Can Crypto Bounce? | 1000x

The amount of effort that I had to put into figuring out these fucking settings. Jesus Christ.

We're technical people, Avi. We try to move money around internet protocols. This is low stakes.

I know, but like, it's honestly, it's easier to use crypto than it is to use Twitch to livestream. And this is the biggest bull case ever for crypto.

I agree. Who's building live streaming on-chain? Because this is a fucking disaster.

There is no bull or bear, although I did get a dog and his name is Baloo.

I think it's pronounced Baloo.

Baloo from The Jungle Book. Baloo.

And he's got The Jungle Book wallpaper behind him too.

Hold on, come here. He wants to say hi to everyone.

Hello, Baloo. Hello, Baloo, Mr. Jungle Book.

Yeah, it's B-A-L-O-O. Baloo. I just got him, he's 3 months old.

By the way, if this were 6 months ago, Baloo would be a meme coin already. Like, should we, should we kick off with whatever is going on with Pump.fun?

What do you mean, whatever is going on with Pump.fun?

I've seen a lot of stuff on crypto Twitter about how Pump.fun, the founders, uh, are earning a lot of money, and something about how nobody who uses it makes any money. Um, I'm not sure I agree with that. but, uh, it seems to be a little bit of a scandal, which I think is inappropriate because obviously if you create a meme coin, it's that like you're, you're not creating a business. There's no pretense around that. So have you seen some of the, uh, some of the hatred and loathing around meme coins and Pump.fund recently? Yeah.

I mean, the reality is that all of these things, they're just, they're just for the insiders. I mean, using Pump.fund, very few people actually make any money. It's only the coin creators that make money.

Yeah.

And the people, the people that buy are these people that are just trying to pump lottery tickets. I mean, you know, Murad kind of has gone off the deep end a bit in terms of tweeting about meme coins, but he is a good trader. But he has— what's up, buddy? He has some really good points. It's honestly, it's safer to buy a meme coin that already has an established crazy community than to try to gamble on something that's sub-$1 mil market cap. Because it's really, really, really difficult for any of these things to meaningfully break through. And I mean, a lot of people have strategies to actually trade these things, right? So there are a lot of people that during the last market, what they did is they would write these programs to automatically scan every new contract that's being put out and see if the contract is a rug risk, see if it's going to be you know, potentially a bunch of new coins are going to be created, and they would score them. They would assign a score to each new contract that would come out, and then what they would do is they would make bets on it. And if you don't do it in an automated fashion, I think you're basically in for a losing, uh, losing battle.

Yeah, I mean, basically what my experience with meme coins was, was I never understood Doge when I was a professional crypto trader. I didn't touch it because I didn't think that I could justify to my backers losing money on a dog coin, right? So didn't really participate in these sort of early memes. Pepe came out during this like nuclear bear market where it was very hard to trade memes. And again, if you're, you know, investing $10-20 million worth of somebody's, somebody's like prop shop tradfi money in a frog coin and you lose half of it overnight, like it's pretty hard to justify those losses and keep your job. So I missed Pepe. And then during this meme coin frenzy, I was more sort of like, um, solo personal trader. I just opened Twitter one morning, saw Bowden, started laughing my ass off and made a bunch of money on it and got out, you know, 50x higher than where I got in. But like, I don't think that's most people's experience with meme coins. I think most people's experience with meme coins is like getting shilled a bunch of garbage, trying to chase the next big winner, losing, not having caught WIF or BODEN or Pepe or Doge at the early days, or SHIB. And I think if you don't catch one of these early, it's just this sort of like random noise thing. Like, it's very hard to trade a meme coin once it's already a mega cap. You have to catch it early or you kind of have to stay away. Well, What do you think?

I mean, once it, once it gets to mega-cap world, like a Pepe or a WIF, the way that I think about trading these is that I buy them as leverage during periods where I think Bitcoin can outperform. And one thing that I, I think the most instructive thing that you can do with a WIF or a Pepe or any of these coins is look at the 4-hour chart going back you know, or even the 1-hour chart going back 3 or 4 days. And if it started to bottom out on the BTC pair and you're bullish on Bitcoin too, you can actually short BTC, buy these coins. And that's generally, you know, I, I think that makes more sense if you're trying to trade these things. They, instead of becoming an instrument of, okay, maybe it'll 10x, 100x, whatever, they become a very good levered beta play. On BTC. And that's how I treat them once they get above a billion, is it's just okay. Like, you buy, you buy— like, when Bitcoin traded $50K, $52K, and we were buying, it's like, okay, maybe buy some PopCap, maybe buy some things that seem like they've bottomed out against BTC as a leveraged beta play. But I would never really hold these things for a 3x at this point. It's just not the market environment for it. The only time that you're going to see these crazy moves from memes that are over a billion is if Bitcoin is at $90K.

Okay, that's an interesting—

there's, there's just not enough, there's just not enough money to actually push them up there. So the idea of holding a meme above a billion right now in this particular market environment, if you're a trader, just doesn't really make sense. I mean, you should be trading them and using them in the way that they're meant to be used, which is trade. Uh, there are actually a lot of really good I mean, there are a lot of really good pair trades in the market right now, personally.

