Building a Crypto Portfolio for 2025 | Dan Matuszewski & Roshun Patel

Yeah, Dino coins are great. I'm like making so much money. It's like you didn't catch every single one of these Dino coins. Some random 12-year-old on TikTok put out a video and ripped it up.

In general, if you put a gun to my head, I'd say like the basket of like investments we make on top of the L1 will underperform the L1 itself. But you just like sort of own both in conjunction. You can't— it's like doesn't work if you're not willing to do both components of it.

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Excellent. That was perfect. Thanks. Couldn't have done better myself.

Great. We have two sworn enemies back on the show. Ro going head to head versus Dan. What's up, fellas?

Wait, what? Yo, what's good? Oh my God.

How we doing?

Good.

Good.

Yeah, stuff is up. I am seeing— I got to pull you both, you guys, into the better view here. So, Dan, we got a Pepe painting here. And Ro, I think I see a tungsten, tungsten cube in the bottom left. Or are we at that point in the cycle?

We never left the cubes, you know.

The cubes were last cycle. I assume that was bought at a much lower cost basis.

Yeah, I was actually looking at Midwest Tungsten's website. They've really jacked up the prices on some of these bundles and cubes, I think. The demand went a little wild because they know the Bitcoin boys are back. Yeah, I feel like they look at the price, they're like, 100K, and they just add a zero to the cubes.

They definitely do their like targeted marketing when like the price moves up. I definitely start getting the emails.

100%. Dan, how— what is, what is your size cube that we're working with these days?

I think I bought all the ones they'll ship. There's like a 6, a 7, and an 8. I think it's 8 inches, the biggest one. The heaviest one is 250 pounds. They won't ship it over that, or at least they won't ship to me over that. So that way I've exhausted the list.

For the new— for the Empire newcomers, uh, well, what's the story of the Tunks and Cubes, guys? How did this—

what's the lore?

I remember Niraj was talking about on Twitter with, I think, Nick Carter. I think that's like where I first saw it, and then I was like, oh, we gotta get one. And then I just bought it, and then I was like, well, how much bigger can they get? And that just sort of went down the rabbit hole.

Yeah, I can't remember. I felt like it was like, it came from like Telegram or group chat or something and then it kind of made its way to Twitter, but yeah, it sort of blew up and then there was a blue version and then Nick Carter and then Dan, I think you just, yeah, plopped it.

Remember there's like that photo in the Wall Street Journal of Niraj in that like ridiculous kitchen and he's like, yeah, he's just looking at the cubes.

Yeah, that's iconic.

That was like almost to the week, the 2021.

It was like November 10th or something. It was like breakpoint placement.

No, it was the top sign. Yeah.

Yeah.

The tungsten cubes are back. What, Dan, what's the story of the, uh, the Pepe painting? Let's see this thing here. Let me get you in the It's for the office.

So, hey, dude, it just fits. Look at it, like hits against the ceiling.

It's like, it's beautiful.

It's actually leaning a little bit, but yeah, it's gorgeous. Yeah, I had to create to like a framer in town who like thinks I'm a lunatic now, but like we had, we just needed some stuff for the office.

Not wrong. Nice. Um, all right, fellas. Well, a whole bunch of stuff to talk about. I'd love to, I mean, I think there's a bunch of folks who are just unsure of what is happening in the markets today. So I wanted to Yeah, I mean, I think people know both your guys' backgrounds, but maybe we could start with— there's kind of two views, it feels like, of this cycle. And so one of the views is like, Trump is— we've never had it. We've never had seen crypto with this like bull president. It's the biggest government in the world with a bull market president. And like, this cycle is just like— is going to be— last cycle wasn't the supercycle. This is the supercycle. Maybe we'll see 30% or 40% or 50% drawdowns. but, you know, this cycle is going to be different than all other cycles. That's, that's one view. The other view is like, hey, maybe we top like somewhere between May to October. So because I've seen some cycles, I'm going to be, quote, smart money around this and start selling early. And this cycle looks no different than other cycles. Just curious how you guys shape out on that.

Yeah, Dan, you want to rip it first?

Sure. I don't think it feels much different yet, except there's a little bit of a constant bid in Bitcoin in particular, maybe a little bit ETH, but not really, just because there is a conduit into more traditional flows. I think the ETF in particular is big. And then obviously MicroStrategy is putting a floor in it, but there's a set of risks different that come along with that. But either way, I think the altcoins will have the same market cycle. I think you'll just see more muted responses on the way down in Bitcoin and ETH. I will say I thought that last time and that just ended up not being the case. So there's a Well, that's wrong. I do like to think they're hitting a little bit of like a terminal, like, valuation where their volatility will start to come down a bit. But I think the rest of the market's going to do the crazy swings, right? Like your meme coin to your AI chatbot to your sort of alt L1. Like, those are going to have just as much market cycles going forward.

Yeah, for sure. I tend to agree largely with that. Like, I think the rotations are still in play. I really, I mean, I think, you know, given where we are now, it's logical to maybe ask this question, but I really don't think we've topped yet in at least the majors, maybe in some other stuff like closer to it. But personally, I'm expecting like pretty strong, uh, Jan inflows into ETFs, funds. Like, Dan, I don't know if you remember.

Well, you definitely remember.

Q1. Yeah. Remember that? Where like January was just like all—

everyone got their check. Yeah.

Yeah.

And like these boomer ICs are so like, they're talking now and they've been talking since Thanksgiving about what do we do? In January when we're back from Aspen or whatever. And, uh, I think, um, yeah, you should see some pretty strong inflows. I think it's a little silly to kind of try to step in front of that or try to be too cute. But yeah, you know, December seasonality exists a little bit. March and May for sure, summer for sure. So, you know, I think as you go into March or May, you can maybe think a little bit more about portfolio rebalancing. But for now, it's like, it feels pretty healthy. Also, like, if you caught us at a good time, right, where a week ago I was probably a little bit more— like, if PERP funding was at like 150% and pre-washout, like straight through 100 okay, uh, you know, you'd have to be a little more careful on this podcast. But, you know, we saw the flush. The flush happened. Things got, you know, kind of washed out. And, uh, yeah, now today is a really supportive day. Like, you know, we rallied and funding is still pretty— is really flat. Like, it's really off of where it was. So yeah, I think signs are looking pretty solid.

Yeah, I think the idea though that like crypto traders aren't going to over-leverage themselves is like—

yeah, that's silly. Like, we're gonna continue Every time. And the cycle is never really truly different. You know, it's just, you know, it's just what you're trading changes.

That's fine.

Yeah. But maybe the only thing that's different is that there's so many people who have seen this is now their third or their fourth cycle. So everybody is— it does feel like something in the air right now is like everyone's looking for the top, whereas I don't think that was the case last cycle. Last cycle it was like we could go to $400K Bitcoin and like this thing's going to change the world. And now the conversation is like, is this a top signal? Is this a top signal?

Is this a top signal?

Yeah, but to be fair, like, on the way up, like, people were doing the— like, like, it's always that way, right? Like, people start fading it on the way up and they start looking for tops, and then at the top they're like, it's going to go higher. Like, I don't know, that just tends to be the, the way, like, heuristically you talk to people about it, it goes.

Yeah, I feel like that's why really, like, the last leg of any real cycle is, like, probably the most parabolic because of this exact sentiment where you have people who have, you know, trimmed a bit or a little under— less exposed than they were before. I don't think that that part necessarily changes. I do think the PTSD from, you know, multiple cycles and knowing that crypto tends to go up a bunch and down a bunch sets in, but I don't think it's necessarily unwarranted. So like, yeah, people are, you know, looking at signs, seeing journals or seeing like the Wall Street Journal article headlines or whatever about how everyone's getting rich off meme coins and whatnot. You know, there are little things here and there, but Overall, I think, you know, the last leg is always the most parabolic and I don't think we've seen it yet.

Yeah. Do you, Ro, do you still believe it's a sell in May, go away type of, type of—

Well, I know we were talking about that the other day. Well, you know, I don't want to be like, look, like if you're in this thing for the long term, like, you know, never— who cares about it? Like, whatever, May, November. But my thinking is that if, you know, if November of next year is truly like, let's say, the top and it's not like March or, you know, it's later, it's after Q1 of next year. I do think like generally you'll always kind of have a good buying opportunity in the summer. So I think if you're trading more tactically or have like a liquid book or something, um, yeah, de-risking in, you know, late Q1, early Q2, and then just looking to buy the summer blood has historically worked really well in crypto. And I don't see why it necessarily doesn't continue to work. Maybe I'm wrong, but you know, it feels pretty solid.

Dan, do you think like that, or you just wait for some blow-off top to happen?

