最糟糕的阶段已经过去

Imagine being a bear.

The 10:30 a.m. seller who’s been here every day for the last month, just nuking the charts, appears to have run out of coins.

Anthropic went from $5 billion in Q1 to $16 billion in Q3. It’s never happened before.

It’ll either be China or the U.S. who gets Satoshi’s coins, or—

Pearl is a tool to identify who doesn’t have size.

I sold some of my long-term Bitcoin holdings and put them into Zcash.

I think Zcash could go to $5K, but I think it could go to under $1K after that.

The best way to build loyalty in crypto is to make people rich on your protocol.

I love how Thanksgiving in the U.S. is a time to be grateful and a time to source eggs and liquidity.

You don’t dump on your friends; you dump on your family.

All right, welcome back to the Delphi Hive Mind podcast. Another week. It’s funny: yesterday, as we were going through and preparing for this, I think the vibes might have been a little different. I don’t want to hang too much on a green-candle day, but as Jason said before we started recording, we’re so back, so we can dig into that a little bit.

Let’s start with our usual markets banter and update. We’ve definitely seen crypto markets pull back pretty decently for the last couple of weeks, and some names are starting to find a bottom right now. We’ll get into the AI debt bubble concerns and everything that’s rocking certain parts of the tech trade, the AI trade, and the stock market itself. But let’s start with crypto. How are you guys feeling here?

Imagine being a bear.

I feel like crypto looks pretty good here. We’re up this morning; Bitcoin’s back to $84.4K. We had a month there that was pretty rough. On-chain has looked pretty bad, but the winners are starting to win again—

I hate that that’s a thing, “on-chain.” That’s now a thing people say, referring to memes and all that crap.

It’s not just memes. It’s the highly speculative area of the market, I guess.

Unlisted stuff.

Yeah, like—

But yeah, the Robinhood and Solana on-chain trenches, whatever you want to call them, have been hammered pretty hard over the past month. I don’t know if you’re really seeing that come back right now, but you’re seeing strong continuation from some of the majors here.

We’ve had the rumors that they’re doing some ecosystem fund. I haven’t really done the math on how much business that could drive, and then how much fee revenue they’d get directly from their sequencer and indirectly from activity and users. But I could see even a small amount moving the needle. I’m not really banking on it.

How would you even play something? You’d just have to do Pawns or something, some nonsense, right?

Pawn, yeah. Pawns and Cash Cat, which is what I bought when I heard there was a rumor. The second I saw it hit the tape—

I was looking at markets over the weekend, and some of these things looked not great, in terms of distribution or just general consolidation. But I was looking at Bitcoin and thinking, Bitcoin could get under $75K, $74K, or $73K, and it would still be completely fine in the grand scheme of things. It would look completely fine.

I had some bids set down there. I was thinking, “Yeah, I’m gonna catch this,” and then the last 3 days, everything rallied pretty hard. The 10:30 a.m. seller who’s been here every day for the last month, just nuking the charts, appears to have run out of coins, maybe.

There are some interesting little trade opportunities, like Yan brought up. Obviously, this isn’t something I would do now because it’s the day of the Robinhood earnings call or whatever, or the later earnings call. But you could buy something into that, especially after it’s been pretty much straight down in a line since the middle of September.

Heading into the end of the year, I have no read on midterms. I don’t know. I have no idea at this point. I’ve thought about it a lot, but I just have no read, no idea, so I’m not going to spend any more mental bandwidth trying to game-plan around it. I think I’m just going to wait and see until it’s clearer.

But certain things, like on-chain stuff, as José hates to call it, or even smaller things like Lighter—obviously, a couple of us are probably relatively bullish on Kinetiq and what that might do for the Hyperliquid EVM down the line. Tons of these projects are pretty good and everything, but they also have some pretty big unlocks coming up into the end of the year.

One thing I’m keeping an eye on is whether these teams try to do something to pull the unlocks forward a bit, get through that wall of worry sooner. Maybe they work with teams to come to some kind of agreement to restake portions of the unlocks, essentially trying to signal to the market that this massive supply coming into a lot of the projects people like isn’t actually going to nuke charts. But it’s hard to do when you have all these different stakeholders. It’s a lot easier when you’re Hyperliquid and you pretty much have full control over all the unlocks anyway.

That’s one thing I’m looking at. With Lighter into the end of the year, I was always thinking, “Oh boy, I don’t know how they’re going to navigate this,” because everybody’s up so much in their private rounds. Even the most recent round is up a boatload, so how do you navigate that as a—

One thing that might help with these unlocks coming up is that there aren’t a lot of them now. It’s not like the entire industry is going through an unlock phase.

It’s just the projects we care about, right?

Yeah, but I wouldn’t treat them equally either. I think—

Yeah.

HYPE was probably a relevant example of the pain getting front-run and then people assuming the worst. Obviously, that was compounded by a lack of trust in revenue durability, at least back then. I think it’s harder to make that argument now.

I imagine the strongest names will try some kind of cushioning, where they speak to investors and potentially even try to line up buyers. I think this is going to be more prevalent for revenue-generating assets that can be fundamentally understood. You can reasonably find buyers and cushion that blow. So I’d probably use any material weakness in Lighter as a buying opportunity, because I imagine it’s something everyone’s aware of, right?

Yeah.

It’s the same way everyone’s yelling “Black Monday” on Sunday. The more awareness there is about it, the less likely the event is to play out the way people expect. I think that also applies to midterms. Actually, maybe you could argue the other way.

Over the past—I think going back to Bush Sr.—the incumbent loses the House in midterms. It’s just the way it is: people are pissed about something, they scapegoat, and then everyone’s like, “All right.” It’s the same way things swing back and forth. To a smaller degree, you have it happening in midterms, too.

I don’t know. I guess it depends on the degree to which they win and what that might do for the AI buildout. We already had all the acts not really go through. There’s a world where Democrats win the House and try to go after crypto to some extent, and that could be a headwind. But I don’t really view these as a factor. You might get a little bit of a sell-off going into them, and then it happens, and everyone’s like, “All right. Fine. Event behind us.”

We’ve had so many massive negative events, and crypto’s held up pretty well. Nothing’s really been favorable for it. The acts didn’t pass; there are concerns about trade and the AI trade; inflation’s coming in hot, so the probability of rates going up is there. All these events taking place while crypto is resilient just shows that the market’s able to climb the wall of worry.

That’s not to say everything is going to go up, or that there won’t be some big drawdowns when alt open interest gets excessive. But if you look at a lot of the alts that have traded well, you’ve seen open interest reset back to pre-big-move high levels. And if you look at where the volume deltas are, it’s been mostly perp selling.

So I think you got a pretty healthy reset in a lot of these names. It goes back to the stuff we’ve been harping on: concentration in a handful of names is the easier trade. If you’re going to do additional work to try to outperform those, you have to find the next altcoins that are going to be accepted as blue-chip.

You mentioned the AI risk. Just isolate away the midterms. Assume they’re not happening. How do you guys feel about the AI trade? Kevin, Yan, José? I know you guys are a little more plugged into that trade than Ceteris or I am. We’ve seen a lot of stuff on socials over the last week. Apparently, CoreWeave is patient zero, according to Nic Carter’s sarcastic tweet, with the stuff going on there. Obviously, the Anthropic IPO is probably the biggest market event on the calendar at this point—or pseudo-on the calendar. So how do you feel about it?

Yeah, Kevin, do you want to kick us off with that Venky from Menlo tweet? I think that’s a pretty good framing.

Yeah, I do. Give me one second; I’ll pull that up. Where I sit, I think right now it’s really tough to discern what the expected revenues and actual economics of this entire trend and trade are going to be. I thought this was a really interesting post that we can link in the show notes.

