Building The Perfect Portfolio In 2026 | Tushar Jain & Pranav Kanade

Yeah, I think the market is just wrong. They're wrong. What you just said, Santi, of applications capture 60% of the value, but have a minority of the market cap. Uh, that to me, it looks like an opportunity that is very clearly an opportunity. Uh, and I think it's setting up for the pair trade of the next cycle is that. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only, and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the companies, funds, or projects discussed.

All right, gents, this is Monday, March 2nd. We had a pretty eventful weekend, even last week. As we record, oil is up. Iran situation is blowing up. We're going to talk about macro. We're going to talk about crypto. We're going to talk about AI. Tushar, Pranav, you guys are not new to the show. You guys have been around here for a few times. Excited to have you guys here and make it a really good discussion.

It's great to be back.

Tushar, I always like the phoenix, which is the emblem of Multicoin, which is, you know, Phoenix rising from the ashes. Where exactly are we in that evolution in terms of the market? Seems like a lot of stuff is on fire, but I'm curious, what's, what's the house view on macro and where we are in the cycle?

So I think we're at the point where the phoenix has already burnt down and is about to hatch, and the new little hatchling is emerging.

You mean we can't go down more, another 50% from here?

Uh, you can, uh, you possibly can, right? Um, I, I can't call the local bottoms, but look, let me zoom out and tell you like how I think about these market cycles is to think about what has changed and what hasn't changed. Uh, why don't I start with what hasn't changed? The things that haven't changed are human nature. Um, people let price lead sentiment. When prices are up, everyone feels like a genius, and when prices are down, they feel like morons. And human nature is to capitulate at the bottom and to buy in at the top. That hasn't changed. That's not going anywhere. Animal spirits and markets, not going anywhere. Uh, and we're very clearly on the lower end of that that cycle right now. We're seeing a number of large bull capitulations. Uh, we are seeing prices, uh, capitulate. We're seeing apathy. Uh, you have to remember the opposite of love is not hate, it's apathy. And we are starting to see apathy in the market, which is a good sign. It shows you that, um, a lot of people have just kind of given up or are washed out of it. Uh, But we've seen this before. We've seen this movie before. This is my fourth cycle. Um, for some people, you know, they've been around even longer. They've probably seen it 5, maybe even 6 times. I think there've been 6 total since Bitcoin started. And there's a few things that are really different this time. The past cycles in the bear markets, I will say I was, I had some deep fear that the industry was not going to make it. I was worried that, man, the industry is like maybe over. And now this time around, I'm not worried about that at all. Like they're just, uh, there's basically a 0% chance that the industry is over. Yeah. Prices aren't great right now. And, um, you know, that affects sentiment, but we have engagement with the largest asset managers. With the regulators, with the politicians, with the biggest tech companies, like everyone has underwritten this technology. And we are going to see all of them deploy using blockchains as financial rails. And so that's really changed. Um, and I think it's important to zoom out and remember what has changed and what hasn't changed.

Purnav, I want to get your opinion, but reaction to that first before I go.

There's a lot to unpack there, but yeah, I think I was going to kind of maybe approach that question from sort of two angles. And then, by the way, Tushar has seen more cycles than I have. So, um, and I think, I think he's— I think, Tushar, you're right that we're closer to the end of this bear market than the beginning. Uh, we're closer to, let's just say, the bottom than the top. But the two questions I, I generally ask myself here is like, have we had capitulation yet? And, and I think to give you an anecdotal perspective on that, I was at iConnections last week, and the last time I did iConnections was in 2023. And just comparing the two experiences, we had a ton of more meetings with, let's just say allocators across the board than we did in '23. And the general sentiment, and I think I would almost say even more qualified meetings. So like the '23 meetings where people just kind of like, Do I YOLO into this or not? And it was like, you know, 20% of the people I met wanted to YOLO into the asset class and then 80% were just outright dismissive. This time around, I want to say 70% of the people had some framework for understanding what blockchains were about. And they were genuinely interested in asking, is this a time they should start to deploy capital because they are underexposed or have no exposure? So I feel like there's. Capital on the sidelines that is waiting to come in. Now I can make the bullish case around that and say that must mean that we're closer to the bottom. But then again, I've seen the last cycle where people who wanted to buy the dip, um, ultimately all went away and said this asset class was dead and that was the bottom. Like that sentiment of like this asset class is dead is the bottom, you know? Um, and that was probably right after FTX, 'cause it was, so bad, the sentiment was so bad. And the question I ask myself is like, do we need one of those? Like, do we need like that, like, this asset class is dead type feeling? And I think you would probably say 2018 or '19 even felt like that. So I don't feel like, just anecdotally, I don't feel like we haven't hit that neg— like that negative sentiment yet. Doesn't mean we have to. Maybe this time we don't have to.

Well, that's— I think that my perspective is there's a very big wider dispersion. And historically, there's been a lot of correlation within crypto. And when you think about the investable universe in the early days, it's just Bitcoin, and then it was Ethereum and smart contracting platforms, and then applications on top of that. And now you're at a point where you have other products and ways to get exposure as an allocator. When people go to Davos and they hear Larry Fink talk about tokenization, question for you gents is, Where is that incremental buyer going to come from and what are they going to express the thesis for blockchain? And for me, like last year, I really restructured my book and said, okay, tokens are very broken across a wide variety of reasons because we haven't really been able to structure them as equity compounding instruments. The only things that resemble— the only things that have done well closely resemble equities like Hyperliquid.

Of the world.

But like, am I better off investing in Ethereum at $300 billion or Stripe at $100 or $150 billion? And really, who's going to capture and compound using this technology? Is it a BlackRock? Is it Stripe? Is it Figure-like businesses where you're sitting there and saying, I think no one discounts now the demand side of the house, which is Stablecoin is gonna continue to grow. It has very positive tailwinds with agentic commerce and, you know, just businesses and cross-border and what have you. Tokenization is gonna continue to be a thing. Like Wall Street's gonna continue to push the technology forward. Question is like on the supply side, block space is infinite and easy to replicate. Tushar, you guys were early investors in Solana. The innovation between Ethereum and Solana is zero to one. Ethereum and all the high throughput blockchains, I would argue not as meaningful, but we have like this plethora of blockchains. How do you guys position your portfolio to be playing? Like, yeah, I think everyone in the room agrees, like crypto's gonna continue to grow, but that doesn't mean that like Ethereum is gonna be worth a trillion.

Yeah, maybe I'll, I'll, I'll give you a framework and this kind of was maybe segues to like the, the when question and then the where question, right? So let's just say you do think we're kind of close to the bottom and you wanna start to express directional risk. Um, we both, Tushar and I both obviously do tokens, equities, kind of all the above. Um, the way we at least break up the where question is if you're gonna look at the top 10 tokens, then you wanna compare it against like large tech equity opportunity set and say, am I better off expressing the same view in a public equity or buying this top 10 token. 'Cause for the top 10 tokens, you need a lot of flows to drive meaningful price performance. And I could, I just have a hard time seeing a lot of flows coming into like, you know, some of the top 10, um, relative to like sort of, you know, the public equities. Now, if you look at like things outside of the top 10, like you go down from like, say token number 10 to token number 200. There's really interesting pockets of value there. So if you're finding a project that's like sub $5 billion, like it's very easy to imagine how that thing reprices from that sub $5 billion to like tens of billions. Uh, because all you need is marginal capital flows within crypto. You don't actually need like, you know, XYZ pension fund or whatever, trying to step in and allocate to that.

