Market Talk- MASSIVE move for crypto soon!? IWM and stocks melt up!?
Hosted by @BecauseBitcoin.com · 2026-01-15 · Tags: BTC
TLDR
The discussion contrasted optimism about equity highs, global liquidity, Monero, and a potential Bitcoin breakout with technical warnings that Bitcoin remains in a damaged downtrend. Speakers debated key levels between $96,000 and $107,500, weakening technology-sector liquidity, altcoin rotation, privacy coins, and risks surrounding MicroStrategy’s financing structure.
- The host argued that IWM price discovery and strength in global indices support a bullish outlook for crypto.
- A weekly Bitcoin close above $97,000 was presented as a possible breakout trigger, while more cautious participants required sustained closes above $100,000 or a reclaim of $107,500.
- One bearish technical view held that Bitcoin is forming a lower high and could eventually fall to $60,000 or below.
- Monero’s rally above a $10 billion market capitalization was viewed as both a risk-on signal and a possible late-cycle warning.
- Participants described altcoins as short-lived, hype-driven trades requiring active rotation and disciplined profit-taking rather than long-term conviction.
- Solana was considered technically promising but needed to clear roughly $145, while Hyperliquid was viewed as weaker over the medium term.
- Macro commentary warned that liquidity is leaving large technology stocks as software companies face disruption from large language models.
- Declining Bitcoin volatility was attributed partly to adoption, but speakers warned that lower volatility could also drive traders toward more speculative markets.
- MicroStrategy’s preferred-share financing was criticized as potentially creating hedging pressure, a discount to its Bitcoin holdings, and eventual forced coin sales.
- Despite bullish short-term momentum, several speakers expected a corrective shoulder near $108,000 unless major policy or liquidity support emerged.
Speakers
- Because Bitcoin — Hosted the discussion and argued that equity strength, global indices, and large-cap crypto breakouts could precede a major Bitcoin and altcoin move. The same diarization label also captured extended cautious commentary about Bitcoin resistance, weakening technology liquidity, mortgage rates, and MicroStrategy’s capital structure.
- Speaker 1 — Contributed brief opening lyrics and occasional short interjections during discussions about privacy coins, market cycles, and trading platforms.
- Speaker 3 — Appeared briefly in the opening audio and later offered a short admonition not to fight the prevailing market move.
- Speaker 4 — Discussed recovering from a health issue, praised Monero’s genuine privacy properties, expressed caution about VC-backed tokens and bear-market dilution, and promoted a small decentralized trading platform.
- Speaker 5 — Explained the case for a Bitcoin shoulder or lockout rally toward $108,000, emphasized high-time-frame bearish divergences and overhead supply, and discussed housing-market constraints and trading platforms.
Notable quotes
- “And I really think what we've been discussing on the show where BTC just blast through 100K is really going to shock people.” — Because Bitcoin
- “I think if you put in a weekly close above 97, I think it's off to the races.” — Because Bitcoin
- “until proven otherwise, I think we're going to 60k and below.” — Because Bitcoin
- “It's a game of hot potato, man.” — Because Bitcoin
- “You got to define each trade each time you put money in risk.” — Because Bitcoin
- “And Monero is one of those things that is absolutely not vaporware.” — Speaker 5
- “You know, the market doesn't care about your coin.” — Speaker 4
- “But we're losing liquidity.” — Because Bitcoin
- “They'll get those coins shaken loose, and that's not gonna be pretty.” — Because Bitcoin
- “I'm still in the camp that you're forming a shoulder.” — Speaker 5
Transcript
Speaker 1: Don't look down, just.
Because Bitcoin: Keep your head up, you can finish. Open up for him.
Speaker 3: That's the point of normation. Reach the top, but still you gotta learn how to keep it.
Speaker 1: Throttle wide open like a.
Because Bitcoin: Bell, and you crash the gates.
Speaker 4: Going towards back again.
Speaker 5: Nothing gonna stop you, there's nothing that's wrong. Throw close now, and then you have the brakes.
Speaker 3: Welcome to the limits.
Because Bitcoin: What's going on, boys? Afro, what's going on, man? We're gonna be having a big chats here in a little bit, and we're also gonna have some of our other speakers, like Knock and a few others later on in the show. But guys, this week has shaped up to be a very, very, very nice man. I'll tell you what. You have the IWM making yet another all time high and some things on chain are popping off on SOL. As always, 67 coin is just blasting. You also have that SOL tomato AI coin also making new highs as well. But the broader crypto market is on a pullback. Things like a VC are also making fresh local highs. Things like CLED are also going into price discovery, very close, that one going into price discovery. But where I was getting at is you have the broader crypto market kind of pulling back. Where there's the equity market is now catching up to the outperformance that crypto has had on the lower time frame. You have the S&P a hair away from hitting 7000, man. The S&P was like six points away from making a new all time high. You also have the queues. close to flipping that trend. And I think if we flip, I think it's like 627, that's the December high, you probably make new all time highs. And I really think what we've been discussing on the show where BTC just blast through 100K is really going to shock people. And I understand that we have had some people on the show and also some things that you might have seen on your timeline where this is being compared to the March 2022 complacency shoulder. And the context is just so much different. You had rising inflation in that time period, month over month, to an extreme degree. And you also had a huge monetary policy regime change, which was going from ZIRP and QE to high interest rates and also quantitative tightening, which We all saw how that panned out in 2022, and you essentially have the inverse of that occurring. I see Big Chuds here in the audience. I'll send him an invite to speak. And the entire crypto market year to date is looking pretty damn bullish. You have BTC well above the December highs. I think if you put in a weekly close above 97, I think it's off to the races. And 97, 98K has kind of been that inflection point. for really any huge rally that Bitcoin has had over the last year. That was the inflection point around this time last year before the inauguration high at 110. And also in, I think it was going into July of last year, we blasted through 97K and eventually made our way to like 118, 119, something along that line. And here we are again, that same inflection point. And the confluence is not only the IWM, but also the broader global indices, things like the Nikkei, things like the Euro stocks. And if you just zoom out and you just look at the all-time chart for the IWM, This thing looks like this thing looks like the equity version of XMR, Monero. And we've all seen what Monero has done over the last over the last few weeks. This thing blasted through 500 and went like I think it went on a 45 to 50% rally in just a few days, which is insane. But outside of markets, I saw that Nikita Bear, he's the head of X. He's now going to eliminate all the AI slot bots and all the info five stuff. So CT might be coming back. The old algorithm from 2023, 2022, 2021 might actually come back and this little niche of CT might come back, which is great for all of us, man. My timeline was looking very disgusting for a very long time. But price action to start off the year has been nothing short of remarkable. And really, as I've said on these spaces, the start of the year does tend to be slow and you usually don't get any volatility at all until the end of the month. And to start off the year, you guys saw we had coins like Pepe rip, I think, like 35% to 40%, which, I mean, that caused the broader all coin space, in my opinion, to just rip. I kind of thought of it as a shot in the sky, like, hey, we're going to rip and we're going to shock people for 2026. And the fact that we're seeing the IWM continue to rip is remarkable, really, like this thing is actually blasting into price discovery rather than making these small marginal highs and then dipping back down. And as we've stated on previous shows, things like the Nikkei, things like the Euro stocks, those indices do tend to peak well before the S&P 500. I think the Nikkei peaked out a few months before the S&P. I think the S&P topped out in January of 2022. Same thing with the Euro stocks, peaked well before the S&P as well. And there's a saying that I've been yapping on here on these spaces over the last few years. I think, yeah, over the last three years is, History doesn't repeat itself, but it often rhymes. It does often rhyme. And I mean, since crypto inception, and by crypto, I mean like after the Ethereum TGE, not crypto pre 2014 where it was a tiny market, but over the last 10 years, when you see things like the IWM and more specifically things like the Nikkei, which is really important, And even the China index in a bull market, I mean, there's the bearish argument against crypto is very weak. It's extremely weak because at this point, if you've been in the market for at least two to three years, you'll know that crypto is a vehicle for liquidity. It's an indication of how global liquidity is right now. And if you have broader markets and something that is so liquidity dependent, like the IWM roaring into new highs, then that can only mean good things for crypto. And we saw a couple of weeks, a couple of months back, equities were ripping while the crypto market was in shambles. If you guys remember what happened on October 10th, the entire market just got absolutely hammered. whereas the QQQ continue to make new highs weeks following that. But that's kind of my opening statement here, boys. I got Ched's up here. I want to see what he has to say. It's been a couple of months, but before I do that, guys, I want to welcome you all back to Market Talk, brought to you by BB. I'm your host, Wabian. I hope you all have had a fantastic Thursday. Today is Max's birthday, so if you guys are active right now, just go on the purple pill and just put HBD Coach Max or Happy Birthday, Max. And spaces are recorded as always, guys. And I just want to thank you all for showing up, whether you're here listening to the audience live or you're listening to the recording. And I hope you all enjoy the show. But if you guys can go ahead and show some love to the space by clicking the Spaces tab. Once you guys do that, you'll see that nice link above all of our profile pictures that says x.com/i/spaces. If you guys can do me a favor and show some support to the stream by clicking the like button, clicking the repost button helps bring the more out into the algorithm, which hopefully, which hopefully does go back to the way it was a couple of years back. And of course, that's very much appreciated. Give a like, retweet, repost, and all that good stuff. So without further ado, big chads, brother, what's going on, man? It's been a very, very, very long time since we connected, man. Would love to know your thoughts on the market, things that have transpired since we last spoke. I think that was since like September. And here we are, man. We're starting off the year great. Lots of momentum. Equity markets look tremendous. And just want to welcome you back onto the show, man. Welcome, welcome. Sir, this is a Wendy's. Yeah, that that that that would have been that would have been the mood probably like in the spring of 2022, maybe 2018, man. But Yeah, I'd like to have a big bacon classic. Those are pretty good. So everything's, yeah, that was good. Just chilling, man. Thanks for having me. Just want to check in. I appreciate your work and now you're creating content.
Speaker 4: I think everybody like wants content, but nobody wants to create it.
Because Bitcoin: You know, like we all want like fresh content, but like, you know, somebody's got to do it. So good work, man. Keep it up. Thanks, man. I try to curate these spaces. More so of a conversation, not so much of an interview. I think interviews are outdated and they don't really generate new audiences because you can grow a following, but if you're not consistently adding new followers, then I mean, I'm sure you've seen it, Chad's like some of those followers that you've gained a couple of years ago might not be active now. Yeah. So it's like you always have to be consistent even through periods of, of quiet time, right? Because like not, not, not every stream. And you've seen how big these streams get. Like not every stream is going to have like 500, 800 plus listeners. So for me, it's just all about consistency and more than anything, just showing genuineness and actually speaking on things that I know about, you know, like I don't know **** about bonds, but when it comes to all coins and just crypto specific stuff, I try to be well informed. So you catching these moves on like Monero and some of these other high flyers or what? Not necessarily things like that, but things like like pump fun and things. Yeah, things on Solana on chain. I'm just kind of remaining low key a bit more, just a bit more quiet because I know like with the way the algo is, if I just spam cash tag tickers, my profile can be like taken down and all that stuff. And I'd rather just remain like discretionary trading for a bit. I'm kind of burned out with all of like the tickers and all that stuff over the last few years. So for now, I'm just kind of remaining low key and I think that's going to change and I'll probably be more open once I see Bitcoin flip full bull, once it puts in at least two back-to-back weekly closes above 100k, that I would be more confident in the market at that point. It's a big level. It's a big level. I'd like to see it higher before I'm like convinced the top's not in. Like I, you know, I got to see a weekly close over 107.5, which for me was, I.
Speaker 4: The key level it should have held on the weekly throwback, you know, when it when it broke out.
Because Bitcoin: So, yeah, I don't know. I'm not as convinced that all we need is like what you said earlier, like 97 or whatnot. You know, I think a bounce here is not unexpected regardless of like, you know, next couple months. We could very easily still, you know, be headed way lower. I think it probably is. I still think the tops in and until like we reclaim 1075, that's what I need. personally, because, underside 100, underside 107.5 would be pretty normal to put in that lower high. And just for me, the way I trade, methodically, like losing the weekly 50, and like I said, inability to hold 107.5, I still think we're going way lower, despite like these reasons should be bullish, despite like all this other stuff. It's like when we get a little bit of medicine with a little bit of green, we get a little bit of a pump up, and it's like it's good for the hopium and all that, but I just, I'm just not convinced. I'm a little still skeptical. I'm still old man. I'm still Uncle Chad's. And, you know, I just got to see way more to think this is other than just a corrective move against the current trend, which is a downtrend in my view. So, I mean, not to like ruin the party or whatever, but I just think, you know, we're looking at underside tests now, whether it's here, 100 and 75. You know, I think, you know, until proven otherwise, I think we're going to 60k and below. So. Chad, do you look at like the equity markets for some of that confluence or just like? No, not at all. No, I'm not smart enough to do that. I'm not smart enough to really do that. And plus I try not to add too much more noise. Like I just think there's enough in the Bitcoin chart. There always kind of has been to get like a good sense of what the trend itself is doing. And like, the decay or like what spies doing doesn't really give me any real indication of whether or not like Bitcoin's going to hold.
Speaker 4: Support or not or like how it's going to respond to a test or like.
Because Bitcoin: Whether I'm going to get like volume on a breakout or whether or not like Ethereum's going to lead or Bitcoin's going to lead or like TRX is going to start bouncing and now it's BNB. You know, there's like smarter people who have a better system maybe who use, you know, that type of analysis. I'm just, you know, me, the four corners of the chart and I kind of just.
Speaker 4: Maybe it's stupid, but it works pretty good.
Because Bitcoin: For me to just focus on what the Bitcoin chart is doing, plus maybe sentiment, as so this is purely off of TA, not really the like the four-year cycle or any of that stuff. Not so much, not really. No, it's just that we lost the weekly MA50 and we should have held at 107.5. Like the trend is badly damaged and like a minor bounced here to like 96K, 97K, 100K, like doesn't, that doesn't change the weekly picture for me. It's in a corrective state and it's gonna put in a bigger picture lower high here from the major high. And that's just what makes sense to me. And I'm ready to be wrong. I'd be happy to be wrong. I'd love to be really wrong and have people quote tweeting me and call me like a moron. It's fine. Like everybody does well if the price goes up. But it's, you know, it's just, I think, more prudent to look at the damage that's been done to the trend and just based on my style, as you know, you know, classical charting and all that.
Speaker 1: So.
Because Bitcoin: Yeah, I've been in the I've been in the same position for all coins, like With all coins, like, you know, and you buy an asset and it's going up, right? Like you think it's going to just continue to rip, but at some point, like when you see the momentum starting to dwindle down, that's kind of like, all right, I'm up like 600, 700%. Do I want to take my money and run? Do I want to take half? Do I want to take my initials? And you start asking all these questions and then it's like, you And you take a step back and crypto is a momentum oscillator. It's not really like a buy and hold, buy crypto. It's a game of hot potato, man. You know what I mean? Yeah, But what's it like? What's it like, Wabi, to be up 600%? Like, how does that feel? Because I don't know. I mean, it kind of depends. Like, are you up 600% on the... on an asset that's that's trading at like 30 mil, 40 mil market cap? Or are you up on something that's up from like 100 mil market cap and it's trading at like 700? It kind of depends. It kind of depends, right? But aren't you taking like, are you layering profit? Like you aren't you like scaling in and out and kind of I am 100% a rotationary trader. Like I understand that. When I buy anything on chain, it's kind of like an option. It's like the options market. There is a decay on that, right? Oh, for sure. There is a decay. And over the last three years since, you know, since FTX went to zero or whatever, the lifespan of an altcoin, most of its gains happen within the first like two months, if that. There have been very few altcoins that have managed to outperform majors quarter after quarter. So with that being said, like I'm not really a believer in any altcoin. And like when I see these stories of, oh, just wait until it crosses XYZ market cap and then they compare it to some other asset and it's like you're comparing it, you're comparing an asset. that has a completely different cohort of holders. Yeah. So it's like I understand TA right for like majors and all that stuff. But yeah, when it comes to things on chain like these newer altcoins, right, that are mainly just launched by people locking up their own liquidity and launching it on PumpFun and all that stuff. You can't really do TA on that because it's all like sentiment and hype-driven and all that stuff. Yeah. So it is a completely different market than how it was in 2021 and 2017, right? Yeah. Did you buy the Mayor Adams coin, the New York Mayor Adams coin? I did not. I did not. But I put my life savings into it, man. Yeah, that was a weird one, man. But what is the deal?
Speaker 4: What is the deal with these people?
Because Bitcoin: I mean, I guess it's just like it's. Is it like a free pass to crime or what? Yes, it's like it's like a grift. A grift. It's kind of like. Like a weirder version of like BitConnect and stuff. Yeah, I guess. And it just sucks away liquidity and like retail has no money because they keep getting like absolutely like scammed for just no reason. And it's just, it's just really frustrating. Yeah, I understand that. What about things like, the salon or a hyper liquid? Like what? Yeah, still hype hype's rolled over, man. I mean, hype has been a great run, but hype doesn't look good. And Solana is trying to break out. Solana looks decent, but hype I think has some downside ahead of it in the at least medium.
Speaker 4: Term, you know, short, medium term.
Because Bitcoin: Solana is like trying to break out. It's trying, you know, but it may sink or swim a little bit with Bitcoin here leading the way in terms of like dictating a little bit, you know, how the market goes. But like for example, 145, if you know, Solana can clear that level, I think you can go long, but it's like chopping through that. Now it's losing that level. So it looks okay. I put a couple tweets out about it. Like it looks like it was trying, like getting ready, but I don't see the strength I really want to see. Like you see what's happening with some of these alts like Monero and what's it called? Zcash is like ripping. You know what strength looks like, you know, and I don't want like a halfway breakout. You know, I want to break out. I want to break and go. And so I'd rather hold Solana though than hype right now just based on the chart. Yeah. For what you stated about like Monera and all that stuff. Yeah. It's really rare, Chad, to see something have a breakout and it trades at a market cap of over 10 billion. Yeah. And for that not to cause at least some form of breadth in the crypto space. Yeah, yeah. It's kind of like. a risk on signal of sorts. Yeah. For something that big. Yeah. Yeah. And perhaps we see things like, like a small ETH BTC rally, maybe an echo bubble of what we saw last summer. And I understand, right? Like people have PTSD with privacy coins rallying because over the last few years, anytime privacy coins rally, it does tend to mark a top, right? Like in 2021, when Monero had that massive rally going into, I think it was like the second-half of April, BTC had topped, right? Yeah, yeah. So it's like then people see Zcash and what that did a few weeks ago, then they see Monero and they're like, oh man, the market's topping. But I think the precedent is a bit different. Like Monero is a coin that's trading well above 10 bill, which that is a ton of money, man. That is a massive amount of money. It's trading at like 13 bill market cap. That's insane relative to its 2021 high of eight bill market cap. This is like some serious money. So, you know, I think there might be a trickle down effect, Chuds, I think. I mean, I hope so. And the best medicine for sentiment is a little bit of green. And, you know, if people think Bitcoin's on the way up, they're probably more willing to risk in some of these more speculative, you know, higher beta stuff for sure. Yeah, I don't know, man. You know, I'm gonna remain cautious for sure. Certainly 100K, but really 1075. And I think that's gonna dictate. you know, what happens, you know, with the rest of the market. I don't know, man. I don't know. I mean, I'm watching all these ones, you know, for opportunities, even like garbage coins that bounce, you know, I'm waiting to see like even what Cosmos like was kind of turning around here. Maybe something's going on, but like, you know, if you can't hold like 240, I'm going to kind of give up on that idea. So it's like, you know, you'll watch these, give them a little bit of a rope, but you got to define, You got to define each trade each time you put money in risk. You got to say, okay, I'm here because of this. And then like, if that idea fails, don't like, look for another reason to keep holding. You know, you just got to you just got to take it like one shot at a time, I think. And like you said, posting when not everyone's watching, creating content when like numbers are low, you just got to keep plugging away, man. I mean, there's no other way, no other way about it. Yeah, yeah, that's real. I've actually had to like mute some people, a lot of people over the last 24 hours. For what? Like bots and stuff or what? No, just like people posting, like complaining content. Like they just like complaining. I see. And moan and all that stuff. And am I on that list? No, no, you're good, man. Okay, cool, cool. You're good. You're good. But the algo is so weird, Chad. Like if you do, if you do. so much as like bookmark anything and I mean anything outside of crypto like oh boy oh boy dude it's so bad it's so annoying like I want to like something but then it's like my whole my whole feed is football or like like hoops I love sports but like I'm not like you know I want to you know stay finance and it's just algo is so annoying you know yeah yeah that's uh that that's the real thing I I I do think the the like the AI slot bot's going away yeah uh and like I mean I'm I'm a crypto guy right so it's like I I I want to root for everyone yes um but there's this like infoi platform called kito which was good at first right like you guys wait isn't that the guy who um from from OG Simpson no no kito's a a crypto oh that's Kato Kato you know the guy who lived in the beach house no oh you're too young man Damn, you're too young. The other boomers in the audience, the other unks like me, they know about Cato. Yeah. Cato. Oh, boy. That was something. There you go. Thank you. Stood by him throughout the whole trial. Yeah, he did. Look it up, Bobby. Look him up. Cato. Didn't he go on one of these, where they live in a house together? One of these real... You know, like the end.
Speaker 5: Oh, yeah, yeah, yeah.
Speaker 1: I think he did that. Yeah, yeah.
Because Bitcoin: Like rehab or something like that?
Speaker 5: Yeah.
Speaker 4: Celebrity rehab or whatever.
Because Bitcoin: Yeah. I mean, I forgot to mention this man, but SanDisk made another all time high. It's an AI hardware stock. Been yapping about it here on the spaces for a minute. SNDK. Yeah, that is, that is, that is crazy, man. Like pretty clean. I really think. some people in crypto should like trade some stocks from time to time. It's just like, it's just like, I think there's this thing that people have on a crypto Twitter where it's like, if it's not trending on their timeline, they're just not going to buy it. They're not going to buy it if it's not trending. I think people are scared to actually trade on their own. Like they, if they don't have anyone to handhold them and someone to put the blame on, then they're just not gonna buy it. I was looking at a bunch of stuff.
Speaker 4: Yeah, it's true. That's true.
Speaker 5: But you'll be, I mean, there's like.
Because Bitcoin: Biotechs or some of these small caps can have these, you know, altcoin type moves for sure. So, I mean, you know, there's the joke though. Everybody pivots from crypto to Tradfi, right? Like in like darker times, but I mean, I'll trade anything I just don't care what it is like it's it's numbers it's letters or rather it's just a symbol and I mean oh it's my wife called me I'm not smart enough to to find the fundamental place I gotta grab this call to Wabi it's good to hook up with you brother right yeah no problem man thanks for coming on Judge thank you thank you bro I appreciate everybody stay blessed peace thank you man till next time and I'll pass it over to Afro Afro what's going on man I I just saw your message about not really having much time, dude, but dude, how have you been? It's been a minute, bro.
Speaker 4: Yeah, I was in the hospital, dude.
Because Bitcoin: Man, what went down.
Speaker 4: So, you know, I've been losing a ton of weight. You know, I think when you saw me, dude, I was probably like 280, 260. around there and I've dropped down since the summer I know this is like you know.
Speaker 1: Over a year ago that.
Speaker 5: Lee last saw me but I dropped down weight tremendously just cutting carbs and all that good stuff and.
Speaker 4: I didn't know you had to take probiotics whenever you're you know fasting and stuff like that and I didn't think about any of that so I got like this really bad bacterial bloom and I got to get like a scope done just to make sure I don't have an ulcer so it always happens whenever you know I think I've mentioned here plenty of times that I paid off all my debts on January 2 officially so I don't incur some some cap gains or at least I don't pay them until next year but whenever you whenever something big in life happens you know you typically get hit with this Mike Tyson one-two punch.
Speaker 5: And it's it's real so you know.
Speaker 4: Uh had to go through all that thankfully you know thankfully I'm good you know just uh taking some some meds and you know eating a little bit um eating a little bit more more often and that's basically you know kind of where I've been I've been kind of I've been actually starting to get back into you know getting some trades done I'm super happy that Monero is finally having its day in the sun um I think it wholeheartedly deserves to be higher But ultimately, you know, it's it's getting delisted off of the majority of exchanges other than I think Kraken. But I think they stopped doing something on futures with them. Or maybe you can't do perps on Kraken anymore with Monero. But regardless, I was kind of upset about and I was kind of being a hater with this whole Zcash Monero thing.