It goes over a couple of different paths forward. The rough numbers—stick with me here—are important context. He starts off by saying there’s roughly $4 trillion in AI CapEx through 2029. This gets into the whole data center and infrastructure CapEx build-out, and all the fear-mongering right now, especially around CoreWeave debt and equity.

If you’ve got $4 trillion of AI CapEx over the next 3 years or so, and you assume that capital needs to earn a relatively high return to make it attractive, he uses a 12% return in his assumptions. You wind up needing about $500 billion of free cash flow by 2029 to support that amount of CapEx and earn a return on it. At 50% gross margins, that translates to about $1 trillion in revenue for the AI compute that’s being installed and used.

There are 2 paths forward, and I’m curious about your thoughts on this. José, I know you’re deep on this too. One is that the labs simply fall short of this revenue expectation. In that case, there’s definitely a painful unwind. A lot of the concerns people are talking about are happening today.

One important historical point is that this isn’t necessarily a 2001 dot-com-style, full-blown debt crisis. The top 4 AI spenders represent about 70% of the spending, and they’re funding the majority of it from operating cash flow. We’ve seen the numbers showing more of that free cash flow going toward CapEx, but they all have pristine credit ratings.

The debt really lives with these other firms: Oracle, CoreWeave, and Meta’s off-balance-sheet financing. Private credit has become much bigger. He estimates there’s somewhere around $350 billion of private credit going in to support this. So path 1 is basically: Yes, there’s going to be some pain. We’re long-term bullish on AI, but there will be unwinds, and things like CoreWeave will probably do extremely poorly.

The other option is that the labs actually get there. What I thought was interesting as you go through it is that he lays out where this money could come from. The combination of those sources makes me less cynical about potentially getting to these numbers. It’s a big if.

Yeah.

But the money has to come from somewhere. He looks at U.S. wages, for example, which are about $15 trillion a year. If you take about 3% of that, you get to about $500 billion. That represents about 5 million jobs. Unemployment goes up 2%, maybe 3%. It’s not a huge labor crisis. It definitely hurts, but it’s doable.

The other option is about 1.6% of U.S. GDP, where output growth can help support this funding. Then there’s global software spending, where you’d need to shift a majority of that spend toward revenue for AI compute providers. The big takeaway for me is that there’s definitely a path forward. It’s not super clear, but it’s not as if all this installed compute and infrastructure won’t earn some type of return on that CapEx.

Yeah, yeah.

It’s just a matter of— it’s almost like a timeline game right now.

Just real quick, in terms of setting the stage, the numbers you mentioned relate to that one popular chart that’s going around, which I think even Chamath tweeted about. The whole idea is that 80% of the spend is coming from 1% of the share of spend. In other words, the top 1% are spending 80%, and 80% of that is AI and VC-backed.

But VC-backed is a binary trigger, right? VC-backed or non-VC-backed. The source of that capital is the question, because they can be VC-backed but raise debt.

But it’s like a bridge.

Right.

Yeah, yeah.

I think this chart doesn’t reconcile with the numbers you were saying earlier. But I guess the caveat is that VC-backed is binary, yes or no. It’s the share of the capital you’re spending that matters. What share is coming from VCs versus credit? You can argue they both have their own issues: VCs pulling back, credit getting expensive.

I’m maybe pretty bullish on us being fine and hitting the numbers we need. I think his numbers are basically $500 billion of free cash flow, which means $1 trillion of revenue at 50% gross margins. He assumes the labs are half of that, and right now they’re about $100 billion. So you’re basically saying they need to grow 70% a year on a $100 billion base over the next 3 years, which has never happened.

But I think we’re seeing a lot of stuff that’s never happened before. Frontier lab revenue 3 years ago was $2 billion; now it’s $100 billion. Anthropic went from $5 billion in Q1 to $16 billion in Q3. It’s never happened before.

Even at massive scale, Nvidia was up 106% year over year in the last quarter, and its revenue this year is projected to be 80% higher than last year on a $200 billion base. It’s just insane. There’s this good chart Jensen Huang put out: analysts basically assumed they’d be flat or down. The bullish analysts, like Altimeter, assumed they’d be up 20%, but in reality they’re up 80% this year.

And the stock’s only up 20%, by the way. I think Nvidia’s forward earnings multiple is about 13x. So I do think the market is heavily discounting it. The market is not pricing in AGI, which is kind of my point. Even SpaceX came out yesterday. I think they’re up 161% year over year. They did about a $1.5 billion quarter, which is kind of crazy.

When you look at some of the fundamental demand indicators, I think one of the most important is spot rental prices for GPUs. They’re all up, even in October, if you look at the Oren Index. Then you can look at OpenRouter tokens per week. That’s up 36% in the last month and 35x year over year, in terms of token spend. The majority of that is open models.

According to SemiAnalysis, about $1 trillion of binding data center leases have been signed this year. The other thing I think Venky’s analysis misses is that you’re basically counting the frontier labs and hyperscalers, which are definitely the majority of the revenue. But one really interesting thing Jensen talks about in this podcast with Gerstner, which I really recommend everyone listen to, is that a third of Nvidia’s revenue is just classical computing moving from CPUs to GPUs.

All these things like data processing, search, and recommenders—all these algorithms that used to run on CPUs—are now moving to AI compute.

And that’s literally a third of their revenue, and it’s growing 30% to 40% a year. So that already puts in a big— That’s revenue that isn’t even accounted for in this. And I think there’s a bunch of unknown revenue that could come in.

For instance, physical AI—robotics—could come in big time by 2029. Self-driving could come in, as could surgical robots, medical imaging, and satellite imaging. I think basically everything is going to be intelligent and leverage AI compute, in my mind. So I just think there are many ways to get there.

I’m pretty confident the labs themselves can reach $500 billion by 2029. “Very confident” might be too strong, but I’m pretty confident. My main worry is what you just said, which is this reflexive demand. There was a post that I linked—maybe we can put it in the show notes—by a guy called Giovanni Cattani, who we’re actually LPs in and really like.

He put together this framework for AI demand that I thought was really interesting. You split it into bounded tasks and unbounded tasks. Bounded tasks are things like taxes, accounting, a basic front end—all these things where there’s a limited amount of tokens you can spend, and you’re just going to go to the cheapest model you need to achieve that. You can look at progress on all the benchmarks: these tasks are getting cheaper and cheaper and cheaper.

Those tasks will eventually move off frontier models. Then there are unbounded tasks, where there’s never really a finish line and there’s almost infinite demand for spend. One example is quant trading: if you spend more on intelligence, you can get more edge. There’s probably not infinite demand, but it’s extremely high. Apparently, those are some of the biggest spenders in AI.

There’s also AI R&D, which is sort of infinite. The models could keep getting more and more intelligent; at least, there have been no signs of slowing so far. And then there’s building software—you can always build more software. Tasks like this are like Formula 1: you always want the fastest car possible. I think frontier revenue is mostly from unbounded tasks.

The worry is that a lot of those are running on VC money right now. One stat that really worried me was that new labs—basically, labs trying to compete with Anthropic and OpenAI, like the ineffables of the world—have raised $40 billion since 2024. They’re basically forced spenders. Let’s say half their money is on training—or, actually, the majority of their funds are on training, because they don’t have a model to do inference on yet.

A lot of that will also be spent on Anthropic and OpenAI tokens to do training runs, software improvements, algorithmic improvements, and stuff like that. I do think that’s my main short-term worry: at some point, this could get very reflexive. There’s all the money being raised in venture, and a lot of it is being plowed back into these models. If that slows down, it could get pretty reflexive.