Uh, I mean, I don't try to like pick seasonality as much, I'd say. I mean, it ends up working out that way a lot of the times. Um, I think you just, like, you want to look for like the froth in the market, right? Like, you want to look when like funding is massively extended, people are like levered to the tits. Like, I mean, you're getting degrees of this for sure, right? Like, there was pretty good leverage, which is what unwound over the last couple days. Um, I mean, we got blown out and you like, people just like reaching for risk everywhere. I think that's just like the biggest thing is you haven't— it's been pretty still contained to the crypto universe, though it's like gotten a little bit out. Like when Ripple started flying and everyone was talking on TikTok about Ripple, like that's like where you see it breaking out sort of into the mainstream. At some point there's no more marginal buyer, right? Like if everyone's already like in it, like then everybody's in it. So it's like you have to start thinking, being like, well, like this doesn't sort of like work. Like there's no like pool of like passive capital that's like sort of like coming through it. And like I said, that changes a little bit now that you have the traditional pools that potentially are moving into this thing, um, via the ETF product, um, or even MicroStrategy, right? Like, that's like another conduit into it. So that, that changes things a little bit on the Bitcoin-specific side. But either way, like, you, you see it ubiquitous everywhere. Like, people are trading memes and levered up, then like, you know, like, there's— you're pretty extended into this thing.

Yeah, yeah, go ahead, bro.

No, no, I, I agree with that. I would also say, like, relative to the previous, um, You know, I think the fact that the last cycle, like the last bear market, came with such a brutal, like, just cataclysmic implosion of credit, and then also like the macro side of things, like, that was definitely a catalyst for downside. And I think in this, like, right now, at least looming on the horizon, there's not too much that's super obvious that could like be like, you know, Luna level or like, you know, massive over-the-counter lending kind of implosion looming. So like, I think like that kind of catalyst doesn't— hasn't yet may not ever like materialize. I mean, maybe you could point to certain things, but really there's nothing as obvious. So that helps a bit, maybe smooth out this one. And but it also still affects the minds of like people that experience that 2022 year, which was obviously awful.

2022 was different, right? Like 2022 was a bear market and like a credit contraction.

Exactly.

Yeah, it's like it's missed. It was a lot different than other cycles. And this is why so many people didn't make it out the other side, right? It wasn't just like you lost a lot of money. It's like you lost more money than you had and you like actually had to take money out of it, which was like, hadn't it? Obviously people would blow themselves up with like perps and leverage and stuff, but people really got like all sides, like larger institutions, people. Like we lost some old soldiers, so to speak, in that one.

RIP.

That was much different than previous, like bear markets. And to be fair, like from my vantage point, like we were pretty active in the credit markets back then. Like we have not seen that come back in any real size. Um, like there's bits and pieces of it. You see people trying to like spin it back up and credit will get looser as like people started just believing that this will go up forever. But as of right now, like there's not the same like access to like borrow and especially terms that were sort of back then. So that's a big difference.

I think this point in the cycle last year, so what, like, uh, you know, Christmas 2020 credit was flowing, right? Genesis had— Genesis's book was massive already, right?

Yeah. I mean, credit got like a mini reset during the March 12th 2020 move where, you know, obviously the COVID crash, right, that kind of like reshuffled it a bit. But then I think it ultimately bleeds down to like a little bit of, you know, Cantillon effect in the sense of once the spigot opened at the top, which is really the Fed and like QE infinity post-COVID, I think it, it really just bled into all lending markets and, and the crypto lenders were kind of maybe at the tail end of it. Like, you know, it starts at the banks, then it goes down and then But you see it, right? It's like the hedge funds are getting more exposure and leverage. They want more demand for it or they have more demand for it and it kind of bleeds, bleeds down. So yeah, at that time credit was flying. I don't know if we're necessarily in December of 2020, if it's a perfect analogy, but at least from a credit perspective, yeah, it's much different for sure.

What's funny is like people were insolvent during like the COVID crash. They just got saved. Like a lot of people were.

Yeah, they were just like, I hope it goes up.

It just bounced back so fucking sharp that like everybody's like, I like maybe we weren't like, Drew's super solvent at this period, but like, we're okay now. So I think like that papered over a lot of like a potential credit event that could have happened there. Is that like, I mean, you don't know, but like what you hear is that there was definitely some entities that were like very close to, if not like underwater for a short period of time there.

No doubt. No doubt.

I mean, Lord knows what the fuck FTX was at that time. Like probably was underwater too. Like it doesn't, like you don't really sort of know cuz you get saved if the market like rallies. Yeah.

But is there, is there a question then where it's like, okay, that is happening this cycle, you just don't know because every number is going up like FTX, BlockFi, Celsius, Luna.

That's the thing is that you can't even get it if you want it.

Yeah, yeah, yeah. You're just talking— you're talking about credit. I mean, but there were other like— I mean, Luna wasn't— Luna was just some like weird Ponzi. FTX was a fraud. BlockFi and Celsius were just credit. I mean, or like, you know, borrowing from retail. Like there are these different flavors of it, right? So in this cycle, you could say like, I don't know, is MicroStrategy a risk? Is something like, you know, other people's words, not mine, is something like Athena a risk? Is something like restaking a risk?

These are all things that are risky.

Yeah, yeah, for sure.

Yeah, these are all risks. I mean, to, to the three that you spoke about, I think, um, MicroStrategy is probably the most interesting one. It reminds me, you know, not, not exactly, but a little bit similar to, um, the GBTC premium discount, like basically the way I think that this could potentially play out or the risk at least, like, you know, it wouldn't be ideal. But basically if MicroStrategy, if there's an exodus of capital from crypto for whatever reason, right, people who are in MicroStrategy stock will sell it. Right. And that'll drive the stock back closer to its net asset value. But if they still want out, it might even— it could potentially drive it to below its net asset value. At that point, there is a decent arbitrage flow that could come in. It's sort of like fundamental arbitrage. It's not true. Where it's like, hey, I can buy MicroStrategy at a discount to the Bitcoin holdings on its balance sheet, right? Which is what you could do with GBTC in the bear market. It was a 50% discount to spot. However, at a certain point, if there's not enough demand to support that arbitrage flow, then there's an absolute bottomless pit on the, on the equity price. That is, I think, the tail risk there that, that may come out. But it's a lot of series of events would have to happen to get there. But Yeah, like basically the reflexivity on the way up for MicroStrategy with the premium and this recycling and kind of the yield pitch of it can work equally both ways. I don't know if you agree with that, Dan. I was thinking about—

I think, I mean, I think there's just like this— there's definitely a line of reasoning that people put out there being like, oh, like they don't have to sell the Bitcoin, so it doesn't matter. And like, I don't think that's right because if it starts to trade at a discount to the NAV, people will—

they're going to be pressured to, right?

Like people will buy that and sell Bitcoin or like people are just like, well, I could buy some ETF or I can just buy discounted Bitcoin in the strategy, like people just use it as a substitute good and they'll just buy that. So like it does have an effect on the overall price in the same way it affects it on the way up. Like it's like you're not in a vacuum.

Yeah. Like to put it simply, I think there's a certain amount of notional dollars that are willing to buy MicroStrategy at a discount to NAV, either just outright or against a short ETF or short Bitcoin spot position as more of like a basis arb trade. But that is a limited amount of capital. And if that ever runs dry relative to outflow demand, you know, then, then, then it could be a pretty, pretty negative downward spiral.

Do folks not— well, on the, on the market, back to the leverage for a second. Do folks— what's— why is leverage not building up in the system? Like, is it that there's no supply of leverage, like the BlockFi and Celsius and the Genesis don't exist anymore, or is that just the demand hasn't gotten that crazy yet?

So there's still leverage, right? Like perpetual, like financing, like still shows you, like there's like still like the OI in crypto is still gigantic and it's like, I don't know if it's at the highs, but I bet it's pretty damn close to it. Um, but there's no uncollateralized borrow like P2P, like there was. Like, that's like not really a thing. Like, you can't like go borrow from somebody against like a basket of assets, or like you have to like do it with the exchanges. And the exchanges like are a different beast because they can just blow you out of it really quickly. Like, they can also just ADL. Like, there's like mechanisms they have for controlling that risk a little bit differently. But you can't, you can't go negative on yourself right now. Like, it's hard to put yourself in a position that lets you lose more than you like put in.

Yeah, yeah, exactly. Like the perps. Yeah, I think, you know, the perps is kind of— it's impressive that they can still blow out so much on annualized funding even when this basis trade of the perp trade has become so popularized. Like it's not a new trade, it's relatively old. And I think that's an exemplification of the fact that people aren't getting enough dollars into crypto. So like the interest rate gets bid up in the derivatives markets relative to like, you know, it happens over the counter and then people can actually keep the basis relatively in line. So there's still leverage, just it's not— there's no hidden lending, I guess, going on or like off screen as much.

Will that come back?