Um, I, I agree with that. I think you have to, do some, uh, segmentation across both the market participants, like Pranav is suggesting, and then also segmentation across the assets. I think it is inappropriate to look at crypto as just like one blob of things. I think that it's actually separating and we're seeing more dispersion now than ever before. So Uh, first, why don't I hit on, uh, Purnav's point of dispersion of, uh, the market participants. The sophistication of these participants has increased dramatically over this last cycle. We are seeing professional investors as opposed to amateur investors come into the industry, and professional investors understand that the thing that matters is cash flows. It's the discounted value of cash flows and then the terminal value, you know, discounted back to today. And that's what, uh, you know, we've all been taught this. All we studied this in school. Uh, and it's not a, uh, theory in the sense of like, oh, I think this is true. It's kind of like the theory of gravity, in my opinion. Like, I believe it is a fundamental truth of finance that assets are worth the discounted value of their cash flows, and you can get distorted away from that for short periods of time, but gravity always comes back. And I think that is what has driven a huge repricing in these tokens is we've seen the unsophisticated retail actors kind of get washed out. Uh, we've seen the people who are betting on narratives and momentum and using lots of leverage. Get wrecked this last cycle. Not the first time that this happened before, but we are now seeing that things that have cash flow and potential for cash flow are doing really well and are holding up. And no, are they at all-time highs? Like, maybe not, but they're holding up really well. Uh, yeah, look at it.

I mean, I got cooked on the timeline because, you know, I came out with this idea of price-to-sales ratio and PE ratios, and everyone's like, look, man, you're really overthinking this. Like, you gotta focus on network effects and Metcalfe's Law and new paradigm and, you know, future, like, you know, fat protocol thesis, new fundamental. Like, you're— I, again, like, I do, I maybe want to double-click on that a bit in terms of where you're seeing There was a really good report by 1KX that talked about value accrual flowing out to applications, whether it's DeFi or deep in. And you guys have both invested across the stack. For better or for worse, most of the concentration in market cap continues to be at the L1. Is that just telling you that when you think about what gives value to these things, it's not— 'Cause from a cash flow perspective, applications now, I think, command are capturing 60% of the value and L1s are not capturing as much, but the valuations from a market cap perspective, L1s continue to be the lion's share of it. And so there's some goodwill, memetic, social component that L1s are really good at doing that deep-end protocols and DeFi protocols are just not. So I want to just get your thoughts on like, like how you think about that.

Yeah, I'll respond to that. And also the IQ chart meme, which by the way is my favorite meme of like internet culture in the last decade, uh, at least. Uh, and yeah, I think the market is just wrong. They're wrong. Uh, they're valuing the wrong thing. Uh, and yeah, like what you just said, Santi, of applications capture 60% of the value but have a minority of the market cap. Uh, that to me looks like an opportunity that is very clearly an opportunity. Uh, and I think it's setting up for the pair trade of the next cycle is that because we are seeing the market participants change and evolve and we're seeing the mature investors come in to the industry, uh, we are seeing, um, the cash flows start to really develop, right? Like, you look at some of these protocols, like, uh, these DeFi protocols specifically, and DePIN protocols as well, these have real sustainable cash flows. You know, Helium has AT&T paying to offload data onto their network, and they're paying tens of thousands of dollars a day, um, to do that. Uh, you have Hyperliquid making, you know, hundreds of millions of dollars a year in annualized cash flow. And you're seeing things like Aave make, you know, tens of millions of dollars a year in cash flow. And that cash flow will be useful to drive token value. You know, one of the other things I'll push back on is there's been this common sentiment that cash flow being used to buy back tokens is inefficient because it didn't work. And I think that's just a load of crap. Like you have no counterfactual at all when you're making that claim. You have no idea what it would look like if those, those cash assets were not used to buy back tokens. And second, the purpose of a buyback from a company or a protocol is not for the company to make the best trading decisions and make the most money off of it. Of course, that's better if they buy cheap and then the price goes up, but that's not the point. The point is to return capital to its investors. That is the point. And so if it returns capital at a higher price versus a lower price, either way, it returned that capital to investors. Uh, and so it did its job. So I think that narrative is just, uh, it's just a bunch of, uh, crap basically. Yeah. Coinbase crypto-backed loans powered by Morpho empower users to borrow up to $5 million using Bitcoin. Or $1 million using ETH as collateral. Loans originate in seconds with no additional credit checks and competitive rates typically between 4 to 8%. Use USDC for down payments, debt refinancing, unexpected bills, and more. Repayment anytime with no fixed deadlines. Over $1 billion in loans have been opened through Coinbase to date. With the Coinbase app, you can manage crypto-backed loans loans with ease. To learn more, click the link in the show notes. As always, investments in blockchain technology involve risk. Terms and conditions apply. The Blockworks Digital Asset Summit is back in New York, March 24th through 26th. We'll have top speakers from leading asset managers, financial institutions, DeFi protocols, crypto companies, and policymakers all under one roof. Think BlackRock, Coinbase, Robinhood, and more. Follow the link in today's show notes to buy tickets and make sure to use code EMPIRE200 for $200 off at checkout.

Let's talk about, before I go to you, Pranav, like, look, you guys have been investors in Helium since kind of the early days. Um, and so like when you look at like cash from operating activities, I'm looking at Blockworks dashboard here. I find pretty reliable, like they've broken a profit now, like from operating activities in this year, or they're set to, they're burning now. And so they're offset, so they're making more money now than the emissions. So that's fairly positive dynamic. There's like a lot of discussions in the community around like this value leakage between like what is like the protocol and what is like Nova Labs, the entity. And I feel like they've done some work around that. What is interesting to your point of the market, you know, being wrong, like HNT's actually been an outperformer as of late over the last 30 days. And maybe it's that the market is really unappreciating it, but, you know, HNT's still like way down from its all-time high. I'm curious, as you guys like constantly— I know you're the kind of guy that constantly re-underwrites his thesis. Like when it comes to Helium, is it just that, that like it's The, the MVNO is growing, like the network is really strong, like they're offloading, like these things are, like these networks are churning. Um, but what is the disconnect? 'Cause like Helium, you could argue that the, like if you look at the MVNO and it has, I think over a million customers and you comp it against like a traditional MVNO, like Mint Mobile should be worth probably a bit more. When you look at the network and like it should probably be worth a bit more, but you know, it's sort of stuck in that even though it's outperformed the last 30 days. But like, what is, what is the, is there some truth in like value leakage and this disconnect between the entity and the token? And, or what is the causing like the network to be undervalued in your opinion? Or maybe you don't agree with that.