On the other side, AI just hasn’t penetrated the economy at all. You still have people like Meta spending a bunch to improve their ad efficiency. A lot of the hyperscalers and big companies still have a lot of room to go in terms of what they need to adopt AI. Overall, I’m still long.

I sold all my neoclouds a while ago, and I’ve been looking at buying them back here. But it’s in the too-hard bucket for me: as I dig into the businesses, there’s so much crap, so much different stuff you have to understand, so many different vehicles, so much off-balance-sheet stuff. It’s just really hard to underwrite. I’m sure some funds are going to make a killing doing that, but it’s probably too hard for me.

As for the debt, I’m not too worried about it right now. I looked at the debt. I think the 15% chart that goes around is their unsecured debt. I think there’s stuff that’s secured, and it’s moved up with the risk-free rate. Their secured stuff is backed by NVIDIA GPUs, and even the old generations are selling for more than they bought them for. Given the fundamental demand drivers, I just think we’re still pretty good. That’s sort of where I sit on it.

So you think the band continues to play for a little while longer? The music continues to play?

Yeah, I think we’re going to have some scares in the middle with the VC funding. But VCs just keep raising bigger funds, right? I think every single startup is spending more and more on tokens. So I think there’s probably going to be a scare with that at some point, but I just wouldn’t try to time that or sell. I think people are going to be pretty on top of it, looking at this stuff.

I mean, I think—

Yeah.

VC stuff can take a bath if the last exit starts to get hit, right? If Anthropic starts to take a material markdown, then that works its way down the VC chain, and that’s where VC funding can take a hit and people tighten their purse strings.

Yeah.

That’s the thing. I agree the chart is going to continue grinding higher, but there’s no world where spending, particularly when it’s debt-fueled, lines up perfectly. It’s almost like when you see the solar system flying: the sun moves in a straight line, and everything else oscillates around it.

There are going to be periods of overspending relative to revenue. Conversely, you get a positive revenue surprise when things pull back and you see a model breakthrough or a use case or whatever. Then all of a sudden, revenue cranks higher and debt spend is actually below it. You have this periodic movement.

There’s no world where everyone can time spending relative to revenue well. You’re going to have periods where people get ahead of their skis, offset by positive revenue surprises. I think people are always going to look for the negative revenue side because it’s easier to tangibly identify that story. The positive side is just breakthroughs that haven’t happened yet and are much harder to account for directly, so you need to assume there will be one every X amount of time. That’s how it trends higher. It’s never going to be in a perfect, linear fashion.

So, I guess the question is: do you look at 2000 and 2001, or whatever, as an example? Clearly, everything in the tech bubble pretty much nuked, good or bad. Then it took several years for that to work its way through everything, and for the actual real winners of that era to start to manifest.

But there was no revenue, right?

Yeah, exactly.

Yeah.

So my question to you was: you don’t think that’s really a potential outcome? You think it’s more shallow scares along the way, as opposed to a mass washout event and then a recalibration?

Yeah, I think 2000 is very different because—

It definitely is.

When you look at the multiples, there was just no revenue on any of these things, right?

It definitely is, yeah.

Whereas here, no one believes the revenue. All these things are trading so cheap that you have to just not believe there’s going to be any growth. Nvidia and Meta are both trading below 20 on forward price-to-earnings. I do think it’s hard for me to imagine this doesn’t bubble up eventually, once robotics and AI are happening and people get super over their skis.

But the revenue is so real, and there’s so much revenue, that you would need so much money to bubble it. For Nvidia to be trading at 100 times price-to-earnings is kind of impossible, right? It would be a $40 trillion company or something at this point.

Hell yeah.

At this point—

But nationalize it. Pay off the debt, baby.

I think it’s less—

Boom.

It’s less about that. Obviously, the issue with comparing it to 2020 or 2001 is revenue versus no revenue. But I think more important is the spread, and then—

Mm-hmm.

…

And then there’s also durability in particular, where—

Yeah.

Revenue here, when a scare happens, it’s not as if it’s isolated to a name. It’s pretty systemic, right? I think that’s why people apply a pretty big discount to revenues, because when one of the issues people are worried about comes to light—and if it does come to fruition—there’s a meaningful step down. I think it’s the correlation of the sources of revenue that causes people to discount.

I think there’s probably going to be an overbuild. Yeah, I think there’s probably going to be an overbuild.

There has to be.

It seems impossible to me—

There’s just no way there isn’t.

—that there’s no overbuild. The only way there isn’t is if the Saudis’ projects all got nuked—literally, in some cases. And then, obviously, in the U.S., no one wants data centers, so that’s sort of naturally slowing down the bubble, which is good. But I do think you’re going to get an overbuild eventually.

Someone in a group chat made a good point yesterday: Jevons can be true, but on a much longer timeframe, where a lot of people go bust in the meantime. I think that’s true, and it’s basically why I’m not trying to play in neoclouds and stuff anymore. But I think it’s very different from 2000.

I think the only way the overbuild doesn’t happen is if the denominator comes up, right? If revenue positively surprises. Otherwise, there’s either a massive drought in revenue that causes a collapse, or, as long as there’s some money readily available, there will continue to be an overbuild somewhere. So it’s either a massive collapse, or revenue just cranks and it actually wasn’t an overbuild because revenue came in where people expected it, or higher.

Yeah.

The bio use cases for frontier models, all the bio and material science stuff, take way longer than the revenue we’re seeing right now. If the bull case for frontier tokens is that you need them to internalize these unbounded tasks, they basically need to become biolabs and trading firms and, you know, R&D labs. I think that’s probably going to take much longer than their current trajectory.

But those could wind up being significant—not just enterprise value accretion mechanisms, but significant revenue drivers—even if it’s on a longer-term time horizon, to your point. That’s why I keep coming back to the fact that nobody has a crystal ball. It’s very much a question of whether we’re going to get a timing mismatch.

1. How Compute Deals Work

I found it interesting that CoreWeave has even come out and said, “Hey, if we stopped building today”—if we stopped increasing CapEx on new data centers and infrastructure—“we would be massively cash flow positive.” Take that with a grain of salt, but I think the point is about the way these deals are structured. We could do an entire episode on compute markets, which are starting to pop up and which I think will be a pretty key piece of the next phase of the infrastructure build.

A lot of these deals are done with creditworthy entities, as lenders see them: AAA- or AA-rated hyperscalers. Or companies essentially have signed contracts for the compute before they go and build it. The problem, though, is that those require longer contracts right now, because lenders want to make sure the revenue will be enough to cover their costs and the loan.

There’s a huge gap right now, and that’s why you see this mismatch between on-demand, or spot, pricing for GPUs and compute versus these take-or-pay rates. Is there going to be a time, probably relatively soon, when these contracts start to roll over? Will they be refinanced or restructured at these higher spot rates for GPUs, which would be net positive for the neoclouds? And does demand continue to increase and come in through that shorter-term spot market, allowing these companies and inference providers to increase revenue by charging higher rates on capacity they don’t have to set aside for a lower rate and a longer contract to meet their loan obligations?

I think that’s going to be a really interesting dynamic to watch. On the earlier point about VC-backed companies, there aren’t a ton of VC-backed companies or startups that can commit to a three-year, take-or-pay compute deal. But there are potentially a lot more that can commit to three months, six months, or even a week. If you have enough of those players, with enough capital and enough potential revenue coming in for these inference providers, you could actually see revenue start to scale up and, to Yan’s earlier point, see positive surprises.