Speaker 1: And I'll absolutely grave dance on Zcash because it.
Speaker 4: Was never private. You know, privacy is not really optional. It shouldn't be optional, it should be made inherent. And, you know, I think you already know some from Wabi and friends spaces back in the day, you know, I loved everything about Monero and I can, I can kind of go on about it about how to onboard off board the right way you can use Monero. Unfortunately, I think Majestic Bank is is no longer no longer I think they got they got caught by.
Speaker 5: Biden or maybe the Euros or something like that. But.
Speaker 4: They went out through regulation but I'm glad man good crypto deserves to stay around and I think the the the ethos of of crypto you know being a cypherpunk it really found its home in Monero and you know I think what is it right now like
Speaker 5: seven something right now maybe eight.
Because Bitcoin: Yeah Monero right now is I'm more so looking at like the market cap, but yeah, it is down like 10%. It's trading right below 700.
Speaker 4: And I will say you're probably right. When privacy coins pump, it kind of usually.
Speaker 5: Signals kind of, you know, the end of things, but, or the, you know, very, very late cycle, you know.
Because Bitcoin: Top, top action.
Speaker 5: But I think the whole point of my spiel is that.
Speaker 4: There's too much vaporware here in the space, as everybody already knows.
Speaker 5: And Monero is one of those things that is absolutely not vaporware.
Speaker 4: So certainly hope that other projects that are all about privacy, like Railgun, I hope they get their stuff together and they're able to do something more. And hopefully this incentivizes people who are trying to do something EVM and private.
Speaker 5: To, you know, do so, right.
Speaker 4: But we'll see, right?
Speaker 5: The market will call for it eventually, I'm sure.
Because Bitcoin: Yeah. And I know the Monero pump seems huge, but since the April lows, there have been, dude, there have been so many stocks that have outperformed Monero. Of course. Like a hood, like an iron, and it's almost as if like, This current version of CT is just always late to the trend. And I think they also forget that silver is also of the same amount. Yeah, roughly the same amount, maybe a little bit less. I think silver's actually up like three and a half X since the April low and Monero is up like four. But nonetheless, man, it's been a tremendous, a tremendous window of opportunity since those April lows. It's just that like some assets have been laggards. And I mean, dude, it's so hard for me to-- it's so hard for me to see like huge imminent downside when I see a coin in crypto blasting through 10 billion. It's usually an indication that something massive is going to happen to the altcoin space, even if it's just like small complacency rally. So that's what I have to say about that. But I guess like if I want to take the other side, it would be when Hyperliquid was pumping in December of 2024. Hyperliquid peaked out at like 11 bill going into Christmas of that year. And I mean, not much happened in the market after that. Like the market peaked shortly after that. And well, we all we all know what happened there. Yeah, they all went to kingdom come after that. And everything just got absolutely shreked, man. I think, dude, but the difference is you didn't have all these other things happening, right? Within the K, Euro stocks and all of that. And I think time is going to be the ultimate arbiter of truth. And what I mean by that is like, if we range between 93 and 96, just as much as we ranged between 82 and 86, I think that's going to drive people nuts. And that's going to be indicative of like the trends being bullish. And I don't really care if I'm wrong on that because I don't think I have been wrong. I think I've done a great job at pivoting in every single inflection point and we've called practically every single trend on chain on this show. But this price action just, it kind of reminds me of at this point, now that we've broken out of the December high and we're above 94, it reminds me of like Q4 of 2023 in a way. It's just this like slow trajectory upwards. and we're starting I certainly hope you're right dude I would love to also be.
Speaker 4: Bullish but something that I was gonna add on when when Chad's was talking was you know you can you can just check you know a couple things I use when I trade I also use the VRVP and I was seeing.
Because Bitcoin: That like we're kind of stuck in a void right now you know 97 through 101 K so.
Speaker 5: If we blast through that.
Speaker 4: Up to 101, 103 and then higher from there, but it's absolutely like you got to hold something above that.
Speaker 5: I hope you do.
Speaker 4: I think for everybody though, it's probably different structure, different folks obviously. But right now for me, man, I have quite a bit of extra money coming in.
Speaker 5: I'm looking just to get back into the market little by little and cash is always a position too.
Speaker 4: So we'll see, you know, not trying to time bottoms or sell tops, but just trying to build that position over time and get ready for the next cycle. You know what I mean?
Because Bitcoin: The next cycle, man.
Speaker 1: Well, you know what I mean.
Speaker 4: You know what I mean?
Because Bitcoin: Yeah. Geez, lighter is getting its *** handed to it, man. That is... That is a death spiral chart, man. That is a death spiral chart. Can you tell them about lighter? Well, they have a very toxic community, insanely toxic community. I hopped on a space, like a lighter community space. I'm not going to say who it was because the space is recorded, but it was probably the most toxic community that I've ever stepped into. since like the Solana meme coin craze in the summer of 2024 with some of those communities. Or like they would launch a ticker that already existed on ETH, for example, some of those communities, probably one of the most toxic like ever, ever, ever, ever, ever, ever, ever, ever, ever. But it's just like a hyper liquid derivative, man. That's all lighter is. It's a hyperliquid derivative and they did an airdrop campaign. And you already know what happens with a lot of these projects where they have like airdrop incentives. The chain activity completely dies off after the airdrop. It's not like a hyperliquid that's been around for years before the token was even dropped. And I think lighter actually did a VC raise where there's hyperliquid. I don't think they did VC raise, so.
Speaker 4: Didn't they partner up with like Robin Hood or something like that to be there, you know, have their platform?
Speaker 5: One of these guys did.
Speaker 4: I don't know if it was Hyperliquid itself or if it was, there's too many perp dexes, dude.
Because Bitcoin: There's way too many. Yeah, I mean, it all started with GMX, didn't it? That was like the original.
Speaker 4: DMX is so expensive, though.
Because Bitcoin: That was the hardest part about it, but it was one of the first.
Speaker 4: Well, you have DYDX too.
Because Bitcoin: Damn, man. That's OG.
Speaker 4: Yeah.
Because Bitcoin: That's like early 2021, bro.
Speaker 5: Dude, study those rebates.
Because Bitcoin: Yeah, it's like early 2021, late 2020, something like that. That's when DYDX was like relevant, I guess. Yeah, dude, Vidor is just a beneficiary of Robinhood throwing money at crypto products. They're not, I don't think they're really partnered. I think Robinhood just cut them a sponsor check or something like that. That's what partnerships are, man. It's just transactional. That's what it is. It's all transactional, man.
Speaker 5: You know I do I do.
Speaker 4: If it can I shill my buddy's decks I mean it's it's his own decks but it's it's really good.
Speaker 5: He made it all by himself would you would you mind if I shill his decks?
Because Bitcoin: Does it have a ticker?
Speaker 4: Does not have a ticker no there is no token he just made a dex so that people could actually trade and not get screwed over all the time by getting counter traded against.
Because Bitcoin: Was it built on orderly?
Speaker 4: It was built on orderly yes sir.
Because Bitcoin: Dang dude or isn't orderly like the Claude of crypto where you can just like build any decks with a few clicks of a button?
Speaker 4: Hey man it works and I've gotten really good fills on it anytime I need to add you know I can literally talk to him about anything and say hey can we add this because I want to bid on this I don't see it as long as it's on the orderly network he puts that thing on dude and he's really responsive so he actually I know that he's talking.
Speaker 5: With some people to you know he's talking with some VCs potentially to do something but I think he's got.
Speaker 4: Some some he's a smart dude he's one he's part of my my discord he's just a really smart.
Speaker 5: Guy and a good guy at that does.
Because Bitcoin: It have heavy liquidity.
Speaker 5: It does.
Because Bitcoin: Go ahead, man.
Speaker 4: It's a scalpter dex. S-E-A-L-P-T-U-R, scalpter, scalpter.xyz. It's good, man. For what it is and what you want to use it for, I really enjoy it. I like it. I think that-- I hope the product is better than the name.
Speaker 5: Yeah that that you know um.
Speaker 4: I will say it's a one-man team right but you know you you can do what you need on it you can do what you need on it that's yeah I mean that that is a terrible lane like legitimately terrible.
Speaker 5: Well it's wonderful that it's not mine and it's not yours either but appreciate it not.
Because Bitcoin: Not Naka bro you should build uh you should build something on Claude man if there's anyone that can build an AI product for crypto has a ticker with insane tokenomics.
Speaker 4: I'm gonna I'm gonna I'm I'm gonna build yeah I'm I'm gonna build naka dex uh it's going to be a perp dex it's going to be launching on ethereum and our unique yeah well our unique our unique our unique selling point is going to be you can only you can only short.
Because Bitcoin: Did you flip bearish naka or something like that?
Speaker 4: No I'm I'm joking it's a joke but that that would be the USP you can only short the long the long button doesn't work it's just like shorts only.
Because Bitcoin: I think there's actually a platform where that's all you can do it's like inverse pump fun where you can actually.
Speaker 5: Like dump I'm pretty sure like dump where so you could just like so you could just short all the coins to zero like literally all the.
Speaker 4: Wait, what's it called?
Speaker 5: I saw it a long time ago. I cannot remember. It's like dump fun or something like that. And so you can just short all the **** coins to zero. There's like no liquidity though.
Because Bitcoin: Nice.
Speaker 4: That is hilarious. But I'm still I'm still bullish on Monero. What do you guys think of me tripling down on my Monero position here?
Because Bitcoin: Man, I hope you make some money, bro. I do. I'm not going to I'm not going to talk bad on another man's position.
Speaker 5: Wouldn't you be ******* your cost basis?
Speaker 4: Well, Monero's at 670 and my initial buys were like 620 or something. Because I bought like the day after the breakout, so I wouldn't really be ******* it that much.
Because Bitcoin: That's funny, bro. Monero is locally bottomed at 670 and 67 coin is up on the day, man. I got a lot of crap for like being bullish on that coin, man. A few days ago, believe it or not, like I went on some weird web three space and I'm like, yeah, if you're bullish on something like you want to buy, buy things that are still trending and are bouncing off of their lows. And here we are. Like if on chain is going to ramp up, dude, then things like pumped and the six seven coin are probably going to trend really hard. I like that tomato coin too, man. Have you checked that out, Naka? We talked about it, I think. When you came back on on on Friday, I believe.
Speaker 4: What's what? What's it called? What's it called?
Because Bitcoin: Tomato. Like soul the tomato. So basically it's like this AI growing this tomato. And I think some guys from Anthropic like commented under the posts and like they're sharing it also. And yeah, it's like It's kind of like another iteration of forecoin, I guess, where it's like the concept of it seems ridiculous and it's like, oh, it's another ******* right? But isn't everything a ******* in crypto and pretty much every single way. So yeah, there's also some big brain stuff, but I really don't want to come off as a show or whatever. I'm just saying like there are some things going on on chain that are interesting, but not to the point where like, I'm going to post about it. I really don't want like any reply guys to like go under my post and say, oh, it's down 10% on the day or whatever, which it's not. It actually made a new high. But like when you show tickers right outside of majors, I don't know what it is, but like you get this army of bots, this army of reply guys. And like once the momentum stops, you know, it's like, oh, Like, what is this coin doing? Like, you were you were sharing it a few weeks ago. And it's like, I'd rather just not deal with that anymore. At least not right now. Just not right now. Because I think you actually need BTC above 100K. I think you need SOL above 180. Eth, who cares? But maybe above 3800, I would say, right? for feelings to be raised and for market wide breadth rather than like a few select tickers. And at least for me to be confident enough to like put some tickers out there. Like back when like Aster and all that stuff was trending, that was, that was a great time, dude. That was a great time. But liquidity is just, it's just a bit different now, man. But Yeah, Naka. You should probably get some monad, bro, to be honest. It's probably a good buy here, man. We'll come back in like 2 years.
Speaker 4: You reckon?
Because Bitcoin: Yeah, come back in like 2 years, man. It'll probably be up a bit.
Speaker 4: It could be. I mean, the thing is, if we do go into a bear market, you don't want to be holding a VC coin. The reason I'm the reason I'm kind of like allowing myself to be a bull with Monero is because it's not a VC coin, right? Like it's not, it's not really part, it's crypto, but it's not really part of the crypto ecosystem. You know, so like, I mean, Monad, like, you know, Monad only has 10% of its coins actually floating at the moment. So it's like still, it's FDV is 10x bigger than its market cap. And that's just kind of rough going into what I think is a bear market. Like if I didn't think this was a bear market, I'd be more interested, but it's just very dangerous, right? It's very dangerous. Like there's so many coins that I like that I thought the concept was cool from the 2021 run. And you know, I basically ended up selling all of them basically. pretty much all of them went minus 90% to minus 95%. You know, the market doesn't care about your coin. It doesn't care about your narrative. It only cares whether there are more buyers than sellers or more sellers than buyers.
Because Bitcoin: David, you had your hand up, man. How are you, man? How are you holding up? I'm doing fine. A little better than the other day. Are you able to hear me? Yeah, yeah. Loud and clear, man. Well, I'm glad you're doing better, man. Yeah. Sounded like you were going through a really rough time last time you spoke. No, I mean, the doctor looks at the readings and he says, oh, it's not the guy said I could have used another angle, he said, because I wanted to get around the bone. Anyway, nothing acute, and we'll see what happens in a month. Every time I go on my elevator, I lose, if I'm walking the dog and I come in, I lose the spaces. So that's why I drop down, I come back up. Anyway, so just a couple things. I'll let you guys get going. We've had so much interference for the government holding the dollar down. And the problem is you start looking around the world, there's six and a half billion people and their currencies are at all-time lows, which means they are siphoning away our inflation. They're not going to be able to buy commodities. They're not going to be able to buy crude oil, coal to make the cement for the tall buildings. Indonesia, all-time low today. India, all-time low today. That's 2 billion people right there. And the curve is flattening. People most often think if you're slowing the economy, the Fed's got to cut more, you steeper the curve. Well, what's the opposite of that? 5.4% GDP. We're probably going to be up from the current Atlanta Fed after today's 199. I mean, how are they going to cut? How's Powell going to be forced to cut with under 200,000 jobs and falling and strong growth? So you flatten this curve, and where did mortgages go? We got to a 562 for a seven-year fixed rate six-month adjustable. That's three basis points from a three-year low. The 30-year fixed, that's 604 or so. We're at the lows. And you get a flatter curve, and you've got so many mortgages down low that people don't want to refinance, you're going to sweep that rate, and you're going to flatten that curve pretty damn hard. If you take the five-year to the 10-year, which is where a lot of mortgages are hedged by levered buyers, It's flattening. It's getting ready to break down. Five more basis points, goodbye, Charlie. Mortgage rates drop 50 basis points in a flash, because there's a special thing in mortgages. You have everyone gather all the mortgages, they put it in a pool, and they sell it off to the buyers. There's just this natural thing that when you start going above 100, which is the current one, nobody wants those, because then you refinance, you lose money. So the bottom line is mortgage rates are looking like they want to go a lot lower. And you saw the gap open in the market today on the $500 billion from Taiwan and then the Taiwan story, and we closed at the low. You started the day with the NASDAQ up twice as much as the S&P. Yesterday, the NASDAQ-- I mean the NASDAQ 100. Yesterday was twice as weak as the S&P, and we finished the day. They were basically a push. If you look at the NASDAQ divided by the S&P, it's basically, that's called innovation inflation. It's the expansion of tech over the regular stuff. We're at the lows since the second rate cut of this year, and it's getting worse. And you look at Microsoft, you look at Adobe, you look at Salesforce, you know, Brad Gerster from Altimeter, The guy who, with the performative hair and the performative black t-shirt, who thinks he's the greatest things that ever lived, he started his career in November of 2008, the exact law of the NASDAQ. And when the Fed started adding, you know, 10 times the balance sheet, 890 billion to 8.9 trillion. And he's saying, oh, software at 14 times I like it here, you know, last year, two years ago, it's five times sales. It's going lower. And if you look at these names like Amazon and Meta, you look at Google, you look at Microsoft and Apple, I call it Mama. Mama versus the NASDAQ 100, Amazon's at a 2017 level. The money is leaving these guys in their market cap weighted and other things look okay. But we're losing liquidity. And you look at the volatility ratio between NASDAQ-- this is some of the work I do in my spaces. NASDAQ volatility is rising versus the S&P. It's about to get a cross-volatility golden cross. On a weekly, it's already on a daily. That is the measurement of deterioration of liquidity. That's the distillation of evaporation of liquidity. If you'd look at those two, you go back to dot-com, the NASDAQ volatility was more than twice as high as the S&P volatility, the VIX. And the problem with that is we're probably not going to stop at double this time. We'll probably stop at triple because you have this passive money and it's going to have to buy these low beta stocks. And there's no stock there. There's nothing available. They're so small, 2.5 for the utilities, 4.8 for the staples, 9.6 for the healthcare, that's 19.2% of the market. Tech and com, it's 50. They come in and the passive money starts flowing. And what happens when you start recognizing that, hey, these three sectors will benefit a lot from tech? And then you bring in some brilliant tech people and you say, you know what? Our stock is going up fast. Let us pay you in stock. What happens when the low beta stocks start paying in stock and their earnings start to grow like bananas? 'Cause they don't actually have to pay cash. You're just gonna suck all that money out of tech and it's gonna drive up the dollar. So we're starting to see an accelerated decline where when they cut rates, it doesn't help, and now we're growing like crazy bananas, you know? And so you'll see a lot of these, you know, these tech alts, you know, just melting up, doubling of the memory stuff because of some stories about shortages of the last, you know, month. But the software is getting assassinated by these large language models that are just getting better. You see Adobe anytime soon? It's five-year low. Salesforce? There's nobody getting hired. Nobody's getting fired, but no one's getting hired.
Speaker 5: Well, that's because their boats too, David, are disintegrating with anthropology.
Because Bitcoin: That's exactly what we're talking about. Brilliant. Exactly. But how's that going to stop?
Speaker 5: There's a lot of money trapped in it. It's not. You're getting you're getting a repricing across the board.
Because Bitcoin: How about Walmart versus Amazon? That's not looking so pretty for Amazon now, is it? That money's going from one place to the other. And so the problem is, you're going to annihilate a lot of this tech money. It's 2000. You know, in 2008, when you had the Lehman Brothers rug pulled, you have to remember, the NASDAQ fell 83.6 versus only 49.9. So 84 versus 50, okay? NASDAQ fell 84 S&P 50. You get to the GFC, these people have really rationalized. So when you get to the peak, the NASDAQ bottoms at 800, the NASDAQ 100, it doubles. It only goes down to 1,000, 1,018. It was up 25% from its low. The S&P fell 15% below its 2002, 770. So the S&P was down 57, NASDAQ's only down 50. Then you're off to the races, but there was a lot of trouble there, a lot of air. When you have Microsoft, six-month low, but you have Adobe and the other software, you can't short Adobe down five to buy Microsoft. It's too cheap. You're not getting paid enough for all that risk. You don't have the up-escalator, the source of funds to hold up Meta and Microsoft, Amazon, and Apple. and with these emerging markets looking like such trash. I mean, this is 1997 currency level. Korea couldn't cut last night. I don't know if you know. Korea didn't cut yesterday. People thought they would. They can't. They had to intervene over the New Year's. Their currency is in freefall. Going back to 1997, inflation's getting bad over there because the currency's falling apart. So they're not going to be buying as many Apple iPhones. So you're starting to see more money leave there. Go to other places. And it just it's opportunity. Just look what's working.
Speaker 3: Don't fight.
Because Bitcoin: Don't invest in the rearview mirror. You know, Wabi just said, look at a stock once in a while. Look at something going up. Don't be shy. You know, it's not a crime if something's going up to get aboard a little. But if you're starting to see the yield curve flat, because we have too much growth. And if you don't remember, or you hadn't read, China is exporting $1.2 trillion last year. And a lot less of the normal came to us. That's why our trade deficit collapsed, down to 29 billion last month. We're growing at 5.3, according to Atlanta Fed, down from 5.4. They'll probably write that up to 5.6, 5.7. China's not sending us their goods. and they're sending out more goods. What does that mean? They are emptying the economies in South America and in Europe. They're just cutting the price to get the goods out. What's that gonna do over there? They have to cut rates. They got no growth in Europe other than a couple of bombs they wanna build. You remember, they're not going to Ukraine, Germany, they wanna go to Greenland to protect against Trump, not to protect against Putin. So we're experiencing a deterioration of liquidity Tech volatility is rising, and that means dealers are backing away. They're not selling it. They are up to here in short volatility, which means they're short gamma, which means the market goes up, they get hurt, and they got to buy. The market goes down, they get hurt, they got to sell. But when you have a falling market, when you have underperforming markets that are doing worse than the S&P, and that money's flowing out, You know, and then take a look at Bitcoin today. I don't know what time I was up this morning. 35. I happened to get the screenshot. 39.22 on Bitcoin volatility. A new low since October 9. You're losing all the volatility. You're going to lose the traders. They moved over to silver. Bitcoin went up, it's stalling, but its volatility keeps on making fresh lows. And the lowest monthly close of all time, it's like 35-ish. We got to 39, 22.
Speaker 4: Yeah, Bitcoin vol is on a long-term down trend. Yeah, absolutely.
Because Bitcoin: And that just means fewer people are willing to do the chaos and more people want to do the harvest. And that makes it uninteresting.
Speaker 4: Well, I think it's just a sort of artifact of the adoption.
Because Bitcoin: You got it. You got it.
Speaker 4: You nailed it.
Speaker 1: Yeah.
Speaker 4: When Bitcoin is very small, it could be very volatile because, you know, it has like a million dollar market cap. You know, if it goes on the news,
Because Bitcoin: suddenly the market cap goes up to like 20% in a day in the day. That's Bitcoin, not an alt.
Speaker 4: Exactly. And it can't do that now because it has like a trillion dollar market cap, $2 trillion market cap. There just isn't enough money in the world--
Because Bitcoin: That's right, so they'll short that by the alts, but at times when that's in a trend to go lower, it'll kind of create a vacuum because you can't short a falling Bitcoin to buy an alt. You could short a stable Bitcoin, a rising Bitcoin, but you need to make sure that there's liquidity showing up. But at this level, I mean, we're at 69 on 11/10 of 21, you know, more than four years ago. And if you adjust for, you know, add 10% for inflation, you're talking about 75. And that's what sailor's numbers. I did want to talk about one thing. I know I went on for a while, but I want to talk about one thing. It's very, very important, okay? You know, I know a little about how converts work, credit fault swaps. capital structure. I want to explain what Sailor's doing. One second. Hold on, hold on, hold on. Oh, thank you. Is this me? Oh, no, it's not me. No, I ordered something. It said it's coming tomorrow. It was not for me, it's somebody else. Okay, so I just want to run through what Sailor's doing and why it's such a disaster MicroStrategy. He fell 90.8%, his company, from May 10th of 2000 to April 17th of 2000, 38 days. I posted it many times. It was from the New York Times business section. He can't sell his converts anymore. It's too dilutive. So he came up with this idea, let me sell some preferreds. He's had to raise the yield of the preferreds to try to get them to kind of stay anywhere in the range of par. But what people do not understand is the more preferreds he sells, he is driving a wedge in the capital structure between the equity and the debt. And what does that mean? When Oracle did their deal and they had this non-transparent order that Safra Catz announced we're getting 300 billion of orders, and it turns out it was Sam from Sam Altman's Fables, and now she's being sued, as I said she would be sued, for that non-transparent disclosure. you only had $18 billion of debt financing and the credit default swap traders just, they were shorting Oracle to hedge off that. And I like Larry Ellison, but they were shorting the stock to hedge off the risk of a breakdown of the company. And they took the credits default swaps from like 50 to like almost 200. Well, that's when you have like the straight debt. What's happening here is He's selling all of these preferreds. How do you hedge your preferred? You hedge a bond with stock. You're gonna hedge preferreds with stock. So what's gonna happen is he is gonna shove too many of these wedges in there, too many of these preferreds in there, and people are just gonna start shorting the stock against the preferreds. And then he's gonna end up driving MicroStrategy to a discount to the coin. And at 20% or 25%, the board will either get rid of sailor or make it that the CEO buys the stock in by selling coin. They got no choice. It would be complete malpractice. Someone, what is it? Saba, what's his name? The guy who does the closed-end funds. Oh, the name just, it's Saba Capital is the firm. He does all the hostile takeovers of the closed in fund to get rid of the discount. There will be people, remember, what's the name? Chainos was shorting MicroStrategy at three times Bitcoin. And he says, why wouldn't I just buy the Bitcoin and short the MicroStrategy? Well, guess what? That worked. So he closed out. But if you take all these converts and then you keep on selling them, and then people start funding them by shorting your MicroStrategy, and you take MicroStrategy down, you'll get a hostile takeover, and they will liquidate all those coins to close that gap. So the problem is it's not free. In local stability, they can issue all these preferreds, but as prices go down, they will get hedged and they will drive, in all likelihood, MicroStrategy to a discount. And then those 687,000 coins, which you will try to top off at 700, they're going to get separated from the company. So when you have all these people on the internet saying, Oh, it's so great, it's the greatest thing ever, they're bots. whether B-O-T or B-O-U-G-H-T that are getting ad dollars. But there's something special about, you know, when you sell something and the market doesn't really want it and you reconfigure it, oh, it's a preferred, but it's not guaranteed, we raise the money, it's not gonna work when you have any of this pressure that, I call him Jonathan Karl, I was listening to this guy, Ched, the first guy, he sounds like Jonathan Karl from ABC, I thought I was listening to ABC News. But he's negative. But he says it's not trading well, Bitcoin. You take that lower, you start getting some pressure on these converts, on these preferreds, and then you're gonna end up having selling pressure on strategy. And at some point, they'll put enough pressure on, it's only a $50, $60 billion company. They'll get those coins shaken loose, and that's not gonna be pretty. But it creates a lot of opportunity when you have these down waves when it stops going down for a bounce, that should be like a quick air pocket to shorten it a rise, and that money will go into the alts. So you get these like alt weekends instead of alt seasons. That's what I have to say. And Prometheus, feel free to follow that up, man. I don't think you've had the chance to speak.