I mean, wait, but so, so hold on, hold on. Before we get there, let me just try to understand this correctly. Let's say that I'm fairly convicted that the crypto market is going to take off to the upside in the next week, 2 weeks, 3 weeks, and it's going to go to $100K. Bitcoin's going to go to $100K. You're saying instead of buying Bitcoin for a trade I should buy PopCat, I should buy WIF, I should buy something that's like an established meme, I should buy Pepe or Doge because it's going to go up way more than like 60%, it's going to go up 5x or 3x or 2x. Is that kind of the argument? It's like when you're, when you're bullish for a trade, you're, and you're really convicted, this is like, this is like kind of cheap leverage with limited downside. It's like call optionality.

Oh, look, I'm never going to tell you that there's limited downside. Uh, sorry, I'm never going to tell you that there's limited downside to buying a meme coin, but at the same time, it makes sense to use them to trade when you're bullish, right?

So, you know, it's like that there—

there's, there's a lot of asymmetry there, where something like a WIF or a PopCat or whatever, on the initial move out of the bottom, if you're trying, if you're trying to bottom pick, they basically can go up 40-50%. And as was just pointed out there, you can't get liquidated on the position if you don't actually use leverage, right? So if you have $100, you buy it, you're getting asymmetric leverage on BTC, which is why people buy them. And that's why I think You, you know, if you, if you haven't been doing that, you should at least look at it.

Yeah, it's like a call option.

Yeah, but it's— yeah, exactly, it's exactly— it's like a call option, but what I'd say is like a 3-day call option. It's— that doesn't— I mean, it doesn't have any theta to it either, right? So it's just—

yeah, no theta, and the liquidity is amazing. It's not like you have to like call up QCP and get ripped off to trade this call option. Like, you can just buy DOGE and have like a much more efficient expression of that sort of like nonlinear payout. And I like that, I like that. And that's really, that's what I, that's what I use them for.

So I mean, you know, it's when I, when I got bullish, it's like, okay, let me buy some, uh, MU, WIF, POCK, all these like random, random things. I, I don't buy the small caps, and I would never even mention anything small, uh, because I don't want to, you know, I, I don't want to cause any trouble. But the things that are over a billion, for sure. For sure.

Yeah, I mean, there was a moment— this is like kind of when I went into hobby mode in my crypto trading career. Like, I, I was sort of like, there is a moment where it pays to get long low market cap meme coins, and that moment was when meme coins were sort of having their arrival, right? There was, uh, there was WIF that had just hit, there were a few other big ones, and then it was kind of like the entire world was investing, like the money fire hose was like pointed at this space. Everybody was lighting up a Phantom wallet. Everybody was buying. That moment is done. That doesn't mean that meme coins are dead. That just means that the way that your process for trading meme coins works has to, like, you have to update it. You have to update your process. So Avi, I really appreciate that because like my process for trading memes felt like a very, it was like, okay, the fad is happening. Profit from the fad. All right, the fad is over, get out. But no, you've kind of like identified a new way to think about this stuff, which I think is like super important. And you know what else is bullish? What's bullish is Baloo slobbering all over your, your white muscle shirt there.

Um, he's a very bullish dog, what can I say? Even though, you know, his name literally means bear in Hindi, but you know, he's a very bullish dog. He's 3 months old. And I'm going to teach him how to trade crypto soon.

Did you get him with your girlfriend who's now your Twitter photo? I did.

Yeah, that's, that's, that's a new, that's a new PFP.

Wow, amazing. Um, so, okay, so do we have, do we have any sort of like general broad views about crypto at the moment? Because I feel like I've been pretty convicted that it's going to break out for some time now. I've been kind of wrong. It's still locked in this earmuffs below this kind of dogshit range. And I'm not— I'm starting to lose faith that we're just going to go vertical in the near term because I think there's so much election overhang, which I really do believe is important for crypto. However, there are like all these kind of good tea leaves appearing in the market, the first of which is like, okay, despite what should be bearish news like Kamala and Leed, Kamala, you know, rumors that she's going to appoint Gary Gensler to Secretary of the Treasury. Like all of this, like horrible stuff, like crypto's performing right. You have like price action strength against weak news. Also like NFTs, they're not rallying even though people are saying NFTs are back. They're not back yet. They're just clearing like you're getting liquidity. It's kind of like what happened in 2008 during the housing crisis. When real estate was in freefall and nothing traded and then suddenly a lot of stuff was trading. That was the, that was like the first thing that you saw before a 15-year-long, like, giga bull market in real estate, which is sort of similarly illiquid to NFTs. Like now CryptoPunks are clearing, you're seeing like 15, 20, 30 of them trade per day. The floor is like leaking upwards. You know, they're like, there's signs but we're still in this range. I don't know, Avi, are we, are we about to break out to the upside, or is it, is it still like kind of complacency?