To tie a bow on this, José, you made a really good point: there’s a lot of complexity in how these compute markets actually operate, where the revenue is, and where the value flows. It doesn’t take as much negative press or as many negative headlines to scare the market, because it almost feels like the market is just waiting for some negative headline to confirm the bias that we’re in a bubble and all of this is unsustainable. Underneath the surface, though, there’s more complexity to what’s actually happening. The market runs with the narrative that’s most relevant, or the one people can actually grab onto and understand at a headline level.

Mm-hmm.

At a headline level.

That’s also not what happens in a bubble, in my experience, right? There are generally way fewer bears. It’s not so antsy. You climb this wall of worry and keep converting people: “Fuck it, I’ll buy, I’ll buy, I’ll buy, I’ll buy.” And then there’s just a voice—

Yeah, you’ve got Newton, right? You need the bear to capitulate by the top.

Exactly, yeah.

Yeah.

You need Michael Burry to full-port CoreWeave before you can—

There’s also just—I don’t know. There’s so much money dependent on all this that—

It’s becoming—

And there is—

Yeah, there’s a lot of money still going around, so there’s still enough fuel to keep this going for a while. I do think that, as I talked about a few months ago, the highly speculative capital is different now. A lot of things went up a lot over the past year, including the neoclouds, memory, and other AI names. So I think the worries are bigger now, and that will also lead to more of this slow-grind, wall-of-worry thing.

But I do think the Goldilocks case for crypto is that all of this continues to grind higher, and there’s enough money to support it and keep it going for at least the next few years. You’re not getting those really crazy outliers, especially in public markets. Maybe you’ll get some of that in private markets, but in public markets, you might not see something like SanDisk going up as much as it did, or the neoclouds going up as much as they did. Maybe there’s some other little pocket that does that. I do think speculative capital has shifted a bit.

2. Bitcoin Faces Quantum Risk

Think about Bitcoin specifically. I think this sets up for a good year next year for Bitcoin, because everyone sold their Bitcoin, right? Everyone was concerned about Saylor, and thought he was going to get liquidated at a much lower price, or that he had to send the price way lower, and then it didn’t happen. Now he’s in a pretty good position, and people don’t even really talk about Saylor when they talk about Bitcoin anymore. He doesn’t have a huge impact on the market. I think that gives crypto markets a pretty good amount of fuel over at least the next year.

Is this your tweet? “Liquid crypto markets are the best arena,” or whatever?

Yeah, I just think that crypto in a bull market is always the best market to be in, honestly.

Easily.

I think there are kind of these two opposing forces with Bitcoin. The macro stuff—obviously, if the AI trade significantly rolls over and the frontier labs all get blown up, Bitcoin isn’t going to do well in that scenario. But under this grinding—

No, bro, we’ll be good, because quantum won’t crack it, and we’ll be chilling.

Yeah, under this grinding-higher scenario, I think it sets up very well for Bitcoin and the rest of the crypto market. Bitcoin has a lot of good signals on its side, but there’s still this quantum thing, which I actually think will be okay for Bitcoin.

My new base case on quantum is that by the time it happens, most people will have migrated, or at least they’ll have their coins in unspent UTXOs that they can then migrate. I think it’ll either be China or the US that gets Satoshi’s coins and all the old coins. I’ve thought about this a lot, and I don’t really think it matters whether China or the US gets the Bitcoin. I know some people think it’s bearish if China gets it and bullish if the US gets it, but I don’t know if that’s true. Just because China doesn’t let its citizens hold Bitcoin doesn’t mean it doesn’t want to own a bunch of it, right? The size of it is so big that, regardless of which one of them gets it—

True.

Regardless of which one of them gets it—

You can’t sell it, right?

You can’t really sell it. I’m sure they’ll sell some over the years, but I think you have to take Bitcoin’s 21 million supply into consideration when you think about quantum. You can’t price Bitcoin as if some amount of coins are lost. I think you have to assume that all coins will be active at some point. And I think there’s a 90% chance, probably higher, like 99%, that it’s some Chinese or US lab. Who else is going to have the resources to do this?

If it is a doomsday scenario involving Lazarus or North Korea, I think people would just fork their coins out.

It’s never going to be them. They don’t have the—

No, I don’t think so.

If I ranked them best to worst, Red US would be best, China would be in the middle, and Blue US would be worst, because they’d just nuke it to fund three days’ worth of some retarded socialist agenda.

With all that being said, I agree with that ranking. With the quantum thing, I do think that until it happens, it’s breathing life into these other stores of value. You saw that this year with Zcash, and you’re starting to see more of these. Everyone’s talking about Pearl now. I don’t know much about Pearl; I need to look into it. It seems—

Pearl is actually a tool to identify who doesn’t have size. There’s only $3 million in 24-hour volume, and these dudes have been going ham about it, like they’re full-porting it. It’s a very clear indication of who has no size.

There are a good number of people—there are a handful of OTC brokers who have direct connections with the miners. They’re facilitating some of these trades. But I personally haven’t aped into it on SafeTrade.

Yeah.

No, and everyone’s talking about it, and people are running this trade that it’s going to get listed on Coinbase or something, so buy before then. I don’t know. That just seems like the classic top, you know? All these people who can’t sell now have all this liquidity on Coinbase, so—

Yeah.

Yeah, but I think Pearl has a really good narrative.

I agree.

I think it makes sense. Some people pitch it in a way that doesn’t really make sense, and I think a lot of people don’t get it, based on some of the questions I’ve been getting about it. It’s also somehow reached people outside of crypto. I’ve been getting questions about it from VC friends, which is interesting. They all think it’s a decentralized inference network, which—well, I meant to look into whether they can get there from what they’re doing now.

If it succeeds, you get into this pretty interesting place where everyone who has a large amount of GPUs is incentivized to run this on top of them, so you end up with a lot of compute power. The initial thesis for me was just that compute power equals a secure network. It’ll probably have more hash power than Bitcoin at that point, so it’ll be very valuable. But there’s another possibility: maybe you then have this amazing supply side to do other things with, like decentralized inference. They’re pretty cracked. Remember, we met them in SF, Yan. I think it’s a really interesting one. I bought a bit of it, but I didn’t know how to buy it. I somehow didn’t consider the OTC side of things. It’s just really hard to buy.

Yeah, but I do think you’ll see more of these, too.

Yeah, I wish it were more liquid. Just like Derive.

There are also others. I don’t own any of these, so I’m not talking my book. I own Zcash, okay? That’s the store-of-value coin I like. There’s this QANX one that a lot of people are talking about.

That thing ripped.

Yeah, it ripped so hard. There’s ORE on Solana, which is still very small, like $50 million or something, but it’s starting to get more interest. You’re seeing people interested in these alternative stores of value to Bitcoin. In Bitcoin’s early days, it was money, and everything was the best Bitcoin. Then everyone was like, “Okay, Bitcoin’s money.” The next cycle was ICOs and grand ideas like decentralized Uber and all this other bullshit. The last cycle was L1s and DeFi.

But three years ago, the industry had kind of come to this consensus, except for the ETH maxis, that Bitcoin was the store of value and there was no room for anything else. I think that’s changed a lot because of quantum. Whether or not that’s right, I don’t know, but it does seem—

Take a coin.

It does seem like it’s reignited interest in buying stores of value outside of Bitcoin. The thing is, with quantum, it’s not disprovable. It’s basically just that one day it’s going to happen. Until it happens, it’s always going to be a bit of a headwind. Maybe if it doesn’t happen for 10 years, the longer it goes on, the more people start thinking, “Okay, maybe we’re never going to get it.” But, yeah.

Has quantum risk, or the recent rise in discussions about it, actually changed your positioning?

No.

No?