Uh, I do agree, and I think it comes down to one major thing, which is that markets hate uncertainty. And with the two cap table structure right now, markets perceive some uncertainty on value capture. Uh, and they're not sure what should I buy. And so instead of saying, oh, I'll buy a little bit of both, they say, I'm going to buy nothing because this is too complicated. And it's not like, you know, this is some you know, $50 billion asset or company that it's, you know, you're going to do all of the work to figure it out. It's still pretty small. And so people put it in the too hard bucket and then they move on and they just don't pay attention to it. Uh, the reason why there's a separate token and equity cap table is a regulatory hangover. It's because of when Helium launched, you couldn't have those things be combined. You had to keep them separated. Obviously we had all the regulatory battles, you know, Helium got sued by the SEC, um, with the SEC finally settling and saying no, HNT is not a security. Uh, so, you know, that hangover still persists. I do believe that Nova Labs and Helium will figure out a way to correct this and figure out a way to align all the value. We've seen a number of examples of this recently. You know, I thought Uniswap doing that recently was a good example. Aave, just the vote to do that passed this weekend for basically folding down AaveDAO and AaveLabs into a single entity. At least I know I'm overly simplifying it, but I think that's like the simple interpretation of it. And I think you're going to see this as a mega trend. Across all of these crypto businesses that have this regulatory hangover and have real revenues. And just like the markets hate uncertainty, they love clarity. Uh, and that could be a catalyst for repricing all these things where you're seeing, you know, like positive yields off of Helium burn mint emissions, right? Where you're seeing the cash flows from an Aave. Get redirected, uh, and just don't see any sort of leakage and everything is, uh, just like certain now, uh, I think that can be the catalyst to get this class of professional investors to be excited about these.

Pranav, I know you take more of a macro view, like what is the incremental flow coming from? Like, how do you see the world?

Yeah, I was going to say like there's a different I mean, slightly different lens you can kind of think about all this from, which is people want to buy assets that go up in price and they can make money on it. And I think the reason people gravitate towards L1s is you have this anchor, which is Ethereum, that, you know, has made people money in the past and that has this big market cap. And then any, like, people can very simply say this blockchain that I'm looking at has like better properties than Ethereum. And so, and it's relative value, I think the is cheaper, so I'm going to buy it and it, I think it's going to flip Ethereum one day or whatever. That's like an easier sort of rationale you can use to buy something. And that is what has worked in the past. Now this kind of concept around cash flows and all that, I think cash flows by themselves aren't a good enough narrative for people to run out there and buy some token. But I do think tokens get to an inflection point where their market caps and floats gets becomes small enough and the buyback becomes large enough such that the buyback itself can start to drive the price. And that's what's going to probably get people interested again. Now, like most tokens of the past that had some sort of buyback mechanism, they also had this other problem, which was their market caps were just too big. So if all you had to rely on was your buyback to only drive your price and no incremental net new buyers, then you're looking at something that needs to be trading at like 5 times cash flow for that to be the driver. And I use that as a proxy because that's what worked in the public equity markets. So go find any value investor and see when their portfolios did well. It's when like those holdings were like trading like 5 times cash flow. Um, until then it was all, all dead money, right? Um, so I think in general, outside of L1s, I think either two things need to happen. One is these market caps need to get down to a point where it's like at 5 times cash flow. Or what they're building needs to be so exciting for people that, um, and when I say exciting, I, I use that term relative to what's most exciting in the world today, which is all things AI, um, such that they want to go out there and buy that token. And so I think, I think that second part is most interesting, right? It's like getting net new people to buy your token is more interesting and is going to drive prices more than like the buyback stuff. But I see a path with the buyback stuff, which is generally if buybacks tend to drive token performance, which will happen at some point, then maybe that drives incremental net new buyers. But we live in a world today where people want, you know, returns in 2 weeks, not, you know, 2 years. And for that, you just have to have an exciting story. And most tokens don't have an exciting story at the moment.

Yeah. I mean, let's just like, I want to maybe round out this chapter of the discussion around like this idea of valuations in general, like what drives the incremental buyer here. We've talked about cash flows, like, look, we're looking at a dashboard here, Blockworks again, like the highest revenue generating protocols here, Hyperliquid at $800 million over last year, then Solana closely there around $720 million, then Tron, then Pump.fund, then Ethereum. These, when you look at it in a price to sales and then, you know, fully diluted or circulating, it's hard to really make sense of these valuations relative to the opportunity cost and the opportunity of just going and buying stuff in the public markets that has come down a lot. You're looking at SaaS total repricing from 15 times price to recurring contracted revenue down to 4. And so who, when you go to iShares or you're talking to LPs, sophisticated guys that invest across asset classes, I mean, do they like, what's the bull case for investing in an asset that's already worth $30 billion or $50 billion and is only cranking out like less than a billion in revenue? Like, I mean, you really have to bake in some pretty optimistic scenarios here of value really coming on-chain, and maybe you're sitting there on the weekend saying, look, look at Hyperliquid, like the perp on oil, like, you know, got some really interesting traction. Like, maybe that's a hyper bull case, but like, you got to discount that future state to today, and the world's really uncertain right now. Like, people are just not willing to pay for rosy projections. Uh, like, how do you make sense of this?

Like, I'll kind of frame how I sort of talk about it with, you know, the allocator types, and then maybe Tushar can share his perspective on that as well. So I— okay, so if I take a step back, active management only works if you can like destroy the market net of fees, right? And for lack of a better proxy, let's just say the S&P 500 and NASDAQ are like your market proxies. Um, and if you can substantially beat that benchmark net of fees, obviously adjusted for vol, then you shouldn't be running a fund anyway. So then, um, the question then an allocator should ask is like, can this manager being able to invest in both public equities and tokens over a long enough time horizon meaningfully beat the market such that it adds like torque to my portfolio? It's not a diversifier, it's just really this asset class needs to be something that can add torque to someone's portfolio. Um, and what I tell people is like, I think a bulk of the future opportunities will likely come from finding great businesses, which are likely in the public equity markets that can leverage parts of the blockchain stack to just make their business better. And that might end up enhancing the enterprise value by 5%, 10%, 50%, who knows, but ultimately you just want to own great businesses regardless of how much impact it will have for how much benefit they'll get from using a blockchain. And then the other part of it is that there's going to be a a ton of opportunities in the top 200 tokens where you can find asymmetric trades any given year. It'll probably be 3 to 5 tokens that have outsized performance for whatever set of reasons. And if you can capture one or two of those, then that's where you're going to get a lot of upside torque to that overall book. And do those two things really, really well, and then sort of generally managing the direction of the book can give you potentially much better performance than the indices. If you, if you believe those things are possible, then you should. I don't try to tell people about like XYZ token and cash flows it can do or whatever. Right.

I have a slightly different perspective on some of those multiples and how to think about them. Clearly, if you're investing in this industry, you're betting on growth. You're not buying any of these things, hey, you know, this is a private equity style buyout. It's going to have this huge cash flow yield. And, you know, um, I'm going to make my money back in cash flow in the next 5 years. Uh, like those investors are not here, nor should they be here. It's not appropriate for them. Uh, so you are betting on growth and you're betting that stablecoin growth will continue. You're betting that DeFi growth will continue. You are betting that Deepin growth will continue. You're betting that blockchains are fundamentally useful and are the right way to track transactions and assets and trades and capital formation across borders and across different cultures. It's just the most neutral way to do this. So that's what you're betting on. Then the question is, how do you express that bet? And I think the thing that you need to do is underwrite Where will there be sustainable margins? We just saw this with the SaaS example that you gave, where SaaS sustainability just went through the floor because AI, uh, has scared people into thinking like, okay, well, these SaaS companies are not going to be able to charge as much as they do. Uh, and the value has gone down. So you need to apply that frame over to crypto investing and look at Okay. Let's use the AI example. AI makes it very easy to code up a new competitor for any of these. It makes it easy to route between them. Uh, it makes it easy to, um, incorporate, you know, all of the underlying DeFi protocols into your fintech, um, business that faces the end customer, makes all those things easy. Who still makes money in that world? Right? When, when all the friction is gone, who still makes money? And I think there are two places that make money. The first is whoever owns a customer relationship. Because what I expect to see is due to proliferation of AI, we're going to see a lot more micro-focused companies that have just much deeper understanding of a niche set of customers than these broader companies, because it's just easier to create them. And then the second place that makes money is a place where there's a huge network effect. And there is a huge network effect to liquidity. It doesn't matter how easy it is for me to code up a new exchange and matching engine. It's damn hard to displace Binance, right? Like that's, that's an incredibly difficult thing to do. It doesn't matter that I can build Binance using Claude in 2 weeks. That, that doesn't solve the problem. Binance is still going to make a ton of money. I think the same thing is true on DeFi, right? If I want to go take out, you know, a billion dollar loan on DeFi, there's like one option, right? It's just Aave. Like there's nowhere else that you can really go that has that scale. Uh, there was others who are, you know, at the next scale down at the $100 million level. Uh, but it doesn't matter how easy it is for me to code up a borrow-lend protocol, uh, if there's one place to go to match borrowers with lenders. And, you know, with that liquidity and actually like the plethora of new people plugging into it because AI tools make it easy for them. They don't have to underwrite like, oh, you know, should I go to Aave or should I go to Morpho? Should I go to Kamino? Like, what should I do? They just tell the agent like, borrow for me at the best rate at the, you know, uh, best risk. Terms for me, and then the agent just does it. Uh, then what makes money is the thing that I'm talking to, which owns the flow, and then also the backend, which owns the liquidity. And I think you don't want to be anywhere in the middle. I don't think you want to be at the base layer either. And so that's why I think, you know, the big pair trade of this cycle is going to be apps versus L1s.