Speaker 5: Sure. I got to go in here. I got to go into the bank here pretty soon, but-
Because Bitcoin: Take some out for me.
Speaker 5: No, it's all going into a house. So with that being said, I mean, I tend to agree with a lot of the points said. There's been this discussion and Tommy and I, one of the other analysts on BB, he has been mentioning. you know, this and he loves being on the like super like there's the tail move and then beyond that there's Tommy, right? So Tommy sits on the like utmost extremes whenever he's convicted and you know, you know, upside or downside or whatever that may be.
Because Bitcoin: Oh, I thought of a crime.
Speaker 3: I thought of a crime.
Because Bitcoin: You said convicted.
Speaker 5: Yes. Yeah. Oh, I did say convicted whenever he has conviction. No, but it, so him and I have been talking and he's been saying, it's kind of consensus at this point. Bitcoin's going to put in some form of shoulder. And typically when you get consensus within the market, it's generally not the most ideal position to necessarily be taking. Sometimes it works out, sometimes it doesn't, right? That's markets for you. But with that being said, I still lean within the kind of shoulder camp. The big question for me right now is, I'm in one, I'm in one of two, I'm in one of two camps, right? And it's either you get everybody piled back into this market and you like rip this thing up to like 108 in everybody's face. And we had mentioned the variable time on the live stream today on YouTube. And what time, time is a finicky, finicky little ***** sometimes, right? And if you're able to really, 'cause a lot of people within this market, one, have either been liquidated and that happened on 10/10, two, they sold or, you know, and are waiting to get back into the market, or three, they never sold and they're down bad, right? So what from a psychological perspective could you do in relation to time that would really, let's just say, get the juices flowing. You create what's called a lockout rally and you get this move, you could get a move up to like, you know, 108 and you have then created a scenario where the people that have been holding the entire time now feel exuberated or they feel exuberance because they have now they now have an opportunity to make back their money. You then have the people who have sold and been out of the market that are looking to buy back lower feeling tremendous amounts of FOMO because it happened in a very short period of time. And Because of that, you're creating extremely strong emotion to get people allocated back into the market. And then three, these people that are in the shoulder camps, you've probably gone beyond their invalidations at that point of, you know, their lines in the sand of how high the shoulder can go before they're like, okay, we're bullish skin and we need to be getting back into the market. David, I see your hand up. What's up? You can talk. You don't have to, you don't have to put your hand up.
Because Bitcoin: There's something that's very important that just came out. that you can't ignore. The move index, which is the volatility curve for the treasuries, it didn't just go to a new five-year low. It's now less than $3 from a dark cross, and we're less than $5 from just before the global financial crisis. And what does this mean? This means that as volatility goes down, in the treasury market, one of two things happen, either rates are going massively lower or massively higher, because you got everyone short the volatility and half of the people are wrong. The dealers are just screwed. And then you got the whole mortgage market. So in this case, you have bonds down for five years, the probability is much more that rates are going to go lower and not higher, and the problem with that is that starts to cause mortgage activity to pick up, which is great for rocket mortgage and homebuilders and and the interest rate sensitive like lows.
Speaker 5: We need supply though, David. There's no there's no supply like that's no supply for single families, single families.
Because Bitcoin: So that means that means the price has to that means the price has to go. That means the price has to go up.
Speaker 5: Yeah, I know. I mean, it's going to be great for companies, but I mean, I mean, at the end of the day, is that is that I mean, mortgages are I mean, the average cost of a home, I mean, this is going to go up, right?
Because Bitcoin: No, no, but the mortgage rate was three basis points from a three-year low. The adjustable is 562 on the 7/6, and the five-year, one-year is probably 540 right now. And with this move index coming in so hard, getting ready for a dark cross-- I don't like saying death cross-- you're talking about dropping 100 basis points in mortgage rates in six months. another 100 basis points three months later. And when you have a... Hey, David.
Speaker 5: David, I hate to interrupt you. I have like 5 minutes here. I'm just going to finish my point real quick. What I was saying earlier, right? I'm still in the camp that you're forming a shoulder. It's very difficult for me to see. Otherwise, I've seen what I've seen and I cannot unsee what I've seen. What do I mean by that? Your high timeframe divergences on your momentum oscillators. on weekly candles or on your weekly candlesticks on your monthlies, I cannot ignore that, right? I view the price above kind of like 110 as you created essentially, you know, weeks and weeks and weeks worth of supply. Now, localized price action. I understand from if you take a fixed volume profile and you look at kind of the volume that's been done over the past 12 months, we are right at that right at the kind of point of control of that right sitting at 96 specifically I've been mentioning the Discord if you get weekly closes above that to me then I lean rotational and rotational means I'm targeting then the value area high which sits around 108 we see how we react to that within that area you have a very important uh very important indicator that I like to watch and that is your 365 day rolling VWAP at 100K so you have a lot of resistance to chew through. You have a lot of supply overhead to chew through. And the only way that I see us truly out of this, you know, the instance, because Chad's had mentioned structure and or trend, excuse me, looks awful. Structure looks horrendous, right? You're underneath significant key points within the chart that you have to, that historically you have to have had remained above to remain bullish for significant periods of time. If you get above them, That's a good sign, but to remain above them, I think you need some serious, serious intervention from Trump and from the administration that in turn would make who rich and wealthy. And what I mean by this is make middle class, make the people that actually transact within this market in a meaningful way, make them, if they're able to make That demographic wealthy again, right? And I don't mean by putting a ton of money in their pockets. What I mean is stabilize the cost of living, flatten out the cost of living curve in relation to your annual, into the average median income, right? Flatten that, right? If they can flatten that, if they can, if they intervene in these markets in a big, big, big way, you know, I've no, I've no problem expecting higher prices, but until then, I have a really tough time just from a price perspective, seeing these, seeing these charts go on to set new all time highs. And with the lows that are currently in, they're ugly. They're ugly. And lows that are high time frame pivot lows that look like this are ones in which price never, ever, ever visits again. So you have, I'm in one of two camps, right? This is a shoulder and you know, we're going to be seeing lower prices without a doubt, or for whatever reason, we see massive, massive, massive intervention, like beyond what people think possible. And we never, ever see these prices again. With that being said, I got to go. Appreciate you.
Because Bitcoin: Evan, what's up bro? I saw your request. How are you, man?
Speaker 3: Hey, yeah, it was a little late, late this time. It was getting, yeah, it went a little long at the gym. But yeah, I mean, basically, I think this is like one of the first places as we kind of get really close to that, like 50 weekly moving average that we were talking about yesterday for Bitcoin. I mean, I think that, I think that, I'm more in the, like Prometheus was saying, the shoulder kind of theory, the theory that, I mean, obviously there's one or two things that are going to happen as always, you're either going to keep going upward or you're going to reject from one of these, one of these places. And my view is that like probably like you're hitting an EMA or excuse me, an SMA right now on like the two-day, but really the daily, oh yeah, daily 50, you're above that. I meant to say the weekly, my bad. But the weekly 50, you're almost there. That currently is at around 101, probably hit that right at 100. So I think despite the view of the masses, that the masses are always wrong, I think the masses are right that you will come up to 100. But the question is, can you break through? I don't think it's very likely. I think that we're in a rhyme to a certain extent with 2022, where energy outperforms everything for at least a few months. I don't think it's going to be as crazy as 2022, where everything really goes down so much, like S&P 500, all that. But I do think a milder version of that, where energy has its run. I think uranium-- people have mentioned it for the past few days. I think that's got a good shot of getting back up to its-- what is it, 2011 highs, similar to what silver did. SQL is always worse than the original. You're going to probably not see anything do go as crazy as silver has gone. But I still think you got, you know, definitely some momentum there to keep, you know, recovering from, you know, 15 years ago, which is, you know, kind of crazy to think about how long these things take sometimes. But, you know, if you're in at the right time, that works. So that's kind of the next six to eight-month area. The other ETF, LXE, that looks good, you know, compared to NASDAQ, compared to S&P 500, compared to a lot of things right now, even gold to a certain extent. So I would think that people were going to be taking profits in the gold. I mean, I would hope that maybe some of that money goes into all coins, some of that money goes into Bitcoin. And I think it will, but probably not enough to really bring on the Apple run. So I think it's going to be more of an energy centric bull market probably until the summer. I think in terms of interest rates, like I don't think it's going to be that extreme is what some people think coming down, I don't know, 200 basis points or anything like that. I mean, I could see 50 basis points, that type of thing. You would need asset prices to really go down, I think, to have your average 30-year mortgage below like 5.5%. But I think you can get there kind of the middle of the year. And I think that'll probably spike back up. Those yields will probably come back up a little bit as things recover probably later this year or early next year. I know it is kind of like clockwork maybe with the first cycle a little bit, but I think the recovery is going to be a little bit earlier. And I think things bottom out a little bit earlier every time. I mean, keep in mind, Ethereum bottomed out in June of 2022. It could bottom out in May of 2026 this year at maybe 1,800 to 2,000, which I think would be a really golden point to get in. So I think it's like if you're an aggregating kind of investor like I am with kind of my long-term bags, I mean, I have a decent position that I got energy pretty recently. I've been in gold, I'll be completely honest. I completely missed out on silver. I didn't think that would go as crazy as it did, but got some uranium, got some LXE, Occidental Petroleum, trying to hold those four to six to eight months, those areas, and then converting into Ethereum, which would be probably my main crypto pick in 1800 to 2000, those areas, and then some other crypto picks, hopefully in the summer, some good deals to convert that into. And let's say energy, let's say I'm completely wrong. Let's say energy doesn't do much. Maybe it goes down a little bit or something, or it's just sideways. I'm completely fine with that. Most of these aggregate trades I do, do work out. So there's going to be some that don't do too well. But I still think getting in good deals on Bitcoin ETH and all that is what I'm looking for. And I think that the last thing I'll say here is like on Bitcoin, I really like EMAs like on your three-day, once those turn bright again, I know if you know, you know with EMAs, once those turn bright again, that's a good place to really get in wherever that may be. I don't think that's going to be at least until another four to six months, kind of those areas at least, maybe closer to the end of the year. But that's the place where I would convert a lot of more safer stuff, energy, S&P 500, bonds, that type of stuff into the crypto market. So it's kind of that patience game. But I do think if you look at XLE versus I mean, that could outperform it by maybe 100% over the next four to six months. So potentially, you know, allocating a little bit of Bitcoin into that or bring a little bit of Bitcoin into that, maybe could double that evaluation. I like those type of bets for the spot market. In terms of very short market, I mean, short-term market, I mean, try to get up to 100K. That's all I'll say right now. So yeah.
Because Bitcoin: Yeah, man, there's always a-- bull market somewhere, right? Like I think silver, I think we mentioned this yesterday, silver is up over 100% since Thanksgiving weekend. And if anyone said that back then where, hey, silver's going to be up well over 100% against BTC going into the middle of January, they'd call you a crazy person. But I guess that's just what this administration brings, right? It brings in an a entire class of volatility that we haven't seen in a very, very, very long time. And it wouldn't surprise me if BTC just gaps up. Is it like the 50, the 50, like the 52 week or whatever?
Speaker 3: 50 week SMA is the one everybody's that's right out with 101k right now. I mean, if we hit it by end of month, it'll be 100k probably.
Because Bitcoin: Yeah, yeah, I think like, like, like, I would say two back-to-back weekly closes above that EMA that would take us to like 110. But I'll say this, man, I will say this. I think the worst thing that would happen is like we just make a marginal high to like 130 K and then we repeat the same exact thing that happened in Q1 and Q2 and Q1 of last year and we just repeat that in Q2 of this year. I think that would be ****** honestly, rather than like, and I've seen this tick before, right? There are a lot of people that are bullish long term on this market, but they would rather see a flush to like 70k below 70k. Basically right around that range high that we hit throughout 2024, if you remember that range that we were in for a few months, the bottom end of the range was at 53. Top end was at like 68, 69. And so some people are calling like for a retest of that. And then we have a few years of up only. And I just have a hard time. I have a very hard time because the market doesn't care about tariffs. A huge unemployment scare would be the only thing, rather than this like perpetual grind up in unemployment. Which we know is just going to be up and to the right. If you believe that UBI is going to be a thing, which I do, we all know inflation is up and to the right. Like $100 today is not the same $100 in purchasing power as it was 30 years ago. So it's like now that trend that we've had with inflation is probably going to be with unemployment. That's what I have to say about that. I know it sounds pretty crazy to say, but like with AI and all that stuff in automation, yeah, productivity is going to be, it's going to be looking a lot different now. Like some people are just AI prompters now. They can't even think for themselves. The way they do analysis is that they just type in their thoughts on ChatGPT and they come out with, they come out with paragraphs of just pure slop. And perhaps that's what markets are going to be, Evan, right? Just pure slop. How does it make sense that something like silver has bursted into a nine month rally of like 250%? That's called slop. That's boomer slop. And I guess Gen. Z slop was like meme coins and AI stuff going up like crazy in 2023, 2024. Oh, by the way, Naka, you know what's funny? When I mentioned Claude, no, not Claude, Anthropic talking about that tomato coin or whatever, sold a tomato, Claude made a post about it, which is, that's just, that's a movie, man. You love to see it. I think just like this whole social dynamic of markets is just slop, like it's no longer, the 80s or the 70s where you had to have this like huge thesis to why things would be going up. I think this is just the beginnings of Project Zimbabwe, which ultimately leads to UBI and the age of these like multi-year bear markets are over with. But ironically, Yeah. Hey, dude, the last time we had a multi-year bear market was in 2000, because 2000.
Speaker 4: Oh, you mean in, you mean, you mean in TradFi?
Because Bitcoin: In anything, in anything, in crypto, in TradFi, like, dude, the last multi-year recession was over 20 years ago, or whatever it is, right? It wasn't even a.
Speaker 4: Recession, because jobs, the financial, the financial crisis was. The financial crisis was, it like lasted a bit more.
Because Bitcoin: That barely lasted a year. I think the S&P 500 peaked out in like Q4 of 2007 and then the market bottomed out 15 months later in March of 2009 when Obama had that meeting with Paul Volcker to the day the S&P bottomed that 666. And it's like, yeah, that coin is probably going to go to like a billion if markets actually melt up as high as like they can, and it's in front of everyone's faces, and they're going to miss it. But I could be wrong on that, whatever.
Speaker 3: Just wanted to mention real quick. I mean, you look at that, that is true. But like, if you look at that whole decade, like the S&P 500 in 2011 or 2010 was the same price it was in 2010 years. later. So I mean, that whole decade, if you do look at that Eric Gold outperformed the S&P 500 during that whole decade, I mean, you probably, I don't know completely, but I think you would have had a better return if you were just in bonds for that 10-year period. The same could be said for the 1970s. Obviously, that was the crazy gold rally. But I think there's going to be a lost decade, man. If you're talking about UBI, there's going to need to be things going down. And you're going to need to get in the type of politicians that would approve that. would need like not necessarily 08 type crashes, but you would need unemployment high. You would need things to come down into bad shape, which I do think you can see probably in the 2030s. But I mean, I don't really see, you would need somebody like an AOC to be in to get a UBI. I mean, maybe Newsom, maybe. I don't even think that would be as far enough to the left. You need somebody like more radical, like a Mabdani and AOC, which you could get, like that's the ingredients for it. Like if you do see kind of like, wait, that was kind of the ingredients, for somebody. Obama presented himself more moderately in the beginning, but like even looking back to FDR, like that was very radical left at the time, like somebody FDR, you need things to really come down and then people really want change and they'll vote for somebody more socialist. But until that happens, I think you would need a lot of automation driving unemployment up and then people get scared, people sell off and all that. Last thing I just wanted to say real quick, I mean, I think it's more similar. Like I wouldn't compare it to, I don't think Zimbabwe, I'll be more optimistic than that, but kind of like the UK, like 1930s, 1940s, like they were printing money. We weren't. That's why our, that's why the US crashed so much more during the Great Depression. You would have been much better off. You still would have lost money, but you would have been way better off in the UK stock market. back then, kind of in the 1930s. I mean, the British pound still exists. It's probably down 99.9% since the 1930s. I don't know the exact thing, but I think it'll be like that. It just keeps slowly going down. But there's going to be bad decades for the S&P 500. There's probably going to be bad decades for Bitcoin, too. And I would assume 2030s probably won't be as good as the 2020s, just like the 2020s for Bitcoin haven't been as good as the 2010s. So I mean, yeah.
Because Bitcoin: If you want to know what's wild, man, if we talk about a last decade, if you want to talk about growth, right, we're basically halfway there, right? It's been about five years since 2021, and this is going to be a pretty crazy statistic, but from their respective peaks last cycle, the S&P peaking out at 4,800 and BTC at 69K, If you would have bought in those tops, right, you would have been up more on the S&P 500 than on BTC. Isn't that crazy, bro? And with inflation adjusted, that's an even that's a terrifying story, bro. That is a terrifying story. In a way, we're kind of we're kind of halfway there, dude. And then you look at all coins kind of the same thing five years since the all BTC top almost inflation adjusted. Oh, boy, you got a long ways to go. So in a way, We're kind of already halfway or potentially this is near the top right of that, I guess, halfway last decade. But maybe this is maybe this was like an experiment for what's inevitably going to happen in the 2030s after the next round of Zerp and QE, which I think is going to happen under Trump. Like I legitimately think QE and Zerp is going to happen. over the next, I mean, now two years, right? 'Cause that's when the next election season comes. So over the next like two and a half years, I genuinely believe QE and ZIRP is going to happen. And then that I think like it'll kind of be like a more extreme version of what happened after the COVID cycle where it's like you have this huge drawdown and then this huge echo bubble where all things growth perpetuate to the upside, and then you come off of the sugar high, off of the complacency high, right? Kind of like how in 2023, you had that massive echo bubble after the sugar high came down. And if you look at like alt BTC pairs since key one of 2024, they've gotten slaughtered after that huge rally that they had. And if you bought all coins during that time, right, just as a trade, there were a lot more opportunities, Q4 23, Q1 24. By an extreme amount, I think a lot of people, including myself, took it for granted. And yeah, I kind of think the same thing is going to happen, but just to like a more extreme degree, especially if it's going to be a Trump administration where Trump is basically not only the president, but he's also like, I guess, like the pseudo head of the Federal Reserve, because he will be. He's going to be the one that gives this guy instructions and all that stuff, right? If he wants negative interest rates, we're going to get negative interest rates, man. If he wants money printing, we're probably going to get money printing.
Speaker 3: Bro, it's even crazier, though, is if you bought gold in the year 2000, you would still be ahead. I think the S&P 500 now, 25, 26 years later. Don't agree with everything Peter Schiff says, but that was one of the things he was right on statistically.
Because Bitcoin: Yeah, I had him on the show here a few weeks ago. It was actually a pretty nice conversation, man. I think people just give him a lot of crap for no reason, man. He knows he knows how to attract a crowd and get people riled up and and all that stuff, man. So is there anything else they want to say, Evan or Naka? Anything else you guys want to discuss? Anything that perhaps we didn't we didn't yap about on today's show.
Speaker 3: I'm just going to mention or go ahead, go ahead.
Speaker 4: Did did Joe Carlosar actually crash out last time?
Because Bitcoin: No, I think he was getting a phone call, man.
Speaker 4: Okay.
Because Bitcoin: We said it on the space. I'm getting a phone call.
Speaker 4: Is he getting a phone call from the Bogdanov twins?
Because Bitcoin: Nah, dude, he doesn't even trade leverage. He just buys the S&P 500, man. And BTC. I don't really think he trades, man. I think like the only trade I've heard him talk about is like something about bond calls or something like that. And that was in like 2023. in 2024. I don't really think he like trades on options or anything like that. Yeah. Go ahead, Evan.
Speaker 3: I was just going to say, I mean, I think you're right to like a certain extent about like the Trump thing controlling the Fed. I mean, I think a lot of people got to realize that like even if you replace Powell tomorrow, like that doesn't mean because there's other people like on the Fed that it's like Powell doesn't have 100% or the Fed chair doesn't have 100% of where, you know, rates are going to go And I think that if you look at the betting odds and where the money is betting, too, I mean, it's only like, what, two rate cuts this year? And that's assuming that Trump puts in exactly who he wants to put in, too. So I don't think Trump's going to be able to get that amount of power that quickly. That's my opinion. Maybe I'm wrong, but I just don't think he's going to-- I think he's just going to kind of drop this-- well, not really drop this lawsuit. They kind of stop talking about it. There's big successes Trump has, and there's big failures kind of like Trump coin Melania coin like you don't talk about that no more you know what I mean like it's going to it's going to go like one of those things you know what?
Because Bitcoin: I mean yeah that that that video that Powell put out man really made the rounds I even saw it on Instagram dude um it's it's like uh this Administration is kind of like a reality TV show. It's a reality TV show that makes the stock market move. And making the stock market move now over the last year is a lot different than moving the stock market back in 2017, 2018, a lot different. Like you now have multiple stocks trading at over 1 trillion in valuation. That's nuts, man. That is absolutely nuts. I think that happens with crypto, probably like the next batch of Kiwi. I think you'll actually see at least like two other coins going over a trillion in market cap. If Kiwi and Zerp happens, as I think, which I think it will, but I could be wrong on that. You'd have to have something crazy happen. I don't think a war is going to break out. I know that's what everyone's thinking, but like, it doesn't have to be a war for Kiwi and Zerp to happen. Other things can happen, right? We saw tariffs that caused such a huge meltdown where they had to basically use a bunch of reserves to pump up the market. And if what Bassett is saying is true, then like, the Face Ripper rally likely starts in like two months. three months, like the real Omega rally, which so far percent hasn't really been wrong as far as dictating like where the economy goes in correlation with markets, which I think this is one of the first times, man, in modern day history where like you have an active, like what percent is what, like the head of the treasury actively be bullish on markets. It's not like Yellen word. She basically just said a whole lot of nothing and she was job owning. Bessent is actively bullish on the US of A, which is great to see, man. We should have more people like Scott Bessent. If anyone, by the way, if anyone in the audience wants to come up and talk some shop, if you're listening right now, you want to ask any questions or. Just come up and give your thoughts on the market or comment on anything that we've said. You guys can go ahead and click the mic to the bottom left, and I'll bring you right on up. If you guys want to come up and talk, yap, you've been listening to the show for a while, whether it's a few weeks, months, or years, you can click the request button. Just click the spaces tab. Right at the bottom left, you'll see that little mic that says request, and I'll bring you right on up. I'll give it a few moments, but just one more call out for you, Naka and Evan, if there's anything else that you guys want to say before I wrap up the show here.