I mean, I owned Zcash, so yes, in that sense. But it didn’t really make me afraid of it personally. It changed my positioning because of how I think other people are going to think about quantum and how that’s going to change their allocations. So, yes, the answer is yes. The Zcash chart looks pretty great again.

It’s the classic beauty contest: predicting what other people are going to think, as opposed to what you think.

I mean, that’s what you’ve got to do, right?

Yeah, I mean, it is.

Like—

It doesn’t really matter what your opinion—

But it turns yours, too, though, Jason, right? The first time you said it, you said it was the first time you didn’t feel comfortable holding Bitcoin for—

Yeah.

—for a decade plus. That’s basically what happened to me. I had this Bitcoin stash that I never touched—

I haven’t done anything with it.

—and I was like—

But I’m really thinking about it, you know?

Yeah.

I’m seriously thinking about it. It’s not something I’d mindlessly shill to my family at Thanksgiving today. Five years ago, sure, but today, if they ask me about the quantum risk, I’d have to be honest and say, “I really have no way to accurately underwrite it.” I’d be lying if I said I did, and I don’t think it’s as clear as it was.

Dude, I was on a—

Nice flex, dude.

And she was asking me—

What is a naturopath? What does that mean?

Naturopath? It’s like a—

The fuck? How long have I—

Yeah, I’ve never heard that word.

…been in a relationship?

…naturopath?

I’ve been out of the game for too long.

It sounds like a Canadian scam.

It’s like a doctor who…

You don’t even know what it is.

…does natural remedies and stuff like that.

Yeah, okay.

Run. Why are you even going on that date?

Like, even more? Like the homeopathy thing?

I don’t believe—

Here’s some water.

Yeah.

Were you just hungry and bored?

This is not homeopathy. No, honestly, it’s—

It’s a system of alternative medicine that focuses on natural, non-invasive therapies and the body’s ability to heal itself.

Yeah, some of it’s honestly good. Some of it’s good. You can kind of tell. Some naturopaths are complete quacks, but others are just about what food you react poorly to, fixing your diet, stuff like that. It’s low-risk type stuff.

Anyways, my point is that she was asking me how worried I am about quantum with Bitcoin, and I was like, “How the fuck do you know about this stuff?” It was interesting to me.

Is she actually into technology, or—

Dude, she probably looked you up and was like, “This guy’s gonna like this question.”

She can’t really look me up, no. But I thought it was interesting.

Is this something that normies actually know about, or is she—

I assume they do. She said she’s become interested in it, so she does have a bit of an interest in crypto.

Okay.

But it was interesting that she was talking about how, when she asked her financial advisor, he was like, “No, don’t touch any of that.” Honestly, that’s fine advice for him to give. But it was interesting that she straight-up asked me, “Is quantum gonna destroy Bitcoin?”

My uncle was asking about it, too, because over the years I’ve been shilling Bitcoin to them, and they’ve bought some. They still have a little bit of Bitcoin and ETH in wallets for their grandchildren and stuff. He was asking because he’s following along now that he’s bought some.

I was like, “Dude, I actually don’t have an answer for you right now. I really don’t.” I think if you talk to 10 people—

It kind of goes back to what we were just talking about with AI, though: the negative headlines are what people grasp onto. Again, I’m not discounting the risk. To be honest, I thought Luke Martin’s latest interview with Nic Carter on quantum was super interesting.

I was curious if it’s actually impacted things. For me, it’s made me more bullish than I ever was on something like Zcash, but it hasn’t really changed my allocation that much. Maybe that’s partly because I’m in a similar seat to Jason, where I have a really hard time underwriting what that risk really looks like. If anything, it’s more about what people will assume, where people will gravitate, and how we’ll try to position for it.

But I think it’s like any kind of risk, whether it’s quantum or public-key cryptography breaking. All this stuff is just bad for Bitcoin because Bitcoin can’t adapt to it. I feel like all these things are very bullish for the alternatives. It changed my allocation: I sold some of my long-term Bitcoin holdings and put them into Zcash. I’d love to put some into Pearl or whatever else. Those are the only ones I’ve really thought about.

I’m just less confident in Bitcoin. It’s harder to hold, like you said, on a 10-year time horizon.

I don’t know.

Maybe NEAR?

I think next year Bitcoin’s gonna do pretty well. I think it’ll get back to $120K or above.

That’d be insane. I’d love that.

But I do think these other ones are gonna go crazy, right? And then they’re gonna be brutal. They’re gonna go through an absolutely disgusting bear market. I just think—

Nah, not my bags.

I just think even Zcash could go to $5K, but I think it could go under $1K after that. That’s just what these store-of-value-type assets do, right?

3. Tokens Return To Fundamentals

I think money is gonna be a big theme for the coins next year. The 2 big themes—and I’m writing about this for Year Ahead—are money and more of these token protocols that have good tokens. I think good fundamental token designs are coming back around. A lot of people are realizing that Hyperliquid did so much for the industry. If you build a token that you throw value to, it’s gonna do well. People are gonna like it.

If you launch a token, you don’t have a lot of the regulatory concerns that you do with having equity. I think you’re gonna see a lot more really thoughtfully designed tokens. It’s kind of like a DDoS attack, where it’s a perfect regulatory environment to do it now. The more of these projects that do this, the better everything becomes.

I’m really bullish that the tokens are being unfucked, and that a lot of the unlocks are past us in the industry. In AI equities, all the unlocks are starting. You have these very divergent forces between everything. It’s still a token-picker’s market, obviously, but we’ve seen breadth go up, right? Zcash is still crushing it. Fennec is still doing a run, and LIT and all that. You’re seeing more coins recently, too, and more interesting pockets.

Before, Paper Trade took $140 million of liquidity out of the market, but—

Yeah, that was a tough one.

It just—yeah. I think you definitely want to be paying attention. There have been more interesting things. You’re seeing the hooks; people are doing stuff with the hooks. There’s some other stuff going on in Robinhood. Solana is doing well again. I don’t know.

On the Paper Trade thing, maybe Yan or José, since you guys have a lot of experience with token work: is there actually a solution for that? Or as soon as they make the token transferable, do perps markets get listed, and then the native token and the protocol itself are at risk of an oracle-type attack? Or just somebody with enough size to move the Bitcoin price or whatever on Hyperliquid?

Is there no solution? Are they just kind of stuck, in the sense that as soon as they make that token transferable, it opens up that existential risk to the protocol? That was my read of it. Like, I didn’t—

Yeah.

If I’m being blunt, I didn’t see—

Mm-hmm.

—a real solution there.

I haven’t thought about it enough.

I’m fairly close with one of the guys, and I think if anyone’s gonna figure it out, it’s them. I really think they’re some of the smartest people in crypto. It’s hard, but it’s kind of the same issue that all the stablecoin protocols had to some extent, like Luna. Shorting a stablecoin is kind of free, right? Because the worst case is it goes back to—

One.

—it goes back to one. And you also have added juice with shorting the native token if you do manage to depeg it. So it’s always… This is kind of a worse version of that because it’s built into the mechanism. I don’t know. Yan, have you thought about it?

I’m sure they’ve thought about it enough.

I put about 30 minutes of thought into it after their post, and I was just thinking, with a pretty smooth brain like myself, there doesn’t seem to be too much wiggle room here. To me, you’d combat that by reducing or capping position sizes or whatever. But as soon as you do that, it kind of takes away—

Well, so—

…

From the whole usability.

Yeah.

Usability.

One issue they have is that they emulated Rollbit, which is a brilliant product, but Rollbit hedged its underlying positions. Because it was through their platform, they knew who was sharp and who was a sucker. They could hedge the people who consistently won, or whose book was skewed against them, so there was a natural hedge baked in.