I promise I won't keep pulling this up, but this is, this is ranked by like lowest price of sales. What's interesting here is when you look at the, you know, 20 of these names, there's not a single one in here that is an L1 except Hyperliquid. And I think, I think, look, I've written about this. I do agree with you. It's a pair trade of the century in many ways. But like talking about like as it relates to your portfolio, like give me a reason, like why should you be holding any L1 when you can go buy Pump You can talk about meme coins are here to stay. It has established itself as a venue, as a launchpad. You know, it's sitting at a $1 billion market cap and it's cranking out $530 million in revenue. I mean, it's less, you know, price to sales is 2.2, 3.7 fully diluted, less than SaaS. Like, you know, when you think about what AI comes and displaces, it doesn't displace this affordability crisis and doesn't displace the casino element. Um, like, is, is the answer here like don't own LE, like short the L1 and just buy Pump, or buy, you know, Bananagun, or, uh, you know, Radium? Um, um, you know, Athena sitting interesting at 4 times. Like, you know, you talk about like stablecoins, um, you know, it actually, in an environment rates go down, Athena benefits as well. Like, I'm just kind of curious, like Um, you know, Camino, for instance, the difference between Camino and Aave, like, you know, Camino, I know you and I both are investors in it, like 4, 4.5 times price to revenue, and Aave is at 16. Like, help me make sense of the disconnect between Aave and Camino, for instance. Like, like, what is it? Is it just brand power? Is it like, like, Aave has way more liquidity, right? But, but But is, or is the answer here like just crypto markets are incredibly inefficient? Just, you know, be patient enough to survive and don't get liquidated.

Uh, that is absolutely the answer is that the markets are really inefficient and they're emotional. And you see emotional market participants go and drive prices to completely irrational levels. Some of these assets that you just named have idiosyncratic reasons why they're valued where they are. For example, PumpFun, great revenue. Uh, I do think meme coins as a concept are here to stay, but they have a huge unlock coming. Uh, and a lot of people are, are up massively on that investment. And so the market is just, you know, getting ahead of that and saying, hey, like, I don't want to buy this if I think there's going to be a huge amount of selling pressure coming in the next few months. That's pretty reasonable. And I think it's unfair to like say it should be trading at a higher multiple because there is an idiosyncratic reason for it. The other thing to look at is like, you know, on that dashboard you pulled up, it's showing trailing 12 months, but really what you should be thinking about is projected next 12 months, which in crypto is very different based on where you are in the market cycle. Pump Funds' projected revenue is probably going to be lower than the trailing 12-month revenue because in a bull market, those type of gambling meme coin things make way more money than they do in a bear market. Uh, and so you have to project it forward. We just don't have the sell-side research analyst coverage to have those types of estimates on a go-forward basis. Um, for something like, you know, Kamino, I think that there's idiosyncratic things there too. Um, it's, I think it's criminally undervalued right now. I own a bunch of it, uh, as you noted. and I think it's just criminally undervalued, uh, where it's at. And they've shown great real-world asset adoption. Uh, they are the leading borrow lend on Solana. Uh, and so I think, um, that just is another example of the market inefficiency. Uh, with Hype, it feels actually relatively fair where it's valued based on its cash flow. I think it has a great growth potential. We own Hype. Um, I do find myself very impressed with the business that they have built. Uh, and they are the first real derivatives DEX that I think is a real threat to the centralized exchanges. Uh, no one else has gotten to that level of scale before and then sustained it. Um, so I think it's really impressive, but also, you know, trading at about 40 times. Feels right in a, in a place where new competitors can pop up and there is regulatory uncertainty and all of this stuff. So like, I think, I think that's actually kind of fair where it's at. And so a lot of these stories, like you have to peel them apart and look at each one and understand why is the market valuing it at this level? And then do I think the market is wrong? And if so, why? Right? Like with Camino, I think the market is wrong. With Pump, I think it's actually very rational to not want to go and buy this thing before a big unlock. With Hype, I think the market's probably right. I think it feels about right here, you know, give or take some number of multiple on the revenue. So you have to, you have to separate it out. In a bull market, correlations are high and like you should be thinking about things kind of as like a trend and Oh, I want to buy this thing because it's a play on X and that's what matters. And narrative stuff really matters. In a bear market, you need to do the idiosyncratic underwriting. You need to try and peel it apart and understand the asset very specifically, and then understand where you disagree with the market.

I wanted to like, I hate to use the word double-click because people overuse that. But, uh, there are a couple of things you guys were both saying that I thought was interesting. So I'm curious, have you or anyone on your team played around with OpenClaw in the past, like 30, 60 days? Yeah. Um, so I haven't done that myself, but I have team members who have and have kind of gone down that rabbit hole. I'm just too afraid that it's going to somehow steal my stuff. But, uh, I have a member on my team who's very actively using it, helping it develop skills. And I think one of the takeaways generally was that specialized agents on, on OpenClaw are better than sort of generalized agents. So if you have one agent that you're like doing all this stuff, that's doing all this stuff for you, maybe that's worse off or worse agent than an agent where you say, your, your focus or job is to be the best YouTube content creator, and I'm going to add skills for you that will do that one very specific task really, really well. And then you create multiple sort of agents that can do different things for you. Um, so I was thinking about that and then I was thinking about the fact that basically the person on my team that is, you know, using Open Claw is not really using any user interface. It's just like a pure chat interface on like Telegram. He's like chatting it saying, book me an appointment for this and it'll go do it. Right. Um, I think we have an entire world today that is over-indexed to user experience. So people will use worse products if the UX wrapper is really, really good. Um, and so if I think about, you know, what this looks like 12 or 24 months from now, again, as it brings pertains to crypto, maybe the answer is like the UX that everyone's used to, or that is everyone that everyone's using, but might not be the most efficient product will ultimately end up losing. So the most efficient product that an AI agent will use for a very specific task will be the winning instrument or platform to bet on. That's one thing I've been, I've been thinking about, but I think one of the things we did as an exercise, and this is like a really dumb exercise is, you know, I think the future looks like that movie Her, um, in, in the distant future, because like, yes, I don't want to run OpenClaw on my Mac mini, but some company will productize it, make it really secure for me to use that experience of it. And you're going to probably have something that's like an agent app store rather than pure app store. And, and then the world end state looks like Her. If that's what the end state looks like, what are the bets you're going to make today? How would you construct a portfolio today that would win in that end state? So rather than get too caught up in like the metrics of different tokens, I think I almost have to work backwards from that end state.