Well, you just said a lot. Yeah. And a lot of really interesting things in that.

Yeah.

So the first thing that I'll say is that I've been waiting for mid to late August for a very long time, and it's mid to late August, and nothing has changed except prices have gone lower, which is again what I was waiting for. And the reason I was waiting for this is because I think that Jackson Hole tends to be an event, especially over the summer. People want to de-risk. They don't want to think about the market. They want to step away. If the Fed hikes a little bit extra, there's probably going to be some nervousness in the market for about 3.5 seconds before the market moves on and starts to go up again. And so people just tend to step away during August. Now come September, Q3, what you're going to see is everyone comes back from vacation. Everybody says, okay, now it's time to actually do the things that we were thinking about over the summer. Let's start allocating to BTC, start allocating to ETH because there are these ETFs, right? I think that a lot of people that you would have expected to allocate to an ETH ETF or a BTC ETF They just haven't because you're not going to do that in August. And so I do think there are genuine flows that are going to come in in September. I think an additional point that I didn't consider back when I first saw this because I didn't know Joe Biden was going to step down is that Kamala has decided to step up and try to run for president. And Kamala's having her DeSantis moment, right? Everybody's— she's new, she's different. She's not Trump, she's not Biden. Everybody's talking about her and the media is pushing out this campaign. The reality is this woman is a terrible politician. She is so uncharismatic, she is so unlikable that once the public gets to know her more, I really think they're gonna get rid of her. They're gonna say there's no way we're voting, we're voting for this one, right? She's just not a good politician. She's not very smart either. So look, and I'm not even super Republican, I just I, I can't stand the idea of this woman becoming president. And I know a lot of people that are even Democrats that feel this way. They're like, there's no chance. So I, I do think that as Trump odds go up, as we pass Jackson Hole, as we get closer to September, you start to get, you, you start to get inflows into, into BTC. Now BTC has actually been lagging equities. Equities have retraced the entire sell-off. BTC, not at all. And so you have to ask yourself why. And it's because there are no, like, real allocations right now. And also, if you look at open interest, if you look at funding, it's all come off, it's all neutralized. People are starting to short, and everyone that I talk to is sidelined. People have raised cash. And so the moment this thing starts to go up and get away from them, I think all the shorts cover. I think all of the cash comes in from the sidelines, and we're back at $70K quickly. And then we probably have an October and November that we're very, that we're very happy about. Now, for the time being, I don't know exactly when this is gonna, this, this is gonna happen. I mean, it's possible that we trade down to 57 in the next week. I don't know. All I know is that if I buy 58, 58.5, 59, I'm probably going to be pretty happy in a month. And so in the meantime, to try to, you know, scratch that trading itch, there are a lot of really good trades in this market that I'm personally looking at. Tron has been talked about a lot. I didn't realize that it generates, you know, the most fees of any L1 blockchain over the last 90 days. They're starting to lean into the meme coin game. This is probably going to last another 6 days and then everybody's getting out. But it's a good trade for the time being. You can pair it against ETH if you want to hedge your market downside. Same.

I don't, I don't like any L1 other than BTC, ETH, and Solana for like a time horizon of longer than 3 months. I could see how you could have views for, on Tron for a few days, but like, to me, Telegram, like TON, is the most interesting kind of like mega-cap coin, and it hasn't budged since March. It's like unchanged. And so if that thing isn't rallying, I'm like struggling to understand how any of these other alt L1s will rally. Telegram actually has things like actual applications being built on it that have product market fit.

Like, well, like the one, the one thing that I was discussing today that's kind of interesting is that Tron, USDT on Tron is used pretty significantly across the board. If you want to go rent a Ferrari in Dubai, then you can actually go pay for that with USDT but it's going to be on the Tron network. If you want to go—

wait, why, why not ERC-20?

I don't know. I, I can't tell you why. I just know that they prefer Tron. And I know for, you know, actually I got a really interesting DM that says there are a bunch of people, uh, from Iran that live in North America that use USDT on Tron to send money back and forth. I mean, you know, probably should report that to the FBI, but You know, I just heard about it, so I haven't had time to do that yet. The other thing that's true is Latin— I just saw a comment about this, but when I was in Colombia, you could pay for like a bus, like if you wanted to like rent a car for like 6 people, like one of those like Mercedes things, you could just do it and try it. And so it generates a lot of fees. And so I think people are starting to wake up for this. The one thing that I'll say is I, again, I just to take a second, this is all hindsight. I didn't have a position in Tron. I barely own any of this thing. Uh, I probably should buy more, but if you look at the chart since May of this year, it's just like, I mean, basically since December it's up only. I mean, even against, against ETH since the bottom on May 27th on the ratio pair it's up 120%, and it really just took off in the last couple days, actually.