It hasn't. I'm skeptical. Like there's just not a lot of appetite for it yet.

Yeah. Like eventually it comes.

I don't know.

I just feel like human nature with— at some point people go back to the whole like, oh, this yield is worth it. Like these guys—

will it be on-chain though? That might be the big difference.

Is it all different? It's just like how you settle in it.

Yeah, right. By definition, unsecured credit's like, yeah, sure, you can make the unsecured loan on-chain and send it from my wallet to Dan's wallet.

Then he goes and, you know, rips like zero GTE calls.

I don't know.

I don't know. It never looks the same, but it'll come back at some point. I just don't— in general, like, the crypto industry is still like pretty starved for like risk capital, right? You still can't borrow like money from traditional venues in any capacity, right? I think that's kind of crazy. Like, I can't go to a bank and be like, hey, I want to borrow and I own X, right? Like, you can't do that.

Yeah, yeah. I mean, the whole debt markets are shut off to crypto companies too, like not just funds and individuals, but if you're a company and I mean, unless you're someone like a Coinbase, like you, you're forced into a Series A, then a B, then a C, then a D. Like, there's no, there's no debt markets available to you.

Yeah, and to be fair, probably right. I mean, like, it would not have been great. Like, a lot of your counterparties would have fallen over.

Yeah, yeah. The crypto market makes it, I think, just a little difficult to do truly unsecured or like illiquid ABL kind of stuff because it just moves so fast. Like, you know, like these companies that are used to making loans, like, you know, they're like real— they're like normal companies with stable flows and they like, they kind of just accrue over time. Like, a trading firm in crypto's net asset value can move quite massively, like, relatively quickly. And unless you have like a real, real-time time sense of it, like you're not really going to be comfortable with any degree of unsecured or illiquid ABL kind of stuff. So I think that got like exposed and, um, it's a structural problem, right? Like unless the volatility in crypto gets completely sucked out, um, I don't know, like it's going to be hard to overcome that particular hurdle.

Yeah. Dan, what's your sense of what takes down this market? Like, are there any market— you— it sounds like me buying a watch.

When I buy a watch, I'll tell you guys.

Okay, we're just sitting here like, blow this thing up.

Yeah, this is just bear porn here. Um, all right, we can— let's, let's talk about—

it's the same thing it always is. It's just like, it's apathy, right? It's like people get disinterested in it and they move somewhere else. Like, I don't know, Trump comes in and he's like, everybody who's ever tried to do an IPO for the last 2 years, go for it, right? And then suddenly you got like 500 new companies that push through it. Everybody wants to start trading. Then like crypto is not as interesting.

Yeah. All right, pivot. Let's talk about, uh, 2 charts, ETH BTC and SOL ETH. Um, ETH BTC is starting. If you zoom in enough on the screen, we're making a look. We're making—

hold on.

There we go. That's what we're— that's what we're looking at here is a little ETH BTC coming up. Um, Dan and Ro, what are your thoughts on how this chart plays out this— the rest of this year? Or excuse me, the rest of the cycle?

Um, yeah, man, talking about the ETH BTC chart is just like an absolute widowmaker. It's like every time you think, uh, it can't get much worse, it continues to get worse. But look, I'll say this, like, now that Bitcoin's broke $100K, The, the more Bitcoin goes and like some of this other stuff, like the— I feel like the, the more relatively cheap ETH kind of looks, right? So, you know, the thing about crypto is like everything is always kind of mean reverting. Like whether you bought Ripple in 2017 or, you know, Solana in 2019, you may have performed the same as of one week ago. So I don't know, I tend to believe that things that get exaggerated one way kind of come back. So yeah, like ETH probably goes up, you know, it's, uh, it's fine. I, I would— I don't want to call a bottom on ETH/BTC because it's like a cursed thing to say, but, um, yeah, looks good.

I'll give a little bit of nuance answer. I bet, I bet it trades a lot of beta, right? So I would imagine that SOL/ETH continues to outperform like ETH/BTC or even just like Bitcoin on the way up, but on the way down I think I'll just have the exact inverse, right? Like I think these things will like revert back to their historic median if we get like a bit of a bear market. See, now I'm the bear. You just think it continues as it is. Like I think the trend probably continues, though ETH/BTC has been kind of flat now for a bit.

Yeah. So you just think SOL is higher beta than ETH and ETH is higher beta than Bitcoin. And then, I mean, same thing obviously on the way down.

Yeah.

Yeah. I mean, like, look, like how much of the just net sort of interest in what's going on, like in crypto is related to sort of this meme coin phenomenon. Like if that were to suddenly turn on a dime, like SOL would be the biggest, like loser of that. And it would sort of like, and you could see that happening in a detracted, like bear market.

Yeah, I guess it was really interesting though.

Yeah, go ahead, Jason.

Oh, I was just gonna say ETH BTC kind of was up for a bit like during that 2022 bear, right? Like it didn't exhibit that downside beta.

Um, it did have the merge, but it's true, the merge, right?

And now we have the splurge.

So yeah, I think the only thing BTC's got going for it is if any of this like L2 stuff like plays out the way they think it has. I guess like really Coinbase is the one doing all the heavy lifting there.

Yeah. Yeah.

The sentiment is so bad though. It is just, it is rough. If you just want to earn some quick Twitter points, just go like make some like ETH jokes and like people just pile on.

Yeah.

Yeah. Yeah. It's quite, it's quite funny. Yeah. If you, if you post something like bullish ETH, like the amount of engagement you get relative to something like Solana or AI related, it's night and day. It's wild. Or God forbid you make like a bearish post that you're over, like no one will like it.

Honestly, do you, uh, you guys think, you guys think the L1 trade is still on?

Yeah, of course.

I think it's going to be huge.

Yeah, like, have you not seen my Monad bags?

No, I really— but all right, agnostic of it, I mean, like, look at what Hyperledger just did.

Hyperliquid.

Sorry, I'm, uh, Hyperledger is John Colstan. He—

I was just talking about— no, no, that's Hyperlane.

Hyperledger. Hyperledger is the R3 blockchain thing or whatever.

Yeah.

Right, right. There's also Hyperdrive.

There's all sorts. There's too many of these. Anyway, I should know this. Eric will kill me. Yeah, no, like, right. But that's like a great example of sort of one of these things getting out there and just like re-rating super higher. I mean, you got Barra probably next, though. That's like really confusing when it is actually going to hit.

Sounds like January.

I don't know. I've been like, it's been a month away for like 6 months, so I'm just like trying to like pick it. I won't, I have no inside baseball there. But anyway, I think these things are going to trade huge.

Yeah.

I mean, it seems like what— so Movement came out of the gates, traded at like 7 or 8 or 9. Well, I don't know what Hyperliquid's at, Ro. I know you've, you probably tracked that thing pretty closely. Magic Eden traded like $13.

Like, yeah. Magic Eden, I thought, opened at like 12 or something ridiculous. I don't know.

Yeah, but it was only there for like a second.

Yeah, it was like, it looked a little like the Hawk 2.

Can you guys explain that to me? When something trades, it like opens it. Why does Magic Eden open at $12 billion? What is the, what's going on in the background that makes that happen?

I mean, do you want like, if like the crazy Tim Pla hat theory on it, or do you want just like the probably, like more likely than not, it's just like people have like bad bids, like in a level, or like there's some chunk of liquidity that they want. That's not, that's not interesting for the podcast. Purposely like paint the tape to like make it look high. But I don't generally—

no, no, I don't think it's— I don't— I mean, that's the— that's very nefarious if that were the case. But I think it's more like, hey, look, the airdrop is live, the token's live, there's maybe a small amount of liquidity seeded or not. But it's like there's two types of people. There's people that want to be like, oh, Magic Eden's live, I'll buy a little token. And then there's people that actually claim the airdrop and sell into it. And those opening hours, both of those sides are relatively thin that the thing can just go everywhere. It's completely untethered from any price. It's just there's no—

there's not a lot of trading there.

Yeah, exactly. It's just like a little bit of thin volume and then it finds its true value relatively soon. It's not like, you know, if you got a huge airdrop, you would necessarily be able to sell it all up there, right? Yeah.

Why did nobody— why were there no sellers for Hyperliquid Row?

Yeah, that's a, that's a, that's an interesting one. I mean, I think the Hyperliquid community, it's a little different than like the people that, you know, maybe like farm something for an airdrop, and then once they're done with the airdrop, they withdraw and they're done. Like, the, the people that hold the thing are genuinely people that like, I feel like, use the platform pretty much every day, and it's relatively sticky. So they have this loyalty that's like actually like, you know, kind of raw to the platform, and they want to be bullish the thing that they like and they use so much. And then obviously the hype, like Hyperliquid I think made a smart move going with this like kind of hype chain, uh, maneuver rather than trying to just be a pure DEX. So you know, they're inviting builders to come and like do things on the chain and build like dApps that support the exchange. So like it's getting this little bit of a premium, like, hey, hyper liquid relative to maybe a normal Perp DEX token, it might seem like very wildly priced, but relative to like an L1, it's actually pretty reasonable, if not, you know, cheap. So I think the holders are putting those two things into their calculus, which is, you know, they love the platform and they think it's a layer play, not a DEX token play. So yeah.