Speaker 4: I mean, I'm just interested in what people are interested in buying if they're bullish, right? So obviously, you know, the whole like complacency shoulder narrative has become very mainstream right now. And I kind of believe it. I think it's probably going to happen again just based upon like MVRV and high time frame divergences and stuff like that. I think it's... It's definitely going to happen. But like, I mean, you know, we don't know how much ******* there's going to be. Like this thing can go sideways for two months or something and make people believe that it's a bull market and whatever. I just want to know what else people are actually, you know, buying if they're bullish. What do they think is good? What's bullish? What's going to go up?
Because Bitcoin: I have the perfect person to answer that question. Uncle Mike, I see him in the audience. I'm sending him an invite to speak. He can give you a plethora of tickers.
Speaker 4: Mike Alfred will probably just tell me to buy Bitcoin and Bitcoin miners or something. And I'm not really interested in holding Bitcoin miners for like a month or something.
Because Bitcoin: Iron was a pretty good call, man. That was like pretty great. I think that was probably like one of like the only trades in the equity market outside of hood that I've done that have actually like been pleasantly surprising, honestly. Yeah, I think Cipher also did pretty well. Yeah, he can come up if you like. I'm sending him an invite to speak. But yeah, and I think Iron probably outperforms MSTR, like once beta of BTC starts to go up.
Speaker 4: I mean, honestly, I'm just very skeptical about any Bitcoin beta. Like, we're so late at the Bitcoin cycle. I don't think any of that stuff is a particularly good investment at this stage. I mean, I'm interested in things that are a bit more, you know, unconventional, off the wall, maybe something that I haven't thought of, you know. I saw there was one thing that I did get interested in, which was MuteSwap by Virtuals. Because I think, Wabi, you mentioned the Virtuals ecosystem. Yeah. but I mean anything else that people think is bullish that people are like yeah this is you know this is the the hot new thing that's up and coming uh I would be interested to hear that because I I mean I am a bear right now I'm a bear until basically I'm a bear until the mvrv resets right I want bitcoin's value to well.
Because Bitcoin: What's mvr what's mvr mvrv Mark.
Speaker 4: Market value to realized value, right? So you have the Bitcoin realized price, which every single Bitcoin bear market, the Bitcoin's market value, i.e. the value you can buy and trade on Coinbase today, has gone substantially below the realized price, right? And the realized price, I haven't got it up in front of me, but it's like 50K at the moment or something, or 40K, something like that. So like, I am kind of bearish, right? Until it goes below that realized price and then comes back up above it, or whilst it's substantially below it, that's when you want to basically be like a Bitcoin bull. But just because I'm a bear doesn't mean I think everything is going to go down and I'm just sort of bear up about all assets on all timeframes. So if people do have any suggestions to crypto stuff that they think is interesting, I'd be interested to hear it.
Because Bitcoin: Yeah, as far as virtuals, I think that's probably the highlight of the Ethereum ecosystem, in my opinion. Like if ETH goes above, I would say 8000, I think virtuals is really going to surprise a lot of people. I think it's probably.
Speaker 4: I mean, I mean, if ETH goes above 8000, that will surprise me a lot.
Because Bitcoin: Yeah. I think ETH right now is just kind of like a more expedited version of Amazon stock after.com. So 800 USD for ETH would kind of be like that bottom that Amazon put in. I think it was at like $0.50 or something like about a yeah, about a year. Yeah.
Speaker 4: What was what was the Amazon market cap at that point? Right. Like ETH has almost a trillion dollar market. It's like half trillion dollar market cap. Nobody's using it. Right. Like, when was the last time anyone here actually used ETH? I mean, I like Ethereum. I haven't used it for like 12 months. Right. It has a half trillion dollar market cap with no users. This is like a red flag.
Because Bitcoin: Yeah, I'm not too sure about like no users because like people still use like DeFi and all that stuff. Things like Aave. I think even more recently, like people started using synthetics and.
Speaker 4: My God, that's a name I haven't heard in many years. Synthetics.
Because Bitcoin: Yeah, they had a trading competition. that actually got a good amount of volume. They've been doing these trading competitions over the last few months. And I think ETH is probably just more so not to use for mainnet, but like L2s and all that stuff, specifically things like Base, right? That's where like the virtuals ecosystem operates. And I think like if you hold stable coins, you're probably going to hold them on Ethereum and not any other network. And those stablecoins are usually deployed once you start seeing BTC going into price discovery. At least that's what the trend has been, right? We actually saw a glimmer of what we've seen in past years over the summer. We actually saw ETH making a marginal all-time high back in August, right? I mean, if you want to pull up like squiggly lines and all that stuff, then perhaps that was Ethereum's 74K BTC moment, right, in March of 2024. And we didn't revisit those levels until eight months later after the election, right? So perhaps sometime in May, later this year, after Powell gets replaced, and this dovish guy that Trump brings in, perhaps slashes rates at the next FOMC by a good amount and it does some, does some, does some light QE that would probably spike up ETH. And I think we all know, like the ETH eco is likely going to blow up in a big way to the upside after all this happens. There's DeFi and all that stuff happened during Kiwi and ZERP.
Speaker 4: Well, it depends though, man. I mean, it really depends on how that all goes, right? We don't know. A lot of the TradFi people talk about predicting TradFi markets based upon central bank policy and this kind of ****. They don't really have a very good track record, right? Predicting markets based upon TradFi fundamentals like 12 months out is basically a complete crapshoot. They have no idea what's going to happen. They can't trade it. Wait and see. Maybe it does happen. Maybe there is the big QE thing. Maybe in June, yeah, Trump has rates back to zero and then, okay, we're on. But I'm not going to buy ETH now based upon fundamentals of people saying that Trump is going to lower rates. Right. If you traded, if you just traded every single thing that Trump said he was going to do, you'd just be completely wrecked because he frequently says something and then two weeks later he turns around and says the exact opposite.
Because Bitcoin: I don't know, Naka. He tweeted. He tweeted on April 7th at like 6 a.m. Now is a good time to buy. And then the S&P had that.
Speaker 4: Yeah. So that one time, you know, it was actually.
Because Bitcoin: No, no, he also said it a few weeks ago. And he said new all-time highs and then the S&P made new all-time highs. Like there's, I don't think there's ever been a point to fade. Trump, when it comes to the stock market, he is the stock market, man. Like there's, there's never been, there's never been anyone more influential in market history than Donald J. Trump, dude.
Speaker 3: Bro, my, my Melania token isn't.
Because Bitcoin: Too much too good, bro.
Speaker 3: I'm a little disappointed my Melania token, man.
Because Bitcoin: Well, that, well, that, that, that's different. I'm saying equities. As far as equities, dude, like Trump is, he is the Fed when he's, when he's, uh, when he's in office. And he gave you the small local top after the inauguration. He said the market is a sick patient. It's a sick, it's a sick person and it has to go into surgery. And sometimes accidents happen, but it's going to be okay. Just give it a few more months. And what happened in a few months after that, like the biggest recovery in stock market history?
Speaker 4: Yeah, I mean, that again did like happen to me. You did completely nuke everything with like Liberation Day and his tariffs, right?
Because Bitcoin: So that was the bottom, dude. Like that was basically the week that the market bottomed out and the S&P is up over 40% since Liberation Day. That's insane. That's actually crazy.
Speaker 4: Yeah, but that was like a massive, that was like a massive nuke on everything as a result of him.
Because Bitcoin: Yeah, everything went back to all time highs. That's the thing. Like you didn't get blown out if you were on spot, right? Like, I think there's this like weird misconception that people in markets, they're always putting on leverage. They're always going on like options markets and equities. Most people, they just buy and hold, man. Yeah.
Speaker 4: Yeah, I mean, look, if you just buy and hold triple Q's, you're probably okay. You can ignore the noise. You don't care who the president is, right? But like, I mean, if you're in crypto, you kind of do care because if your narrative is like, running and then Trump blows up all markets and everything, you know, legacy markets crash 30%, your national is probably permanently dead, right? Or at least it's going to take a massive **** and then who knows what's going to come out the other end of that. So I just I just would like my take on anything TradFi is mostly ignore it, right? And just pay attention to what the crypto markets are actually doing.
Because Bitcoin: I'm going to pass it over to Uncle Mike. Uncle Mike, what's going on, man? It's been about a month since we last spoke. A lot of interesting stuff has happened since then. The Nikkei is in price discovery. The IWM is actually expanding this time in a big way. You also have Euro stocks making all-time highs. The S&P is about to make an all-time high, probably by the end of the week, man. What's on the menu coming up for the wines?
Speaker 4: I'm drinking some Masato again tonight at this private club that a buddy of mine invited me to, but I'm actually becoming a member too because it's such a cool place. I'm like, I got to become a member of this place. But listen, happy New Year. Your timing of doing spaces before the market closed, like it's just never gonna work with me. So you don't have to ask me if I can come, 30 pacific. And then just this week, I've had like four or five board meetings and board calls, had some back stuff. We closed the acquisition of DTR, tons of stuff going on there. I had an IRIN board call today. That was the first update I've had on IRIN in this new calendar year. And as expected, there's just a **** ton of stuff in the works because guess what? Every single available megawatt in the US in particular, and particularly if it's in large size, it's all going to be needed. It's all going to be subsumed. It's all going to be used up. It's all going to be leveraged. And that whole process is just accelerating across the board. I think there's going to be I don't know, this year there's going to be dozens of major combination cloud and colo agreements announced across this space. I think some of the biggest deals that have been done will probably be done this year. From my perspective, the environment's actually accelerating. The CapEx investments are actually increasing week over week still. Now, it's in total, totally contrary to what people were saying in November, December, like the Jim Cramers and the talking heads on TV were saying about there being a bubble. There is 0 sign of a bubble there. If anything, there's a sign of an acceleration. And in addition to the things you mentioned, like the small caps outperforming, the large caps, the equal weighted S&P is significantly outperforming the S&P. Year to date, it outperformed yesterday, it outperformed again. Today, I just checked to make sure. because I was busy today. I wasn't able to watch kind of all those dynamics, but it's much more like a second, third, fourth inning, like early cycle feel to the market right now than a mid to late stage. And I think a lot of people are just incorrectly anchored to a timing perspective on where we are in the cycle and not enough are anchored correctly to the right fundamentals. I think the right fundamentals right now are watching the areas of the market that have underperformed for three or four years now. So everything from small caps to biotech, which has recently started to outperform sectors like consumer staples this year, which are all of a sudden have woken up and are starting to run. I'm seeing a big broadening effect in equities just in totality. And then there's also just the fact we haven't had like a real US business cycle at all. We've seen some assets reprice, right? So basically the digital financial capital has repriced, but the Main Street, the real businesses, right, like the manufacturing sector, hasn't really had anything that looks like an expansion yet. My suspicion is because of all the chicanery and all the crazy things that Trump is working on right now, and I think he has good intentions with some of those things, I think the net effect of that is going to be to finally heat the market up enough. The combination of sort of anti-Fed job owning and sort of signaling that rates are going to come down trying to juice the real estate market, trying to bring down costs for consumers, trying to stop corporate interest from buying up real estate, et cetera, et cetera. So you go down the list of all these things that he's pulling on these levers right now. I think what he's trying to do is finally get the ISMPMI to flip over 50 going into an expansion territory. And the small cap index and the broadening we're seeing in the eco-weighted S&P is all signaling that the market thinks that that's going to happen. And that, I think, is what you actually need to finally see strength in crypto assets beyond Bitcoin. I think with the benefit of hindsight, you can say that we have not been in a bull market at all for the broader crypto ecosystem since 2021. 2022 was a nasty start to a bear market, and then we've effectively, with some small rallies, just been floating around those levels for four years. We've seen, look, BNB's up, and Solana's up off the bottom, and Ethereum is up, but none of these things have gone into sort of parabolic price discovery above previous all-time highs from 2021. And it makes sense because there really haven't been the correct liquidity conditions for anything that isn't in its own idiosyncratic S-curve to run. So people say, oh, Bitcoin's up a lot. Well, yeah, it's up a lot because of very particular institutional factors like the adoption of the ETF, the most successful ETF in history, and the rise of these large-scale treasury companies. which is a very idiosyncratic factor that has mostly impacted Bitcoin, not other cryptocurrencies. I'm aware of Bitmine immersion, I'm aware of Sharpling, I'm aware of the other Treasury company strategies, but nothing has been as pervasive as the Bitcoin Treasury strategy, and no ETF has had as much success. as I bet. And so Bitcoin has basically been able to buck this sort of negative environment where the Fed in retrospect has been too restrictive. There's been no business cycle. Liquidity hasn't been quite right to go out further on the curve beyond Bitcoin. And I think that's finally probably going to change. The other thing that people say. against this argument is that, well, look at the S&P, it's at all time highs. And I'm like, well, tell me about the composition of the S&P and what really drives it. And it's really a small group of companies which almost without fail has some direct exposure or viewed as having some direct exposure to AI, something that sort of launched in the consumer consciousness in 2022 with ChatGPT during the last sort of deeply negative part of the bear market for U.S. equities. And so we've had a nice recovery, right? Like a rubber band recovery in pretty much everything that has to do with AI and in the broad market indices. But we haven't seen, just like in crypto, we haven't seen a lot of different names beyond technology and AI participate in that equity rally. You can point to some utilities, but all those utilities are selling power. to AI companies, right? You can point to some equipment makers like GE Vernova or Vertiv, et cetera, like Celestica, et cetera, and they're all exposed to the AI data center. A thematic, again, a thematic that probably has 20 or 30 years to run, and at least in the short term, probably doesn't have a major downturn in it until Microsoft, Meta, Amazon, Tesla, et cetera, all decide that they don't want to keep investing here. And what I'm seeing right now as sort of a macro thing is that you have these 2, 3, 4, $5 trillion companies. They're the biggest companies in all of human history. They have more cash and more cash flow than any companies in human history. And they're in an existential battle because effectively, if you serve on the board of those companies, you cannot preside over becoming Kodak. You cannot preside over your company becoming. blockbuster video. And there's a very real risk given how quickly the AI adoption curve is moving up, that the companies that don't invest correctly here or don't invest enough can actually become somewhat irrelevant within five or 10 years. And then you become a Harvard business case study. You were a hyperscaler, you're one of the greatest companies in all of human history, and you became a dinosaur because you didn't invest enough in AI. So effectively, like the game theory of the math is like, there's really no amount of money that's too much to defend a two or three or $4 trillion market cap company. Look what's happened with Google. They launched Gemini, Gemini went into a leadership position, and Google's effectively outperforming Microsoft, Meta, and everyone else ever since then. The market is not irrational. The market is rationally pricing in the risk to these legacy business models of things like AI. And Google, I think, is doing correctly. Like if you search for something in Google that's really a question now, it doesn't give you a hyperlink. text, it just gives you the answer. And the answers you can get from Google Gemini just in the regular Google search bar are really good. They're far better than the answers you would get from just getting a list of links where you have to go and effectively do the research yourself. So that's what's happening. And the reason why you just can't get a downturn is that that's driving the whole economy. It's driving the S&P, right? It's driving GDP. GDP is far outstripping what most people thought it would do six months or a year ago. And right now it's accelerating. And I'm sitting at the front lines, right, because I'm selling compute to the gold miners who are out there trying to figure out like what applications are actually going to be the long-term winners and what foundation models are. Like that's a tough game. It's not a game I necessarily want to play. And personally, the game I want to play is I want to serve all those people, you know, beans in the kitchen after a long day of gold mining. I want to sell them Levi's jeans in the store. Right. I want to sell them pickaxes and shovels and buckets and anything they need in order to mine for AI gold. Right. And so when you're sitting in that place, you see the demand in real time. It's not predicated right now on who can actually deliver revenue at scale yet, because it's not about that. It's still about like we're laying the groundwork. We're creating the field. for the next 10, 20, 30 years of AI. And anyone who doesn't participate now is probably going to become irrelevant anyway, and they just don't matter. So that's why if you're selling compute right now, every single hyperscaler is calling you every single day. And they're asking for more, more, more, more, more every single day. They're asking for more iterations on how they can do more, how they can get more power, how they can get more buildings stood up faster, right, because they need more capacity sooner. because they're worried that their core business is at risk. So that's the environment. It's highly competitive. And it's not the type of environment where you're going to get a sudden pullback in demand. It's actually an environment where you're likely to see more exuberance and more mania, probably significantly more before the pullback. And it really does remind me of like 97, 96, 97, 98, even internet where you weren't wrong to say the internet is a bubble. Because eventually it was a bubble. The problem was is that the vast majority of the money in the market, the internet market was made in like the last six months. So you were calling it a bubble three years early and you weren't wrong, but you were wrong in terms of not making money. And I refuse to do that here. I just think it's quite silly. Unless you're out there selling compute every day and you're talking to hyperscalers, you're really not going to be in a position to judge. where we are in that cycle. If you are, and you have any markets background at all or any experience, you're gonna recognize that this is not the way tops feel like. This is what early to mid-cycle heat-up periods feel like, where there's some chirping from people that don't know anything yet because they missed it. And so it's really important to convince their investors or their friends or whoever they respect that they didn't get it wrong, and so we need to tell everyone it's a bubble. right? And hopefully we can get the stocks down and we can buy them lower. And they were successful at that in Q4. I mean, you could buy iron at $37, $33, right? $37 at the end of the year. And it was $75 just two months earlier and nothing's even happened yet. Like none of the AI contracts have even like really been executed on yet. And almost none of the capacity that's available has even been put under contract yet. So I just, I'm sort of chuckling and like, Who are these people that come out of the woodwork saying we're in a bubble? They must not actually be in this business. They must be just sitting, I don't know, somewhere, sitting wherever they're sitting in their home office and just digging around on the internet, but they're certainly not in the business every day. If you're in the business every day right now, it's really, really hard to see how we get any sort of significant top in the CapEx cycle for 12 to 18 months at a minimum, and that doesn't mean the market won't front run that. But in order for the market to front run that, we need to go multiples higher on a number of different things. We need to see a lot more FOMO and a lot more mania and a lot more euphoria. And if we see that and it pulls forward enough of that demand, then I'll change my view. But right now, I see a lot more fear and uncertainty from people who don't know anything about what's happening in the sector. And I see for people who know a lot about what's happening in the sector, the opposite, they're just in a rush. They realize that they're short and they need to get longer. They need more power, they need more infrastructure, they need more chips. And again, if AI, if you agree with me that AI is effectively what drove the S&P the last few years, then you'll understand why you're not going to get the 20% drawdown or 30% drawdown that people are praying for until this slows down. And I'm telling you, it's accelerating. So I'm just going to continue to do what I've been doing, right, like it's worked really well. The past three years, there have been a lot of traders who were short or bearish or drew chart squigglers dozens of times since Q1 of 2023. I was told I was an idiot for thinking Bitcoin go up at 18, 25, 35, 45, 65, 85. Now we're in the 90s and people are annoyed because it went down from 126. What if everything but over the last three years was literally not even the cycle yet? It was literally just the rubber band. snapping back to something that resembles fundamental value in a steady state world. And we're not in a steady state world, we're actually experiencing significant adoption. The ETFs are not shrinking, they're growing. The treasury companies, none of the major treasury companies are selling Bitcoin, right? And some of them are actually still able to buy Bitcoin because they launched the preferreds early enough, and those preferreds have a yield high enough in fiat terms to continue to attract flows. That's a real business. It's a real model that probably works at scale, particularly once Bitcoin goes back to sort of more reflexive, impulsive price behavior, which I suspect it will do at some point. So I think we're, for Bitcoin, maybe we're fifth or sixth inning worst case, where we get to 150 or 180, whatever this year, maybe even running in 2027. I think for the small caps and for the equal weighted S&P, effectively 480 or 450 companies that really didn't get an AI benefit. In the S&P, we might be in the second inning of a turnaround, which basically started in Q4, like a couple of things bounced in Q4, and then a whole bunch of names are behaving much better in the first couple weeks of this year than they did, particularly the end of last year, 'cause you had tax loss selling and a lot of stuff that was down. In crypto, like I'm watching Ethereum and Solana and pretty much everything else, anything that moves, there for signs that liquidity is going to start to make its way beyond that. I added more Ethereum in the last few weeks. I added to the iShares Ethereum Trust. I think I went from 130,000 shares to 160,000 shares, whatever that is, for four-ish million or so. And then I have my core spot Ethereum position that I've been holding since a little over $300 from way back in like 2019 timeframe, 2020 timeframe. So I still think Aren't you kind of wrecking your cost basis with that? I mean, if you bought Ethereum at 300, why are you buying at 3000? Because it doesn't, they're two different things. One is a position that I bought personally as a long-term VC style play I plan to hold for 20 years, and the other one I bought in my fund. They're wildly different. Oh, okay. It's your fun. Yeah, okay. But what's your target for Ethereum then? Over the next 24 months? I'm not sure over the next 24 months, but I think over the next 10 years, it's going to like 30 or 50,000 minimum. And it could do some component of that in the next 12 or 24 months. It's not so important to me that it does in the next 24 months. But I think because of the Ethereum treasury companies sort of as a fast number two behind the Bitcoin, treasury companies and then the utility specifically for stablecoins, I just see not only narrative support, but flow support for the foreseeable future, which given better macro, which I see coming over the next three to six months, I can see Ethereum re-rating to $5K, $6K quite easily. And of course, if it breaks $6K and goes into real parabolic price discovery, it's certainly going to get to $10K or $15K. in that window. But I also just think that, at least as it relates to crypto, it's similar to a value investment in equities where you have a bit more downside protection because the utility for stablecoins is so real. Stablecoins is probably the part of crypto that is the most real to the most real people. in the most places in the world, such that you can argue that even Bitcoin is sort of speculative from some dimension, right? But it's hard to argue that a US dollar stablecoin is not useful. Like, look at Venezuela. Why do you think stablecoins are going to help ETH? Like, nobody pays any fees on ETH anymore. I mean, I looked at the ETH fees chart and it's basically gone to zero. Like, not the fees per transaction, but the total fees per day. Ethereum doesn't make any money. It's a charity. You're not buying the Ethereum token because the Ethereum protocol makes money, I don't think. So what does it have to do with stablecoins then? Like, is it kind of a vibes-based thing where like the good vibe of stablecoins will make people put trillions of dollars into a charity? Like, what's the deal? I don't think it's a charity. I mean, like, look, all speculation in markets is about trying to see a year or two out, three years out. And I think Just the fact that Ethereum is becoming an embedded part of the stablecoin ecosystem means that it has more sustainability. It has more potential optionality to generate economic returns than some of these other things that are probably just there. And again, part of my thesis is macro such that if the money starts to go out further on the curve, it's going to go beyond Bitcoin. And it maybe will impact some of these things that are even more kind of silly. than Ethereum, but I actually don't think Ethereum is silly. Like, I think there's actually, there actually are going to be use cases. But how, I mean, how do you think Ethereum is going to make any money? Because right now, as I said, nobody pays any fees. It's operating as a charity. It has, it's like a, you know, half a trillion dollar market cap charity. Like, how, how's, how's this going to use it for stuff? Like, they still use it to transact. They still use it. to do NFTs. They still use it to provision NFTs applications. They still use it for decentralized trading. It doesn't, look, Bitcoin doesn't generate any fees for the users either, but the value for the user is the scarcity. So it doesn't need to generate, you don't need to, you don't need to use it to, it doesn't need to pay you a dividend. It doesn't generate any embedded yield, right? And it, and the protocol doesn't make any money necessarily that benefits you as a holder. You benefit because the protocol, protocol functions. in a decentralized way for a long enough period for it to accrue value in fiat terms because it is better than the system that it's it's stood up against and the better than the system that it measures values against. So as long as. Okay, but I mean, I feel like there's a bit of a sort of tension between the buzzword of like accrue value and the reality of it's a charity.
Because Bitcoin: How do you have .eth in your name, man?
Speaker 4: I'm just saying, you've got to understand the bear case.
Because Bitcoin: No, for real, like you had .ETH for like five years.