Yeah, I like that, Pranav. Uh, and I would just say like in the Citrini research thing that made the rounds and caused quite the stir last week. Was that last week? Yeah. And they talk about this exact thing with regards to payments. And they say, you know, right now, the user experience of swiping your Visa credit card is the best user experience. But in a world where agents lubricate all of the friction out of commerce, they're going to find the most efficient way to do that, just like you're saying. And the most efficient way to do that is going to be a stablecoin on Solana paying, you know, zero gas fees, basically. Like that's going to be the most efficient way to pay, um, or on, you know, ETH or something, but more expensive there. Um, right. So you're going to see the agents prefer crypto rails because crypto rails are the most efficient, even if they're not always the most UX friendly.

But that doesn't mean the blockchains themselves where these stablecoin transactions happen are valuable as investments.

I agree with that. Yeah, definitely. I actually don't think stablecoin transfers deliver almost any value to a blockchain, uh, because they have to be essentially free. And so why does the blockchain make money off of that? I'm not bullish on transfers as a source of revenue. I'm bullish on trading as a source of revenue. I'm bullish on DeFi borrow-lend as a source of revenue. I'm bullish on derivatives as a source of revenue. I'm bullish on asset issuance. And therefore trading as a source of revenue. But really, it comes down to those handful of activities and nothing else, which, you know, I think is contra to what a lot of people were excited about last cycle, right? They were excited about stablecoin transfers. I'm, you know, I'm pretty bearish tempo. For example, the Stripe chain, like, I think it's gonna be a bunch of stablecoin transfers. Fantastic. Good for you, Stripe. I don't think that token makes any money because who's paying for stablecoin transfers? No one. No one's going to pay for that stuff. Right? Also, we saw all this experimentation around Web3 social and like, we're going to reinvent social media and stuff like that. Obviously didn't work out because no one's going to pay to click like on my post. That's just not a thing that's going to happen. Um, so too short.

You, you're a, I know you love history and you know, anytime I see obviously is not going to work, uh, I, I, I pay attention to that because you almost like, I think being contrarian is, is overrated. Uh, I do think in crypto it pays to re-underwrite again your thesis, like prediction markets. You could have invested in Augur and, and Gnosis and just missed Polymarket and, and Kalshi. You guys invested in Kalshi. I was a first investor in, in Polymarket. But you had to re-underwrite that thesis against a different technology, which is a stablecoin. Like, you needed a stablecoin to settle that bet. Otherwise, the user experience is absolutely broken. And you need to have like a very determined founder to do that. Um, talk to me about like when you say obviously Tempo is not going to work or obviously Social is not going to work. Like, give me why it would work. Under what circum— and it doesn't have to be those two examples. Maybe you're totally convicted that those are totally wrong. And Fast— Farcaster just returned money and we've had Lens also shut down. So like maybe social is again, network effects in social are very strong. You have TikTok, Facebook, and like, you know, everyone else is kind of an Instagram, but everything else is just kind of dead, including Snapchat. But like, what is it that Are there any sectors that you are particularly excited about that the market is kind of leaving for dead? Or is it more of the same, like DeFi is just going to continue to grow and invest in DeFi?

Yeah. So I want to clarify something. I'm not saying Tempo is not going to work. I think they're going to deliver something that does work. Uh, I just don't think stablecoin transfers make a bunch of revenue. And so the business opportunity there is going to be in all of the ancillary stuff around the stablecoins. Uh, and that will likely be captured by Stripe, not by Tempo, uh, because Tempo is an asset ledger that tracks transactions. And I don't think people are paying a huge amount of fees for those transactions. So it's going to work. It's going to function. It'll probably create a ton of consumer surplus. Its value capture is just really challenged. Um, and then with Web3 social, my view is actually different. It is, I think it does not function. I think it fundamentally misunderstands the customer. And the problem is it's inserting financial incentives in an area where people don't want that. Financial incentives work in an area with scarcity. And social media is not an area with scarcity. And it's not an area that humans have demonstrated that they want scarcity. We want abundance. And so you don't really see blockchains do well in a place or in an industry where the goal is abundance. You see blockchains do well where their job is to track scarcity, which is why I'm excited about two things primarily. And then you can zoom in and there's a lot of, you know, smaller themes of it, which is capital formation. So think of this as asset issuance. DePIN, I think, falls into this category. DePIN is capital formation. In an internet native way, but I group that together with other types of capital formation. And then the other is DeFi. And I think those things just continue to compound. And that's another fact pattern that shows the changing of the market here is the market in crypto historically has been people looking at what's going to be new, what's going to be new, what's going to be the new exciting thing. And I think this time, What's different is it's not about finding the new exciting thing. It's about underwriting the thing that is working and compounding. We've moved beyond the phase of, oh, there's going to be new exciting ideas. And we are now in the phase of build a real business that makes money off of ideas that actually work and compound and grow that business into a sustainable, long-term, uh, going concern, not just, uh, uh, hype machine.

Yeah. Bernard, before I go to you, can I, can I just double-click, uh, Tushar on, on Aave, for instance? It's trying to move upmarket, like be a neobank. Um, gun to your head, you can buy one asset. Would you rather buy Revolut or would you rather buy Aave? I mean, both have execution risks, but similar valuations. I guess like in, in a perfect world where Aave's worth the same as, I don't know exactly where secondary is, but like in a world where Aave is worth the same as you know, a Revolut, which one would you buy?

Uh, I, I believe there's a pretty significant valuation difference between those two. Uh, no, no, there is.

I think Revolut is like worth 100+ billion now, and Aave is what, sitting at 8? No, not even 2 billion now. I forget. But say, say you—

Aave today is, is 2 billion.

Yes, 2 billion. 2 billion. Okay, well, the, the standout on Revolut doesn't doesn't, but the question still remains, like, would you rather invest in a, in a, a Revolut-like that may utilize stablecoins for subsidizing transfer, like, like a new bank, right? There's these companies that are entering the market and reaping the benefits of a stablecoin and tokenization, including Robinhood. Like, is that a better asset to own versus like an AAVE that is trying to move upmarket and acquire these customers?