You still holding your airdrop?

I don't, I don't, I didn't get the Hyperliquid airdrop.

So you don't comment on your bags? Yeah, yeah.

No.

What, going back to the L1 trade, there's, I mean, it seems like there's a bunch coming out in Q1, right? You've got Mega.

Oh, the one, one thing, one thing I'll add on the Hyperliquid though, to not be super like, you know, moon boy on it, is I do think just given the amount of liquid wealth it created, if this market ever is in a position where it wants cash liquidity, I would be interested to see like kind of how deep it goes there because, and that would, might be an interesting opportunity. But in any case, yeah, like it created a massive amount of liquid wealth. So like, you know, the things where I'm saying, where does that flow to? I think it's just flowing. It's just there.

It's like people just don't sell it.

I'm not selling it, right?

It hasn't flowed anywhere.

Yeah. Where, where, where will it flow? Like the, like Solana, people who made a lot of money in Solana. They didn't move that money into Optimism and Arbitrum. They didn't start buying ETH NFTs. They just moved it to, you know, start buying Jito and they're buying Joop and they're messing around with— I mean, it's the meme coins, like they're messing around with the meme coins. Like it all stayed in Solana.

Yeah. I mean, Hype has some stuff on its exchange and there might be— there will be some dApps on it with their own tokens. I don't know, maybe you could see that. But yeah, as far as I can tell, it's kind of idle. I don't know, Dan. Yeah, I don't know.

If I had to guess, I'd be Solana adjacent more than it is Ether, Bitcoin.

Yeah.

Sorry, I interrupted you. You were going to say something?

No, I was just going to go back to the L1 trade because it feels like Q1, probably even actually January specifically, is like, I mean, Monad, MegaETH, Bearachain, like Abstract Chain, which seems like people are liking right now. What I mean, just what is your sense of how this all plays out? Like they all just catch a bid and it all rips or one does much better than the other one?

Better than the other one's going to be relative to where they open, I think. Because like some of these are probably going to open pretty high. So like you may not just get a crack at it liquid, like where you sort of would be as interested in. I think that's like what's very interesting about HyperLiquidity is you kind of got a window there to buy it, though like it was very hard. But like there was like a 48-hour period we could take a crack at it. Some of these might, you just might not, like, because they're going to like be a little more like organized with a market maker across like a bunch of centralized venues and they'll probably have some level that they open at. So anyway, like in terms of like performance, I mean, your bigger gains are going to be in the ones that are like a little more the underdog and like turn around a little bit as the ones that are like sort of like priced in for perfection, which like may also like trade up, but like be a little more— the typical sort of like structure you see is like something like grows higher, right? Like it's Wilbur at a $1 billion valuation and like you hit a home run and it's like, looks like you're going to be even overtaking some other like L1. Like you're going to like appreciate much faster than something that's like baked in as like already like a core L1 when it goes out to market. So it's all just about expectations. Yeah, some of these things have huge expectations on them coming out of the gate.

Yeah, they do. They do.

Right. Like, and Monad, they all like, they're, they're priced very well. Like, they're not really priced yet because they're not out there, but my gut is they're going to price to like a very— an FTB that's already like a lot of success baked into it, which isn't a bad thing. It's just going to be, you got to grow into that a little.

Yeah, I think the ones— if they could somehow figure out, or I don't know if there's a way to launch at a cheaper value, I do think it's just better. Like I think it actually, it reduces so much downside risk in the future. Get build, like at least gives people like the opportunity to get into it liquid, like something that Hyper Liquid I think did decently well. I mean, obviously you had to be quick and you were like, you had to be there, but, um, no, but you had to— I don't know, cautiously—

I think it changed the narrative. I think that like, I hopefully that happened with enough time before any of these other projects that, right, coming out in Q1 can like pivot a little bit and find a way to like match it. It's hard because you run into a lot of regulatory problems, right?

Like suppress— like how do you keep a price suppressed? Like, okay, you have to introduce supply.

Boom. Regular, right? Or like, and then you can't— like, well, it's like, all right, well, what if I sell it to like 20,000 people?

But then like, can you, can you explain that? I didn't get that.

Well, like what would keep the price of a thing low at open if there's like an innate massive amount of demand and people want more exposure to it? Like something like that's very hyped up and and expect it to be worth a lot in the future. Yeah, you need, you need to introduce supply, right? But then it's like selling something, especially in the United States, like in a lot of jurisdictions, and I'm not a lawyer, so NLA, not legal advice. But yeah, like within a year, like at the day of something going live, like selling something, like there's all sorts of complications that could come into that. So generally, I feel like that's avoided.

Right. Like back in the day, you just ICO like a big slug of it. And then like, that would be how you get distribution. Like you can't, there's not a great model for that yet.

Yeah, exactly.

And like, how did, how did Hype do this?

Well, Hype did this by airdropping so much of it.

Yeah, yeah, I see.

Yeah, so that is the other way you can do it. It's a little— but then like, you got to figure out, right, how do I airdrop this? How do I avoid siblings? Like all that jazz. Like there's like another set of problems that go with it. That is like, I think, a good thing to be doing. I think projects should be giving out more of it. But like, it's just, it's, it is a tough— it's also specifically hard with like L1s where like you need it to launch with a native token out of the gate and it's like, well, how do I then like airdrop it to people that are using it like that? That can be like a little bit of a challenge, right? Each through the crowd sale, like you can't take that path.

Yeah.

Dan, as a, as a big Monad investor, do you, from an investor's point of view, want them to launch at as high of a valuation as possible because you're like, great, my bags? Or is it like, look, my long-term bags, I want them to actually launch low because I think that's better for them. What would be from the investor's—

I would rather them go into evaluation. I mean, like, if asked, I would say figure out a way that you can get a bunch of this in people's hands at a cost basis that's low enough. That'd be like my— and I do think they're thinking along those lines. It's just, it is a regulatory and like legal problem more than it is like a marking and like, what do people like? It's not like this, like there's not this inherent, I think, idea that people who have like bought these things at like lower cost basis, just like wanted to be like up a ton because like that doesn't like work for anybody like longer term. Like you want to figure out a way to get distribution. It's just been very hard to do that compliant. And a lot of the attempts at doing that in the past have like not worked out great, right? Like airdrops have a little bit of a checkered history of like sort of how they work.

Yeah, wholeheartedly agree.

What's the matter?

This is what, this is what Kobe's trying to fix, right? Like this is like part of what he's trying to do. Yeah. Yeah. And like Coinlist has a similar product. They, they're compliant. There's always going to be a world that like people who don't want to do—

I know Kovi's checklist. I don't know when you guys signed up for Echo, but like the checklist when you go through onboarding, it's like, you know, 80 questions long of like, are you aware that you will lose money? Like, I'm like, oh, this is, this is going to some regulator.

Yeah.

Yeah, exactly. And I mean, Coinlist has had a similar product for a while, which has been great. I mean, a lot of people got into the Solana one that way. That was a great Yeah. So there are, there are some solutions. They're just not, they're not massively adopted yet. I mean, like, I don't know how many people Echo has, but I guess it's—

I mean, I don't know the counter is, I was with the founder last night. He put something up on Echo. It sold. He raised $500K in 2 minutes on Echo.

Yeah. So you got to keep the limits low and you got to like try to like get it broad on it.

Yeah. There's some fewer too. Yeah. There's like a couple of them now.

Forge. Yeah. Whatever it is. That one's a little weird.

Like that.

That one's a little on the like, not compliance, but like, yeah, it's an option. Okay.

Yeah. I don't know anything.

Well, they don't KYC, so you just do it.

Got it. Got it. Interesting. I mean, there was something quite elegant and democratic about like a 24-hour or 48-hour shot clock with an ICO. You just rip it and then you get the tokens like when everyone else does, and then it's on Binance or something. Yeah, it was nice.

So bad at the end of the—

Yeah, yeah. It went too far. Like all good things, it goes too far.

Okay.

Then it got so toxic. It always goes like that, you know. I guess PumpFun is kind of, I don't know, like, has like ICO DNA in it, maybe.

I don't know. I mean, yeah, it's democratic in that sense.

It's just, I don't know, it's just—

there's no like— it's not like you need to raise capital for something.