Often, they’d hedge out the winners and take naked exposure against people who didn’t trade well. That’s harder to do here because people can spin up wallets, and there’s no way to stop that. But the more delta-neutral your book can be, the more open interest and capacity you can take on. Effectively, your exposure is just the delta; it’s not how much you’re long or short individually. It’s the difference.

I think that hurts them a bit in terms of scaling, but I don’t know that they’ve actually hit a big limit. I think they’ve hit some limits, but I don’t know if that’s been a major headwind for them. I’ll check, actually. But the issue is that creating transferability lets people short the token, and then the token goes down?

Yeah. If you pull up Paper Trade’s initial thread, they have a paragraph with a rough example: a $10 million or $15 million Bitcoin short, paired with a $10 million paper perp short, would be enough to essentially nuke them.

Right.

Scroll down a little on the left. Yeah, right there, for example. Obviously, the numbers change with the size and the protocol, but—

You have to limit exposure to assets where it would cost more than that to manipulate. You can’t manipulate BTC with a $15 million trade.

No, but people can.

But they already do. Their algorithms and risk metrics are tailored to avoiding that, right? And even then, it’s fucking difficult. Some whale exploited it on ETH.

On ETH, yeah.

On the first night. They made, like, $1.5 million or something.

Yeah.

So even then, it’s hard. But this introduces another lever they can play with. If they can short the native token in size, these attacks get way more profitable. If you succeed, you don’t just make money on the attack; you make money on your short on the protocol, too.

I think there’s probably a way to do it, but it may increase the risk of the thing going insolvent, which means Paper is worth zero. It’s transferable, but it’s worthless. Or you might have to make the risk parameters, like the queue, so much longer. I don’t know how you’d allow 1,000x leverage.

I think that’s where—

Yeah, see, it’s the top 10—

No, I think that goes back to off-balance-sheet hedging, or just the ability to maintain some delta-neutral component. If you manipulate it one way and someone turns a big profit, there are a bunch of people on the other side getting licked. You have to try to maintain delta-neutral status to the highest degree possible, and that lets you scale.

The other element is trying to do something else, but that’s a different beast altogether. It’s no longer a DEX or decentralized. You have a centralized party. I mean, what do you think HLP is doing? That’s just the team running a market maker, creating liquidity for their platform.

I think you could probably tranche it and be delta-neutral to some degree. You could also create limits on the upside, which harms UX, but allows you to do the opposite of an ADL: automatically close positions when they’re too far into profit. You’d have to be transparent about it. You’re not gearing for long-term holds, but rather short-term trading within windows and sizes you’re comfortable with.

I think it’s solvable with risk. The question is how much these parameters impact UX—

—and cause people to step away from the platform.

It’ll be interesting. It’s definitely an experiment. It wasn’t something I was super interested in messing around with at launch, but I’m clearly watching.

It was a great idea for us to mess around with at launch.

Yeah.

I didn’t either, but I know some people who did, and I—

I did.

Yeah.

I went golfing instead.

It was so obvious that you should just try to lose as fast as possible in the first block.

I just know—

It’s like you either win or you win, basically, on those—

I owned some of that Paper strategy thing. It’s been getting hammered since they announced it. It was doing very well, but now that they’ve announced it’s no longer transferable, it’s hard. You’re buying this liquid version of something that you don’t know.

They’ve already bought back a lot of its supply. But it’s a low market cap now; it’s gone down so much. I think it could actually—I don’t really want to say, because it’s a low market cap now.

What has?

It’s the only liquid token, like—

Paper strategy?

It’s the only liquid token. They own, like, 2% of the Paper supply.

Do they stake it all? Is that what they do? They just—

They stake it all. They’re also outpacing the Paper inflation. The price has gone down so much that their buybacks are burning more. If this blows over two months from now, it might actually end up being good for them, because they would have—

This is the actual Joe McCann strategy.

What?

You could actually run the “farm the Hyperliquid airdrop by getting liquidated” strategy.

Yeah, basically.

It was such a good tweet.

Yeah, we’ll see how it goes. I think it was interesting that they—I own Kinetiq, as a disclosure. They’re launching their mainnet soon. Jason really pilled me on it, along with some other people at Delphi.

It is interesting that they didn’t just wait for that to go live—

Because that eliminates the queues, yeah.

—because it might. Maybe they’ll end up launching some there. I think this showed a good appetite for people wanting to use HYPE-adjacent products. The founders of Paper Trade are very well known and respected in the HYPE community, so that went a long way for them.

A lot of people know the Kinetiq founders, but I don’t know if they have the same cachet as those guys. Are people going to use this now, especially because the supply is getting close to 12 billion, which is the max? If you lose a trade now, it takes, like, 3 years of yield to make it back at the current rate.

I did not expect to hear people so bullish on liquid-staking Layer 2 in the year of our Lord 2026.

Yeah, but the infrastructure of it—I’ve said this a few times: we have too many chains, but that doesn’t mean a new one can’t be successful. You saw that with Robinhood. Will Kinetiq be successful? I don’t know. Maybe.

Sick HYPE video, though.

But—

Awesome video.

Bullish start.

You don’t even know this is crypto. That’s how bullish it is. So we’ll see. It’s not about the tech; it’s about people…

HyperEVM just isn’t going to—

There’s a button in Hyperliquid that lets you transfer your money to HyperEVM. There are billions of dollars sitting in Hyperliquid, and people just want to click that button and go mess around on-chain.

And think about the—

Let them do it.

The social apps don’t have HyperEVM because it’s such a bad experience, right? You get a performant experience. To buy Kinetiq, you can’t use FOMO or whatever because it’s only on HyperEVM, right? Wait until FOMO and the Pump app add support for it. Then you have all the HYPE ecosystem tokens. I feel like that’s good for the HYPE ecosystem and good for HYPE.

So all it is, is sort of redoing the HyperEVM thesis. Are they putting buybacks toward HYPE or not?

Yes. It’s 50/50 between Kinetiq and HYPE buybacks.

Okay, so that seems decent. That seems—

Aligned.

Yeah.

It’s like ETH alignment.

It’s called the ethos, José.

But it’s actual revenue.

It’s ethos.

It’s way more aligned than the ETH rollups, though. The ETH rollups paid, like, 0.1% of fees, right? This is going 50/50. The Ethereum rollups paid ETH DA costs, okay? These guys are paying Hyperliquid straight-up sequencer revenue.

What are they going to send them, their tens of dollars of revenue?

What, Kinetiq?

No, the—

Oh, the… I mean, Base—

The ethos.

Base and Robinhood make a lot, right?

Yeah.

If they’d been set up that way back then.

I think, based on testnet, it’d be, like, $250,000 a year or something in HYPE buybacks. I don’t know—

Well, there’s nothing live on it. It’s, like—

I mean, testnets get spammed, right? People run their own stuff.

Solana made a billion dollars in revenue one year, so—

I think it’s a good—

Yeah. Solana’s the example where this worked out, right? People did want to buy the alts, and the memes did well. People wanted to gamble with their native coin. But I’ve heard this many times over the years: “It’s the first alt on X chain,” you know? These things sometimes don’t work. It’s kind of weird.

No, 100%. And I don’t think that’s the thesis—

Bitcoin L2s are a great example, right? Bitcoiners have been waiting for something to speculate with their Bitcoin.

Yeah, but Bitcoin L2s still sucked. They were still slow because they were actually using Bitcoin. Don’t actually use Bitcoin. Stay here.

And Bitcoiners don’t actually want to do anything.

Don’t make it a real L2.

Yeah.

Put it down.