Wow, this is pretty nuts. I haven't paid any attention to Tron. Um, to me, like, the Justin Sun peacocking, uh, PR thing was sort of like, oh, you're, you're just trying to be a protagonist, you're basically the next SBF or Do Kwon or whatever. I just kind of ignored it. It was a bit cringe and retarded, but at the same time Like, yeah, by the way, product market fit. It's like this is the thing, Avi. I'll let you go in a second. I just wanted to like put this out there. There are green shoots in crypto right now. Like product market fit seems to be kind of blossoming everywhere and I don't want to sleep on it. Like Polymarket, product market fit. Meme coins, product market fit. TRON and EM apparently product market fit. NFTs, uh, you know, I guess you had product market fit in 2021, but they were priced wrong. Now you've got product market fit and it's priced, priced attractively. Like, something's happening here. I don't know, there's just all the, all these little corners of crypto that are kind of attracting usage in ways that we haven't seen before. And I wonder if it's just going to lead to this like, like, like you said earlier, like a disconnection from equities to the upside, which, as we've discussed on this podcast a thousand times, like, that is the FOMO moment. That's when, that's when institutional and retail money, fresh retail money, just piles in. Not the same washing machine of retail that's been in here for, for 5 years, you know.

I, I agree with you. I, I agree with you wholeheartedly. I mean, that's why I'm bullish, you know, long, longer term. I mean, I will say that if you look at, you know, I have the way that I, the way that I section out my trading, um, just to take a tangent here, is I have my fundamental core positions that I've done research on that I really like, that I want to hold for a long period of time. I have my long-short book where I put on things either for beta trades, like for example, if Bitcoin sells off a ton, I might buy a ton of BTC or buy a ton of Ether, buy a ton of SOL. And then I'll short— this is where all the shorts like, uh, StarCore and WorldCoin and SUI that I've discussed on a bunch of podcasts go. And then I have my real now book where it's generally just like catalyst trades or narrative trades. And catalyst trades and narrative trades, I always, always, always pair. And the reason I always pair them is because inherently in that trade you don't want to take a market bias because you're betting on a catalyst or you're betting on an event or you're betting on a narrative.

Are you, are you like long AAVE versus short Compound or something like that?

Something like that. I mean, that would have been a great trade. I didn't do it, but I mean, like, just as an example right now, these are two massive assets. I don't feel bad about talking about them, but, you know, CZ is getting released from jail in 40 days and I guarantee you like 2 weeks before he gets released, everyone is going to be talking about BNB and BNB probably goes up. And so I'm long BNB BTC. Because the chart looks good because of that. And, you know, it's not, it's not massive.

You know what I love about what you just said? That trade makes so— what I love about what you just said is that that trade makes so much sense. If you, if you, if you discuss a trade idea like that in the commodities market, you get laughed out of the room because underlying fundamentals don't allow those things to happen. But in crypto, you can literally be like, CZ's coming out of jail, no one's talking about it, He's probably going to do something. Maybe it's BNB-related. At the very least, there'll be a narrative. It should pump. And you're right. Like, you're dead right. Those sorts of trades work. It's super exciting. And that's what I love about crypto trading. Like, there's a lot of interesting blockchain tech going on, a lot of interesting ways that this technology can help move money and create the internet of value. But like, from a trading perspective, crypto trading has this beautiful thing where for certain tokens at certain times, you isolate out just the psychology, just the psychological element of trading, and you can separate everything else, all the broader market fundamentals away, and just get long BNB because CZ is getting released from jail and actually make money on that. Like, it's such a unique market in that respect. Every other market, those trades have been basically arbed out by machines, but not in crypto.

Yeah, somebody mentioned that the BNB-CZ trade is kind of crowded. I, I disagree. It's, it's up 15% off of a— let's see, it's off— it's up 15% off of a 5-month low against BTC. I don't think that's crowded, you know. It, it hasn't even reached the highs of, highs of this year against, against BTC, uh, but, you know, I don't think that, that makes it a crowded trade personally. One, one other person. I'm sorry, I love you. I don't know how to pronounce your name. We would have invited him on if we— yeah, if we like— we weren't so terrible with tech and I didn't want to like fuck anything up, I would have brought you on because I really, I really like your, uh, Fijian— sorry, I really like your, uh, I really like your takes. Uh, we'll, we'll have to do that next time.

Yeah, we'll have to figure out how to get people in here. We— I can see some friends of the pod in here, some, uh, some familiar faces in chat. This is amazing.

But I don't quantitatively hedge the positions because it's really difficult because those, those ratios are inherently unstable and we just don't have enough price history for me to effectively do that. So for example, the correlation between two assets might be 1 for 2 weeks and then go negative, right? It's, it's really tough in crypto and I've just noticed that there's a tremendous amount of instability. In these ratios. So the best thing that I try to do is, you know, you calculate the beta to the asset and you try to think about how the market environment would affect that. And then you can, you can come to your conclusion. You can either do 1:1, maybe do a little bit more, maybe do a little bit less. But I don't ever— what I don't do, for example, is I don't say, okay, well the position has gone up, now let's rebalance, make sure it's still beta-adjusted hedge. I don't do that because it's, it's very, it's very unstable.

Yeah, you need to balance those trades for you.

Yeah, exactly.

Better not to do it yourself.

