’s part of what makes me so bullish.

Ultimately, this matters for certain altcoins—not all altcoins—because outside of crypto, it’s impossible to transfer an asset to somebody else easily when that asset trades dynamically all day.

You can wire money the same day. Payments in most countries are pretty easy. There’s Zelle. What you’re doing is sending a stablecoin. But there’s no way for me to send you some SPY, some S&P 500 ETF, without waiting for some system to transfer it from my brokerage account to yours.

Crypto is the only platform, the only set of rails, that allows you to transfer dynamically liquid, volatile assets instantaneously. That’s going to matter more and more as people denominate their wealth in dynamically traded, liquid, volatile assets instead of effectively stable assets, which is what our parents’ generation did.

In summary, you’re so bullish you can’t see straight.

I’m still so bullish I can’t see straight. It’s not just crypto I’m bullish on; I’m bullish on stocks, too. I’m not bullish on commodities because I’m bullish on human innovation, which means you’re kind of bearish on commodities in general. People always find ways to dig commodities out for less money.

Ultimately, I think you’re supposed to hold risk assets until the redistributionists take charge—the AOCs and the Bernies of the world. We’ve just seen this massive political wave effectively take the global macroeconomy in the exact opposite direction.

Barring World War III or something extremely bearish, like China getting into a hot war with a bunch of Asian countries or the United States, you’re not really thinking about your crypto. Barring one of those left-field events, where who knows if the world will end, the literal opposite of what would make me bearish just happened.

I don’t know what I’m missing. I feel like I’ve lost my mind because I’m so much more bullish than everybody else and the market’s at the highs, like you said. Maybe I’m crazy, but I really believe this. I feel super convicted right now.

I’m not bullish on gold. I think Bitcoin is a catch-up trade, and when Bitcoin gets to the same market cap as gold—or when MVRV hits a cycle peak—it’s probably time to take a breather. We’re not even close to that. We’re at a fraction of those levels.

I think everything you said is accurate. The economy has been held back by poor decision-making for a very long time, and this is clearly a repudiation of all of that—a repudiation of everything since effectively the Obama years.

This allows us to get into a crazy mega-bull-run scenario. I don’t necessarily think it ends when the redistributionists come in. I think it ends when things get really crazy.

I’m not a political dogmatist. I look at both sides and try to consider the pros and cons. When you look at liberals and their view of the world, the pros and cons are reasonably obvious to people who sit on our side of the political spectrum.

Redistribution is very high up on their menu of things they want to do, and that by definition caps the top. We’re not going to grow as wealthy as we otherwise would because we have to spend a disproportionate amount of our time, income, and energy taking care of the bottom quintile.

That’s their preferred status quo because, in their minds, it doesn’t matter how rich people are on an absolute basis. It matters how rich people are on a relative basis. They’d rather all be living in mud huts if everyone lived in a mud hut than have some people be extremely wealthy while everyone has a fridge.

On the conservative side, in the world of Trump and Elon, there’s a free-market approach. They want people to be able to innovate and do what they want when they want in order to advance the human system.

What that leads to are precursors to the Global Financial Crisis. With very little regulation, you do get boom-and-bust cycles. You have people handing out mortgages to people who don’t deserve them because they’re making a ton of money while the market is going up.

My best guess is that it ends when things get really crazy. Things aren’t really crazy yet, so my view is that we have some time. I’d probably sell when things seem too good to be true. That’s when it’s time to take some chips off the table.

We’re not quite there yet. Trump isn’t even in office yet. So far, it’s all promises. We’re still far away from the scenario I described. It was just a point to make, because I don’t think it necessarily needs the other team coming into power to blow up.

Who knows? Maybe Trump campaigning on crypto is just a bunch of hot air and he’ll break our hearts. But to your point, the bar is already so low that the risk-reward is skewed to the upside.

The previous administration was so ridiculously anti-crypto that even marginal improvements—like not suing everyone in the United States who talks about crypto—would probably send the thing higher by another 20%.

I feel like your downside is capped. You’re one of the masters of trading the range, and that’s very rare in crypto. You meet momentum people in crypto, because this is a momentum asset. It’s okay to buy rallies. It’s okay to invest in things that have already 100x’d because they could 100x again.

That’s the value—and one of the many little pearls of value—in these conversations for me. I’m a momentum trader; that’s how I’ve always made my money. I appreciate speaking to you about being sober about some of these momentum trades.

Even though they’re lucrative and you make your money on them, you have to take profit at some point. Otherwise, all that money just vanishes into thin air.

You absolutely have to. The key here is that, if you don’t take profits when things are up, you tend to get forced into selling when things are down because most people don’t have the discipline to hold things they think are up and to the right for a long period of time.

If you own anything other than BTC, there will probably be a period when that thing is down 70%. How are you going to feel when it’s down 70%?

The conclusion is that if you decide to buy anything other than BTC, you have to learn how to take profits. If you just buy BTC, you’re willing to stomach a 50% drawdown, and you’re not going to give up on BTC if that happens, then sure—don’t trade it; hold it. If you buy anything else, you’d better be willing to trade.

You asked me before the podcast how I think about things not staying stabilized at all-time highs. We’ve talked about this before: How high could it go, and what do you look at?

Just talking about Bitcoin again for a second, I think the way I would look at it, as in oil, is that you have to look at supply and demand. Somebody has to take your risk off your hands in order for the trade to keep moving higher.

In oil, if there was a big demand boom, like in the 2000s when China was buying more and more oil to grow its economy, China was always there. It was the greater fool buying from everybody.

In other circumstances, you look at supply. When a bunch of producing countries suddenly can’t produce anymore because they’re having civil wars, disruptions, problems, strife, or mismanagement, those are the greater fools who effectively bail you out of your position.

In Bitcoin, at $108,000 per token, who’s going to buy from us? The supply side doesn’t matter as much in crypto because of Bitcoin’s halving. There are only 21 million tokens that will ever be minted. The supply side isn’t really something traders need to think about actively because it’s so transparent and planned.

All you really have to care about is the demand side. We can continue melting upward in price discovery as long as the following groups of people act as the greater fools to buy our Bitcoin: sovereigns, institutions, retail—but not people like you and me. I mean traditional retail, like Millennials inheriting a million-dollar home from their Boomer parents, selling it, and putting $100,000 into IBIT.

Then there are Strategic Bitcoin Reserves, central banks, trading desks, TradFi, and clearing systems migrating to crypto. There are dozens of different categories of institutions and people who haven’t stepped in yet but almost definitely will.

As long as those groups are lurking, there isn’t too much cause for concern beyond black-swan events or political sea changes.

That’s fair. As we were talking about at the beginning of the discussion, it’s worthwhile trying to map out how you think these people are going to behave so that you can act around it. I guess we’ll see. Maybe our agent can tell us.

I’m going to go play with this thing now. It’s so fun to tell it what to do.

It’s already getting better, and it’s going to keep getting better. We’re going to keep working on it. None of this is financial advice. Please don’t do any of the trades that we do or talk about doing. It’s a terrible idea. We’re just talking to each other, and we really have no idea what we’re doing.