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I mean, the market's ripping and like random names are flying huge amounts. Like venture crypto venture funds are going to have a great time. We're going out and raising money in the near future. So I'm like skeptical of like the, like the macro sort of nature of that, of like it being bearish for crypto venture. I do think that it's giving I think it's forcing the conversation of how do we actually get this thing to have some ICO-like properties and get distribution better. The FTV meme needs to die. And what's funny is we used to get so much shit for this in 2021. There was definitely even a meme that got passed around with our logo on it about— and we surprisingly had little control over those terms that teams were going out with. But I do think that it's putting some pressure to get the distribution better.

Yeah, yeah, exactly. I think, you know, I think there's going to be a balance here that's ultimately struck. Like, you can argue in 2017, the ICOs were just a little too out of control and like, you know, venture was still good, but it was relatively small. Then it kind of went all the other way, right? There was like no public access. Venture is the only way you can get exposure to this stuff. And then all, you know, all the insiders have the tokens and then retail has to buy it at whatever they kind of get. I feel like the ultimate state of this, like with stuff like Hyperliquid kind of showing it, is like like, let's figure out distribution and like get it so that— and I think a lot of, you know, venture rounds are kind of doing this where like investors will take less allocation and be like, hey, look, get like $120K checks in and that's going to be quite beneficial. So, you know, there's going to be some reckoning in terms of like balancing out distribution and not having it be like just in investors and then public investors kind of get whatever price they can rip on a liquid market. So I don't think it's necessarily bearish for crypto venture. I think it's a forcing function for evolution of how crypto venture is architected.

Maybe, you know, if you were raising right now, would you go to Echo? Would you just do like, would you kind of copy the Hyperliquid playbook? Would you just go raise from like the traditional crypto venture firms?

I just text Dan.

I'm like, I think it'd be depending a lot on what I was building. I think if I was building something that sat on top of an L1, I would probably approach the L1 for funds, and I would then be like, listen, my plan is to like give half this thing away via airdrop and then figure out a good way to do that. Obviously there's a lot of nuance in like what you're building and like what your plan is and like what the purpose of the token is. Um, if I were raising an L1, I would try and go and raise like a massive round via like an Echo, Coinlist fund style and just get as many participants as I can. I do think you could legitimately probably raise like $10 million that way if you like had a wheel.

Yeah, I agree with that for sure. For sure. Dan, why? So I see you in all these Monad ecosystem deals, like the apps building on Monad. What is the, what is the return? What is the math of that? Like, are you trying to make money on these? Obviously you're trying to make money. Are you— do you think the return will be high on these, on these applications, or is it more like, look, I own so much Monad that I need there to be an ecosystem on Monad?

Yeah, it's kind of the same thing with Solana, like back in the day. And like, we weren't around for ETH, but sort of the same process is like, you own a big slug of the L1, you just like build, you're going to need like the functionality on top of it. So you're like subsidized, sort of like financing a bunch of that stuff. Not that we don't think it would be performant. Like some of it may like overall, but like in general, if you put a gun to my head, I'd say like the basket of like investments we make on top of the L1 will underperform the L1 itself, but you just like sort of own both in conjunction. You can't, it's like, doesn't work if you're not willing to do. Both components of it.

Yeah, yeah, they tend to be cheaper too. And it's like nowadays I feel like you have seen a slight subtle maybe renaissance of like apps. Like, okay, sure, Hyperliquid is maybe more of an L1 app, but it is kind of an app token too. But some of the stuff on Solana, even L1 mainnet things that have launched recently, like they're, they're commanding like valuations that maybe L1s would have early and like back in 2021. So, and especially if you can get them at like, you know, 8 or 10x cheaper price relative to an L1, Seed or something.

Magic Eden is an app.

It's not—

Right, right.

There you go.

Yeah. Right. The thing is, I don't know, you got to— let's say you back 25 and like Magic Eden is one of yours and you like average that return profile against like Solana itself. Like it probably underperforms by a little, be my guess. At least historically, that's how we've seen it.

Yeah.

It's hard because it's a scenario where like the application built on top of it will do really well if the underlying L1 explodes in popularity, which will also cause like price appreciation. Yeah, it's like, as long as he's like, don't bother with all this venture stuff, just buy like the underlying, right? Like, that's like, which is possible, but if everybody does that, then nothing gets done.

Yep.

How do you, when you hit a winner, how do you— I was talking to Ro about this the other day, um, and I, we didn't finish the conversation, the conversation, so I'm curious to get both of your views. How do you or is there even a way to lock in a price, like to hedge a winner on a liquid, liquid investment? All right, let me use an example. MVMT just went live. Yeah, let's say you, let's say you invested $100K into MVMT. You're sitting on probably $25 million of locked MVMT right now.

Nice.

That's nice. That's nice. It's locked. And maybe you think the bull— maybe you think the bull market, maybe your first year vesting cliff, you got 4-year vest, 1-year cliff. And you think the first cliff is going to hit end of the end of next year or something like that. I'm making these numbers up. How do you— yeah, how do you lock in? So you're like, oh man, I'd love to, you know, maybe lock in $10 million of this move instead of sitting on $25 million of, of locked up. Hypothetically, how do you get like, how do you lock in that price? Do you just go to someone like Second Lane and you're like, let me— hey, is there a market? And I'll sell to you for 50% discount. Is there something you can do with perps? That I'm just not smart enough to do? Like, how do you think about that?

Yeah.

So yeah, you can always try to just sell the position. That's kind of hard. I don't find a lot of—

because there's no buyers.

Like actually selling the SAF, you mean?

Yeah. Yeah. So like there's two worlds, right? There's where they'll support a SAF reassignment, which where like you can sell something and like the foundation that ultimately like keeps the record is like, okay, like we can like move this from here to here. They don't like to do that for like reason. And like that just is very— and like they're also like, you're making work for me. So like we just like don't want to like be involved in this. So more often than not, that's not an option. The other option then is you can face each other and do— you can do either risk transfer where it's just like, all right, I'm willing to buy this at X price on a forward basis. So I'll pay you— you're moving SAFs worth $10 million today if you were to take the fully diluted on it. I'll give you 2 for it. And you can either— more likely than not, you're just doing a risk transfer. So you're locking in the econ on that, but you don't get paid until the tokens actually transfer. Is much more unlikely that you can get them to front you the credit and like give you the money for that position. But like in a world you could do that, you could be like, all right, like I'll sell this to you on a forward basis, you give me cash now. Like that's a legal-heavy one. You're gonna need to like paper that pretty well, um, just because now you're taking like credit exposure to each other. Uh, well, one person's taking it to the other, but— and then the other way you can do it is you can hedge it via derivatives, but you need a lot of collateral, right? Because if like you want to sell this thing, you're going to have to post a hefty amount of like collateral to be able to sell it down and you're going to pay financing on it, right? Like there's going to be a cost to hedge that. Like in a bull market, you might just get paid to be short it because like the financing may actually be positive. But I would guess over the lifetime of that position, like that's going to become a negative cost, right? Like you're going to have to like pay financing to be able to hold that hedge on. And you also are on the hook for the collateral, right? So if it doubles, you're going to have to find a ton more collateral to post up against that. So that's like the other issue you run into. It's like the position runs against you, you have to post additional collateral. You can also go to the— some of the brokers, like the OTC guys, like Wintermute. I know Arbelos does this too. Um, you can be like, listen, I have this position, I want to buy a hedge. You can either buy an option or you can like sell them a forward, and like you may need to post collateral, or just like outright buy the like put if you want to do it. So there's ways to hedge it. They're expensive. Um, and also like they're not always clear, like from a credit standpoint, like riskless.

Yep, yep, I agree with that. The only thing I'd add to that is like, you know, it's a lot easier as like for the, for the MoveIn example you kind of gave, like, you know, I think the TG happened like 2 days ago or something. It's a lot easier as you get into like a specific unlock and like not selling the whole position, like let's say that specific one within like, let's say 6 months, 4 months, because then the bid side starts to formulate where like trading firms will basically price like, hey, what would I buy this at? And then I'm going to short the perp, I'm going to try to collect the funding and then price out the variable rate that I can get for that relative to the discount I need for spot. With the added sort of calculation of how much collateral do I really need if this thing goes bananas. So like that's easier, like day zero of something like this.

I get it. Like something like Jito where it's been live for like a year and like most of the terms or maybe like a quarter of it has unlocked or something like that.

Yeah, there's a deep spot market.

It just unlocks like last month.

A couple of days ago, I think.

Yeah, something like that.

Yeah, yeah.

But yeah, obviously as you get closer to the event, like there's less unknown. It's much easier to price.

So what do firms— what do most firms do there? Like, are they— are they just holding and they're just like, all right, like, I'll take the risk of just sitting in spot until I unlock? Or are they— is there— is there all these backroom things that are happening where they're hedging out? And like, what actually happens?