So I think that right now, the, the other, the other trade that I kind of, I, I kind of like, I mean, I, I like, uh, the AI trade. I mean, Nvidia Nvidia went up the entire way, uh, back. It's like up 30% in 5 days, uh, and, and AI coins haven't really done much. And I think that if Bitcoin gets above 60 and holds, you probably get a resurgence of that narrative. The one thing that I'll say is that Wolf has done really well. Oh wow, that's crazy. I just mentioned Wolf and then somebody typed in Wolf. But yeah, Wolf, Wolf is, Wolf is doing really well. Druckbot, Soros bot. And I think it's— I think it's still underpriced. I've, I've held that position for months at this point. I, I've been accumulating it for, for a while. I really, I really like it. I really like the management team. I like their— I like their expansion plans.

I like their cost of capital. Just for the people who aren't versed on this, what is Wolf and why do you like it? Like, what's the, what's the elevator pitch?

So long story short, Wolf was a Bitcoin miner. They're also signing contracts to build AI data centers. They have a, they basically have a plan to expand that is a very good plan, and they have a very low cost of electricity, and they're moving into the providing HPC compute for people that need it. Yeah, I think that they're going to do very well here.

Okay, so a lot of miners— let me just poke one hole in your thesis— a lot of miners are pivoting to AI. Uh, the miners are all as crazy and competent. The miner space has ripped, like, PE ratios. I don't have my Bloomberg in front of me, but they're high. So why, why Wolf? Why is Wolf priced for a rally? Is it a pure narrative trade, or do you feel like Wolf lagged and they have a better plan?

So I mean, they— I, I didn't want to get too into the details here, but they basically have a site, it's called the Lake Mariner site, and it is an extremely valuable and underappreciated asset on their balance sheet. It's going to take a while to convert it to you know, and actually, actually provide these services. But I don't think the street has quite appreciated how much they're going to be able to provide from that, from that site. It hasn't really been, you know, talked about enough. And that's why, that's why Jocklin and Soros are coming in. I also think that the management is really good. So the guys have been in the electricity business for 30 years. And you can't really say that about any of the other, any of the other miners. And so the management team, I think, is just a lot more confident. And so that's why it's really my only, it's like the only, it is the only miner that I hold.

So it's like our new Coinbase that we should, we should look at in, you know, TradFi markets as a, as a kind of crypto, crypto proxy slash AI proxy. Interesting. Okay. So here's my take on, you mentioned the word electricity, which I, I'm really I'm glad you brought that up because I have a take on this. Basically, I think that the way that AI is going to scale, like the way that it's going to consume compute, is at first, they're like the demands of AI search, which consumes something like on the order of 10 to 100x the magnitude of energy of a regular search. I think that at first, centralized providers of compute like Wolfs, like, you know, OpenAI, like Google will be able to keep up because I think that these operators can source the GPUs and source the, the sort of silicon that they need to run our sort of current level, like humanity's current level of searching needs. But as like the volume of queries that the world currently pipes through Google shifts from Google to like AI engines that contextualize the search and consume 10 to 100x the amount of energy that Google does per query, um, I think that basically centralized operators are no longer going to be able to handle Uh, well, they may be able to source enough, like, semiconductors to handle the compute, but they won't be able to power them in a cost-effective way. So basically, my thesis is that it's going to be electricity, not compute, that drives AI into the world of decentralized computing, i.e., crypto, basically. And I think that BitTensor, like, chief shilled us on this, the more that I do my homework on BitTensor, and I don't like adding core positions without doing a lot of work. The more work I do on BitTensor, the more I'm like, I think this is the platform that's going to provide compute in a year or 2 years when the query volume goes exponential on AI. And just to finish out the thought, It's like every schmo is paying for electricity in their apartment. They're not going to notice if their GPU consumes a little bit more. But like, you know, so I think that basically the way that AI queries need to scale is a horizontal problem. Horizontal scaling means that like every Joe out there is mining a little bit of Tao, trying to earn a little bit of this distributed computing revenue that's going through the internet. It's not necessarily a problem that can be solved with vertical scaling where like one operator just buys all of the GPUs and sources all of the power. I think the GPUs will be available in significant quantities to centralized operators, but electricity will not, right? It's, it's too, it's too complex. You need, you need to, you need the electricity problem to be distributed. So I think that it's actually a commodity question that's going to cause AI to go decentralized. And I think that BitTensor will, will benefit not because of the compute necessarily, like the compute is there on BitTensor or in centralized modalities. It's really the power that's going to force AI into the land of decentralized computing. It's a nuanced take, but I like, to me, it's kind of crystal clear as a commodities guy, you know?

Yeah. I mean, that, that, I mean, that makes sense. That makes sense to me. I'm, I don't really know how you draw the connection between the decentralization of electricity or the decentralization of AI happening because of electricity and how BitTensor necessarily benefits.

Yeah, basically what I'm saying is like there's going to be a baseline network of providers of compute, powered compute for AI queries. That's going to be a network of centralized providers that we've discussed already. But then like when demand exceeds supply, you need some sort of marginal producer of powered compute to come online. And that marginal producer is probably a random guy somewhere in the world. Right.