Speaker 4: Yeah, but here's the thing, Robby, like if you're bullish on something for five years and it doesn't work, should you keep being bullish or should you ask skeptical questions? I'm just asking questions. You just said it, I've been bullish on Ethereum for five, six years now and I'm up 11x. Right. So like that's a reasonable return. It's a really good return. Well, it depends. It depends when you bought it. If people bought in, you know, like in 2021, you'd actually be down right now. Who actually does this for a living. You could. Yeah, I'm not. I'm not saying that you're personally down. I'm just saying that like the asset hasn't actually moved in price, right? It's it's been in a long term consolidation with no loss or no gain overall. Right. The asset doesn't have any protocol revenue. Nobody spends any money on it. So these are both kind of bearish. So I'm trying to see what is the rational case. I don't agree with your premise, but that's okay. Like I've just gotten the point in my life where I'm not going to try to convince everybody. But my argument is simple. Ethereum has proven itself alongside Bitcoin as a sustainable, decentralized ecosystem with use cases that are different. than Bitcoin and the simple fact that it is in existence and unlikely to go away means it will accrue value relative to anything that you're trying to compare it to. So if you're buying Ethereum in dollars, yes, Ethereum is more scarce than dollars. Will Ethereum still be more scarce than dollars in five years? Probably. Almost certainly. Will Ethereum be more useful than dollars? Well, it depends. How much more NFTs do we want to buy? How many more decentralized protocols do you want to use? Nobody's buying NFTs. NFTs. No one's buying NFTs today, but during every recession in US history, the demand for one-of-one artwork in the physical world went down too, and those were always buying opportunities. So I'm not an NFT bull. I'm not an artwork bull, but I understand that other people like those things. And as an investor, I try to be agnostic. If you're too emotionally tied to this, Naka, I can understand why you sold Bitcoin seven times already and you're not long Ethereum. I'm not emotional about it. I just think these things are gonna be more valuable. And even if I don't use them personally, I think it's very easy to model a five, six, seven, $8,000 Ethereum price. And I don't see a lot of other things in the economy that I wanna own right now that are going to do that, whatever that return is, 100, 150, 200% in a reasonable timeframe with the same amount of risk. Right. I actually don't view Ethereum in Bitcoin. When you say when you say model like a 7 to 8K Ethereum, like what does this model consist of? What's the model? It consists of some view of the different use cases for Ethereum over time. And which which use cases are we talking about? I'm not going to keep saying the same thing over. Well, do you mean NFTs which are currently dead and like basically don't exist? Or do you mean stable coins that don't pay any fees? Like what's your portfolio? You keep giving me these premises that I don't agree with. Like literally my wife got a notice that one of her NFTs just shot up in value like a couple weeks ago. Like she bought this thing for nothing and someone wants to give her like $5,000. for us. She bought it for $5. OK. What's the NFT?
Because Bitcoin: Nako, you're going to have a brain aneurysm, dude.
Speaker 3: May I ask you a quick question? I know you mentioned, I really liked how you mentioned like we're similar to like Titan in 1996, 1997. I'm curious what your views are on for potentially the 2030s. It seems like you're still bullish into there, but if you look at what happened between 2000 and 2010, obviously it was a lost decade, you know, for the Nasdaq.com type of stuff. Do you think that could be similar? with AI and crypto in the 2030s?
Speaker 4: I mean, it wasn't really a lost decade for investors who were diversified. Real estate did great in a big chunk of that window. Value stocks did great. Berkshire Hathaway did great in that window. Certainly, if you paid peak prices for the NASDAQ and dot-com stocks at the peak of the bubble, it took you a long time to dig out. But I know a lot of people who bought Amazon and Microsoft and things like that in 2003 and 2005, and they bought Apple in 2009, 2010 during the great financial crisis, right? And Google, they've done great. Lost decade doesn't mean anything. I mean, what matters is idiosyncratically, when did you take your exposures? And because I'm a concentrated value investor, I only really get interested in anything when other people are largely disinterested. Like, effectively, I need lots of Nakamotos. in the world in order to make the types of returns that I've made over the last three years like he was bearish when I turned bullish at the end of December in 2022 and correctly I wasn't I wasn't bearish I wasn't bearish I was like fully allocated in 23.
Because Bitcoin: I'm not gonna know you were not
Speaker 4: Yeah, I was. I publicly posted it. It's still on the timeline.
Because Bitcoin: I went full in. You said you had 2% in ETH, 1% in BTC, half a percent in MATIC. Like, and then, hey, and I have, the spaces are recorded, bro. In the summer of 2023, when Air Mass,
Speaker 3: I was in Madden, too.
Because Bitcoin: I lost a lot of money on that one. He said, and Air Mass said, Naka, and 12% allocated, what the **** are you talking about? And that was on the space where we,
Speaker 4: hold on, hold on, hold on.
Because Bitcoin: Wait, Naka, I need you to be like a Russian tank and back off from Ukraine.
Speaker 4: Listen, guys, let's not make this personal. Nakamoto, I like Nakamoto, listen, so I'm not going to say, because I like you, I'm not going to say anything else about you specifically. But the comment I want to make is that this is what's so challenging about markets, is everybody remembers the past differently. Everybody remembers things incorrectly, everyone, including me. And you can go back and listen to the recorded spaces from 2023. The one thing I can say with certainty, and this is the only thing I can probably say with certainty, is that I never turned bearish once. between January of 2023 and now, every single time, every single space, every single moment, because I'm not going to turn bearish when we have asymmetric upside and sentiment being too negative and nothing's even happened yet. So I still think it's foolish today to be bearish, particularly on any asset that is more scarce than Bitcoin, or sorry, more scarce than the dollar, right? So that includes houses, like I'm still buying real estate because I I think even real estate's a good investment at the right price, and if it's the right type of real estate. I'm buying everything that's more scarce than the dollar, because the dollar is going to debase. The debasement trade has been around for a long time. It's funny that the banks, the Goldman Sachs of the world, just showed up and started talking about it last week. I guess their clients wanted to hear more about it. But it's going to go on for 20, 30, 40, 50, 100 years. As long as there's still fiat, the debasement trade will be on. And occasionally, stuff that's actually a really good antidote to debasement gets cheap because for periods of time, people say, oh, that has no value. So right now, the narrative is, well, Ethereum generates no fees for stablecoins. There's no NFTs. Nobody's doing decentralized trading. Again, I beg to disagree on that. Decentralized trading is quite active on Ethereum, and almost all of those protocols that are useful that people are using are built on Ethereum, but that's beside the point. Maybe it doesn't matter. And then you look out two or three years and you ask yourself, OK, if anything in the crypto ecosystem is still going to be around and kicking and decentralized, how could you bet? How would you want to intellectually bet against a protocol that has the second longest sort of lifespan of utility after Bitcoin? And there's no way to shut it off or kill it right now. So how is it going to go down in value? Help me understand how it's going to go down in value. I don't see it. I think the odds that it's higher-- The way it's gonna go down in value is there's gonna be more sellers than buyers, right? The Ethereum network can still work if the price goes down 90%, right? It can still work. All the people who said Solana was gonna out-compete Ethereum and that all these other layer ones are gonna out-compete Ethereum, they've all disappeared. Because Ethereum is, as messy as it is, it's still very, very sticky. Bitcoin is the same way. The argument about Bitcoin that was totally incorrect for the past seven years because I battled with these people on here is, oh, from a technology standpoint, it's antiquated technology. You need to use XRP because it's so fast. And you can't do decentralized trading like Ethereum, and Ethereum is ultrasound money, and it's going to be Bitcoin. No, it doesn't matter because for what Bitcoin is trying to do, it is so much better. And it's better because it's inefficient. The fact that it wastes energy, quote unquote, according to some people, is the reason why AI can't attack it. AI can probably attack and rewrite the blockchain for almost every cryptocurrency other than Bitcoin. Like, I don't think that's true. Ethereum has finality, like, you know, Ethereum is safe from any kind of AI attack. So you making the, hold on, you make, did I just catch you making a, 'cause that's my bull case. You just made my bull case so well. In an AI generated world, real world experiences, like touching somebody in person, actually conversing in the real world with a person, that's gonna be a huge flex in five years, 'cause so many lower and middle class people are gonna be stuck being programmed by AIs all day long, 'cause that's the only way to make money. And anyone who can actually just not go on the internet and like sit in a cafe and like talk to a real person and not have their **** hacked by AI because they own Bitcoin and Ethereum, that's going to have real value. That's ******* digital real estate. Ethereum is a blockchain. It's not going to prevent some kind of AI cyber warfare agent from hacking your phone, right? I'm not talking about all Ethereum at the chain level. You just said it probably couldn't be that easily hacked by AI right now, correct? No, it couldn't. But that's the Ethereum chain. So here's something I expected to hear from Mike that I didn't hear, which was a fairly simple thesis that people are actually going to start paying fees for stablecoins, and that's why Ether is going to go up, or the market will see that. That's a reasonable thesis. Would you agree with that? I didn't say that. What I said was the optionality, because I think these are long duration options with no expiration. essentially, right? They're reverse options. Effectively, you always have the ability to turn on fee generation, just like a startup who's selling you food delivery. Like they use VC money to subsidize delivering you the food cheaper than it really cost initially, and then later they gouge you once you're addicted to it. So if I'm Ethereum and I'm smart and I'm a complex organism that's decentralized and I want to embed myself, decide I do exactly what you said, I get super embedded in all the table coins and I don't charge any fees. So you become so addicted to my rails that when I do finally turn on the fees and Clarity Act comes through and other people start charging for stablecoins and the banks start being more supportive and the US government fully adopts it, you're already so embedded in the ecosystem, you can't be pulled out. So I just, look, I think that's optionality value, it's a call option. That's possible. It's certainly possible, but like, you know, like what Ethereum is actually doing technically and increasing their throughput, increasing their TPS, is just making more and more and more block space. It's kind of like, imagine like if Rolex, 'cause the way Rolex makes its watches expensive is they underproduce them, right? They make it really hard to buy one. Imagine if Rolex changed its business model to, we're gonna open up a massive factory in Shenzhen and flood the market with infinity Rolexes. That's kind of what Ethereum is doing with block space. They're making it extremely cheap. The same thing as the value of the token, you may argue that they're related. in the long run, and maybe that's correct, but it is not as an investor. Again, I'm a professional investor. I'm not a technologist. I'm very well versed in technology. I like AI, et cetera, but I'm not sitting around coding. I don't care about a lot of using Ethereum on-chain. I don't care about that personally. I care about how much is a token, how much is one Ethereum going to be worth in three to five years. Now, you could argue that if they make block space less valuable, that that will eventually affect the value of the token. I'm not so sure. And again, if you want to make that argument, I'd love to hear it, but if you're making the argument that block space is going to be more or less valuable, I don't really care. Yeah, I mean, like, if you have a lot of people who are basically just long Ethereum, because like, you know, they have money and Ethereum is a thing you can buy, And like, they like Vitalik and he sounds smart. And so, you know, everyone just piles into it. And that's one argument. The problem is, that's basically been the reason that crypto has pumped for the past 10 years, especially anything that's except Bitcoin, right? So like, maybe that trade is a little bit exhausted now that we've got to, you know, a half trillion dollar charity that doesn't have any revenue. Like, I mean, at some point that trade exhausts, right? I mean, maybe if the Mike Alfred thesis of like, look, you know, up only until the singularity, like AI is booming, you know, so because people will be rich from AI, they'll have money sloshing around from the AI trades going well, and they'll just rotate into crypto. I think that's a reasonable bull thesis. But I was just wondering if there was any, you know, anything else. I love you, you re-summarize what I say, but you leave out like dozens of things. No, that's not. the entirety of it. But yes, I do agree that AI is going to make some people extremely wealthy. In fact, I see some people in the room throwing up smiley faces and whatnot who've already been made extremely wealthy, so wealthy that they're independently wealthy as I am, where we don't have to go to work ever, ever again for multiple generations, right? It's like an empowered. Yeah, unfortunately, you know, I haven't got there, but one day, one day, lifeline will pump and I'll be independently wealthy. Look, your philosophy on trading is different than mine. you're very focused on avoiding 5% and 10% and 20% drawdowns, and I'm not. And the reason why I capture more 10% and 20x is I ignore even up to 30% and 50% drawdowns if I'm confident on a two- to three-year point-to-point basis that I'm correct. And I think this is actually the only way to beat the machines now, because the algos and the bots and the quant traders and all those guys, they're going to know more about the direction of the market in the next millisecond in the next five milliseconds, the next few seconds, few minutes, because they see everything, the option chains, the flows. They're in every market. They're arbitraging every market. They're smarter than you. You're a smart guy, but they're smarter than both of us about where markets are going in the next five minutes. What AI and algos. Yeah, I don't care about five minutes. I'm interested. The point, though, what they cannot do, what they absolutely cannot do is tell you anything about exactly what will happen a year from now. or two years from now, or three years from now on a point-to-point basis. And what I see a lot of investors doing and traders doing is trying to over-engineer to avoid even the smallest of temporary dislocations and drawdowns, 5%. In crypto, up to 25% or 30% is literally like nothing. In some of these small-cap equities, 50% drawdowns are a regular occurrence. In fact, in all the stocks that I've made 10 or 20x on in the last three years, every single one went down. least 30, 40% every year, sometimes twice. But at the end of the period, they were up, in some cases, 30, 40%, sorry, 30, 40x off the bottom. I mean, Iron in particular has been up over 50x off the bottom, and at one point, it was up almost 80x off the bottom, but you had to go through three 50% plus drawdowns over those 36 months, right? So that's how you get really wealthy. Now, can everybody do that? that because everybody have the mental fortitude and the stability to sort of look past. Okay, but I mean, suppose you do have the mental fortitude. Suppose you do, right? Like there's still the question, should I put my mental fortitude money into ETH or should I put it into iron or should I put it into IWM calls or whatever? My answer would be all of them. I mean, my exposure, I'm exposed to. Yeah, but you still have to decide what your percentages are, right? Like I mean, should you do like a global market cap rating thing? Edge, at the bottom of the cycle, I was sitting on the board of Iris Energy, which is now called Iron. So I had more insight into what all of the top 30 Bitcoin miners slash AI, future AI infrastructure, and by the way, I viewed them as infrastructure developers at that time. I called them Bitcoin data centers, not Bitcoin miners, before anyone else on the market called them that. And I was talking about the AI conversion opportunity before the market because I was in the business. That's what I was saying earlier. Like the real edge that allows you to size up and hold positions comes from knowing more than the other market participants. I come in these spaces to share what I know, recognizing that the vast majority of people in these spaces don't know anything, right? And just trying to be helpful. And I enjoy the banter and I learn a bit occasionally, right? But the reality is like the answer to the question of how to allocate is where's your edge? I think you in particular should have an edge in Ethereum because you have it in your name and more about it than I do, right? But you're not, you're not going to make problems in Ethereum than you are, not because I know more, but because I have more conviction on a point-to-point base about where it's going. But why? Like, why do you have conviction that Ethereum is bullish? That's my question. I mean, I walked you through the things and then you made the argument for me. You said AI cannot hack Bitcoin at the protocol level. You said that. That is the most important thing in the next five years. The most. Look at the software industry year to date. Look what's happening to freaking like Adobe and Salesforce and look what's happening to freaking stack overflow. The ******* platform collapsed. Nobody wants to use it because AI can basically disintermediate that whole business in five minutes. So the only thing that matters the next three to five years for an investor is what are the things that are so immune, so decentralized, so removed, so like have defenses that they cannot be attacked and they cannot be disintermediated by AI. If you don't have an answer for that, you will lose money compared to somebody who does. My answer to that is truly decentralized systems with immutability. So that's Bitcoin and maybe Ethereum, right? Bitcoin much larger than Ethereum because I think Bitcoin is much more defensible. AIs would have to take over a million robots and then attack the physical data centers and commandeer them, right? In order to actually attack Bitcoin. Like people just don't understand like all this, all this digital security that you have around your bank account and your identity, it's nothing compared to Bitcoin. It'll all be hacked. before Bitcoin will be hacked, it is largely immune, at least today, and particularly with some more protocol upgrades in the future. So Bitcoin and Ethereum, right, that's number one. Then I go beyond technology, right? Look at what's cheap right now in the economy, stuff like alcohol brands, right? Like AI is not going to make alcohol tomorrow. Like AI is not going, somebody who likes Jack Daniels or Guinness, right, or Pacifico or Michelob Ultra, like they're not going to change to an AI-generated beer brand because those brands take decades of conditioning and marketing in order to get people to like them. And you'll find if you try to serve somebody who likes Jack Daniels, Jim Beam, they will not drink it. They'll say, give me something else. Give me vodka or beer. I don't want whiskey unless you give me. my freaking jack animal. That is what you call immunity to AI. There are other areas of the economy that I think are similar, right? But I want to be in, if I'm in a digital space, I'm not going to the most disruptible part of the economy. I don't want to go straight to software. There are a lot of trad goons right now are like, you should be buying Workday and you should be buying Salesforce and Adobe because they're cheap. And I'm like, yeah, because you don't understand AI. Right? You didn't understand Bitcoin. You didn't understand AI data centers. Now you expect me to think that buying overvalued software stocks that are going to be absolutely clobbered by AI is a good idea? I mean, there is kind of like a version of this thesis that I've heard from Etho Taku. And his thesis is kind of a bit like yours, but it's not like immunity to hacking. It's specifically that In the AI world, TradFi will have too much latency for AIs that are going to be operating at significantly superhuman speeds. In that world, finance is actually going to shift to blockchain. When it goes to blockchain, it's going to go to the incumbents because of network effects and risk aversion and stuff like that. That means Ethereum and Solana and maybe one or two others if they can make it in the remaining time. His thesis is basically that all the finance that currently happens in the banking system will actually have to quite rapidly shift to the blockchain system, which is quite a radical thesis. Do you believe that? Do you think something like that's going to happen? I've been talking about agents wanting to use algorithmic money. They're not going to wait for the FedWire system to send a wire. If it does a job, it's going to want to be paid immediately. It's going to want it to be immutable. It's going to want it to be done on a blockchain. They're going to want it to be systematic money. Fiat money is not systematic money. It's funny money. It takes forever to send it. There's too many restrictions on how you can use it. So, yes, almost everything that AIs do at scale is going to require a monetization mechanism that looks much more like Ethereum and much more like Bitcoin and much more like stablecoins than it looks like. Well, I don't think this is. I don't think this thesis is very bullish for Bitcoin because Bitcoin doesn't have the TPS and the Bitcoin devs are slow. I'm saying Ethereum, I said Ethereum first on purpose. Yeah, I think it's more bullish for Ethereum. It's a lot more bullish for Ethereum. Look, you're not going to be doing agentic commerce. on layer one Bitcoin. If you're doing it on Bitcoin, you'll be doing it on some layer two or layer three. And these are the types of things that haven't been built yet fully. I mean, people are talking about the lightning. But all the Bitcoin layer twos all suck and the Bitcoin protocol is never going to upgrade. So if this thesis, if this sort of like ethotaku, like finance moves to blockchain because AIs need to be very fast, if that happens, that's extremely bearish for Bitcoin and very bullish for Ethereum and probably very bullish. a huge error in thinking, in my opinion, and that is that you sound like the guy who said, well, I'm never going to use the internet because my 1998 modem blocks my phone line and it beeps really loudly and my kids can't talk on the phone when I'm using it. And it takes forever to load the **** videos. It takes like 45 minutes. And I'm never going to use the internet because of that. No, like that's ridiculous. Like nothing's happened yet. Bitcoin is a multi-hundred year emerging phenomenon in money, and we're like 16 years or 18 years or whatever, however many years, 15, I don't even know how many years, 17 years in, right? And so, yeah, it looks like the 1996 or 1998 modem, but that has nothing to do with what the consumer internet felt like 15 years later. And so you're making a huge assumption that the way the world now is the way it's always going to be, I'm telling you that it's just flat out wrong. Everything's accelerated. The Bitcoin, the Bitcoin devs are definitely not accelerating, right? Like AI is accelerating. The Bitcoin devs don't need, I'm talking about second order and third order, second layer and third layer. I'm not talking about the. The problem, the problem, the problem with the problem with Bitcoin L2s and L3s is there are fundamental limitations built into Bitcoin's core protocol that make it difficult to do them properly or basically impossible. So there are, you'll have more rules. And you'll know it's not like humans that are gonna do something wacky on the Lightning Network. You're gonna have thousands of agents who are all working in concert who have very specific sets of rules of engagement that they've developed with each other that you'll be able to model pretty easily because they're agents, they're not humans. So they're not gonna do as many crazy things as humans do. And so you'll be able to build systems that are much more precise and algorithmic for how to interact with the chain, how often to reconcile with the chain, how to source liquidity for certain types of transactions at certain times, that's much more efficient, sort of like self-driving cars have gotten so much better, right? Like, there's so many fewer edge cases because the computing power being pointed at it and the algorithms and the software around it have gotten-- the lasers have gotten so good that you're actually safer doing FSD and Tesla right now than driving yourself. And the same thing will happen-- the best layer 2s and layer 3s on Bitcoin will be completely algorithmic, too. They won't be humans, like, trying to source liquidity for one transaction on Lightning, it'll be literally millions of agents on a layer two platform. This particular use case that uses... If you want to build an L2 for AIs, you'll build it on ETH not Bitcoin because Bitcoin has limitations that make it difficult to build proper L2s. that are actually trustless, right? The L2s that I looked at this a little bit a while ago, okay, things have moved on a little bit since then, but basically every story about Bitcoin L2s is how they suck, and each one tries to suck a little bit less, but they're still nowhere near as good as Ethereum or Solana or anything else. I just smashed by another 20,000 shares of the iShares Ethereum. Interesting. Which one? Ethereum. I bought 20,000. I mean, your commentary is making so much more ******* bullish money. I mean, look, what I'm what I'm what I'm talking about now is bullish for ETH, right? Like if you buy this thesis, the kind of ethotaku, you know, all finance has to move to the blockchain because it's all going to be AIs and they're going to require very fast speeds. That is hyper bullish for ETH. And you need to be talking about like, you know, $100,000 ETH, not like $6,000. This is why I like every time we talk, you start off saying you wildly disagree with me. And then by the end, you've made my thesis stronger and more bullish by the end. So I love you, buddy. Thank you so much. Over the next five or 10 years, I'll come back. The question is, the question is just, is this going to happen, right? Like the question is not, I agree with you that would be very bullish. The question is whether this is going to happen. I don't see what stops it. That's where you and I disagree. Where I'm, what I'm connected to is at the base level of the compute man right now, I'm telling you, it is ******* insane. And it's accelerating. It is so much bigger than even AI bulls think it is right now. There's a good analogy for this, which is the internet. Even internet bulls were wrong. The internet bulls in the late '90s were bullish on internet stocks. And they thought the internet would be a cool thing that we would use. And they just totally missed that Meta, right, and Google, and some of these companies were going to come out and be the biggest companies in the world. That was completely non-consensus and non-obvious. in 1999, 2000, it seems obvious now because we know what happened. I'm telling you, the AI thing that's happening right now is probably bigger than that, and it's happening faster because it's accelerating on internet rails. The internet was distributed on wired in modems on your phone line, right? And it was like one person at a time got AOL, and they got Instant Messenger, and then it became a communication platform beyond e-mail. For a while, it was just professors sending emails to each other and people watching ****. And then AOL Instant Messenger came out, I was like, oh, cool, I can use this to talk to my friends without calling them, which is kind of the precursor for everybody texting on their phone. So anyway, like long story short, AI is going like five times faster than that. And I suspect that even AI bulls right now are going to be way too bearish about where this plays out. And if that's correct, then there's gonna be a total remaking of the entire financial superstructure, which is going to cause things like Ethereum to go completely *******. The timeline for that and exactly how high it goes, it sort of doesn't matter to me because when I take these positions, I take them with the idea that I'm willing to hold them essentially until the full thesis plays out. So if we get out three years from now and it hasn't really gone yet and it still seems like it's going, I'll still be holding. If we go up 10X on Ethereum in the next three months, I'll probably sell some, right? It's really more being responsive to Like where I think we are in the cycle and how sort of delayed or pulled forward that phenomenon is at any given time is reflected in asset prices. And that's where the nuance comes in is like, I'm bullish long-term on the trajectory of AI. I'm bullish long-term on the trajectory of decentralized finance. I'm bullish on the long-term of sound money, right? But at any given time, one of those or multiple of those things could be too cheap relative. to where it should be on that curve, and at other times, it could be too dear. It could be too expensive relative to where it is on that curve. That's the artistry of investing. It's one thing to get the big top-level thesis right. It's another thing to buy those things at the right times, at the right levels, and the right sizes to get the sizing correct. Then it's another thing altogether to have the guts to hold them long enough to actually capture. Let me give you a counter thesis. All the stuff about like people buying NFTs, that's all bunk, that's not going to happen. But the stuff about like AI is going to force all of finance onto the blockchain. Suppose that is going to happen, right? But, and hear me out on this, suppose that between now and when it happens, some other blockchain appears that's much more optimized for AIs, because Ethereum was very much built with human users in mind, right? Nobody's ever built a blockchain from the ground up saying, This is purely going to be used by AIs, humans can **** *** right? So if that happens, This thesis could be right, and we're all putting money into a half-trillion-dollar charity that's like Vitalik's socialist larp, and it actually doesn't capture most of the thesis. Most of the thesis goes to some other thing that doesn't even exist yet. Now, I'm not saying that's going to happen, but it's just something to bear in mind. Well, my position And Iron and Cipher are probably, I'm just doing the math. Yeah, Iron is better. Let me finish the thought, though. And anything that's on the AI hardware side is super safe because no matter what happens with AI, assuming it's bullish, the hardware side is gonna be bullish, right? And this isn't even just hardware, man. This is even more fundamental. This is the land. This is the electricity. This is a connection with the electricity grid, the ability to suck large amounts of electricity to control that. The buildings which are 40 and 50 year live CapEx investments, they're not hardware. That is a different trade. It's a different trade. Four to five year turnover. The buildings, the land is infinite duration and the buildings can be 40, 50 years. But let me finish my thoughts on sizing matters. And so everything you said could be true, but also I don't care because my iron and cipher positions are like 30 times bigger. I mean, I would say, I would say your positions in, you know, like Physical AI hardware infrastructure is an incredible trade. It's basically free money. Like, you know, it literally almost can't go down. So I'm definitely- It seems like free money now after I've made like $100 million in those names, but it was not money three years ago. They went down 50% or more three times. I took 20 to $40 million drawdowns three times in the last three years to make 100 million. I think basically any of this stuff, like post ChatGPT investments in AI hardware is basically picking up free money, right? But I'm talking from the crypto side. I don't think Ethereum is as low risk a trade as that, right? I think Ethereum is a high risk trade because It is vulnerable to disruption. There are plenty of versions of the AI future that exclude Ethereum. There are plenty that exclude Bitcoin. There are none that exclude like silicon chips, right? I don't necessarily agree, but it doesn't matter. I sized it with the idea that my conviction for Ethereum is a lot lower than Bitcoin. Yeah, yeah. I'm not trying to criticize you. I'm trying to criticize your personal position. Grant that your sizing and positioning and diversification is fantastic. I'm talking more about for the benefit of the other people in the space, like should I YOLO? 'Cause some people might not be able to buy iron, right? I can't buy it 'cause I don't have a TradFi account, so I'm only able to buy crypto. So I have to decide what within crypto am I gonna buy. And there might be other people in that position wanting to make that kind of decision. Yeah, that's all good. I would just say from a risk standpoint, I think Bitcoin and Ethereum in particular are among the lowest risk. Now, I think of risk not as volatility, right, or not getting the price you want at a certain time. I think of risk as the risk of cataclysmic, catastrophic loss, which I think is the classical definition. But there are a lot of newbies, a lot of traders that showed up since COVID, right? There are a lot of people who think that short-term volatility is the same thing as risk. And maybe for those people, it is because they're overtrading. And so downward movements will cause major losses. They don't cause major loss for me. I just buy more of things. And my view right now is that the risk of a zero outcome in Bitcoin is effectively almost zero. And Ethereum is up there close to Bitcoin. I think even Apple, right, could go to zero before Ethereum goes to zero because Apple's a company. And if consumer tastes change and the Apple ecosystem does not, It will, but let's just say hypothetically it becomes Kodak because they failed integrated AI and people are able to get better experiences using AI on Apple devices. And again, total hypothetical, 'cause I'm not arguing that Apple's going to zero. But I actually think because Apple's a centralized company with a balance sheet and customers, that if the world turned against Apple, Apple has a bigger risk of a zero outcome than Ethereum does, because no matter how much you hate Ethereum, you can't shut it off. So, as long as some nerdy guy, someone wants to build a centralized application, you'll always have a reason to have some Ethereum, and you won't always have a reason to have Apple shares if the whole company's collapsing. Just because you can't shut a blockchain off doesn't mean the price doesn't go to **** right? Like, there are plenty of blockchains from 2013 or 2011 that are still operating. You know, you want to buy some NovaCoin, you know, you can't shut NovaCoin off, it's still operating, right? It's like, no. That's a reasonably good argument, but I don't think Ethereum is VertCoin or NovaChain or whatever. I mean, you even said earlier that you just don't like that there isn't enough fees, but I don't really think that, it's not like you buy Ethereum for a dividend yield. If Ethereum's proposition was By the way, staking is a form of dividend yield, but let's just say that their value proposition was, oh, we're going to start charging a lot of money to stablecoin issuers, and that's what we're going to use to send money to you as an Ethereum holder. That's a very different proposition than what I think it is today. But that would be pretty cool if they did. It's a charity with a token today. It operates as a charity. It gives people block space. that essentially aren't paying for, right? Because fees are so low. Have you used mainnet recently? Like, it's ridiculous. But here's another way to look at that, and this is probably getting into the weeds a bit. One of the trade-offs that Ethereum made that turned out to be a good bet was they deliberately decided not to be very innovative in their technology, right? So they're using kind of, you know, ****** smart contract languages, you know, like Viper and stuff like that, that are kind of, you know, not great, right? But they work and they have all of the, they have the devs, right? So all of the devs develop using the Ethereum stack. Now, one thing that AI clothing will do is it will sort of remove that moat. So, you know, people People who code in Viper or Solidity or any of the other popular languages and know the ins and outs of the Ethereum ecosystem. That's kind of like a moat at the moment because if you have an alternative chain that's trying to compete against Ethereum, they can't easily spin up. 10,000 new developers who know their language. Ethereum's moat is a moat of it's hard to quickly spin up more devs. AI removes that moat. AI is both bullish and bearish for Ethereum, I think. It's bullish because I think blockchain actually does have a good synergy with AI, which is that it's fast and it's open 24 hours a day, unlike normal banking. Normal banking It's never going to fix that. Certainly not on the kind of AI timelines people are talking about. So it's almost inevitable, actually, I think that the Ethotaku big brain thesis of like crypto is inevitable because of AI. I think that's actually probably true. But the problem is, right, Ethereum is like the worst blockchain and the reasons that it gets away with being banned are reasons that go away once you have AI. Right? So, it's kind of unclear to me how that all plays out. I mean, and also, in terms of buying it, right?