It's a good question. And the question, as I interpreted it, is, is it better to be lower in the stack, moving up the stack, or higher in the stack, moving down in the stack? Um, and I think both are valid. It's hard to say one definitely works. If I had to bet, right, like the strengths that Revolut has is that they understand their customer and they own the customer relationship. The customers go to Revolut. That's who they interact with. And Revolut can change things on the backend. They can verticalize and therefore capture more of the value that they create with their customers. Uh, so that thesis is really clear. Actually, my partner Spencer gave a presentation about this. Uh, it's on our blog, um, from our last summit talking about specialized stablecoin fintechs. And I think all these fintechs are going to adopt stablecoins to capture more margin. So I think that opportunity is really clear. The opportunity for Aave to move upmarket, I think, is harder. It is harder to get customers to pay attention to you and to care. But I think the opportunity for Aave to be a clearing layer for global liquidity around assets and borrowing against those assets in a secured way is much easier. Revolut can't go do that. Revolut is not going to be the money market layer. For tokenized equities, bonds, DPENs, and DeFi tokens against cash like that. They actually don't even have that opportunity. Really, no one's going to trust them to do that. That is going to be done by a protocol like Aave. And so which opportunity is bigger? It's really hard to say. Uh, I think the global backend opportunity is absolutely massive, uh, because without antitrust, enforcement ability to break up the scale of these protocols. I do think these are natural monopolies. These are absolutely natural global monopolies where all liquidity ends up coming together into one thing. Uh, and the front ends, I feel like are lower risk to own because they already have revenue. They own their customers. Uh, those customers are sticky, but that's not a global monopoly. Revolut is never going to be a global monopoly. They don't have a shot at that. There's no, there's no world that I can imagine where Robinhood owns every customer in the world. There is a world that I can imagine where a DeFi borrow-lend protocol is powering the vast majority of borrow-lend transactions in the entire world. And so last thing I'll say on this, I know I haven't actually given you a straight answer because it's really hard and you asked a very difficult question, is it comes down to the the valuation of these two things. Would I rather own Aave at $2 billion or Revolut at $100 billion? Uh, I think I'd rather own Aave at $2 billion, uh, than Revolut at $100 billion.

Purnav, over to you. You've been quiet for a while.

No, I was going to touch on the social, the Web3 social thing only to play contrarian because I would agree with, with, with Tushar that, um, like there is no product market fit there in the sense that customers don't want to be like looking at, you know, trading stuff on their social media feed. I think the approach had been, had been generally just wrong. Now, I, in December, I did rethink my, my thesis a little bit on this because, um, so, so I was looking at Zora as an example and I was like, man, this thing's such a missed opportunity because I saw, um, you know, this guy Nick Shirley and the thing he was doing in Minnesota really go viral. And he was on some podcasts talking about how he's never, he hasn't really raised any capital and there's all this interest from his followers for him to go do this investigative journalism thing, but do it in LA. And there's always been that opportunity in crypto where you can find interesting creators you like and you want to support them economically and have the ability to participate in the upside. Now, I don't know if that's like a regulatory thing that wouldn't allow it, but there's just this white space to create something like that where you can, you know, support creators and participate in their upside. And ultimately, you don't need to like own every piece of content, which is what I think what Zora has created where you can like trade every little content. I don't think people want to do that, but there is something there. I would love to see someone create a platform that captures that.

I was, um, I think every so months we converge on a narrative in crypto. Now I'm seeing the forget about humans using crypto, like crypto is made for robots, and, you know, latching on to the AI momentum trade. Um, so curious what you guys like, just zooming out a little bit. I mean, I think before we started recording we talked about a certain research piece. I mean It's pretty thought-provoking. Maybe walk me through kind of, you read that letter and you said, okay, feels like the world's going to blow up. Maybe not. But what was your immediate reaction to that? And did it force you to really recalibrate how you think about investing, where the opportunity set is, or, you know, Yeah, just, just kind of curious.

I think I'll, I'll pair that with some of just the things I'm noticing in the market, right? So if you look year to date, the hyperscaler stocks are all down despite the fact that they all kind of came out and boosted their capital expenditures by making the argument that, um, the capital commitments they have from like the labs, companies, and whatnot are, are so enormous they have to go spend all this CapEx. Um, so I think the public equity markets, at least momentarily, has stopped rewarding the biggest spenders from building out these data centers. And, you know, then, then you kind of peel it, peel that onion a little bit and you say, then what's happening? I think the market is also saying that the, the, the second derivative of growth. So the rate of change for capital expenditures is going to slow down. So, so yes, CapEx from hyperscaler spend is going to continue to grow, but it's maybe not going to be the same extent because nobody's getting rewarded for doing that. And the winners in the equity markets right now have been concentrated in maybe two areas. One is like these memory stocks and the other one are these photonics stocks because, you know, in a world where, um, you know, CapEx is what it is, the areas of scarcity where this, where there's a supply demand imbalance has ultimately pricing power and that's where kind of the marginal dollars are going. And so anyways, the, the returns have been concentrated in a very small group of equities. And so that gives me some pause on how quickly we're going to get to, let's just say, 10% unemployment or whatever that article was trying to say by 2028. Because again, ultimately the formula seems to be more compute and more data equals like smarter and smarter models and intelligence. Well, there are some things that are happening in the market that tells you that that might be a little slower than you would have anticipated. Um, so anyways, I read that article and I said, and I paired that with what, what's happening in the markets. And, and my takeaway was directionally right, but the magnitudes might be totally off, which can yield very different outcomes on how you set up a book. Because if you read that article and say, this is like where we're going to end up, then there's very few things in the world you can actually own. And you might, you know, end up with a very concentrated portfolio of like some very specific things. Versus if you say directionally right, but this is going to take a longer time to play out, then, then you can bet on the path of that, of how that plays out.

I completely agree with that last thing you said of you have to bet on the path on how it's going to play out. I think everyone who is looking at AI sees this is going to change like basically the entire economy. There's, you know, maybe a handful of things that don't change, but almost everything gets changed by this. The question is how, what timeframe and, and, you know, what is the path that we take? Uh, I thought the Citrini report was like well-written and it pulled on heartstrings and, you know, it like made you like really visualize like those people who have these jobs that get automated away. And I think that that created a huge reaction. However, it ignored a lot. Um, it ignored two major things. I think the first that it ignored is just the scale of monetary and fiscal policy response that we would see to something like this happening. Uh, you're going to see a lot of the surplus that is created by AI get redistributed back to people through monetary and fiscal stimulus, uh, because AI is a net deflationary force. It's one of the most deflationary things to ever happen. And that means that that opens up the opportunity for tons of stimulus without spiking inflation. And I think that's what, that's my base case. That's what we're going to see is we're going to, in an ideal soft landing type scenario, see stimulus ratchet up now ahead of big job losses such that it's very smooth. Uh, and by the way, as an aside, I think that'll be very good for asset prices, especially high beta assets, because you remember what stimmy checks looked like last time, like imagine that, but way bigger and as a continued program, right? So, so I think that's one major thing that it, that it did not really give enough credit to. And the second major thing that it didn't give enough credit to, and it's going to be somewhat controversial, is You can't automate away fake jobs. How many of these jobs are basically made up where it's like, we came up as a society with this rule that, uh, you know, you have to have these people supervising this type of task, right? Like you've seen the meme of the construction worker where there's one guy digging and there's like 10 guys watching, right? You can't automate away those 10 guys because that's a fake job. It was made up. By some regulatory regime in order to create more union labor. Right. And like, it doesn't matter how good the technology gets. You're not going to automate away fake labor. And I think that's also underexplored or ignored in this report is so many of the jobs that they're saying are going to go away are fake jobs. They're not, they're not real jobs in that they don't actually need to exist to do something productive. They exist. Because they're politically necessary. Like, do you think the dock workers that threaten to go on strike every 5 years are that essential? Or could we automate our ports like China has done? Like, we could automate them. We've still got the fake jobs. That technology has existed for a long time. Why does that not apply to the white collar work that, uh, you know, they talk about in this report?