And I think that, that, that is, that, that, that is fair. I mean, regardless, regardless of how this specific thing plays out, I'm fairly confident that over the next 3 weeks you're going to see a resurgence in people betting on AI just because of how well Nvidia did, uh, and the fact that people have, haven't really caught on to that, uh, in the crypto markets yet. I mean, even today, like, AR, AR is up a ton, uh, doing, doing very well relative to the rest of the market. I think you can run all these as pair trades. But just to, just to take a step back for a second, the move into decentralization, I think, is just, it's always going to be forced by costs. That's why, that's why people are doing it. Is because in a globalized world, it makes sense to be able to— it makes sense to be able to run things in a decentralized manner. And in a world where, you know, technology— every day that goes by, technology allows a human to do more and more, right? And so the leverage that you get from using a computer today is way more than using, you know, a pen and paper 200 years ago. You could do a lot more. Like, an individual human can do a lot more. So when you think about something like providing, I mean, I'll use Helium as an example. It's been, it's been beaten to death, but it's sort of coming back, coming back now. It was never possible before for an individual person to provide wireless services to somebody just by buying, you know, a piece of hardware. It just wasn't, it wasn't possible. That technology didn't exist. And so now that it does exist, you can provide lower cost services through decentralization because it's easier for one person to provide that service as technology improves. And this is also what AI is doing, right? It allows one person to provide a service that they couldn't necessarily before, which makes sense to have a marketplace that's decentralized. So you can sort of go out there and now, you know, instead of having to aggregate a bunch of people in one area, you can get individual— you can get the same output from individuals that are all over the world. So it just makes— it just makes more sense. Again, one of the reasons I'm super bullish on Helium. So, um, I mean, I— like, that's— like I said, I love— I love Helium. They're actually adding— they're adding something like 400 subscribers a day right now.

What? Yeah, really? Are you serious? Where?

Uh, you're on a date? Helium Mobile? Yeah, I'm just making sure that I got the numbers right. But year-to-date, Helium Mobile has added almost 80,000 new subscribers, uh, which is crazy. AT&T and Verizon, they've added about 550,000 new subscribers. So Helium is already, is onboarding, you know, a little bit, a little bit more than 10%, 13% of all the subscribers.

That to me, that's like, if, if this had— again, more green shoots— like, if this had— that headline had hit the market in 2021, Helium would be up like a bajillion percent on it. And now people are literally so jaded with crypto that they're just like Well, show me that Helium has just intermediated AT&T, and then maybe we'll consider buying the token, you know?

Right. Well, it's totally outperformed the market, I will say that. And it's, you know, one of the things I'm most proud of holding because I actually think it's solving a real problem in this world, you know? I'll say that there's somebody— somebody asked a question here, uh, brother, your wormhole and stuff are going to zero. I agree. I mean, bridges and L2s, basically zero.

It's infrastructure no one wants or needs. Like, there was an undersupply of block space and an undersupply of infrastructure for like 10 seconds, 3 years ago. That era is over. Now you have an oversupply of block space. The world is like, okay, so it's nice that you can bridge from L1s to L2s. Like, it's nice that the Cross Protocol is there to help you get your assets onto Base cheaply from the mainnet. But like, in terms of cross-chain protocols, man, dude, the reality is nobody cares. Yeah.

And L2s are cannibalizing ETH. And I think that we're just going to see activity congregate onto specific chains. Chains. So things like Solana, Telegram, maybe Ethereum, although, you know, again, I'm still bearish on Ethereum just generally. I think the, the user experience is pretty bad.

Over, over what? Should I sell all my ETH and just rotate it into Telegram?

And my personal, my personal view is that there's no reason to hold Ethereum anymore. We've talked about this, I don't, I don't want to, I don't want to rehash it.

No, we've actually talked about the opposite of that. Like, we've talked about how ETH is hated and it's coming back. We've never said that it's over. You know, that's a— that's a spicy—

every, every time I have made this argument, I have said that ETH is bullish in the short term because of flows, but over a long period of time, I'm very bearish on Ethereum. This has been my— it's been a very clear stance of mine from the beginning, is that yes, it can do well because of flows over a 6-month time frame, but over a 5-year time frame, I see no reason to hold this. Interesting, uh, personally, you know. So I mean, yeah, I, I, I just see it losing really badly because again, its user interface is not, is not great. It's not, you know, the lack of leadership I think is very worrying. It's a completely decentralized network, sure, but if there's nobody— Bitcoin doesn't depend on BD as much. Because basically what you have to do with Bitcoin is— what gives it value is you buy it and you hold it. So if I go to people and I say, hey, I bought this thing, you should buy this thing because it's a digital gold, because it'll protect you in times of inflation, because it'll do all these, you know, amazing things for you, it's you know, it'll save you if you need to flee in the middle of the night because Jew hatred is getting too much. It's— you just have to buy it. That just gives it value. Ethereum needs people to build on it in order for it to have value. And if you don't—

People are though, they're just building on L2s.