There’s no such thing as a real L2 in the market anyway. Did you see the L2BEAT guy’s amazing troll the other day? He basically launched a whole framework for people to launch rollups that just uses the Gnosis Safe contract.

Mm-hmm.

He was introducing the “zero-proof system.” It’s faster than any proof system on Ethereum because you don’t need proofs. But that’s essentially how rollups work today, right? His troll was basically saying that none of these rollups actually do anything. Every rollup is a Stage 0, and even Vitalik now says, “Yeah, it doesn’t make sense for Robinhood to ever move from Stage 0.” So what’s the point of the tech behind these things? I don’t know.

You’re not bullish on HYPE season, HyperEVM season, José? Doesn’t seem like it.

I bought Kinetiq.

Oh, okay.

I don’t take—

You’re just flooding my bags now, got it.

Yeah, if you—

Got it.

Yeah, if—

Fair enough.

If people at Delphi are bullish on something, I just buy it. I don’t overthink it.

Jason actually got mad at me because I wasn’t doing it, and he was like—

He’s like, “Yeah, I’m not gonna turn on my VPN and go buy Kinetiq.” I’m like, “Dude—”

That’s the most ridiculous.

I was like, “Dude, send me USDC now and I’ll buy it for you free of charge.”

Dude, I love that.

I also added a new address to my taxes. It’s like I have a new address I need to reconcile.

I know what you’re gonna be showing at Thanksgiving.

Taxes? Dude, you’re making money?

That’s crazy.

I’m chilling out.

Yeah. You gonna be showing Kinetiq at Thanksgiving dinner instead of Bitcoin, Jason?

Yeah, exactly.

Everyone send me your USDC right now.

Right into your order.

Right now.

I love how Thanksgiving in the U.S. is a time to be grateful and a time to source—

Show—

—extra liquidity for our bags.

Yeah, 100%. You don’t dump on your friends; you dump on your family.

Yeah. Oh, man.

I do think it’ll be a… I think CoolCrypto, or whatever his Twitter handle is, had a really good one-sentence framing: it’s either an overvalued LST as it currently stands, or a really undervalued L2 on HYPE.

Yeah, I thought that was fair framing, too. I didn’t realize that guy had $10 million of Derive on-chain.

That guy’s massive when it comes to these things, and he uses all of these apps, like Derive.

Yeah.

He uses the Kinetiq Markets app, so I generally trust his opinion on the products. At least, he definitely—

Yeah.

—has more size than I do when it comes to trading these things. If he likes Derive, thinks it’s a good experience, and does most of his business there for on-chain options, that’s probably a reason to take a look at it.

If there’s one person you can have faith in, it’s the Kool-Aid Man.

Great account, entertaining account. Are you still bullish? I think we had this conversation somewhat recently. If Elysium’s mainnet, which is November 9th, isn’t as successful as some people think, would you still be bullish on Kinetiq, given everything else that’s going on?

Oh, no. I bought it purely for—

For it to succeed, you need to see projects coming over. I’m pretty sure they have a few things lined up for mainnet launch. It’ll be pretty clear within a month or two after launch whether things are moving in the right direction.

Hypercall is launching there day one.

Is there a chain that launched and then took a while to get going? Usually it’s the opposite, right? There’s a ton of pre-deposits and hype, and then it’s down only. Like Verasity, for instance—

You know pretty fast.

So many pre-deposits, so much hype, and then down only, right?

If the market’s in the dumps, but you’re still seeing teams move over and traction there, that would be a sign to let it breathe a little bit. But I think you’ll generally see the signposts you want to see within 30 to 60 days.

Yeah.

Are you talking about price action or fundamentals? TVL moving over?

No, just actual people using it, TVL.

Okay.

You’ll be able to see people moving money from Hyperliquid over to HyperEVM, right?

It’ll be interesting to see how much money comes from other sources versus how much HYPE is bridged over from Hyperliquid. Maybe the Robinhood degens are going to move over, right?

It’s very possible. It’s mercenary capital, right? I don’t think anybody on Robinhood has any loyalty to Robinhood, for example. Whereas people on Solana do have loyalty to Solana to an extent, and people on ETH have loyalty to ETH to an extent. It’s pretty siloed that way. I think HYPE has that, too. There are a bunch of people who just want to do stuff on HYPE, myself included.

I think HYPE can get it because, if you look at the successful L2s, they’re all corporate chains, right? You’re not really going to have loyalty to those. You’re not going to have loyalty to Coinbase or Robinhood or whoever. HYPE is like Solana in that regard, and it’s a good point about people: no matter how many Ethereum EVM L2s launch, Solana’s still going to be Solana, right?

To me, Solana is still the best, and they released Alpenglow today, which is a new consensus mechanism. It’s still by far the most complete overall blockchain. I really don’t know how SOL, the asset, will do at this point, but as an overall blockchain, it’s definitely a tier above everyone else to me. And they’ll always have that—

Yeah, sorry.

—they’ll always have that strong developer and end-user community, right, that’s hard to fork out. Hyperliquid can be similar. Now, are people going to treat Elysium like that, right? It’s giving 50% to HYPE, so that’s pretty good. But there’s still another token, right?

I think it comes down to this. We wrote about this in 2024, when Rinco [?] was around, when we were writing about Solana a lot. People have loyalty, especially in crypto, whether it’s fairly placed or misplaced, to wherever they make it. If you made it on ETH, you spend a lot of your time doing stuff on ETH. If you make it on Solana, you spend a lot of your time doing stuff on Solana. And it’s just like—

You made it on Boden.

That was such a good meme. Holy shit.

And then gave it all back on Boden.

Yeah, I was gonna say, nobody made it on Boden.

You made it on Boden, you gave it back on Trump.

Yeah.

The line, yeah.

But I do think there’s a very clear pattern in crypto. We called it “patrons of the chain” back then. You get airdropped, or the native token of a big ecosystem like SOL or ETH runs up a lot, and you 10x your portfolio. Then you go dabble on-chain, maybe get a Jito airdrop for depositing 1 SOL, and you get a $30K airdrop or something, right?

These things build loyalty, and the best way to build loyalty in crypto is to make people rich on your protocol. It might be passé to say that, but it’s obvious. That’s how you build community, reputation, and loyalty. HYPE would clearly be the only place where you’ve had a native token go up 20, 30, 40, 50x from TGE. A huge number of people have quite literally made it—made generational wealth on Hyperliquid—and there’s nothing for them to do. Give them the opportunity to speculate in Hyperliquid land, and they will. It seems so clear that I’m like, “Is this actually that easy?” That’s how I think about it: the keep-it-simple, stupid strategy.

Yeah.

Fine, I’ll buy more.

I think you could see some crazy stuff going into year-end. Once the midterms are over, the people don’t take effect until January, right? So I think you could see some crazy stuff in November into December.

Yeah, you’ve got 2 months.

It’s starting to run a little bit.

And you noticed it never came anywhere close to that strike price, right, for their airdrop—the 26-cent, whatever it was.

I mean, it came when—

It came, yeah.

And I get it, I have bags. It came to 2 cents with—

Okay, so 10%, bro. Come on.

What is 10% on a coin that’d take, like, $100K to move?

I’m just saying, it didn’t go below. I think it shows decent demand. I think people are buying.

Pull up the Pump chart. I’m actually curious what it looks like over the longer term.

Pretty good.

That looks pretty good, yeah.

Pretty good. Nice little pullback. Grinding higher now.

Yeah, I know. I ended up getting rid of all the rest of my stonk. I don’t know, maybe that thing rips, but I change my mind every day about whether it’s going to $2 billion or $10 billion, and whether I want to own it. Seeing them do all this KOL stuff, I’m kind of just like, “Eh, do I even want to own the token?” But I should probably put it in a locked contract for 6 months so I can’t touch it—

Save yourself from yourself.