Because Bitcoin: Naka, it seems like you're shilling Jensen, man. It seems like you're shilling, it's literally like... a blockchain specifically built for agent model intelligence like that's exactly what you're shilling.
Speaker 4: Yeah but you know maybe there'll be another Jensen and like a Jensen killer and just who knows what the **** will?
Because Bitcoin: Happen Jensen's a crypto project that's not even like live yet it's not going to come out for like another year.
Speaker 4: Yeah. So basically, as this plays out, if people are looking to position, if they position in Ethereum now at a price which is historically quite expensive, and we get some kind of drawdown because of like Trump does tariffs 2.0 or war with Russia or Iran or something, I don't know. And then Ethereum goes down to like, back down to a thousand or whatever, right? Then at that point, AI kind of starts hotting up and then this, you know, gens in this kind of like blockchain for AI is only kind of appears and that actually starts getting all of that activity. That could be kind of rough, right? That's the reason that I'm not currently allocated to ETH. So that's what it is. So let's look at the chart though. I mean, the all time high six, it's at 3,300, going to a thousand now, a drop of 60 something percent, almost 70%. That would imply to me that we're in a large scale macro event similar to 2022 or the end of 2018 or 2011 or 2008, 2009, right? Like those types of events, maybe March of 2020, very briefly, right before the Fed and Treasury stepped in and backstopped everything. I just, again, as I said earlier in my opening comments, how are you going to get that type of liquidity environment in a midterm year where the US president is literally going to move heaven and earth to run the economy hot, at the same time that the manufacturing, the ISM and PMI, has not flipped to 50 yet? The Federal Reserve is probably still 50 or 100 bips over where Trump's going to try to push them to by the end of the year, and among many other levers he's going to try to pull. to do that. And you're arguing that Ethereum has a chance of going to that. I think it's much more likely Ethereum is going to six or eight, statistically, probabilistically. Yeah. You disagree, but I think you're going to lose a lot of, like once again, you're going to be like, I'm not retired yet. I'm not independent wealthy. I'm like, the reason why I am is because I'm going to take this trade. Like I'm going to stay long Ethereum until 6 or 8,000. Maybe it'll go a lot higher. Yeah, I mean, nobody's, so if you're kind of poor and you have $1,000 and you put it into ETH, at $3,500 and ETH goes to $7,000, then you have $2,000. You're still kind of poor, right? It's not going to retire you. So it's not crazy. I mean, I kind of believe you on the macro. I think it does kind of look bullish at the moment. But macro has a tendency to sort of change, like people change their macro opinions every three months. Just to pause you real quick, you keep starting with these premises, in this case, a total red herring. Just let's make up a number. Let's assume the guy investing is $1,000,000. Is it a bad decision from an expected value standpoint to put $1,000,000 in Ethereum? Is it a good decision to do it if it's a thousand? Well, in terms of, in terms of, it doesn't matter what the amount is. Like, it doesn't, from my view, putting $1,000 in anything doesn't matter because even if I make 100X, it doesn't change anything. Even if I make 1000X, it doesn't change anything for me. If you want to analyze it at a sort of deep level, you'd look at Kelly Betts. You'd say, well, look, my total bankroll is X. What's the upside? What's the downside risk? What's the volatility? That kind of thing. You'd look at portfolio theory. Now, if your upside for ETH is like a double, that's a 2X, and it's a pretty high volatility asset, you're kind of like optimal allocation and portfolio theory is not very good. No, but it has been a high volatility. It hasn't been that volatile recently like Bitcoin it's been extremely volatile it's been extremely volatile not compared to like 2017 I was there in 2017 I bought some at 25 and 30 bucks the annualized annualized rolling volatility the annualized rolling volatility of ether is huge I can't remember what but it's a very volatile asset right it's traveled from like 4,500 down to 1,300 and back up again like that's extreme vol for years now though it's The volatility is objectively compressed relative to history. Same with Bitcoin. That's one of the reasons why I'm still lagging into some IBIT call options further up, because I'm very confident at some point, again, predicting timing is impossible, at some point volatility returns. to this sector, probably related to the manufacturing cycle turning over in the US, probably related to the election cycle, probably related to liquidity conditions, maybe some geopolitics thrown in there for good measure. But at some point, the volatility comes back, and I'd just be really surprised in this environment with AI CapEx doing what it's doing, that the next major volatility move in Ethereum is down. me that just I mean it's it's fair enough it's yeah it's it's fair enough I mean it probably its next move probably is up um but maybe not that much I don't know like it has kind of crabbed around a lot right it has been up and down I mean like when you when you sort of when you look at these things you know you have to consider like what's the sharp ratio of this uh instrument um you know how like if you really are targeting like 8,000 um that's cool but like you You know, given the volatility of the asset, if your upside target is 8,000, the optimal allocation is not very big, right? You should be allocating maybe like 1% to it or something like that, right? Which is fine, but like, you know, If you're targeting 100,000, because you think, yeah, this is ******* happening, the whole of finance is going to come on chain, the optimal allocation is a lot higher. That's a very big difference. Did you just tell me I need to consider the Sharpe ratio when I make my investments? Did you just tell me that? I'm not saying it for you. I'm saying it for everyone who's listening. People might be a bit confused. Does it matter if you only have a thousand versus if you have a million? No, it doesn't. You have to do Kelly Bets, you have to look at Sharpe ratios, you have to look into portfolio theory a bit. But basically, the conclusion of all of that **** is basically, if your upside is like a 2x, you shouldn't really allocate that much. No, it depends. 2x on what timeframe, what return. The volatility, the volatility, the time frame, a 2x / 3 years for most investors is a pretty darn good return, right? It's like a it's like a low. You have to consider the volatility. If you compound it 20 or 25 or 30% for 30 years, you're going to be a billionaire. Yeah, but this is why portfolio theory has volatility in it because some of that volatility is down as well. I know a bit about portfolio theory because my portfolio made me retire. I'm trying to help you get retired. So you've got to stop teaching me about stuff that got me retired. What I'm saying is that what that will tell you is if you have a very volatile asset and you don't think it's going to go up that much, if you go up a bit, not much, then you probably shouldn't allocate much. Large dollars, look, I have a lot of things that I think could do 30%. CAGRs or even more, but you don't want to put 100% of your money in things that you think can do 30% or 40% CAGRs because those things have a correlation of one whenever there's a major liquidity issue, right? So like everything goes to one and then everything drops together. And so I like to add stuff. I have a whole bunch of stuff that doesn't look anything like Bitcoin or Ethereum, doesn't look anything like AI data centers. It literally is the most boring stuff in the world, but as long as I buy appropriate ballots. Yeah. I mean, honestly, Mike, this point is probably the one that everyone from this space should take away, which is you shouldn't be all in crypto. You should have a diversified portfolio. And a lot of crypto degens would have much better lives if they did that. And I think on that note, I will see. Great chat with you, buddy. But just to be clear, like I've said that in every major conversation I've had about crypto over eight or nine years now. So like, there's not a new thing. Like anybody who's listening to me, I talk about energy companies. I talk about dividend stocks. I talk about consumer staples. I talk about alcohol companies. I talk about bond proxies, barbell portfolios, right? Like it's fine if other people want to chase crypto with 100% of net worth. I mean, look how that's turned out. Think of all the crypto hedge fund guys who look like geniuses in 2021 who haven't made any money in like four years, right? And a lot of cases burned up a lot of that capital. And this is what happens in markets. There's a tremendous amount of mean reversion. So whatever's worked really well for too long, like at some point it stops working as well and then eventually it goes negative relative to other things that have underperformed. And you're seeing that sort of rotation happening right now in the US capital markets where like a lot of the stuff that was getting beat up at the end of the year had the worst year ever, the bottom of December, right? Like the end of December, you got tax loss selling and technical selling and whatnot. And then all of a sudden the The calendar flips to January 1 on a Friday and everything just like lifted up like magically. This mean reversion for you, right? Like stuff's gone too far and it overshot its valuation on one side and now it's coming back. So look, I appreciate you making that comment, but I would have argued to you five or seven years ago, you're too into crypto and not. into equities and other stuff. I don't think anyone here needs to hear that, honestly, candidly, because almost everybody here has heard me say you should be diversified.
Speaker 3: I was just going to say, I mean, you guys, obviously, I think most of us would agree that monetary policy, because obviously, if you're deciding between Bitcoin and Ethereum, I think that monetary policy has historically led to Ethereum outperforming Bitcoin. I mean, what's crazy is you look at even through pandemics, even through that area from mid-2019 all the way until kind of the end of 2021, Ethereum outperforming Bitcoin. And I would think that that's mainly because of loose monetary policy. And I think that would be the main reason why I believe Ethereum will outperform Bitcoin for the next few years. What's even crazier, and I don't think it's a good idea to, you know, you got to know what the hell you're doing with all coins, obviously, but other versus Bitcoin, that's everything outside the top 10 of market cap, crypto market cap, that even outperformed Bitcoin through pandemic, through all that type of stuff. A lot of people still, like Mike was saying, a lot of people still found a way to lose money with altcoins, though, because there's so many of them. You got to know what you're doing. And I think that right now, I'm not personally not buying altcoins, but I think Ethereum is the most attractive thing. In my, I mean, I have the view that we probably will maybe receive, I don't think we're going to go really below 1,800, but you could see, we see 1,800, 2,000, those areas for Ethereum. I think it could rhyme with 2022, a much milder version because energy looks so bullish right now for maybe the next four to six months. Maybe I'm just being too paranoid. But I do think that Ethereum does look pretty attractive. And I think that into the end of this decade, I mean, I don't know about 20K or 30K Ethereum, but 10K, 15K, big areas since the end of this decade. Bitcoin probably at least 150K next few years into this decade. I mean, it's crazy how time flies. I mean, we're already in 2026, a few more years there. Maybe it could go up to 300, 400K. I don't know. It's hard to say in my opinion, but I know in 2021, the narrative was kind of crazy because so many people were disappointed with Bitcoin and how Ethereum outperformed and how all these new all coins outperformed, like Solanas or Cardanos, all of that. And then this previous cycle was kind of the opposite. Bitcoin was so dominant. And the number one reason, I think, was mainly monetary policy. I think a lot of people underestimated how powerful monetary policy is in terms of that. So my guess is probably blow off top for ether, a lot of things, not too crazy, but into the end of this decade. And then probably the 2030s will rhyme with-- I mean, I know I'm a patterns guy, I'll admit it. The 2030s will have some rhymes with the '70s, the 1930s, 2000 to 2010. I don't even know how to say that decade. What is it, the double O's, but those areas. So I do think that that's what's to look for there. So yeah.
Speaker 4: I think that's a pretty astute point. I mean, the Fed raised rates 500 basis points and basically crushed risk asset markets in 2022. And I think the mistake people have made is because some assets and some indexes have come back. over the last three years, that means that we're in the same type of environment and we're having a similar cycle as we had in the kind of 2017 crypto bull market and then the 2021 version. This period hasn't felt like a bull market in crypto at all because it hasn't been a bull market because we actually haven't had the correct conditions. We didn't even start to get rate cuts again until relatively recently. right? And those rate cuts, according to Trump and people that want to run the economy high, they're not enough, right? And you can take whatever views you want on that. I personally don't think the Fed is very independent, so I'm not too bothered by the people who are saying that Trump's messing with that, because I never thought it was independent in the 1st place. I think it's actually ******** to say the Fed's independent. I think it shows a lack of understanding of how the world actually works. And basically, you're basically a cuck for the TradFi system telling you That this is how everything works, and you should believe the masters, and you should believe the authorities when they tell you that we're here at the Fed, we're nice old men that are here to look out for the American public. No, you're protecting the bankers and the plumbing of the banking system. That's why you're buying $40 billion a debt. You can call it QEA or not. The reality is your buddies from the banking sector, who, by the way, when Jerome Powell in the press conference says, hey, we talked to our contacts around the industry. No, they're just like Goldman Sachs bankers. and JP Morgan bankers, and they tell them, hey, the plumbing of the banking system is not looking too great. Can you help us out? No, it's not to help the American public. It's to make sure we protect asset prices and make sure we protect the banking sector. And so maybe it is a good thing. Forget about politics. Maybe it is time for Jerome Powell to go. Maybe it is time for rates to come down enough further to actually be a real business cycle in the US. Maybe it is too restrictive if the ISM PMI can't go over 50 for four years. Like maybe that is too restrictive. Maybe it's objectively restrictive and it's not even a political comment. So to your point, if we haven't had a crypto cycle, because we haven't had the right conditions for a crypto bull market, then everybody has been wrong about like what's going to happen and what sequence. What we're essentially experiencing right now is the gold-silver rally that predates previous crypto cycles, 'cause we haven't had a crypto cycle. So we're actually at the early, early stages of when money starts to rotate into the risk part of the curve that includes cryptos beyond Bitcoin and Ethereum. And that means that we maybe have a good 12, 18 months ahead of us and that the exact dynamic you describe where Ethereum outperforms Bitcoin, which typically happens as that cycle progresses, that might start to happen now or soon. And that actually isn't bad for Bitcoin because Bitcoin actually posts its largest return when the rest of crypto's outperforming it. That's the piece that the maxis always get wrong. They're so angry about telling other people how they can invest and how they can spend their money. If you don't do it the way I do and 100% Bitcoin, then you're an idiot and you're a scammer and blah, blah, blah. Those people are largely dinosaurs and mostly dying out at this point. Serious, more nuanced professional investors don't care about any of that stuff because it's just noise, right? Your personal dogma about which crypto asset you like is irrelevant. I post about it occasionally because it's fun. But in terms of investing, it's really dumb to get too sucked into that. But Bitcoin will probably perform best when Ethereum is outperforming it. And again, that's a statement that'll get you tossed out of Bitcoin rooms. But I don't really care because I'm only actually concerned about what's going to happen and profiting off of it. That's what your job as an investor. It's not to become an acolyte or a cult member or priest or any of that ****. It's just to figure out what's going to happen. and take advantage of it. And if I'm right, and we are at the part of the cycle that I think we're at, we're actually at the beginning of the main part of the crypto bull market that didn't happen because we've effectively been trying to work our way back to baseline from a deep bear market over the past four years. And that's where I think we are. I think the small caps right now are confirming that. I think biotech is finally confirming that. I think there's a number of other factors like the equal weighted S&P showing a broadening and and equity flows beyond just the AI theme. Those are the types of things you wanna see. You also wanna see silver cooling off. I think I said on Scott Melker's thing yesterday when I was shorting it again for like the eighth straight day, that it would come back to 81. It didn't come back to 81 during the regular session, but it did come back in the overnight session and then again today. And so it's doing what it's doing. It's making a topping pattern. And once the money starts to come out of metals again, that's when I think you'll really see a more aggressive move in like Solana, Ethereum, right? A bunch of other cryptos I've never even heard of yet. And that'll be a really good time to be a Bitcoin holder as well. I'm pretty sure about that.
Speaker 3: Yeah, 100%. That makes a lot of sense. I think that... When people get bored, and I think that we're early, we're so early that it's like we need kind of maybe 6 to 8 months of a little bit of an energy run, like a little bit of those last like uraniums, your palladium, or those other metals, maybe a little bit of copper for like another 6 to 8 months, kind of that being dominant. And then from there, you'll kind of see that more transitional phase. And then 2027, 2028, probably 2029 as well, you see crypto being very dominant. And you finally see, I don't want to say like altcoin season, but you know, you see people really back in the seat because this is a very apathetic time for crypto. And I mean, I think that it's probably going to be more apathetic for a lot of this year. Like I would give it apathetic for another like 6, 12 months. You're seeing a little bit of greed come back right now. Well, actually a lot of greed because it's kind of like Bitcoin's down, you know, still down significantly from 126K, ETH still down significantly from its all-time high. And I think fear and greed is at like 60 right now, which my guess is, It almost feels like a simulation when you look at it. And I'm going to go into TA a little bit. 50 weekly moving average, that same place that you rejected from back in 2018, back in 2022. And I would say every bear market's shorter. You get diminished returns both on the upside and the downside. So my, I guess, fear or my slight bear case, and I'll admit I was wrong, and I'll buy more Bitcoin, I'll buy more ETH if Bitcoin gets above 115K. If my EMAs and my three-day look a lot better, that's what I've been waiting for, because that's historically a really good place to always buy Bitcoin on the EMAs on the three-day. When that happens, I'll get back in. But I would say there's potential to see, you know, into maybe May, I would say it's earlier every time. ETH bottomed in June of '22. Maybe May of this year could be 1,800 to 2,000 Ethereum. Great, rare opportunity to get in.