Well, kind of, but even L2s are, I think, under— I mean, L2s will cannibalize—

Stablecoin market cap is at all-time highs. I don't know what percentage of stablecoin transfers occur on Ethereum, but I would guess— or in Ethereum L2, but like I would guess significant percentage of it. Um, Polymarket, you know, I guess, you know, there's plenty of stuff going on.

L2s can take off. L2s can get interesting activity, but they're going to cannibalize ETH. And this is what we've been saying, or, you know, I've been saying for a very long time. A lot of other people have been saying it. Everybody kind of ignored us. Um, that everybody that was invested in L2s kind of ignored us. But the reality is that L2s cannibalize activity on ETH and they don't provide enough. They don't provide enough fees to ETH to make it worthwhile.

Yeah, they're uninvestable too. So L2s just kind of play spoiler, right? Like their own tokens suck and they make ETH less valuable.

NFTs are like— L2s are like the RFK. They're like Ross Perot. They just spoil it for the main guy and then make them lose.

So basically what you're saying is I should keep my CryptoPunk and move all of my other Ethereum assets.

I like, I like, I like NFTs. NFTs are great, but only, only the ones that have real history and real provenance, like your relevance, as they say, and cultural relevance. If it's culturally relevant, sure. Like my, you know, my EtherRock, like Rock83 culture, it'll be—

wow, this comment section is Great. I like— for all— I think this Twitch setup headache was worth it. This is fun.

It took me so long to figure it out, but I finally figured it out. The tech setup was a fucking nightmare. Like, I don't— I don't know what I'd rather do, have Campbell be president or go through that tech setup again.

We have a guy on here who's literally like offering to be our new engineer. This is awesome.

Anyway, like, I mean, this guy— I mean, I'm— I'm down. See, the thing is Just to, just to talk, you know, about the general market one more time, because I see somebody, you know, wanted to hear about that. My view is that we're going to have a great, great, great year. And just to talk about the equity markets for, for a moment, people are worried about if Jackson Hole, maybe, maybe they hike 50. It doesn't matter because What matters is growth. What matters is the data. What matters is the, you know, ever, you know, the inflation, unemployment, earnings. This is what matters. And I think at this point, the Fed raising 50, the, the room temperature take of the Fed raising 50 points is that the Fed is made up of these very— hold on, hold on. The Fed is made up of these very smart guys. And they know something that we don't. And so that's why they're raising, they're raising 50.

Cut it.

So yeah, sorry. Yeah, cut it. And I keep saying raising because, yeah, my bad. Cut it. So that's, that's what, that's why they're cutting 50 because, because these guys are— the reality is they're, they're not and they've proven that they're not. And, you know, real money doesn't even follow that anymore. It'll be a, it'll be a blip. But the only thing, the only thing that will really change this is a deep recession. In my, in my, in my personal opinion, that's not coming. And that's not coming based on, based on the data. That's not coming.

Basically, what it would take for a big recession to come is policy error. You would need, you need Kamala to get elected and institute price controls. You would need Trump to get elected and put like 80% tariffs on auto imports or something crazy. Like you would, you would need policy error to cause a recession at this point, or a massive commodities supply shock, which I don't think is going to happen. Like, I think Iran wants détente. I think Russia and Ukraine are more likely to like end the war next year than not and flood the world with hydrocarbons. Like, honestly, like, I just don't see a recession. I'm a macro bull right now. I like all equities, especially on dips. I think that against that backdrop and against the backdrop of rates going down, like crypto, the macro tailwind for crypto just looks insanely good. But, but like I say crypto, I really mean Bitcoin. Like what I'm worried about, that when I look at my portfolio, the toxic risk that I'm worried about, potential toxic risk, is like, is my ETH allocation, which is substantial, going to become a flaming pile of elephant shit, or is it just gonna, uh, skyrocket past Bitcoin and go straight to $10K and outperform like crazy on institutional adoption with a more friendly SEC? Like, it— to me, it feels binary. I don't know what's right or what's wrong, and I'm getting a little uncomfortable with that piece of my portfolio. I'm thinking Like, I, I go back and forth. Some days I'm like, Trump's gonna win, the SEC is going to get friendly, institutions are going to start selling, somebody said it's going to the moon. And then other days I'm just like, why do I even own this thing? Like, I want to get out of all of it and rotate it into other things that I'm more excited about. What were you saying? Somebody said what?

Yeah, sorry, somebody said that, um, 25 bps on the S&P is shockingly bad. Why is BTC underperforming both NASDAQ and gold? Uh, one, BTC really never follows gold. Like, if it follows gold in very short periods of time, but it doesn't actually— you know, if you look at correlations over a month-to-month time frame, it doesn't really follow gold. Mainly follows NASDAQ. And the reason is because there's just less people looking at crypto and less allocation into crypto than there is in, in, into equities. And a lot of the people that sold crypto, like, sold and are just waiting, waiting on the sidelines right now because there's, you know, most, most people don't have a mandate to be allocated to crypto, uh, whereas people have mandate to be allocated equities. So generally what you see is like when equity markets sell off and then they bounce, it's very rare that Bitcoin outperforms that. It's just, it's, it's, it's actually quite rare. What ends up happening is that when equities stabilize, then Bitcoin starts to rip. And the other thing is that Kruger said 50 is needed now and 25 would be an error. No, I, I know, just wrong. Um, 50 is not needed now.