I think a lot more than not, it's just people are sitting on the risk.

Yeah, more— way more often than not.

Like, I think there's this like court process. It's like all this stuff's getting hedged out and it's like very— I think it's very infrequent that it happens.

Yeah, it's very frequent. It's very thin relative to the underlying, like, actual FDVs and net asset, like, the values of the tokens for sure.

Is that different? Like, Ro, you have— you sit in two different camps, right? You've got your, like, your Hack hat and then you've got your, like, personal angel investments. Do you do the same thing with both?

Well, that's just to be clear, like, I mostly, you know, kind of invest everything out of Hack. Personal angel investments are stuff that Hack passes on or things that I have done. Prior to Hack, which is actually quite significant from previous days.

I guess these are from the mostly from the last cycle too.

Yeah, the last cycle. Yeah. The, you know, I would say definitely have dabbled in a, you know, a little bit of kind of hedging flow, but generally it's a lot easier to kind of ride it out and just see where it goes from a complication perspective. Also, like from a not going bankrupt, if something 10x into unlock, if you have collateral, like as an individual, you generally just have less credit risk access compared to like a big firm. So from an angel perspective, I would say like, yeah, if you have to post liquid collateral for an OTC forward or something like that, you have to be quite careful because like, yes, something might be like very, very currently valued, but like there's no real limit as to where it can go. So my general philosophy is kind of like crypto is fine, you know, it's a good asset class, like having exposure is is okay. And then you can kind of just deal with things as they sort of become liquid and come to fruition.

Yeah, there was— we had Ray— was Ray's last name L1D?

Oh, Hindi.

Hindi. Yeah, right. Ray and Tushar on the podcast a couple of months ago talking about liquid funds and how it's been like, you know, maybe 98% of the capital has been venture funds in crypto and now you're going to see more liquid funds coming in. There was this tweet tweet that he posted a couple of weeks ago that was like, you got venture and then you got TGE, you know, the early stage TGE, then you got liquid venture and then you've got long-short and then the gross trade stage and then trading and trading ARB. And he said liquid funds are making a comeback. November is estimated to be the strongest month for liquid funds this cycle, the fourth best month since L1D started allocating in November 2028. The monthly print will likely attract significant institutional flows. Here's a look at why and how founders are increasingly engaging with liquid funds. How do you think this dynamic evolves?

Yeah, I am still skeptical on liquid, mostly because, like, people just can't stomach the mark-to-market. I think I've wrote about this and talked about a couple of times. It's like the vol is so damn high, people just like puke it and the venture smooths over it so much that they're like willing to like hold it. Um, I just don't know if people are like okay taking like intra-month.

You're saying, you're saying the LPs in these funds?

Yeah, exactly.

Yeah, yeah, yeah. And I, you know, for the liquid funds, you know, there's definitely a couple good ones, but when you look at like the overall landscape, especially this year where like dominance on Bitcoin has been relatively high and it's generally been like a magnet for capital, especially from the tradfi perspective, it's kind of hard to outperform Bitcoin, right? Like if you're trading other things and like in and out and doing other It's been— I'd be curious to see like what percentage of liquid funds have actually, you know, meaningfully outperformed Bitcoin. I imagine it is a small sliver.

Yeah, I mean, we're an investor in a handful of them. I'd say like its average return is like under Bitcoin. Some do beat it, but like some just get smoked by it too. So it's like, yeah.

Dan, do you guys have LPs?

No.

What was the thought process behind that? I'm sure people have asked you that before, but—

Yeah, I mean, I'd say it's mostly luck. So we started in October of 2019 and we were going to get a year track record and then see if we wanted to go raise. And then COVID hit and it was like, all right, well, clearly, like everything got fanned out really quick. and then we basically like made a fortune on like the following sort of 6 months of it. And then we just like deferred ever trying to raise. So we got like, just like lucky with the pad dependency and like we hit that big bull market and then we just sort of haven't looked back. But like in theory, we were going to go out and like potentially raise in the beginning. Wow.

I didn't even know that about the beginning. You never said that.

Were you running Circles OTC desk? Is that right?

Yeah.

Was Ben Floyd over there?

Ben Flo was there. Yeah, yeah.

With Ben. Yeah. Interesting. There's some— I feel like there's some like, that early circle crew. There's some good, good folks who've gone on to do good things.

Yeah, there's been a lot of people now too. It's kind of wild. Like, I don't really know anybody anymore, which is like the sort of crazy part.

Yeah. Interesting.

Yeah. Wow.

But yeah, like, it just sort of was a timing. And then it just like the math didn't make sense to like bother. So we just kind of went with it.

Yeah, let's, let's talk Circle. Um, what do you guys, uh, you think Circle ends up IPOing in '25?

'25, I don't know, probably 25% chance. I think like in the current Trump admin, they'll probably be able to get it out.

Yeah, yeah, Kraken and Circle are probably ones to look out for if I had to guess. Um, I think it also, it'll come with a broader IPO, like kind of kind of trend. I think it wouldn't just be like endogenous to crypto. Um, but yeah, optimistic there.

I think they'll get out though. Yeah.

Did you see, uh, you see Coincheck? Just—

I did. Is it trading? It's today, right?

Oh yeah. So this SPAC has been— they've been working on this SPAC for like 3 and a half years, and it just got hung up in regulation. And I think this is actually— this, this story, like, I'm not really seeing it talked about at all, but I think it's really bullish news for the industry because it means these IPOs and SPACs can start going through again. So Coincheck is a big, what, Japanese exchange, I think.

Yeah, they are.

They're kind of like the second exchange to go public on Nasdaq. So it's live.

It started trading.

Wow.

Yeah, it's $13. I don't know what that is in market cap.

Interesting. So anyways, I think that's pretty bullish. What do you think happens in the crypto IPO markets outside of all the miners and MicroStrategy?

I think you're going to finally see some of these names that have been like hung up that are like at pretty big valuations, like push out finally. Like there's like, I don't know, there's probably like 15 crypto companies that are like well north of $1 billion that just like haven't been able to get public.

Yeah. Yeah.

But are they ready to go? Like, um, all right, let's run through the list. It's like what? Circle, Kraken, Chainalysis. But then there's, you know, Blockdaemon, Fireblocks, Blockdaemon. You think these guys are in a position to go public in the next like 2 years?

If we stay at these levels, probably. Yeah.

Yeah, that would be bullish.

That would be great. Yeah.

Blockworks, obviously.

Yeah, why not?

It's also a two-way street. Like, they have to want to go public too, right?

Where it's like, I think some of these, like, their early investors are just like, can you please start?

I mean, they're getting pushed. Like, if I'm Blockchain Capital and I've been sitting in Kraken for freaking 11 years, I'm like, guys, you gotta, you gotta do something. Something.

Fair enough.

Yeah, it would be good. Bring some permanent capital space, M&A market heats up, that trickles back to Series D, Series C. Yeah, it's—

it would be sick. Yeah, it is wild that it's only really been Coinbase outside of MicroStrategy and the miners.

It's crazy.

There's no permanent— that was 3 years ago. Like, that was— crypto IPOs, remember?

Public markets give you this permanent capital that you can then do things with, right? You can buy companies and it flows back to late-stage cap, late-stage venture.

So yeah, get access to fixed income price. I mean, like, it would also just be— there's so many of these early venture folk that like have just been sitting on these marked-up books for so long. So if they can finally like nickel some of that, that'd be great.

Um, Dan, why did you tweet this thing about Coinbase the other day?

What did I tweet? I don't even remember.

Um, that's a fun— oh no, never mind, it was about Andreessen. You said Andreessen was one of the largest benefactors of heavy—

yeah, all right, yeah, let's do this. So listen, man, when I, I worked at Kraken in 2013, so when I was there, nobody had a bank account. So like, Kraken couldn't get an ops account, they couldn't get bank account to basically even just pay bills. So the only person who had a bank account at that time was Coinbase, who A16z had backed and who basically leaned on SVB and said, you have to bank these guys, or I'm going to, like, whatever, yank all my other business from you. And that was enough that Coinbase had a bank and nobody else had a bank. So part of Coinbase is the fact that it's so dominant today and owns basically the entire US market. Is that they got to operate for years, probably like 2 years. They were the only people that had a bank account in the US, right? So they were the only people that were able to like onboard US retail and get them to like be able to buy and sell crypto. So they had like a monopoly for a couple years, and it was mostly because they were the only ones with like that banking relationships that was in there. So they were a benefactor of the fact that nobody else could get banked. And then they were obviously— look, I'm not like taking away everything Coinbase did, but it was a massive leap that they got forward. And I remember just being infuriated by it at Kraken because we couldn't get anywhere with any banks. We ended up with just only having this Fidor Bank in Europe, which is like why it was a euro exchange.