Speaker 4: Yeah, look, I like a lot of the stuff you said earlier about monetary policy. I think where we disagree is I think macro is going to lead crypto, like crypto's a light switch. I've seen this a million times now, so I will not be convinced otherwise. When crypto wants to flip bullish, you can flip bullish in one day. You can flip bullish in one week. It can look dead, and Bitcoin can wake up and literally rip your face off in a couple weeks. And some of the derivatives of Bitcoin, like the miners and stuff, behave very similarly, where they look dead, look dead, look dead, and they run 5 or 10x in a few months. So I don't agree. I get that it feels bad now. I actually think that's the kind of powder keg setup that you want. You want macro to align with more liquidity. You want lower rates. You want the ISM PMI over 50. You want to see like a broadening cycle with like liquidity coming out on a curve at the same time that the participants in that ecosystem don't believe it's possible. The only way you're going to get really explosive outcomes is when you get the combination of those things where the actual fundamentals that are going to drive flows and liquidity are super positive, but the internal attitude and mood is super negative because people have been losing money for four years. right? And I just see a lot of tired people, a lot of angry people in the crypto ecosystem for good reason, right? Like not making money in four years will make anyone grumpy. The silver people didn't make any money for two decades, which is why they're so grumpy about anyone shorting them now, because they didn't make any money for two decades. They're finally making money, and I'm making money shorting on an interday basis, and it really ****** them off. I get it. Maybe I shouldn't poke them so much. They've been in pain for a long time and show some more empathy. But look, markets are markets. They're hard. If you're not hard enough to deal with the way markets make you feel, you shouldn't be in them. And what I would say is a lot of people in crypto are not serious people. They're not serious investors. And so this timeframe right now wiped them out. And it probably cleared the field for an actual run in the sector, a run that most of the people who were around two or three years ago, like Nakamotalists, are not going to participate in because they have given up before the actual move even happens this time. And that's fine. Well, it's not that I'm not going to participate. I mean, if I see Bitcoin at new all-time highs and I see Ethereum at new all-time highs and I see all of the altcoins breaking out, then yeah, I'm going to allocate, right? I'm not going to. I'm not going to allocate likely that the conditions you just described happen in the next 12 months. And because I think it's that likely, I'm not going to wait until the chart. confirms it or people are going nuts and my neighbor wants to buy a Bitcoin and my neighbor wants to talk about AI data centers and stuff. I buy it when nobody wants it, right? And I buy a lot of it and then I just wait and I wait for you to capitulate to the upside. So if you capitulate to the upside, we'll be on the same team again. But I don't want to wait for 126K to be long Bitcoin. I just want to be long Bitcoin all the time. And I want to be long the best companies all the time. And I want to add to them if they go down and They go up too much, maybe I'll trim a little bit and rotate to something cheaper. But basically what you guys are saying is you're waiting for the market to tell you the fundamentals. And I'm telling you the fundamentals are going to support the market doing what you think you're waiting for the fundamentals to tell you. The fundamentals are already saying that what you're saying you need the chart to tell you is going to happen from my perspective. So how much of your return do you want to give up waiting? for the market. Well, I'm quite I'm quite I'm quite happy to give up a 25% return waiting from like, you know, 96 K to like, you know, 113 K, whatever. And a lot of people, given the same thing at 25 K Bitcoin, they said, I'm happy to wait for a clean break of 40. And guess what? And I, I, I, I, I bought the return. And they never passed the return of Bitcoin they would have got if they just stayed in for 25 because they convinced them they had to wait for some arbitrary resistance level to clear before they could get long and after that's going to go up for ******* ever well you may think it'll go up forever but you know a lot I mean a lot of people thought BitConnect was going to go up forever and look at them now A lot of people thought Luna was going to go out forever. I mean, yeah, I'm happy to give up 25%. I don't care. Bitcoin went up like 790% over the past four years. So I'm happy to surrender like 25%. Let's call it, you're not giving up 25%. You've been giving up CAGRs for decades. I don't know how old you are, maybe you're not 40, but you've been giving up your... For 20 years, your CAGR has been reduced because you've been waiting for a chart to tell you about the first 25%. Well, that's actually not true. A little fact about me, because I'm based in the UK and I'm kind of from a normie person family, I kind of missed out on any kind of financial upside of tech between 2000 and 2020, because it just wasn't normal for people to have any kind of stocks. and people were expected to have a job and have money from the job. Then crypto happened and that red pilled me on the idea that instead of wanting to get a job, you should actively avoid getting a job and use it only as an absolute last chance saloon to prevent you from being homeless and you should have as much of your income as possible come from investments because that can scale, whereas jobs can't really scale. I wish I'd worked that out earlier, I could probably have already retired myself by DCA-ing into Google, which is just the easiest trade ever. I love that story. And by the way, I think it's great. I think people should be aware of where they came from and what advantages and disadvantages. But I think the important point that you're not going to make, but I'm going to make it for you to help fill in color, is you wouldn't have been able to hold Google for more than six months because you haven't been able to hold anything. for very long because as soon as the chart turns over and it turns negative, you try to get out before you take a drawdown. Google's drawn down 50 or 70% multiple times that I've been watching it since it went public in 2004. I remember 2008 vividly, it got clobbered along with Apple and Amazon and everything else. Nothing changed with anything about the long-term trajectory of those businesses during that time. The only thing that changed was people's perception and liquidity conditions. And the same thing is happening over and over again. You don't see it that way, but I think Ethereum better than I do. Ethereum better than 99.9% of the people in the world. And if it goes to 100,000, you're not going to own any of it. You may own some of it for some of the ride, but you would have made more money just buying it at 300 and holding it to 100,000. Yeah, but I'm not going to let Ethereum break out and not hold any of it. I mean, it's just the other difference there is that Google has users, right? Ethereum doesn't. It's not quite the same thing. I first used Google in the last millennium, okay? That's how early I was to being a Google user, right? I was using it in 1998 or 1999 or something. It was obviously the best search engine, but I didn't buy any. I didn't buy any of the stock when it IPO'd. I didn't even know that you had to put log on stock charts. I didn't look at charts. I didn't think there was any alpha from looking at charts or noticing trends. I'd fall into the trap of like, Oh, you should leave it all to the professionals and just work a job and you'll gradually accumulate money in your pension. But it's funny the way that's worked out for the UK a lot of UK pensions are what's called defined benefit pensions. So because the benefit is defined, not the contribution, the managers of those funds put it all into ******* bonds. So these pensions have like a 1% CAGR on UK pensions. So like people in the UK are completely ****** on this. Like I'm actually ahead of the curve for UK people. Nobody has investments. People like go to a job, pay rent and have some beers. So yeah. As long as those beers Guinness is, I'm okay with that. I hear Guinness is going gangbusters in the UK right now, and I'm long Diageo. It's one of my largest positions. I think I got 12 million or so in it right now. It's got a three, 4% yield. They got Don Julio, Smirnoff, Johnny Walker, Captain Morgan. Guinness is one of the best brands in the world. I like stuff like that, and I think more English people should be investing in companies that are domiciled in England, candidly. So they should be buying Diageo. They got the guy from that supermarket guy, Chainsaw, Drastic Dave or whatever. He came in and saved one of your biggest supermarket companies and he got knighted. He's now the CEO of Diageo 'cause the last CEO got fired after the previous CEO died. So look, I think, I hear everything you're saying, but I still don't agree. that you would have held Google. I don't think it matters whether Google is materially different than Ethereum or Bitcoin or any other company. I think mindset and approach is more important than the asset. And your mindset and approach historically has been to use charts to trade. And then you're very particular about avoiding drawdowns, which is fine. And nobody likes drawdowns, but in order to make significant long-term returns, drawdowns are part of the business. And you minimize them with portfolio construction and sizing correctly and doing maybe a little trimming and trading and hedging, but you don't sell whole positions because of a chart. And if you do, you're going to have a job, right? If you don't want to have a job, you've got to actually swing bigger and hold and wait until those positions actually materialize. So that's what investing is, right? You're betting on a future that doesn't exist yet before it happens. And the more right you are about something that the rest of the world doesn't understand, the bigger the reward. The more you get behind consensus things, the more your returns look average, right? So like consensus right now is only S&P, right? And get whatever you get, 10%, 12%. I mean, we've had more than that the last few years. it's likely to be lower over the next five years. And that's fine, right? It's better than a bond-like return. In real estate in the US on an unlevered basis right now, residential, you're probably going to get 3% or 4%. And if you use leverage correctly and you time it, it may be better, right? But you're not going to make 20% or 30% or 40% CAGRs just trading charts, right? Somebody might make a good return in some short period. But net of taxes and transaction fees and the cost of being wrong, like when you're out of a stock or out of crypto, when it actually goes into a parabolic style price discovery, which tends to happen every few years in some of these assets, missing out on that is worth way more and cost you way more than any benefits you get from defending against the downside. And that's just like the math, especially when you consider the compound math and you consider taxes and fees and things like that. There's just nobody who's perfect. Well, that's not actually true for crypto, right? Excluding Bitcoin, most people who've applied a sort of investor mindset to crypto have just gotten wrecked on altcoins. Because when you invest in altcoins, they're kind of scammy. They tend to pump early and then crap forever. I know this guy who was big into Polkadot. I think he made like a 5X or something, and he was really interested in selling to buy an apartment or something at the top. when Polkadot was like $40 and then he decided to like, you know, hold for more and like, yeah, it's just completely wrecked. So I think like basically for the investor mindset, you know, you want to be in TradFi, you want to be buying real companies, cryptos are mostly Ponzi schemes with like a wrapper and you don't want to be an investor, like a long-term investor in Ponzi schemes. I basically only own Bitcoin and then the sprinkling of Ethereum because as an investor, it's the only asset that if my mom says, hey, I want some exposure to crypto, it's the only thing I could put her into where I don't have to check in with her every year. Everything else I got to check in and I got to look at the price and I got to consider my mom's retirement. Bitcoin I could put in there as a 10% or 20% allocation paired with very stable tobacco companies and consumer staples and energy MLPs and things like that to get a blended 4%, 5%, 6% yield on one side of the barbell and then Bitcoin the other. Bitcoin does all the heavy lifting in terms of for capital appreciation slash purchasing power increases. And the dividend yielders provide all the ballots and all the income. So she can pay all of her bills while she's just letting Bitcoin go up. And that's what's done. She bought Bitcoin at like 15K. And she's just held it and never touched it. And her dividend stocks are paying all of her bills along with Social Security. And so that approach works fine for Bitcoin. But to your point, if you actually want to make a lot of money in markets long term, you really can't buy any of those other things. And I think Ethereum is the closest thing in terms of sustainability and utility. And I may be wrong, but it's worth a flyer if for a period of time it significantly outperforms different.
Speaker 1: Mike, one thing to add on Ethereum, because this has been a change for me and there's been a good conversation. Nakamoto, one thing I will say is I have this, you know, this core belief that To be a trader, you have to be the top 1% to actually make money over time. Most people, by definition, not the top 1%. So 99% of people will lose. And I don't want to do that because I'm better at other things. So that's the reason why I would say most people that think that they can be traders and can beat the market consistently over and over without losing their shirt, they're just wrong. And it's just the data is the data. Number 2, the big drawdowns are actually incredible opportunities. And so it's really weird that people are trying to avoid them. They're actually incredible opportunities if you have a thesis underlying them.
Speaker 4: Number three, they're not on drawdown if you're holding.
Speaker 1: No, actually, that's quite clearly correct. So they're seeing through.
Speaker 4: Go ahead. For the drawdown, and then you can buy.
Speaker 1: But again, if you actually look at the data, the data shows that that most of the major moves that occur happen in a very short period. And so actually predicting when a drawdown is going to end and there's going to be a fast, rapid rise is actually not really possible. Again, you have to be a world-class trader to be able to know those 10 days that led to all of the movement. And most people miss those. And they keep talking about it for, oh, I missed that, oh, blah, blah. All those people are sitting on the sidelines when actually there's a ton of people.
Speaker 4: Yeah, but I don't miss them. I'm pretty good at trading breakouts. I caught the breakout at 30K.
Speaker 1: Every trader ever, but yet here we are. So I was going to say, regardless, my point is that I've, you know, This is not even really talking to you, it's just talking to people that think they can do this and it's hilarious. The one thing I will say is the Ethereum flyer, there is actually a thesis behind it that is interesting. I've been a little bit careful about it because I've been pretty much a Bitcoin maxi on the crypto side, but I did enter. I think it's a very good opportunity with Ethereum, largely because I started doing a little bit of research on where most of the Ethereum activity is actually occurring. And it's been interesting. A significant portion of the Ethereum activity is actually occurring through these prediction markets. And I'm very, very bullish on prediction markets, even though I think they're awful for society. And prediction markets, specifically Poly market has been built on Polygon. And so it's been quite interesting to see that play out.
Speaker 4: So would you would you buy Polygon rather than ETH?
Speaker 1: No, I would not buy Polygon rather than ETH because I believe that the infrastructure picks and shovel is a better place than the actual.
Speaker 4: Wait, so you're bullish on Polymarket, which doesn't run on Ethereum.
Speaker 1: It runs on which is built on Ethereum.
Speaker 4: Polygon isn't built on Ethereum.
Speaker 1: It's an L2, dude, come on.
Speaker 4: It's not an L2. Polygon is not an Ethereum L2.
Speaker 1: It's literally an Ethereum L2 scaling solution, bro. Like, what are you talking about?
Speaker 4: It's not. It is not. Polygon is not an L2. You cannot. If the Polygon value data set... That's what Gemini says.
Speaker 1: Jesus Christ.
Speaker 4: I trust Google. And by the way, I agree with you. If you want to withdraw your funds from Polygon and the Polygon value data set won't let you, you can't permissionlessly do that. So it's not an L2. It's being marketed as an L2, but it isn't.
Speaker 1: The long and short of it is when you look at Ethereum activity across the chain, it seems as though these prediction markets are driving a significant portion of it. I think that a significant portion of the activity that was going to go into these shitcoins, which by the way, if you're dumb enough to be an investor in shitcoins, that sounds like an IQ problem. And that's okay. Not everybody gets to have an high IQ, but you don't need to act on it. Sorry for your buddy, but that's just ********. What I was going to say is that when you look at Ethereum and you look at these infrastructure picks and shovel plays, the thing that was super interesting about it is that we're actually seeing call sheet now open up toward that. I think there's going to be a lot of movement around other prediction markets launching. They're going to make it easier to launch prediction markets. Prediction markets have a lot of unfortunate societal impact, but really, really good business impact. And so, you know, it just depends on your...
Speaker 4: What do prediction markets have to do with Ethereum?
Speaker 1: Because a lot of them are built on things that are built on Ethereum because the blockchain activity actually is super useful for being able to track activity at scale using smart contracts. And so that has been the key approach.
Speaker 4: Which prediction markets are built on Ethereum?
Speaker 1: You are, for some reason, disagreeing with the fact that Polygon is built on Ethereum. I'm not sure why.
Speaker 4: Polygon is not built on Ethereum. It's its own blockchain. I think it's practically a sidechain, but it is designed to scale Ethereum. It's a sidechain. Okay. But like, it's quote unquote designed to scale Ethereum, but it's just meaningless, right? Polygon is a blockchain, Ethereum is a blockchain, they're separate. Like when you pay fees, on Polygon that doesn't go to ETH, right? If you want to withdraw your money...
Speaker 1: I'm happy to send you some information, which might be actually helpful. When you actually look at Ethereum on-chain activity right now, a significant portion of it is being driven by these prediction markets, and it's been quite interesting. Which one? So again, I just mentioned Polymarket, specifically Polymarket. So I'm happy.
Speaker 4: Okay, so what does Polymarket have to do with ETH? Like, can you explain to me if I want to go on Polymarket right now, how do I touch ETH? You can actually what's really good and
Speaker 1: helpful is if you actually went to Polymarket's own website and when it's asked. What are you built on? It says we're built on Polygon, which is a layer if you want ETH. You can literally go to their website and they actually say those words. So it's, you can't, I'm not going to have this conversation.
Speaker 4: They say those words, it's marketing words. It doesn't mean anything. If I go to Polygon and I want to, if I had Polygon, I want to place a bet. In what way do I touch Ethereum?
Speaker 1: This is like, again, The main premise of this is to the thesis around the platform aspect of Ethereum is based on the fact that they are becoming the picks and shovels for some of these production markets. The picks and shovels by definition means...
Speaker 4: Can you explain what the pick is? What's the pick there?
Speaker 1: Again, Polygon right now is powering...
Speaker 4: Polygon is not a very different thing.
Speaker 1: it's funny, like, how are you supposed to have a conversation with people that, just are straight up just arguing?
Speaker 4: I'm sorry, if you think Ethereum is powering Polygon, can you explain to me technically how that works?
Speaker 1: I don't need to. This is an investment thesis. OK, so again, you can actually look at the data. So, this is like the funny part, which is like... I invest for a living. So I invest across multiple different areas where I find significant interest. This is an interest area where I put a flyer in based on my understanding of the situation. It's clear that it's going to be powering significant portions of the market. Why?
Speaker 4: What do you mean by power?
Speaker 1: So again, okay. All right. This is like a hilarious circular conversation, which by the way, it really tells you why so many people miss out on such big moves is because they like, what's the word? They go fully ****** on these things. And it's like, there's no reason to do that.
Speaker 4: So is your thesis basically that Polygon has a marketing statement about being associated with Ethereum on its website and because of that, If there's more activity on Polymarket, that will drive the price of ETH. I mean, that's a thesis. It's not crazy.
Speaker 1: So it's a very simple concept. So what the actual Polymarket itself was built on Ethereum, but it actually uses Polygon. Polygon for the fast, low-cost transactions. But yet the infrastructure was built on Ethereum, which actually matters quite a lot.
Speaker 4: What do you mean by the infrastructure? Can you explain that?
Speaker 1: So the execution layer is currently running on MATIC or Polygon, the layer two network. But the transaction off the main Ethereum chain are being used. The reason why they're using Polygon is because they're trying to stay off the main Ethereum chain so that they can get speed and savings and all these other things. But really, Polymarket already has announced on their own website that they're going to be migrating to a separate Ethereum layer L2 network. This is like all public information. You can go to their website. So hold on, hold on. Let me finish now. Right. Like you asked for an answer. Again, I am not an expert in this space. So But this is like a very basic concept, which is currently they built it on Ethereum, they were using Polygon to get it off the ground, and they're now migrating to an L2 on Ethereum based on their own website and their own public information.
Speaker 4: Okay, so let's suppose Polymarket abandons Polygon, which is not an L2, it's a sidechain, but you know, it's marketing L2, and they become a real L2 settling to Ethereum, right? So they have like, you know, you have that protection, right? How will that drive the ETH price? Because there are a lot of L2s already. There's base, there's, you know, like arbitrary, and there's all these L2s. How do you think these L2s are going to drive value on ETH?
Speaker 1: Because driving transactions, I mean, again, this is a very simple concept, but that's actually what the value of Ethereum is. The more people that build on Ethereum, the more valuable Ethereum becomes, because again, that's their entire network.
Speaker 4: OK, this sounds a little bit religious, though, right?
Speaker 1: I'm saying this is a flyer on the basic premise and thesis that I believe there's going to be 100 poly markets. I think they're going to be 1000 poly markets.
Speaker 4: OK, so suppose there's a lot of prediction markets that set up their own L2s and they settled to Ethereum. So they're using Ethereum block space. But the problem is. blob space, right? So the problem is Ethereum blob space is getting extremely cheap and Ethereum is actually failing to capture any of the value from its L2s. So isn't that kind of bearish for your thesis?
Speaker 1: No, it's not. Because ultimately the activity... Look, again, the point that I'm making is that ultimately increased activity on Ethereum is going to improve the price of Ethereum. This is like just a very basic...
Speaker 4: Why, how is that going to happen? How is that going to happen? If when you have activity on these LPs, it doesn't actually pay any money to Ethereum or it pays a very small amount, how is that actually going to drive the value of ETH up?
Speaker 1: I mean, I feel like you're like literally is like a weird cyclical argument right now. So first you said?
Speaker 4: I'm asking a very, I'm asking a very, very, very.
Speaker 1: I'm actually like you've already been wrong about like 5 different things. I'm not even sure if the rest of this conversation is worth my time. I'm like having this conversation with.
Speaker 4: Other people, not for you. You're free to log off.
Speaker 3: You're free to log off. Wouldn't you?
Because Bitcoin: Exactly.
Speaker 1: Like so ********. It's like, do you not understand supply and demand?
Speaker 4: Okay. Okay, well, yes, but right now the supply vastly outstrips the demand, and Ethereum has plans to scale a whole lot more, so there's even more supply, right? Fees are going down and down and down, lower and lower and lower, because there's an oversupply of block space. So like these L2s are not actually driving value to Ethereum at the moment. So in order to have a thesis that they are going to, presumably, you could say, well, maybe like something that I don't understand will happen, I'll get lucky. Or maybe you have some reason as to how that's going to happen. But like the L2 thesis is not a new thesis. It's like a quite old thesis.
Speaker 1: There are use cases right now that actually scale significantly. I think the prediction market business is going to scale dramatically. It is going to scale at a level that most people are not paying attention to. It's happening right now in a very niche space, but we're actually going to see everybody using prediction markets for a variety of things. In fact, we currently know that prediction markets are having a significant impact on decision-making. Like there are people that are using prediction markets to build oracles to understand what is going to happen on geopolitics. I mean, there's so much that's happening right now in the space that I think we're super early, and my point is that all these **** coins are going to disappear, and we're going to replace a lot of that with prediction markets. It is very obvious that that's already happening. It's sucking the air out of the room.
Speaker 4: Yeah, I'm not disagreeing with that. I'm actually bullish on prediction markets as well. What I'm bearish on is this connection you're making between activity on prediction markets, which might move 12/2s, and the price of ETH, the asset, right? Because there's this disconnect where there's an oversupply of Ethereum block space, and none of the L2s are actually driving any value to ETH. So how's that going to get fixed?
Speaker 1: Again, increased volume and increased demand of these L2s. as we see this, you're kind of like, it's interesting because it helps me understand a little bit more about you as an investor, but we're sort of like super early, like crazy early in prediction markets. So you're seeing Uber just launched the black cab and you're like, how is this going to replace the taxi world? And I'm like sitting here, I'm saying, dude, it doesn't matter. Anybody will be a driver, anybody will be a driver.
Speaker 4: I'm not there.
Speaker 1: No, no, but I think you're not understanding the scale and the migration. So the fact that Again, Polymarket has been public about the fact that they're not only going to move off of Polygon and build their own L2, but they're going to be building it on Ethereum is quite bullish for Ethereum. If you can't even admit that, then it's like, okay, well, I'm just talking to somebody who.
Speaker 4: Has like a- Why is?
Speaker 1: That going to bullish for Ethereum? Oh my god, circular.
Speaker 4: When you actually look at the numbers, L2s don't drive very much- I will say.
Speaker 1: As somebody who's hosted many of these, This is not really adding that much value at this point because we're sort of having the same argument over and over. I'd recommend. I just told you, demand is going to go up.
Speaker 4: Okay, but is it going to go up enough to actually make a difference?
Speaker 1: Again, that's the question.
Speaker 4: Block space is also going to go up, right? Like the amount of block space and block space on Ethereum is going to increase a lot.
Speaker 1: And my point is that prediction markets are going to scale so fast. so vastly that any increase will be outstripped by 10x by the activity on prediction markets. Right now, your nana is not on prediction markets. Your grandpa is not on prediction market. We are so early on the prediction market world that I think it's going to be such, it's going to be a moral quandary for society. Like people will be, will have all the time in there. Again, it depends on your AI thesis. I think people, a lot of people will just be sitting on prediction markets all all day. That's all they're going to be doing all the time. And so if that's where we end up, I think there is a significant increase in demand no matter what Vitalik is. And so that's the point that I'm trying to make. So I think that's the key on the thesis on the investment. My point is it is such a small portion of my investment. But I think it's worth a small portion because of this underlying thesis on the fact that people are building on Ethereum.
Speaker 4: Did you guys see that MrBeast took an investment from Bitmine Immersion, too? $200 million. Just seems like there's-- look, you could make the same argument. You could be like, oh, well, how does MrBeast have to do with the value of Ethereum? And it's like, well, what's bigger than the largest content creator in all of human history taking an investment--?
Speaker 1: We're seeing a lot of-- It's all converging.