No, I mean, it's, it's not needed with stocks back on the highs. If things look shaky, I think the Fed is much more reactive to stock markets than they'd like to admit, right? So maybe a week and a half ago, they would have— a 50 basis point cut would have been more on the table. Um, I think that it's an election year. I think that a lot of people are politically sensitive. You know, I hate to keep banging on this election drum, but it's just as like crypto has become an episodic macro asset, just like many other things that I've traded in my career, and I see all the hallmarks of it. It's— you have to pay attention, otherwise you're going to miss opportunities. And to me, like, one of the biggest opportunities that I've seen this entire year was something that we shouted out on our Emergency 1000x podcast. Crypto nuked right as crypto and stocks nuked in the middle of a very sensitive time for Washington Uh, and they telegraphed very dovish things very loudly. It seemed like an obvious dip to buy across equities, crypto, all risk assets. We shouted about it, and frankly, we were right. Like, I think you have to buy these dips in this, in this particular election year. You just have to.

Yeah, I mean, the only, the, the only thing that'll just destroy us is if Kamel puts in, uh, price controls. Yeah, I, I think, I think we're good.

Um, policy error, it's really what the only thing that could cause a recession is, just like showing up and, and getting it wrong. I mean, Trump, Trump could do it too, just to be, just to be totally bipartisan here, like Trump could do something stupid. Um, tariffs, you know, like get, get too aggressive with it. Who are you texting?

My mother.

Because I hear clickety clickety click. So it's like you're like my mom who has the sound alerts turned on.

I'm listening to you. My mom was texting me some wild stuff. I had to respond to her before she gets upset.

Is she in the chat?

No, she's not in the chat. Girlfriend. Who else? His GF. What GF?

Your GF.

I'm not a doctor. Now she asked me, she asked me today if I was gonna quit because she said she looked at Bitcoin, she goes, Bitcoin's under $60K, you're gonna quit? What's going on? No, no, no, no med school yet. No med school.

My wife's like, how much do we have in crypto again? And I tell her the number and she's like, What the fuck? Like, what are you— you know, I get shouted at basically. And that's just how aging goes.

Oh, look, they're asking us personal questions. What did I go to college for? I graduated with a degree in chemical engineering and computer science.

Wow. I did chemical engineering. Oh, sorry. I did econ and operations research, but no one knows what operations research is. So I just say statistics because it's basically that, but with a little bit of engineering on top.

Chemical engineering was the worst mistake of my life, to be honest, because why I did it. So the whole reason that I studied chemical engineering, not that anyone cares, is that I was fascinated, like super, super, super fascinated with the way that water moved. And I wanted to figure out how to like think about it. Yeah. I remember you like take the drain off your bathtub and you'd see the swirl. I'm like, why does it do that? And so then it turns out that the way that you model the movement of water is not— is the Navier-Stokes equation, which is literally unsolved. So one way of solving it is this thing called Newton's method where you basically just like iterate through a bunch of numbers to try to figure out. Like what the actual answer is. And so basically what I found out is the whole reason I went into it, they were just like, I have no idea.

It just does. Doesn't it teach you?

But then I, then I, then I fell in love with thermodynamics. So that was fun.

Thermodynamics is great. I think one thing that's, I started in physics too. I used to work at Lawrence Berkeley National Labs in the particle accelerator and it's called the ALS, the Advanced Light Source. And one thing that those subjects teaches you is that One, it teaches you to do your, your own research and work really hard and actually like try to solve complex problems by just sitting there and grinding it out, which is valuable even in crypto. The other thing that those, those subjects teach you is just how much stamina you have to have in order to sit through like 60 years of researching a question whose answer you may never find. And so I think a lot of people who start in the hard sciences end up in trading because they want a shorter feedback loop. They want to know whether what they're doing is like kind of working or not, you know, 100%.

It's like, you know, the dopamine is great and you still get to use math and you still get to think about statistics and you still get to solve complex problems. It's just you make a lot of money.

Yeah. Or lose a lot.

Or lose, or lose a lot of money. And then you just go back to engineering. That actually, I will say, if anyone here is studying in university right now, Getting an engineering degree was the best thing I ever did for myself because it taught me how to think. I probably wouldn't have chosen chemical engineering, but because really, really fucking hard. But, uh, engineering just helps you, helps you how to think. And— oh, hello, hello, we have to go, my girlfriend is calling me.

Well, that's the end of the episode. Not financial advice. Love you all. Do your own research. We don't know anything.

I know nothing. Alright, coming. See you guys. Gotta cut some grass.

See you later. First Twitch.