So anyway, that's why Kraken is so big in Europe. I didn't, I didn't know that.

Kraken couldn't get any US presence, so they had Fidor, which would give them a euro bank account. So they were just like, all right, I guess we trade euro Bitcoin. Like, that's what we're going to do. They did that for years.

I've always wondered why Kraken was so big in Europe.

Because they couldn't get US banking.

It's the only reason. Yeah. You open up your Kraken account. It's like Euro BTC. I'm like, I don't want to trade Euro BTC.

It's because that's all they had for a long time.

Yeah.

It's because Coinbase and Coinbase just dominated the US because of that.

Interesting.

So I don't know. I just think it's so funny to be like, oh, they're de-banking everybody. And it's like, yeah, I mean, like, all right, but let's be honest. Like you also massively had a windfall from this.

Like, yeah. And that was the start. I think it kept it like even with the BitLicense, right? I think to this day, I don't know if Kraken actually ended up getting one. I'm not— I'm unsure if Kraken serves New York customers, but like Coinbase went and did the thing, whereas Kraken was like fundamentally philosophically opposed to the BitLicense to the point of not supporting them, you know? And then it's like your friends in New York are like, hey, I bought crypto on this app. They know the one that works. So there's other things too. But I think it's a fair, you know, they're definitely weird.

Yeah, there are these weird things. It's like Who's got a BitLicense, right? Cash App, Coinbase, Gemini, Rob, and then Robinhood has it because they bought Bitstamp. And there's just this dude, Ben Losky, who like, you know, stamp of approval.

Complete sham. It's a joke.

Doesn't Losky run a consulting firm helping people get BitLicense now?

Yeah, I think he did it.

Right.

What'd you say? Yeah.

Is he on Ripple's board still?

Yeah. In any case, maybe during the Trump admin, that is one optimistic thing to tear that thing up once and for all. It's been just an absolute nightmare for, for particularly New York, which obviously sits close to home.

Yeah, that was Cuomo. Cuomo created that.

I don't think Cuomo was like, yeah, this BitLicense is good. Like, you know, he probably signed a little thing like they wanted.

They— it actually came out of a good place. I think they wanted—

they—

it was bullish crypto at the beginning when the BitLicense got created. They wanted wanted crypto to be like in the hub. They wanted New York to become the hub of crypto, so they needed regulation. So they created this thing and they were starting to give this BitLicense out to different people and then it just got squashed and they stopped giving it out to people. That's just that statement.

I was there at the time and then like they basically shut the door. They're like, all right, well, it does exist. We gave one out and then they just stopped.

It's like Anchorage getting the, the national charter or something. And then a day later they— whatever. What does Anchorage have? The national—

I think they have a bank charter, right? A national bank charter.

They have a national bank charter. And then like the next day, I think it was Biden's like, we're not giving any more of these out. Anchorage is like, oh, we got that in. All right.

Oh, right. The North Dakota one, I think. Or I don't know, maybe.

Yeah.

Yeah.

There's like OCC bank charters. Yeah.

It was like funny. It was like FTX was actually trying to get that. I don't know the exact details. I don't want to butcher it.

Well, that was the hottest thing. The hottest thing in M&A right now in crypto is, uh, are these regional exchanges that have licenses in like, you know, the Philippines and Thailand and all these places. Like, those are the— that's where the M&A is happening right now because, you know, people used to give out licenses. Now they stopped giving out licenses, but some folks, random people, just have them. So That's where the M&A is still happening.

Sounds like that filters into so many things for sure. Like just having the license goes to like cannabis, whatever.

Dan, where else is like weird stuff, stuff happening in crypto that people are unaware of? I like these stories.

Oh, like in the past? I don't know. I've—

no, it's a big question.

I mean, I— dude, it's like so— there's just so much going on now. It's like very impossible. It's like even so, I, I find this whole AI AI agent thing, mind-numbing. But like, that seems where like a lot of weird stuff's happening. And most of it seems to just be like people masquerading as pretending to be AI, which is like the funniest parts of me. And they're just like out there for some reason.

I met a founder who's doing that. It's worth real money. I met a founder who's got an automated bot, an AI agent on Twitter, and he's just ripping out tweets.

It's like he goes into ChatGPT and types something, so it's like, oh, it's an AI agent. Like, I don't understand it, but there's like real money moving through it right now.

Dude, it's kind of— it's why I've never seen more of a juxtaposition between like when you hear someone talk about something like, oh, I'm super bullish this thing. Oh, this thing's down 40%. Got to buy more, whatever. And then you go, you click it and you go to the Twitter and you just like scroll down a bit and you're like, dude, like, what is this? Like, this is, you know, it's like you have to kind of like inhale some glue before sitting down for the AI coins. I feel like, you know, you got to get in there and be like, you know, I'm just not going to think about this thing and like, wow, that's really funny. And like, look at how innovative and exciting this, this guy chatting on.

But you got to buy it so that your friends aren't more wealthy than you.

Yeah, yeah, for sure.

Yeah, exactly. Hotball of money Dan, I would say, is still very much alive.

It's been the last month in particular. It's been really roaring its head. Yeah. I mean, like, look, like there was weird stuff over the last week, like archaic stuff flying around.

Dino coin season.

Real dino.

Like, let's talk, let's talk dino coin. Do you think these dinos run the rest of the cycle?

Oh, that's a good question. Um, I think they'll continue to like have moments where they're like hot and they can like double over like a period of like 4 or 5 days, but like they'll end lower than they start.

Yeah.

Yeah, I think they'll just be instruments that get like wound up and like the closer they are to leverage, like the more moves they'll have.

I mean, yeah, Hedera is up 430% in a month.

Somehow HBAR has infiltrated the American mind of like retail, like the matter of regular people.

You have to go on— if you have not opened up TikTok, go to TikTok and type in crypto and you will see Ripple and Hedera just everywhere.

Yeah, well, Ripple and Cardano were the staple and like somehow HBAR got snuck in there. I don't know how it happened, but it did.

Yeah, yeah, good for them. It's been the Dino coin narrative. It's like, I would say most people in crypto, they're like, yeah, maybe they LARP and they're like, yeah, Dino coins are great. I'm like making so much money. It's dope. Like, you didn't catch every single one of these Dino coins. Some random 12-year-old on TikTok put out—

you caught it because you bought them in 2017, then you never had the balls.

You don't have it.

Yeah, you're like, oh, my Coinbase account. That's why, that's why you own, like, that's why you own Ripple.

You know, I mean, we do a lot of like, all right, look at the top 50 names, like what hasn't moved, all right, like we'll just buy that. Like, it's kind of how it plays out.

Yeah, yeah. And it's not even like that, it's like a little bit of the anchoring bias, like look at where the chart was in 2017 and look at where it is now. Like, look, there's like this huge gap, right? You just like pull up, but it's like the capital that's driving it up is not even— they don't even care about that. It's like unit bias stuff or whatever. Um, yeah. I think a lot of those things are maybe closer. They have less upside relative to some of the— I don't know, it's hard to say the majors. Like, for example, like Ripple traded $280. Like, how much higher does it go this cycle, right?

I've seen TikTok things in hundreds.

Yeah, $100. Ripple goes to $100, 40 bips of global.

I got a text saying Ripple could hit $1,000 from a friend who had just bought— just bought crypto for the first time ever. Like 2 months ago.

Yeah, that's— it's possible.

I mean, if no one sells, right? Like, hear me out. If everyone 3-3s, theoretically it could just go—

just buys a whole country.

Yeah, like, yeah, just like—

you think Ripple Labs IPOs?

I think they're gonna try it.

I don't—

that one will be a little bit harder, I think, to get out, but it's possible. They'll try. I will definitely try.

Yeah.

Yeah.

There's a lesson, which is just really never underestimate Ripple, whether it's the equity, the token, the people, the army. Just, you know, do not use it as your short beta hedge going back to that long short part of that liquid fund.

Yeah.

It felt like someone got carried out on that.

Somebody probably had it on.

Someone. Yeah.

So that's always like when Ripple rallies, I'm always like, gotta buy Stellar. Just cause like, it's just like, right. It's like, it's just right next to it and it doubles move. It's like so silly.

So now that the hot ball of money is just back in the system, I mean, like Pudgies are ripping. Pudgies, the Pudgies went from like $8 to $25 in a month. It's great.

Yeah. Well, they got the chain. Yeah.

They got the chain. They're getting some airdrop. You got the Abstract airdrop. You got the Pengu airdrop. Like, you know, you got all that.

NFTs are kind of back.

Yeah.

NFTs are back. Dino coins, AI, like basically hot ball, hot ball of money is floating around the system. Do you, um, for the next several months, do you think it's a good idea to be chasing these hot— the hot ball? Like, are you gonna make more money if you chase the hot ball, or if you just sit in like Bitcoin, ETH, and SOL?