Speaker 4: And I think the dumbest thing you can do here is act like you're smarter than the market. The market is moving there, and answering exactly how a VC-backed token or a VC-backed company is going to extract profits five years from now or 10 years from now is a loser's game, unless you're... Look, I have a very simple alternate thesis. The reason that Polymarket probably wants its own L2 is because if they stay on Polygon, then the Polygon token might capture the value from the hype they're creating. But if they create their own L2, guess what they can also create? They can create a Polymarket token, not a Polygon token, a Polymarket token, and they can say, Hey guys, we've got this really successful prediction market that everyone's using and we just launched a token, and they get everyone to buy their token and they dump the **** out of it and they extract a massive amount of value, and they will not drive very much value into Ethereum in the process of doing that. Yeah, people will use DEXs a little bit and they'll use exchanges and stuff like that, but this doesn't really consume very much block space because unfortunately, Metallic's scaling work has worked too well. When L2s commit their states to ETH into the blobs, it just doesn't take up much of the space. Blob space This is basically free, right? So I think this is actually bullish for crypto, just not for Ethereum. It's bullish for the token that Polymarket is probably going to launch and dump. And the best way to play on that thesis is to fish for the airdrop by going and using Polymarket. If you're poor like me, that's what you should be doing. If you're rich and you buy Ethereum because you think Polymarket is going to drive value to the ETH token, I think that's probably not going to play out. Maybe we're rich because we take those types of trades all day long. I mean, I've been doing this for years. Okay, but I mean, I think like there are other theses for why the ETH token could do well, right? This does not seem like a good thesis to me. The other thesis that seems good is the one where like in maybe five-ish years' time, AI basically takes over the whole economy, and the traditional banking system just isn't fast enough, and we need some kind of-- We covered that. Because in my view on decentralization, we covered all this stuff, Nakamoto, and then Denise comes in here and gives a totally different thesis, which I hadn't even been spending time on that thesis, and I'm still long Ethereum, because I'm seeing a dozen other things converging that would make it a good long. That has nothing to do with what he said. I think the prediction market thesis for ETH is like, I don't particularly buy it. I mean, he didn't convince me. I mean, you may have got that, but it is what it is. Well, I was convinced by your bullish arguments on Ethereum an hour ago to add more to my position. Fair enough. I'm already bullish, and I added more. After you told me you were bearish on it, after talking to you for 20 minutes, you gave me a better argument than I gave for why to be long, and I added 20,000 shares of the iShares. Ethereum trust up to 180,000. Here's the thing, my 130,000 is only going to show 130,000. So I'm up from the end of the year already, and I'm going to keep adding. Yeah, so here's the thing. The things in that that kind of make you bullish about Ethereum might make you even more bullish about something else. You might want to buy an altcoin. People have considered by actually buying the Polygon token because of prediction markets. And if Polymarket abandons Polygon, then that's probably going to **** that trade over. So I guess one thing you could say about Ethereum is basically, it's kind of like the IBM of the crypto world. Nobody ever got fired for buying IBM, right? It's probably not going to be a complete disaster, probably. And if the market as a whole goes up, it'll probably lift Ethereum. It's kind of like, you know, if everyone thinks that IBM is a safe stock and everyone gets 50% more money, like everyone on average is going to increase their IBM position by 50% in dollars. And so IBM will go up, right? And I think Ethereum's kind of like in this position. Like that's my honest dead honest position on Ethereum and that's why I haven't bought any because like the upside of that is not great, right? The upside of that is like you will keep up roughly with the market as a whole. That's nice, but it's not great. And I think if you're kind of like wealthy and you just want to allocate a lot of money, the other thing is like if you're wealthy like Mike is rather than a ******* poor *** like me, you have to consider liquidity as well, right? Like Ethereum's very liquid, right? Whereas, you know, miner shitcoins might not be so liquid. So, you know, there is that consideration. But yeah, I mean, it's not crazy, it's not great, but it's okay.
Because Bitcoin: Man, let's hear from from BTC AI guy, aka BTC mining stock guy as he was formerly called. What's up, man?
Speaker 3: Hey, I appreciate the opportunity to share my survivorship bias. So I've been in Bitcoin for 12 years. I'm an OG. You know, I've been in crypto for a long time and crypto brought me into the stock market. And just one of the things that makes me successful, I like to think, is my self-awareness. And I'm just hearing a bunch of bottom signals. As an investor, as a trader, I do this full time. So when I hear mid-curve takes for an hour, and I look at these prices of altcoin, shitcoins, Ethereum, crypto's been in a depression for years. and uh you know that is that is not.
Speaker 4: True Bitcoin is up like.
Speaker 3: 800% please don't inter interrupt me okay when money is talking you do not interrupt okay so your case is a technology case I'm an investor right I'm allocating Capital right this is this is money moving right uh we're in a new era if you haven't noticed in in crypto the investor class is here, right? The investor class is allocating capital in the trillions, right? I've seen Bitcoin. When I bought Bitcoin, it was under $100. Today, you know, it's under $100K, right? The conversations that I'm having today are completely different than five, 10 years ago, right? You know, the Bitcoiners today are talking about cash flow. and investments in AI, right? I'm not talking about Bitcoin miners transitioning AI. It's the participants in crypto today, right? Well, at least on the Bitcoin side, have capital, right? They've made good decisions throughout their entire years of being an investor or doing something great in business, right? Right. So, so a lot of these **** coiners that come on these spaces, they can't appreciate that.
Speaker 1: And they say, oh, the technology is not there to scale.
Speaker 3: It's not about technology. This is about money, right? Crypto is fundamentally anti-fiat, right? The highest upside for Bitcoin and Ethereum is not a store of value. It's money. Everything needs to be denominated in Bitcoin or Ethereum. That is the $100 trillion opportunity, right? It is not about a 2x here, right? right? And people like myself who are putting money at work, we're not thinking about a 2x, we're thinking about 100x, right? And, you know, a percent or two doesn't sound sexy for someone that has $1,000, but if you have 10 million, 20 million, $50 million, you know, a small percentage can go a long way. And that's how institutional capital thinks, Right? So this is not a technology argument. Sure, there's a **** coin with $50 million market cap that is better than Bitcoin. It's better than Ethereum. It could scale. It's decentralized. It can get you a girlfriend. It sounds too good to be true, but that's not how money thinks. Right? And my friend, I think this is the time to be long. Right? This is not the time to be afraid.
Speaker 4: I'm not finished.
Speaker 3: I think if you're thinking about $1,000, You need to get a job. You don't need to be on Spaces, right? You don't need to listen to Mike Alfred. You need to get a job, save some money, and then allocate to Bitcoin. Maybe take a percentage of that, right? Or, you know, 5%, put that in Ethereum. It might go somewhere in 10 years. But when you have capital?
Speaker 4: I mean, that sounds like honestly awful advice. Like, get a job and allocate to Bitcoin. Like, you know, okay, cool. Like, you didn't get to where you are today by getting a job and allocating to the SAP.
Speaker 3: I was very well having a job. I was one of the highest paid people outside of my college graduating class. I was in the top 1% income earners at a college.
Speaker 4: Okay, but suppose somebody's in the 50th percentile, they're exactly in the middle, they've got taxes, they've got expenses, they've got a limited amount of capital, and you're telling them, like, work hard at your job and allocate to Bitcoin, then we go into a Bitcoin. I don't have a Bitcoin problem.
Speaker 3: I have an income problem, right? Listen, like, I don't think we're in the same, on the same page here, I think we're, in a financial conversation, not a technology conversation, right? I mean, there's hundreds and hundreds of billions of dollars allocated to Ethereum today because that capital believes it's a multi-trillion dollar idea. And there's applications such as prediction markets. It's not the main thesis, it's not my main thesis on Ethereum. I'm not a Ethereum maxi, right? I would allocate a percent to that idea, right? And I'm happy to trim that position if it gets too large. But my end game is more Bitcoin, right? And I invest in a great companies, great ideas, great people, great businesses, to ultimately stack and multiply more Bitcoin. I like to take risks to stack more Bitcoin. I think that is the game of capitalism. If you're a Bitcoin capitalist, you're doing a great job. But I think this is not a technology argument, right? And I've been in this space for 30 minutes laughing my *** off because you're arguing against layer twos and the definitions don't really matter. This is a game of making money, right? And yeah.
Speaker 4: Yeah, but when you say making money, right, you've got to consider like how much money are you going to make? What are you going to risk? And if your advice is basically go get a job in GCA Bitcoin. You should get a job, not everyone.
Speaker 3: I think my followers are very wealthy, right? My followers don't need a job. If you're thinking about a thousand dollars, you should not be debating on which shitcoin to buy. I think you should, you, you know, dot fiat guy, I think you should. get a job in Stack SATs, right?
Speaker 4: For the million years-- No offense, but I think that is objectively terrible advice, right? Like telling somebody who has thousand dollars to invest or even 10,000 to like, you know, get a job in Stack SATs when Bitcoin is already up 800%, that's terrible. But I mean, you know, you're not in that position, right? You have more money. You know, you're prepared to like stack some money if you make a CAGR of like 10% so it keeps up with inflation, that's cool. But I mean, it is what it is, right? Like not everyone's in the same position.
Speaker 3: Right, right, right. I appreciate you giving me the opportunity to share my survivorship bias. I've made money. I was in your position not too long ago. I mean, I'm only 32. When I was, you know, 17, 18 years old, I was in a similar, how old are you? Oh, you're older than me. Oh, you should definitely take my advice. Yeah.
Speaker 4: You're giving terrible advice, bro. Like, I'm sorry. You're telling people who have a small portfolio to just DCA Bitcoin, right? Not only telling them to DCA Bitcoin, you're telling them to DCA Bitcoin after it's gone through an 800% bull market, right?
Speaker 3: Yeah, so that's the thing with capital.
Speaker 4: Capital is not determinate, right?
Speaker 3: Like, it doesn't matter. If it's a great idea, if it's a digital monopoly, if it's going to be the perfect money, it doesn't matter if it's 100K or 100 million, it is the best thing to allocate to. And you should have an allocation. That's how capital thinks. Small capital, small money thinks, this already ran. I should take 100 times more risk and gamble it away. The smart investors, They take an allocation and say, I need this because this is oxygen.
Because Bitcoin: Oh, but Gary, what's going on?
Speaker 4: I was going to mention that. Oxygen is free, actually, but anyway, if someone else wants to pipe one.
Speaker 3: What's going on, brother? I was going to say, if you can... If you can just invest $1,000 a month, regardless of what it is, figure poison, Bitcoin, S&P 500, NASDAQ, something that trends up with time, let's say. You're like in the top 5% at least. You could even be-- I think it's $2,000 a month puts you in the top 1% of actual investors. So even $1,000 a month. And I mean, I think the argument where if a person-- it's not really realistic to say like, OK, a person has barely any money, they only have $1,000 to invest. Like, that person needs to get an income, whether start a business, do something. You know what I mean? Even if it's just driving Uber to make an extra $1,000 a month to try to invest, I think those are kind of good ideas. But I think 1,000 bucks, if you can put that away, you're already investing so much more than 95% of people.
Speaker 4: The question is, what do you put it into? Do you really want to put your $1,000, your $10,000, your $15,000 into Bitcoin at this?
Speaker 3: I would say, obviously-- let's be real. Obviously, I would say 20, 30-- you shouldn't put all of your money into one thing unless you 100% have a-- you have to be really like Michael Saylor levels of confidence. That's usually the only way you win when you do stuff like that. But I would say, I don't know, for me personally, 20%, 30% right now, probably more if Bitcoin goes down lower. I wouldn't just put it into fiat. be diversified in certain senses. And I think that 30%, that's more risky, Bitcoin, maybe some Ethereum. Right now, I would definitely be putting money into energy stocks, energy ETFs, definitely some uranium like I have recently. So I would watch the market that way. And I'm planning on taking profits on some of that, hopefully in six to 12 months, converting that more over into Bitcoin, some Ethereum as well, and running that up to, hopefully, we can get Bitcoin at 60K, 50K, running that up to 200K, you know, hopefully by the end of the decade, a couple of years, that's a 4X. Now, if you're somebody who's only putting away, let's say 12K a year, you know, you could get up to 100 grand or more by the end of the decade. And if you have 100 grand, I mean, that still puts you, way ahead of most people.
Speaker 4: A hundred grand, you know, at the end of the decade is not going to be that great, right? House price is going to be up, what, another like? Well, I.
Speaker 3: Mean, you could buy, and there's a lot of places in the world where you could buy a nice condo for 100 grand, then your living expenses can only be 500 to 1000 if you could work remotely and make 1000 a month.
Speaker 4: Yeah, but you have to like, you have to move to a third world shithole for that.
Speaker 3: Oh, come on, dude, I'm in Medellin right now. It's not a third world shithole. That's offensive. Come on, bro. Come on.
Speaker 4: If you're like, look, if somebody's got a relatively modest amount to invest, right? And the reason I'm saying this is A, because I have a relatively modest amount to invest, like I could invest like say about 50K total right now, I'm holding most of it back. But a lot of people will be in that position, but it's also a more interesting question. If somebody's already got 15 billion gazillion dollars because they were in at the bottom on iron, it's like, yeah, your investing problem is actually not very interesting because you can just diversify and you're mostly optimizing for safety at that point. You're not optimizing for returns, right? I mean, if you have, say, between like one and 50K to invest, what should you do with it? Should you really just put it into Bitcoin and a bit into ETH? Is that really the best we can do here at CT?
Speaker 3: I'm just curious if you guys have looked into this. For ultra wealthy people, I believe it's a net worth of around 15 million or more. If you had to guess what average makeup their net worth is made-up of, what would you guys?
Because Bitcoin: Think it is.
Speaker 3: Yeah Gary do you do you know it what it is statistically what's your question so people Ultra High net worth people with 15 million more what's their allocation 30 million uh I don't know I don't know I suspect their allocation is uh you know S&P some money in cash I mean um.
Speaker 5: Real estate for sure.
Speaker 3: The passive money right real estate but you.
Because Bitcoin: You know, 30 million, all that money's at work, okay? Someone's still working.
Speaker 3: So I gotta say, okay, the reason I popped up on the stage, I actually think the advice.
Because Bitcoin: Bitcoin, I don't know who was giving the advice, but I think that's excellent advice. You have an income problem.
Speaker 3: I'd spend $1,000 on books instead of investing right now. quite frankly, and I would go get a job. I'd mine fiat and plow it into Bitcoin. I don't know a human being that can't make $10,000. I see so many opportunities.
Speaker 4: I have 10,000-- What, $10,000 a year?
Speaker 3: No, dude, over a weekend. If you told me I had a week or I was going to die to make $10,000, I am sure you could-- look, you're articulate, dude.
Speaker 4: You could hustle the **** out of things. How would you make $10,000 over a weekend or over a week?
Speaker 3: Well, I'll pay somebody about three different projects, 10 grand, just to come here the weekend and fix some **** at my house.
Speaker 4: I'm paying my daughter $10,000 just to fix my art room. If the offer is open, I will ******* fly over from England. I will do it. I will do it for 10K. I'm that desperate.
Speaker 3: Yeah, well, that's what people should be doing. They should be hustling and looking for funds to invest. And I wouldn't invest like these guys invest in $1,000. I would not invest $1,000 in anything. It is wrong. Okay, you can afford to lose $1,000. You need to invest like it's going to ******* hurt if you're wrong. You guys are doing this all wrong. I don't make $50 ******* bets because I don't give a **** if I lose them. If you've ever played poker with me, okay? You can make a shitload of money off me. Because for me, it's a ******* game. It's just entertainment.
Because Bitcoin: But it's not investing. I take it very, very differently.
Speaker 3: So, like, I would absolutely get a job, get on a ******* plane, get the 10 grand, and you'll work your *** off, and you'll have some cash too. And everyone can do that.
Because Bitcoin: I could do it if I wanted to.
Speaker 3: Okay, and by the way, I'm adding Bitcoin right now, and I am at no greater advantage than you or Mike Alford or Billy Bob or my sister. I'm out of cash, dude. I have to go figure out how do I get enough cash up? How do I get a deal done, do something productive and creative to generate fiat to buy Bitcoin? **** Ethereum, dude. I don't need to make this bet. The gentleman said the most important thing I have heard in so long about Bitcoin. We're here to tear the whole ******* system down, dude. That's the upside trade here. And there is no other thing that offers the ability to systematically be be a Trojan horse across the entire global financial complex. No matter how bastardized it's going to be, with or without regulation, clarity bill, no clarity bill, whatever, jurisdictional issues, I still think Bitcoin offers you this unbelievable upside, asymmetric ******* trade that you're never going to see again due to its finite, both its real finite and its adoption at this phase. It's cheaper today at 100 grand than it was at 10. Risk adjusted, it is much cheaper, and that's the way rich people look at **** dude. Like you guys deserve to make 90 grand on your $10,000 Bitcoin. It's awesome. You were so early, you were ******* blinded by a religious kind of theory. It's cool, it's awesome, but you don't take it to the next stage. That does not take it to the next stage. The next stage is right here, man. So I would most certainly get a job, mine Fiat. If you're making 200 grand a year, you should go figure out how to make 200 more.
Speaker 4: Yeah, I mean, you've got to kind of adjust your expectations for England, right?
Speaker 1: No, no, no, no.
Speaker 5: **** your, you could have ******* left, bro.
Speaker 3: Don't give me that **** okay? You saw this coming. You like being a prisoner there and a victim. ******* get up, get the **** out of that country. They're gonna ******* imprison you, dude. They won't even let me go there. So, ****. Get out, get safe, get your family safe, and go produce something, man. It's the right solution, guys. This is why I love coming to these spaces, okay?
Because Bitcoin: This is productive, productive. Not how much money I've made, I'm out of money, okay?
Speaker 3: Now I have to decide, oh, wow, am I going to go get another job, go create another business, do some art? What's more important to me at this stage? And how to also add 500 ******* Bitcoin. See, I want to add 500 Bitcoin while you guys are ******* around with one saying I have an advantage. No, dude, I want to buy 500 more below 100 grand. I think it's the ******* trade of a lifetime that does not require me to ever look at a chart.
Because Bitcoin: I could literally go away.
Speaker 3: And be in the middle of Timbuktu, it doesn't ******* matter. I own a shitload of Bitcoin. That's the greatest investment opportunity of a lifetime.
Speaker 5: If you're really serious about super wealth and ease, an ability to live a really cool life.
Speaker 3: I'll end there. I was going to mention, I never knew this, really interesting what I found out. Ultra, well, I think it's generally people who have enough money where a hedge fund is going to take you, their net worth is made out of, very interesting to know. One third is real estate, one third is equities, and usually the last third a lot of the times is either with a hedge fund or it's in bonds, that last third. I never knew this, found it very interesting, and generally what they do, every time there's a crash, They're obviously their equities go down. Obviously, their real estate generally goes down a lot of times. And what they do is they reallocate because that last third is in hedge fund or it's in bonds. And that percentage obviously is going to become higher. Maybe that 30% becomes 40 or 50%. They reallocate what they made from the crash. They reallocate it into real estate, into equities. I think in this day and age, you could consider equities, you know, consider Bitcoin's not an equity, but that would probably be part of that one third at least. What was interesting too, I found out Jeffrey Epstein's, of all people, his kind of net worth thing at what it was made out of leaked out or something, I think a month or two ago. And it was exactly that. One-third was a hedge fund. One-third was equities. That sounds like an old guy, right? Like my lawyer, who's 1,000 years old, he'll have a 50% bond portfolio. And he will not have looked at it. He knows my whole Bitcoin story, but he just cannot get it. And he's going to be there forever. It's cool.
Speaker 5: But listen, just because you're ultra wealthy.
Speaker 3: And I think there's 356 or so thousand families in the world, I think, that are ultra wealthy. Yeah, I think that's right, 30 plus million. It does not mean that they end their lives ultra wealthy. And the average number is 30. So many of those people will go broke. And most of them, their wealth was made from a highly, highly concentrated position. Most of the money that's earned, the greatest amount of money that's in the system is earned from entrepreneurs, people building businesses and making billions of dollars. So this concept of diversifying and moving around and flipping and flopping and arbitraging the ******* markets and the spreads, That's not how most of the money is ever made.
Because Bitcoin: Like, I've never made my money doing that.
Speaker 3: I made my money building businesses and selling them. And it's highly concentrated, and you can't ******* focus on anything else, and you work 18-hour days, at least.
Because Bitcoin: Uncle Gary, I want to thank you for coming on. Same thing with all the other speakers. I got to go now, guys. It's been an interesting stream. We've been yapping for about four and a half hours now. I hate to end it here, man, because we're really on a roll, but I do have to attend something right now, which I'd have to put my full focus on. But I want to thank all the speakers once again, Gary, Evan, Naka, Mike Alfred, Prometheus, I think, yeah, his name is BTC. AI mining stock guy, whatever his name is, he's changed his handle a few times, so pardon me, brother, if you're still listening or on the panel, spaces are acting weird, like I see listeners. I saw listeners, like it showed listeners on the panel and they still were speaking. So you're still here on the panel. I see you as a listener. Maybe you're still a speaker. I'm not sure. I wanna thank you for coming on, man. Same thing with any of the other people who spoke in case I had forgotten. Again, we were yapping for about four and a half hours, man. What an incredible show. Thank you. Thank you, Naka. Thanks for coming on as always. But guys, if this is your first time tuning in And you've been enjoying the conversation over the last four and a half hours and want to keep up with what we do here. We are Because Bitcoin and the show that you're listening to right now here on xSpaces is called Market Talk. I'm the host, Wabi. I've been doing this for just over three years now. And really, the purpose of the show is to talk all things markets, hence the name. We talk all things BTC, alts. We talk a lot about TradFi and macro as well. And usually we have a couple of guys up here on the panel that have been with us for number of months or even number of years. Like Evan's been up here for years, same thing with Naka. Uncle Mike has been with us for just over a year, I believe. That was the first time he came on the show. And so again, if you want a one-stop shop for all your things, markets, you want to tune into a daily live stream, feel free. To give us a follow, follow the Because Bitcoin account. I go live here Monday through Friday, usually at 3:30 PM EST. And the show typically goes on for about an hour and a half, two hours. But when we do get these large panels, the show usually ends up pushing four or five, maybe even seven or eight hours. does happen quite frequently. And now that the year is well underway and people are getting back on their desks, really eager to find alpha in these markets. I'm sure that we'll have many more new speakers potentially and new listeners. So if you guys want to give us a follow, go ahead and follow Because Bitcoin Account. But just as important as following the BB account, you guys should also follow all the speakers. They've done massive contributions to today's discussions. Follow everybody up here, guys. Whether you're listening live right now or you're listening to the recording, go ahead and follow everybody up here on the panel. You can also check out my personal profile. It's here as co-host. It's King Wabi. I'm going to start being more active on there now that markets are flowing in with volatility and also some liquidity. We talked about broader NDC markets like the Nikkei, but we also talked about crypto. We talked about all coins on chain stuff. We talked lower time frame, higher time frame, price action. So you can kind of think of this as a show that's really focused on where people view the markets on where they're going across multiple time frames. Sometimes we do call out some banger trades on here. So you guys have a good rest of your Thursday or Friday. And once again, thank you to all the speakers and Shout out to all of you guys in the audience, whether you're listening live or listening to the recording. But once again, would very well appreciate if you guys give the Because Bitcoin account a follow and feel free to tell a friend to tell a friend about who we are. We also have a TA show that's our YouTube show called Market Check that centers on all things charts, graphs, all that stuff. Very, very much so. We do interact with the live chat on the YouTube. That's a very lively bunch, a bit different than here on Market Talk. I feel like it's kind of these two separate communities. But if you guys are also looking for something a bit more exclusive, something a bit more private, we do have our Inner Circle Trading Alpha Group, where we have multiple live streams that are private for our members. Pretty much every single day, Monday through Friday, which are all archived in a separate channel. And we also have various channels covering multiple sectors of the market, whether it's on chain with crypto, whether it's TradFi in regards to commodities, stocks, all that stuff. We have something for everyone in our inner circle also group, and all of our analysts, including myself, are very active on that. And for those of you that are a bit more advanced and want to upgrade your toolkit to navigate the markets, we do have our trading terminal. Link to that is in our bio. The at handle is at BB terminal. And if you have any questions at all whatsoever, guys, in regards to our Discord. or our terminal, you can send us a DM or any of our affiliates a DM and we'll get back to you within 24 hours. You can send me a DM, you can send Tommy a DM, Tucker a DM, Max a DM, and we'll hook you up with a... Apologies, guys. I just got a phone call. But you can send us a DM if you have any questions at all whatsoever, guys. With that being said, follow Because Bitcoin account. Follow all the speakers. God bless you all. And I want to thank my Lord and Savior Jesus Christ for allowing me another day of health. But talk markets with each and every single one of you. Welcome, guys, to Because Bitcoin. You can check out our website as well to check out any of our testimonials regarding any of our products. And we'd love to welcome you into our community. And I'll see you tomorrow at the same time, guys. Take care. Bye-bye.