I think that's an excellent point. Like, uh, like some things just don't change even though technology can theoretically change them. and, you know, human psychology doesn't change, uh, regulatory capture doesn't necessarily change. Um, I guess, I guess, are there— I know you guys spend all your time, most of your time thinking about crypto, but in, in your PA, um, you know, how do you position against that? Because look, my house view is like vol is only going to continue to go up because the world just sort of became more uncertain and Whether it actually becomes in practice more uncertain or the market perceives it to be more uncertain, it doesn't matter. It just will be more uncertain. And so go long vol. And, you know, there's, I think, a couple of things that you want to own if that's the case. But obviously, like, you know, the more simplistic assessment when it comes to framing it under the crypto lens is that crypto is just one of those industries that is hypersensitive to everything else that's going on in the world. And so good or bad, vol going up and what you saw in, you know, the SaaS apocalypse of a massive rerating. And then it's like every week we go through a particular sector where AI is going to kill it. I think like Howard Marks describes, it's like the market pendulum swings to extremes and we see that time and time again in crypto. I mean, Tushar, I think you guys have a really steady hand when it comes to investing in this asset class. But I'm curious, AI I think does introduce a little bit more uncertainty into the world. Is there anything that you feel very good about in terms of having in your portfolio that weathers against that uncertainty?

Yeah, so I think you asked PA because I, I think that's a, a better way to answer this question, right? Our mandate as a firm is to do crypto exposure. So like, that's what we're going to do, uh, in the fund. However, PA, I think about it a little bit differently, right? I, I think about one, if AI is this hugely deflationary force, that means having some cash or longer duration fixed income is valuable. Because in a deflationary world, that cash becomes way more valuable. So I do have a bucket of that. Um, two, and this is the more exciting, fun part, is I have, uh, a bucket of really moonshot type deep tech bets. Things that, you know, if, um, people pitched a few years ago, you'd say this is nuts. Uh, like this requires like 5 compounding innovations in order for you to actually deliver a product to market. And now with AI, I think that the timeline to those innovations has decreased because the most effective researchers and the most effective engineers have just gotten 100 to 1,000 times better and more productive because of this technology. And so I think those bets are underpriced right now. Uh, and so I own a lot of those like deep tech type bets.

Some are probably biotech, uh, like, uh, you know, protein unfolding kind of stuff, like research, new molecule discoveries.

Yeah, that, that's a big category of it. Um, you know, another theory that I have is I think we're going to see ASICs everywhere. Uh, because chip design has been one of the most human capital constrained things. Out there. So I think we're going to see ASICs for every kind of workload, basically, because you have AI designing the chips now. And now a tapeout goes from costing, you know, $50 million to, I don't know, a fraction of that. Um, also nuclear. I think nuclear has a ton of opportunity, not just because of demand side, because of AI, but also I think the innovations to build safe nuclear reactors will be faster because of AI. I think longevity, there's a whole set of like super moonshotty kind of opportunities that I think are exciting. I think crypto is really exciting because once again, I think it is the lowest friction way to trade or have capital formation. And I think AI is going to prefer the lowest friction way. To do those things. It's not going to go through the high friction, uh, kind of easy UX way. Um, it's going to go through the most efficient path. Uh, and then the last part of my portfolio, the last quarter is real estate because, uh, AI is not making any more land.

But, uh, so wait a minute, you're telling me my Decentraland is not going to be worth more?

Shit, man. I would have bought tons of parents. Do you still own that stuff?

Man, if I told you how many wallets I discover from time to time and I, you know, MetaDM and no, what is it? A Golem? Man, like it's just relics of the past. But anyways, they're NFTs now. For now.

Actually very similar to how you described it, probably for the same set of reasons. I was going to point to a quote that I had. I just tweeted last week after listening to that Dan Suntine podcast. He was talking about how this conversation, he has these conversations with some of his private company founders where he says, I have tons of cashflow, no terminal value. You have tons of, you have no cashflow and tons of terminal value. Um, and I was just thinking about that and I was like, that's probably a good framework to think about for all of us in terms of our personal investing. Um, You know, I think having a ton of cash in this world, you know, park it in T-bills or whatever, personally makes sense because as you can see, there's a lot of dispersion in the market. And when I look at even the, the SaaS universe, I can make a case that you're looking at some companies that are deeply undervalued at this point. Uh, they're not going to like, you know, disappear over the next 5 years and they're generating so much cash. So anyways, point is there's a lot of dislocation and having liquidity allows you to potentially take advantage of some of that in the liquid side. And if you're going to be illiquid, I think you go out in duration and, and make the moonshot bets. And then the simplest, simplest framing I have there is like, okay, let's assume we get to like this, um, world of AGI and everyone's got a ton of free time and ton of resources. What are the things humans would want to do? I don't know, space travel seems to be one. We want to go colonize other planets. We want to live longer. That seems to be one. Um, and we'll want to do sort of these in-person experiences. Um, you know, I don't have an investment in this, but I think it's interesting. This company Colossal Biosciences, I think we'll want Jurassic Park maybe, right? So, um, I just think like, I, you know, it's kind of like consuming sci-fi and then imagining that, um, and then finding interesting bets to make there.

Yeah.

Everything in the middle is just kind of noise, you know, like Private equity, like, you know, all this stuff is just kind of noise for me at least.

Yeah. I think the, the, there will always be an opportunity to have excess returns because humans, I think like human psychology is always very near-term focused. And there's also some things that just never change. Like human, humans will always want to differentiate and especially when you have more excess time and you know, like you can make the case, like if you're going to have hold one stock, I remember being asked that question time and time again when I would be interviewing at investment firms and I'd be like, probably like Hermès kind of like company. Like it's just humans. That's like, I can always bet on the fact that humans will, will, will always like a bevel and good because it's, it's the purest expression of like, I'm different and humans want to differentiate. Like, you know, to your point, I do think having cash is very useful because there's going to be continued to be dislocations. Where the market just treats everything in SaaS land the same. But like, you know, you remember when the Apple Watch came out and like people were saying, oh, like luxury watches are dead. Like Geneva is dead as we know it. Switzerland craftsmanship. I think craftsmanship, if anything, it had the opposite effect. Like there's just, humans crave more of the nostalgia factor. Pranav, you and I have talked about that a lot. Like just invest in those sectors that are really, really AI resistant. Versus like, I don't know, I don't know if I want to buy SaaS at 4 times because the per-seat model's going away. And like, one thing is clear, like credit cards don't work if you want to pay like on a, on a, like an agentic workflow kind of style. You'd probably use stablecoins. So I think, I think we're on the right side of the trade, like go long stablecoin adoption. How you express that may not be buying Pump or Solana. It might require rethinking how we like go along the stablecoin thesis.

Yeah, in a lot of ways, what you don't own is just as important as what you do own. Uh, right? In this world of, um, extremely passive investing, people just own everything. Uh, and I think you can outperform by just not owning certain things you think are going to do poorly. You don't have to specifically own the biggest winners. I like to own the biggest winners. Like that's what I want to do. That's what I enjoy doing all day, every day. But I do spend all day, every day thinking about investing and thinking about markets. Some of the listeners here may not do that. And, you know, the very simple, um, kind of heuristic I would offer them is sometimes not owning things that you think are going to do poorly is enough to generate outperformance.

Hey, Tujo, you're inverting right there. I love it. For now, I mean, we've covered a lot. I mean, I know coming into discussion we wanted to talk about sectors that we like, AI in the conversation, obviously stablecoins, the state of crypto. I don't know if we've touched much on, just as we think about rounding out the discussion, like things we have learned, um, or things that perhaps you, you really want to continue to double-click on, as you say, Pranav, like, hey, I feel like I really need to level up and have a better understanding of, or things you're really paying attention to. Just kind of curious if, as we round out the discussion, like, just if we can focus on, on that.