If you're a regular person, sit in Bitcoin, ETH, and SOL. But if you're like going to be active in this stuff, you want to be like allocating to where it's going, not where it is.

All right, so where is it going?

Whatever hasn't moved yet. Like, I really do think that's like generally like the braindead way of trading this. Yeah.

For most people though.

So what hasn't moved yet? Like OG DeFi, like, okay, here's what hasn't moved yet.

Like none of that stuff.

Not like Aave, Aave, RAM, other things haven't run. So therefore other things should run.

Yeah. But it's like, I know it sounds stupid, but like that, that could be all there is to it.

Maybe some stuff in like Cosmos ecosystem.

Like, oh man.

Cosmos just had a big thing this week. Yeah.

Yeah.

Cosmos is the problem with the Cosmos stuff is even if it could run, no one knows how to get their capital there. Like we go on Osmosis. I'm kidding.

You got a little Kepler wallet. Yeah.

Yeah. It's a little more esoteric. All right.

Let's end with, uh, let's end with the conversation of how much money is enough to retire.

It's crazy. 'Cause inflation now, I don't know, maybe you need like $12 million.

So the context is that we had Buffett coming out and saying $10 million is not enough to retire.

Yes, fact.

Damn smart. How much is it needed to retire?

$12 million. No, this all started because my comment, because I said to somebody, you can't retire with $10 million. And I'm going to stand by my comment because my comment was, if you're like 22 years old and you made like a bag on crypto, like that money isn't going to last you as long as you think it is. And like people really discount how long they're going to live and how much money they're going to spend over the course of that. Death. That was my point, not necessarily like the exact amount. And then people are like, yeah, you can go live in the desert and like live on $5,000. And it's like, that's not like what I'm trying— not like it's not a hard number. I'm like, you just should prepare a little bit more for this. Like, don't be ridiculous. Sorry, my number's $12 million now.

Post or pre-tax? Post-tax, like 12 liquid straight up.

We never— it never even came up, which is hilarious because it's like a factor of 2.

It's a huge difference.

It's like we're arguing like without even discussing that aspect of it.

Yeah, yeah. I feel like in a major, you know, American metropolitan center or something, like 12 is probably there to like feel comfortable and never have to really look at things. It's crazy. Like, you know, inflation and price level are two very different things. And like that price level— price levels are never— they're never coming back for across the board, right? Like they just don't, right? So you want the same things, um, you know, you want that— that is very— yeah, you want the cubes.

If you need a $50,000 a month cube budget, you're going to need to work.

But also, if you go to Bali—

spend on cubes last cycle.

Oh, that's— let me look it up. Let me see if I can pull this up real quick. I— it's definitely north of 50 because like the 4 cube that we bought was like 40, I think, itself. My point is too much. I'd wager it was probably—

what is the— what is the most expensive purchase you made last cycle?

The— we— there's money we spent at the auction for the dinosaur. Like, it's just ridiculous. Like, besides, like, things you buy in your— like, it's like a frivolous purchase. Like, that would be it.

What do you spend on that?

We wired €250, which I don't know what is in, like, dollars back then. So maybe a little bit more.

300K or something?

Yeah, something like that. So that's what we spent on, like, this is the Big John dinosaur. Yeah, we didn't get the big— we didn't get the dinosaur, obviously. Um, we got like other stuff.

Yeah, at least you bought something physical. I bought the Pico top of a Zuki NFT, so there you go.

We bought, we bought, uh, we bought an Urbic Galaxy. That was a bad purchase.

Well, I don't know if it's—

I was looking at it again.

Yeah, yeah, that one is Urbic Galaxy, which is invaluable.

They don't like trade, though, is kind of the problem. Like, I don't even know where we market, but we paid real money for that.

We had, uh, we had Curtis, we had Curtis Yarvin on the pod.

Like, oh nice, you got the man himself.

We had Curtis on like 5 months ago and it was a ridiculous episode.

He was, he was one of the earliest on Bitcoin going back to that blog post. Yeah, savage. Yeah, he was like, buy $10 of it now. It was like a dollar.

I don't know, I have actually related to the $10 million question, um, You guys have both stayed— you didn't move to Monaco or Puerto Rico or some tax haven. Like, I don't know if you— Ro, we can cut this out if you're not comfortable with it, but Ro, you're in New York and Dan, you're in Boston. We can cut that out if you want. But like, you guys stayed in these, like, in these cities with high taxes. Like, what is the rationale for that?

I mean, the point of making the money is you can live where you want, right? Like, I don't think that's like ultimately Like, you want to— I mean, like, look, you could argue where you sort of want to be, but like, to move just for a tax reason is like ridiculous in my mind. Like, you should— the whole point of like making a good living or like making some money is that you can like live the way you want to live, not so that you can like go somewhere else and like live in some siloed structure that you can have like more. Like, I don't know, I think that's silly. And I've been here the whole time, right? So I've like paid the taxes along the way, not like I came back.

Yeah, the philosophy is really, I would say, just, you know, you could make more money and that does the same thing, right? But yeah, I don't want to come off as too detached by saying like, hey, like, you know, you need $10 or $12 million to like live comfortably. Like to most people that's like, this is a bit of a joke. It is a bit of a joke, right? Just to be very clear. And there are other countries, right, that have very solid quality of life that are much cheaper that might be perfect for you. It really, it's a personal thing, right? Like depends where your family is, what you want to do. Like, you know, if you want to go live in Bali on a, in a villa for nothing and spend $3 on breakfast, lunch, and dinner combined. Like you can go do that and it's like a very chill life and you might like it. Like, yeah, maybe your Amazon doesn't arrive the next day or whatever, but you know, it's fine.

Hmm.

Yeah. I don't know. You can also, like, if you're gonna eventually like come back to reality and like have a family, like you're probably gonna wanna be near your family. Like that's like a, I think that's a big problem for sure. Yeah. Like if you wanna just be a digital nomad and like, be single your whole life, like, fine.

Yeah, yeah. And when you think about other places, like, you know, America has it pretty solid. You got the—

it's pretty fucking great.

It does.

Like a big buffer to the rest of the world. You got a lot of resources.

Yeah, not, not— I mean, we're gonna— our impending fight with Canada, you know, or join us.

I don't think— I think it's gonna be okay with it. Wait, has anybody like pushed like Trump on the idea that like this would also massively throw off his like current like sway in the electorate? Like, like Canada is like very liberal. Like it would just like make the country more democratic.

No, he would be like, they're like Guam. They can vote symbolically.

Yeah. Like if you're actually a state, like the whole— thrown out of whack for him, like indefinitely.

They can vote on the Rockefeller Center tree color, but that's about it.

Yeah, you're seeing like think tanks put out pieces like the merger of the century.

Dude, I know people that are super deep on this. Like they've thought it out. They're looking at one, literally like maps.

It's very easy. You don't have to spend a ton of time thinking about it. Like we don't even really protect that border anyway.

Yeah, it's fine. Just, you know, like trade between Canada and Michigan, it's like just as important as trade between Michigan and China because of like the rotating automotive part and labor supply and materials. So it's like Canada's super intertwined to the US.

Yeah. Isn't like 80% of the country live within like 20 miles of the border? Isn't something like that?

Yeah, there's all sorts of things. And then like the lake here, I don't know. Yeah, that's some interesting YouTube videos on like you can judge the particularly like particular states versus Canada versus their trade with like someone like China. And it's like significantly more important.

I mean, this used to actually be a big issue in the, in the early US, like the American Revolution, Civil War, War of 1812. We used to always— it was like a hot-button issue. Should we, should we invade Canada? Should we take—

Yes, we should have done it earlier, but yeah.

And now, and then it just stopped for some reason.

Yeah, I could have like Louisiana purchased it probably at some point.

Yeah, exactly.

Like we did Hawaii and Alaska, and then it's like, all right, we're good. But we shouldn't have.

Yeah. Yeah.

Um, anything else we, we should have discussed that we have not covered yet?

I think you got it.

I think we got it.

Leaving Boston to speak at any of our 3 events this year? Nope.

Nice, bro.

Dan plays hard to get.

Maybe, we'll see. It's busy right now, you know, didn't end up going to Dubai or whatnot, but your 6 games of padel a week, you seem real busy. Yeah, they're at 7 in the morning.

This is why I don't have an Instagram. Nobody can call me out.

Cool. Well, appreciate you guys' time. Always a fun pod and enjoy the rest of the week.

Thank you.

Hey everyone, thanks for watching today's episode. Just wanted to quickly thank today's title sponsor, SKALE. SKALE really is one of the best chain experiences out there today, and I've used so many different chains. There's a reason they are gaining so much adoption in both gaming and AI use cases. Hit the link in the show notes to explore the SKALE ecosystem.