—and see how it goes. I don’t know, man. It does seem like a pretty strong thesis.

There’s a bid there, dude. Somebody’s bidding that every day, pretty much.

Well, why didn’t you include it in your speculation report, actually, Jason?

Pump?

As, like—

I thought I—

Oh, yeah.

So this is part one. I just wanted to lay it down, and then in the year ahead, I’m going to expand on individual names more. It would be hard to do both in the year ahead, so I figured I’d do this now and then actually get into—

Okay. But you consider them the house to an extent?

Yeah, to a degree. I just—

They have 90% now. Actually, you should pull up this tweet. I’m going to send it to Kevin.

I’ve just been so personally burned, and it’s not even Pump’s fault, right? It’s just me being a terrible trader on the day or whatever. I have a problem when I get burned on a token because of myself. I don’t like going back to the well again.

I think it’s a fair strategy.

Yeah.

Look at this with Pump, man. This happens. It’s happened at least 3 times now where—

Well, that was Robinhood Chain, so it’s hard to map Robinhood activity—

Well, even if you go back to the Bonk run, right?

—which is inversely related.

For sure. It’s mostly Robinhood Chain activity, but—

Does this go back to last year, though, when they had the Bonk—

On his site, it does. He actually has a really good site. This is their—

Is this Adam? Oh, yeah. He launched his own site. Yeah.

If you look at the Robinhood period, that’s actually what you should look at, if we can pull that up. Hopefully his site works. When Robinhood goes crazy, Pump metrics don’t really drop. Robinhood actually looks like net new, and then it just kind of dies, but Pump stays pretty stable throughout the whole time.

It’s wild. I don’t understand this Pump revenue chart. It befuddles me.

Yep, I’m in the same boat. I don’t know.

I think a lot of people are in that camp. The longer it goes on, the more you’re kind of like—I don’t even know how much of their cash they’ve spent. I know they’re paying people to use the Pump app, but what else are they spending on? I feel like it’s such an overall loss.

I saw Soby tweet, no shade or whatever, that he moved all his stuff to the Pump app, and he was a top FOMO trader. I feel like FOMO organically got a lot of the good people to use it. On Pump, I go on the Pump app and I don’t know anybody on there. It’s a totally different crowd, whereas I feel like FOMO has more of the CT I know.

But Pump has the money to literally buy everybody on FOMO if everybody took their deals, right? I think Pump mobile app revenue might be above FOMO revenue now. I saw 2 charts of them; they basically went in opposite directions.

Who’s signing up for these things, man? Like, what?

Dude, that video Yan posted in the chat—that’s who’s signing up. Dudes in Dubai. Did you see that?

Just the most bottom-feeder people in the world. God damn.

I was watching an anime.

We can bundle this shit.

That was so crazy. These guys are literally talking about how they bought 50%—they found this meme, created a coin, created all the socials, bought 50% of it, and then he was like, “At the peak it was worth—”

It was $400K. His biggest win was on a $400K market-cap shitter where he made $100-and-something K.

But what’s crazy—

And this dude owned about 30% of the supply.

It’s just crazy to me that people—

It’s—

It’s like that meme from The Big Short.

Hey, hey, hey.

The Big Short. And it’s like that meme where they’re—

I literally just posted that in chat.

—confessing their bet.

They’re bragging.

They’re bragging, and I don’t understand how this became so normalized to so many people that it’s like—

It’s social trading, man. It’s why I hate all of it. It is that, bro.

It’s healthy social trading.

It just incentivizes the worst behavior ever. And it’s minus EV to call it out.

Yeah. But the funny thing is, KYC solves this, right? If you had social trading on Robinhood, you couldn’t have this dude sitting on three other accounts in the shit and trading these coins. You’d have to—

I don’t know, man. He’s on video. I’m pretty sure he’d do this under a KYC’d account. This dude’s on video in his house—

No, but—

—bragging about—

If you’re limited to one account… No, more so that social trading—

Oh, the one-account thing.

—isn’t a mega PvP.

Yeah. KYC solves a lot of things.

I mean, you’d probably just buy a KYC account, right, and do it that way.

Yeah, with, like—

Not on a US exchange.

Yeah, no. You’re gonna need a Social Security number, all that stuff. It’s—

Oh, okay.

Yeah, signing up for US things via KYC is like giving them your firstborn.

I don’t think this dude’s American. I’m just gonna go out on a limb.

No, I don’t think so either.

No, but I’m saying a KYC’d platform that—

Yeah.

—has strong KYC parameters actually solves this and is probably what’s needed to have organic social trading. It’s just so bad.

It’s these subcultures that emerge in crypto every once in a while. There was the NFT art expert era—

Yeah.

—where people were analyzing—

The salt makers.

—like, doing long—

The squiggles.

Yeah, the squiggles, and the art and stuff. Everything became art.

It’s like that I Think You Should Leave episode. The more complicated the design, the more the shirt’s worth.

I want that one so bad.

So bad.

Oh, man.

Yeah, it was a great time. Really good. All Andrej, obviously. I spoke for like 2% of it, which is perfect. He does a great job just breaking down the space, their positioning in it, why they have a right to win, and the markets they’re gonna go into. Genuinely, if you asked me for 3 tokens that I thought would, with the highest certainty, be higher a year from now, Grass would be very much on that list.

Who would the other two be?

Hmm. Hyperliquid, I think at this valuation.

And Kinetiq.

Probably Lighter.

Ooh. Lighter’s an interesting one. I think a lot of people have written it off based on a combination of the unlocks and the Robinhood thing or whatever. Is that kind of your thinking? What do you hope for?

I think options come into play, and they can do event contracts a year from now, not 3 months from now.

Yeah, okay.

A year from now.

They’re starting with the binary, right?

Revisit October 2027.

I guess they’ll announce some stuff on options, probably on their investor call or whatever today.

Yeah, I think it starts in the binary way, where it’s not real options.

Like the hit-$4 ones or whatever.

Yeah, exactly. And then eventually they launch the real thing.

It’s the first step.

Yep.

I like that. If I lose money, I’ll just send you an invoice.

I’ll send you back some Kinetiq. I could see Venice as well, pending some acquisition. I’m thinking about business lines and products that are gonna continue to do well, and obviously will be beta to crypto to some degree. A year from now, unless quantum gets figured out and everything just craters, I think those will all do well. This goes back to Ceteris’s post about there being a lot of interesting opportunities in crypto because the market’s been beaten down, but there are actual compelling products being built under the surface.

Yeah, good momentum.

Good pod, guys.

Yeah, this was fun.

Yeah.

Great stuff. Quick shout-outs. Read Jason’s latest speculation report; it was fantastic. I like the takeaway of antisocial trading, but at the end of the day, if people are going to do it, own the house. It’s the best strategy. That one was really good. We just mentioned Yan’s latest interview on the Delphi podcast with Andre from Grass. It was really, really good, and there are a lot of outstanding questions around Grass: what they’re doing, how they’re positioned, the rise of personal agents, and how that plays into this. That’s a really good episode to check out. And last but not least, we launched our new show, Convergence, with Luca Martin. It just started. The first two episodes are already out. There’s a really good one on quantum with Nick Carter, like we mentioned, and his latest one with Arthur Hayes, who’s been a controversial figure lately within crypto. Any time he speaks, you always find something interesting in his take. Those are really good, so definitely check them out.

Hell yeah.

All right, guys. Gents, till next time.

Yes, sir.

All right.

See you guys around.

See you, everyone.