Yeah, I'll just keep one simple one. I never used to pay attention to technicals. I always used to think the people that draw lines on charts are kind of silly. I still do think a lot of that is very silly. Drawing lines on charts to then say when you buy or sell something. But I was just, you know, spending some time over the holidays thinking, just listening to a bunch of old Stanley Druckenmiller content. And I heard him say something in one of his older interviews that I thought was interesting. He said he never usually looks at the fundamentals first. He always looks at the chart, and if the chart makes sense, then he'll go look at the fundamentals. Now, I don't know if I'll go to that extreme, but I did build a bunch of tools for myself thanks to AI on what are the best kind of technicals to map out over— if your investment time horizon is 12 months, right? So if your investment time horizon is a day, then you're, you're, you're using a whole bunch of different things versus if your horizon's a year or 2 years. Um, and, and, and let the market essentially be the signal to you if something's working or not. So, you know, that way you don't end up with a completely contrarian portfolio where maybe one thing works and 9 things don't work and ultimately you make no money. Like that, it avoids that outcome in, in the world we're in today. Because the world is telling you where capital wants to flow, and, and using that as a signal is often helpful. So anyways, point is, I built a bunch of tools for myself to look at technical indicators over a 12-month time horizon, which I wouldn't have done, you know, a year ago.

So is this me reading into it saying you're long copper and just not, not overthinking, like, the most crowded trade now? Like, you're just long copper and call it a day? The same way you could have been long. I feel like there's an element of like, you want to be smart, you want to feel like you're smart when you make money.

Yeah.

And some of this feels dirty when you're just— it's like, truly, it can't be this easy of buying Nvidia and holding it for the last 3 years. And yet that was a winning trade. Um, I feel like, you know, I've seen, I've seen a lot of family offices, especially second, third generation folks, that they want to feel relevant, you know, they want to feel alive. So they go and do and buy the shit that Goldman offloads to them and that no one else wants, you know, and the reality is just to just punt the NASDAQ and the S&P and just focus on like having more free time to live your life, you know, but very few people resist like just, you know, anyways, um, funny story on that actually, this links back to meme coins, uh, to me because both of those things that you're describing meme coins and, uh, you know, third gen family office guy who, who who's buying structured products from Goldman because he wants to feel smart and how he makes money is both entertainment finance.

And what we're seeing is the democratization of entertainment finance. Before you needed to have like a 9-figure family office in order to do entertainment finance. And now you just need a Solana wallet and load up PumpFun and you're off to the races or you load up a prediction market or something, right? Like, It's kind of funny how that has now become way more accessible.

Yeah, the one thing I was going to say is, I, I, you know, we all use a lot of AI tools, right? And, and I asked, um, one of those, one of the models I use the most, um, like, I've spent a lot of time with you, tell me some areas of improvement for myself, or like, like, you know, blind spots for me, uh, and what it suggested actually was that cause it knows all my background and how I analyze things and all these things. It said, you're very analytical and you lean heavily on me for a lot of the analysis, but you should trust your instinct cause that's what got you here. So one of those lessons for me, I need to trust my instinct more.

True. I mean, I, I, I have resisted my, like for writing, I do wonder in a world where like if I continue to, I, I've now used AI more in my writing and The benefit of all that is I've been able to write more and I stopped writing cuz it was like the editing process I dreaded and now it's actually really, really useful. But I do think like, is my skill actually going down? Like my, my critical thinking and, and am I now second guessing myself? Like we all second guess ourselves. Like I, I think people would say like with more money or success, you're always gonna second guess yourself. Like Stan even talks about it in that like Morgan Stanley interview. But, but now it's like AI is taking that to a whole new extreme that I wanna stop myself from like constantly prompting the AI. It's like, Hey, polish this, or is this like, am I, it's like, no, sometimes you just, just do it. You know, it's, you know, it's human to make mistakes. Uh, Tushar, same question to you that I asked Pranav. Um, I can rehash it if it got lost in the train of thought, but it, it was really more around stuff that you're really focusing on. Um, on a personal learning basis, or, or maybe things that you've learned over the last 6 months, um, um, that have been really instructive, or where you're spending most of your time? Just very open-ended question.

Um, so I think AI has been the driving force for all of us on learning over the last 6 months. Uh, one of the things that I've been really excited about and I've been doing personally is just focused on health, fitness, and using AI tools to help me construct experiments for myself.

Right?

Like one of my beliefs, and I used to be in the clinical research world before I was in crypto. So I had some background in this. One of my beliefs is like clinical research is an industrial age process. It's designed to look at what works for everybody across a large set of people. And I think, you know, running experiments on a one of one is really interesting and powerful. Like, does this work for me and help me design that experiment? So I've been using a lot of tools for that. I've also then been using it not just for health, but for other types of coaching, right? Where I can just get like the world's best expert in order to help me improve and get better. And I think that's what you're going to see with an AI world is you're going to see people who have motivation and desire to improve, get better way faster at a whole variety of things, right? Pranav built these tools so you can track charts. I've done a bunch of professional-related stuff with AI tools too to Okay, now I can basically build on-the-fly sell-side research reports for any asset that I want based on a certain template and have, you know, separate agents checking each other, right? Like, that's really powerful and really cool to be able to just like say, oh, give me the research report for XYZ, and I just get that. But then I also think it's super valuable. Personally. Uh, and, uh, you know, I'll, I'll end with this. Santi, you mentioned that we've been particularly stable hands at investing through all these market cycles. And I think a part of that really comes down to personal psychology. And a big part for me, at least, is having a diversity of identities. If your only identity is, I'm an investor, and then when the portfolio is going down and the market's going down, you're going to feel like shit. And that's going to drive shitty decision-making. It's going to mess up your psychology. However, if you have a diversity of identities, that makes you much more secure and it allows you to zoom out and say, okay, well, this part is not going so well right now. That's okay. All right. I don't feel like my sense of my entire sense of identity is threatened. Because we're in a bear market. I'm not going to make some overly emotional decision. I can zoom out and then I can be much more rational because of that. And so I think that's been a big part of our success.

It's the most important thing I think we've touched on this pod. It's like, know what your identity is and it's not tied to a number or a particular— like your work. To me, I had to go to therapy in like one of the bear markets. I think it was 2017. And this psychologist, like therapist in New York was like, so tell me who you are. And I started rambling like, oh, you know, I used to work here and that, and I do this and I'm an investor. And he's like, dude, you've spent— and he was quiet for 30 minutes and he said, you've told me nothing about who you are. Like, go and actually write it down and you come back to me and tell me who you are. And I had to do that in many ways to like just become better at everything. Otherwise you're just stuck in what your identity is. It's just not a number. It's not like just what you do. But you know, unfortunately it's easy, it's easier to identify yourself with a particular, you know, type of work or a number. But yeah, I know it's certainly very good advice. All right, gents. Well, this has been a great discussion. Thanks for coming on. I hope we can do it again later this year. If the world doesn't blow up. But definitely appreciate you guys taking your time. I know you guys are super busy and I think this is a really good treat for our listeners. Thanks, man.

Thanks for having us. And I don't think the world's going to blow up.

So you said the Phoenix is rising now, so that's— we'll hold you to that. So here we go. All right, everyone, thanks. Thanks so much for listening. We'll come back to you guys with a weekly roundup and see you next time.